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  1. #1
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    How to start a bike shop?

    I have been into mountain biking for over seven years now, and am seriously concidering opening a bike shop. I even have some one who wants to go in halfs. I would appreciate any comments or help from those of you who have started bike shops. Like what is involved in getting venders, min orders and so on. All help is appreciated.

  2. #2
    Nightriding rules SuperModerator
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    interesting..I would like to know what others say... (subscribing to thread)

  3. #3
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    I hepled some friends open a shop. They're doing fine now, but it was rough going for awhile. Here's what they advise, before you even commit to the idea:

    1. Do market research until you turn blue. Competition, seasonal considerations, and location are things you don't want to leave to guesswork or happenstance.

    2. A solid business plan should be drawn up with a professional advisor.

    3. Be ready and able to live income-free for at least one year. Probably longer.

    4. Get your credit rating into the "impeccable" category.

    5. Don't do it if you're newly married or a new parent, or plan to be in the next two years.

    6. Hire a good lawyer.



    This link might be helpful: http://nbda.com/page.cfm?PageID=70

    Best of luck if you take the plunge!

  4. #4
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    Work in a shop for a while and learn the business from the inside out. Once you work in a shop, you can determine whether the lifestyle is for you or not. You'll be surprised at how much less ride time you'll have when you're a shop owner...

  5. #5
    Can Tree Member
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    You know the punch line, don't you...?

    Q. How do you make a million bucks in the bicycle industry?

    A. Start with two million.
    Dad is sad.
    Very, very sad.
    He had a bad day.
    What a day Dad had!

  6. #6
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    Quote Originally Posted by Godless Communist
    6. Hire a good lawyer.
    i don't have a lawyer...replace 'lawyer' with 'accountant'...
    the first five are right on though...

    as with any start up business...be ready to work _a lot_ for no money in the beginning...you'll need quite a bit of savings to keep you floating or an additional job...or a very supportive spouse or family member or what have you...

    owning a bike shop is no way to get rich quickly...you must have the commitment to stick with it...

    i started off super small and grew slowly and solidly...building up a sound foundation through a solid customer-base is a much better way to go than jumping in with both feet with $100k in small business loans and hoping it works out...patience is a must...as you won't see large numbers coming in for quite some time...

    that's all i've got for now...

  7. #7
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    If you don't learn the ropes through working in another shop, I would say you are going to fail within a year. Honestly. I don't know one shop owner that didn't spend years in other shops, learing everything he possibly could. You will also need luck, plans to not make money for AT LEAST a year (sometimes up to 3), and say bye bye to riding. My boss barely rides, after working 10-9 every other day, with a family at home.

  8. #8
    feel the Force
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    I agree with all the above sentiment. Think about this, too:

    1. IF you sell a bike a full markup, it's only about 35-37 points margin. Due to the internet and many off-price markets, how many bikes get sold at full pop? Really make this a deciding factor on the brands you carry. Many of the "cooler" smaller brand are only 32-33 point margins. And if there is a large "grey" market, C0ln@go, than you'll have a hard time selling product.

    2. You must make 32-33 points to cover overhead and expenses. That means every dollar you bring in, you get to pocket 2-3 cents!

    3. Forget about riding your bike. Not only will you be working 80+ hours a week, for at least a year, you will be so tired from being on your feet all day that riding doesn't seem all that appealing.

    4. Good people are hard to find, and even harder to keep a hold of. Face it, Bike people - myself included- are opinionated, and notoriously difficult to get along with. We also tend to be transitory.

    If you do it, don't forget the passion you have right now. That's what'll sustain you through some tough times ahead.

  9. #9
    Not a smartass.
    Reputation: Brutal Cycles's Avatar
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    1. Beat head on wall.
    2. Repeat.
    No snappy sig.

  10. #10
    Interlectchewal
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    Quote Originally Posted by Dad Man Walking
    You know the punch line, don't you...?

    Q. How do you make a million bucks in the bicycle industry?

    A. Start with two million.
    50% return on investment? Where do I sign up?

  11. #11
    Can Tree Member
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    Quote Originally Posted by tvrbob86
    50% return on investment? Where do I sign up?
    Uh...it is supposed to be a joke about loosing half of what you started with. An old joke, but still funny.
    Dad is sad.
    Very, very sad.
    He had a bad day.
    What a day Dad had!

  12. #12
    Interlectchewal
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    Quote Originally Posted by Dad Man Walking
    Uh...it is supposed to be a joke about losing half of what you started with. An old joke, but still funny.
    I know that. But for it to be accurate, it has to go: "How do you end up with a million dollars?" "Start with two million." The way you worded it, it would be a 50% ROI. Not bad, in my book.

  13. #13
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    I am not by any means an expert in the area but would finding a location where one might be able to rent bikes to people as well as sell and do maint be a good way to go? So near a big park or something...


    also what about a multi shop....the most sucessful shops around these parts (VT) are the ones that sell bikes in the summer and skis in the winter....all seasons are capitalized on...

  14. #14
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    For those of you who have a bike shop what manufactor would you say has the best bang for the buck bike. Don't want to get into the issues of differant suspension types, just most for your money bikes. There isn't a manufactor out there that I now of that doesn't have a bike that I dont want, so I don't have major preferances. Also who do you guy like dealing with the best. Best customer service to the dealers. Also what dollar amount would you start with. So far I've been told 75k-100k to cover lease, inventory, and all other initial start up costs, does this sound about right.

  15. #15
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    Quote Originally Posted by mark_8408
    For those of you who have a bike shop what manufactor would you say has the best bang for the buck bike. Don't want to get into the issues of differant suspension types, just most for your money bikes. There isn't a manufactor out there that I now of that doesn't have a bike that I dont want, so I don't have major preferances. Also who do you guy like dealing with the best. Best customer service to the dealers. Also what dollar amount would you start with. So far I've been told 75k-100k to cover lease, inventory, and all other initial start up costs, does this sound about right.
    where are you planning on starting up...?

    $100k is high...of course it depends on what business model you are planning on having...

    how many employees do you plan on having...?

    i'd gauge you'd need about three plus yourself to cover what $100k would get you...

  16. #16
    velocipede technician
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    good answer

    Quote Originally Posted by Brutal Cycles
    1. Beat head on wall.
    2. Repeat.
    you gonna go work with sky?



    to the OP, best of luck.some really good advice in this thread.spend some time on the NBDA website.ask a lotta questions.
    looking for 20-21" P team

  17. #17
    Not a smartass.
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    Quote Originally Posted by hollister
    you gonna go work with sky?
    Yep. One week from today, I'll be driving off to San Diego, with half of a bike company jammed in the back of a moving truck. I've planned stops at Fruita & Moab on the way out there, & I'm thinking it'll be a perfect opportunity for a photo shoot of the newly completed pair of bikes. Oh, and maybe do some riding...

    Sky's got a good crowd down there, it looks like. All manner of assorted lunatics. I'm excited. The city sounds great, and I'm pumped to get back to my favorite kind of work again. There are a couple other bigger things in the works as well. 2008 is looking good.
    No snappy sig.

  18. #18
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    specialized. low end, high end, great market, covers clothing, helmets, bikes, and everything else. Also id suggest trek, but getting both lines are going to be very hard to get

  19. #19
    TranceX Rider
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    This one's risky as walking on tight ropes... with no safety line tied up on you... Well, better to risk something than not trying at all & risking everything at the end. I hope that makes sense at all. LoL!

    Well, best wishes on your endeavour!
    Quote Originally Posted by jcatienza
    There was no need to scare potential buyers and burn bridges "buddy"
    Tell me now, what's Product testing all bout then?

  20. #20
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    I would advise agaisnt a partner unless you have no other choice. Partnerships are usually problematic and fail due to disagreements way to often. If you do take on a partner make sure you own 51% or more. Also understand that most bike shop owners have only bought themelves a job, and at less per hour than they could do working in other fields. Also unless you own the building and land you will not be building much in terms of assets. It will take 20+ years and/or some real savvy business to make the "goodwill" portion of your business worth much.

  21. #21
    Fun-O-Meter
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    The E-myth

    Having cycling experience has almost nothing to do with running a successful retail business. Many entrepreneurs decide because they know how to ride bikes, or cook, or whatever, that they should open their own business.

    To really run an effective business, you need to possess strong leadership abilities. You need to be good at merchandising, so your store is organized, attractive, and is easy to shop. You need to have a solid understanding of retail financials, including profit & loss statements, gross margin, how to record inventory. If you are planning on having employees, you should be familiar with payroll procedures and the legal implications of having employees. Know the ramifications of terminating employees. Be prepared to manage your rent, utilities, and insurance.

    Having an accountant you can trust is incredibly helpful, and probably necessary.

    I would echo the opinions of others above who recommend that you work for a shop to gain experience. I would try to find a shop that has been in business for a long time and is held in high esteem in the local cycling community.

    Good luck!

  22. #22
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    It's funny, I am either going to take over an existing shop or start my own. I'm intrigued, what other info do you guys have?

  23. #23
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    I currently manager a million dollar paint store so I am not concerned about the retail end of the business. It would be a matter of paint to bikes. I am more concerned about branding, and initial inventory levels. I am getting differant opinions on initial number of bikes, starting square footage, and which brand. I am being told that I wouldn't make it with out on of the major players (i.e. trek, cannondale, specilaized) I was concidering going with Jamis. I always thought of them as a good player, but now questioning myself.

  24. #24
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    Quote Originally Posted by Dad Man Walking
    You know the punch line, don't you...?

    Q. How do you make a million bucks in the bicycle industry?

    A. Start with two million.
    It is:
    Q. Can I become a millionaire in the bicycle industry?

    A. You can - provided that you are a billionaire now.

  25. #25
    Love+Peace+BikeGrease
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    Hmmm...a subject I am intimately familiar with. I am half owner of a retail bike shop that just celebrated its 1 year anniversary. Previous experience? None – nor did my partner. Just a desire to give up our high-paying 9-5 cube lifestyle for the freedom and independence of having a non-paying, 7-day/80-hour a week job. And like others have said, you can forget about riding.

    For someone like you (and us), no bank will touch you, and SBA loans are virtually unobtainable with no experience. This is a harsh reality, but one you need to be ready for. We cashed in our savings and hit up the “Three F’s” – friends, family and fools.

    The internet is your worst enemy. Overhead is a close second. Lack of funds to advertise properly is up there, too. You can do $30K in sales in a month, and be left with less than a grand in profit. And that’s with NO employees.

    My advice? Here is what has saved us and kept us going:
    1. Customer service. We have built a solid rep for our friendly, knowledgeable, no-pressure service. As a start-up, this is the only thing you’re gonna have to separate you from other shops. We care A LOT more about happy customers, because our jobs depend on it.
    2. Fix ANY bike. Repair work will keep you afloat, and your time is 100% profitable. I can’t tell you the number of customers that have bought a bike or recommended us after getting their old clunker back on the road (when other shops have turned up their nose)
    3. Have a great accountant and a lawyer. Their fees are odious, but a necessity – they have saved us thousands of dollars by knowing things that we simply didn’t
    4. Prepare to be broke. Happy but broke.

    Good luck!

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