Updated on: July 19th, 2024

How to Start a Bike Shop? (Guide for New Entrepreneurs)

From an LLC for your Bike Shop (from $0 + state fees)

It’s no surprise that bicycling has grown increasingly popular over the years and is set to continue its rise. If you’re an avid cyclist with a passion for bikes, why not translate this into something more? Starting a bike shop could be your entryway into turning your hobby into a full-time career! Not only will you have the chance to help other bicyclists get what they need, but also introduce newcomers to this fantastic sport. Bicycling can be about fun, fitness or sports; it doesn’t matter where your interest began – make something of it today!

Ready to Start your own LLC? Let’s do it but if you don’t know how to start your own LLC take a look at our easy step-by-step guide on how to start your own LLC.

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Bike Shop Biz Overview

If you’re a cyclist in need of assistance or supplies, look no further than your local bike shop. With an extensive selection of bicycles from various brands and types, these stores are the ideal place to go for any cycling-related items. Plus, they offer much more than just bikes: helmets, apparel, parts & equipment – even customization options! Bike shops also supply repair services ranging from simple tire changes up to complex repairs/rebuilds; so whatever issue may arise with your two-wheeler can be remedied quickly and easily by their knowledgeable staff.

Small, local bike shops must strive to compete with the giants of big-box retailers who usually offer prices that small stores can’t match. Fortunately, these independent businesses stock specialty bicycle products that larger chain stores don’t carry and provide a more intimate shopping experience as well. What’s even better is that the majority of shop owners have experienced cyclists themselves providing invaluable advice in selecting the right gear or choosing from their selection of bikes!

Industry Growth

With the surge in bicycling as a recreational activity, workout and transportation from 2015-2020, IBIS World recorded that the bicycle shops, Bike store,s and bicycle repair services expanded by 1.1% annually! This was due to an increase of individuals utilizing bicycles more often coupled with higher disposable incomes which enabled people to purchase their own bikes. By 2020, this market had become worth $4 billion generating 102,725 jobs across 16461 businesses.

The bicycle dealership and repair industry is predicted to expand from 2020 to 2025, thanks in part to rising consumer spending along with an awareness of health benefits. Consumers are also more mindful about the environment than ever before, which may drive them towards bicycles over other modes of transportation. Therefore, IBIS World anticipates that this sector will continue its growth trajectory for years to come.

Industry Potential

The home training industry has seen a major uptick over the past few years, with bike trainer sales projected to reach an astonishing $140 million by 2025. Innovations like indoor and smart trainers that link up with online game-training programs are driving increased enthusiasm in this sector as riders can now compete against each other virtually for added entertainment value.

3D printing is revolutionizing the bike industry by enabling manufacturers to create customized parts and accessories that can be tailored specifically for customers. These components may come at a higher price, but with their unique features they offer an appealing option to riders seeking something extra special.

PROS and CONS of Starting Your Own Bike Shop in 2023


  • Rewarding work that will leave you feeling fulfilled and proud.
  • Forming lasting business relationships
  • Engaging in physical activity on a daily basis is essential for your health and wellbeing.
  • Incredible benefits and major savings!
  • Strengthen your local community by engaging with people in the area and getting involved in meaningful activities.
  • Interacting with people face-to-face is essential to forming meaningful connections and lasting relationships.
  • A straightforward approach to success.
  • Grasping the business fundamentals is a simple process with our comprehensive training materials and support system.


  • Very Busy and Crowded Working Space
  • Locating the Perfect Supplier for Your Needs
  • Inspiring Employees to Achieve their Greatest Potential
  • Smaller profit margins
  • Abrupt and frequent employee departure can be detrimental to any organization.
  • Various Taxes
  • You may experience financial hardship (initially)!

11 Steps to Start Your Very Own Bike Shop Business

Here is our 11 simple steps guide to help you establish your own Bike Shop:

1. Form a Business Plan


Once you have come up with the concept of your bike shop, it is time to create a business plan. This vital document will help clarify important aspects of your venture such as who are your target customers, how do you intend on getting in touch with them and estimating sales and costs. Moreover, not only does having a business plan make lenders more likely to approve financing but studies also show that having one improves the probability of success for most businesses.

Some Important Factors to focus on while forming your Business Plan

Initial Cost of a bike Shop

One of the initial investments you need to make is getting all necessary business licenses and permits. The cost for opening a bicycle shop can vary greatly depending on its size, location, and rent prices; while it could cost as much as $350,000 in larger cities with high rents, smaller towns will likely require an investment of only around $10, 000 due to their more reasonable rental costs.

Ongoing Expenses for a Bike Shop

Ongoing expenses include:

  • Rent and Licenses
  • Business Insurance fees
  • Inventory maintenance costs
  • Freight charges
  • Inventory management software designed specifically for bike shops
  • Tool maintenance
  • Staff training and Incomes

Target Market

The target market of a bike shop is dependent on its particular expertise. If the store offers more general products, then its main customers will likely be recreational and health-conscious cyclists who are part of families or simply enjoy cycling as a hobby. On the other hand, stores that specialize in high-performance bikes and gear can expect to reach competitive athletes primarily.

Rates and Charges for Customers

From basic beach cruisers that can range from $199 to $700, all the way up to rugged mountain bikes for around $10,000, bicycle repairs and maintenance are essential. Though they may come with a higher price tag, most people still choose professional bike shops over big-box stores because of their quality products and experienced staff who provide unmatched customization services. Whether you’re in need of simple fixes or complex replacement parts – costs typically vary between only $10-$150!

How to Increase the Profit of Your Bike Shop?

By selling a combination of bikes and cycling-related items such as clothing and accessories, the average bicycle shop can boost its profit margin from an already generous 36% to approximately 42%. This shows that bike shops have tremendous potential for profitability when they diversify their bike sales.

2. Form Your Bike Shop Into a Legal Entity


Forming your bike shop into a legal entity is an important step to protect yourself and ensure success for your business. Doing so creates an independent, legal identity for the store, different from its owners or operators. It also provides advantages in terms of personal liability protection, taxation and other regulatory matters. In addition, by forming as a legal entity you’ll be able to gain access to important capital, including traditional loans from financial institutions as well as investment funds. Ultimately, creating a legal entity is an essential part of establishing a successful business and safeguarding it for the future.

The steps to form an LLC are relatively simple: registering the business name, filing articles of organization, having documents prepared, opening up a bank account and possibly obtaining federal or state licenses/permits depending on your venture. The advantages of forming an LLC far outstrip any costs associated with it- it is certainly worth considering if you’re a small bike business owner aiming to make your enterprise legitimate.

Protecting your Bike shop from any potential legal action is as easy as establishing an LLC or corporation. By doing so, you will be safeguarded from any personal liability in the event of a lawsuit against your business.

If your goal is to save money, you can easily form an LLC yourself with minimal effort and pay only the necessary state expenses. On the other hand, if you need professional help when establishing your company entity, it’s wise to hire one of the finest LLC services that charge a small service fee.

3. Choose a Business Structure


When it comes to structuring your business, decisions must be made in order for lawful operation. From sole proprietorship and partnership to corporation and Limited Liability Company (LLC), each legal structure has its advantages as well as disadvantages such as liability exposure, costs, and administrative requirements. Weighing all of the pros and cons carefully is key when selecting an entity type that best suits you.

When selecting the most fitting business structure for a bicycle shop, it is generally between a sole proprietorship and a Limited Liability Company. However, forming a partnership could leave owners exposed to needless personal liability; if one partner were to cause the store legal trouble or flee with its funds, all other partners would be held accountable monetarily.

Forming an LLC is truly a great and recommended choice. And it can be as easy as 1-2-3 with our 10 best LLC formation service providers.

If you’re looking to reduce personal liability and separate business assets from your own, the corporation is ideal! It may be more difficult to manage than an LLC but it comes with a lot of benefits. Not only will you not have to personally repay any debts or fees if the company faces litigation – which makes sense for larger companies who plan on securing a lot of investments- but sole proprietorship and LLCs also become viable options after considering all these factors.

The sole proprietorship is an economical and painless way to initiate a business, but the owner does not have any legal protection in case of lawsuits or debts. An LLC can be formed for relatively low costs (ranging from $40-500), allowing the same convenience as a sole proprietorship with added liability coverage. Creating an LLC offers peace of mind that you will no longer bear full responsibility if something disastrous happens to your venture.

4. Select Your Location

When calculating the cost of renting a shop, factors such as square footage, location, and amenities all come into play. Renting a store in an area with high foot-traffic may be more expensive; however it has its advantages – increased public knowledge and walk-in customers!

5. Apply for Business Licenses and Permits


The path to owning a bike shop is not complete until the owner obtains all of the necessary business licenses and permits required by their state or town. This may include registrations such as an Employer Identification Number, Occupancy Permit, sales tax permit, and more. Depending on your location these requirements can vary greatly so it’s important to do your research beforehand!

To be successful in the bike shop business, certain permits and licenses may need to be acquired from your state. To discover more about what’s required of you by law, check out the Small Business Administration’s breakdown of necessary certificates and permissions for each US state.

Bicycle shops should consider obtaining a resale certificate, as it will enable them to purchase items intended for future sale without needing to pay sales tax.

Liability Waiver

In order to keep both customers and the bike shop safe from potential accidents, it is critical for a bike shop that wants to rent bicycles to obtain liability waivers. Moreover, riders should always wear protective gear while riding in high-risk areas. To ensure you are up-to-date with the latest safety requirements and regulations, here is a link providing access to an all-encompassing informed consent form meant exclusively for bicycle rental shops.

Certificate of Occupancy

Operating a bicycle shop from a physical storefront necessitates obtaining a Certificate of Occupancy (CO). This document guarantees that the store abides by governmental regulations and zoning laws, as well as confirms compliance with all building codes.

6. Open a Business Bank Account


To effectively monitor your business’s revenue and expenditure, it is imperative to keep separate banking accounts for both personal and enterprise purposes. This will also allow you to detect patterns in financial transactions.

If you’re looking to save money on business expenses, taking the time to research your options for a free checking account from various banks is an excellent way to get started. Don’t miss out on this cost-effective opportunity for your business! You will also get a business credit card.

Separating your personal assets from those of the business is crucial for safeguarding, and opening a business bank account helps you do this.

Additionally, it simplifies accounting processes and tax filing obligations – an added benefit that promises greater convenience. Beyond being mandatory when applying for loans to start a company, a separate banking account can be incredibly advantageous in other ways too!

7. Find Financing

Possessing the skills to create a successful bike shop is important, but securing adequate funds for it can be a challenge. In order to obtain approved loan(s), the borrower must have impressive credit scores and invest 15-25% of their own money towards initial start-up costs.

8. Get Your Marketing Plan in Place

In order to distinguish yourself from other stores, why not host unique events that no one else does? Group rides are always a popular choice, but offering beginner rides for kids is an untapped strategy that may help you stand out. Through this activity, both the children and their families can become familiar with your store—maybe even long-term customers if they develop an appreciation at such a young age! Investing in these activities now could pay off down the line.

When preparing for your store, really research what cyclists need in your area. Concentrate on the trails favored by mountain bikers, bike paths accessible and nearby universities to help you decide which inventory to stock up on. Having insights into these details will assist you in targeting potential customers better and make it easier to determine the type of products that should be stocked.

Bike shops can employ various marketing methods ranging from social media and online advertising to direct mail ads and even radio commercials. Additionally, a loyalty program should be established in order to boost return customers. Although it may initially cost more, constructing an informative website is highly beneficial as it allows the shop heightened visibility on the internet while also allowing for e-commerce transactions!

9. Get Business Insurance and Register Your Business for Taxes


When starting an Independent bike shop, it is important to consider the various types of insurance available. Here are some key policies to keep in mind:

  1. General liability insurance safeguards your business from the potentially expensive medical and legal bills that could arise if a customer ever suffers an injury while on your premises.
  2. Commercial property insurance can safeguard your business from the daunting financial burden of physical damage or destruction caused by fire, storms, and other unpredictable events.
  3. If an employee experiences harm on the job, worker’s compensation insurance covers costs associated with legal fees and medical bills – providing shops a secure layer of protection.

Business Taxes

In order to open your business, you will need to register for various state and federal taxes. Fortunately, it is a straightforward process: all you have to do is apply for an EIN! It’s free of charge and takes only minutes. With this essential step taken care of, you are ready to launch your venture into the world!

Various Business Taxes

Depending on your chosen business structure, there might be different routes you can take to reduce the amount of tax payments. If a Limited Liability Company (LLC) is what you decide upon, then being taxed as an S Corporation (S corp) could prove beneficial for your enterprise.

10. Set Up Accounting for Your Bike Shop Business and Hire Employees

Establishing an effective and comprehensive accounting system for your bike shop is essential to its longevity. Not only will it keep you in the clear with federal authorities, but it can also give you invaluable insight into performance trends, cash flow analysis and profit optimization – all of which are integral components of a successful business venture.

Employing staff at a bike shop is essential to its success. PayScale reveals that bicycle mechanics usually draw an hourly wage of $13, while sales associates typically make around $12 and store managers earn approximately $17 per hour. Yet there are other employee-related costs such as Workman’s compensation insurance, unemployment insurance, and paid time off which must be factored into the budget for any shop that hires personnel.

11. Define Your Brand and Create Your Website


Your brand is what sets your business apart from the rest. It defines who you are, communicates your company’s values and makes a powerful impression on potential customers. A successful brand will help ensure that yours stands out amongst competitors in the eyes of those that matter most – consumers!

Marketing and Advertising

An effective way to promote your business is teaming up with surrounding companies to support bike races and other community activities that benefit charitable causes. People find biking so appealing because it allows them the chance to enjoy being outside, connecting with nature and their local residents. By giving more possibilities for these experiences, you’ll be certain to draw in even more customers!

Social media platforms such as Facebook and Twitter are the perfect places to promote local events, sales promotions and product announcements. Furthermore, bike shops can easily reach out to their customer base by creating a page on Shopify or similar eCommerce sites. A website is also an efficient way of notifying frequent customers about new products and offerings; it’s a brilliant platform for publicizing upcoming deals too!

Making Loyal Customers

Shopping for second hand bicycles from your local community is a wonderful way to build strong relationships, nurture customer loyalty, and reduce overhead costs. Moreover, sellers of outgrown kids’ bikes frequently use the proceeds to purchase new ones; so you are not only doing yourself well but also helping others in need!

Create a Bike Store Website

Constructing a website might seem like a daunting task for those with limited web-building experience, but fortunately, the world of technology has seen remarkable progress in just the past few years. Now more than ever it’s easier for small business owners to create websites and take control of their online presence without having prior knowledge!

Hire Professionals to Help You Form an LLC for Your Bike Shop

It can be difficult and time-consuming to form an LLC all by yourself.
That’s why we decided to give you a few of the best options for professional services that can help you start an LLC in no time & with 0 effort!

#1 – Create an LLC for Your Bike Shop Using Northwest Registered Agent

Northwest has vast experience in creating LLCs and Corporations. They by far have the best support and client satisfaction rate. We’ve used and tested them ourselves and can guarantee that they’ll do an exceptional job for you.
You can read our full & extensive Northwest review here.

$39+State Fees

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Rating: 4.9/5
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Form an LLC today with Nortwest. They have 98% customer satisfaction rating and over 4150+ verified reviews. They will include 1 year of free registered agent service!

#2 – ZenBusiness will help you form an LLC for your bike shop

ZenBusiness is one of our top-rated LLC services as well. They have a super value-to-price ratio. And it’s perfect for those who are looking for the cheapest option to form their LLCs. When we tested their service — they’ve done a great job, so we can honestly recommend them.
To know more about them — read our full ZenBusiness review here.

$0 + State Fees

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Rating: 4.8/5
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Form an LLC today with ZenBusiness for only $0 + State fees. They Have 98% customer satisfaction rating and over 4830+ verified reviews.


Opening a successful bike shop in 2023 requires careful planning and research. In addition to familiarizing yourself with the national bicycle dealers association and regional regulations, it’s also important to stay up to date on national trends in the Bicycle Industry as well as regional cycling preferences. By following the steps outlined in this guide, you’ll be ready to launch your shop and jump into the lucrative and growing business of bicycle sales. As the Bicycle Industry continues to grow, the potential for greener commuting options could mean even more salary growth potential down the road. With some forethought and dedication, there are limitless prospects for success when opening up your own bike shop in 2023.


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