Usually, a small – scale but standard bait and tackle shop that is located in a high – prone human and vehicular traffic location in a fishing hub will make on the average between $45,000 to $500,000 annually all things being equal.
Whenever an entrepreneur wants to start a new business, one of the first questions that they usually ask is how profitable the business is or how much they are likely to make on the average yearly from the business. This narrative also applies to entrepreneurs who are looking towards starting a bait and tackle business.
They would want to know how much they are likely going to make annually on a daily, weekly and monthly basis on the business.
Americans love to fish, and fishing is generally allowed at certain times in the year. At such times, a lot of people head to the waters to catch themselves some lunch. Of course you can’t fish without the right equipment, and that is where bait and tackle shops come into play.
What is a Bait and Tackle Shop?
A bait and tackle shop is a fisherman’s go-to supply shop for bait when it comes to fishing. Normally, a bait and tackle shop is located near boat launches, piers, and lakes so they can be close to their clients. If they are licensed, a bait and tackle shop can make extra money by selling drinks and beer to fishermen.
Some bait and tackle shops also known to sell snacks. It is on record that over thirty million people aged 16 and older went recreational fishing in 2006, the latest year for which the U.S. Fish and Wildlife Service has data.
They spent $42 billion doing so, of which 45 percent, or $18.8 billion was spent on fishing equipment, or more precisely, bait and tackle shops. Before we look at how much a bait and tackle shop can make, let’s find out how they make their money.
How Do Bait and Tackle Shops Make Money?
It is a known fact that many bait and tackle shops make money by selling bait alone. Some bait stands, in fact, only have a single tank with live bait. Others, meanwhile, offer lures, hooks, line, and even spare rod pieces. Depending on the location, a bait and tackle shop will offer different items.
Ocean fishing is different than freshwater fishing, and it needs additional gear. Some bait and tackle shops also make additional profit by selling food and drinks. Some shops sell beer and liquor. Other shops may open a café so as to serve coffee and breakfast fare to the early risers.
While rare, some shops are also seafood restaurants. It all depends on the shop’s location as some locations can allow you to go all out. Bait can be charged by the bucket, or it can be charged by individual fish, worm, etc. Tackle is sold on a per item basis.
Bait and tackle shops are known to charge customers between 25 and 95 cents for live bait, per bait. Fishing lures can be priced between 95 cents and $10. As for tackle, prices range from $15 to $80, depending on what you’re selling. If you’re selling rod necessities like spinning reels, you can sell products up to $100.
The truth is that there is no one mold-fits-all when it comes to how much a bait and tackle shop is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average bait and tackle shop make yearly.
Factors Determine How Much Money a Bait and Tackle Shop Will Make
The Size of the Bait and Tackle Shop
One cannot conveniently state the amount a bait and tackle shop is expected to make yearly if you do not know the size of the shop.
As a matter of fact, the amount a mom and pop bait and tackle shop is expected to make annually will be far different from the amount a standard bait and tackle shop franchise with several outlets will make annually even if they operate in same location.
Of course, the amount invested in a small bait and tackle shop is different from the amount invested in a large shop hence the amount they will both make will be far different. One the average, the approximate cost of starting a bait and tackle shop could be anywhere between $5,000 and $500,000 and even more depending on what you want to achieve.
The Location of the Shop
When it comes to setting up a new business, location plays a major role which is why feasibility studies and market survey are essential.
For example, the amount a bait and tackle shop that is located in a low traffic area in a non-fishing hub will make yearly will be far low compared to the amount a bait and tackle shop that is located in a high – traffic area in a fishing hub will make.
So, if you want to make it big with your bait and tackle shop business, then you must be ready to rent a facility in a high traffic area and a fishing hub. Please note that you are going to be paying more to rent a store in a high – traffic area in a fishing hub as against a low-traffic area in a non-fishing hub.
The Type of Products Retailed in the Shop
Another important factor that will determine how much a bait and tackle shop is expected to make yearly is the type of products retailed in the shop.
You will agree that there are bait and tackle shops that sell a wide range of products like hooks, lines, sinkers, floats, rods, reels, baits, lures, spears, nets, gaffs, traps, waders and tackle boxes from different manufacturers. The profits you are expected to make selling these products will sure be different when compared to a shop that sells limited products.
Other Related Products and Services Offered by the Bait and Tackle Shop
Aside from retailing a wide range of bait and tackle products such as hooks, lines, sinkers, floats, rods, reels, baits, lures, spears, nets, gaffs, traps, waders and tackle boxes et al, renting these products is yet another additional income that can determine the amount a bait and tackle shop is will make. So also, if you offer delivery services, it will definitely help you make more money.
The Management Style of the Bait and Tackle Shop
Another key factor that will determine the amount a bait and tackle shop is expected to make yearly is the management style of the shop. Trust me, the results you will get when you have a good manager and an average or bad manager will definitely be obvious and different, even if you give the managers same conditions to work and same products to retail.
The Business Model of the Bait and Tackle Shop
There are different business models that a bait and tackle shop can adopt and these business models offer different results. For example, the amount a bait and tackle shop that also runs online deliveries make yearly will be different from the amount a strictly brick and mortar bait shop will make.
The amount a bait and tackle shop that also sells franchise will be far different from the amount a strictly one location walk-in shop will make.
The Advertising and Marketing Strategies Adopted by the Shop
Another key factor that will determine the amount a bait and tackle shop can make yearly is the advertising and marketing strategies adopted by the bait and tackle shop.
Trust me, there are several advertising and marketing strategies that can help a business increase their earnings, but you may be expected to spend more. But the results you will make will far outweigh the amount you spent on advertising and marketing.
The Number of Years the Business is in Existence
Lastly, another key factor that will determine the amount a bait and tackle shop is expected to make on a yearly basis is the number of years the business is in existence.
For example in your first fiscal year (FY1) you might make a hundred and twenty thousand dollars ($120,000), in your second fiscal year (FY2) you might make two hundred and twenty thousand dollars ($220,000) and in your third fiscal year (FY3) you might make four hundred and fifty thousand dollars ($450,000). Interestingly, most businesses including bait and tackle shop usually breakeven from the third year of operation.
Recurring and Ongoing Costs of Running the Business
In order to calculate the profit margin from a standard bait and tackle shop, then you should be able to place a figure on the recurring and ongoing costs of running the shop. Recurring costs are the consistent expenses you will be seeing as your business grows.
These are your day to day, month to month, and year to year costs of normal business operations. You can’t avoid them, so make sure to take the applicable ones into consideration.
Mortgage or lease payments
whether you rent or buy, you will have a monthly payment to keep the doors open. Costs will vary greatly, but make sure to factor them into the budget.
Insurance is typically calculated in annual premiums, though you may be able to split the payments by month. The average cost is $300 to $700 per year. As the owner, another potential factor is the provision of health insurance. Although rarely offered for sales boys and sales girls, you will have to factor this in if you want to provide your employees with this benefit.
Compliance permits often have renewal fees. Be sure to check with your council office for specifics.
Depending on your business model, you may be paying a salary to each of your sales boys and girls. You could very well operate the commission-based model. This cost will range according to your employee payment structure. Also keep in mind that you, the owner, should be taking a salary too.
Payroll taxes or self-employment taxes
These fees accompany your wage expenses and will also vary according to your business model. Make sure you consider your employees’ particular situation, as well as your own, to determine the taxes you will owe. Keep in mind, these taxes often need to be paid quarterly. Self-employment taxes will amount to around 7.6 percent of individual sales.
Electric, gas and water bills will vary by the kind of equipment your bait and tackle shop is running. Expect $640 to $4,000 per month here.
The high end more accurately reflects bait and tackle shops with multiple big screen TVs, lighted decor and various other energy-guzzling pieces of equipment. Most bait and tackle shops find their utilities costs fall on the lower end of that spectrum.
Credit card processing fees
Here’s a potentially sneaky expense. As a modern business, you will want to accept credit card payments. Standard industry base rates for processing fees range from 1.5 percent to 2 percent. But many bait and tackle shops end up paying more than 3 percent, so be careful and shop around for your provider.
Repairs and maintenance
Normal wear and tear takes its toll and equipment often breaks. You will need to factor in the costs of routine maintenance. Expect up to $500 per month.
You will need to get the word out about your operation to drum up clientele. There are a number of avenues you can take (print, broadcast, web, social advertising), all with different price tags. You could spend as little as $20 for an email marketing solution or upwards of $4,100 for more robust advertising campaigns.
Legal and professional fees
This is a fluctuating expense, as it depends on your particular business model. Just keep in mind that professional services such as accounting or legal typically run about $200 an hour.
You never know what problems may arise. It is always a smart idea to budget in some funds for miscellaneous expenses. We suggest at least $500 per month. Building a bait and tackle shop can profit greatly if you set it up in an area ripe with opportunity.
If you want your business to be successful, your products and shop need to be designed to catch fishermen, not fish, because you have little business with them. That means you have to run your business just as any retailer: choose the right location, promote and create an appealing atmosphere for your customers.
Commercial fishing is a big business, but it might not be big in your area. Instead of expanding your floor space off the bat, look for better locations. Host special events like contests, and sponsor charitable community work.
Additionally, expand your sale of margin-rich merchandise either by buying it much cheaper or changing your merchandise mix to include a much higher percentage of high margin products. Alternatively, purchase a larger number of closeouts, join a buying group or consider either direct import of port of entry purchases, all of which will yield large margins.
If you want to be a retailer with considerable net worth, focus on any product or category that will generate sales and consumer following. Experiment a lot: jettison the failures and embrace the winners. If your net worth is not increasing year over year, it’s time to reassess both what you are doing and how you are doing it.