In February 1921, he opened Shimano Iron Works in Higashi Minato in Sakai City when he was 26 years old. On the site of a demolished celluloid factory, he rented a nearly 40-square-meter area. The monthly rent was 5 yen. At that time, the new establishment had only a single lathe, measuring about 1.8 meters long. He had borrowed that machine from Sano Iron Works, benefiting from his friendship with its owner.
By the time he founded his own business, Shozaburo Shimano had already decided to produce free wheels. Of all bicycle components, free wheels entailed the highest level of technology to produce.