Originally Posted by
vane171
Maybe you should start here with telling us what your friends told you.
From what I've seen of LBSs where I live and bike near in a smaller town, the man behind the counter is probably shop owner and the other guy servicing bikes in the back probably his friend/employee or maybe owns the business with the guy behind the counter.
I think the impetus to start a business like that needs some starting point, like you happen to have or inherit some premises that call for doing some business in them and also there is not a bike shop in the area and you believe one could be here. Another impetus might be coming into the money somehow that you think of 'investing' into some business and you know something about bikes.
I guess it depends on whether you want to start small, tiny and grow, of start higher up which then requires some more significant capital investment.
Many years ago I traveled in states (I lived in Canada and that's where I am now also) and on some radio station there was this guy who people calling in were asking for advices on various things in life and his replies to them didn't spare them a bit, he could even be very rude to them and put them down hard (while having good reason for treating them like that) and I believe that's why he was so popular on the show (as I gathered after listening for a while). And it wasn't that listeners reveled in somebody being put down but the guy had very good common sense, real down to earth advice to the callers in.
This guy called in and said he wants to open a car servicing shop in a small town and how should he go about it. He was told if he doesn't have the capital to invest in it, he should first go and get two or even three jobs going for some years, sleep 4 hours and work the 20, to make loads of money first, and when the guys jaw dropped, since it became obvious that that wasn't the advice he was looking for, he was asked how old he was and then told that given his age, he could endure that, and that it still will be nothing compared to when he finally starts up that business of his. Maybe some of you might know such radio show.
For most of the 80, I was a field service engineer traveling from Bakersfield to Oregon. There was a radio station in Fresno that played the cyindicated Ted Wiallom show talk. There were many night on my way home that I listened to him. A few things I picked up from him were:
- If a Dentist is working 3 or 4 days a week it is more likely that he does not have enough work to keep the office open longer than it is that he wants to take a day off.
- A lot of private practice doctors work 60 to 80 hours a week because the office overhead is so high that he may not even break even at 40 hours. The last 10 hours that he works is where he makes money for himself.
- Most small business owners work 60 to 80 hours a week for the same reason.
- You do not have to be small to work a lot of hours, ask Elon.
- The restaurant owner called in and said we are busy but I am losing money.
- What are your food costs? About 35%. Someone is stealing from you. Eather employees are taking food out the back door or your customers are taking it out the front door because your prices are too low. Your food costs should be less than 25% maybe 30% maximum if you do not have a sit-down restaurant with wait staff and table cloths.
My daughter semi-managed a bike shop while the owner worked a real job trying to keep the doors open. She did not have access to the books or overhead information but she could order parts and repair bikes, She did not like the selling part but she did that if too she did not have someone else to do it.
There are too many LBSs running at cost or less.
Most bike shop workers are not close enough to the books to understand what is going on.
I had an instructor that was working for a competitor as a field service engineer. Things looked good so he and some of his friends doing the same job bought a bunch of stock 2 weeks before the company went bankrupt. Unless you are close enough to the action to look at the real books rather than having the boss say things are going fine. A friend of mine opened a clothing store and said things are looking great about a month before he closed it.
The short answer, get a job as a store manager that has access to real books before opening a store. If you buy a store make sure you are looking at the real books.
One of my customers bought a small-town newspaper. The books looked good, the paper was full of ads. It looked like the paper was making money and the price was right. They found out later that a lot of the ads were bartered. I will run this ad for you for the next 2 years if you give me a great price on a pair of motorcycles kind of thing. Most of the ads were like that. Free pool service as long as I run your pool serve ad. The new owners looked at what the ad sales and only ran ads that customers paid for. Several of the bartered ad customers came in wanting to know why their ad was not running. These guys were professional businessmen but they got took. They found out the paper was for sale because there were not enough cash ads to break even. None of the barter ads benefitted the paper, they gave the powers some "free stuff" but the main thing is they made the paper look profitable enough to justify the price. The paper did not last long.