Starting a skate shop can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful skate shop.
Importantly, a critical step in starting a skate shop is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Skate Shop:
- Choose the Name for Your Skate Shop
- Develop Your Skate Shop Business Plan
- Choose the Legal Structure for Your Skate Shop
- Secure Startup Funding for Your Skate Shop (If Needed)
- Secure a Location for Your Business
- Register Your Skate Shop with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Skate Shop
- Buy or Lease the Right Skate Shop Equipment
- Develop Your Skate Shop Marketing Materials
- Purchase and Setup the Software Needed to Run Your Skate Shop
- Open for Business
1. Choose the Name for Your Skate Shop
The first step to starting a skate shop is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own skate shop:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your skate shop.
2. Develop Your Skate Shop Business Plan
One of the most important steps in starting a skate shop is to develop your business plan. The purpose of a business plan is to ensure that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your skate shop.
- Company Overview – this section tells the reader about the history of your skate shop and what type of skate shop you operate. For example, are you a pro shop, core shop, or a general skate shop?
- Industry Analysis – here you will document key information about the consulting industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract a loyal customer base to your skate shop? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your skate shop make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Skate Shop
Next you need to choose a legal structure for your skate shop and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the skate shop owner and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the business owner is liable for all debts and obligations of the business.
2) Partnerships
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a skate shop together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a skate shop include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a skate shop is that it offers limited liability to its owners. This means that the skate shop owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your skate shop, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Skate Shop (If Needed)
In developing your skate shop business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a skate shop to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a skate shop that they believe has high potential for growth.
5. Secure a Location for Your Business
The first step in finding a retail space for your skate shop is to determine the demographics of the area you are targeting. This will help you identify the population size and spending power of the potential customers in that area. You’ll also want to consider the competition in the area and what kind of facilities are already available.
Once you have narrowed down your search to a few locations, it’s important to visit each one and do some research. Check out the surrounding businesses, talk to residents, and get a feel for the neighborhood’s vibe. You’ll also want to make sure the site is large enough to accommodate your shop and that there is easy access to parking and public transportation.
It’s also helpful to talk to existing shop owners in the area. They can give you an inside perspective on what it takes to run a successful business in that neighborhood, which will go a long way toward helping you find the ideal location for your skate shop.
6. Register Your Skate Shop with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your own skate shop’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your skate shop to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
Every state, county, and city has different business license and permit requirements.
Here are some that you should consider:
- General Business License: for the purpose of doing business in your state.
- Sales Tax License or Seller’s Permit: for selling products.
- Zoning Approval: typically at the city or county level, this provides authorization for construction or use of a building or land for a particular purpose.
- Fire Department Approval: a process by which the local fire department reviews and approves the installation of a fire alarm system.
10. Get Business Insurance for Your Skate Shop
To operate a skate shop, you will need business insurance.
Other business insurance policies you should consider for your skate shop include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Skate Shop Equipment
To run a skate shop, you will need some basic equipment. This includes a cash register, credit card machine, and skateboards. You may also want to invest in shelving and display cases to showcase your merchandise.
12. Develop Your Skate Shop Marketing Materials
Marketing materials will be required to attract and retain customers to your skate shop.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your skate shop. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional skate shop website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media platforms will help customers and others find and interact with your skate shop.
13. Purchase and Setup the Software Needed to Run Your Skate Shop
The software you need to run a skate shop is a point of sale (POS) system and a skate inventory management system. These systems allow you to track everything from sales, inventory, and employees. You’ll also need a customer relationship management (CRM) system to manage your customers.
14. Open for Business
You are now ready to open your skate shop. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
How to Finish Your Ultimate Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your skate shop business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
Click here to finish your skate shop business plan today.
How to Start a Skate Shop FAQs
Is it hard to start a skate shop?
It's not hard to start a skate shop, but it takes a lot of work. You'll need to find a space for your shop, stock it with skateboarding gear and supplies, and market your business to attract customers. With a little effort and know-how, you'll be able to get your shop off the ground.
How can I start a skate shop with no experience?
There are a few ways to start a skate shop with no experience. You can look online for resources and speak with other skate shop owners for advice. You may want to look into starting a business with a partner who has experience in the skate industry. Or, you can go into business for yourself and learn as you advance. You may also want to hire experienced people to work in your skate shop.
Starting a business can be difficult, but it can also be rewarding. You have to find the right way that works best for you.
What type of skate shop is most profitable?
There is no definitive answer to this question as it largely depends on the location. However, skateboard shops that sell skateboarding gear and apparel in addition to the skateboards themselves are generally more profitable than those that only sell equipment.
How much does it cost to start a skate shop?
It can cost anywhere from $10,000 to $50,000 to start a local skate shop, depending on the size and location of the shop. Some of the common startup costs include rent, security deposits, inventory and equipment.
What are the ongoing expenses for a skate shop?
There are a few ongoing expenses you should consider when starting a skate shop. The first is the cost of inventory. You'll need to purchase new skateboards, shoes, hats, and other gear to sell in your store. You'll also need to pay for a space to operate your store, and you'll need to invest in marketing and advertising to bring in customers.
Other ongoing expenses for a skate shop can include employee salaries, utilities, and insurance.
How does a skate shop make money?
A skate shop makes money through the sale of skateboarding gear and accessories. They also make money by providing skateboarding lessons and hosting events for the skateboarding community.
Is owning a skate shop profitable?
There are a few reasons owning a skate shop can be profitable. First, the skateboarding industry is growing rapidly. This provides a lot of potential for growth and profitability. Additionally, skateboarding is considered a "lifestyle" sport, and many people are passionate about it. This means that there is a large base of customers who are loyal to skate shops and are willing to spend money on products and services. Finally, skate shops typically have low overhead costs, which can make them more profitable than other types of retail businesses.
Why do skate shops fail?
There are a variety of reasons skate shops fail, but one of the most common is a lack of understanding about what it takes to run a successful business. They also need to be able to provide quality customer service and products, which can be difficult when competing with an online store. Furthermore, rent and other overhead costs can be high in busy urban areas, leading to many small skate shops to fail.
Business Plan Template & Guide For Small Businesses
How To Write A Great Business Plan
100 Business Plan Examples To Use To Create Your Plan