HOW TO START AN EBIKE RENTAL COMPANY - YOUR COMPLETE GUIDE

Post time: 2023-07-29

With their popularity on the rise, many people want to know how to start an eBike rental business. As one of the leading providers of commercial-grade electric bikes online, we wanted to create a complete guide that will get help you started with this fun - and potentially lucrative - business model.

THE OPPORTUNITY

Starting an eBike rental business can be a great entrepreneurial endeavor, as either a part-time side business or a full-time undertaking. Electric bike rentals have soared in popularity in recent years and are almost everywhere you look - at crowded beach towns, in mountain resort communities, and in many other locations where local attraction and tour operators are present.

But that's not to say it is going to be easy! There are a number of things to consider before starting your business, especially the profit potential. It is important to understand what your upfront costs will be, and have an idea of how long it may take to turn a profit based on a number of bookings your business can handle.

SAMPLE COST ANALYSIS

There will be some up-front costs to your business that we will go over in detail, but to understand your profit potential long-term, here are some numbers to consider.

Your revenue potential will essentially be a function of how many eBikes you have in your inventory, how often you can rent them out (and how often you can make post-rental sales). To start off with some conservative numbers you can use the following:

$50 per 2-hour eBike rental (depending on location) x 10 bookings per week = $500

Each eBike you buy will cost at least $1,499, which means it would take you roughly 3 weeks to pay off each eBike rental unit. Of course, every local market can be different - and there are parts of the country where you can command as much as $100 per rental (for a full day, or a guided tour with snacks included), which would change your numbers significantly.

MISCELLANEOUS UP-FRONT COSTS

Aside from purchasing your first commercial eBike units, starting your business will require some upfront costs that you should be aware of. Here is a list of things you should consider researching beforehand:

· Insurance: You want to make sure you are protected against any liability in the event of an injury. This will depend heavily on the kind of insurance policy you purchase and what state your eBike rental business will operate in. There are some brokers like Veracity Insurance Solutions that specialize in bicycle rental businesses.

· Business Incorporation: It makes sense to set up your ebike rental business as an LLC or an S Corporation. This can be done in the state you plan to operate in, or any other state where the taxes and reporting requirements are less stringent (for example, RGE is registered in the State or Wyoming). LegalZoom is one of the best resources to learn about business incorporation. Count on costs ranging from $149 - $349 to set up your LLC.

· License to Operate: Most states and municipalities require a business license in order to operate an eBike rental business. You can check out this guide for more information.

· Website: You will definitely want to set up a website, which is super easy these days - no coding know-how required. There will be a small fee to register your domain, keep a monthly hosting plan, and to design your site. You can do it all yourself using sites like Wix, and this should not exceed more than $150 - $250.

· Advertising: You will want to set aside a budget to advertise locally in order to get your first customers. This could be as little as a few hundred dollars, or much more, depending on how much money you are willing to invest to get your business up and running. Of course, if you simply add your website address and phone number to a metal plate that you put on each eBike, the will find an incredible (and free) source of advertising. Other free sources include Google My Business, Yelp, and Viator.

· Legal Material: In order to protect yourself and your business from any kind of litigation, it makes sense to have a standard contract and liability waiver that you will have customers sign before renting an eBike. Forms for this are readily available online for free, but you could also hire an attorney to customize the forms for you.

RESEARCHING THE MARKET

Starting an eBike rental business could be an incredible opportunity if your local market is underserved. Conversely, it might be a tall order to wiggle your way into an already crowded market. There are a few ways to approach this.

THE COMPETITION

Your first order of business is to find out how many businesses are actually offering eBike tours and rentals in the geographic area that you want to service. Luckily, that is quite easy to find out these days by doing a local search on Google or Yelp. Some key things that you want to take notice of:

· How many businesses are offering bicycle or eBike rentals?

· What prices are they charging? Find out what the going rate is, and what additional services they might be providing. For example, are they offering guided tours? Are they offering snacks or meals as part of longer tours? This will give you an idea of your profit potential, as well as how competitive the market may be.

· How well is the competition presenting itself? Are their websites professional looking, or do they look very out of date and confusing? That may be an opportunity to differentiate yourself.

Once you have taken stock of what the market looks like then you can start determining whether a real opportunity exists. Pro tip: Even in a what appears to be a crowded tour rental market, you can open a business and be very successful by having a “unique selling proposition.” Think about it - how many restaurants are in your town? How many hotels? Competition is a good thing - it’s a strong indication of market demand.

MARKETING YOUR EBIKE RENTAL BUSINESS

In order to get your first customers, you need to let them you know you exist! Local marketing has completely changed, largely because of the Internet. It used to make sense to take out a few ads in the Yellow pages and other local magazines, but that simply isn't the case anymore.

If you aren't connecting with your customers online then you are missing the boat. Your first order of business will be to get your online affairs in order. Here are a few key places to get you going.

· Trip Advisor

· Viator

· Yelp

· Peek (app)

· Yahoo Local

· Google Place

· Facebook

· Instagram

· YouTube

YOU NEED A WEBSITE

A website has turned into the modern business card. When people are searching for eBike rental businesses online, you want to make sure that you show up. More importantly, you want to make a good first impression. There is nothing worse than seeing a poorly-designed website. It gives the impression that you are not serious about your business, and it is likely that potential customers will turn to your competition who has done a better job.

PEOPLE NEED TO FIND YOU ONLINE

What is the first thing that you do when you are looking for a local business?

You most likely answered typing your query into Google, which is what the majority of people are doing when they research local businesses to hire. Therefore, you want to make sure that when someone types in X Bounce House Rentals, you are going to show up.

LOCAL ADVERTISING CAN BE EXTREMELY EFFECTIVE

Online advertising technology has gotten extremely advanced, and local businesses can pinpoint their potential audience with greater accuracy than ever before. When you are first starting out in your eBike rental business it will make sense to set aside a budget for advertising in the beginning. Your goal is to book new business, impress your clients, and have them spread the word online and in their local community.

Right now the best bang for your buck will likely be Google and Facebook. They are the two most-used websites out there, and they offer the best advertising products for local businesses.

You can read up about Google's Adwords local program here. The key reason why Google is so effective is because you are capturing a potential customer at the moment of intent. If you are able to serve up a relevant advertisement to a family who are looking to find a local eBike rental business for their visiting family, you can make sure that you show up.

The only downside is that pay-per-click advertising has gotten very competitive, and you could be competing against other eBike rental businesses for those spots. The best thing to do is to set aside a test budget and track very closely how much you are paying for new leads.

Facebook offers a different local advertising product, which you can read more about here. They allow you to target various demographics and geographic locations with impressive precision. You can offer deals, drive people to your site, and various other methods. Facebook is constantly making their technology more effective, which is why it has become a preferred choice for local marketers.

Additionally, you could experiment with local deal sites like Groupon in order to book your first set of clients.

GET INVOLVED IN THE COMMUNITY

Another effective tool in promoting your business is good old-fashioned networking. Get a bunch of professional-looking business cards printed from a service like Vistaprint, and get prepared to pound the pavement!

There are plenty of ways to get creative with this approach. One way is to make sure you are connected with local companies that are associated with your eBike rental business. For example, there could be local tour companies that don't offer eBike rentals, and you could make sure they know you are available to supply them if the need arises.

Additionally, you could get involved with local organizations like The Rotary Club. Anything you can do to make yourself visible to members of your community will help keep your bounce house business in their minds if they eventually will need your services, or a friend of theirs asks.

WRAPPING IT UP - WILL YOU TAKE THE DIVE INTO STARTING A EBIKE RENTAL BUSINESS?