Stallionforce

Is it possible a "proper education" is one which isn't a means to the end of wealth and the acquisition of material objects? In fact, could it be a proper education might encourage a completely different life purpose and mindset?

Ah well, no point in pursuing that further.

To the OP, I feel, as another poster has suggested, that you should try working in a bike shop as a mechanic for a while. Pick a successful, established shop.

Sasquatchula

A couple of things that haven't been brought up(I think)yet. Take a look around, is there enough demand/need to support your business? Is there anything special about what you intend to do that others in the are aren't already doing. Do you have ANY existing customer base?

A buddy and I started a store front computer repair service years back after it outgrew his garage, I'd guess we had about $5k going in. By the time we opened the doors we were just about broke: with rent, licences, decor, insurance,etc. It was hard work and A LOT OF SACRIFICE was involved, I'm talking $70.00 paychecks per week kind of sacrifice, for a long time. But we had something no one else offered and small base of existing clients that had some word of mouth influence in our area. We built a reputation of honesty(even if you didn't want to hear it) and integrity in our work. The biz eventually flourished, become licensed dealers, and soon, certified repair center. We sold three years into it, he went on to some very successfull ventures, funded by the experience and cash he eventually got. I stayed on, and live a comfy enough life.

So, I guess what I'd ask you is this; is your passion for bikes strong enough that you would sacrifice a little of your life in order to light the fires of others?

vantassell

+1 to what sasquatchula said, he stole my thunder. The most important thing is the market.

Go talk to local shops and see how long it takes them to make a repair. The longer it'll take them the higher demand is in your area. You'll need to investigate the market numbers of your area. How much are other shops bringing in?

You also need something to differentiate yourself from other local shops. What will that be? Fast service? some special warranty on service/fit? I may be wrong but it seems most shops make most of their money of servicing bikes, not selling them. Most industries operate like that. If I were you i'd try to find some service/attitude that other shops don't have and market that.

Again, the you need to see what demand is. If larger shops are flopping, so would you

patentcad

A) Start with less than $20K, open a friggin DUMP and close the doors in 6 months.

B) Do your homework, line up adequate financial backing ($300K-$500K), open a slick store in the RIGHT LOCATION with good inventory that looks like an American Express Card commercial. Succeed.

I've seen about 10 shops in the local NY area here try method (A), they're all gone. The two shops I've seen try method (B) have been quite successful.

blonduathlongrl

5k is nothing, 5k is quickly going to go on insurance for your building and employees, payroll ect... you need way more money.

patentcad

+1. WAAAAAAYYYY more money.

On the other hand $5K will buy you a nice bicycle. But you'll need more dough for the Zipps and all the other crap you'll want after you post pics of your new bike here and everybody tells you to add this, add that, flip it, etc.

roadwarrior

5-6k, with all due respect, is nothing.

I've not read any of the responses, but there's no way with that money you'd make it.

Seriously. You'd run out of cash getting the doors open with no inventory.

Perspective...I work in one of the top rated shops in the US. A number of rating sources rank bike shops.
We SELL almost five million dollars of bikes and accessories a year. That's sold. That does not count what's in the store at any given time that's not sold to you, the consumer, but the shop owns. Two weekends ago at a sale we sold well over 600 bikes in three days. Takes a lot of capital to buy those bikes and all the goodies that go along with it.
Bike companies need a minimum number of bikes to be bought by the shop to even want to talk about doing business.
You could maybe buy one high end bike...maybe a few hybrids. No accessories. No clothes. No shoes. No helmets. No pedals (from $50 SPD's to $400 HM carbon Looks).

Very simply put, and I mean VERY simply put, you put together a business plan and ask a bank for a line of credit. And they will want to know what your experience/background is on running a business, what you know about the bike business (where shops close every day).

Then there's knowing about payroll, taxes, laws you must comply with, accounting...

The biggest problem with the bike biz is that shops are owned by enthusiasts that have little business sense and cannot manage the inventory/credit issues and you end up with shops that are the ones that I read about out here almost daily.

A little example...stems. You need ones with different lengths and rises in order to satisify customers. And you need different price points...so I need 10 $50 stems at different lengths, I need 10 Deda Newton style stems (about $125 retail a piece) and I need 10 carbon Zipp stems (around $200 a piece)...now extrapolate that to forks ($300-500 a pop), seats, seat posts, cables, shifters, cassettes, chains, handlebars...and for different types of bikes...hybrids, road, mountain...you get the point. And I realize those are the consumer prices, not what you pay the manufacturer to get it into the store...but the point is that many people on this forum complain about the LBS that is understocked. They go there, they don't have what they want, they don't go back.
Soon, they are out of business.

So, you need a lot more zeros behind the 5-6 before you have a shot at success.


...and I didn't even get into repair stands, tools, racks to display bikes, signage, rent, upkeep, insurance, yadda....

Seriously, if you want to do this, go to work at a shop. A good one. Learn about the business. Then, you might be able, if you can raise the cash, to open a shop.

It's a lot more complicated than it looks.

atomship47

my usual advice to fresh grads is to save up as much $ as possible for a down payment on a house. it sucks when you get married and start a family and really have to eke by.

otoh, i think its admirable that you have a vision and are working towards it. kudos to you for doing what you love!

people start up businesses all the time. it seems many more fail than succeed. speaking as a "family man," its better to take these kinds of risks when you're younger and have shallow roots. when you have a family, its more difficult to take risks like that (for me anyway).

patentcad

On the other hand, don't let that stop your entrepreneur dreams. Now focus on the kind of shop you'd open, the kind of backing you'd need, where you would get the money, etc. But don't blow your dough on an under-funded enterprise that's doomed to fail. F the new bicycle. Keep that $5K for your future bike shop....

roadwarrior

If you are less of a cycling person and more of a numbers/money guy (like you were an accounting major for example) you will have a better shot at business success.

Seriously, if you think the bike biz is for you, try to find a job at a manufacturer or a good shop and learn this business...

The guy that owns the shop I'm at started it with several other guys and it evolved over 25 years or so to what it is today. They were all investors looking to have a bit of fun, but were excellent money people who happened to cycle. But they were all in their 30's back then with kids and mortgages. And they pulled it off. They were excellent money managers and understood how to run a business. It's all about the money. Follow the money.

Personally, I started and own a business, but I am not sure I'd want to deal with all the issues of running a bike shop. I am just there for fun and amusement. Done well, it's a very complicated business.

Retail is mind numbing.

carpediemracing 

As someone who was in the bike business (from 16 years old till I closed a shop 15 years later), this is what I tell people who want to "try" the bike business:

1. First, realize that a bike shop is a BUSINESS! It is not a "fun place" unless you have gobs of money to burn and you don't care about making money. One shop owner I spoke with put $360k into the business before he opened the doors and didn't make a profit for THREE years - he's since left the business. Decide if you want to go into the bike business or some other business. Successful bike shops are run by good business people, not necessarily "good riders". In other words, a cycling enthusiast will make a shop work only if they are a good business person as well. Remember, you're in business.

2. Get a real job (not facetiously, meaning get a job that pays you, pays insurance, and pays you enough to get by). This job should be a weekday job (M-F). As a CS person, you can do CS work. Actually that's what I do now

3. Go to your favorite shop. Ask them if they need help on evenings and weekends during their peak season. That is their dream question - someone who only wants to work evenings and weekends. Oh, you should be someone who can talk their way around bikes and accessories and is polite and presentable. Tell them you'll either work on trade (i.e. credit towards things), for some paltry sum, or for free.

(a related tactic would be to get a night job, i.e. loading UPS trucks or doing IT support at night, and working days and weekends, more as a mechanic than as a salesperson - but mechanics require more experience than sales people).

Number 3, i.e. working in a shop but not in a permanent manner, is something I recommend but I also discovered that McDonalds makes their franchise owners do as well - new franchise owners have to work every position in a McDonalds so they get an idea of what everyone does.

Now you have two things: a job that pays you reasonably well and an opportunity to observe what happens at a shop first hand. Maybe you'll even have a nice bike at wholesale!

If you like working at the shop, *take a business class or five!!!*. I know that when you're finishing college that taking classes is the last thing from your mind. But trust me, you have to, have to, have to know the basics of business before you go into business. And this does not mean read a few books and articles (that's what I did, and I can tell you I made the most fundamental errors right from the beginning). Take classes at night or something. Then work your "real job", save your money, and open a shop. It might take you 10 years but that's okay - in the meantime you'll have developed a "backup" career and get an idea of what other people do in "real life".

That last bit is critical. Your $5k question is very revealing. If you said $500k, then you're in a "realistic" frame of mind which will not be shocked at some of the expenses related to a bike shop. When I left the shop, I had no idea that to some people here, $5000 is chump change. That $300 for a helmet is completely reasonable and cheap for someone who races cars for fun too because car helmets cost a lot more - in fact, $300 might pay for gas for a weekend of car racing or pay for one tire (which lasts a weekend or two). Dinner for two around here might cost $200, and the place is packed. That financial investors might walk home with a million dollar paycheck, and that when they want the "best bike", you sell them the "best bike", even if you might think it's a bit much. That taking a boat out for a weekend will cost $1000-2000 for gas alone, yet guys (like the one that maintains our watercooler at work) manage to do it a couple times a month (what do you think they'd consider reasonable for a mountain bike to cruise around once they get to some little island?).

If after experiencing life outside of cycling you still want to open a bike shop, by all means go ahead. At that point you'll know exactly what you want and you'll know how to get it.

Some ideas on opening a shop without actually renting a space:
1. Work for a shop with the idea you want to buy it. The current owner might help you transition, doing things like talking to the landlord about rent deposit, giving you credibility with the vendors, etc.
2. Work for a big chain shop (if they're around). Running a big shop will get you more pay quicker than if you tried to grow something like that on your own. A working system for repairs, new bikes, etc., and heavy marketing power also helps things run smoothly. And if you decide to leave, you can incorporate some of those ideas. You'll also get an idea of how hard it will be to compete against those guys.
3. Work for a bike manufacturer. Work the phones and talk to a lot of shop owners. Get an idea of how they are, and see if maybe you can work a bit for them.
4. Internet sales baby! I think this would be hard though, unless you sold commodity items at low prices (means you'd have to have contacts in, say, the Far East).
5. Custom frames.

Incidentally, every single person who's asked me about "I want to start/buy a shop, can you give me advice", I tell them the same thing. And all of them have come back to me and said "Boy am I glad you told me to try working at a shop first". All of them have "real jobs" and have helped out at a shop on their own time. Only one has persistently come back to me "Hey I want to buy this shop, and I will if you run it". I turn him down every time. Why would I take a 50-60% pay cut to work more hours? How will I support my kids? I don't have any, but if I did, I think it'd be hard supporting them with a shop salary. How will I pay my mortgage? What will I retire on?

Finally, you can start things right now by maintaining your credit history. Meaning right now, today. I know, this topic sucks for a lot of people, but if you can't maintain a good credit history now, then there are elemental problems with you which would make me lean towards recommending you not go into the bike biz. Maintaining credit history means paying every single bill on time. That dumb $1.11 phone bill, pay it in full (or send what you think the next one will be, so your bill is, say, 7 cents next month.... this is what I've been doing for the last 6 months with my phone bill). Pay your credit cards off. Pay your student loan every month (I think you get lower rates if you do that too). Demonstrate to yourself and to others that they can trust you with money. Things go a lot easier if you have that discipline and if creditors, when they get your credit rating, see that discipline in action for the last, say, 10 years.

hope this helps
cdr

ps There are plenty of very successful shops where the owners are paying the mortgage, building their 401k's, etc., but they are a minority. Most shops struggle. As one very famous rider said to me on a group ride, "I've never met a rich bike shop owner". He's been riding (and sort of racing) for probably 30+ years and he lives in an area known for its cycling. He was glad to hear I'm not in the biz anymore.

LowCel 

Oh well that will be easy then. I believe Giant currently has a requirement of 60 - 80 bikes per year. Shouldn't be a problem on $5,000. You may want to check with a smaller company such as KHS. They are very easy to deal with for the smaller shops.

obelix67

You have an IT degree go into that line of work, use your uncles space as a weekend sideline for you, be open to do repairs on Sundays - something different as others have said above.

The income from your day job will keep you living, if your uncle is there then he can field questions and get you to call people back lunchtime, get an answer phone service if he cant.

Start that way and you have put some time into it.

You can be open evenings, and then take your vacation when there local holidays and be open..... your business - your time - makes your money... offer an emergency repair service - over here the equivalent of the AA or RAC offer a bike assistance - where if you breakdown / have an accident they get you and the bike home. You could see if that would be of interest to local bike clubs or cyclists if that service isnt already offered. The time you have invested getting a bit of paper from a university or college is a fraction of the effort making a successful business is.

I owed a business for a few years and we had 36 staff when 9/11 after effects burst our bubble, just because a business is viable for the moment doesnt mean it always will be.....

obelix67

I dont know about rich but when my dad sold his bike business the property location was prime real estate and it made him comfortably well off, and if he had kept it and leased it out, it would have been up into 7 figures by the time he retired, just one of the mistakes of life as he put it......

Mcurrier1241

If your college, or university is worth the money you paid to go to it, they will have a small business program where you can go and talk with experienced entrepreneurs who have invested their time to helping people with an idea. I currently attend the University of Maine at Orono and our small business program is top notch. Leaders throughout Maine come and talk with students about opening small businesses, teachers in the programs help students generate a business plan and attain the assets necessary to start the business. See if your college has a program like, this it will really help.

rhodeshg

2 suggestions

1. Open a "repair" shop. Do repairs from your uncles extra room, buy some used bikes, sell some used bikes. Offer cheap, fast repairs. Word of mouth and some adverising could get you going. Same money, a lot more money, to open up new store front or get some merchandise.

2. Get a wrenching job at an established shop. Learn the business. Save money.

mrfish

This is an interesting thread with lots of good advice. However you need to really think hard about why you're thinking about running a bike shop. Basically unless you can build a large pyramid underneath you (think 5+ successful stores) and do it pretty quickly you aren't going to earn more than you in a professional job IT or business consultancy / financial services / law. In my view the professional job route is more secure, straightforward and certain - how many banks go bust?

Example 1: My friend started up a repair shop because the local shops were incompetent. He built the business over 5 years up to a high quality store filled with everything from cheap kids bikes to a few upper end MTBs and road bikes. He worked 12 hour days 6 days a week on near zero pay. His mum, sister and dad all pitched in. His pay was near zero because it was being used to build up capital in the store. He later sold the business for £70k, so probably dividend to owner was £10k per annum plus £40k stock, sold at a big discount.

Example 2: Work hard at university. Get a job in consulting starting salary £40k. Work damn hard for 10 years and switch to work in the city on a generous 6-figure pay.

The reason why it was worthwhile to my friend was that the bike shop was that he didn't have many options and couldn't go to university. That said - I would look very favourably on anyone who had left university and had spent 1 or 2 years attempting to build their own business. Probably a lot more favourably than someone who had spent the same time doing an MBA.

My advice - understand what you're getting into (work in someone else's shop), set goals and go for it. If you don't meet your goals, make sure you have the education to do something else.

spiderbike

1. come up with a business plan
- write down your plans
- borrow some of your friends business planning books (educational ones not commercial)
2. become a LLC for liability reasons not tax reasons (tax is always individual unless Inc.)
- always sign everything by your LLC name
3. Get a business loan
- start out as big as you can
- your return will be higher with leverage
4. don't discount bikes
- give deals when people are deciding to purchase but there is a specific marketing plan for the pricing the manufacures are using.
- give a free fitting, a 10% opening reduction, free work, whatever
5. get a good mechanic or get yourself to be a certified mechanic, fitter
6. have a great location


thats all I can think of...basically if you have a dream to open a shop continue doing research on operating your own business, you can suceed if you have a good plan. You might be a able to find a partner interested in investing but not really managing if you have a good plan!!!

Use your computer skills build a website and have a similar US Pro bike kit prices for products online for groups and other products.

spiderbike

I agree with Mr. Fish, you will make more money in your professional job then as a bike shop owner unless you have multiple locations. Think about what you want.

merlinextraligh

Lot's of good advice in Carpediem's post. but I think this is the best. Find someone looking to retire or get out in a year or two. That way you can learn the business, decide if you really want to do this, and you don't have to invent every thing from scratch.

Also if you can save some money in that timeframe, and the business has a proven record, getting bank financing to buy the business will be a lot easier.

vpiuva

The big American names we're all familiar with require (as of 3 years ago) a minimum $50k initial inventory purchase to become a dealer (bikes, not all the other stuff you'll need). Others that include an entry-level line like KHS and Ironhorse will work with any purchases, but then your competition is the on-line warehouses. Or you can focus on some of the other higher priced names (read higher priced inventory) that will let you buy a smaller # of bikes, but leaves you with an upper-priced market niche. Add into this that much of your competition in this niche is doing it for the love of biking and access to new equipment to ride/race - not neccessarily to feed a family, so they will work on slim margins that make no sense to a businessman. Pick your poison for working on a limited budget.

kartoffel

If all you have is $5k, form an LLC and start eBaying stuff. You can't afford a physical presence. You said you have a CS degree, so if you have any hot ideas for business, DO IT ONLINE.

To open a brick and mortar bike shop from scratch, you'd need $200K up front, plus you had better start turning a profit right away or it will all fall apart.

Walter

Amen. Did it while in school and for awhile after I graduated and was looking for my 1st teaching job.

That sounds like pretty decent advice. A way for you to take advantage of having access to "free" retail space and, if you're good, a way to build up some customer base. Your $5-6K can get you started with tools anyways. There's still probably other issues like insurance (see top of post for my experience ) but it might be a way to get started on a shoestring budget. Of course it means you're working 7 days a week.

2manybikes

At the level of knowledge you have about the bussiness, you will lose your shirt. Put the money in the bank instead of throwing it away while working 80 hours a week. It's not like electrical parts, that's a whole different ball game. Not even remotely close.

DocRay

I've been involved on the setup of a new Road racing shop.
The answer is $850,000, but this does not include a lawyer and an MBA who are working as partners.