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geting into bicycle shop business, buying a bicycle shop, any advice?

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geting into bicycle shop business, buying a bicycle shop, any advice?

Old 07-28-14, 07:30 PM
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Eds0123
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geting into bicycle shop business, buying a bicycle shop, any advice?

I apologize if this is off topic:

Does anyone know how to start bicycle shop business and be successful at it?. There are bicycle shops up for sale here and there. I have 3 bicycles and I have been out of work for sometime. I like working on bicycles and owning a shop but I don't have much experience running a shop or bicycle repairs. I understand that very hard work, customer service, advertising and social media presence is crucial as well as good service and a nice clean shop floor, Please brain storm anything you might know or your experiences as a consumer, as bicycle repair technician or as a shop owner.

Thank You.
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Old 07-28-14, 08:11 PM
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...don't?
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Old 07-28-14, 08:18 PM
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Originally Posted by ThermionicScott View Post
...don't?
well, thanks, not tryig to make a lot of money but just make a simple living
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Old 07-28-14, 08:21 PM
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There are too many considerations for a post here, but the number one consideration is location, and whether the surrounding population is adequate to produce an adequate customer base. If you talk to owners of struggling stores, the common theme is "lack of traffic". It doesn't matter how good you are, how well merchandised the shop is, or any other positive, if there simply isn't enough base to make a go of it.

The next biggest factor is rent and utility costs, as compared to sales. In most of the USA the bike biz is highly seasonal, so a good part of the year, you'll be shelling out dough to keep the door open, with few people coming through it. The rest of the year you might have more traffic than you can support.

Before you commit, work up a reasonable estimate for the potential gross volume, then subtract the cost of doing business (aka the nut) from 40-45% of the gross volume, and that's what you have left for some payroll, things like insurance, incidental expenses, and (oh yeah) yourself.
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Old 07-28-14, 08:35 PM
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My condolences for your current situation. But those businesses are for sale for a reason - the owners want OUT. I owned a marginally successful shop over 20 years ago. Unfortunately in the time between then and now, the business model hasn't changed, the typical terms and conditions strictly enforced by the suppliers haven't gotten any better and with worldwide online sales as competition, your outlook for anything beyond marginal profitability is poor. My best and honest advice is - Don't waste your time or your money. Keep cycling your passion not the albatross around your neck. Find something else to do, maybe retrain in another field. But unless you are extremely lucky, the LBS in your future will may make your life more miserable than it already is.

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Old 07-28-14, 08:39 PM
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Not a way to make a great living even as an owner, and you won't make anything for yourself for a while. You need to have some capital beyond the cost of the shop for utilities, insurance, ordering C.O.D. and just to live on. As an owner you either have to be willing to do or able to pay for bookkeeping, ordering/stocking, and advertising. Without extensive repair experience yourself you will neither be able to handle repairs nor be able to evaluate the skills of employees. Without good familiarity with cycling products and the market you will have a hard time ordering correctly. VERY hard to make it without significant hard good sales, as there is a finite limit to the amount of labor one can produce and what one can charge for it.

Hard work? Yes, long and hard, and not always things you like or want to do.

Customer service? Yes, and if you don't have good retail experience it will be hard to learn the ins and outs.

Advertising? Overrated - location and word of mouth is more critical for a new operation.

Social media presence? Also overrated, and if you get negative presence it can be a quick death.

Clean shop floor? Not really that important. You don't want downright messy, but a small busy shop is not always easy to keep clean.

All of the above comes AFTER a thorough vetting of the shop that one proposes to buy. It's being sold for a reason, and if it's "affordable" it probably is not successful. Even if it is successful there's no guarantee you can ride on the coattails of the previous owner.

I operated a mobile repair/sales business and also did tour support and contracted with Sears for their assembly and maintenance contract work. I had no rent or utilities, only one seasonal and occasional temporary employees to help on large events. At the time I started I had 12 years experience at two shops, including as service manager and head mechanic, and had worked on my own bikes since age 11. I was also able to do my own bookkeeping on computer, wrote my own ad copy and got a fair amount of publicity. In my best year (1995, after operating for 8 years) I netted about $50k. I would not be able to duplicate that today, because I would not be able to get even a C.O.D. account with a distributor without a staffed shop, and one has to have access to wholesale distributors to make a good margin on parts/accessories, and even then Internet prices are often not much above wholesale for small orders. I loved it, but could not have done it even then had I not had a second job doing overnight supervision (mostly sleeping) at a mental health transitional living facility, as well as owning a house with roommates that paid my entire house payment.

If one has enough capital to consider buying a business I would instead consider a quality franchise operation, but in my view one still should have a solid background in the particular business or very solid business skills in general. The fact that you are not employed is not a good start - and I don't mean that as an insult, it's just reality.
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Old 07-28-14, 08:40 PM
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Unless you're a head mechanic, you'll need to pay salaries to qualified bike mechanics and also sales staff.

And then there is inventory, product fulfillment and customer service. Its not easy to open a bike shop.

If you don't know what you're doing, short answer is: DON'T.
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Old 07-28-14, 08:54 PM
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I was going to say "Don't quit your day job", but . . .

the point being that you shouldn't consider it unless your financial needs are otherwise met.
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Old 07-28-14, 09:14 PM
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OP will never get rich from it. The bike business is a seasonal business and some months of the year, no one will come into a bike shop.

Its just high risk for marginal gain. Unless you have years of experience, opening a bike shop isn't advisable unless you have capital to see you through lean times and its a fact of life few new businesses survive beyond their second year.
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Old 07-28-14, 09:28 PM
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Success in any business depends on business skills much more than trade skills. Business skills and many other success factors are forward looking processes within business planning. If you consider buying an existing business, you will also need due diligence based on history.
Get in touch with local small business resources like a development center, SCORE, etc.
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Old 07-28-14, 10:55 PM
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Originally Posted by coupster View Post
My condolences for your current situation. But those businesses are for sale for a reason - the owners want OUT. I owned a marginally successful shop over 20 years ago. Unfortunately in the time between then and now, the business model hasn't changed, the typical terms and conditions strictly enforced by the suppliers haven't gotten any better and with worldwide online sales as competition, your outlook for anything beyond marginal profitability is poor. My best and honest advice is - Don't waste your time or your money. Keep cycling your passion not the albatross around your neck. Find something else to do, maybe retrain in another field. But unless you are extremely lucky, the LBS in your future will may make your life more miserable than it already is.
man, thanks, this makes me feel a lot better?!, I don't know, I was and i am thinking that bicyclingin general and bicycle commuting and bicycle touring is getting more popular and the bicycle shop business could be growing and one might benefit if one can find a good shop in a good bicycle receptive and friendly area and offer services which could not be provided through the Internet sales.

but anyways, thanks all for the replies and for providing real world personal experiences and hard facts.
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Old 07-28-14, 11:13 PM
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Don't unless its a hobbie that you can commit too 100 perecent with the undersanding you will likely loose money and go out of business.
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Old 07-28-14, 11:20 PM
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Sell drugs using the bike shop as a front
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Old 07-29-14, 03:55 AM
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Originally Posted by Canker View Post
Sell drugs using the bike shop as a front
+1.

"It's the only way."
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Old 07-29-14, 05:38 AM
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start with 2 million. Wait, we haven't said that yet.

Identify what products or services other local shops are not offering. In my area, it was high-end servicing and a dedicated workshop which did more than just assemble bikes for the sales floor.

Identify what local riders like and dislike about bike shops. Some things will be unavoidable, like pricing in many cases, but some gripes customers have you can actually address. In my area, it was unwillingness to install or work on parts bought online, an arrogant sales-based attitude from many shop staff, and a lack of suspension servicing or other specialist (eg tandem/recumbent/IGH/wheel building/etc) work.

Then, do your maths and boring business-y stuff. See if you can address the shortfalls in your market, and stand out from the pack. You may have to think outside of the box and be prepared to re-invent an existing business.

My business partner and I started our repair shop 2 years ago, with almost no capital, and have yielded a reasonable salary for each of us in both of those 2 years. Nothing special, just work hard, be nice to people, and be flexible.

YMMV, maybe your area is over-saturated and a few places have to close.

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Old 07-29-14, 06:58 AM
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If these businesses are for sale, the owners/sellers should have their financials in order to show you and help you build a business plan. First thing you should do is see if the numbers work. And if they are getting out because the bottom line is low or shrinking, try to figure out why and see if it's something you're capable of addressing, or if it's just not going to work no matter what you are bringing to the situation.

With a small shop, employees and the owner wear many hats. You'd need to be able to sell bikes, fit people to them, know some mechanics basics including swapping out a tube quickly, in addition to managing a workforce and taking care of the money end of things, making sure the shop is and remains profitable. You'd also be working long hours, 6-7 days/week.

Daunting, and given the chance, I wouldn't do it, even with some years of experience working sales/mechanic in a shop.
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Old 07-29-14, 09:38 AM
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Originally Posted by tomacropod View Post
start with 2 million. Wait, we haven't said that yet..............
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Ha ha ha. This made me think of a lecture I attended by Richard Branson. He was talking about his decision to start Virgin Atlantic Airlines and a friend asked him "what's the quickest way to become a millionaire?" The answer was to be a billionaire and start an airline....
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Old 07-29-14, 09:52 AM
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Start with a business degree and some retail experience.
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Old 07-29-14, 01:17 PM
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Every time someone asks this question these are the responses, So if no one opens a bike shop what are we going to do in the future after all the current shop owners have retired and we need a bike or service? Advice is to not ask here, take your time to learn about the business, take the time to do a thorough business plan and after you have done all that research it should be obvious weather it will be a money making or losing enterprise for yourself. Good luck in whatever you future may hold for you.
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Old 07-29-14, 01:58 PM
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Maybe the Wright brothers moved on to planes for a good reason??...
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Old 07-29-14, 02:04 PM
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It CAN be successful, but I doubt you can make LOTS of money at it. LBS to me Century Cycles has 3 locations and the one by me moved into double the floor space 2 years ago. The people there seem to be much more polite than most stores. Thats a plus to me. Also there are a lot of group rides happening in the area these days which I am sure has helped the popularity of two wheels.

How it works in your location you have to find out. When shops have wanted to close or sell, the usual commentary about them is poor service and high prices. That usually leads to the price of the store being MUCH too high as well. It might be easier to let them close for good, move out, and then move your new store in.

Good luck in your decision.

-SP
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Old 07-29-14, 02:04 PM
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Here is a thread in another forum about opening a bike shop. It goes on for a few years and is continued in two or three other threads. Good reading. This will keep you busy for a few weeks. This particular owner has opened and closed a few locations for various reasons. This will either inspire you or scare you into selling insurance for a living. LOL.

Opening a bike shop...
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Old 03-15-15, 08:30 PM
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Originally Posted by Chombi View Post
Maybe the Wright brothers moved on to planes for a good reason??...
ha! That's a good one!,
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Old 03-15-15, 08:39 PM
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Originally Posted by Mnrecurve View Post
ha! That's a good one!,
You do realize you are being entertained by a joke that's 10 months old.
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Old 03-15-15, 08:57 PM
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Originally Posted by HillRider View Post
You do realize you are being entertained by a joke that's 10 months old.
An oldie but goodie?
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