Right, shall we win this race? Are you determined to become a bike rental operator in 2023? Great news: we know this subject spoke by spoke (yes, we know, that one was easy 🐣). What's more, you're on the right track. The rental market is booming (+119% in 2021), and so is the love of cycling, the new star of "soft mobility" (lovely, isn't it). But before you join the race, you need to know every stage. Ready to give it your all? Lokki explains everything.
1. Do a market study before becoming a bike rental operator
Would you head into the middle of a forest in Sologne without a plan, a map or a landmark, at the risk of bumping into a stag on the way? We love animals, of course, but we'd rather know how to get home after a great breakaway. The same goes for your future bike rental business! The first step for anyone interested in the bike rental market, electric or not: do a bit of digging (in other words, a market study).
Basically, the aim is to make sure your project is viable and to avoid failure, in the short and long term. Bpifrance (the French public investment bank), which knows the subject well, explains on its website: "a market can be national, regional, seasonal, concentrated, diffuse, captive, closed, mobile... Each market characteristic brings specific constraints and keys to success that it is important to identify". Here are the questions to ask yourself first:
- Is there a real need for bike rental? In other words, start by describing your location precisely. Is it a tourist spot, full of great routes and breathtaking scenery that can be ridden by bike, rather suited to experienced riders? Or are you targeting the idyllic banks of the Loire, accessible to all levels? Are you focusing on an urban area where many workers choose the bike to get to work? These criteria will help you decide which models to buy to become a great bike rental operator.
- Do you have well-established competitors?
- Will my product or service "extra" help me win market share?
- Is the market big enough to welcome a new player?
- Does the way the market is evolving support my project in the long term?
- Are there cycle lanes nearby?
- What do you need, and how much, to set up this business?
- What regulations apply?
Tip: To carry out a good market study, it's a good idea to send a questionnaire to a sample of your future customers. Who knows, these generous souls could become your first customer base and your first fans on social media!
2. Choose your business model to succeed in the bike rental market
This is one of the first questions to ask yourself if you want to become the best bike rental operator of 2023. Do you prefer riding solo or travelling with the pack? In other words, do you want to be independent or a franchisee?
Each option has its pros and cons, of course (otherwise it wouldn't be fun).
- As a franchisee, you get:
- a structure and a concept that are already up and running (pun fully intended)
- But you need a larger personal contribution to open your bike shop
- As an independent, you can:
- Work fully autonomously, with no one above you
- but you are more vulnerable financially
And since starting a rental business is not a sprint but a marathon (a fun one, though), you will also need to think about the legal structure of your bike rental company. In France, the main options are:
- SARL (limited liability company), the favourite of retailers: good security, good social protection
- EURL (single-member limited liability company): low social contributions, but strict rules and higher social charges
Tip: Feeling like you're pedalling in circles? Don't panic, we were lost too at the beginning. Contact us, we'll be happy to talk SARL, SASU, EIRL and EI with you (yes, really, it's great fun, you'll see!)
3. Define your business concept to stand out in the bike rental market
There you go. You now understand the bike rental market. Yes, you can become a bike rental operator, there really is a gap in the market. All that's left is to stand out from your competitors by creating your own concept, based, of course, on the needs of your area:
Choose your bike models:
- Traditional bikes? Sure, but which ones: Dutch bikes? Vintage? Road bikes?
- E-bikes?
- Mountain bikes?
- Folding bikes (for commuters in a hurry on packed suburban trains)
- Cargo bikes
- Air bikes (no, just kidding! Although it could be fun...)
Plan your additional services and logistics:
- A repair service? If so, it requires specific skills, so perhaps an extra hire
- Which insurance?
- What deposit should you set?
- Will you offer online booking?
- Add accessories, from the essential to the nice-to-have (or not, we'll let you be the judge)
- Locks
- Child seats
- Baskets
- Helmets
- Phone holders (very handy for avoiding that stag)
Define your bike rental offer precisely: short term, long term? Subscription?
Tip 1: Do you handle a large number of weekly bike rentals? Want to know whether you need technology to manage your stock easily and avoid headaches? Quickly calculate how much time you're losing with our calculator.
4. Get equipped to become a bike rental operator
Ta-da! You've launched your bike rental business. Better still, you're leading the race to take over the bike rental market. But you'll still need to get your hands a bit dirty, sorry.
Typically, it's time to plan how you will manage the most glamorous side of any shop:
- Stock management
- Rental agreement and invoice
- Booking schedule
- Check-in and check-out inspections
- Maintenance schedule
- Dashboard
- Quote builder
If reading these lines already makes you want to give up, keep your hands on the handlebars (oops, I did it again!). We recommend going digital. You know who we're talking about, of course.
5. Draw up your financial forecast
How much does it cost? That's for you to work out, of course! Now is the time to call on your best friend who's good at maths to check that the pluses and minuses balance out (don't worry, we promise there are no equations).
Basically, the aim is to check that the costs vs revenue ratio works in your favour, so you can draw up a financial forecast and a financing plan... and, you guessed it, start building a proper, solid business plan. Since I don't want to lose you, I've prepared a short article just for that. No need to thank me, that's Lokki generosity. But roughly, it looks like this:
REVENUE [rental income + expected utilisation rate + pricing] - COSTS = [rent for the commercial premises + equipment + cost of management tools + cost of repair equipment + insurance costs + staff costs]
Tip: Whoa! We can see you coming, Lance Armstrong! No need to reach for doping straight away. To put it more clearly: you can find funding beyond your own capital. A bank loan (feel free to contact several banks to find the offer that suits you best). Crowdfunding through dedicated platforms, and also business creation or takeover grants in France such as ACRE (a start-up social contribution exemption) or keeping part of your unemployment benefits (ARE) if you are eligible.
6. Set your location and purchasing criteria to become the bike rental operator of the year
Time to get practical and REALLY launch your bike rental business and take the market by storm: the right place, the right bikes, the right communication.
- Choose your location carefully
You already know the area. Now you need to decide exactly which street and which premises. And obviously, this isn't about jumping on the first dump available! Choose your premises carefully: it's a key step to becoming the coolest e-bike rental operator in town.
It all depends on your target customers' needs, but you must make sure your bike shop gets plenty of footfall. Shopping streets and the town centre are always tempting, unless your neighbour is a direct competitor and you're stuck in a narrow, winding alley that risks causing a jam with passers-by at peak times.
Your target customers should guide the choice of your location.
Tourist area? Go for a busy neighbourhood.
Offices? Stay close to the workers, they're already exhausted!
City? Think of the nice neighbourhoods to explore by bike (and go for e-bikes if you're targeting a hilly area like Belleville in Paris!)
- Sustainable consumption, remember
The bike market is under pressure and lead times for supplying your fleet can get longer. Speaking of which, at Lokki we believe that if you start a rental business, you might as well follow your convictions all the way. So we strongly recommend working with local bike shops and building your fleet with second-hand bikes. If you can do more, you can do less, as they say...
- Me, me, me
Hallelujah. You've launched your bike rental business. But it's not over yet. Now you need to get known! Choose your communication channels (website, social media, local radio, posters, newsletter...) and craft your sales messages to boost your business. In short, pedal hard to make your bike rental launch a success!
Tip: In cycling, as you know, it's better to start gently. Don't rush into premises the size of a football stadium if you're setting up in a town full of competitors. Choose the size and location according to your funding, then decide how many bikes to buy based on your floor space and organisation.
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