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How To Start A Bait Shop In 2023

How To Start A Bait Shop In 2023

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How To Start A Bait Shop In 2023

How To Start A Bait Shop

Fishing may be your favorite pastime, but it can also be the source of a profitable business, too. Starting a bait shop can help you provide a much-needed service, connect with other fishermen, and support your local fishing community.

While passion and technical knowledge about fishing and live bait are crucial, they aren’t enough. Our comprehensive guide will walk you through the process, ensuring you have the tools to navigate the journey ahead.

Business Overview

Bait shops, commonly called bait and tackle shops, sell a variety of bait to fishermen. These shops may sell live bait like worms, crickets, and minnows, frozen bait, or a variety of both. Most will also sell fishing licenses and fishing products like fishing rods, reels, line, hooks, artificial lures, nets, tackle boxes, and other accessories. 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.

Running a bait and tackle business 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.

Industry Summary

The bait shop industry is a segment of the wider sporting goods industry, and its success is closely tied to the health of the fishing industry. According to the U.S. Fish & Wildlife Service, over 30 million people have fishing licenses in the United States. This huge number of fishing enthusiasts creates a substantial market for bait shops.

The industry is growing too. According to the 2023 Outdoor Participation Trends Report by the Outdoor Industry Association, the outdoor recreation participant base grew 2.3 percent in 2022 to a record 168.1 million participants or 55 percent of the U.S. population ages six and older.

As the bait shop industry is dependent on the fishing industry, it’s also influenced by seasonal changes and local fish and wildlife regulations. Bait shops tend to do better in warmer months, and some may even close or significantly reduce operations in colder months. Therefore, a thorough understanding of the local climate is needed for anyone planning to enter this business.

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 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 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 when importing products from overseas. Stores can even set up a second-hand area to sell gently used products, extending their lifespan.

Target Market

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.

Checklist To Start A Bait Shop

If you’re thinking about starting a bait and tackle shop, it’s important to do your research first. Here is a checklist to help you get started.

Step 1: Research the market

The first step in starting a business is to see if there is a big enough market to support your idea. Without adequate demand, your business could struggle to generate sufficient revenue and could ultimately fail.

In the case of a bait shop, you need a solid customer base of fishing enthusiasts who frequent local fishing spots. Your research should look into how many anglers visit the area, how often they visit, and what they might need from a bait shop.

Here are some ways you can conduct your market research:

Local Fishing License Sales: Check the number of fishing licenses sold in your area. This information is often available from the local or state Department of Fish and Wildlife or Department of Natural Resources. High license sales suggest a substantial potential customer base.

Surveys and Interviews: Connect with local anglers, fishing clubs, and outdoor recreation groups to understand their needs and preferences. Online survey tools or face-to-face interviews can help gauge demand for a new bait shop.

Observation and Field Research: Spend time at local fishing spots to get firsthand knowledge of the local fishing culture. See if fishermen bring their bait, buy it locally, or express a need for a local supplier.

Competitor Analysis: Look at other bait shops or stores selling fishing gear in your area. If they are thriving, there’s likely demand for your shop too. Consider their strengths and weaknesses to identify any gaps in the market you could fill.

Tourism Data: If your area attracts tourists, look at tourism data, which can be obtained from local tourism boards or chambers of commerce. Fishermen traveling to your area for leisure might require a local bait shop.

Online Forums and Social Media: Online platforms can provide insights into what anglers in your area or similar regions are discussing, their common issues, and needs.

This research will not only help confirm demand but can also guide you in tailoring your bait shop to meet the specific needs of your potential customers, improving your chances of success.

Step 2: Create a business plan

After confirming that there’s a viable market for your bait shop, writing a business plan becomes a crucial step. A business plan not only acts as a roadmap for starting and managing your business but also helps attract potential investors or lenders. It provides a comprehensive view of your business idea, your strategies, and your financial projections, establishing the bait shop’s potential for success.

For a bait shop, while all sections of the business plan are essential, some parts can be particularly important, especially when seeking funding:

Market Analysis: This section, where you present the results of your market research, is of particular interest to potential funders. It shows that there is a demand for your business and that you understand your market. It includes an analysis of your potential customers, your competition, and the overall fishing industry in your region.

Products and Services: Detailing what you’re offering is vital. Will you only sell bait, or will you offer fishing gear, equipment rentals, or guided fishing tours? The more comprehensive and appealing your services, the more attractive your business will be to investors and customers alike.

Marketing and Sales Strategy: How do you plan to attract and retain customers? A solid marketing and sales strategy shows potential investors that you’ve thought about how you’ll drive revenue. For a bait shop, this might involve partnerships with local tourism organizations, hosting fishing events, or offering fishing classes.

Financial Projections: This section is particularly important for lenders and investors. Your financial projections, including revenue, expenses, and profitability, provide a tangible measure of your business’s potential success. For a bait shop, consider seasonal fluctuations in sales and the potential impact of weather events on your business.

Remember, while these sections are crucial, they need to be part of a well-rounded business plan that paints a complete picture of your bait shop business.

Related: How to write a business plan

Step 3: Find a suitable location

Finding the right location for a bait shop is a crucial step in the planning process. Your shop should ideally be situated close to popular fishing spots, whether that’s near a lake, river, or coastline. This would ensure easy accessibility for your customers who may need supplies on their fishing trip.

You’ll want to research available properties in these areas, taking into consideration factors like visibility from main roads, proximity to other businesses that could complement yours (like boat rentals, marinas, or outdoor recreational stores), and the ease of parking. It’s also important to consider the local regulations related to operating a bait shop in the area, especially because you’ll be dealing with live bait.

While you might find a perfect location, it’s prudent not to sign any agreements to lease or purchase until you have your funding in place. Securing a location prematurely could lead to financial strain or even loss if your funding doesn’t materialize.

If the location needs renovations to suit your bait shop needs, remember to estimate these costs beforehand.

Step 4: Secure funding

Funding a new bait shop can be a challenge, but can be approached in various ways.

some business owners may choose to self-finance, using personal savings, home equity loans, or even funds from retirement accounts. However, these methods can be risky as it may be difficult to leverage additional funds. Another option is to seek investments from family and friends who believe in your business idea and are willing to contribute.

One of the most common forms of financing for a small business like a bait shop in the U.S. is a bank loan. These loans are usually long-term and offer reasonable interest rates. Before applying for a bank loan, it is important to prepare a strong business plan that shows your financial projections and repayment ability. In some cases, the bank may want an additional guarantee that the loan will be repaid, and if so can utilize a Small Business Administration (SBA) loan guarantee. SBA doesn’t lend money directly, but it offers loan guarantees to banks and other lenders who then make loans to small businesses.

Related: Finding the money to start a business

Step 5: Register the business

Before you can open the doors of your new bait shop, it’s essential to ensure that your business is legally registered and compliant with all relevant laws and regulations. Each state has different rules, so be sure to do your research.

Here are the general steps you should follow:

The first thing you’ll need to decide is what business structure is best for your business. This could be a sole proprietorship, a partnership, a limited liability company (LLC), or a corporation. Each of these structures has different implications for liability, taxes, and administrative complexity. Many small business owners opt for an LLC because it provides personal liability protection and has fewer administrative requirements than a corporation.

Related: Comparison of business structures

Business Name Registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Related: Tips for naming a bait shop

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Business Licenses and Permits: Bait shops may need specific licenses or permits, especially because you’ll be dealing with live bait. At the federal level, you might need permits from the Fish and Wildlife Service

It’s common for most states to require bait shops to apply for a retail or wholesale bait dealer’s license to catch and/or sell bait. Additionally, if you’re importing or exporting live bait across state lines, permitting will likely be needed as well. Check with your state’s Department of Natural Resources or Fish and Game Department to find out the details.

If your location is hooked into the local sewer system, approval will be needed from the environmental and/or local sewer departments to dispose of the water from your fish tanks.

Also, depending on your location, there will likely be a variety of general licenses or permits needed before opening. This could include a business license, seller’s permit, and Employer Identification Number (EIN).

Related: State guides for general business licensing

Step 6: Acquire the building and start setting up

Once funding is secured and a location for your bait shop is acquired, the next step involves setting up the shop for its grand opening. A few items to consider during this phase include:

Setup and Layout: The setup of the shop should cater to both the needs of the business and the comfort of your customers. It should facilitate easy movement and provide a good display of your products. Given the nature of the business, you will need refrigeration units and live bait wells. Fishing tackle, rods, and other gear should be displayed attractively. The checkout counter should be conveniently placed, and you might want to consider a small lounge area for customers to chat about their fishing exploits.

To be sure there is room for everything, be sure to draw out a floor plan. Free floor plan software like SketchUp can help you visualize your shop layout.

Renovations: If the location requires renovations, ensure they are completed efficiently and within budget. It is crucial to factor in the needs of a bait shop – space for storing and displaying live and non-live bait, fishing equipment, a cash counter, space for customers, etc.

Equipment Purchase: Depending on your offerings, you may need to invest in refrigeration units, tanks for live bait, shelving units for tackle, racks for fishing rods, a cash register, etc. Consider both new and used equipment, based on your budget.

Inventory Acquisition: Based on your market research and local fishing trends, acquire your initial inventory. Remember, the freshness of your bait is a critical selling point, so work out a schedule for regular inventory replenishment.

Signage: Invest in clear, attractive signage for your shop that can draw in passing anglers.

Safety Preparations: Given the nature of the products, it’s important to adhere to safety regulations. This could mean proper handling and storage of live bait, ensuring the safety of the refrigeration units, providing secure storage for fishing hooks and other sharp objects, etc.

Remember, the goal is to create an environment where customers feel comfortable, can easily find what they’re looking for, and are inclined to return. As you get to know your customers and their needs, you can continually adjust your layout and product offering to better serve them.

Step 7: Set up accounts with suppliers

Sourcing the right suppliers is an integral part of starting a successful bait shop. Suppliers will provide you with the bait and other fishing supplies you’ll sell in your shop. Here are some tips on how to find the best suppliers:

Research: Use the internet to research wholesale bait suppliers and fishing gear manufacturers. You can also attend trade shows and expos related to fishing and outdoor activities. They are great platforms to meet potential suppliers and check out their products first hand.

References: Speak to other bait shop owners or fishing industry professionals. They can give you insights into reliable suppliers in the industry. However, be aware that if you are in direct competition, they might not share their resources.

Local Sources: For fresh live bait, consider local sources like local fish farms. This ensures that your bait is as fresh as possible. It could also save on delivery costs and time.

Price and Quality: Compare prices and quality across different suppliers. While price is an important factor, don’t compromise on quality. The reputation of your bait shop will largely depend on the quality of bait and fishing gear you provide.

Delivery Schedule: Check the supplier’s delivery schedule to ensure it aligns with your needs. It’s important to have a regular and reliable supply of fresh bait.

Terms and Conditions: Before finalizing a supplier, ensure you’re aware of their terms and conditions. Look for information on minimum order quantities, payment terms, return policy, etc.

Test Run: Consider doing a test run with a potential supplier before committing to a large order. This will give you an idea of their reliability, the quality of their products, and the effectiveness of their delivery service.

Finding the right supplier may take time, but it is worth the effort. The right supplier partnership will ensure you can offer high-quality products consistently to your customers.

Step 8: Get your marketing plan in place

For a bait shop, effective marketing means tapping into the local community of anglers and positioning the shop as a reliable source for their needs. To achieve this, the shop could organize and sponsor local fishing tournaments, offering some of its merchandise as prizes. This serves both as community engagement and marketing, putting the shop’s name and products in front of a captive audience of ideal customers.

Furthermore, offering fishing workshops or classes for different skill levels is a great way to attract a range of customers from beginners to seasoned anglers. These classes can also help foster a sense of community among local anglers.

Partnerships with local lodges, hotels, and tourism offices can also be advantageous. Many tourists enjoy fishing as part of their vacation, and these partnerships can help direct those customers to the shop.

Finally, maintaining a robust online presence is critical in today’s digital age, especially for reaching people from out of the area. This does not just mean having a website, but also actively engaging with customers through fishing forums, local community boards, and social media. Sharing fishing tips, bait recommendations, and local fishing conditions can help establish the shop as a knowledgeable and reliable source for fishing needs.

Related: Low-cost ideas to market a new business

Step 9: Prepare to launch your bait shop!

As you near the opening of your bait shop, there are several remaining steps that are essential to have in place.

Business Insurance: Given the nature of the business and the fact that you’ll be dealing with customers coming into your store, it’s crucial to have a good insurance plan in place. Look into business liability insurance and property insurance to start with. It’s also advisable to consider workers’ compensation insurance if you plan on hiring employees.

Related: Common types of insurance a business may need

Bookkeeping: Proper bookkeeping is essential for managing your finances and for tax purposes. You may choose to use bookkeeping software like Wave Accounting (FREE) or Quickbooks, hire a professional, or do it yourself, depending on the scale of your business and your proficiency in bookkeeping.

Bank Account: Opening a separate bank account for your business is not just a good practice; it’s essential for keeping personal and business finances separate. This is also helpful come tax season.

Payment Systems: Be ready to accept various forms of payment. This includes cash, credit and debit cards, and even mobile payment methods. Look into different payment processors like Square or Stripe, and find one that fits your business needs and budget.

Hire Employees: Some shops are only run by the owner, while others have full-time staff, and others only hire seasonal help. If employees will be needed, determine the necessary staffing level and be prepared for the additional responsibilities that come with having employees, like payroll taxes and worker’s compensation insurance.

Preparing for Grand Opening: Plan a grand opening event to attract your first customers. Consider offering opening day discounts, hosting a fishing-related event, or even inviting a local celebrity angler.

Everyone’s journey to opening a bait shop will be unique and these are some common steps that many business owners will need to consider. Always ensure you are compliant with local laws and regulations and that you are prepared to adapt to the unexpected. The road to opening your business can be unpredictable, but with careful planning, you can navigate it successfully.

This material is property of StartingYourBusiness.com

Greg’s Tip: It can be easy to do, but be sure to not underestimate the competition when starting your bait shop. Research and analyze existing bait shops to understand their strengths and weaknesses. Then, differentiate your shop by selling what the competition doesn’t, price competitively, provide exceptional customer service, build relationships with the fishing community, and establish a strong online presence.

Greg's Business Tip

Common Questions When Starting A Bait Shop

How much does it cost to start a bait shop?

One of the benefits of starting a bait shop is that it’s possible, to begin with, a tiny 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 could cost about $5,000 to start. A larger shop with a greater selection of bait and inventory can cost $30,000 or more.

Here’s an example breakdown of potential costs to start a bait shop:

Initial Startup Costs:
– Renovations and shop setup: $5,000 – $20,000 (including fixtures, displays, signage, etc.)
– Equipment and fixtures: $5,000 – $15,000 (cash registers, coolers, shelving, tanks, etc.)
– Initial inventory: $10,000 – $30,000 (varies based on the range and quantity of bait products)
– Rent and utility deposit: $1,000 – $3,000
– Initial marketing and advertising: $500 – $1,500
– Insurance: $100 – $300 per month
– Buffer for Operating Expenses: Three to six months of operating expenses: Multiply the total monthly operating expenses (excluding initial startup costs) by 3 to 6.

Please note that the figures provided are estimates and can vary widely depending on location, size, market conditions, and other factors. It’s crucial to conduct thorough research and create a detailed business plan to obtain more accurate cost projections for your specific bait shop venture.

Is a bait shop profitable?

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 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.

That said, we can provide an estimate using some generalized figures.

Let’s assume that the bait shop sells a variety of items, including live bait, lures, fishing lines, and other fishing equipment. For our example, let’s say that on average, each customer spends about $30 per visit. If the shop serves about 20 customers per day, that equates to $600 in daily sales.

However, this is not pure profit. Bait shop owners must account for costs such as purchasing inventory, paying for utilities, employee wages if any, rent or mortgage payments, insurance, and other overhead costs. Let’s assume these costs take up about 65% of the total sales, which is typical for bait shops.

So, the gross profit per day would be $600 * (1 – 0.65) = $210. Multiply this by 30 (for a month), and the bait shop owner could potentially make around $6,300 in gross profit per month. On an annual basis, this would equate to around $75,600.

Next, we would look at common operational expenses, which in this example total $21,600.
– Rent and utilities: $1,000 per month ($12,000 per year)
– Marketing and advertising: $500 per month ($6,000 per year)
– Equipment maintenance: $200 per month ($2,400 per year)
– Insurance: $100 per month ($1,200 per year)
– Miscellaneous (supplies, credit card fees, etc.): $500 per month ($6,000 per year)

To calculate the profit we would take the sales and subtract the expenses.

In this example, we have $75,600 in revenue and $27,600 in expenses, which results in a $48,000 profit.

Keep in mind this is a rough estimate, and actual earnings can be higher or lower depending on many variables. For example, sales can be much higher during fishing season and lower during off-season months. A well-run bait shop in a good location with a steady customer base can certainly earn more.

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 and avid fishermen can help maximize the customer base, and offering some products for sale online can also help drive sales.

What skills are needed to run a bait shop?

Starting a bait store doesn’t require a business degree, but certain skills and advantages can help the shop succeed.

Fishing Experience: Fishing experience and knowledge are a must for any bait shop owner. This experience will help a shop owner make wise purchase prices and 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 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 build the business.

What is the NAICS code for a bait shop?

The NAICS code for a bait shop is 451110, which is categorized 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:
American Sportfishing Association
Fishing Tackle Retailer
International Game Fish Association
International Women’s Fishing Association
National Professional Anglers Association

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

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How To Start A Bait Shop In 2023

How To Start A Bait Shop In 2023

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