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Old 11-07-07, 09:02 AM   #1
flyingcycler
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Opening a new bike shop

Hey there,

I'm located in the NY/NJ metro area and am interested in opening a bicycle store. I've read some posts here about how people say its a tough business, but I'm a real enthusiast and I'm very confident that I can effectively share my love for the sport with others. I realize that enthusiasm isn't going to pay the bills, but with rising gas prices I can't imagine a better time to give this a try. I've ordered a couple books over at the NBDA (highly recommended website!) which don't look superb, but they're really the only thing out there that I could find. I also listed to a podcast this morning called how to start a bike shop with a guy who claims to have been around the industry for awhile. Worth listening to. I especially found his comments on creative advertising to be helpful.

Here's my question for those who have been around awhile. Which books are worthwhile and which are junk? Also, are there any bike business consultants worth contacting (please don't mention the bad ones -- I don't want to make anyone mad -- just the ones that have a good track record)?

THANK YOU IN ADVANCE!!!
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Old 11-07-07, 09:37 AM   #2
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fill a niche
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Old 11-07-07, 10:04 AM   #3
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Don't know. But try calling the big time consultants to see if they have any data for you. Bain, McKinsey, etc. Go to your University MBA business school and they have a business library. These librarians are trained in business research.

Follow the supply chain. For foreign manufacturers, there's a handful of import distributors. They know who's good and who's bad. They know who's going out of business and who's merging.

What's your goal? A small boutique bike shop that does not really want to grow into a chain store?
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Old 11-07-07, 10:09 AM   #4
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Isn't that a double-edged sword, though? If you try to fill a niche, aren't you excluding potential market?
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Old 11-07-07, 11:07 AM   #5
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I don't want to discourage you, but just because YOU like bikes is maybe the worst possible reason to open a bike shop. You need to find THOUSANDS of people who like bikes, then fill a need for them that's not being filled now.
I live in an area that already had too many bike shops, and then an REI opened with all the advantages of advertising, purchasing power and built-in name recognition. Owners of four of the old local shops are friends of mine, and they've really struggled to stay alive (the bike shop at the REI, to be fair, is pretty good, and they can sell comparable bikes cheaper than a small-time guy). One was a high-end pro shop, and he's done pretty well keeping that market. One branched out into weird stuff, like folders and tandems, and offers some rentals, one has increased his stock of comfort bikes and low-end (not junk, just inexpensive) bikes for family rides, and the last guy is really pushing mountain bikes, which have been sliding here for several years. But don't just take all your money and dump it into a shop because you think it would be fun to be around bikes all day. Find a need and figure out how you're going to fill it, or you'll be broke in six months.
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Old 11-07-07, 11:24 AM   #6
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Start by getting as many tools as you can. Then try offering mobile repair service. Also add used bikes. They call that "flipping" a bike. And depending on where you have your shop, offer the used bikes for rent.

The LAST thing you want to do is offer new bikes! Way much money tied up in inventory!

If you last a year offering superbe service, you might THEN consider stocking new bikes.

And my last 2 cents...don't be afraid of recumbents!!!

I've owned 3 shops, managed 2 others, and wrenched in several others. Tools are your best investment. I don't have a bike shop currently, but I use the tools constantly. I had a big chunk of my tools stolen a couple years back, and it was about $8,000 to replace them! (thankfully, they were insured) And that didn't include the welding torches, the repair stand or any of the other BIG tools.
So there's a reference point on how much it'll cost you just to "tool-up" a bike shop.

Good luck and let us know when you kick open the door!
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Old 11-07-07, 12:22 PM   #7
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Wow, a lot of great advice, guys, thank you! I've always been under the impression that you could "build it and they will come." I may throw caution to the wind and give it a try, anyway. Nothing ventured, nothing gained.
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Old 11-07-07, 03:39 PM   #8
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Find a mentor. Someone that has been in the business for years can really help you.
Keep your inventory small. You want to turn a small amount of merchandise rather than stock a ton of stuff. Keeps your money less tied up.
Don't make promises you can't keep to your customers. A guy will come back if you tell him you can't do his bike til friday, but you will never see him agan if you tell him wednesday(Just to get the bike in) when you know it will be friday.
Don't take a ****ty location just because the rent is cheap. Location can often be your best "advertising"
Don't get a huge ad in the yellow pages, get the smallest one you can.
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Old 11-07-07, 04:37 PM   #9
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Don't get a huge ad in the yellow pages, get the smallest one you can.
Good point!
In the Yellow Pages you can list your shop name, phone # (duh) & website under the standard heading for the least amount of money and still be in the Yellow Pages. The website would be in place of the actual shop address, so be sure to list your actual location prominently on the website.
I think it's extra to list BOTH, but check before you commit!
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Old 11-07-07, 04:50 PM   #10
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You need:

A business plan. Most small businesses fail due to poor planning and under-capitalization (not enough cash).

A good experienced attorney. You will need to decide the form of entity in which you will do business. This may require certain filings with the Secretary of State.

A good experienced CPA. I could go on and on. But won't.

Good luck.
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Old 11-07-07, 04:53 PM   #11
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Before you spend any of your money, spend some time working in a bike shop.
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Old 11-07-07, 05:04 PM   #12
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Before you spend any of your money, spend some time working in a bike shop.
Gosh, I would have thought that he'd DONE that already!

If NOT, then YES, that would be where to start!
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Old 11-07-07, 05:30 PM   #13
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Some attorneys have what I call "business sense" and some unfortunately do not. CPA's on the other hand have more of the business sense because they live out the business with the owners. They're more intimate in the running of the business. And if they have experience in a certain industry, its invaluable; that CPA will bring value to the table.

It comes back to what you want to do. Is it going to be a chain store vision or a boutique single location store?
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Old 11-07-07, 06:51 PM   #14
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I just spent a LOT of time typing something to a friend about shops. I've talked almost everyone I know who wanted to do a shop out of it. I've been there, done that, and I have the utmost respect for anyone who is in the business.

I'll find the email and edit it down (it's long) but here's the summary:

You want to live the bike shop dream? Keep your day job. Call your favorite shop or two and ask if they want FREE help on the evenings and weekends. In return you're requesting severe discounts on some items (think of some big ticket items you want to buy). You will buy them from the shop. The discounts will not affect the shop bottom line - it might even help them by getting them free shipping on an order (or upgrade to expedited shipping, etc). Keep your day job, keep your almost free medical insurance, don't worry about someone suing you, don't worry about paying rent and utilities for the shop, and don't worry about some punk trying to steal things from you. Live the bike shop dream at the peak hours, help your shop out, and let them help you.

If, after a month or three of this, you still think it's cool, then start thinking about it seriously. You need a lot of cash to get a shop going so figure out how you'll get it - figure $100k would be good, more would be better. Are you the person that everyone, and I mean *everyone*, goes to for bike/accessory advice? This might even include people who were in the industry. Every shop needs a Guru and if you're not it, it'll cost a lot of money/favors/etc to get one that isn't lying through his teeth or has no clue what he's talking about. After that, it's straight forward - a bunch of money for rent/deposit, utilities, a bat to fend off yellow pages salespeople, and some way of getting really smart and overqualified kids/students to work way below their payscale so they can be around bikes. Get creditlines with vendors and pay your bills on time (most shops don't).

A bike shop is simply a method to earn money. If you think that's the best way to earn money, then it's all good. If you love cycling and sharing your enthusiasm for cycling, post a lot of stuff on a forum or two, perhaps run a team or a race or a club or all of that, and volunteer at a shop you really like. And earn your money elsewhere.

btw I had people like what I just described working at my shop (one guy in particular loved bikes, did IT, and I paid him to work evenings and weekends - he even opened the shop for me on Sundays). I also had a kid who I didn't want to pay because money was too tight - but his parents liked me so much they paid him to work for me (as well as chaperone him at stage races and such). I asked for help from the team that I sponsored - and on some days I'd have 8 or 9 guys talking about roof racks, helmets, pumps, bottle cages, and why the funny shorts are so comfy to customers all day. Then we'd shut the doors, kit up, and go for a kick ass ride. It was fun but I lost 10 years of "real life salary" doing it.

loves cycling but works IT,
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Old 11-07-07, 07:42 PM   #15
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They say to make a million in the bicycle business is to start with 2 million...if you enjoy riding bikes, forget about running your own business, you will spend or at least should spend all time there to make a go of it...Good luck.
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Old 11-07-07, 08:29 PM   #16
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^^^^WORD. When I started working in the bike shop(1994) I could average over 18mph on a single track ride and weighed 138#(5'10"), I now can't manage 18mph on a road ride and weigh 177# There are some downsides to the biz.
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Old 11-07-07, 09:09 PM   #17
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The idea of doing volunteer work for a bike shop is a really really good one. The best part is, if you figure out that there really is a slot that isn't being filled by the shop, you have a really good inspiration for how to open your shop.
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Old 11-07-07, 09:30 PM   #18
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Due to employment regs, it can be very hard to get a volunteer job at any for profit business. It can get the owner in big trouble with the ESC.
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Old 11-08-07, 08:38 AM   #19
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Why not consider opening a bicycle co-op in an economically depressed area such as Newark, Paterson, Spring Valley etc.

You could serve your passion for cycling while providing a much needed service. There would be little, if any, competition and you could get all kinds of economic incentives (grants/loans/tax breaks). Plus if it is possible to set it up as a qualified charitable organization, folks could may a tax deduction for the bicycles and parts contributed.

Legal and accounting professionals would probably donate their time if you promised first dibs on any vintage lightweights being sold by the co-op. Hint...hint.
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Old 11-08-07, 08:56 AM   #20
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contact local middle/high schools to see if any have biking clubs... maybe try to get some started? A great way to get loyal customes (aside from offering great service) is to hook 'em when they're young!

Organize group rides in your area. Get to know the local clubs. See what they want in a shop. Visit the other shops in your area & see what they have/offer & neglect. Have a race.
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Old 11-08-07, 10:40 AM   #21
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Have a race.
Or a "Poker Run"! Far easier to pull off than a race, and anyone can enter. Add a BBQ at the end, even better.

The first one I held, I got reports of someone cheating. They were opening the folded & stapled cards to find good ones. (checkpoints were unmanned)
After that, I had volunteers at each checkpoint. Much better!
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Old 11-08-07, 11:10 AM   #22
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The only way to do well is to move out to fresh patch of suburbia, set up shop, and sell countless Burley trailers and low-end hybrid bikes to yuppies.
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Old 11-08-07, 11:26 AM   #23
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My cynical take. Forget it. In current America the only money is working for the government, or short of that a non profit. See if you can teach bike shop at a local school, or perhaps offer a few days course at each school. My guess is they will not go for it unless you have some sort of credentials.

The other possibility is start a non profit. NYers are smarter than everyone else, this is how they make money out of bikes: http://times-up.org/ http://transalt.org/. You would be surprised how much money there is out there for donations, and since your workers will be volunteers ...

Consider a bike tour. It can be a year round job. like http://www.bikenewyork.org/

Once you convince people that bicycle friendly is a cheap way to improve real estate values you are set.

If you insist on trying to make your way in the free market investigate legal liabilities, especially those that cannot be discharged in bankruptcy court.
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Old 11-08-07, 11:30 AM   #24
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I would think that your greatest challenge after money of course, will be providing the necessary level of repair skill in your shop that is required to make it prosper. Most shops are only as good as their mechanics in my opinion.

Other than that, you have a lot of passion and god knows you have a lot of people, so why not?
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Old 11-09-07, 02:59 AM   #25
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Most shops are only as good as their mechanics in my opinion.
Can you please forward this to my LBS?
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