How to Start a Bait Shop

If you like to fish, you’ve no doubt visited bait shops, which usually offer all sorts of fishing supplies. Fishing is big business in the US, worth more than $10 billion. If you have a passion for fishing, you could start your own bait shop, provide people with much-needed products and build a lucrative business venture.

But before you start digging for nightcrawlers, you’ll need to get a line on the business side of things. Luckily, all the information you need to start a successful bait shop can be found in this step-by-step guide.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a bait shop has pros and cons to consider before deciding if it’s right for you.

Bait shop industry trends

Industry size and growth

• Industry size and past growth – The US fishing industry was worth $10.58 billion in 2021 after expanding 5% the previous year.((https://www.statista.com/statistics/1174479/fishing-industry-market-size-us/))
• Growth forecast – The US fishing industry should continue to remain steady for the next five years.

Trends and challenges

Trends in the bait shop industry include:

• Adding fish scent to fishing lures is growing in popularity, providing another product opportunity for bait shops.
• Fly fishing is becoming popular among millennials, so bait shops should consider offering fly fishing equipment and lures to target that audience.

Challenges in the bait shop industry include:

• Supply chain issues are causing major challenges for the fishing tackle industry.
• Wholesale prices for fishing tackle are rising, forcing bait and tackle shops to increase their prices.

How much does it cost to start a bait shop business?

Startup costs for a small bait shop range from $10,000 to $20,000. Costs include the space rental, equipment, and inventory.

You’ll need a handful of items to successfully launch your bait shop business, including: 

• Nets to catch bait
• Bait containers
• Refrigerators and water tanks for bait

How much can you earn from a bait shop business?

Prices for bait vary, but average about $4 to $5 per dozen. Prices for fishing supplies and tackle vary. These calculations will assume an average sale per customer of $25. Your profit margin should be about 30%.

In your first year or two, you might have an average of 15 customers a day, bringing in $137,000 in annual revenue. This would mean $41,000 in profit, assuming that 30% margin. As your shop becomes more well known, you might get 50 customers a day. With annual revenue of $456,000, you’d make a handsome profit of $137,000.

What barriers to entry are there?

There are a few barriers to entry for a bait shop. Your biggest challenges will be:

• Funding the startup costs of inventory
• Finding a prime location near a body of water

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a bait shop, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research bait shops in your area to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a bait shop that specializes in supplies for ice fishing, or a shop that stocks catfish or trout bait.

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as live bait or frozen bait.

This could jumpstart your word-of-mouth marketing and attract clients right away.

What? Setting up a well-stocked bait shop for anglers

You can sell a variety of fishing supplies and equipment including:

• Live bait
• Frozen bait
• Fishing licenses
• Lures
• Tackle boxes
• Fishing rods and reels
• Fishing gear
• Fishing supplies 

You could also offer snacks and beverages.

How much should you charge for bait? 

Prices for bait vary, but average about $4 to $5 per dozen. Prices for fishing supplies and tackle vary. Check prices in your local area to make sure you’re competitive. Your profit margin after cost of goods, rent, and overhead should be about 30%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be local anglers, which is a broad category. You should spread out your marketing to include sites like TikTok, Instagram, and Facebook.

Where? Choose your bait shop location

Selecting the right location for your bait shop is crucial for attracting anglers and ensuring the success of your business. Look for a location near popular fishing spots, such as lakes, rivers, or coastal areas, to capitalize on the proximity to your target customers.

You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

Additionally, consider areas with limited competition to differentiate yourself in the market and become a go-to destination for fishing enthusiasts.

By choosing a strategic location with easy accessibility and a strong fishing community presence, you can establish a thriving bait shop that caters to the needs of avid anglers.

Step 3: Brainstorm a Bait Shop Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “bait shop” or “bait and tackle shop”, boosts SEO
• Name should allow for expansion, for ex: “The Fishing Hole” over “Carp Fishing Baits”
• Avoid location-based names that might hinder future expansion

Discover over 270 unique bait shop name ideas here. If you want your business name to include specific keywords, you can also use our bait shop business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Bait Shop Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: A concise summary outlining the essential details of the bait shop business plan, including its mission, vision, and key objectives.
• Business Overview: A brief description of the bait shop, detailing its purpose, location, and any unique features that set it apart in the market.
• Product and Services: Clear and detailed information on the range of bait and related products, as well as any additional services offered by the bait shop.
• Market Analysis: An examination of the target market for the bait shop, identifying customer demographics, needs, and trends in the fishing and outdoor industry.
• Competitive Analysis: An assessment of other bait shops in the area, analyzing their strengths and weaknesses to position the new business effectively.
• Sales and Marketing: Strategies and tactics for promoting and selling bait and related products, including advertising, promotions, and customer outreach.
• Management Team: Profiles of the key individuals responsible for the bait shop’s success, highlighting their relevant experience and skills.
• Operations Plan: A detailed plan outlining how the bait shop will operate on a day-to-day basis, covering aspects such as suppliers, inventory management, and customer service.
• Financial Plan: Projections and analysis of the financial aspects of the bait shop, including startup costs, revenue forecasts, and profit margins.
• Appendix: Supporting documents, additional data, or any supplementary information that adds depth and credibility to the bait shop business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to bait shops. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your bait shop will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Form Your LLC

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a bait shop business. 

Step 8: Apply for Bait Shop Business Licenses and Permits

Starting a bait shop business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your bait shop business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as LS Retail, Vend, or Retail Pro, to manage purchasing, inventory, and invoicing.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

1. Local SEO — Regularly update your Google My Business and Yelp profiles to strengthen your local search presence.
2. Fishing Hotspot Maps — Provide maps both in-store and online, marking the best local fishing spots, demonstrating your expertise and local knowledge.
3. Expert Advice Sharing — Share your fishing expertise through regular blog posts, social media tips, and in-store advice on tactics and gear.
4. Active Social Media Profiles — Maintain vibrant social media profiles with updates on fishing conditions, bait recommendations, and showcasing customer catches.
5. Fishing Tournament Sponsorships — Boost visibility and community engagement by sponsoring local fishing tournaments.
6. Loyalty Discounts — Create a loyalty program that rewards frequent shoppers with discounts or freebies to encourage repeat visits.
7. Fishing Clinics and Workshops — Conduct clinics and workshops to help novice anglers improve their skills, led by experienced fishers.
8. Online Fishing Resource Center — Develop a comprehensive online resource center with guides on local fish species, fishing techniques, and gear maintenance.
9. Customer Catch Board — Feature a board in-store and online where customers can post pictures of their catches, fostering a community feeling.
10. Local Angler Features — Highlight stories of local anglers on your website and social media, building a narrative that connects with the community.
11. Virtual Bait Selection Assistant — Introduce an online tool that helps customers choose the right bait and tackle based on local conditions.
12. In-Store Experience Events — Host in-store events such as meet-and-greets with fishing experts or demonstrations of new products to enhance customer experience.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your bait shop meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your bait shop business could be: 

• Fresh bait, beer, and munchies for your day on the lake 
• Want to catch serious lunkers? We’ve got the best lures and live bait 
• Your one-stop shop for bait and fishing gear

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a bait shop business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in bait shops for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in bait shops. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a bait shop business include:

• Shop Clerks – make sales, customer service
• Bait Collectors – find and catch live bait
• General Manager – scheduling, ordering, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Bait Shop – Start Making Money!

If you love fishing, a bait shop could be perfect for you. You could sell all sorts of fishing gear besides bait and become a regular stop for local anglers as they prepare to hit the water. If you put your passion for fishing into the business and provide a great experience, you could build quite a successful operation, and maybe even expand into franchises!  

You’ve reeled in the required business knowledge, so now it’s time to cast your line and launch your bigtime bait shop.