Start a scooter rental business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your scooter rental business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a scooter rental business?
Since there is a necessity for scooters and a brick and mortar location, preferably within a tourist hub, there can be a substantial amount of investment capital needed. A typical used scooter, in good running condition, can cost between $300 and $800. If you average $500 each, a starter fleet of ten becomes a $5000 investment. Include store rental and insurance for the business and customer rentals and you could be looking at an initial investment upwards of $10,000-$12,000. Of course, this is dependent on your location and which insurance companies will supply you coverage. Tourist-heavy real estate and insurance for numerous low experience riders are both going to require a substantial fee. You will also need to factor in regular maintenance and repair costs as well as marketing and advertising costs, although the latter can be mitigated through usage of social media and store location.
What are the ongoing expenses for a scooter rental business?
Maintenance and service of the scooter and motorbike fleet will probably be your biggest ongoing expense. Insurance for the shop and coverage for riders will also be a regularly expected expense. Finally, rental of your brick and mortar location should be factored into regular cost analysis.
Who is the target market?
The target market is tourists and those on vacation, even if they live in the town they’re “vacationing” to. Specifically, younger riders, who want to explore your area or experienced riders who are away on vacation, yet still want to feel the wind in their hair, will be your demographic.
How does a scooter rental business make money?
The majority of the revenue will be generated from the customer rentals of the scooters. Some additional sales may be generated from impulse or customer loyalty buys. It is always advisable to have impulse items or novelty buys near your counter, as you will most likely encounter a tourist-oriented customer base for your rental company.
How much can you charge customers?
Scooter rentals are usually priced by the hour, a half or whole day, and weekly rates. Hourly rentals start around $25, with whole days closer to $65-$75 and weekly rates around the $200 range. These prices may fluctuate, depending on the location and clientele.
How much profit can a scooter rental business make?
Scooter rentals can be profitable, although often seasonal, depending on your location. Therefore it’s critical to save for the off season and invest when possible for the upcoming seasons. On average, a scooter rental business can see annual revenue in the $50,000-120,000 range.
How can you make your business more profitable?
Offer customers additional impulse buys and merchandise, related to your business and the tourist destination in which you operate. Most vacationers have budgeted for the trip and want to have a tangible item or two to take home for the memories. You can also offer rider extras, such as gloves, jackets, and even helmets and helmet add-ons. Some renters ride in their normal lives and will see your offers as an extension of their normal buying habits.
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 Scooter Rental Business Name Generator
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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your scooter rental business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment 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.
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 scooter rental 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, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A scooter rental business is generally run out of a storefront. 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 scooter rental 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 scooter rental business will be in compliance and able to obtain a CO.
To avoid liability and potential lawsuits, scooter rental businesses should have their clients sign waivers.
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.
Learn more about General Liability Insurance.
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.
STEP 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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a scooter rental business
Since much of your business will revolve around impulse or spur of the moment decisions, much of your advertising will need to occur in and around your business. Bright, eye-catching signage and flyers or stickers can be great for directing out of town customers your way. Social media advertising can also prove beneficial, especially if you are able to link with other businesses in your area, as you will all work as a financial ecosystem for the tourist dollars.
How to keep customers coming back
Safe, reliable, courteous, and personable are all important hallmarks for a successful scooter rental business. You may not see as many return customers if you are operating in a tourist-heavy location, so your connection with customers is vital. Word of mouth becomes your greatest customer asset. And, as mentioned above, being able to co-op your business with other retailers and rental companies in the area will be critical for directing customers to your front door.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Scooter Rental Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
If you have experience in retail sales or product rentals, knowledge of small engines, a strong work ethic, and a business mind, a scooter rental business could be your ticket to financial independence. Especially if you have a background in scooters and motorcycles, either as a rider or enthusiast, or from working in a motorbike retail business, your expertise could set you apart from the competition.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a scooter rental business?
A typical day in a scooter rental business focuses on customer rentals and maintaining your fleet of scooters and motorbikes. Greeting potential customers and conveying safety information and insurance practices has to be a regular aspect of your business in order to build a good public reputation. Ensuring your bikes and scooters are in good running order and are properly equipped for safety is also critical for success and goes hand in hand with your customer rentals. You will also find yourself working on:
- Advertising and marketing for the rental company.
- Re-stocking your retail items, such as company logo t-shirts, hats, and other pieces of apparel, and tourist-based supplies.
- Creating service tickets for all repairs not handled in-house.
- Buying or updating safety equipment, such as helmets and gloves and purchasing more scooters and motorbikes.
- Researching industry trends and new products.
What are some skills and experiences that will help you build a successful scooter rental business?
Being able to talk to customers is one of the greatest assets for this type of business. For the most part, customers are picking the company which seems professional, safe, and clean. You have to reassure them that their decision to employ your business was the correct one, and that you will provide safe, affordable fun.
You should also be able to:
- Have some knowledge of small-engine repair and minor maintenance practices.
- Understand how to create business model and the day to day operations of a rental and/or retail business.
- Portray enthusiasm and an upbeat personality.
- See and understand consumer trends and how to incorporate these factors into your flexible business model.
What is the growth potential for a scooter rental business?
Rental companies, especially ones located in tourist-based economies, have seen an increase in their business more recently. If you find yourself in a tourist destination that is growing in popularity, there’s a good possibility you will see your business grow, as well. Historically, tourist rentals do well, as the customers have budgeted for entertainment before going on vacation or for having some fun during time off.
TRUiC's YouTube Channel
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Take the Next Step
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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a scooter rental business?
Make sure you research the success of competitors and similar businesses in the area. Is there room and customer demand for more business? Is your area growing in population for tourism and are scooters a safe and viable method of transportation in your area? You would be wise to understand which way public and political opinion sways for tourism and added vehicles on the streets. Additionally, make sure you have scooters which will be reliable and safe and aren’t too outdated. Customers will be insured for each rental, but accidents happen, so make sure you keep enough revenue put aside to cover surprise costs. Remember, if you don’t have a fleet of bikes to offer, your business will suffer and may never reach its potential.
Although starting your own independent business gives you all of the freedom and control, there is also an amount of risk involved. Therefore, it may be advisable to start out as a franchised rental business. This gives you the financial backing to get your feet wet and really find out the climate for such a business.
How and when to build a team
Starting out, much of the business can be run with a few individuals. Handling rentals, customer service issues, and maintaining the business aspects of the company are the main jobs to cover. As the business grows, a business manager can help to alleviate additional pressure in bookkeeping, allowing you to be the face of the company and grow your word of mouth reputation. As the business really takes off, you will want additional employees handling the rentals and customer service more and more. Developing a trusted staff is quite important for keeping the business on track, so choose wisely.