Start a skate shop by following these 9 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 step guide to starting your skate shop. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
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 long it will take you to break even?
- 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 skate shop?
There are a number of investments you’ll need to make before opening your doors. First, you’ll need a storefront. Location is critical to the survival of your business. Pick an area that’s easy to get to, has foot traffic, and is close to your local skate park. Depending upon size and location, rent can run anywhere from $1000/month to several thousand. When budgeting, plan on setting aside first and last month’s rent as a deposit for your space.
Once you know the size and layout of your new space, it’s time to start purchasing the necessary items to set up shop. A few items you’ll need are:
- Slat walls for displaying decks
- Tools for working on skateboards - skate tool, razor blades, Allen wrenches, screwdrivers, and sockets
- Glass display cases for accessories
- Fixtures and shelving for clothes and shoes
- Music system
- TV/DVD player for skateboard videos
- Credit card machine
- Cash register
The biggest mistake new entrepreneurs make is carrying products in only one price range. While you’ll need to carry some complete sets, the bulk of your clientele will want their own custom board, so stock your inventory with all the necessary accessories. Your inventory should include decks for all experience levels, which wholesale for $10-$25, wheels, which will put you out about $7/set, and trucks which start at $12/set. Build a relationship with a brand that manufactures products you believe in, ensuring you deliver a quality product every time.
Your inventory should also include a small selection of skater apparel and shoes. Inventory will be your biggest startup expense and can range anywhere from $50,000 to $100,000, depending upon how much merchandise you want to start out with.
What are the ongoing expenses for a skate shop?
Your biggest monthly expense will be maintaining a suitable selection of inventory. If you decide to maintain an online store, there will be fees to host and maintain your site. Hosting skate events at least twice a year will get your name out in the community. June 21st is Go Skateboarding Day, so mark your calendar and host a special event that day. The costs associated vary depending upon how large your event is and how much support you’re able to get from other businesses in the community.
Many skate shop owners also sponsor a skateboard team, showcasing the top local talent. Team participants should be supplied with team shirts and free products. Schedule them for demos whenever possible and reward them for a job well done. As the team progresses and funds become more readily available, you’ll need to consider paying them as well.
Who is the target market?
You’ll welcome the novice seeking advice and products to help get them started. The shop will also attract a customer base who, while not skaters, appreciate a specific shoe or clothing brand that you carry. Your bread and butter will be the individuals who have found a common bond with others in the community through skating. Each of these clients are critical to your business’ survival.
How does a skate shop make money?
Revenue is generated through each sale you make. Because your profits are tied directly to sales, you’ll want to maintain a full service operation, offering your customers more than just the standard skateboard. Remember, you’re supporting the culture and all that it represents.
How much can you charge customers?
Skaters recognize the value of a quality product and understand the costs associated. Beginner boards retail for approximately $50 and pro boards customized for the experienced skater retail as high as $500. Be sure to stock your shelves with a variety of options for every skill level; the novice skater will likely not be willing to shell out $150 for their first board.
How much profit can a skate shop make?
Skate shop owners report a profit ranging from $30,000 to upwards of $200,000 annually. Revenue generated is largely dependent upon the community you’re a part of, the location you decide on for your storefront, and the quality of products you maintain.
How can you make your business more profitable?
While opening a skate shop has probably been a longtime dream, it’s more than just hanging out with like-minded individuals each day. Let’s look at a few ways you can ensure your business yields the profit you desire.
- Many small skate shop owners shy away from maintaining a website, but an online store has the potential to almost double your income when managed properly.
- Make space in your store for skaters to gather and talk. This backs your claim that you support the skating community and will generate additional sales.
- Have snacks and drinks available for purchase. Why send them somewhere else to buy refreshments when they can purchase them from you?
- Adjust your hours to fit your client base. Many skate shops maintain hours that fit their client’s needs. Consider opening from 10-7 to accommodate those who work or are in school during the day. Saturdays are a must, as that’s the busiest day for skateboard shops.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your skate shop is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
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?.
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
- 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.
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
State and Local Licensing and Permits Certain state permits and licenses may be needed to operate a skate shop. 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.
Skate shops may also wish to look into applying for a resale certificate, as a resale certificate allows retailers to purchase goods intended for resale without paying sales tax.
In addition, certain local licensing or regulatory requirements may apply.
- 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.
STEP 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.
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.
How to promote & market a skate shop
Word of mouth and being active in the skate community will be your greatest advertising, but there are a few other, low-cost things you can do to get your shop’s name recognized.
First, design a logo that is unique and recognizable. Have t-shirts and stickers made. The skaters will wear your t-shirt and cover their decks with your stickers, essentially providing you with free advertising.
Be proactive within the skate community by hosting local events. This provides something fun and positive for the skaters to do, as well as generates excitement about what you’re trying to do with your shop.
Lastly, get yourself set up with social media accounts. Social media is the perfect tool for keeping your customers apprised of store specials and upcoming events. And it’s free!
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
The best way to attract and retain customers is integrating yourself within that community. Getting to know them on a more personal level offers insight into what products and services they’re looking for. It also creates a loyal customer base that will continue to grow.
STEP 9: Establish your 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.
Start A Skate Shop 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?
Successful skate shop owners are fully immersed in the skating community. They are passionate about sharing their wisdom and love of the sport, as well as offering skaters a place to interact with like-minded individuals.
What happens during a typical day at a skate shop?
As the owner of a skate shop, your daily activities will extend beyond the mundane tasks it takes to run a business.
Some of the most critical daily tasks required of a skate shop owner:
- Maintain accurate inventory of products
- Place product orders as needed
- Maintain online store (if you choose to have one) and ship orders as they come in
- Keep up-to-date on the latest trends within the skating community
What are some skills and experiences that will help you build a successful skate shop?
Experience in the sport itself is critical. Customers will come to you for advice about the specifics of a board or the feel of a shoe. When a skater moves to a new area, the first place they’ll find is the local skate shop. They’ll want to know where the best places are to skate, what type of events are in the area, and what type of support skaters receive from the community.
The second most critical skill you’ll need is the ability to listen and observe. Understand your audience and get to know their ever-changing needs. Listen when they tell you about a product or brand they desire. Offer them the support they need when a community issue arises. Skate parks and shops are often the only community support skaters receive.
There are a number of great resources for skateboard store owners to take advantage of. IASC and Board Retailers Association both offer memberships with invaluable benefits. They help build relationships between retailers and business owners and conduct research for the skateboard industry. Additionally, memberships often come with discounts on products and events happening across the nation.
What is the growth potential for a skate shop?
Most skate enthusiasts make a conscious choice to support the small, local skate shop over the big chains or online stores. With that in mind, you will likely want to keep your skate business small and personal. Your success will come from the types of products you sell and the access your customers have to other skate products in your immediate area.
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.
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.
How and when to build a team
Many skate shop owners hold off on hiring employees for the first couple years. When you’re ready to take on employees, you’ll likely have a number of customers who’ve inquired about a job with your store. Build a solid team by choosing applicants who show a genuine interest in building up the skating culture and are knowledgeable in the profusion of product options.