Cycling for Profit (Van der Plas Publications, 2000) by Jim Gregory helps cycling enthusiasts find a way to earn a living with their bike. With information on business practices as well as marketing advice, you can start a bicycle business of your own. This excerpt was taken from chapters 2 and 3.
You can purchase this book from the MOTHER EARTH NEWS store: Cycling for Profit.
Commercial Cycling as a Business
For those wanting to start their own small business, working as a cyclist has several advantages. The amount of money needed to get started is very low. In some instances, all that is needed is a bicycle. Even the most capital-intensive businesses described in this book require only a few thousand dollars to get started, a fraction of what it costs to start most other businesses. Nor is a building or an office usually needed; inmost instances, you can simply work out of your home.
Moreover, most commercial cycling businesses are subject to few, if any, government regulations. A commercial driver’s license is not required, nor will most businesses described in this book need a permit to operate. (Check with your state and local government to make certain, though.) Using a bicycle may even exempt a business from the rules that other businesses would follow. For example, when I informed the city that I wanted to start a curbside recycling service, I was told I would need a local waste hauling permit and have to get my vehicle inspected annually. When I told them that my “vehicle” was actually a bicycle, both the permit and inspection requirements were dropped.
The Disadvantages of a Bicycle Business
Commercial cycling has some distinct disadvantages. First, it can be dangerous. Commercial cyclists usually have to ride in traffic and, unlike the vehicles around them, have little protection in a collision. For these reasons, it is important to always be alert to traffic, be aware of road conditions, and always wear protective head gear when necessary. Perhaps most important is not to be reckless or foolhardy. There is an old adage among bicycle messengers that says, “There are old bike couriers, and bold bike couriers, but there are no old, bold bike couriers.”
Second, cycling is usually not very remunerative. While a cyclist can often earn $10 per hour or more for each hour ridden, a significant amount of time is also spent off the bike, either doing repairs, preparing invoices, or doing other types of record keeping. Consequently, earning a sufficient income can be a challenge. Most cyclists have to be frugal with their money.
Third, the work can be very tiring, especially when it is necessary to hurry all day, or carry several heavy loads. Commercial cycling requires a great deal of stamina.
Fourth, the weather is not always cooperative. Unlike a recreational or commuting cyclist, commercial cyclists can rarely choose what days they want to ride. No matter whether it is sunny, raining, or snowing, commercial cyclists have to work. Failure to ride on inclement days not only results in a loss of income, but can result in a loss of customers, especially those needing more dependable service.
If you are undeterred by these aspects of the job, then the next step in becoming a commercial cyclist is to determine what kind of work is most appropriate for your circumstances.
Bicycle Business: Getting Started
The first step in becoming a commercial cyclist is deciding what kind of work to do. Although this book lists several types of work, not all of them will be appropriate for your circumstances or locality. Besides, this list is hardly complete; with a little ingenuity, you could come up with several other small business ideas that aren’t listed here.
In this chapter, you will draw up a list of services you could provide in your community, then analyze each service to determine which one you could competitively provide in your area. Finally, you will compare those services based on your available time, resources, and inclinations.
Identifying Local Opportunities
The first step in planning to work as a cyclist is to list all of the services that could be provided using a bicycle in your community. Be creative. Remember that a bicycle can carry small things (like envelopes, pharmaceuticals, videotapes, camera film, and so on) as well as large loads (groceries, lumber, furniture, and so on) if a trailer or a cargo bike is used. How much weight you can carry depends on the terrain, cargo capacity, and gearing of your equipment, plus how quickly the cargo needs to be delivered. Although it is possible to move 700 or even 1,000 pounds by bike on level pavement or even up a slight grade, the top speed is usually no more than 10 mph, and the work is exhausting. It is definitely not something to be done all day. A reasonable maximum load to regularly carry is about 300 pounds, perhaps less in hilly areas.
Also consider the customers you will be serving. There is a small group of environmentally—concerned individuals who are attracted to using a bicycle-powered service. These customers are often the easiest and most profitable customers to satisfy. Think of the types of services they need and how you can market specifically to them. For example, most individuals voluntarily recycle their garbage because they want to help preserve the environment. While using a large truck is perhaps the least expensive and most labor-efficient method of collecting recyclables, using a bicycle has the least environmental impact. Hence, avid environmentalists often find a bicycle-powered recycling service appealing.
Unfortunately, most other people put a low priority on preserving the environment, and so are not persuaded by the environmental benefits of your service. They, at best, will view your using a bike as an added benefit, but not the primary reason they choose your service. The actual service they receive will be far more important. For this latter group of customers, focus on how you could serve them better using a bicycle instead of a car or a truck. In our area, for example, most of the pizza is delivered by car to students living on the local university campus. Many college dormitories are inconvenient to reach by car, but can be easily accessed by bicycle using bicycle paths and sidewalks. Hence, a cyclist can often deliver pizza on campus faster than someone in a car. Plus, a bicycle doesn’t take up an extra parking space as a car requires when parked at the restaurant between runs.
Sometimes a bicycle may not offer any advantages over a motorized vehicle. In these situations, it is necessary to differentiate your service in some other way, such as providing a service that is more reliable, more courteous, less expensive, and so on than what is offered by competitors. Most of our delivery customers, for example, use us because we are reliable and dependable, not because we use bicycles. Or, when we picked up grass clippings as part of our curbside recycling service, we charged 15 to 30 percent less than our competitors. This latter strategy — competing on price — is dangerous, however, as it is very difficult to earn enough income when competing solely on price. Don’t compete on price unless your business has a distinct advantage. In our case, we gave the materials we collected to area gardeners to use as mulch, avoiding the dumping fee that other waste haulers had to pay.
In some situations, a bicycle simply can’t compete against motorized forms of transportation. Trips longer than three miles, for instance, can almost always be done more quickly using a motor vehicle. (This is one reason why we never got into the courier business, because in our town, many businesses are located on the outskirts and can be reached more quickly by car.) Transporting temperature-sensitive cargo, like flowers in below-zero weather, can be impossible without elaborate equipment. Using a single bicycle to carry more than a half-ton of cargo usually is not profitable either.
When comparing different types of work, consider the ones that must be done least urgently first, as these are easier to do. Doing urgent, on-call deliveries often takes extra people (to do the dispatching) or equipment — for example, an expensive cellular phone or radio. Also, the work is not regular, unlike scheduled work that makes it possible to plan your day more efficiently. Perhaps most important, it is often impossible to complete both urgent runs and non-urgent work concurrently while satisfying all customers. For example, I occasionally receive a call from a pharmacy to deliver a prescription while I am delivering airline tickets. The airline tickets have to be delivered by 5:00 P.M., the prescription within the next hour. If I take too long to deliver the prescription, the tickets aren’t delivered on time. So, unless there is someone you can rely on to provide backup help, avoid urgent delivery work, especially when just starting out.
After you have compiled a list of services you could offer using a bike, consider the factors described in the following sections to narrow down your list.
Full-time or Part-time?
It is best to work part-time as a commercial cyclist first before going full-time. A bicycle business is demanding work, and difficult to get started. It takes some time to develop a full-time business out of it. If you quit your current job to take up cycling, only to discover the work did not meet your expectations, you will have wasted considerable time and money.
Of course, if you are a student or already have a job, you will want to work part-time anyway. Fortunately, most commercial cycling businesses work quite well as a part-time job, and most can be arranged to fit the free time available in your schedule. If the first chosen business goes well, you can combine two or more other part-time businesses to make commercial cycling a full-time occupation.
Note that all of the jobs listed as full-time jobs can also be done part-time. Whether or not any of them can be done as a full-time occupation will depend on how much business you can develop where you live. In our small community, none of them by themselves are enough to keep a person busy full-time.
The Advantages and Disadvantages of Self-Employment
Owning a small business has several advantages. As an owner, you can choose the kinds of work to do, and work whenever it fits your schedule. You can decide how much you should charge and get paid.
However, owning a small business also has several disadvantages. You are responsible for getting customers, a task that can be difficult and intimidating. The start-up costs are higher, and your income is less predictable. Time must be spent keeping records of customers’ accounts and personal income, meaning less time is spent actually riding. In short, there is more risk, and much more work is required than just riding a bike.
A good compromise may be to do both; i.e., work for someone else while operating a business, especially when your business is in its embryonic stages. Working part-time for someone else can provide steady income while your business is young and not yet profitable. As the business grows, you can reduce the hours spent working at paid employment and spend more time at your business instead.
Just as above, many of the jobs appear on both lists. In some situations, a company may hire you as a paid employee; in others, they may hire your business. This distinction is important. When working for someone as an employee, your Social Security and Medicare taxes are automatically deducted from your wages. Your employer also pays an equivalent amount, but this amount comes out of your employer’s pocket, not out of your wages. On the other hand, if someone hires your business, then you are responsible for paying both the employee and the employer’s share of these taxes, since you are both the employer and the employee. By current tax law, this amounts to an extra 7.65 percent paid in federal taxes. Keep this in mind when pricing a service.
Bicycle Business: Equipment Needs
To transport cargo, a cargo bike or trailer will be necessary. While this increases the cost of starting a business, it also allows you to do a broader variety of work. For some jobs, like newspaper delivery, the need for extra equipment will depend on the type of work you do.
The amount of money needed to get your bicycle business started depends on what services you provide. For simplicity, the jobs described in this book have been broken down into three categories:
1. Bike only (lowest start-up cost)
2. Cargo bike or trailer
3. Cargo bike or trailer, plus other equipment or supplies (highest start-up cost)
These categories are broad generalizations; how much you actually spend will depend on what equipment you already have, plus what equipment you choose to use. For example, if you already have all the equipment needed for a mobile service, the start-up costs will be very low.
Excerpted with permission from Cycling for Profit: How to Make a Living with Your Bicycle by Jim Gregory and published by Van der Plas Publications, 2000. Buy this book from our store: Cycling for Profit.