Do you want to open a cycle store? If YES, go through this article and learn the steps to start a bicycle shop with cost and profit margin on selling bicycles.
Cycling has witnessed a resurgence in popularity in recent years, fueled by a growing awareness of environmental sustainability, health benefits, and a desire for eco-friendly transportation options. If you’re passionate about cycling and looking to turn your passion into a profitable venture, starting a cycle store business in India can be a rewarding endeavour.
Table of Contents
What is a Cycle Store Business?
A Cycle Store Business, also known as a bicycle shop or bike store, is a retail establishment that specializes in selling bicycles, cycling accessories, and related products and services. These businesses cater to cycling enthusiasts of all ages and skill levels, providing a wide range of bicycles, including mountain bikes, road bikes, hybrid bikes, electric bikes, and children’s bikes, along with accessories such as helmets, locks, lights, apparel, and maintenance tools.
Cycle stores typically offer a diverse selection of bicycles and accessories from various brands and manufacturers to meet the diverse needs and preferences of customers. They may also provide additional services such as bike fitting, repairs, maintenance, and customization to enhance the overall cycling experience for customers.
If you want to start a retail business that needs a small capital investment, then opening a bicycle store is a great option for you. Also, it needs minimum licensing and permissions.
Is Cycle Store Business Profitable?
In the current situation, people are avoiding public transport consciously. And desperately searching for a low-cost alternative. As the fuel (petrol and diesel) price is getting high, the demand for bicycles is increasing very fast.
As per this report, the revenue in the bicycle market is projected to reach US$3.18bn in 2024. Also, revenue is expected to show an annual growth rate (CAGR 2024-2028) of 5.30%, resulting in a projected market volume of US$3.91bn by 2028.
The profitability of a cycle store business can vary based on several factors. Some of them are listed below:
- Target Market
- Product Range and Pricing
- Customer Service
- Operational Efficiency
- Seasonal Trends
- Marketing and Promotion
10 Steps to Start a Cycle Store Business
1. Market Research and Planning
Conduct thorough market research to understand the demand for bicycles in your target location. Identify your target audience, competitors, and popular cycling trends. Based on your research, create a detailed business plan outlining your store’s concept, target market, product offerings, pricing strategy, marketing plan, and financial projections.
2. Select the Right Business Model
In opening a cycle store successfully, the most important thing is the business model. You must select the product range carefully. And also, you must have a clear idea of whom you are going to sell those products to.
As far as the product is concerned you have two options. These are multi-brand stores and single-brand stores. A multi-brand store can generate more unit sales than a single-brand store. However, opening a cycle shop as an authorized sales agent of a reputed brand is also a great idea.
3. Choose a Strategic Location
Selecting the right location is crucial for the success of your cycle store. Look for a high-traffic area with easy accessibility, preferably near residential areas, parks, cycling trails, or educational institutions. Ensure adequate space for displaying a variety of bicycles and accessories.
4. Obtain Necessary Licenses and Permits
Register your cycle store as a legal entity, such as a sole proprietorship, partnership, or private limited company, depending on your preference and business scale. Obtain the necessary licenses and permits required to operate a retail business in India. Here are some of the licenses and permits required:
⇒ Business Registration
Register your cycle shop as a legal entity with the appropriate government authorities. This can be done as a sole proprietorship, partnership, limited liability partnership (LLP), or private limited company.
⇒ Trade License
Obtain a trade license from the local municipal corporation or panchayat where your cycle shop is located. This license authorizes your business to operate within a specific jurisdiction and ensures compliance with local regulations.
⇒ Shop and Establishment License
Register your cycle shop under the Shop and Establishment Act with the respective state government or local authorities. This license regulates the working conditions, employment rights, and operational hours of your business.
⇒ GST Registration
If your cycle shop’s annual turnover exceeds the threshold limit specified by the Goods and Services Tax (GST) Act, you must register for GST with the GST Network (GSTN) and obtain a GSTIN (GST Identification Number).
⇒ Fire Safety Certificate
Ensure that your cycle shop premises comply with fire safety regulations and obtain a fire safety certificate from the local fire department or municipal authorities.
⇒ Signboard License
If you plan to display a signboard or outdoor advertising for your cycle shop, obtain a signboard license from the local municipal corporation or town planning department.
⇒ Other Permits and Certificates
Depending on your specific location and business activities, you may require additional permits such as an NOC (No Objection Certificate) from the landlord, permission for outdoor seating (if applicable), and any other relevant licenses mandated by local regulations.
5. Source Inventory
Establish partnerships with reputable bicycle manufacturers, distributors, and suppliers to source a diverse range of bicycles, including mountain bikes, road bikes, hybrid bikes, and electric bikes, along with accessories such as helmets, locks, lights, and apparel. Ensure that your inventory caters to different age groups and cycling preferences.
There is a wide range of cycles available in the Indian market. According to features, they come in different price ranges also. Additionally, people with different age groups have different preferences for bicycles. So, product selection is the make-or-break aspect of this business.
Some of the most popular types of cycle models are perambulators, tri-cycles, regular bicycles, bicycles with gear, ladies’ cycles, fitness bicycles, BMX bicycles, etc. Each type of cycle comes with different features hence different purposes.
Some of the popular cycles are listed below:
- Normal Bicycles
- Travel bikes
- Fitness bicycles
- Adventure bikes
- Mountain bicycles
6. Set Up Your Store
Design an attractive and functional retail space that showcases your bicycles and accessories effectively. Invest in quality shelving, racks, and displays to organize and showcase your inventory. Create a welcoming atmosphere with proper lighting, signage, and branding elements that reflect your store’s identity.
7. Hire Employees
Hire trained and professional employees who have previous experience. Talking to a customer at a shop and describing the features according to his or her needs is the most important aspect of this business. So, you need experienced employees here. Employee training is a must in any retail business. Employees must have clear knowledge about your company, the brands you sell, and product features.
8. Marketing and Promotion
Develop a comprehensive marketing strategy to promote your cycle store and attract customers. Utilize a mix of online and offline marketing channels, including social media platforms, websites, local advertising, and community engagement initiatives. Offer promotions, discounts, and special events to drive foot traffic and generate buzz.
9. Provide Excellent Customer Service
You must focus on delivering exceptional customer service to build customer trust and loyalty. Train your staff to be knowledgeable about different bicycle types, features, and maintenance tips. Offer personalized assistance, expert advice, and after-sales support to enhance the overall customer experience.
10. Build Community Engagement
Try to foster a cycling community around your store by organizing group rides, workshops, educational events, and other activities that cater to cyclists of all skill levels. Partner with local cycling clubs, advocacy groups, and event organizers to amplify your store’s presence and establish yourself as a hub for cycling enthusiasts.
Frequently Asked Questions
What is the cost of starting a cycle store business?
The investment required to start a cycle store business can vary based on factors such as the store’s size, location, inventory, and operational expenses. Typically, you may need to budget for expenses such as store rent, interior setup, inventory purchase, marketing, and working capital.
You will need a minimum area of 1000 sq. ft space to open a cycle shop. The investment will depend on the size and the number of bicycles you are planning to stock as inventory. The cost of starting a small-scale cycle store will be around Rs. 10 lacs to Rs 20 lacs.
What are the legal requirements to start a cycle store business in India?
To start a cycle store business in India, you typically need to register your business entity, obtain necessary licenses and permits from local authorities, and comply with taxation and regulatory requirements. It’s advisable to consult with legal experts or business advisors to understand the specific legal obligations based on your location and business structure.
What factors should I consider when choosing a location for my cycle store?
When selecting a location for your cycle store, consider factors such as foot traffic, proximity to residential areas or cycling trails, accessibility, parking facilities, visibility, and competition. Choosing a location with high visibility and easy accessibility to your target market can help attract more customers and drive sales.
How do I select the right mix of products for my cycle store?
To determine the product mix for your cycle store, research the preferences and needs of your target customers, analyze market trends, and assess the demand for various types of bicycles, accessories, and related services. Consider offering a diverse range of products catering to different customer segments, including recreational cyclists, commuters, enthusiasts, and children.
How can I differentiate my cycle store from competitors?
Differentiating your cycle store involves offering unique products, exceptional customer service, and value-added services that set you apart from competitors. Consider providing personalized recommendations, expert advice, bike fitting services, maintenance workshops, and after-sales support to enhance the overall customer experience and build customer loyalty.
What are some potential challenges I may face when starting a cycle store business?
Some potential challenges you may encounter when starting a cycle store business include intense competition from existing retailers, fluctuations in consumer demand, seasonality factors, inventory management issues, regulatory compliance requirements, and evolving market trends. Conducting thorough market research, developing a robust business plan, and staying agile in response to market dynamics can help mitigate these challenges.