How To Start An Ebike Business (2021 Updated Guide)

ebike business plan

 

With the popularity of ebikes on the rise, many people want to know how to start their own ebike business. 

As one of the leading professionals in the ebike industry, I wanted to create this Complete Guide, to help you get started with this fun - and potentially lucrative - business model.

In this Guide we discuss some key business decisions to think about before moving ahead with your own ebike business. There are many things to consider:

  • How much does it cost to start an ebike business?
  • Are licensing programs with Pedego or Rad worth the cost?
  • Which brands and models should start my fleet with?
  • What kind of business structure should I set up?
  • What licenses and permits do I need to get before opening?
  • Do I need a website with a booking engine?
  • What kind of marketing will I need to do?

All of these questions and more will be answered in this Guide.

 


 

Really Good Ebikes offers this Guide free of charge, and we will do everything we can to help you open your own ebike business.

I often get calls from people who are semi-retired but still active in life, who want to learn about starting their own ebike business. Some have prior business experience, but for many this is a completely new experience.

I'm here to help. If you choose to buy your rolling stock from me while getting your business up and running, that would be great. And if you want to work together to make future retail sales through our ecommerce portal, even better.

I have well established relationships with each of the brands I carry, and can provide you and your customers with the highest level of support and satisfaction.

I am also developing a brand licensing program for 2021 and beyond. So if you want to be one of the first operators of a Really Good Ebikes Demo Store, give me a call today.

ebike rental business with really good ebikes

The Opportunity

This will be your own business, for you to build and run as you like. But just like any business, it will rely on a couple of key factors, which you have to get right to succeed.

First, you should love interacting with people, sharing with them the joys of ebike riding. And second, you must have an entrepreneurial mindset, believing that anyone who works hard on a good idea can succeed in business.

Starting an Ebike business can be a great entrepreneurial endeavor, as either a part-time side hustle or a full-time venture. Electric bike rentals and sales have soared in popularity in recent years. If you look for them, you will see ebikes around crowded beach towns, in mountain resort communities, and in many other locations where other tourist attractions and operators are present.

But that's not to say it is going to be easy! There are a number of things to consider before starting your business, including the proper business structure, permits, and the profit potential. It is important to understand what your upfront costs will be, and also to have a good idea as to how long it may take to turn a profit based on a number of bookings your business can handle.

But if you wait until the end of this Guide, we will reveal the hidden money-making secret that many ebike rental companies completely fail to tap into.

Sample Cost Analysis

There will be some up-front costs to your business that we will go over in detail, but to understand your profit potential long-term, here are some numbers to consider.

Your revenue potential will essentially be a function of how many eBikes you have in your inventory, how often you can rent them out (and how often you can make post-rental sales). To start off with some conservative numbers you can use the following:

$50 per 2-hour ebike rental (depending on location) x 10 bookings per week = $500

Each commercial ebike will cost about $1,499, which means it would take you roughly 3 weeks to pay off each ebike rental unit. Of course, every local market can be different - and there are parts of the country where you can command as much as $100 per rental (for a full day, or a guided tour with snacks included), which would change your numbers significantly.

ebike rental business at really good electric bikes

Let's say you decided to start off with six (6) ebikes. The retail price of this small fleet would be $9,594 ($1,599 each), and we would give you a 10% discount, for a fleet price of $8,635. That could mean you would be earning up to $3,000, and that it would take just over three months to pay off your investment (after other expenses we discuss below). Three Month! Keep that in mind. After that, you would start to turn a nice profit each week, and the more you are willing to work, and the creative you are, there’s really no limit to how much you can make.

Here are a few other examples of the upfront costs to buy your initial inventory, which was developed for an actual customer of RGE.

Model Unit
Price
Qty Total
Price
10% Fleet Discount Fleet
Price
X-Treme Catalina $1,599 4 $6,396 $640 $5,756
X-Treme Laguna $1,599 4 $6,396 $640 $5,756
EBC Model C $2,278 2 $4,556 $455 $4,101
Revi Cheetah + Accessories $2,699 2 $5,398 $540 $4,858
12 $23,388 $2,275 $20,471
X-Treme Catalina $1,599 4 $6,396 $640 $5,756
X-Treme Laguna $1,599 4 $6,396 $640 $5,756
Revi Predator $1,449 2 $2,898 $290 $2,608
Eunorau E-Fat-Step $1,199 2 $2,398 $240 $2,158
12 $18,088 $1,809 $16,279

 

The beauty about ebike rental businesses is that they are easy to run, and easily scalable. If you start off slowly with just two, four or six eBikes [pro tip: ebikes are rented and sold in pairs], your investment will be minimal, and the scale potential will be great.

When things start to work and you can see what your customers really want, then you can expand and grow - the only limit with be where to store all your ebikes. There are major ebike rental companies that have over 40 units in their inventory, which you can imagine builds up the profit potential.




Getting the Right Equipment for Your Electric Bike Rental Business

In order to make sure you can service your customers properly, and not incur any unforeseen costs, it is best to make sure you have the right tools and equipment. Here are a couple of important concepts to understand.

Commercial vs. Residential Electric Bikes

Some owner-operators might be tempted to buy ebikes on Amazon or eBay because they are far less expensive, or maybe they will get ebikes that appeal to their personal needs, without considering commercial aspects - ease and frequency of regular maintenance; high-quality components; resale potential.

There are hundreds of ebike brands in the US today, so picking the right brands, and the right ebike models for your rental startup business will be important.

Typically our most popular personal models sell for $1,000 - $2,000, while the commercial-use ebikes start at around $1,500 and top out around $2,500. Trying to save the extra $500 can be a big mistake! 

    If you are serious about your business you should not take any chances buying products that are not suited for your use. It will likely cost you more money in the long run than you saved initially.

    electric bicycle rental business at really good ebikes

    Miscellaneous Up-Front Costs

    Aside from purchasing your first commercial ebike units, starting your business will require some upfront costs that you should be aware of. Here is a list of things you should consider researching beforehand:

    • Insurance: You want to make sure you are protected against any liability in the event of an injury. This will depend heavily on the kind of policy you purchase and what state your ebike rental business will operate in.
    • Business Incorporation: It makes sense to set up your ebike business as an LLC or an S Corporation both nationally and in your state of operation. LegalZoom is one of the best resources. Count on costs ranging from $149 - $349.
    • License to Operate: Most states and municipalities require a business license in order to operate an ebike rental business. You can check out this guide for more information.
    • Website:  You will definitely want to set up a website. There will be a small fee to register your domain, keep a monthly hosting plan, and to design your site. You can do it all yourself using sites like Wix, and this should not exceed more than $150 - $250. Another essential resource for your business is Bike Rental Manager software, which helps you run your entire business.
    • Advertising: You will want to set aside a budget to advertise locally in order to get your first customers. This could be as little as a few hundred dollars, or much more, depending on how much money you are willing to invest to get your business up and running. Of course, if you simply add your website address and phone number to a plate that you put on each eBike, the will find an incredible (and free) source of advertising.
    • Legal Material:  In order to protect yourself and your business from any kind of litigation, it makes sense to have a standard contract and liability waiver that you will have customers sign before renting an eBike. Forms for this are readily available online for free.

    Researching The Market

    Starting an eBike rental business could be an incredible opportunity if your local market is underserved. Conversely, it might be a tall order to wiggle your way into an already crowded market. There are a few ways to approach this.

    The Competition

    Your first order of business is to find out how many businesses are actually offering eBike tours and rentals in the geographic area that you want to service. Luckily, that is quite easy to find out these days by doing a local search on Google or Yelp. Some key things that you want to take notice of:

    • How many businesses are offering bicycle or ebike rentals?
    • What prices are they charging? Find out what the going rate is, and what additional services they might be providing. For example, are they offering guided tours? Are they offering snacks or meals as part of longer tours? This will give you an idea of your profit potential, as well as how competitive the market may be.
    • How well is the competition presenting itself? Are their websites professional looking, or do they look very out of date and confusing? That may be an opportunity to differentiate yourself.

    Once you have taken stock of what the market looks like then you can start determining whether a real opportunity exists. Pro tip: Even in a what appears to be a crowded tour rental market, you can open a business and be very successful by having a “unique selling proposition.” Think about it - how many restaurants are in your town? How many hotels? Competition is a good thing - it’s a strong indication of market demand.

     

    Marketing Your Ebike Rental Business

    In order to get your first customers, you need to let them you know you exist! Local marketing has completely changed, largely because of the Internet. It used to make sense to take out a few ads in the Yellow pages and other local magazines, but that simply isn't the case anymore.

    If you aren't connecting with your customers online then you are missing the boat. Your first order of business will be to get your online affairs in order. Here are a few key places to get you going.

    Do You Need a Website?

    A website has turned into the modern business card. When people are searching for eBike rental businesses online, you want to make sure that you show up. More importantly, you want to make a good first impression. There is nothing worse than seeing a poorly-designed website. It gives the impression that you are not serious about your business, and it is likely that potential customers will turn to your competition who has done a better job.

    That being said, it is much easier to have a clean, fast, and professional looking website than ever. We recommend setting up your site on  Wordpress. More than 25% of websites are now powered by this publishing platform. You can also try Squarespace, but there is much less flexibility with designs and add-ons to your site. Wordpress has a thriving developer community that has endless design templates and plugins to make your site even more powerful.

    Some Wordpress themes you should take a look at are  Enfold,  Avata, and the  X Theme. There are also plenty of other options at  Theme Forest.

    Overall, you want to make sure you are putting your best foot forward with your website design. Use quality photography and make sure it is easy to navigate. Most of all, explain why customers should trust your service and make it easy to get in touch with you to schedule a booking.

    People Need to Find You Online

    What is the first thing that you do when you are looking for a local business?

    You most likely answered typing your query into Google, which is what the majority of people are doing when they research local businesses to hire. Therefore, you want to make sure that when someone types in X Ebike Rentals, you are going to show up.

    This means setting up business profiles for Google,  Yelp, and other local resources. This is a  great article from SEMrush to help you understand how you can optimize your results in search engines and other local online resources. Overall, you want to make it easy for potential customers to find your website when they are doing research for their next party.

    Local Advertising Can Be Extremely Effective

    Online advertising technology has gotten extremely advanced, and local businesses can pinpoint their potential audience with greater accuracy than ever before. When you are first starting out in your eBike rental business it will make sense to set aside a budget for advertising in the beginning. Your goal is to book new business, impress your clients, and have them spread the word online and in their local community.

    Right now the best bang for your buck will likely be Google and Facebook. They are the two most-used websites out there, and they offer the best advertising products for local businesses.

    You can read up about Google's Adwords local program  here. The key reason why Google is so effective is because you are capturing a potential customer at the moment of intent. If you are able to serve up a relevant advertisement to a family who are looking to find a local ebike rental business for their visiting family, you can make sure that you show up.

    The only downside is that pay-per-click advertising has gotten very competitive, and you could be competing against other ebike rental businesses for those spots. The best thing to do is to set aside a test budget and track very closely how much you are paying for new leads.

    Facebook offers a different local advertising product, which you can read more about  here. They allow you to target various demographics and geographic locations with impressive precision. You can offer deals, drive people to your site, and various other methods. Facebook is constantly making their technology more effective, which is why it has become a preferred choice for local marketers.

    Additionally, you could experiment with local deal sites like  Groupon in order to book your first set of clients.

    Get Involved in the Community

    Another effective tool in promoting your business is good old-fashioned networking. Get a bunch of professional-looking business cards printed from a service like  Vistaprint, and get prepared to pound the pavement!

    There are plenty of ways to get creative with this approach. One way is to make sure you are connected with local companies that are associated with your eBike rental business. For example, there could be local tour companies that don't offer eBike rentals, and you could make sure they know you are available to supply them if the need arises.

    Additionally, you could get involved with local organizations like  The Rotary Club. Anything you can do to make yourself visible to members of your community will help keep your ebike business in their minds if they eventually will need your services, or a friend of theirs asks.

    Wrapping it Up - Will You Take the Dive into starting a eBike Rental Business?

    We've covered a lot! By now you have a general overview of steps you should consider before starting your ebike business. Here is a brief recap:

    • Size up the opportunity - evaluate your competition and the going rate for eBike rentals in your area. This will determine your profit potential.
    • Get the right equipment - Commercial eBikes are a must for your venture. You can see our selection of appropriate inventory here.
    • Don't forget about miscellaneous costs - There could be a few things to consider outside of just purchasing your fleet of eBikes.
    • Have a local marketing plan - people in the local market need to know your ebike business exists so they can hire you!

    If you are planning on taking the plunge we wish you the best of luck.  Keep us in mind for your eBike rental business needs!

    As promised, we wanted to save the best for last. When you run an ebike rental company, for most of your customers this will be their first experience riding an ebike. And if you know anything about ebikes, you know that the first ride is simply awesome and amazing. More than 50% of first time ebike rental customers ask about buying an ebike. And you are the company who they have come to know, like and trust - so they will want to buy their new ebike from you.

    After their rental, you will make it incredibly easy for them to buy their new ebike online, so in 5-7 days, they will have a brand new ebike delivered to their home, and you will reap the benefits. If you’re worried about the cost and complexity of setting up a sales channel, don’t give it another thought. That’s where Really Good Ebikes comes in.

    We have spent the last 3+ years developing relationships with over 50 ebike brands, and we have an ecommerce site that’s built to sell. All you have to do it open a browser, show your customers what their options are, and close the sale. We will take care of all the fulfillment, so you can focus rentals and tours. For each bike you sell, you’ll get 50% of the profits- which is amazing, since the ebikes really sell themselves. All you have to do is open the browser, and point your customers to the BUY NOW button.


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