How to Start a Bike Repair Business

Start a bike repair business by following these 10 steps:

1. Plan your Bike Repair Business
2. Form your Bike Repair Business into a Legal Entity
3. Register your Bike Repair Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Bike Repair Business
6. Get the Necessary Permits & Licenses for your Bike Repair Business
7. Get Bike Repair Business Insurance
8. Define your Bike Repair Business Brand
9. Create your Bike Repair Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your bike repair business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Bike Repair Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a bike repair business?

Startup expenses associated with opening a bicycle repair business are fairly minimal, although you’ll probably need these essential items:

• Basic tools (open wrenches, hex keys, screwdrivers, a ratchet set, wire cutters, adjustable pliers)
• Specialized tools (tire spoons, a chain breaker, a tire pump and pressure gauge, a spoke wrench, a crank arm pulley)
• Work stand
• Truing stand (for wheels)

Business owners who don’t already have these tools should expect to spend a few hundred dollars on them.

Repairing bikes also requires a workspace and replacement parts, but both of these potential costs can be kept to almost nothing. Many bike repair business owners have begun by fixing bikes in their garage or basement so that they didn’t have to worry about lease payments until their business was established. The cost of replacement parts is normally built into the invoices customer pay, and customers who need expensive parts can be asked to provide a deposit upfront. Such a deposit can be used to cover the cost of the needed parts.

What are the ongoing expenses for a bike repair business?

The ongoing expenses for a bike repair business are fairly low. They include:

• Employee salaries
• Workspace or storefront lease
• Utility costs

Who is the target market?

A bike repair business’ ideal customer is an avid cycler who doesn’t know how, or doesn’t want to take the time and effort, to repair their own bike. Such a customer will likely need repairs and maintenance fairly often, since they use their bike a lot, and they’ll be willing to pay for the work their bike requires.

How does a bike repair business make money?

A bike repair business makes money not only by fixing bicycles, but also selling used them at a discounted rate. Many shops choose to offer tune-ups for a flat fee, and charge more for additional repairs.

How much can you charge customers?

Many bike repair businesses offer basic tune-ups for a set fee, and perform more advanced repairs at an adjustable rate. For example, Wheels in Motion offers three levels of tune-ups that range in price from $79.99 to $214.99. Repairs that go beyond what’s included in a tune-up are usually priced based on the parts and labor they require.

How much profit can a bike repair business make?

Some bike repair business owners earn up to $35 per hour or more, not including any profit they earn on parts sales. Business owners who grow their business into full-time businesses may earn $1,600 per week or more.

How can you make your business more profitable?

Bike repair business owners can add new revenue sources and increase their profits, by offering workshops on fixing bikes and repairing old bicycles. Some cycling enthusiasts will pay for a class that shows them how to care for and repair their own bikes. Refurbishing old bikes can also net a nice profit, as they can be sold once they’re repaired and working properly.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your bike repair business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a bike repair shop business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Certificate of Occupancy

A bike repair shop is generally run out of a small store. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.

• If you plan to lease a storefront:
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a bike repair business.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.

• If you plan to purchase or build a new location:
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your bike repair shop will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Anyone mechanically inclined who is passionate about cycling may enjoy running a bike repair business. Enjoying the sport will help a business owner connect with their customers, and making repairs requires basic mechanical skills.

What happens during a typical day at a bike repair business?

Bike repair business owners spend a lot of time working on bicycles. This work includes:

• Testing bikes to diagnose issues
• Stripping bikes down
• Checking and cleaning components
• Repairing or replacing broken pieces
• Rebuilding bikes

When not working on a bike, business owners spend time ordering parts, conversing with customers, and marketing their businesses.

What are some skills and experiences that will help you build a successful bike repair business?

Successfully running a bike repair business requires an in-depth knowledge of bikes, how they’re put together and how they work. Business owners must be able to take apart any bike they work on, identify any issues, address those issues and put the bike back together.

Many regions have community programs and trade schools where business owners can learn these skills. Entrepreneurs who don’t have a program or school nearby may gain the necessary skills by working at an established bike repair shop for a season. The National Bicycle Dealers Association hosts seminars and educational programs for professionals in the bike industry, and may be another useful resource.

After completing any training, business owners should keep a couple of bike repair manuals readily available for consulting. A few widely available repair books are:

• Zinn & The Art of Road Bike Maintenance
• Zinn & The Art of Mountain Bike Maintenance
• The Bicycling Guide to Complete Bicycle Maintenance and Repair

At HowToFixBikes.ca, Gerry (a professional in the industry) recommends that aspiring business owners prove their skills by working on their own bikes. Stripping a bike down to just its frame, lubricating all bearings and fully rebuilding the bike will help a business owner feel confident they’re ready to repair other people's bikes.

What is the growth potential for a bike repair business?

Many bike repair businesses are individual locations that serve the local cycling community, and a number are run by just one or two people. Some, however, grow beyond a local area, eventually becoming regional or national businesses. Bike Doctor in Maryland is an example of a regional bike repair chain, and Velofix is a national one.