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Fishing may be your favorite pastime, but it can be the source of a profitable business, too. Starting a bait shop can help you to provide a much-needed service, connecting with other fishermen and supporting your local fishing community. Running a bait shop requires some fishing experience and bait knowledge, but if you have a good sense of what’s in demand in your area, chances are you can build your business into a profitable operation.
Bait shops, commonly called bait and tackle shops, sell a variety of bait to fishermen. These shops may sell live bait, frozen bait, or a variety of both. They offer convenience, allowing fishermen to stop in on their way out to the ocean or lake, and many shops are conveniently located near popular fishing areas. Bait shops are usually open for long hours to accommodate the most popular fishing hours, especially on weekends.
Most bait shops don’t just sell bait; many also sell essential tackle and other supplies. Many shops also sell snacks and drinks, giving fishermen a convenient spot to get everything that they may need for the day.
Grand View Research reports that in 2019, the global fishing equipment market reached $15.2 billion and was expected to continue to grow in the coming years. This growth is driven by an increased interest in outdoor recreational activities, as well as more people participating in these activities when traveling or going on vacations.
According to the 2019 Special Report on Fishing released by the Outdoor Foundation and the Recreational Boating & Fishing Foundation, fishing continues to grow in popularity. In 2018, 49.4 million Americans participated in recreational fishing, including 9.4 million who started fishing for the first time. During 2018, fishing participants took part in 883 million outings and averaged 17.9 fishing days each during the year.
Freshwater fishing proved to be the most popular in both 2017 and 2018, and in 2018, 39 million people participated in freshwater fishing. Saltwater fishing was the second most popular option, with 12.8 million people participating. The popularity of these types of fishing suggests that bait shops should have access to large amounts of potential customers, both now and in the future.
Many trends are shaping the bait shop and fishing tackle industry. According to the Fishing Tackle Retailer, the trade war with China has proven to be a challenge for bait and tackle shops. With fishing already facing a 10% excise tax, the additional 10% tariff on imported Chinese fishing tackle can drive up prices or eat into profits.
Amazon also poses a threat to small shops. The retail giant has already ventured into many industries, and Amazon is likely to become involved in the bait and tackle industry in the future.
Bait and tackle shops are also under pressure to go green. Anglers are particularly aware of the harm that plastic can do to the waters and to our environment, so stores should make an effort to reduce plastic use and waste. Using paper bags instead of plastic, recycling boxes and packaging, and using compostable materials can all reduce plastic use. A store can also make an effort to stock more locally made or USA-made products to reduce the emissions and waste that occur when importing products from overseas. Stores can even set up a second-hand area to sell gently used products, extending their lifespan.
Bait stores will market to fishing enthusiasts, though many different types of people can make up that target market. Professional fishermen will naturally be a part of the store’s market, but more casual and first-time recreational fishermen will also make up part of the customer base. If a store specializes in certain types of bait, like bait for saltwater versus freshwater fishing, that will further define its target market.
Skills, experience, and education useful in running a bait shop
Starting a bait shop store doesn’t require a business degree, but certain skills and advantages can help the shop to become a success.
Fishing experience. Fishing experience and knowledge is a must for any bait shop owner. This experience will help a shop owner to make wise purchase prices and to give customers quality advice and recommendations.
Knowledge of local fishing spots. Familiarity with local fishing spots can allow a shop owner to recommend appropriate products and bait to customers who are new to fishing or new to the area. This knowledge adds value to what the shop can offer customers.
Awareness of fishing industry trends. A shop owner who stays aware of industry trends can make wise inventory purchase decisions and stock products that customers will want.
Customer service skills. Customer experience matters so much in small shops, and strong customer service skills can help to turn first-time customers into returning customers.
Management experience. A bait shop owner who has previously hired, trained, and managed staff will be better prepared to staff the shop with quality employees who can help to build the business.
One of the benefits of starting a bait shop is that it’s possible to begin with a very small, affordable shop and then grow that into a larger operation once it’s successful. A small shop that stocks bait and a few fishing supplies costs about $5,000 to start. A larger shop with a greater selection of bait and inventory can cost $25,000 or more.
Common startup costs for a bait shop include:
- Equipment like refrigerators, tanks, and aerators
- Shelves and display units
- Cash register, computer, and other office equipment
Steps to Starting a Bait shop
Step 1. Write your Business Plan
After coming up with the idea, the next step in starting your business should be to write a bait shop business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Step 2. Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from which include the sole proprietorship, partnership, corporation and LLC. Each type of entity has its own pros and cons such as liability exposure, costs and administrative requirements.
Related: Comparison of Business Entities
Step 3. Select your Location
Rental costs for a bait shop will vary depending on the location and size of the store, as well as any amenities available, like off-street parking. Location can be significant to a bait shop’s success, and locations that are near popular fishing spots are ideal. It may be worth paying a little more for a highly desirable location, knowing that it can bring increased business and public awareness of the shop.
Related: Choosing a business location
Step 4. Apply for Business Licenses and Permits
There aren’t specific bait shop licenses, unless you are catching and selling your own bait in some states. There are some common local, state and federal registrations a bait shop many need including a sales tax permit, Employer Identification Number, Occupancy Permit among others.
Step 5. Find Financing
Even with the low costs, coming up with a good business idea and having the skills to run it are one thing but getting the funding to start a bait shop is another. In order to get a loan, the borrower(s) will need to have good credit and be able invest 15-25% of their money towards the total start-up costs.
Step 6. Get your Marketing Plan in Place
Marketing can help to build up an initial customer base and keep new customers coming into the shop once it’s established. Common marketing activities include social media marketing, online advertising, and print advertising. Bait shops may network with the owners of fishing tour boats and tourist services to establish referrals and even bait supply arrangements. Establishing a customer loyalty program can also help to encourage customer loyalty. Marketing costs will vary depending on the type and volume of the activity that’s performed.
Step 7. Get Insurance
A bait shop store needs several types of insurance for full coverage:
- General liability insurance helps to cover expenses like medical bills and legal fees if a customer is ever hurt while on the store’s property.
- Commercial property insurance helps to protect a business against financial losses if the store, its inventory, or its equipment are ever damaged in an event like a fire.
- Worker’s compensation insurance helps to cover expenses like medical bills and legal fees that can result if an employee is ever hurt while working.
Many factors will affect insurance policy cost, including the store’s location, the value of the building and its inventory, and the number of people who are on staff. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. Then, compare the quotes and pay attention to how factors like premiums, exclusions, coverage limits, and deductibles differ.
Step 8. Hiring Employees
A shop owner may be able to staff the shop entirely on their own when it’s just starting up, but eventually it will be time to hire some employees. According to ZipRecruiter, bait shop employees earn an average of $28,945 per year, though salaries can range from $16,000 to $60,000.
In addition to budgeting for employee salaries, a shop will also need to include expenses like worker’s comp, unemployment insurance, paid time off, and vacation time in its budget.
Related: Hiring your first employee
How much can you potentially make owning a bait shop?
Bait shops can be profitable, but many factors will affect that profit. A shop’s size, specialty, location, and profit margins will all play a role in how much the shop earns each year. A shop that is located in an area where year-round fishing is largely unaffected by the climate can be more profitable than a shop located in an area with a harsh winter that limits fishing.
To maximize a shop’s margins, consider not only offering just bait, but also some quality tackle and fishing supply products that are in-demand in the area. Catering to tourists as well as avid fishermen can help to maximize the customer base, and offering some products for sale online can also help to drive sales.
Things to consider before starting a bait shop
Running a bait shop often requires long hours, including working from before dawn until dusk on weekends. Selling bait will account for only a portion of your income, so plan to expand your store to offer other important items, like those last-minute items a customer would pick up on their way out to go fishing. Do some local market research and see if you can identify a need that other bait stores aren’t meeting.
You’ll also need to learn about how to keep live bait alive. This can be tricky and requires the correct setup for each type of bait that you’ll carry. If you haven’t cared for live bait before, try to find the owner of a non-local store who would be willing to teach you.