How to Start a Profitable Bike Rental Business?

Avantika Shergil By Avantika Shergil  |  Feb 8, 2023  |  Automotive Business Strategy Startups
Launch Your Own Bike Rental Business

According to Allied Market Research, The global bike rental business market size is expected to grow to $11.3 billion by 2031 at a CAGR of 18.5%.

The impressive growth in the bike rental business market is witnessed due to the convenient way of getting a bike without paying maintenance costs. The users are generally college students or other locals who need bikes to rent such as bicycles or motorcycles, for a short period. Also, tourists take bikes on rent to explore the city uniquely. The users pick up the bikes from multiple dock stations or dock-less stations in the city and can return the bike to the same or another station.

The bike rental market size experienced steep growth in the last decade gets significantly impacted by the latest pandemic. However, as the situation returned to pre-pandemic levels, the bike share market started growing. Technological advancements in bike rental systems and government support for setting up bike rental infrastructure create huge opportunities for new entrants in the market.

If you want to avail of micro-mobility services, that’s rental bike business services, the blog would help you know how to start the bike rental business legally followed by a couple of tips. Let’s dive in!

How To Start a Bike Rental Business?

Steps to Start Your Bike Rental Business

Starting a bike rental business is not only about creating infrastructure and getting it registered with the state government. Instead, it’s about launching a business with a well-thought plan, proper registration, making it comply with regulations, and pre-launch promotion. Follow these steps to start the business aptly.

Decide you are on the right track

A bike rental startup is associated with some challenges and benefits. As a budding entrepreneur, you should weigh both- pros and cons to decide whether the business is right for you or not.

The business provides the flexibility to run from anywhere, and make a good sum of money, and a growing industry helps your business prosper. Environmental concerns and e-bikes are driving growth in the bike rental business. On the flip side, the high initial investment, expensive maintenance, and crowded market brought certain challenges to the businesses. overuse, poor handling, and vandalism deepen the rental bike businesses’ woes. Consider both aspects of the rental market for bikes such as electric bikes, scooty or scooters, mountain bikes, motorcycles, or bicycles, before starting the business.

Conceptualize business idea

When you find out that starting a bike rental business is profitable in or near your area, the next step is to find out how to make inroads into the market. It begins with researching the target market, customers, and competition to identify opportunities to fill the gap.

Research and analyze the local market to figure out the type of bikes you should rent and the location from where you will start the rental business. You can opt to provide scooty, scooters, motorcycles, bicycles, mountain bikes, hydro bikes, beach bikes, MTB bikes, or electric bikes to daily commuters or tourists. You can enable different types of bike rental businesses- city bike rentals, premium bike rentals, and bike rentals for office purposes. You can also choose mountain or MTB rental, or road bike rental for daily or monthly rental.

Set the price for the bike rental business while keeping rent, overhead, and profit in mind so that the business remains profitable. Mostly, the target market will be Gen X and Gen Y which helps you decide on market strategy as they are more socially active.

Find out the name of the rental bike business

The name of the business is an identity of the rental bike business that highlights the business goals and services they provide. The business name must be short, unique, and catchy that’s easy to spell. Don’t try fancy names that do not signal about services. You can also ask friends or others for business name suggestions.

Try creating names that are relevant to the business. you can also take the help of online tools that help you generate and suggest business names. After deciding on the business name, check the names on the patent and trademark office websites to ensure they are not used previously. You can check the business name accordingly which increases business credibility.

Create a business plan

The business plan is a roadmap that helps in launching the business with a laser focus on goals. Also, the entrepreneur can leverage the business plan to raise funds from investors or banks. Here are a few things that should be a part of your bike rental business plan.

  • Business overview defining business vision, mission, and goals.
  • Types of bikes and services offered.
  • Rental bike market growth trends showcasing variation in rental bike demand with SWOT analysis.
  • Competition analysis highlighting the gaps that your business will fill.
  • The unique selling point helps the sales and marketing team to promote business.
  • The management team handles the intricacy of the business.
  • Operation plan illustrating assets and equipment to procure, office location to buy or rent, and logistics details.
  • The financial plan provides the cost breakdown of start-up cost, cash flow, profit-loss estimate, and break-even analysis.
  • The appendix includes all the documents required for the bike rental business launch.

Legitimate your business of renting a bike

Making your bike rental business a legal entity starts with business registration. At first, you need to register the business in the state where you live, and thereafter, you need to register the business in other states or countries if you plan to gradually expand your business cross-borders.

The legal business structure for the rental bike venture is chosen which comprises three options.

  • Sole proprietorship: It’s often selected by small businesses where the owner is solely responsible for profits, losses, liabilities, taxes, and debts.
  • Limited liability company (LLC): The owners are not responsible for debts or losses and pass-through tax.
  • General partnership: Two or more partners together start a company and are liable for profits, losses, and taxes following their share of business income.

The business structure significantly impacts business tax, personal liability, and registration needs. You can pay taxes after getting an Employee Identification Number (EIN) online. You get to know about tax to pay after selecting the business structure. The accurate and detailed account that keeps a record of business income and expenses for your bike rental startup simplifies the tax filing process.

Open a business account

Creating a separate business bank account and credit card is all-important. Otherwise, it put personal assets or accounts at risk when the business is sued. Besides, opening a business bank account eases the process of getting loans and filing for taxes for your bike hire business.

There are some known trade credit or vendor lines of credit available such as Net 30 accounts, which many entrepreneurs can prefer. It enables businesses to buy goods or required assets and repay the amount within 30 days. Getting a business credit card is a good alternative to raising money quickly for your bike rental.

Acquire license and permits

Gaining a license and permit for a rental bike business from the local, state, or federal government is essential to operate and running your business in the city, state, or country. The requirements to get a license and permit vary according to location. Certain states mandate that businesses require a bike rental shop to operate, which you can check from references for licenses and permits.

Provide informed consent agreements to the customers to reduce legal liability and improve transparency as a part of liability waiver. The bike rental service shop requires a certificate of occupancy that confirms that the shop meets all zone laws, building codes, and other regulations. When a bike rental shop is taken on lease or purchased, the process of obtaining a certificate of occupancy would differ.

Obtain insurance for the bike rental business

Lawfully operating and running the business is a good approach, but operating it safely requires insuring the bike rental business. The bike rental business insurance ensures the company remains financially healthy even in the case of losses. Different types of insurance policies are available to cover different business risks.

Initially, it’s good to go ahead with General liability insurance that covers common risks that businesses have. Also, a worker compensation insurance policy is required for bike rental businesses to cover the risks that workers may have.

Raise necessary funds

Starting a bike rental business to rent bikes without enough funds is not possible. If you have a deep pocket, that’s great. But if you need to raise capital for starting a business, there are various ways to secure finances.

  • Apply for bank loans with a business plan and good credit history.
  • Apply for SBA-guaranteed loans.
  • Government grants assist rental bike businesses financially.
  • Considering venture capital helps you get funds but you lose some control over the business as they take an ownership stake in exchange for funds.
  • Reach out to angel investors that invest in startups in exchange for a stake.
  • Crowdfunding is a low-risk option to raise capital.
  • Self-fund your business with saving or property.

Amidst various ways to raise funds, the changing finance ecosystem is impacting rental bike startups, which is important to know beforehand.

Make the rental bike business market-ready

Finally, you are all set to launch the bike rental business. As a business owner, you are wearing many hats from building the brand from scratch to its sales and marketing. Fortunately, many digital tools can help you promote the rental bike company and increase customer retention.

  • Custom development: You can opt for a website or app development that simplifies business tasks such as fleet inventory, bike rental bookings, payment, and more. Also, Investing in digital transformation can help you to penetrate the market better.
  • Digital marketing: Creating business pages on social channels, regular post publishing, paid to advertise, listing on Google or Yelp, and SEO-optimizing websites or ASO-optimized mobile apps help in improving brand awareness, increasing lead and conversion rate, boosting customer engagement, uplifting retention.
  • Social Networking: Tap the professional network from social networking channels such as Facebook and LinkedIn to inform more people about the bike rental business launch and gain valuable insights into business offerings.

Prepared to set off a bike rental business?

Are you interested in making money with a rental bike business launch? If so, you make the right choice as people are increasingly opting for it as an eco-friendly travel alternative. The desire to make millions from a lucrative bike rental business is accompanied by lots of effort and resource investment in starting a business.

As you get detailed information on how to start a bike rental business You must be thinking about what to do after its launch. For the next phase of your bike rental business, you can choose to develop a custom app with help of startup app developers or do online marketing with help of a top digital marketing agency.

It helps you start the business legitimately with a rock-solid foundation. Stay tuned to us know more about business digitization, technology stack, business model, monetization, and a lot more.

Frequently Asked Questions About Bike Rental Business

You can start a bike rental by conducting market research, creating a business plan, making your business a legal entity, obtaining a license and permit, and making it market-ready for launch.

Conduct market research, customer research, and competition research to identify the gaps and turn the gaps into USP to seize an extra edge in the crowded market of bike rental business.

Avantika Shergil Avantika Shergil   |  Feb 8, 2023

An enthusiastic Operations Manager at, coordinating and managing the technical and functional areas. She is an adventure lover, passionate traveler, an admirer of nature, who believes that a cup of coffee is the prime source to feel rejuvenated. Researching and writing about technology keeps her boosted and enhances her professional journeying.


Enter your email

Connect Now

    Full Name
    Email Address
    Contact Number
    Your Message
    44 − 42 =