Road Cycling - Planning to start a LBS

Any shop owners or employees have advice for someone planning to open a LBS (in NH)?

G'day,

No direct bike shop experience, except a customer.....but I doubt that it's that much different from any other business that buys products at one price & sells tham at another...the difference between the 2 pays the wages & all the out goings!...pretty simple, but alot of businesses forget that they have a need to concentrate on that margin. My advice would be, know your market, know your competition, keep your eye on margins & get a good accountant...oh & with LBS's...don't expect to get rich. hope it works out for you.

Hitchy

if you wanna make money, start a fastfood restaurant. If you wanna just get by doing something you love, then good luck to you and have fun.

One thing I really like about my LBS is the owner's commitment to service. That's the only way IMO that you can compete vs the bigger chains and promote consumer loyalty.

One major setback he has (which I don't have the heart to tell him) is the lack of salesmanship and marketing of his people.

As a former advertising guy we had this tool which was pretty much a day in the life of your anticipated consumer, then you figure out entry points where you can 1) promote yourself b) sell your product.

A very obvious case in point is this fund raising event I'm doing with my wife called Team in training. I've been told that about 500 TNT riders will be doing the Solvang Century this march, many of whom don't even have a bike. HELLO!!!!

Basically you have to stop thinking that you're a cyclist but a guy selling to a cyclist. Then after sales, you can enhance the experience and create repeat business by including your cyclists experiences in how you service.

Got tons more ideas should you want to discuss privately.

My wife is an advertising agent! I don't want to get rich, just make a liveable salary by doing what I love and sharing it with people who might not experience it. Will be a ski and bike shop as it's NH and a short season. :)

I went to 4 bike shops, all within blocks of each other, and the one where I bought my bike was the one that spent time with me, fitting it, just for a test ride! In fact, since it was my first, I was a little hesitant to ride, but the young owner said they wouldn't even sell me a bike unless I test rode it; and it HAD to be comfortable for me to make sure I rode it! Sold me.

Interestingly enough, it's NOT the place where I buy accessories. I go to the one just around the corner. In there, you're greeted as soon as you walk in and asked if you need help finding anything, and they have tons of choice as far as tires, bells, locks, mirrors, you name it. The one where I bought my bike has few choices, if they have it at all. And the guys/gals that work there are just aren't as 'friendly' to the recreation biker as they are to fellow 'racers'

You sound that you're really people friendly, as well as loving bikes! Sounds like you have the perfect basis for a successful life/business. Good luck!

I don't have advice, but please come move to our town. We have one shop and it's not the best in the world. It woud really be nice if you sold FELT as well, since my wife has one, and I would like to get one for my daughter next year.

Plus I could work for you part time. I have the location already picked out.

hahaha

I have run large Retail stores for many years. I have always worked for other people and have made tham alot of money over the years. One day I hope to get all my resources together and open a store of my own as well. (type is yet unknown)
My advice is to accomplish two things.
1. Happy employees. You must find people who want to be there. And I do not mean " Be there" Because its a bike shop. They must want to WORK there. If you have unhappy people you should first look at yourself and your managment style. If that is ok. then you must look at your people. Never be afraisd to fire people. Go through as many people as needed to find the perfect ones. They are what your customers see first.
I suppose, create a Family.

2. Customer service. I know this is said everywhere. And for the most part it means nothing.
There are a lot of LBS in Austin TX and I have yet to find one where I feel comfortable. (i am willing to give examples)It is sicking how employees feel that because they work in the industry they are somehow better than the masses. (this goes for all types of specialty stores)
This arrogence will chase away your most profitable customers.
You will make the most money on first timers. Accesories! Upgrading! Loyalty! Sadly they go to a large discounter by a peice of junk and end up never doing anything with it. All because a bike shop employee told them that they needed something well out of their price range. Or made fun of them when they asked where the kickstand goes.
Ack.. turning into a rant...

Make your people helpful and patient. Have them understand that new cyclist need to feel welcomed and not belittled. Build up your client base and the world will come to you.


As for knowing what I talk about. Its my job now for the company I work for. I go into underperforming stores and "fix" them.
A good rule I use is, Change the people or Change the people.
That goes for owner/managers as well. Take alot of managment classes if you can as well.

Nicco

As a former mechanic at two different shops, my first recommendation would be to pay your mechanic(s) decently. If you're going to have sales people and mechanics, work out some sort of bonus plan for the mechanics to ease the disparity between the pay of sales/service. At the last shop I was at, they worked out a bonus for us mechanics where they assigned each of us a SKU for our labor, so that they could track what we'd done, dollar-wise. At the end of each month, we compared what we did in labor vs. what our pay was. If we produced more in labor than we cost in payroll, we got a share of that profit. Keep in mind that if you offer a low rate of pay to your staff, you'll get unqualified people, who will end up costing you more in loss of sales that if you were to pay a decent rate to get qualified staff.

Be honest with the customers if a mistake is made. At that last shop, the service manager clamped the top tube of a triathlete's bike the week before he was to fly to Hawaii for the Ironman, severely crimping it. He chose to disguise the damage by creatively routing the varied tri-geek fixtures on the frame so the customer wouldn't notice. He also instructed us to not say anything. When the rider returned from the triathlon (with no mishaps), one of the bike builders pulled the guy aside and informed him of what happened. The shop ended up buying the guy a new frame, but should have informed the customer themselves, instead of having someone below management do it for them.

If your mechanic asks to take a couple of days off, unpaid, to go to the Olympic Training Center to become USCF certified, at his own expense, and even finds someone to cover his shifts while he's gone, let him. Don't fire him, only to re-hire him two weeks later. It just makes you look bad. And if you don't let him go, then fire and re-hire him, don't lay him off while he's trying to close a sale on a $1700 bike. And no, I'm not bitter.

I recently had to talk to some 200 odd shop owners in the Northeast as part of new campaign for the zine I intern at. Good luck-I would say shops are doing merely OK right now in the New England area. There a lot of bitter ex-riders turned shop owners who have no idea how to run a business, get screwed and get mean, then poor (not to say they weren't poor to begin with). Try to find a niche market...support local riding-trails, teams, etc I know us collegiate boys are always looking for more help...have good mechanics and make them happy-they''ll be the reason customers KEEP coming back...keep your floor guys from being attack dogs...sell the Ride magazine

I say don't do it. If you enjoy riding at all, bear in mind that your chosen job will take you away from riding. There's not much money in it at all, especially in the supergo/nashbar/performance era in which we live. Don't try to be everything to every cyclist-pick an area or two to focus on, ideally those which are not adequately met by other shops in the area.

If you have a University near by that offers a marketing program have one or two of the students do a marketing profile for their class to find out what types of bikes people want to see, how much money can the area afford (you don't want to have $5,000 bikes if no one has the money to buy that level of a bike), where would people like to see a bike shop locate (location, location, location). Offer bicycle brands that no one else for 50 miles around you offers; 3 or 4 different brands that reflect a world view and a variety of prices, with the ability to order whatever a customer may want that the other stores don't carry. Try to find as many different brands of accessories as possible so that again you can carry different brands then the other LBS's; and carry a wide price assortment to please a wide client base, (one bike shop I knew only carried bike lights over $125 or the real cheap $25 and less lights, I bought a light from a bike shop that carried cheap, midend and highend and paid $48-the other LBS lost the sale because of lack of assortment). Go out of your way-beyond the call of duty to perform outstanding customer service, and that means if a part is delayed you call the client ASAP to explain the situation-don't wait for them to call. Study and learn as much as you can about your products and your competitors products so you will sound intellegent when talking with a prospective client. Sell other unrelated fitness and/or sports equippment for the off season otherwise you will be broke at least 4 months out of the year, sell a sport related item that people in the area due when not riding bikes like snow sports, or water sports, camping, hiking, bow hunting etc. Maybe take on a side business and run it out of the shop like locksmith, then you could sell locks for the bikes as well as making keys and opening doors etc. Be prepared to live for a least 3 years with no profit.

There is an LBS here in pittsburgh called Kraynic's Bike shop. Its run by Kraynic, its closed on Sunday, Monday, and Wednsday. He usually closes around 6:30 and opens around 10 to 12. He lets you use his shop for free and carries more stuff (forks, breaks, rings, frames, etc) than you can count. If you need the odd bottom bracket that is a shorty and has a french thread, he has it. His prices are super cheep, he sells mostly lightly used or new stuff and he will build you a bike but he does not carry any assembled bikes. Because of his "style" he is widely considered the only bike shop to get parts, and he is the "wise one" at the centre of the urban bike culture in Pittsburgh. If you are in a bike friendly town they may need someone like that, tools are expensive, buying a brand new pair of aero break leavers is expensive, so if you can fill that void for bike people you will not only be involved in the culture, and spend a great deal of time riding but you will also provide a service that cannot be turned into a commodity no matter how many nashbar's show up.

Milo

if you wanna make money, start a fastfood restaurant. If you wanna just get by doing something you love, then good luck to you and have fun.

Have to agree with this.

Also be advised that the start up costs for an LBS are very high, cost of your stock.

I buy from the LBSs that support the bike clubs to which I belong--an exchange of loyalty, you might say. You might consider sponsoring rides or supporting bike and ski events in your community.

Feltdude,
I would say do your homework, then spend time with another shop owner that you can learn from. Starting a LBS can be very costly, and location and market are important factors. We have had several LBSs' kick the bucket here in the last year around Charlotte. Biggest reason is the big box retail stores and online purchases. Mainly Dick's Sporting Goods has opened a two story super store and now we are getting another store similiar to REI. I would think twice about it, and maybe follow Opie's opinion, I know for fact that Subway has a nice profit margin with little investment. ;)

I have to preface this by saying there are 4 Performance bike stores and 1 Supergo within 30 miles of where I live, the closest about 4 miles away. I buy lots of stuff from Performance because it's so ridiculously cheap. Sales + coupons + Performance Team Member points = nothing anybody can match. Nowhere. I can't justify paying 25-50% more for the same thing elsewhere. Plus, I like the store manager. Can't say much about the employees; they change about every time I go in there lately. I know more about the bikes they sell than they do in many cases. I am a seeker of information.

I'm pretty much a do it myself person. I can do everything to my bike except true the rims and change the bottom bracket (no tools, never had to anyway). I really don't need their service. I have bought 2 bikes from Perf for a total of about $1700. The prices went down within 90 days and I went back and was refunded $100 from each bike. I got $100 in points from each bike in the store (double points from one bike). It just goes on and on. I'm not a big fan of Wal-Mart, but Performance lets me buy twice as much stuff as I'd get elsewhere, actually more, because the selection through the catalog is immense. I'm sure you know.

On the other hand, there is a small shop up in the mountains I go to on the weekends when I'm up there. I've bought brake pads, chain lube, tools there and have no problem paying a little extra and here's why. My 13 year old mtn bike was not shifting too well a few months ago and I had had it with trying to adjust. I figured I'd just take it to the shop and let them replace the cables and I'd get the adjustment for free. So I walked it back there (didn't have to schedule it for 2 weeks later like Performance) and the guy puts it right up on the repair stand and starts working on it. In a few seconds he tells me my derailleur hanger is bent and proceeds to straighten it with a tool only a bike shop would have. Also, my new rims (bought guess where) needed a spacer for the 7 speed cassette. We looked around the parts bin and came across a spacer that came from a bottom bracket I think. I modified it with a dremel at home (bike still up on his stand) and came back and we put the wheel back together. Then he adjusted both the front and rear ders to perfection. All in all, my bike was on his stand for over an hour. He wasn't going to charge me. He said just come back to the shop when I needed something. I couldn't believe it. I said no way and he finally came up with a price. $10.

I will always only go to that shop when I'm up there. I'm a lifetime customer.

I think I have explained why people buy where they buy. Price and/or service. Shops can rarely afford to do both. I can live with either if I need it.

Here's another novel idea. Since you will probably be competing with the likes of Wal-Mart/K-Mart etc, maybe buy a few of their bikes from them to use as comparisons. Most people see a bike as a frame and 2 wheels and cannot differentiate anything between them. Let them ride the junk bike and then one of yours. Point out the differences. They will form their own conclusions. Even sell them the junk one at the same price if someone is dumb enough to buy one after riding a bike shop bike. You could probably even carry them as a line (Mongoose, low end GT are sold in discount stores, and some actually aren't that bad) Sometimes you will lose, but you will form an impression of an honest, fair bike store and they will probably come back for something. Repair bikes for kids that come in alone for free, using old parts you wouldn't sell anyway. They'll tell their parents.

That being said, can you make any money? I have no idea. I suppose it depends on how many bike stores there already are in your area.

This will be the first bike store in this city, about 30-40 minutes from the nearest competition. Thanks for all the tips.

Story off a bike store in my childhood.

He did not carry more than 10 new bikes. He could get you any bike you wanted.

He built up the business on service and repair. He once told me that he could make more money selling loads of bikes by having them in stock. He would rather you bought the bike elsewhere thern came to him for everthing else.

If the job would take less than half an hour he would do it on the spot all parts where at cost you only paid for his time.

feltdude, do you know everything there is to bike repair and maintenance? If you are not efficient in bike repair nor the bike business I would suggest looking into classes for both.
I'm thinking about going to UBI soon www.bikeschool.com

I know a group of riders that went to a bike shop in another state and proposed to the owner that they would work there for free during the summer if he taught them the tricks of the trade. Then they would open a bike shop in their town (absolutely no competition to the other bike shop owner). He thought it was a great idea and they worked for him (FOR FREE) all summer long. In October they opened up this bike shop and are doing pretty well.

if you wanna make money, start a fastfood restaurant. If you wanna just get by doing something you love, then good luck to you and have fun.

I know this guy that's making a boat load of money owning a topless bar. Probably the best way to make money is in sex, drugs and cars. Not in that order either.

Starting an LBS is basically buying a job. J.O.B = Just over broke.

I have run large Retail stores for many years. I have always worked for other people and have made tham alot of money over the years. One day I hope to get all my resources together and open a store of my own as well. (type is yet unknown)
My advice is to accomplish two things.
1. Happy employees. You must find people who want to be there. And I do not mean " Be there" Because its a bike shop. They must want to WORK there. If you have unhappy people you should first look at yourself and your managment style. If that is ok. then you must look at your people. Never be afraisd to fire people. Go through as many people as needed to find the perfect ones. They are what your customers see first.
I suppose, create a Family

This is going to be tough. Why?

Unlike retail where cashiers come a dime a dozen, a bike shop mechanic is a skilled position. If you're doing all the wrenching, then it's another matter. Finding quality bike mechanics often means hiring low wage Mexicans who can barely speak english or types that look like they just came out of a skate board park! Sure you can fire them all but you'll only going to get more of the same because that is the nature of the position. A bicycle wrench is a low paid job and you'll get whatever comes into the door. Bottom line. If the person really knows how to fix bikes, that's a keeper because there are loads of wrenches out there who only think they know how! If he/she has poor communication skills, he's still a keeper and YOU have to do the selling.

Customer service is dependant on these shop wrenches who may not have good communication skills. That is why this should be YOUR job! These kids repairing bikes are not paid loads of money so don't expect a top rated professional. I'm sure somone like the "shop girl" in Bicycling goes for a pretty penny in salary. A good manager is one that can work with everyone because you cannot fire skilled position employees unless you can repair bicycles on a professional level. The only people you can fire at will are cashiers.

I've worked in retail and met managers who fired everyone upon arriving. This policy works for low skilled positions but not for the high paid ones. Eventually it caught up to them all and they were let go because high volume retail is all about crash and burn.

If you can't repair bikes, you better be able to sell. If you can't sell, then you better be able to fix bikes. Don't try to do both.

I know some decent bike repair skills from helping out at the local shop here in NC. I am also an expert in the ski department (the other facet of the store.) To start I'll probably be doing the repairs and the sales, but once we get break-even business going I'll hire a mechanic and just be the salesman.

My wife is an advertising agent!
I've been in advertising for over 20 years and worked for some of the biggest agenicies on both coasts - I have never heard of an "advertising agent". Is she a media seller of some sort?

55/Rad
www.eurorscg-drtv.com/ourleaders/jerry.asp

No, 55/Rad, I was just excited and misquoting her job title as usual. Advertising Executive, Advertising Agent.

There is a well known formula for the bicycle retail business that will virtually guarantee you $1,000,000 by the end of your first year in business.

First you start with $2,000,000...

No, 55/Rad, I was just excited and misquoting her job title as usual. Advertising Executive, Advertising Agent.
Ahhh, well then. Would she like to come work in Portland? We need good people....

55/Rad

Bingo, if you want to end up with a small fortune, start with a large one.

My LBS Guru said the money is in repairs. He loves Wal Mart bikes, lottsa down time.

He also sell Roller Blades, Scout Uni's, patches, etc. Hockey equipment ios a big part of his inventory.

There are some franchises in our area. Bike Doctor. It is expensive to have a big selection of multi sized hi $$$ bikes.

Good luck.

Your customer is handing you money equal to the full price plus taxes be it for labor or goods. You correctly percieve only the margin you expect to realize. If the customer is parting with $100 and you "act" as though you are receiving only $7 you and the customer will never see eye-to-eye on the value of the transaction. Sales of service or goods is largely acting.

If I peel off 5 twenties and hand it to you, you need to react and treat me like I just gave you $100, not $7. If you can master that, I'll be back next time I have 5 twenties to spend.