How to write the perfect business plan to start a bike rental business

There's no way around it: you'll have to write one. This document, essential to launch your small bike rental business, will soon be your professional bible and a source of personal pride. Here's the lowdown on the business plan (calmly, and with a recap at the end!).

The icing on the cake. "The yolk of the egg", as the Germans say (charming). Better still, according to the French Ministry of the Economy and Finance, the business plan for a bike or e-bike rental business is the "culmination of putting your project together", after carefully writing your market study, defining your business model and choosing your company's legal structure!

So what exactly is a business plan?

It's a document of 20 to 30 pages at most that sums up and gives shape to your bike shop or bike rental project, in a clear, easy-to-follow way. Put like that, it sounds like a school exam, but don't underestimate it: the business plan is a key lever to make your project happen and a very powerful communication tool.

For external communication, because this is the document you will present to every business partner you meet along your entrepreneurial journey: banks, investors, partners, distributors… It will help you convince them to provide funding, whether you are starting from scratch, taking over an existing business or growing your bike rental business.

But the business plan for your bike rental shop is also an excellent internal communication tool. It lets you explain your short, medium and long-term plans clearly to your colleagues, your employees and your partner, and also helps you build a company culture around your concept.

1. Describe your bike rental project in your business plan

A business plan is like a restaurant. You start by reading the menu! In your case, it won't be "Bacon royale with truffle jus" but rather "who does what, how and where?". Here are the ingredients to mix together:

• The origins and context of your bike rental business, and its environment
• Your target customers and their identified needs
• The legal structure you have chosen (independent or franchise?)
• The market analysis, locally and nationally if you're feeling ambitious
• The products and services you offer, your marketing and sales strategy
• Your target customers and their identified needs
• The overall strategy you plan to implement, including how the project will be financed (personal contribution)
• The team and yourself. Present  your background and CV, without going all the way back to nursery school
• Your planned growth plan
• The return on investment you expect from your bike rental business
• Your competitors: size (employees and revenue), results
• The prices of the products you will sell or rent, and the prices your competitors charge
• If you have them, photos, illustrations, or mock-ups of your website and  social media.

In practice, here is an example of a business plan for your bike rental business:

"My name is Vincent, I'm 30 and I'm a professional handball player. After a 10-year handball career, I want to devote myself to my other passion: cycling. For environmental reasons, and because it is a way of consuming that French people are particularly keen on, I want to rent out, all year round, a fleet of 50 standard bikes, mountain bikes and e-bikes. My bike rental shop will be located in a tourist area near an upmarket ski resort, with plenty of safe cycle paths. The fleet will be aimed at beginners and experienced riders, women, men and teenagers. Given the location, high-end products will be carefully selected for a demanding, sporty clientele with strong purchasing power. The shop will be 30 to 40 square metres, with an outdoor area to display a few models. This project requires renting premises for xx thousand euros a month and buying 50 bikes...."

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2. Take care when writing the business plan for your bike rental business

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The website of the French Chambers of Commerce and Industry (CCI), which specialise in supporting entrepreneurs, recommends paying attention to a few specific details in your business plan. Here is a quick recap to make life easier:

1. Highlight your skills, especially your knowledge of the market and your trade skills. If you consulted experts early on to make your case watertight, mention that too.
2. Explain clearly why your bike rental business is relevant and robust in your market. "Customers don't buy a product or service just because it is good or better than the others, but above all because it meets their needs, does something useful for them or gives them pleasure", the CCI points out.
3. Stay realistic and honest. Don't overestimate or underestimate any parameters. This means you also need to mention, in your bike rental business plan, any potential difficulties or risks your project involves. On the other hand, remember to include a paragraph on how you plan to overcome them.
4. Your business plan is not a thesis. Be simple, clear, concise, organised and convincing (give figures and justify them). Remember that your reader won't necessarily be an expert in your field. So no need to go into detail about the brakes on a particular hardcore mountain bike, OK?
5. Add a short summary at the end of your business plan to recap all the key points of your project. "The reader must be able to tell what you are selling, to whom, for how much, and why you are likely to succeed", the CCI insists.

3. Include 3-year financial statements in your business plan

After the writing, the maths! The business plan for a bike or e-bike rental business requires a financial forecast of around ten pages, including:

• If you are taking over a business, the income statement, a mandatory accounting document for the tax authorities ("Marco Mouly li li li li li", a nod to a famous French fraud case, is a firm NO, needless to say) and for potential investors to analyse the business's profitability over a given period. It lists all your income and expenses (gains and losses). Basically, it is used to analyse your company's performance, in particular its net result, whether a profit or a loss.
• The balance sheet: your financial ID card. It describes your financial position at a given moment, usually at the close of the accounts, if you are taking over a business. It shows what you own ("assets") and what you owe ("liabilities"), as well as the resources you will use to finance your business (loans, share capital).
• The financing plan, an essential part of the business plan for any bike or e-bike rental business. It's a two-column table that aims to show the consistency between, on one side, your needs, meaning what you have to finance. And on the other, your resources: the means you have available to cover them.
• The staff: "My instrument is not the piano, it's the orchestra", said the brilliant Duke Ellington, American musician, composer and bandleader. In other words, your success depends on people and teamwork, whatever the size of the project. The staffing plan will help you choose who to hire. You need to describe who will do what in your bike rental business, what the organisational structure will be and how much it will cost.
• The cash flow. Cash, dough, money, bucks, moolah. OK, cash flow is a bit less sexy than a rap video, sorry. It's a table listing all the cash inflows and outflows you expect during the first year of business of your bike or e-bike rental company, including the payment timing gaps between money coming in and money going out. This document is vital because it helps you weather crises (hello, lockdowns) or slowdowns in business (hey, war in Ukraine).
• The break-even point: this is the crucial question that tells you which strategy to adopt to grow quickly and well. You reach it when you make a profit, thanks to your margin, in other words the difference between sales and variable costs. Warning, the formula is brutal, are you ready? Break-even point = fixed costs / contribution margin ratio.

One last point on costs... No, you won't escape them, and on top of that, there are two kinds.

1. Fixed costs, which do not vary with activity and must always be taken into account, whatever your revenue): equipment and property rents, insurance premiums, internet connection fees, fees for external service providers,  equipment or property lease payments, salaries and social security contributions.

2. Variable costs, whose amount varies in proportion to changes in activity, such as purchases of goods, subcontracting costs, production costs of the products sold, or salaries linked to an activity-based indicator).

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Still spinning your wheels? Don't panic, we've summed it all up 👇.