How to Start a Skate Shop: Cost & Profit Potential

These are the key elements to think about when starting your skate shop:

1. Choose a location — Select a high-traffic location with good visibility, such as near skate parks, schools, or shopping centers. Ensure the location has adequate parking and is easily accessible.
2. Sourcing suppliers — Establish relationships with reliable suppliers and manufacturers to ensure a consistent and high-quality inventory. Attend trade shows and industry events to discover new brands and products.
3. Website and online presence — Create a professional website that showcases your products, store location, hours of operation, and contact information. Consider offering online shopping options and get listed on Google Business and Yelp.
4. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
5. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
6. Partnerships — Build relationships with local businesses, schools, and community organizations to generate referrals and collaborate on promotional activities.
7. Inventory management — Implement an inventory management system to track stock levels, monitor sales, and reorder products as needed. Ensure you have a diverse range of sizes, styles, and brands to meet customer needs.

Step 1: Decide if the Business Is Right for You

Pros and cons

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

Skate shop industry trends

Industry size and growth

• Industry size and past growth – The US skateboard industry is worth $2.19 billion and has grown 13% since five years ago.((https://www.statista.com/statistics/935225/skateboard-market-value-worldwide/))
• Growth forecast – The US skateboard industry is projected to grow nearly 10% by 2025.

Trends and challenges

Trends in the skate shop industry include:

• Social media videos, particularly on TikTok, are going viral and increasing interest in skateboarding.
• More and more females, known as “skater girls”, are adopting the skateboarding hobby.

Challenges in the skate shop industry include:

• There have been recent shortages of skateboards and equipment due to increasing demand.
• Skateboarding is being outlawed in more and more public areas, which may start to decrease demand.

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

You can start an online skate shop for as little as $1,500. You don’t have to purchase inventory if you can find a supplier that offers dropshipping. Dropshipping means that when an order is placed on your website, you order it from the manufacturer and they package it and ship it directly to the customer. 

To start a physical skate shop costs about $50,000 or more. Costs include a shop space rental and inventory. 

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 - $200	$175
Business licenses and permits	$100 - $300	$200
Insurance	$100-$300	$200
Business cards and brochures	$200 - $300	$250
Website setup	$1,000 - $3,000	$2,000
Shop rental deposit	$0 - $5,000	$2,500
Inventory	$0 - $30,000	$15,000
Shop space preparation	$0 - $10,000	$5,000
Total	$1,550 - $49,100	$25,325

How much can you earn from a skate shop business?

Good skateboards cost between $75 and $150. Your profit margin for an online shop after the cost from the supplier should be about 40%. These calculations will assume that your average sale to a customer will be $150 total if they buy accessories and a skateboard.

In your first year or two, you might make 3 sales a day, bringing in $164,000 in annual revenue. This would mean $65,000 in profit, assuming that 40% margin. As your brand gains recognition, sales could climb to 10 sales a day. At this stage, you’d rent a commercial space for your skate shop and hire staff, reducing your profit margin to around 15%. With annual revenue of nearly $550,000, you’d make a tidy profit of $82,000.

What barriers to entry are there?

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

• Finding a good supplier of skateboarding items
• The startup costs if you open a physical skate shop

Step 2: Hone Your Idea

Now that you know what’s involved in starting a skate 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 skate shops in your area and online to examine their products, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the market is missing a skate shop that also sells roller skates or snowboards. 

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

What? Determine your products

In addition to skateboards you can offer skating apparel, helmets, and other skateboarding gear. You could also sell roller skates, rollerblades, and snowboards with related equipment.

How much should you charge for skate equipment?

Your prices will depend on your costs to acquire the items from your supplier. You should aim for a profit margin of about 40%. 

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 tend to be a younger demographic who you can find on sites like TikTok or Instagram. 

Where? Choose your skate shop location

Finding the right location for your skate shop can make all the difference. Look for a spot that’s a hub for skaters, with high foot traffic, nearby skate parks, and limited competition. The ideal location will help you capture a passionate customer base and stand out in the crowded skate shop market.

When selecting your location, consider the layout and design of the space, ensuring that it matches the vibrant and creative spirit of the skating culture. You may also want to consider the proximity to complementary businesses, such as streetwear or music stores.

By choosing the perfect location for your skate shop, you can create a thriving business that serves the needs of the skating community while embracing the unique spirit of the sport. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Skate Shop Name

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 “skate shop” or “skateboard shop”, boosts SEO
• Name should allow for expansion, for ex: “Skater’s Paradise” over “Freestyle Skate Docs”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

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 Skate Shop Business Plan

Here are the key components of a business plan:

• Executive Summary: Outline your skate shop’s mission to provide a comprehensive range of skateboarding gear, apparel, and accessories, and your strategy to create a community hub for local skaters.
• Business Overview: Describe the skate shop’s focus on selling skateboards, parts, safety gear, and related streetwear, catering to both beginners and experienced skaters.
• Product and Services: List the products you’ll offer, including complete skateboards, custom components, and repair services.
• Market Analysis: Assess the local demand for skateboarding products, identifying your target customer base, such as young skaters or skateboarding enthusiasts.
• Competitive Analysis: Compare your shop to other local sports and skate shops, highlighting your unique offerings like custom board building or exclusive brands.
• Sales and Marketing: Outline your marketing strategies, which might include social media campaigns, sponsoring local skate events, or hosting skateboarding workshops.
• Management Team: Present the qualifications and backgrounds of your team, emphasizing their expertise in retail, skate culture, and business management.
• Operations Plan: Describe the daily operations of your shop, including inventory management, customer service, and community engagement activities.
• Financial Plan: Provide an overview of your financial projections, including startup costs, pricing strategy, and expected revenue.
• Appendix: Include supporting documents such as market research data, supplier contracts, or sample marketing materials that underpin your 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 skate 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 skate 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. 

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.

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 skate shop business. 

Step 8: Apply for Skate Shop Business Licenses and Permits

Starting a skate 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 skate 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 services like WordPress, Wix, or Squarespace. 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:

• Social Media Challenges: Engage your audience with skateboarding challenges on platforms like Instagram or TikTok, encouraging user-generated content that showcases your products and builds a community around your brand.
• Local SEO — Regularly update your Google My Business and Yelp profiles to strengthen your local search presence.
• Local Partnerships: Collaborate with local skate parks, schools, or youth centers to sponsor events, workshops, or competitions, fostering a strong connection with the local skateboarding community.
• Influencer Collaborations: Partner with local skateboard influencers or enthusiasts to create authentic content that highlights your products, reaching a broader audience through the influencer’s followers.
• Skateboarding Workshops: Host beginner skateboarding workshops or clinics, attracting newcomers to the sport and providing an opportunity for them to purchase gear directly from your shop.
• Limited Edition Releases: Create a sense of urgency and exclusivity by periodically releasing limited edition skateboard decks, apparel, or accessories, encouraging repeat business and word-of-mouth marketing.
• Community Events: Organize and sponsor community events like skate meetups, movie nights, or art shows, creating a positive image for your shop and strengthening ties with the local skate scene.
• Customer Loyalty Programs: Implement a loyalty program offering discounts, exclusive access, or freebies to repeat customers, incentivizing them to choose your skate shop over competitors.
• Unique Merchandise: Design and sell unique, custom-branded merchandise that extends beyond traditional skate gear, creating an additional revenue stream and enhancing brand visibility.
• Skate Team Sponsorship: Sponsor a local skateboarding team or individuals, providing them with gear in exchange for promoting your brand during competitions and on social media.
• Interactive Store Displays: Create interactive displays in your store, allowing customers to test products, view skate videos, or even design their custom decks, enhancing the in-store experience and driving sales.

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 skate 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 skate shop business could be: 

• Skateboards, roller skates, snowboards, and all the trimmings
• Affordable top-quality skateboards and accessories
• The best skateboards and accessories for serious skater girls

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 skate shop business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in skate 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 skate 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 and you open a shop, you will likely need workers to fill various roles. Potential positions for a skate shop business include:

• Store Clerks – make sales, customer service
• 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 Skate Shop – Start Making Money!

Skateboarding is booming again, and starting a skate shop online is easy and only takes a small investment. You can grow your business and eventually open a physical shop that could grow into a chain. It’s a growing $2 billion industry, so there is good money to be made. It’s also a fun business, since you can talk to people in your shop who share the same passion for all things skating.

You’ve now got all the information you need to be an entrepreneur, so roll on and get your successful skate shop off the ground!

Help Section

Can a skate shop be profitable?

Yes, a skate shop can be profitable. Gross profit margins are high, so if you sell quality products and a variety of products, you can make good money.

How to sell skateboards online?

To sell skateboards online, start by setting up an e-commerce website or utilizing existing online marketplaces. Create engaging product descriptions, high-quality images, and detailed specifications for each skateboard. Implement secure online payment options and ensure a user-friendly checkout process.

How can I attract customers and promote my skate shop effectively?

To attract customers and promote your skate shop effectively, utilize a multi-channel marketing approach. Develop a strong online presence through social media platforms, blogs, or vlogs that focus on skateboarding culture, tutorials, or product reviews. Collaborate with local skateboarding communities, skate parks, or schools to organize events or sponsor competitions. 

What types of skateboarding products can a skate shop offer?

A skate shop can offer a wide range of skateboarding products. Some common products include complete skateboards, skateboard decks, trucks, wheels, bearings, grip tape, protective gear, shoes, apparel, accessories, and skateboarding-related merchandise. 

How can I differentiate my skate shop from competitors in the market?

Emphasize exceptional customer service and a welcoming atmosphere that caters to skateboarders of all skill levels and ages. Offer a curated selection of high-quality products that cater to the specific needs and preferences of your target market. Develop a strong brand identity and engage with the skateboarding community through collaborations, events, or social media interactions. Provide unique services or experiences, such as custom board building, skate ramp installations, or skateboarding workshops.