Business Overview

Do you love exploring your home town or popular tourist destinations on your bike? Does it really make your day when you bring a friend along to see the sights? Operating a bike tour company may be right up your alley. Whether you are simply renting bicycles and maps for patrons to use on their own or providing week long personalized guided tours that include meals and lodging, this can be a rewarding business.

Who is this business right for?

If you are going to run a one-man show, you will need to be physically fit, have fantastic people skills, and enjoy managing the many facets of your business. If you are operating a large tourist attraction, the right owner will have a good background in business management with a focus on the service industry.

What happens during a typical day at a bike tour company?

From the time the sun rises, your bike tour company may:

  • Take reservations for future tours
  • Explore the nearby area to determine safe and accessible bike routes for your patrons
  • Maintain your fleet of bicycles
  • Size your guests for proper safety equipment such as helmets, knee, and elbow pads
  • Network with local restaurants, campgrounds, and B&B's who can accommodate and serve your customers who wish to do multi-day tours
  • Provide roadside assistance for self-guided tourists who encounter mechanical problems with their bicycles
  • Research the history of destinations to provide an insightful narrative during the tour
  • Standard business practices such as taking payments, balancing the books, processing payroll, etc.

What is the target market?

You will have two major age demographics to target. Young millenials and empty-nesters are free to explore the world at their own pace. If you are located on the seashore, you will be targeting families looking for a value bike rental for a couple hours. The millenials and baby-boomers have extra cash to spend and would like to invest in a complete experience that features a tour guide, picnics, and an insightful discussion of locations. They may be interested in overnight expeditions or more physically challenging tours.

How does a bike tour company make money?

Your services are for rent, even if you are simply renting a bicycle for a day-tourist to use on their own. They may pay you by the hour, day, or for a specified guided tour package that includes meals and lodging. You need to generate enough rentals to make a profit on the cost of the bicycles, their maintenance, and your payroll costs.

What is the growth potential for a bike tour company?

Most bike tour companies rely on the local sights and attractions to generate business, making expansion a more difficult endeavor unless you find a second market that needs your bike tours. Urban based companies are able to offer "party-bikes" which offer alcoholic beverages as the 10 to 15 people on board pedal their way through local streets. If you create a unique entertainment experience through use of comedy or music, it is possible to duplicate the business in more locations.

Getting Started

What are some skills and experiences that will help you build a successful bike tour company?

Your personal experience will be your most valuable asset when establishing a bike tour business in a popular tourist area, such as national parks, natural wonders, or scenic paths. Your knowledge of unique look-outs, the best place to grab lunch, or the most remote camping spot can build a loyal following of fellow bike enthusiasts and help promote your business. It will also be a huge boost to have a tour guide with an naturally outgoing personality who loves to talk to people as much as explore their world on a bike. On the marketing side, you will need to target your market through shrewd placement of ads on travel sites and by attending travel conventions.

What are the costs involved in opening a bike tour company?

You will need a storefront/bike shop where your bikes will be stored and maintained--rent or mortgage will cost about $30,000/yr. This may not be where your tours begin, so you should have transportation able to carry enough bikes for a group tour--anticipate investing $20,000 for a van. You will need to invest in sturdy bicycles that will stand up to constant use--expect to spend around $1,000 each. There is also the usual costs of business equipment like computers, cell phones, and reliable navigation services. Setting aside $100,000 to cover your first year's operational expenses should get you up and running. If you are opening a party-bike tour, you should be able to cut your investment in half.

What are the steps to start a bike tour company?

Once you're ready to start your bike tour company, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:

  1. Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
  2. Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your bike tour company is sued.
  3. Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
  4. Open a business bank account. A dedicated checking account for your bike tour company keeps your finances organized and makes your business appear more professional to your customers.
  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.
  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.
  7. Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
  8. Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
  9. Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Select your state below for an in-depth guide on completing each of these steps in your home state.

Where can I find a business mentor?

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Recommended: offers video courses and a supportive online community of like-minded entrepreneurs. Try one month membership for for free.

What are some insider tips for jump starting a bike tour company?

Know your location. If there is no constant inflow of tourists, it will be harder to sustain the business. Network through the travel industry reaching out to local B&B's, hotels, and visitor's centers to spread the word about your business. Don't forget to optimize your social media presence, as well.

Growing Your Business

How to promote & market a bike tour company

Conventions are a rapidly growing opportunity for service oriented businesses, like yours. Set up a table at travel seminars, hand out brochures as an option for honeymooners and take out print advertisements on websites and catalogues of outdoor equipment retailers. Encourage advanced registration to improve follow through of the customer's intention.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

Your customers will choose your bike tour over a bus when they get to experience parts of the destination commonly skipped by big box tours. You will need to focus on every facet that will be different on the bike path compared to just another tourist destination, raising its perceived value. Your customers will return when they have a fun and uplifting experience due to your exceptional customer service, unique knowledge, and enthusiasm for sharing their vacation. Don't forget to switch up your bike paths to give returning customers a different tour.

How and when to build a team

Planning your tours is as important as reaching out to new customers. You may wish to have a partner where one of you will be the tour guide expert and the other handles the marketing aspects of the business. Bring them on board at the beginning.

Legal Considerations

State & Local Business Licensing Requirements

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

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, check out our informative guide, Sales Tax for Small Businesses.

For information about local licenses and permits:

Certificate of Occupancy

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 location:
    • 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 tour 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 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 tour business will be in compliance and able to obtain a CO.

Liability Waivers

To avoid liability and potential lawsuits, bike tour businesses should have their clients sign waivers.

Reduce Personal Liability

Structuring your business as a limited liability company (LLC) ensures your personal assets are protected in the event your business is sued.

What is an LLC?

Form an LLC in 5 easy steps

Earning Potential

How much can you charge customers?

Simple bike rentals without a tour run around $10/hr. Guided tours in groups of 15-20 might charge $40-$60 per person for an afternoon adventure. Guided overnight expeditions that include hotel and meals run around $300-$500 per person per day. Camping experiences will charge $100-$200 less per day.

What are the ongoing expenses for a bike tour company?

You might think you will be living outside and won't accumulate much in the way of operational expenses. This is not true. You will need to maintain and replace your fleet bicycles, have an office support team, and keep your van operational.

How much profit can a bike tour company make?

Your profit lies in charging an hourly rate for your tour guide's abilities above and beyond the costs of the bike, food, and lodging. Your successful bike tour company should be able to generate up to $200,000 per year in net profit when your reservation calendar is full.

How can you make your business more profitable?

The biggest profits will come by bundling activities for your customers and including all of the costs in a single, attractive package. An all-inclusive adventure is appealing to professionals seeking a temporary escape, and they are willing to pay a premium for the experience.

Next Steps

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