Who hasn’t wanted to own a bike shop? Who hasn’t wanted to just work in a bike shop? The idea of self-employment and doing what you love is a dream that most cyclists have at times. But do you have the drive, the motivation, the determination, not to mention the money, for starting a bike shop? It’s more complicated that it seems, but if you’re willing to take the risk, nothing could be more fulfilling.
Starting a Bike Shop – Business Plan
A brilliant business plan, strong execution, quality service, effective advertising, location and targeted clientele are all part of the equation of starting a bike shop. Building a company that grows and profits is inherently difficult. It’s essential to come up with a great idea, fund the business somehow, and then you have to actually do what you say you were going to do. If you can prove that you can do all of these things well to a bank or an investor, they may just give you a loan for for starting a bike shop.
Leap of Faith
Most things in life that people aspire to do aren’t easy, but once you take the leap of faith, it’s all about commitment. People start businesses all the time, and most of them aren’t bike shops. They’re opening restaurants, retail shops, hair studios and professional services of all kinds, which is also really hard too. So if you open a bike shop, you have to love it and be committed to it.
Opening Expenses
Budget calculations beforehand is the recommended approach; it’s the only way really. A business plan includes finding and possibly renovate a retail spot, as well as a budget for initial inventory, hiring employees, and enough money left over to provide a buffer to last at least a year.
Location, Location, Location
Location can depict startup costs. A newly opened bike shop in San Fransisco, Huckleberry Bicycles, projected they’d need a 2,000 square foot store and the rent would be $6-8,000 per month. Renovating the store would cost about $100,000 doing the work themselves. The initial inventory to get started would be about $75,000 and $25-50,000 would cover miscellaneous expenses. $100,000 would serve as the buffer so they could confidently hire a full-time employee to run their service center.
Income – Where From?
Deciding what your projected income will be and how you’re going to obtain it is part of the business plan. Will most of your income be from retail, the selling of new bikes, or will the income be from bike repair and servicing, or both. It can make a difference.
Smaller Communities
Starting a bike shop in bigger cities might rely on retail purchases of new bikes, whereas a location in a smaller town might rely more on servicing and repairing bikes. A friendly, peaceful spot, in a small town is a self-employment suggestion if you’re good at working on bikes and it gives you a relaxed, pleasant life. Smaller communities are a good potential market for bikes and servicing and one that’s been neglected for too long. Beginning in the early ’70’s, bikes outsold automobiles for the first time in history — someone has to service all those millions of machines.
Small Town Start-Up
Start-up costs in smaller towns is far, far less than in large cities. Smaller towns, no less than 10,000 people, is calculated at just enough to provide the volume to support a bike shop business. It’s not recommended to try in anyplace smaller. Some figures have startup costs as low as $10,000 or less. Rent for unoccupied buildings can be as low as $100 or less. A small building in the very center of town is just about perfect. An old gas station on a good site would be good for a mom-and-pop bike shop.
Wholesale Dealers
You will need to line up wholesale suppliers to furnish you with bicycles, parts, and accessories before your grand opening. And remember, the closer your wholesale source, the less you’ll have to spend for freight charges, and products will likely arrive quicker.
Advertising Expenses
Budget enough money for advertising. A simple, direct advertising approach works best. And most successful business agree that a good, exterior sign can do more for your business than almost anything else. The amount of advertising money you spend is up to you.
Two Brands
Your initial supply of bicycles should allow the customer a choice of at least two brands. If you’re dealing with reputable dealers, they can help you decide on the best colors and frame sizes to start with. But be cautious, wholesalers may want to sell you more expensive bikes than your customer base can support. In the beginning it’s best not to tie up your limited capital in expensive items that may or may not move. But keep them in your brochures to order in case someone wants a higher-priced model.
Dedication and Family
Remember, if you run the shop yourself it’s likely that you will be spending weekends and some nights in your shop, away from your family. As with anything in life, balance is key.
Jobs and Income
If you’re not independently wealthy, you’ll also have to have enough income from somewhere, to pay the mortgage on your own home, buy groceries, shoes for the kids, utilities etc. Can you still work at a different career and run the shop as well? Will you quit your existing job and focus on the shop full time? These are all questions that you need to answer before making the first move to starting a bike shop. You can work out the details later but the big questions need to be answered for a well thought out business to be successful.
Diversify Your Shop
Bike shops are shifting gears around the country. A recent survey by the National Bicycle Dealers Association of 4,000 establishments found that 12 percent have coffee bars, 11 percent offer spinning classes and almost 5 percent serve beer. About 1 percent offer massages, yoga or full-service restaurants. Diversity may be the key to keeping the doors open so keep your options open.