Managing a bike rental shop isn’t a whole lot different from managing anything else. It has its successes and shortfalls, it has tough customers and curious tourists, and there is always going to be a mix of good employees and bad employees. All in all, it is pretty simple yet challenging. There are also major sins of bike shops that you need to know about. Bicycle rentals can be really fun if you know how to manage them! The first thing that you need to do is think of an amazing business name!
As a manager, I am basically given a budget that distributes certain funds to certain aspects of the business. I can spend so much on parts and on retail items. I can spend other money on employees or shop functions so in this regard, it is really just color by number. Don’t run out of colors and your picture looks just fine.
The majority of your money will be spent on paying for your space and employees. Second most will be spent on replacement parts including tubes and tires because no matter what it seems, things are always breaking and will keep on doing so!
Startup costs for tools and a fleet of bicycles are relatively high. I think it costs around $175,000 to open the place I work and we managed to pay that off over the course of 3 years. Now whatever we take in comes directly back to us, so profits are flowing in nicely. A bicycle rental service can earn you a lot of money, although it also requires a lot of starting investment. A good business name will also take you to new heights, think of something catchy!
Tourists/Guests- The Main Target Customers
Bicycle Rentals shops across the world are after one market, tourists. All local people already have their own bikes so we go about competing for all the new business that comes into the city. Luckily I live and work in one of the most bike-friendly cities in America so tourists are already interested when they get here. There are also some great bike share programs that they can check out!
We budget for marketing opportunities but really with how the economy is right now, we haven’t had to use them. We have a great location and I send one of the employees around to all the local hotels with flyers and they pass them on to the guests. All the hotels love to accommodate their guests with fun ideas on how to spend their time. It is also of mutual benefit with the only cost falling on us to keep them stocked with flyers; better than spending $2000 for a local paper ad. If you ever wanted to use cargo bikes instead of delivery trucks, that is a great alternative too.
Getting past the language barriers and customs is pretty easy albeit the interactions aren’t very long. Making sure to lay out the ground rules and explain the liability waiver is really important. If something were to go wrong it is of the utmost importance to cover your assets.
Replacement costs are not cheap and to be honest, customers can definitely be negligent. We often have people who come back trying to explain that their bike is no longer working and they don’t know why.
The bike worked fine when they left so now I have to put the bike in the stand and try to determine what happened and what I can charge them for. It is really important not to be shy about these things or else the guests (Bike owners) will run over you. I’m not saying all guests are this way but the tendency is to not want to pay for anything extra. Try to be better than the other bike shops!
It is very important to also provide a good experience for future guests. The only way you can do this is by either bearing the brunt of the cost yourself or understanding what negligence looks like and charging the party responsible. In order to make money, you need to take the extra steps.
Having Specific Knowledge About Your City
Now, not all customer interactions are like this. Most often I get people who want to really experience the city I call home. They want to dine at all the local spots and shop and see the sights. I am more than happy to oblige because after all they are my business and once upon a time I moved here because I thought it was a great place to be. Who knows, maybe guiding people to the right place might even make money for you!
I worked out a deal with the city to provide us with bike-specific maps and as a cyclist myself I know all the easiest and best ways to see the things people like.
I point the guests/tourists to the parks and shops. For the more enthusiastic riders, I keep a book of long rides handy so I can explain and show some of our premier road routes. I like talking to new and interesting people. I like that brief exchange when the business part is over and I find out why they are here and what they are interested in. As a rental shop, we are bringing one of the main comforts of home travel directly to new people in a new place.
People often express their gratitude when they return the bikes and we get to find out how they spent their time, sometimes you even make money from this. It is really amazing to see what they liked or what wasn’t worth the hype so we can build a mental catalog of where to send the next group, this never stops being exciting.
Bikes and Repairs Go Hand In Hand
One of the most important things is making sure you actually have a working bike fleet to rent out. This means being a strong mechanic or at least a strong enough mechanic to work on your shop bikes. I have noticed that I am not necessarily up to speed on the latest and greatest but I definitely know how to fix the bikes we rent at the shop. All kinds of repairs come in and you need to have the tools and knowledge to fix them. There are also bizarre occurrences sometimes, like parents getting the wrong-sized bike for their kids and then turning to us for help.
First I suggest setting up a dealer account with the tool and bike distributors in your area, this will allow you to get the necessary tools at wholesale rates. Getting parts and tools wholesale will be very important in keeping costs low. Another good place to get tools is through the estate or garage sales. Bike maintenance and repairs are going to be of the utmost importance.
It is important to keep parts stocked before they break so you don’t have to wait for the turnaround from your distributor. Part delivery can often take a week and in that time you have bikes that are just sitting around and not making money for you. Be sure to have some sort of repair system where you diagnose and complete repairs in an orderly and timely fashion.
In my shop, we use tickets where we write the initial diagnosis down right away in case we can’t get to it that day. Then we go back and do a further inspection and make the repair. We then remove the ticket and put the bike back on the floor when we are done. The ideal turnaround for a repair is 2 days max although that can exceed sometimes too. I can understand if employees get busy or if we are waiting on parts but I cannot tolerate repairs that are piling up for no unnecessary reasons.
It is in your best interest to check the bikes each morning before they go out so you know you are giving the guest a quality experience. However, repairs become pretty easy after a while because they seem to happen so frequently. If you are worried about not being able to do certain repairs there are plenty of online and print resources available.
I also recommend Sutherland’s 7th edition catalog to look up compatibility issues with components.
Employees Are The Backbone- Give Them Skills and Motivation
Perhaps one of the harder things but more rewarding things is teaching the people I work with. Because most rental shops are seasonal they often get a certain type of person looking to work with them. People only looking for seasonal work are often younger, and less experienced. In a weird way, they also have a lot of power over their situation.
I need employees to cover hours and the later in the season it gets, the harder it is to find people who want to work because they would only be working 2 months or so. So employees become progressively lazier I have found and I have to work harder to maintain a happy level of stasis. Working with inexperienced people isn’t always like this and some people do take great pride in their work. You have to be careful about the state fess regarding the job structure!
I do my best to hire people who have some knowledge of bikes and hospitality and then I end up having to teach them the rest myself. It is important for me to be the strongest and at times the most creative mechanic because I am the manager. To lose any faith the employees have in my knowledge or ability to run the shop could undermine how things work in the future.
It is important to understand that people are going to make mistakes no matter how high or low your expectations are of them. I had an employee leave bikes out overnight and of course, they got stolen. I don’t think the error was malicious or disrespectful but it did make me angry.
After calming down, I had to realize that perhaps this was an error in management rather than with the employee. I had previously posted the shutdown procedures but I went back over them to reiterate how I wanted things done and I started doing nightly check-ins with my closing crew to make sure nothing was amiss. This is one of the reasons why you should have amazing customer service.
Aside from all the budget items or mechanical problems, what I really do is manage 9 young people who in turn provide humor, a relaxed work environment, and for the most part a smoothly running shop. Sometimes if you hire more people than anticipated, there are a lot of state fees that you have to worry about!
Damage Control
Let’s be honest for a second, things go wrong as they are supposed to. There is no matter of business or walk of life where things don’t go wrong. It is important to be able to deal with the monotony of the same thing day in and day out but it is as equally as important to handle the bad situations with a cool head.
This year I had a reservation for a group that wanted to come in at 9 pm and keep bikes out until 10:30 pm. That is pretty late considering we close at 8 pm. I had opened that day at 7 am and I was going to stay later to cover for a girl who had called in sick (which just happens sometimes). Controlling your customer service is very important, keep that in mind!
I had totally forgotten about the reservation and when I saw the paperwork I assumed that 9 pm actually meant 9 am and that they had just decided not to come. I was definitely wrong. They called at 7 pm after I had already worked 12 hours saying that they would be there on time for their reservation.
At this point, I am pretty tired and it is only me and one of my really good employees left working. I don’t like making people stay later for my mistakes, but he thinks it will be a pretty easy job and he’d rather get paid for waiting for them to come back than just sitting at home doing nothing.
In this case, everything worked out alright but just imagine if they had not called and would have just shown up after we were supposed to be closed. They would have had to cancel their event and we would have lost their business not to mention put them in a really tough spot with their clients. I really try not to add stress to other people’s lives and sometimes I have to admit that I have made mistakes. They also paid through their credit card, which was a good thing. Having a business structure that is able to cope with mistakes and blunders should be your number one priority.
In other times, life requires us to step outside the boundaries of our job and be human. I have had to lay aside all the rules and regulations to help people and co-workers and in turn, they have helped me. We have used 4 person surreys to shuttle older folks back to their cars. We have given out water on particularly hot days because the area our shop is in does not have many water fountains and it also has a fair amount of vagrants.
Patrons have crashed our bikes and we have had to go pick them up. One girl broke her ankle last year after a manufacturer defect caused the fork of her bike to sheer in two. We had to first, get her taken to the hospital and then put her in touch with the manufacturer of some of our specialty bikes to get her bills taken care of. We were lucky that we used our credit card for all the expenses.
It was awful that this happened and I would have loved to have prevented it but sometimes life requires a little bit more. If I had strong customer service before, all of this could have been avoided!
Why I Quit
So I haven’t actually quit yet, which is kind of deceiving I know, but I don’t imagine the reasoning will have changed much once I actually do. I like my job. I’m not some disgruntled employee who isn’t happy with the pay or benefits or lack of resources from the front office. I enjoy being outside and talking about bikes and working with bikes and people who like bikes. That is what I truly love and this job allows me to do all of that. This job also allows me to use my credit card freely which is a lifesaver!
I think when I quit it will be because I am ready for something new, something more challenging. I am hoping that the same company I work for will work with me so that I can simultaneously run the rental shop and start a bike share to benefit the kids and employees under the care of the nonprofit I work for.
It is important for me to be able to give back and I can’t think of a better way than helping to provide bikes to kids who don’t have them or are constantly breaking them from riding too hard. I was that age once too. A good business structure that also gives back to the community is going to be great!
Sometimes we just outgrow our position, and the circumstances in our lives change. Maybe what is so amazing and alluring now, won’t be in a few years. Maybe I’ll start a family or go traveling. I think if you are in a position to open a bike rental company, you should try it. Startup costs are pretty high but if you have a passion for being able to provide people with bikes then it definitely isn’t such a bad gig.
21 thoughts on “How It Really Is To Manage a Bike Rental Shop (And Why I Quit)”
But what about the insurance? It looks like we have the opportunity to take over some bicycle rentals our little shop has been handling for our city for several years. That would be awesome but we are in MN and as you probably know that means a very short season. Where should we get our insurance from? What do you do?
The larger non profit I worked for had an extensive insurance network provided already and I was lucky in that our facilities and accounting department handled all of those top line decisions.
Snow bikes are big know, I know that some are willing to rent rather then purchase just because of the expense of the bikes. I know in Michigan they have a huge following, so the helps with the changing of the seasons.
Truelly enjoyed this article. All the info I was looking for in a concise read. Thanks
Nice article. Is there a type of bike you would recommend if you were going to be a small bike rental company?
I would recommend anything that can be easily maintained. Internally geared hubs like the shimano nexus are low maintenance and last a long time. Depending on how hilly it is where you are, they make 3 spd. 5 spd, and 8 spd versions. Steel frames and beefy tires are my next concern, but this really depends on your market and what people are using your bikes for. There are other shops in my area that rent high end mountain and road bikes so I know I will never be able to compete with them so I don’t offer those bikes.
Do you have a copy of your policies or general rules? Did you use gps in an effort to locate lost or stolen bikes?
I can definitely see why bike rentals would be extremely popular for tourists. My wife and I have been planning on taking a long trip on the East coast. I definitely think that we should rent some bikes that could help us to get around and remain healthy.
I really liked your article very much. Kept me reading! Question. I would like to possibly get in the business but think that the automated credit card kiosks are taking over. Many major cities have this service. Hop on a bike and return it anywhere there is a kiosk. What are your thoughts about this?
So we actually have the bike share kiosks where I live and operate my rental shops. In general I am not a fan of the bike share for a few reasons. 1: they are super impersonal, riders don’t get a feel for the city by talking to someone who has an intimate knowledge of it. 2: Bike share bikes do not come with helmets. 3: Without sponsorship bike share programs are typically not profitable because in order to remain popular they rent at a much lower rate than privately owned rental shops. 4: they basically kill privately owned small business rental shops. Most rental shops in my area have lost around 30% annual revenue once these bike share kiosks got put in place. My ideal type of bike share would be a city or state sponsored fleet that would be housed at various privately owned rental shops throughout a city. This would drive traffic back to businesses within the community instead of spreading out payment to large 3rd party corporations to operate and maintain a fleet.
Well done. Thanks for your insights on the bike rental business.
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how can i get that inssuranc on accidental bikes and of that person if i get some damadge becouse of if bike accidentaly falls or it cant be start then what will do fpr this situation please give me some suugestion on itfor my gud performance .i need it immidately help
Dear
Could somebody able to tell me on rental bike organisation
what is the % cost of the maintenance parts on one year rental
I try to find this number ?
Hello and thank you for the article and sharing your experiences. I found it interesting because I have been asked to invest in an existing bike rental business that went from decent profits, to now treading water.
I have several rental properties in a oceanfront town that I do not live in. We have used a bike rental service for years when my family traveled to my place, and we started driving a lot of business toward this rental company with our vacation rental guests. In turn, they started to comp our bikes when we would need them for a weekend, and I got to know the owners.
They were always professional, timely and had good equipment/service. However at least one of the owners left, and now one of the remaining owners wants to find an investor to buy him out. I was approached, and while I see the potential of bringing some business/marketing skills, I am not familiar with the costs/pitfalls of the bike rental industry. This location while in a warm climate with year round tourism, but does have cyclical seasons with peaks/lows.
Since I would be an offsite business partner, I’d have to depend on the other partner to run the day to day operations, while I would be more of an investor looking for eventual profits on my investment.
There is other competition in the city with both trail bikes and beach cruisers, though none are the types of bike share systems. The existing inventory is starting to age, so considering the salt air and potential problems with the bikes that are rented for beach use, what are the best bikes for the price/longevity for that environment?
Additionally, since you are getting out of the business (at least as a manager) would you recommend I consider getting into this type of business, or is it too fraught with potential pitfalls that make growing and profiting a difficult road?
Another words, if you had the money to buy in as an owner, would you do it, or use your money in another type of endevour?
Hello Bob, Did yo decide to do the bike rental back in 2017?
you had very good questions. I hope you got the answers you needed
I would like to open up a bike rental shop at the beach. Los Angeles County. What permits or licenses would i need if any.
Whats the going rate on bike rentals. Hour, or day rental.
Great article! I was wondering, how many times on average are you able to rent out a bike before having to repair it? Was thinking about renting out my personal bike through a family friend’s business, but don’t want to be responsible for the maintenance cost if I’ll frequently need to repair. Any help would be so appreciated!!!
Thanks to the invasion of Chinese dockless bike share systems in the UK, it seems at least over here that as a result of this, people now expect bikes to be very low price to hire. Not only have these short arsed bikes unsuitable for most people, they have created the sense that bikes are disposable and built to throw around after the hire is over. My city Newcastle was recovering hundreds of these bikes from the river. Unfortunately, i think based on this, the average customer will suffer because the hire market will now cater towards high priced performance bikes in my opinion, so like depends on location/type of terrain
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