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Biggest Challenges Owning/Running a Shop

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Biggest Challenges Owning/Running a Shop

Old 04-30-21, 08:50 AM
  #26  
Josh_Craig
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Originally Posted by Rolla View Post
Don't go into the bike business because you love bikes; go into the bike business because you love business.
Your number one, two, and three headaches will be attracting, training, and retaining employees.
Personally, I'd choose something (anything) else.
Hey Rolla! Happy to say I do love business. Studied communications and business in school and have taken online courses / read books on marketing, accounting, taxes, legal, etc. I'm fully willing to face the hardships about it but want to be smart about what big challenges there are. I can certainly imagine how getting, training, retaining employees is hard. Do you/Have you own[ed] a shop? I'm just curious to learn more about the reality of it. If you do own a shop (or know someone who does) what are you/they currently doing to attract/find employees? How well is it working? In the heart of just looking things head on and facing it, what problems does this challenge around staffing create?
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Old 04-30-21, 08:56 AM
  #27  
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Originally Posted by MarcusT View Post
I agree 100%. Too many people believe because they have a passion for a hobby (biking, backpacking, cars, etc) that they can run a business in that field. Technical knowledge is one thing, but without a good business mind and most of all, excellent customer service, you're going no where.
First, thing for a business model, is how to compete online. I don't mean for repairs, but people search online for sales, service, free advice. And until the pandemic eases up, inventory is a huge challenge
Best of luck. Let us know what you do.
Hey MarcusT. Appreciate the insight. Do you own a shop? I'd love to know what you think the biggest challenge is one you're at a point of owning and running it. I do really love business (in addition to bikes) and want to make sure I'm being smart here and know what to expect/what the reality is. I've taken an online course on business and read books and learned a lot about marketing, accounting, legal, etc. Not like I'm an expert, but I am aiming to know what I'm doing and not just make a "passion decision" here.

I appreciate any down-to-earth, realistic insight you can offer!
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Old 04-30-21, 08:59 AM
  #28  
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Originally Posted by livedarklions View Post
Location, location, location.

Also, how much do you have to invest?

I see a lot of the little shops are one-guy operations that don't really sell bikes, but are really just repair shops or they sell a few used bikes. It helps to be next to a busy MUP or something if you have that very small shop strategy.

I suspect this would literally be the worst time ever to try to start a new bike dealership as getting any significant number of bikes in stock is going to require a lot of capital and even then, you may not find any.

I notice that Trek is buying up a lot of local dealership shop chains right now. I suspect lack of stock has cut too much of the cash flow of these businesses for the independent owners to keep going. You have friends with shops, how are they doing right now?

I've seen a lot of people starting to run those sorts of operations. It's definitely an interesting one. Do you own a shop? I'd be grateful to hear what sorts of big challenges there are running a shop once you've got things up and moving (I see that's the first thing to tackle, but I'd really appreciate your insight so I can better understand what's realistic even if I do get things up and moving).
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Old 04-30-21, 09:03 AM
  #29  
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Originally Posted by Josh_Craig View Post
I've seen a lot of people starting to run those sorts of operations. It's definitely an interesting one. Do you own a shop? I'd be grateful to hear what sorts of big challenges there are running a shop once you've got things up and moving (I see that's the first thing to tackle, but I'd really appreciate your insight so I can better understand what's realistic even if I do get things up and moving).

Sorry, my perspective is strictly as a customer and being the world's most incompetent mechanic. I just do a lot of distance riding, so I encounter a lot of these little shops near routes.
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Old 04-30-21, 09:50 AM
  #30  
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Originally Posted by Josh_Craig View Post
Hey everyone! Here's what's up:
  • New College Grad
  • I've Worked in a Bike Shop for a year and in other parts of the bike world (mtb summer camps, mtb junior devo team director, helped put on races for a few years)
  • Cyclist (Road & MTB) for 10+ Years
  • Curious about the world of what goes on behind the scenes to run a shop.
Not to turn this into a life's lessons, but it is not about bikes, it is about what you are truly good at. Not adjusting derailleurs, but what traits do you have that others don't and then utilize them. It doesn't matter the industry, it only matters that you are really good at using them and you are able to make money because they are in demand. And no matter what you do, there will be days when you hate it.

What can you do really well that will make you the most money?

What I did for a living did not relate to anything in my personal life or interests, but no one wanted to do it and I was really good at it. And what people don't want to do makes them really stupid about the subject.

John
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Old 04-30-21, 09:58 AM
  #31  
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Originally Posted by Josh_Craig View Post
Do you/Have you own[ed] a shop? I'm just curious to learn more about the reality of it. If you do own a shop (or know someone who does) what are you/they currently doing to attract/find employees? How well is it working? In the heart of just looking things head on and facing it, what problems does this challenge around staffing create?
I've worked in several shops, including one owned by a close friend.

Staffing is critical to every aspect of the business. Finding and retaining people who are knowledgeable, honest, dependable, and customer service-oriented is every retail business's challenge. To build a team that is focused on the same goals and how to attain them requires a lot of training and culture-building. The inexperienced don't have the expertise to foster customer confidence, and training them is expensive. Those who have experience are often resistant to supervision and direction. As far as recruiting goes, you just have to be resourceful; social media is your friend, and being an active member of the local cycling community will expose you to possible candidates. Both work pretty well until someone quits and you have to scramble. It largely depends on where you're located, but by and large it's not like the restaurant business where there are lots of people out there with experience; the bike shop is a pretty specialized segment of the retail landscape. The odds of finding people who know what they're doing and who won't rip you off, piss off your customers, show up stoned, or break the bikes they're working on are much lower. Plus, they have to get along with everyone else at the shop. During times when you're short-staffed, expect to put in a lot of hours behind the workstand or on the sales floor yourself, in addition to your ownership duties.

If you haven't already, check out the NBDA dealer forum.

Last edited by Rolla; 04-30-21 at 10:12 AM.
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Old 04-30-21, 01:08 PM
  #32  
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I worked in bike shops on and off for years. I was once offered a job at Specialized, having been recommended by their local area sales rep, but turned it down because I'd have had to move to California and I'd just settled on a house in Baltimore.

From what you wrote in your first and subsequent posts here, and given that, as another poster wrote, Trek is buying up bike store chains around the country, your best bet might be to forget about opening your own bike store and to get in touch with Trek soon. Tell them about your bike store experience and your education and ask whether they'd be interested in having you meet with their local sales rep or come in for an interview. They're probably going to want to recruit new people to (eventually) run some of those stores, since some proportion of the people working in the stores that Trek is taking over will probably quit or be fired.
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Old 04-30-21, 03:52 PM
  #33  
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Originally Posted by Troul View Post
IMO, own a bicycle shop is about like having a bowling ball shop. You'll need to sell other things other than bicycles & services for the bicycles. Bar & Bicycles. Make the first drink very strong. lol
ya, i just cant see owning a bike shop being very lucrative unless there is a heckuva a mark up on bikes and parts
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Old 04-30-21, 05:11 PM
  #34  
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I suspect the two main issues right now with owning a bike shop are: Trying to source parts/bikes in a worldwide shortage due to the beer virus. And second, you would have the same issues as other small business in that overhead and payroll must be covered before taking home any money. Jeff Bezoz biological father operated a bike shop for decades and was successful/happy so I guess not a bad gig if you can handle it.
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Old 04-30-21, 05:21 PM
  #35  
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Nobody is offering decent credit terms to shops right now, it's basically a cash business. It takes a lot of money to start a shop, especially if you want to run an outstanding operation, which I recommend. With your lack of experience, you need a very experienced service manager.
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Old 04-30-21, 05:26 PM
  #36  
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Why donít you shoestring a bike service/repair biz out of a garage for a while.

Fail fast.

That way you gain the experience and see for yourself what kind of $/hr you can make before you have your future on the line with debt?
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Old 04-30-21, 06:37 PM
  #37  
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Originally Posted by Josh_Craig View Post
Hey everyone! Here's what's up:
  • New College Grad
  • I've Worked in a Bike Shop for a year and in other parts of the bike world (mtb summer camps, mtb junior devo team director, helped put on races for a few years)
  • Cyclist (Road & MTB) for 10+ Years
  • Curious about the world of what goes on behind the scenes to run a shop.

I've got some good friends who own shops (either bought-in or started it themselves) and have asked around, but also wanted to ask here:

(1) What are your top three biggest challenges in owning/running a shop?
(2) What are you striving for/what's your goal?
(3) What is the biggest thing in the way of that goal?

Thanks so much!!
Where are you located?
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Old 05-01-21, 11:56 PM
  #38  
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Originally Posted by Josh_Craig View Post
Hey MarcusT. Appreciate the insight. Do you own a shop? I'd love to know what you think the biggest challenge is one you're at a point of owning and running it. I do really love business (in addition to bikes) and want to make sure I'm being smart here and know what to expect/what the reality is. I've taken an online course on business and read books and learned a lot about marketing, accounting, legal, etc. Not like I'm an expert, but I am aiming to know what I'm doing and not just make a "passion decision" here.

I appreciate any down-to-earth, realistic insight you can offer!
No, never owned or worked in a shop. My experience is just from observation. And as much as I detest saying it, the shops that have succeeded over the years are the places that sell high end bikes and gear.The few small, friendly guy shops I've been to are all closed now.
The biggest obstacle you will have is competition, from the already established B&M shops and online sales,
Here's what you face; even if you want to start a small repair shop and if there is a need, you will need time to attract the high end bike owners because they usually go to where they bought the bike for service and repairs and they have the money to do it. Starting out, you might be able to pull in the people with common bikes, bought at big box stores and online, but many of those may not be willing to pay $40-60/hr labor fee. (depending on your overhead).
You will need a parts supplier who is reliable and fast. Few people are willing to wait 10 days for a part to arrive, when Amzn can deliver it in a day
Until you get certificated, you will not be able to perform warranty repairs and service.
Ebikes are the future now, but again, certification and very expensive equipment will need a huge investment.
My suggestion for you is start a small repair/assembly shop. Invest a few thousand $ in tools and equipment. Then target people who buy bikes that need assembly or adjustments from the said big box/online sellers. You can contact the online sellers and try to get referrals from them. Maybe even be a delivery point where they can ship the bikes, you assemble them before pick up by the buyers.
Best of luck.
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Old 05-02-21, 09:45 PM
  #39  
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I've worked at a shop for 30 years and been part owner of a shop for 22 years. My experience is from experience.

I agree with the next statement indirectly - you need to open a shop where the money is at. Doesn't matter if you want to specialize in MTB, road, or be a mom and pop shop that caters to family business. Open a shop where the money is at. For years, shops is our town felt they had to open up hear our university, where you get an initial purchase and that's it. We opened up on the west end of town where the growth has been for the last forty years. Our high end enthusiasts are now outfitting their kids. But we've always been down to earth, focusing first on 'family' needs.

Don't concentrate on repairs but be good at them. You can sell a helmet and a couple of tubes and get more gross profit compared to the tune up from hell that your mechanic spends an hour on.

Certified? To perform warranty repairs and service? Nah. But you'll have to be an authorized dealer of a bike manufacturer to complete warranty work, and bike manufacturers limit their dealerships.

E-bikes? Yeah, there is certification, but equipment is not a big investment.

Owning a bike shop, if you want something done, be prepared to do it yourself. And yeah, staffing will be your biggest frustration.
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Old 05-03-21, 12:03 AM
  #40  
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Around here we have several chains and the market seems very saturated and turnover high, despite it being a large market (this is bike heaven and the locals can afford nice bikes). Right now in Folsom we have Folsom Bike (and coffee) whose other location also serves triathlon and running. Bicycles Plus sold out to Mikeís, the large NorCal chain, after a year or two of being a full-on Specialized dealership. The other local family shop folded about five years ago. Several very local chains have had a go (Patriot, Elite, Neighborhood) and also folded. Weíve also had a few specialty businesses catering elite services like premium bike fitting and fitness testing with masks and so on like a Nike or Gatorade commercial, theyíve gone too.

I think the idea of diversification and selling a lot of clothes is a good one. The people here who work on their own bikes seem to think in terms of parts and service but it canít hurt to be selling zip up plastic shirts for $100ea. You can go narrower than Dickís or REI but setting out to be just a bike shop for one kind of bike is a loser unless itís right next to the bike trail or BMX track.

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Old 05-03-21, 12:17 AM
  #41  
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Also, related to some things in my life the last few years - If you had to take a month off from your shop would it survive?
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Old 05-03-21, 02:34 PM
  #42  
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I dunno, is the failure rate for bike shops as high as restaurants? With the latter I thought I read years ago that the failure rate was 90%.

A successful restaurant is more profitable. But requires a certified sanitary cook space. A bike shop does not. Thus, you can start bike repair out of your home, and in the right zoning, run a bike shop out of a home and have sleeping quarters above, that massively reduces your cost. If you have to pay big rent on a shop, you need to have good sales and/or lots of repairs.

There are easier ways to make money. Owning a bike shop should be if you love providing a good bike shop to the community.

I wish I had a free space in a city where I could run a free bike repair for those in need, and also other general repairs for poor and homeless. But I'm retired. There's definitely a need near Seattle downtown. Years after I thought of this, I discovered (but I've not yet visited), there actually is (was?) a place like that on the north side of the city, and a tool library next door, although I read some years back that they were burglarized and everything stolen.
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Old 05-03-21, 02:35 PM
  #43  
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Originally Posted by vane171 View Post
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.

Last edited by johnd01; 05-03-21 at 02:39 PM.
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Old 05-04-21, 01:30 AM
  #44  
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Originally Posted by JohnDThompson View Post
When the weather is nicest, and you'd like to be out riding is exactly the time when the shop is busiest, and you don't have time to ride.
BOOM!!!!

One of our daily laments in the shop
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Old 05-04-21, 01:40 AM
  #45  
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I worked for some bike shops when I was young, some did well some did not. I was working in one of these when the sheriff’s deputies came in with a court order to take all the cash from the registers and safe, and remove all of the stock which had been provided by a certain supplier. Business can be hard at times.

1) What are your top three biggest challenges in owning/running a shop?

Earning a consistent profit. Cycling is one of those things which moves in and out of fashion. When it’s hot, it’s hot, when it’s not, it’s not. When it’s hot, you had better get your ducks in a row, pay off or pay down your debts, and have the money or credit to get you through when things eventually turn south (as they always do, sooner or later).


Keeping up with trends. Back in the 80’s, most shops were oriented to road bikes and kids bikes. Then the mountain bike craze meant mountain bikes outsold road bikes 5-to-1, and the spread of Walmart took over the kids bike market. A dozen years ago the fixie/single-speed craze hit, and mountain bike sales declined. Then road bikes became popular again, and now outsell mountain bikes 5-to-1. It is not hard to keep up with trends with minimal effort, but some people become comfortable with a particular way of doing things, and these are the ones who fall under the bus when it moves on to another stop.

Keeping ahead of the competition. Running a business in a sea of businesses is hard. Everyone is trying to increase their traffic and sales. For any brick-and-mortar shop, the 3 most important things are location, location, and location. You need to have people walk in the door before you can sell anyone a bike. To get people to walk in the door, that door has to be in a very good location. Nowadays you can also drive traffic with a good website and good use of social media, You must also advertise. Sponsoring events can also drive traffic if you do it right.

I have been running a small business for a number of years. A few years ago I started a YouTube channel which no one watched for more than a year (actually, I got 13 views that first year). But every week I kept adding content, and in the second year I got more views, and a few subscriptions. In my 3rd year I passed 5000 subscribers, and was earning a few hundred a month in ad revenue. But since then, more than 60% of my sales have been driven by YouTube traffic. I started an online store, and sales were good the very first month, and I now have a hard time keeping up.

(2) What are you striving for/what's your goal?

To earn a profit or positive return (for those who find the word “profit” distasteful). The profits I earn allow me to buy more, so I can sell more, which allows me to buy and sell yet more. This allows me to hire more people, to pay them better, to pay more in tax (which is not exactly a goal, but you can’t have profit without tax). According to an old saying, you start dying as soon as you stop growing, and this is true in business.


(3) What is the biggest thing in the way of that goal?

Myself. A business requires those who run it to work hard, to stay motivated. When you don’t have a boss, it is easy to slack off (most people are good at slacking off even if they have a boss). It is easy to fall into a comfort zone, where you earn enough money each month to pay off Uncle Sam and the overhead, and have enough left over to add to the bank account. But it is when you are most comfortable that you are likely to be run over by a truck or hit by lightning. You always have to keep moving.
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Old 05-04-21, 08:42 PM
  #46  
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Originally Posted by Rogerogeroge View Post
E-bikes? Yeah, there is certification, but equipment is not a big investment..
I would estimate Bosch tools being about 1k (assuming you are doing it right) plus potentially other tools you might want to have in the box like a good breaker bar (we broke a Snap-On one trying to remove a Bosch lockring once they replaced it of course) and you will probably want some stuff for other systems as well which some manufacturers do give you when you become certified or sell their e-bikes but not always or maybe you might want extras being that e-bikes are quite popular and you can stay quite busy with them. Plus I would recommend having some electronics tools like multimeter, soldering iron, heat gun, DC power supply.

So not a huge investment but not small either. Don't under estimate the e-bikes, they are big business and when winter time rolls around and less service seems to roll through e-bikes are still going at least around us the regular service tapers off a bit but e-bikes stay busy all year long no matter what.
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Old 05-04-21, 08:59 PM
  #47  
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Originally Posted by veganbikes View Post
I would estimate Bosch tools being about 1k (assuming you are doing it right) plus potentially other tools you might want to have in the box like a good breaker bar (we broke a Snap-On one trying to remove a Bosch lockring once they replaced it of course) and you will probably want some stuff for other systems as well which some manufacturers do give you when you become certified or sell their e-bikes but not always or maybe you might want extras being that e-bikes are quite popular and you can stay quite busy with them. Plus I would recommend having some electronics tools like multimeter, soldering iron, heat gun, DC power supply.

So not a huge investment but not small either. Don't under estimate the e-bikes, they are big business and when winter time rolls around and less service seems to roll through e-bikes are still going at least around us the regular service tapers off a bit but e-bikes stay busy all year long no matter what.
Our shop only does Bosch work, and I think we invested about $500 in tools. But there was also some staff training. I agree, e-bikes are HUGE, and our shop is embracing it whole heartedly, and e-bikes are rapidly growing in our mix of sales.
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Old 05-04-21, 09:16 PM
  #48  
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Originally Posted by veganbikes View Post
I would estimate Bosch tools being about 1k (assuming you are doing it right) plus potentially other tools you might want to have in the box like a good breaker bar (we broke a Snap-On one trying to remove a Bosch lockring once they replaced it of course) and you will probably want some stuff for other systems as well which some manufacturers do give you when you become certified or sell their e-bikes but not always or maybe you might want extras being that e-bikes are quite popular and you can stay quite busy with them. Plus I would recommend having some electronics tools like multimeter, soldering iron, heat gun, DC power supply.

So not a huge investment but not small either. Don't under estimate the e-bikes, they are big business and when winter time rolls around and less service seems to roll through e-bikes are still going at least around us the regular service tapers off a bit but e-bikes stay busy all year long no matter what.
I keep reading all over how "big" ebikes are, and I agree they've grown quite a bit, but from what I've seen,, they're still a teeny fraction of total sales. I think much of that has to do with costs. It's just a much larger investment than many casual cyclists are willing to shell out.

And I'm at a very busy shop, selling lots and lots of bikes.
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Old 05-04-21, 09:40 PM
  #49  
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Originally Posted by SkinGriz View Post
Why donít you shoestring a bike service/repair biz out of a garage for a while.

Fail fast.

That way you gain the experience and see for yourself what kind of $/hr you can make before you have your future on the line with debt?
+1
Add bike flipping to have more flexibility during low customer demand like winter.
You really only need to invest in tools, usables and common parts. If it fails, the worst outcome is you have bike supplies for life.

Don't do retail unless you go big or add really good online sales. But other players with decades of experience already do that. People will buy more online, so local repair is the only business with a future.

Figure out where you buy parts at a cost below end customer price. You purchase amounts will be too small to get really great prices. And nowadays you probably can't demand huge discounts.

Keep your day job until business takes off.

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Old 05-04-21, 09:40 PM
  #50  
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Originally Posted by Rogerogeroge View Post
Our shop only does Bosch work, and I think we invested about $500 in tools. But there was also some staff training. I agree, e-bikes are HUGE, and our shop is embracing it whole heartedly, and e-bikes are rapidly growing in our mix of sales.
You are missing some tools. All the battery mount tools and the Battery Tester (admittedly we didn't really need that and have gotten by for years without it but it is a cool bit of kit) and potentially some other stuff I have missed but those would probably get you there.

Originally Posted by DocJames View Post
I keep reading all over how "big" ebikes are, and I agree they've grown quite a bit, but from what I've seen,, they're still a teeny fraction of total sales. I think much of that has to do with costs. It's just a much larger investment than many casual cyclists are willing to shell out.

And I'm at a very busy shop, selling lots and lots of bikes.
Teeny fraction, I have the feeling your shop hasn't embraced them quite as much. For us they are quite big but we got in the door back in the early 2010s (maybe earlier I started here in 2014 and they had them previous to that). I mean yes current volume regular bikes are on top but without the pandemic e-bikes were most of the big sales in the past couple years.
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