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Non technical but you techs know best. Is opening a shop worth it?

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Non technical but you techs know best. Is opening a shop worth it?

Old 10-31-13, 01:44 PM
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Non technical but you techs know best. Is opening a service shop worth it?

Hi Guys,

I know that there are many variables which can make a bike service shop successful or not but thought I would throw it out to you.

I am a technologist with a huge mechanical background as well. I used to have an auto performance shop which facilitated engine rebuilds, brake mods etc. I have metal turning machines and experience in machining and welding too. I closed the shop because I am moving and do not want to get back into auto, burnt out from that.

I have my all my shop tools still and was toying with the idea of opening a bike service shop. I promise I won't be competition to you guys, I am going far lol.

Is there still some coin to be made still in the industry while having fun working on bikes? I know no one can get rich doing this except being a tech for a top team, but will working on both road and mountain bikes still a viable business?

Thanks.
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Old 10-31-13, 01:55 PM
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This is like asking the Trick or Treaters if opening up a candy store is a viable business option. If you can weld, go into gates, more $, and you deal with adults. That having been said, a bike shop is a viable business option, but don't expect fun.
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Old 10-31-13, 01:57 PM
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Originally Posted by Carib Can
Is there still some coin to be made still in the industry while having fun working on bikes?
Depends on what your definition of coin is. If you're homeless and destitute, the answer is yes; if you're expecting above poverty wages, no.

Originally Posted by Carib Can
I know no one can get rich doing this except being a tech for a top team, but will working on both road and mountain bikes still a viable business?
Starting without any kind of reputation or existing clientele, I'd say business viability is dubious to nil.
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Old 10-31-13, 02:03 PM
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Originally Posted by Carib Can
will working on both road and mountain bikes still a viable business?
Probably not, full service bike retailers are barely viable businesses in today's world.

This not a market segment that respects and pays for high levels of technical expertise and precision as a rule.
The dentist who only takes his Porsche to the dealer for oil changes will exhibit no such "cost is no object" for working on his Pinnalized or Speciarello. For everyone "it's just a bicycle" is the mindset so shop rates are low-balled.

If you need a hobby donate your time to a co-op and walk away when you get annoyed and or bored.

-Bandera
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Old 10-31-13, 02:11 PM
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Thanks for the fast replies, input and advice guys.

Bandera, I like your illustration about the dentist and his Porsche, that sounds so true.

Thanks Guys.
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Old 10-31-13, 02:55 PM
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Here are the two bike shops in Sacramento that (I think) make some money.





.....there are some locals that continue on, but of the recent startups,
I've known the guys at two of them that went belly up in the last two years.

There are a few more locals that continue in business, because they either have niche markets
that are not satisfied by the big guys and the internet, or a very loyal customer base.

The co-op as a hobby thing works pretty well for me.
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Old 10-31-13, 03:07 PM
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I've had a few feelers from people who want to open a joint business (coffee shop + bike shop). I just don't want to spend the energy in my waning years.

I think opening your own shop would require huge energy and time investments for a not-so-likely chance at succeeding. But I've always admired the people who plow ahead chasing their dream in spite of all the nay-sayers. I also think the "perfect" location is essential --and hard to find.
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Old 10-31-13, 03:13 PM
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Having done it, I'll throw my $.02 worth in the ring. (and that's about what a LBS is really worth to an owner/operator.)

1. Its really not fun. (You'll ride more in the parking lot of your shop than anywhere else. And then, it'll be on somebody else's lower end bike.)
2. The industry model for the LBS is completely in the manufacturer/distributors benefit. Its their game, you get to play by their rules or go home (assuming they will even let you play.)
3. You'll work long hours for little $ and less respect from your customers.
4. Contrary to most LBS business models, service and repairs do have the most potential (but you'll have to bow and scrape for every nickel and dime and still have to explain daily why your prices are so high - even if they aren't)

You are so over qualified. The most technical tool you'll ever touch is a wrench. If you're lucky, it'll be a torque wrench.

Long after I closed down, another entrepreneur opened a repair only business in my town out of a commercial garage and we became friends. Last I checked he's doing much better than I ever did as a full Sales and Service operation.

All that depressingly said, your location says 'Caribbean', having spent many hours/days/weeks floating between islands, bicycles there are typically Walmart quality but there are no, none, nada 'professional' repair operations. It just might be a survivable niche if you can get a consistent parts supplier. I used to trade bicycle tune-ups (arranged in advance) on several dive resorts' 'free' fleets for dive time. I brought my own parts.

Good luck, but do it only because it'll make you happy, not financially comfortable. As a final thought, the old saying "How do you make a $1 Million in the bike business? Start with $2 Million. is sadly so true.
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Old 10-31-13, 03:16 PM
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Years ago I embarked upon a thorough examination of my business. I wanted to know where my customers were coming from and what operations were profitable for the shop.

This is what was found; Repairs and parts were far more profitable than new bike sales. Seems obvious, no? But the level of profitability vs. new bike sales was amazing and it was discovered the back room carried the whole shop. We made the decision to run the store from the "back room" meaning we would focus on growing the repair business taking advantage of the margins offered. This worked well, but soon found new bike sales were needed to encourage back room sales. One had a hard time living without the other.

Selling low end and mid grade bikes was easy, but add on sales were limited and repairs were limited in scope. It took about 5 years to successfully establish the shop as a full service "higher end" shop. Still sold kids bikes, but allotted more floor space to upper end bikes, and promote the shop and bikes as the area's better bike shop. This worked and continues to work.

I believe a shop could make it without selling new bikes if it focuses on not only repairs, but add on parts and accessory sales and PROMOTED like crazy to the right crowd.

Comes down to it, the shop went from bottom line profitability went from 2% to 10% two years ago when I retired from it. Good luck and create a comprehensive plan before you start!
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Old 10-31-13, 04:43 PM
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Originally Posted by Bandera
This not a market segment that respects and pays for high levels of technical expertise and precision as a rule.
Exactly. People want to pay nothing to get their bikes fixed. Sometimes I tell my friends what the parts will cost to fix their bike (because I'll do the work for free) and they STILL don't want to pay it. And, bikes are simple enough that once many people get deep enough into it they do the work themselves.
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Old 10-31-13, 05:01 PM
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From my observations, it can work in a metro area if you're in a portion of it with a good demographic and develop a reputation for good service to a higher-end clientele. Places like Piermont Bike Shop, which is along U.S. Route 9W from the George Washington Bridge in Piermont, N.Y., make a mint on service and sales as does a shop about 10 miles away along the same highway because they get a good crowd of hard core cyclists, Ironman trainees, etc.

But if you don't have this kind of clientele naturally going near you, it can be tough. In the same county as both of these is the shop where I got my first road bike and while the guys there are nice and knowledgeable, they have all kinds of folks coming in with beaters expecting them to work miracles for relatively little money. He makes it work because it's got 2 shops, but even then, I don't get the impression he's rolling in the dough.
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Old 10-31-13, 05:40 PM
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I would specialize like Mike Stonich. He works out of his basement and he once told me that he makes a comfortable living. He said that most of his income comes from shortening cranks. It's something that your typical bike shop can't handle, like his other services. What appeals to me is that everything is done by mail order, so he doesn't have to deal with interruptions by walk-ins.

Here's his website:

https://bikesmithdesign.com/

I wish that I could do something similar so I could retire from my gov't job. The trouble is, I don't have any skills.
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Old 10-31-13, 06:35 PM
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A lot of bicyclists are really cheap and are willing to go out of their way to find a less costly repair, regardless of lower quality work. Many don't take any care about their equipment at all then expect a shop to do it for a low price. The ones who take really good care are likely doing most of the work themselves. There may be a living in it, but profitable?

Research it well before going into it. bk
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Old 10-31-13, 06:50 PM
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Carib Can, Depends on location. Around here the only non-chain bike shops to succeed are those that were established 20+ years ago and have built up a clientele. There is also a large contingent of bike flippers that can augment their income. I know of a couple of shops that opened, remained in business for a couple of years and eventually closed their doors.

Good luck if you pursue this idea.

Brad
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Old 10-31-13, 07:03 PM
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Originally Posted by bradtx
Carib Can, Depends on location. Around here the only non-chain bike shops to succeed are those that were established 20+ years ago and have built up a clientele. There is also a large contingent of bike flippers that can augment their income. I know of a couple of shops that opened, remained in business for a couple of years and eventually closed their doors.

Good luck if you pursue this idea.

Brad
In my principal city of residence in Canada, there are a lot of bike shops within a five mile radius, just on the Main Street around six or seven but what keeps them alive is the winter season too, with skis, snowboards, skates, clothing etc.

There are a few a dedicated bike only shops too which have been around for a while.

I was thinking if starting a shop in the Caribbean where a good shop is lacking and where expertise and service is next to non existent.

A lot of people do bike and quite a few professionally however the cost of parts remains high and resources slim.

I do have other options as far as business goes but was toying idea with this since I love working on mechanical and electronic stuff.

Thanks so much for the input and support.
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Old 10-31-13, 07:04 PM
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Originally Posted by bkaapcke
A lot of bicyclists are really cheap and are willing to go out of their way to find a less costly repair, regardless of lower quality work. Many don't take any care about their equipment at all then expect a shop to do it for a low price. The ones who take really good care are likely doing most of the work themselves. There may be a living in it, but profitable?

Research it well before going into it. bk
That's true in most of today's service industry, everyone is looking for fast and cheap.
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Old 10-31-13, 07:17 PM
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Originally Posted by Grand Bois
I would specialize like Mike Stonich. He works out of his basement and he once told me that he makes a comfortable living. He said that most of his income comes from shortening cranks. It's something that your typical bike shop can't handle, like his other services. What appeals to me is that everything is done by mail order, so he doesn't have to deal with interruptions by walk-ins.

Here's his website:

https://bikesmithdesign.com/

I wish that I could do something similar so I could retire from my gov't job. The trouble is, I don't have any skills.
You pretty much have to specialize in some service or sales these days to compete with online marketing.

It's unfortunate that many people get screwed online and by that time they can't do anything about it nor have the cash to get quality or what they wanted in the first place.

Thanks for the link, will look it up.

Gvt jobs are stable, at least here and have benefits, don't toss that so easily. I was self employed from the age of 17 and sometimes wished I had a Gvt job.

Skills you can always aquire, don't allow the lack of it to hold you back in anyway. When I was a kid around 16, I had started my electronics studies and an older technical neighbour told me this. He said, any time someone ask you if you can fix this, you always say yes. He said if you do not know how to fix it, go learn how to do it and fix it lol.

So in a way he was telling me to learn skills and don't give up.



Originally Posted by cafzali
From my observations, it can work in a metro area if you're in a portion of it with a good demographic and develop a reputation for good service to a higher-end clientele. Places like Piermont Bike Shop, which is along U.S. Route 9W from the George Washington Bridge in Piermont, N.Y., make a mint on service and sales as does a shop about 10 miles away along the same highway because they get a good crowd of hard core cyclists, Ironman trainees, etc.


But if you don't have this kind of clientele naturally going near you, it can be tough. In the same county as both of these is the shop where I got my first road bike and while the guys there are nice and knowledgeable, they have all kinds of folks coming in with beaters expecting them to work miracles for relatively little money. He makes it work because it's got 2 shops, but even then, I don't get the impression he's rolling in the dough.

One of the other problems we have apart from facing online competition and sometime sales of inferior parts, is that someone with no interest in quality or ethics will open a shop with back stabbing prices, screw up the market and clientele and then close down.

This leaves a bad impression for others who could do better and offer great service. I don't think anyone can ever make a lot of money in a bike shop as bikes are still seen as something cheap and disposable by most.

Last edited by Carib Can; 10-31-13 at 07:41 PM.
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Old 10-31-13, 07:19 PM
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Originally Posted by 3alarmer
Here are the two bike shops in Sacramento that (I think) make some money.





.....there are some locals that continue on, but of the recent startups,
I've known the guys at two of them that went belly up in the last two years.

There are a few more locals that continue in business, because they either have niche markets
that are not satisfied by the big guys and the internet, or a very loyal customer base.

The co-op as a hobby thing works pretty well for me.
A few of the shops here do really well, these guys have millions invested but have been around for the last 15 years or so. They are so big that they have their own name brands which are popular.
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Old 10-31-13, 07:25 PM
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Originally Posted by FastJake
Exactly. People want to pay nothing to get their bikes fixed. Sometimes I tell my friends what the parts will cost to fix their bike (because I'll do the work for free) and they STILL don't want to pay it. And, bikes are simple enough that once many people get deep enough into it they do the work themselves.
At that point I would ask if they would like me to throw in the parts for free too.

Originally Posted by TiHabanero
Years ago I embarked upon a thorough examination of my business. I wanted to know where my customers were coming from and what operations were profitable for the shop.


This is what was found; Repairs and parts were far more profitable than new bike sales. Seems obvious, no? But the level of profitability vs. new bike sales was amazing and it was discovered the back room carried the whole shop. We made the decision to run the store from the "back room" meaning we would focus on growing the repair business taking advantage of the margins offered. This worked well, but soon found new bike sales were needed to encourage back room sales. One had a hard time living without the other.


Selling low end and mid grade bikes was easy, but add on sales were limited and repairs were limited in scope. It took about 5 years to successfully establish the shop as a full service "higher end" shop. Still sold kids bikes, but allotted more floor space to upper end bikes, and promote the shop and bikes as the area's better bike shop. This worked and continues to work.


I believe a shop could make it without selling new bikes if it focuses on not only repairs, but add on parts and accessory sales and PROMOTED like crazy to the right crowd.


Comes down to it, the shop went from bottom line profitability went from 2% to 10% two years ago when I retired from it. Good luck and create a comprehensive plan before you start!


Wow great insight and info, thanks so much for the input. I was just going to focus on repairs and upgrades, sales of accessories and parts. Selling new bikes is a tough business, there are many shops here and the competition is strong however, many people bike here and are very health conscious.

Thanks for the time you took to reply, advise and for the experience shared.
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Old 10-31-13, 07:37 PM
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Originally Posted by coupster
Having done it, I'll throw my $.02 worth in the ring. (and that's about what a LBS is really worth to an owner/operator.)


1. Its really not fun. (You'll ride more in the parking lot of your shop than anywhere else. And then, it'll be on somebody else's lower end bike.)
2. The industry model for the LBS is completely in the manufacturer/distributors benefit. Its their game, you get to play by their rules or go home (assuming they will even let you play.)
3. You'll work long hours for little $ and less respect from your customers.
4. Contrary to most LBS business models, service and repairs do have the most potential (but you'll have to bow and scrape for every nickel and dime and still have to explain daily why your prices are so high - even if they aren't)


You are so over qualified. The most technical tool you'll ever touch is a wrench. If you're lucky, it'll be a torque wrench.


Long after I closed down, another entrepreneur opened a repair only business in my town out of a commercial garage and we became friends. Last I checked he's doing much better than I ever did as a full Sales and Service operation.


All that depressingly said, your location says 'Caribbean', having spent many hours/days/weeks floating between islands, bicycles there are typically Walmart quality but there are no, none, nada 'professional' repair operations. It just might be a survivable niche if you can get a consistent parts supplier. I used to trade bicycle tune-ups (arranged in advance) on several dive resorts' 'free' fleets for dive time. I brought my own parts.


Good luck, but do it only because it'll make you happy, not financially comfortable. As a final thought, the old saying "How do you make a $1 Million in the bike business? Start with $2 Million. is sadly so true.

Thanks for the details and vivid reasoning, you guys are great on this forum.

Its great hearing your feed back especially since you have been to the islands. There are quite a number of guys who ride professionally and spend some money on their bikes in some of the islands.

I will have to do some research to see how many are DIYers. It's good to get feedback from you guys who have or have had shops.

I like your $ 1 million saying, it's sad indeed knowing its true.

Originally Posted by dbg
I've had a few feelers from people who want to open a joint business (coffee shop + bike shop). I just don't want to spend the energy in my waning years.

I think opening your own shop would require huge energy and time investments for a not-so-likely chance at succeeding. But I've always admired the people who plow ahead chasing their dream in spite of all the nay-sayers. I also think the "perfect" location is essential --and hard to find.

Thanks for the input. Yes location is one important factor. Service, expertise, personality, pricing and honesty just to name a few more important aspects.

I know it's a huge undertaking and I have a few more options so it's great to get ideas, advice and hear about the experience you guys have.

Thanks for replying.

Last edited by Carib Can; 10-31-13 at 07:44 PM.
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Old 10-31-13, 08:45 PM
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Here's another thought. - regarding location. If your focus is repairs and accessories, location should be really low on your list. You're a service provider not a salesman, how many auto repair shops do you see in town? Keep your costs down while you build a reputation as a 'bike-fixer'. You want people to bring their problems to you so you can dazzle them with your magic wrenches. They can buy their steeds somewhere else, but you'll being the independent mechanic who knows how to fix a bike. You'll still be poor, but what the hell they'll make a movie after you.

"Bike Whisperer."
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Old 11-01-13, 06:46 AM
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I went retail 6 years ago and hope to do another 10 or so.
You gotta have good employees and a good location.
And know your target customer.

Repairs can be profitable but you have to be selective. Department store bikes will kill ya.
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Old 11-01-13, 07:01 AM
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If you have to pay rent, fuggedaboutit. Better off to be a house flipper if you are mechanically inclined or a Landlord.
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Old 11-01-13, 07:16 AM
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As with all ambitions, do it, but do it wisely. Create a real business plan (get help from an experienced business person who understands writing a business plan) and you will learn if it is feasible or not.
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Old 11-01-13, 08:07 AM
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Originally Posted by Grand Bois
I would specialize like Mike Stonich. He works out of his basement and he once told me that he makes a comfortable living. He said that most of his income comes from shortening cranks. It's something that your typical bike shop can't handle, like his other services. What appeals to me is that everything is done by mail order, so he doesn't have to deal with interruptions by walk-ins.

Here's his website:

https://bikesmithdesign.com/

I wish that I could do something similar so I could retire from my gov't job. The trouble is, I don't have any skills.
This is actually a good idea. Find some need not being met in the industry and use that as a springboard to other things. JTek engineering comes to mind. Run a local bike repair shop, but also have production of widgets going on at the same time. If your widget is unique and awesome enough, it can start generating some regular-ish income.
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