How Much Money Does A Skateboard Shop Make

Start a skate shop by following these 10 steps:

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your skate shop. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Check out our How to Start a Business page.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What are the startup and ongoing costs?
Who is your target market?
How much can you charge customers?
What will you name your business?

Luckily we have done a lot of this research for you.

What are the costs involved in opening a skate shop?

There are a number of investments you'll need to make before opening your doors. First, you'll need a storefront. Location is critical to the survival of your business. Pick an area that's easy to get to, has foot traffic, and is close to your local skate park. Depending upon size and location, rent can run anywhere from $1000/month to several thousand. When budgeting, plan on setting aside first and last month's rent as a deposit for your space.

Once you know the size and layout of your new space, it's time to start purchasing the necessary items to set up shop. A few items you'll need are:

Slat walls for displaying decks
Tools for working on skateboards - skate tool, razor blades, Allen wrenches, screwdrivers, and sockets
Workbench
Glass display cases for accessories
Fixtures and shelving for clothes and shoes
Music system
TV/DVD player for skateboard videos
Credit card machine
Cash register

The biggest mistake new entrepreneurs make is carrying products in only one price range. While you'll need to carry some complete sets, the bulk of your clientele will want their own custom board, so stock your inventory with all the necessary accessories. Your inventory should include decks for all experience levels, which wholesale for $10-$25, wheels, which will put you out about $7/set, and trucks which start at $12/set. Build a relationship with a brand that manufactures products you believe in, ensuring you deliver a quality product every time.

Your inventory should also include a small selection of skater apparel and shoes. Inventory will be your biggest startup expense and can range anywhere from $50,000 to $100,000, depending upon how much merchandise you want to start out with.

What are the ongoing expenses for a skate shop?

Your biggest monthly expense will be maintaining a suitable selection of inventory. If you decide to maintain an online store, there will be fees to host and maintain your site. Hosting skate events at least twice a year will get your name out in the community. June 21st is Go Skateboarding Day, so mark your calendar and host a special event that day. The costs associated vary depending upon how large your event is and how much support you're able to get from other businesses in the community.

Many skate shop owners also sponsor a skateboard team, showcasing the top local talent. Team participants should be supplied with team shirts and free products. Schedule them for demos whenever possible and reward them for a job well done. As the team progresses and funds become more readily available, you'll need to consider paying them as well.

Who is the target market?

You'll welcome the novice seeking advice and products to help get them started. The shop will also attract a customer base who, while not skaters, appreciate a specific shoe or clothing brand that you carry. Your bread and butter will be the individuals who have found a common bond with others in the community through skating. Each of these clients are critical to your business' survival.

How does a skate shop make money?

Revenue is generated through each sale you make. Because your profits are tied directly to sales, you'll want to maintain a full service operation, offering your customers more than just the standard skateboard. Remember, you're supporting the culture and all that it represents.

How much can you charge customers?

Skaters recognize the value of a quality product and understand the costs associated. Beginner boards retail for approximately $50 and pro boards customized for the experienced skater retail as high as $500. Be sure to stock your shelves with a variety of options for every skill level; the novice skater will likely not be willing to shell out $150 for their first board.

How much profit can a skate shop make?

Skate shop owners report a profit ranging from $30,000 to upwards of $200,000 annually. Revenue generated is largely dependent upon the community you're a part of, the location you decide on for your storefront, and the quality of products you maintain.

How can you make your business more profitable?

While opening a skate shop has probably been a longtime dream, it's more than just hanging out with like-minded individuals each day. Let's look at a few ways you can ensure your business yields the profit you desire.

Many small skate shop owners shy away from maintaining a website, but an online store has the potential to almost double your income when managed properly.
Make space in your store for skaters to gather and talk. This backs your claim that you support the skating community and will generate additional sales.
Have snacks and drinks available for purchase. Why send them somewhere else to buy refreshments when they can purchase them from you?
Adjust your hours to fit your client base. Many skate shops maintain hours that fit their client's needs. Consider opening from 10-7 to accommodate those who work or are in school during the day. Saturdays are a must, as that's the busiest day for skateboard shops.

What will you name your business?

Choosing the right name is important and challenging. If you don't already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Skate Shop Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

Your state's business records
Federal and state trademark records
Social media platforms
Web domain availability.

It's very important to secure your domain name before someone else does.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your skate shop is sued.

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can start an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

LLC Taxes
Sole Proprietorship vs LLC
LLC vs Corporation
LLC vs S Corp
How to Start an S Corp

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

Open a business bank account

This separates your personal assets from your company's assets, which is necessary for personal asset protection.
It also makes accounting and tax filing easier.

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Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

Open net-30 accounts

When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.

Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.

Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

Get a business credit card

This helps you separate personal and business expenses by putting your business' expenses all in one place.
It also builds your company's credit history, which can be useful to raise money and investment later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

State and Local Licensing and Permits Certain state permits and licenses may be needed to operate a skate shop. Learn more about licensing requirements in your state by visiting SBA's reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

Skate shops may also wish to look into applying for a resale certificate, as a resale certificate allows retailers to purchase goods intended for resale without paying sales tax.

In addition, certain local licensing or regulatory requirements may apply.

Check with your town, city or county clerk's office
Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company's financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you're unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it's a great place to start for your business.

Learn more about General Liability Insurance.

Another notable insurance policy that many businesses need is Workers' Compensation Insurance. If your business will have employees, it's a good chance that your state will require you to carry Workers' Compensation Coverage.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.

How to promote & market a skate shop

Word of mouth and being active in the skate community will be your greatest advertising, but there are a few other, low-cost things you can do to get your shop's name recognized.

First, design a logo that is unique and recognizable. Have t-shirts and stickers made. The skaters will wear your t-shirt and cover their decks with your stickers, essentially providing you with free advertising.

Be proactive within the skate community by hosting local events. This provides something fun and positive for the skaters to do, as well as generates excitement about what you're trying to do with your shop.

Lastly, get yourself set up with social media accounts. Social media is the perfect tool for keeping your customers apprised of store specials and upcoming events. And it's free!

How to keep customers coming back

The best way to attract and retain customers is integrating yourself within that community. Getting to know them on a more personal level offers insight into what products and services they're looking for. It also creates a loyal customer base that will continue to grow.

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Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it's out of their reach because they don't have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn't delay building your website:

All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don't need to hire a web developer or designer to create a website that you can be proud of.

Using our website building guides, the process will be simple and painless and shouldn't take you any longer than 2-3 hours to complete.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That's not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We've reviewed the top companies and rated them based on price, features, and ease of use.