Have you been considering opening a ski and bike shop? The outdoor recreation economy is big business, bringing in more than $646 billion each year. According to the Outdoor Industry Association, more than 140 million Americans make outdoor recreation a priority in their daily lives. So if you’ve been dreaming of opening a shop of your own, the outdoor industry has plenty of opportunities for would-be entrepreneurs.
So You Want to Open a Ski and Bike Shop...
If you’re not sure where to start, here are 15 questions to ask yourself if you want to be a shop owner in the outdoor industry.
1. Why am I starting a ski & bike shop?
Are you an avid cyclists or lifelong skier, or are you inspired by the opportunities that an outdoor retailer has to offer? Maybe you live in a location where outdoor sports and tourism makes up a large portion of the economy. Whether it’s a passion-project or a decision backed by strong facts and figure, be sure you can answer the “why.”
2. Who is my ideal customer?
Do you want to service the locals in your mountain town, or are you hoping to target tourists? Is your ideal customer someone who skis all winter long and then hops on a mountain bike during warmer weather? Have this person in mind, because your ideal customer will influence your marketing decisions and much more.
3. What products or services will my shop provide?
Think outside of the box. If you want to open a ski and bike shop, you know what kind of products you will offer. But what about services? Repairs, rentals, and lessons are a great way to bring in more income outside of retail sales.
4. Am I prepared to spend the time and money needed to get my shop started?
Starting a business can be more than a full-time job, particularly if you’re doing it all yourself in the beginning. Do you have the time and resources to commit to your dream?
5. What differentiates my shop’s products or services from others in the market?
If you’re going to be the second, third, or even seventh ski and bike shop to open in your town, what will set you apart from the rest? Consider what kind of added value you can provide or other ways to stand apart from the competition.
6. Where will my shop be located?
Location really is everything, and can make-or-break your business. If you want to open a shop in a highly desirable, high-traffic area, the rent on a retail space may be considerably higher than an off-the-beaten-path location. Will the increase in foot traffic be worth the higher priced location?
7. How many employees will I need?
Employees bring many considerations to your business plan. You will need to know what the laws are pertaining to your employees, what wage to pay, and how much insurance you need to cover them. If you offer repairs in your ski and bike shop, will you hire an employee to handle them, or will you sub the work out to an independent contractor?
8. Which suppliers do I want to work with?
This is an important question for your specific industry. Most bike manufacturers won’t sign a deal with you if they are already supplying another shop within a certain geographic location. Make a list of your preferred manufacturers, then do some research to see if you can get them in your desired location.
9. How much money do I need to get started?
Taking the time to focus on the financial reality of starting a business is crucial. Not only do you want to calculate your start-up costs, but you should also consider the monthly fixed costs of operating your ski and bike shop. How much will you need to get up and rolling, bring customers into your store (advertising and marketing costs), keep the lights on, and employees paid?
10. How long do I have until I start making a profit?
A break-even analysis can help you determine how many units you need to sell (of bikes, or repairs, or even lessons) in order to cover all of your costs. Once you know what your break-even point is, you can then calculate how many units you need to sell in order to start profiting in your ski and bike shop.
11. Who is my competition?
If you’re going to differentiate yourself from the competition, you’ll need a clear picture of who is vying for your customer’s dollars. What other bike and ski shops are nearby, what manufacturers do they carry, and what sorts of services do they offer? Most importantly, what can you offer to your customers that your competition doesn’t?
12. How will I set up the legal structure of my ski & bike shop?
The structure of your business, be it a partnership, LLC, or sole proprietorship, will impact your taxes, liability, and assets. For example, if you are the sole proprietor of your shop, your personal assets can be at risk for your business liabilities. And if your business is a partnership between you and a co-owner, the business itself may be liable for both of your personal actions and debts. Carefully consider the tax, insurance, and financial aspects of your business structure.
13. What taxes do I need to pay?
Business taxes can be more complicated than personal taxes. You’ll want to know when to estimate and make quarterly tax payments, and what federal, state, city and county taxes your business will be responsible for. In many states, retail sales are subject to sales taxes. This is one area where you don’t want to be unclear about what you’re required to pay -- or when you’re required to pay it.
14. What kind of insurance do I need?
Operating a business in the outdoor industry means you face different risks than the coffee shop located next door. While every business needs insurance, not every business insurance policy is the same. Adventure Sports Insurance from Aegis Insurance Markets is specially designed to protect your ski and bike shop from the specific risks and unique challenges you’ll face in the outdoor industry. Talk to one of our experienced agents to find out how much insurance you’ll need for your shop.
15. How will I advertise my shop?
From local directories to Facebook ads, advertising your business is key to bringing in new business. What is your marketing strategy? Be sure to include digital marketing costs into your business planning, such as your website, paid ads, and SEO.
Opening a ski and bike shop can turn your passion for the outdoor industry into a profitable business. If you’ve been able to carefully consider (as well as research and calculate) the answers to all of these questions, you’re well on your way to becoming an outdoor sports entrepreneur.