When might a bicycle rental shop be a good investment for your portfolio? As is always the case, we need to filter our business ideas through four criteria:
1) the asset should go up in value
2) the asset should be cash-flow positive
3) the cash flow should not end
4) the asset should require little time to maintain.
A bicycle shop that you own (but which is run by a competent manager or even automated) can be a GREAT investment, as long as you pick the location well.
What kinds of places are good for setting up a bicycle rental business? Think about tourist areas with boardwalks or mountain trails. Think large cities where traffic is an issue or students living near universities. Consider hourly and long-term rentals, and do something to make your bikes stand out from the crowd, as this business will depend a lot on referrals and people seeing your product being used (for example, can you paint all your bikes a certain color?)
What makes a bicycle rental company a good Forever Cash asset? For one, as long as you choose your location well, the money should never stop coming in. People are looking for more ways to go green and to connect more with the places they visit. College students are often on a budget, and even people travelling on business have been known to get a little exercise between meetings.
There is a huge market for bike rentals, but I’m not necessarily telling you to go out and buy a bike shop. The point is to get you thinking of traditional brick and mortar businesses that can turn a profit, no matter what the economy or current trends may be (I’m looking at YOU, cupcake bakeries).
Bike rental shops can be great investments, IF you choose your location well.