How to Start a Skate Shop
You may have thought of skateboarding as a fun pastime, but what if it could be a career opportunity, too? If you’ve grown up skating, have a genuine love of the sport, and eat, breathe, and live skateboards, then you might be well-positioned to open a skate shop of your own. A skate shop means you’ll be immersed in the skateboarding world daily, and you’ll have the chance to connect with and advise other skaters. There’s also plenty of hard work involved, but opening a skate shop can allow you to combine your work with your passion for skating.
Business Overview
Skate shops sell skateboards, apparel, safety gear, and accessories. These stores offer customers the advantage of being able to see, feel, and even test out equipment in person before making a purchase. Some shops also offer skateboard repair and equipment upgrades, serving as a hub for local skateboarding enthusiasts.
In addition to providing goods for sale, skate shops often sponsor competitions and events. They may put on demonstrations and sponsor local skating groups or individual athletes, too. These shops tend to heavily focus on building the skateboarding community, and they become a go-to resource for skaters of all ages.
Industry Summary
According to a press release by Grand View Research, Inc. on PR Newswire, the global skateboard market is thriving and is predicted to be a $2.4 billion market by 2025. Increased awareness of overweight and obesity issues among children has led to more support for skateboarding and other sports that keep kids physically active and healthy. Increased construction of public skate parks and government initiatives for skate park construction has led to more parks and more opportunities for skateboarders.
North America held 31.7% of the global skateboard industry revenue in 2018, which is the largest market, due partially to increased public awareness of the sport and wide product availability, which helps to drive sales.
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Industry Trends
The sport of skateboarding is well-known for its notable style. According to Martlet, while the sport originated as the “sport of outcasts,” today, skate style is nearly everywhere. Skateboarding has come far in its evolution as a sport and a culture. It’s an officially recognized sport in the 2021 Olympics, and since the 1990s, skateboarding has become tremendously popular.
During those 30 years, skateboarding has been normalized as a sport and pastime. The sport has become more accessible, and skate fashion is now normalized as a mainstream fashion. That style comes in phases, with certain trends gaining popularity and then circling back again.
Electric skateboards have also emerged as a new transit option. According to Ground Control Systems, these machine-powered skateboards are controlled by remotes or by smartphone apps. Because some electric skateboard can reach up to 25 miles an hour, they can shorten commute times and even allow riders to travel uphill. Manufacturers have already created a variety of models, including longboards and shortboards. This trend will likely continue to gain popularity in the years to come, and it provides another retail and repair option for skate shops. Shops that carry electric skateboards could potentially broaden their customer base from those who enjoy skating as a sport to include those who rely on skateboards as transportation.
Target Market
Skate shops market to children, teens, and adults who love the sport. Most shops market to local skateboarding enthusiasts, though shops with online stores may also market to national audiences. When shops connect with children who are just getting introduced to the sport, these kids can become long-term customers through their teen and adult years.
What skills are needed to run a skate shop?
It doesn’t take a business degree to open and run a skate shop, but certain skills and experiences are valuable and helpful when running this type of business.
Skateboarding experience. Experience in and knowledge of skateboarding is essential. This experience will help a business owner choose quality products that will appeal to customers and help the owner advise customers and make good product recommendations.
Knowledge of skateboarding trends. A knowledge of skateboarding trends is essential to ensure that a shop is well-stocked and delivers the products that its customers will want. Awareness of both current and emerging trends can help a shop stand out from others, encouraging customers to turn to it for information on the newest must-have products.
Customer service skills. Great customer service skills are important in building relationships with customers. This is particularly vital in a shake shop since a customer who’s a child may turn into a returning customer for decades to come.
Management experience. Experience in hiring, training, and managing staff can help a business owner keep a business running smoothly and find staff representing the store well.
Marketing knowledge. Most skate shops do at least some of their own marketing, so a knowledge of social media marketing, advertising techniques, and even event marketing will be valuable.
Passion for skateboarding. Above all else, a skate shop owner needs to have a genuine passion for skateboarding. This enthusiasm will come through in his or her interactions with customers.
Checklist for Starting a Skate Shop
Starting a skate shop can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.
Step 1: Write a Business Plan
After coming up with the idea, the next step in starting your business should be to write a 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.
Related: How to write a business plan
Step 2: Form a Business Entity
A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for a skate shop, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
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Step 3: Name the Business
Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 4: Select your Location
Trends and items that are in-demand can vary greatly between different locations and demographics. Before opening your shop, get a sense of what’s popular in your area. Head to a local skate park and look at the boards skaters are using and the clothes that they’re wearing. If your friends are part of your target audience, ask them about the gear that they most prefer.
Location is everything for a skateboard shop, so scout potential locations carefully. Locations near skate parks, schools, and competition venues tend to do well, but look for competing businesses, too. Try to get a sense of the local area and the popularity of skateboarding. Finding a location where there are already local competitions and an active skateboarding culture is ideal.
Consider not only offering in-person sales but branching out into online sales, too. Going online can increase your audience and help to drive sales. There’s lots of competition online for more general skate merchandise, but if you can stock some specialty products or items with unique personalization options, you can appeal to a broad skating audience and expand your shop’s reach.
Related: Choosing a business location
Step 5: Register for Business Licenses and Permits
A skate shop owner will need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located.
A few business registrations include a business license, sales tax permit, Employer Identification Number, and Occupancy Permit.
Related: Common business licenses, permits, and registrations by state
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a skate shop is another. In order to get a small business loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
Marketing is essential to a skateboarding shop’s success. Common marketing techniques for skate shops include social media marketing, print advertising, online advertising, and event sponsorship. Skate shops will sponsor teams as a part of their marketing strategy and have them come in and demo products or teach a beginners clinic. Skate shops will also sell, or in some cases, give away t-shirts and stickers that their customers display and become walking advertisements for the stores.
Related: Low-cost ideas to market a new business
Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting a skate shop. A few of these include:
– General liability insurance will help to protect the shop against expenses it might face, like medical bills, if a customer is ever injured while on the property.
– Commercial property insurance helps cover expenses that could result if the shop or its inventory are damaged or destroyed by an event like a fire.
– Worker’s compensation insurance protects the business from expenses like medical bills that it might face if an employee were ever hurt while working.
The cost of insuring a skate shop will vary from provider to provider, and factors like the shop’s size, location, and the value of its inventory can also alter policy costs. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, it’s important to look at more than just how the premiums stack up. Instead, consider all of the factors like the differences in deductibles, the exclusions of each policy, and how the coverage limitations compare.
Step 10: Hire Employees
A skate shop will need at least a few employees to cover all of its shifts, though an owner can keep costs down by working many shifts themselves. According to Simply Hired, a skate shop technician earns an average of $37,181 per year. A sales associate earns approximately $22,194 each year.
Staff salaries are just one expense that comes with hiring employees. A skate shop’s budget also needs to include expenses like workman’s comp insurance, unemployment insurance, and paid time off.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
StartingYourBusiness.comHow much does it cost to start a skate shop?
Startup costs for a skate shop can vary tremendously depending on the shop’s area, size, and the amount and type of inventory offered. It may be possible to start a smaller shop for about $50,000, but a larger shop offering higher-end products will cost $100,000 or more.
Some common startup costs for a skate shop include:
– Inventory such as decks, bearings, wheels, helmets, pads, grip tape, t-shirts, etc.
– Shelving and displays
– Equipment and supplies, like equipment used for repairs and upgrades
– Renovation costs
– Signage and store decor
How much can a skate shop owner make?
Skate shop profits will vary depending on the shop’s location, size, the type of inventory it stocks, and how long it’s been in business. This can be a profitable industry, but a shop owner will need to understand the brands, types, and price points of the goods that are most in demand in your area. Innovation plays a role in profits, too, and shops that design programs to support local skaters long-term may enjoy increased customer loyalty and skate community support.
Are there grants to start a skate shop?
It’s extremely rare to find a grant to start a skate shop. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.
What is the NAICS code for a skate shop?
The NAICS code for a skate shop is 451110, which is classified under Sporting Goods Stores.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?
Resources:
Board Retailers Association
