A bike-share company as the name implies is a company that makes bicycles available for shared use to individuals on a short-term basis for a price or free. Many bike share systems allow people to borrow a bike from a “dock” and return it to another dock belonging to the same system.
Docks are special bike racks that lock the bike, and only release it by computer control. The user enters payment information, and the computer unlocks a bike. The user returns the bike by placing it in the dock, which locks it in place. Other systems are dock-less.
For many systems, smartphone mapping apps show nearby available bikes and open docks. Statistics have it that the bike-sharing market was valued at USD 3 billion in 2020, and it is anticipated to reach USD 4 billion by 2026, registering a CAGR of about 6% during the forecast period (2022 – 2026).
Steps on How to Write a Bike Share Business Plan
Chris Cross® Bike Share Company, Inc. is a standard and registered bike-share company that will be located in Santa Monica, California. We are located amid a city that attracts thousands of tourists and visitors, with the possible goal of creating a statewide membership system for weekend travelers.
Chris Cross® Bike Share Company, Inc. will ensure that all our bikes meet international standards and we are located near Metro stations and major bus stops, making it easier for commuters to bike from residential neighborhoods to a transit line, where they can drop the bike and continue on their way. Chris Maxwell is the founder and CEO of Chris Cross® Bike Share Company, Inc.
a. Our Products and Services
Chris Cross® Bike Share Company, Inc. will provide different sizes and brands of bikes for share and we have put in place a competent team that will ensure that all our bikes, docking, and payment systems meet and even surpass our customers’ expectations.
b. Nature of the Business
Our bike-share company will operate essentially as a club where patrons can pick up a membership and pay their subscription monthly, quarterly, or annually.
c. The Industry
Chris Cross® Bike Share Company, Inc. will operate in the bike-sharing industry.
d. Mission Statement
Our mission is to establish a world-class bike-share company that will make available all kinds of bikes (electric bikes inclusive) that will serve people with disabilities, older adults, and riders who can’t use a standard two-wheeled bike. We will also feature recumbent bikes, hand tricycles, tandems, and cargo bikes, making our bike share inclusive.
e. Vision Statement
Our vision is to be among the top 3 bike-share services in the United States of America.
f. Our Tagline (Slogan)
Chris Cross® Bike Share Company, Inc. – Reliable Bikes Everywhere You Go!
g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)
Chris Cross® Bike Share Company, Inc. will be formed as a Limited Liability Company (LLC). The reason why we are forming an LLC is to protect our assets by limiting the liability to the resources of the business itself. The LLC will protect our Ceo’s assets from claims against the business, including lawsuits.
h. Our Organizational Structure
- Chief Executive Officer (Owner)
- IT Manager
- Security Officers
i. Ownership/Shareholder Structure and Board Members
- Chris Maxwell (Owner and Chairman/Chief Executive Officer) 56 Percent Shares
- Dustin Emmanuel (Board Member) 14 Percent Shares
- Shannel Brown (Board Member) 10 Percent Shares
- Jamel Falcao (Board Member) 10 Percent Shares
- Becky Furlong (Board Member and Sectary) 10 Percent Shares.
- Ideal location (excellent road network) for bike-share services
- Highly Experienced and Qualified Employees and Management
- Availability of all kinds of bikes
- Excellent membership package
- Budget limitations
- Inability to properly manage off-peak seasons such as bad winter
- The new business that will be competing with well-established bike-share services
- Inability to retain our highly experienced and qualified employees longer than we want
- Excellent location – Santa Monica, California is a thriving market for bike-share services.
- Wide acceptance of our services due to the benefits of bike-sharing schemes such as transport flexibility, reductions in vehicle emissions, health benefits, reduced congestion, fuel consumption, and financial savings for individuals.
i. How Big is the Industry?
The bike-sharing services industry is big in the United States and this can be supported by the fact that as of August 2022, there are nearly 10 million shared bikes and 3,000 bike-sharing systems across the world.
ii. Is the Industry Growing or Declining?
Yes, the bike-sharing services industry is growing. A recent report published shows that over the years, bike-sharing has experienced moderate growth. Industry revenue has increased at an annualized rate of 2.9 percent to reach $371.1 million, including an anticipated 2.4 percent.
iii. What are the Future Trends in the Industry
The bike-share services industry is changing, and players in the industry are improvising on how to serve people with disabilities, older adults, and riders who can’t use a standard two-wheeled bike. So also, the possibility of bike-sharing for kids will emerge. Over and above, technology, the introduction of electric bikes, and social media will change the landscape of the bike share services industry going forward.
iv. Are There Existing Niches in the Industry?
Yes, there are niche ideas in the bike share service line of business. Some of them are;
- For-profit bike-share services
- Not-for-profit bike-share services.
v. Can You Sell a Franchise of your Business in the Future?
Chris Cross® Bike Share Company, Inc. has plans to sell franchises in the nearest future and we will target the United Kingdom, Canada, and Australia.
- High maintenance cost and theft
- Government regulations
- Liability problems
- Continuously changing consumer demands
i. Who are the Major Competitors?
- Capital Bikeshare
- Citi Bike
- Nice Ride
- Hawaii B-cycle
- Capital Community Bikeshare
- Metro Bike Share
- Madison B-Cycle
- Bublr Bikes
- Omaha B-Cycle
- Grid Bike Share
- Healthy Ride PGH
- Yellow Bike Project
- SLC Bike Share
- San Antonio B-Cycle
- Breeze Bike Share
- Pronto Cycle Share
- Coast Bike Share
ii. Is There a Franchise for a Bike Share Services Business?
- Riders Share
iii. Are There Policies, Regulations, or Zoning Laws Affecting Bike Share Services Business?
Yes, and zoning laws require bike-share operators to follow specific rules and regulations, including some that apply only to players in the bike share industry. Please note that in many communities, zoning laws require bike-share companies to apply for a permit from the city.
This application process allows the city’s zoning department to determine whether the bike share service meets the zoning rules for the community. Permits also ensure that all bike-share companies are properly licensed by county or state agencies.
a. Who Is Your Target Audience?
i. Age Range
Our target market age range covers people that are 14 years and above.
ii. Level of Educational
We don’t have basic educational qualifications for those we are targeting; everyone is welcome to rent or share our bikes.
iii. Income Level
Anyone who can afford our rental fee or membership fee will be welcome to make use of our bike-share service.
There is no restriction when it comes to the ethnicity of the people that will patronize our bike-share company.
There is no restriction when it comes to the language spoken by the people that will patronize our bike-share company.
vi. Geographical Location
Anybody from any geographical location will be welcome to make use of our bike-share service.
Chris Cross® Bike Share Company, Inc. will not restrict any customer based on their lifestyle, culture, or race.
b. Advertising and Promotion Strategies
- Host Themed Events That Catch Attention.
- Tap Into Text Marketing.
- Use FOMO to Run Photo Promotions.
- Share Your Events in Local Groups and Pages.
- Turn Your Social Media Channels into a Resource
- Develop Your Business Directory Profiles
- Build Relationships with Other Businesses in Your Area
i. Traditional Marketing Strategies
- Marketing through Direct Mail.
- Print Media Marketing – Newspapers & Magazines.
- Broadcast Marketing -Television & Radio Channels.
- OOH, Marketing – Public Transits like Buses and Trains, Billboards, Street Furniture, and Cabs.
- Including direct sales, direct mail (postcards, brochures, letters, fliers), print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.
ii. Digital Marketing Strategies
- Social Media Marketing Platforms.
- Influencer Marketing.
- Email Marketing.
- Content Marketing.
- Search Engine Optimization (SEO) Marketing.
- Pay-per-click (PPC).
- Affiliate Marketing
- Mobile Marketing.
iii. Social Media Marketing Plan
- Start using chatbots.
- Create a personalized experience for our customers.
- Create an efficient content marketing strategy.
- Create a community for our target demography.
- Gear up our profiles with a diverse content strategy.
- Use brand advocates.
- Create profiles on the relevant social media channels.
- Run cross-channel campaigns.
c. Pricing Strategy
When working out our pricing strategy, Chris Cross® Bike Share Company, Inc. will make sure it covers premium, skimming, economy or value and penetration, All our pricing strategies will reflect;
- Cost-Based Pricing
- Value-Based Pricing
- Competition-Based Pricing.
Sales and Distribution Plan
a. Sales Channels
Our channel sales strategy will involve using partners and third parties—such as referral partners, affiliate partners, managed service providers, marketplaces, or value-added resellers—to market our bike-share services company.
Chris Cross® Bike Share Company, Inc. will also leverage the 4 Ps of marketing which are place, price, product, and promotion. By carefully integrating all these marketing strategies into a marketing mix, we can have a visible, in-demand product or service that is competitively priced and promoted to our customers.
b. Inventory Strategy
Chris Cross® Bike Share Company, Inc. will operate an inventory strategy that is based on a day-to-day methodology for ordering, maintaining, and processing items. We will develop our strategy with the same thoroughness and attention to detail as we would if we were creating an overall strategy for the business.
c. Payment Options for Customers
Here are the payment options that Chris Cross® Bike Share Company, Inc. will make available to her clients;
- Payment via credit cards
- Payment via online bank transfer
- Payment via mobile money transfer
d. Return Policy, Incentives, and Guarantees
Chris Cross® Bike Share Company, Inc. will operate a no refund policy hence we will not provide compensation for paid services in our bike-share company. We will make sure any bike we put out for share meets the required safety standard.
e. Customer Support Strategy
Our customer support strategy will involve seeking customer feedback. This will help us to continue to put our bikes in great shape and also to provide excellent customer service to our patrons. We will make use of an effective CRM software to be able to achieve this.
Regularly, we will work towards strengthening our Customer Service Team and also Leverage Multi-Channel Servicing as part of our customer support strategy.
We plan to expand our revenue by 50 percent in the second year and the plan will include a marketing, sales, and operations component. The operations component of the plan would include providing electric bike charging amenities and attracting tourists and visitors. These strategies will enable the firm to boost our service offerings and support revenue growth.
a. What Happens During a Typical Day at a Bike Share Company?
- The business is open for the day
- Administrative work is done concurrently
- The bikes are cleaned and properly arranged in the docks and ready for share
- Maintenance of the bikes is carried out
- The facility is administratively closed for the day.
b. Production Process
There is no production process when it comes to the bike share services business.
c. Service Procedure
When a bike-share company is opened and everything is in place, they will either choose to welcome patrons based on membership or open their doors to people in the city where the bike-share services company is domiciled.
The bicycles are made available for shared use to individuals on a short-term basis for a price or free. Many bike share systems allow people to borrow a bike from a “dock” and return it to another dock belonging to the same system. Docks are special bike racks that lock the bike, and only release it by computer control.
The user enters payment information, and the computer unlocks a bike. The user returns the bike by placing it in the dock, which locks it in place. Other systems are dock-less. For many systems, smartphone mapping apps show nearby available bikes and open docks.
d. The Supply Chain
Chris Cross® Bike Share Company, Inc. will rely on trusted agents to supply bicycle spare parts in our city and we have been able to establish business relationships with wholesale supplies of all these merchandise.
e. Sources of Income
- Income from bike-sharing fees.
- Membership fee.
Our Membership fee will cost $12,000 for the start and then a $7,500 annual fee from the subsequent year (VAT inclusive and subject to change).
a. Amount Needed to Start your Bike share service?
Chris Cross® Bike Share Company, Inc. would need an estimate of $550,000 to successfully set up our bike-share service in the United States of America. Please note that we will start with only five dozen bikes.
b. What are the Costs Involved?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $7,300.
- Marketing, Branding and Promotions – $5,000.
- Business Consultant Fee – $2,500.
- Insurance – $5,400.
- Rent/Lease – $120,000.
- Other start-up expenses like commercial satellite TV subscriptions, and phone and utility deposits ($2,800).
- Operational Cost (salaries of employees, payments of bills et al) – $60,000
- Start-up inventory – $25,000
- Counter area equipment (countertop, sink, ice machine, etc.) – $9,500
- Store Equipment (cash register, security, ventilation, signage) – $4,750
- Bikes – $250,000
- Website: $600
- Opening party: $3,000
- Miscellaneous: $2,000
c. Do You Need to Build a Facility? If YES, How Much Will it Cost?
Chris Cross® Bike Share Company, Inc. will build a new facility for our bike share services company (a facility that will accommodate our fleet) and it will cost us $200,000.
d. What are the Ongoing Expenses for Running a Bike Share Services Business?
- Cost of regular surveillance
- Utility bills (gas, internet, phone bills, signage and sewage et al)
- Salaries of employees
e. What is the Average Salary of your Staff?
- Chief Executive Officer (Owner) – $55,000 per year
- Manager – $38,000 per year
- IT Manager – $35,000 per year
- Accountant / Cashier – $32,0000
- Attendants – $28,000 per year
- Security Officers – $21,150 per year.
f. How Do You Get Funding to Start a Bike Share Services Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from, the government, donor organizations, and angel investors
- Source for soft loans from your family members and friends.
a. How Much Should You Charge for your product/Service?
- Pass and Membership Options: 24-hour pass ($8); three-day pass ($17); monthly membership ($28); annual membership ($85 when paid in full, $96 when paid in $8 monthly installments). There’s also a daily key membership option that provides an electronic key (similar to a hotel key) that always remains in the user’s possession.
You can activate and deactivate the key for unlimited 24-hour periods, providing one-touch bike access via stored credit card when active. The daily key membership’s cost is $10 for the key and $7 per day when active.
- Passholder Usage Fees: First 30 minutes free; second 30 minutes $2; third 30 minutes $4; $8 for each subsequent 30 minutes
- Member Usage Fees: First 30 minutes free; second 30 minutes $1.50; third 30 minutes $3; $6 for each subsequent 30 minutes.
b. Sales Forecast?
- First Fiscal Year (FY1): $350,000
- Second Fiscal Year (FY2): $480,000
- Third Fiscal Year (FY3): $880,000
c. Estimated Profit You Will Make a Year?
Chris Cross® Bike Share Company, Inc. is projecting to make;
- First Fiscal Year (FY1): (20 of revenue generated)
- Second Fiscal Year (FY2): (25% of revenue generated)
- Third Fiscal Year (FY3): (25% of revenue generated)
d. Profit Margin of a Bike Share Services Business Product/Service
The profit margin of a bike-share business is not fixed. It could range from 15 percent to 35 percent depending on some unique factors.
a. How do you intend to grow and expand?
Chris Cross® Bike Share Company, Inc. will grow our bike-share company by first opening other outlets (docks) in key cities in the United States of America within the first five years of establishing the business and then will start selling franchises from the sixth year.
b. Where do you intend to expand to and why?
Chris Cross® Bike Share Company, Inc. plans to expand to:
- New York City, New York
- Chicago, Illinois
- Washington, D.C
- Minneapolis-St. Paul, Minnesota
- Boston, Massachusetts
- Miami, Florida
- Topeka, Kansas
- Philadelphia, Pennsylvania
- Portland, Oregon
- San Diego, Californias
The reason we intend to expand to these locations is the fact that the cities have the largest market for bike-sharing services in the United States. Internationally, we plan to expand to Canada, the United Kingdom, and Australia.
Chris Cross® Bike Share Company, Inc. plans to exit the business via family succession. We have placed structures and processes in place that will help us achieve our plan of successfully transferring the business from one family member to another and from one generation to another without hitches.