Thinking of buying a bike shop and looking for advice...

boydster76

Hi all, I'm looking at making a fairly significant career change that will take me out of the corporate world and into LBS ownership.

Is there anyone out there that current owns or manages an LBS that would be willing to answer a few questions I have, and possibly direct me away from some of the more common pitfalls? A business mentor would be great - but the chance to ask a few simple questions would be equally helpful.

The plan is to be based on the south coast. I mention this as I appreciate people may not want to help a potential local competitor!

Thanks in advance.

kingstonian

Mm, I'd think extremely long and hard about it before taking the plunge. The online market has eaten into LBS business, and it is a tough market to be successful in.

bendertherobot

Incorporate a cafe/coffee stop thing.

voodooman

Specialise... in something. Something you can guarantee to do better, or cheaper, or with add-ons. And that online cannot provide. Mobile van on a Sunday for repairs? mobile bike fit? Specialised training? Brands that are a bit rarer (Ridley, Be-One, Thorn)? Bikes for a specialised purpose (tandems, BMX, dirt track bikes)?

Difficult if in Southampton (Decathlon, Hargroves, Rock n Road, Brightside training / Vankru, DC Cycles + others), and I've just got a CAADX 105, but not from Hargroves (1 mile down the road, and you know what... next time show some interest in a potential customer who might be spending less than a grand) - Tredz instead who kept the 15% off and then allowed me to buy thru C2W (bike is going to cost me about £550 all told; cracking deal).

clickrumble

This might be helpful;
http://forum.cyclinguk.org/viewtopic.php?f=1&t=103675&hilit=cycling+cafe

mfin

Forget the fact that it is a bike shop. Go looking at the numbers. Premises, all associated stock, credit with suppliers, staffing, margins, all fixed and variable costs, discover what your break even turnover would be etc etc etc etc... in short start to look at all the basics.

I'd be doing all of that way before I consider any nice thoughts of owning a bike shop in particular. DON'T listen to any friends who buy into any romanticism of it being a great idea, the general public know nothing of what it takes to make a successful business.

The other thing I would be calculating and building in is exactly what I need to make out of it, at least for the first five years.

You'll start to form a picture of how much product and services you need to sell, and don't just hope it will happen.

Remember almost nothing is manufactured in the UK, we're exiting the EU, costs are starting to be affected, and retail to the public in the next few years of luxury items is unclear as to how it will be affected.

Plenty of shops go bust very quickly as you know and plenty of bike shops do too.

(Oh, and don't do poor market research and make the mistake of buying into it through confirmation bias, so many people get this wrong).

fat daddy

Move to north Bristol ... Open a coffee shop/ bike shop there open at 5am .... I would be there.

You do need a UPS though these days and a joint cafe-bike shop sounds excellent ... Been to one in Plymouth - it was packed, Mud dock in Bristol is always packed, the bike cafe place in Bristol - packed

First.Aspect

The LBS that survives the best in my area is open 8 to 8 to get both ends of the commute. It also has that hint of Aladdin's cave about it; the odd superbike being worked on, a rack of carbon tubulars etc. And all the staff know bikes. Nothing worse than a vacant expression or a look of fear if you ask about something technical.

By far the most annoying thing about the big chains is servicing. You are expected to leave your bike for a week or more before they get around to working on it. A decent local shop will be first come first serve on the day. Any quick servicing turn around gets my custom every time.

The "Destination bike shop" idea will surely come as a double edged sword. More space, less stock, higher running costs.... Perhaps if you get a shop somewhere people travel to in order to ride and it makes more sense - I know a great shop on the edge or Dartmoor, for example, or near here, the hub at Glentress and even local shops in Innerleithen must make an absolute killing.

mfin

fat daddy wrote:

You do need a UPS though these days and a joint cafe-bike shop sounds excellent ... Been to one in Plymouth - it was packed, Mud dock in Bristol is always packed, the bike cafe place in Bristol - packed

Not saying these particular places aren't successful in financial terms, I don't know the places you mention either, but I'd bet the total amount of opening hours across all opening hours on all days all year when you'd be able to say they are 'packed' would be small.

Anonymous

First Aspect wrote:

By far the most annoying thing about the big chains is servicing. You are expected to leave your bike for a week or more before they get around to working on it. A decent local shop will be first come first serve on the day. Any quick servicing turn around gets my custom every time.

Which big chains do that? They must have a good storage area if they are happy to store your bike for free for a week.

How do you even get in that situation?
If you phoned up they would just say to bring it in when they could do it wouldn't they?
The only way I can see that happening is if you turn up expecting it to be done same day and then they offer or are bullied into keeping it until the time they can fit it in.

Which local shop offers turn up on the day/first come first serve servicing?
There must be a que at the door when they open, like casual laborers outside a building site.

What do you do when you miss the cut off point for that day?
Still happy with the shop for offering the service if that happened to you? Get up earlier the next day?

Do they have diarised work as well?
If so you could book your bike in, but then turn up with it prior if you had the opportunity/free time, and just go for a ride if you missed that days quota.

IME you always have to wait ages to book something in to be fixed.
The answer is to have more servicing capability and/or be very efficient if demand is so high I would have thought.

Am not saying that you mean it like this, but "quick servicing turn around gets my custom every time" sounds like 'drop everything for me and service my bike or I'll shop at wiggle'
Most people that have this attitude will still shop at wiggle for everything else they can though lol

How about a loyalty card that gets fast track servicing for customers that shop in the shop rather than just want to have an unrealistic attitude when they need something they cannot get from wiggle.
This would need to not affect any customers that have been diarised though, so again goes back to high workshop capacity/efficiency.

First.Aspect

Carbonator wrote:

First Aspect wrote:

By far the most annoying thing about the big chains is servicing. You are expected to leave your bike for a week or more before they get around to working on it. A decent local shop will be first come first serve on the day. Any quick servicing turn around gets my custom every time.

Which big chains do that? They must have a good storage area if they are happy to store your bike for free for a week.

Which local shop offers turn up on the day/first come first serve servicing?
There must be a que at the door when they open, like casual laborers outside a building site.

What do you do when you miss the cut off point for that day?
Still happy with the shop for offering the service if that happened to you? Get up earlier the next day?

IME you always have to wait ages to book something in to be fixed.
The answer is to have more servicing capability and/or be very efficient if demand is so high I would have thought.

Am not saying that you mean it like this, but "quick servicing turn around gets my custom every time" sounds like 'drop everything for me and service my bike or I'll shop at wiggle'
Most people that have this attitude will still shop at wiggle for everything else they can though lol

How about a loyalty card that gets fast track servicing for customers that shop in the shop rather than just want to have an unrealistic attitude when they need something they cannot get from wiggle.
This would need to not affect any customers that have been diarised though, so again goes back to high workshop capacity/efficiency.

God what a load of crap.

thebicycleworks.co.uk do first come first serve. If they are booked, they'll tell you. They will rejig things if they can. If they can't they'll either take the bike or you can bring it back at a certain time. Its the best service I've ever had.

This type of shop doesn't and cant' compete with Wiggle. I don't buy much of anything big from them, but if I need a chain, pads, a cassette, that sort of thing, I'll often pick it up as I pass. If I did want to buy an Enigma or an Indy Fab or get a bike fit for another brand, I'd certainly use them.

Both Evans and the Edinburgh Co-op, at least the last time I tried, have a week to 10 day wait for the mamails to have their bikes serviced, but they aren't able to tell you when in that time yours will be done, so you can't book in advance and bring your bike in that day.

Any more questions?

Anonymous

First Aspect wrote:

Both Evans and the Edinburgh Co-op, at least the last time I tried, have a week to 10 day wait for the mamails to have their bikes serviced, but they aren't able to tell you when in that time yours will be done, so you can't book in advance and bring your bike in that day.

Crap lol, then you abuse the other customers (mamils) that are in front of you in the que.

I get the week to 10 day wait but surely they book you in to be done and you come back with your bike then.
If they genuinely were asking to take your bike from you there and then without telling you when it would be done then they sound mad/disorganised beyond belief and I would not want them to touch my bike anyway.

I have never known shop whose policy it was to store that many bikes, but maybe things are different in Scotland

First.Aspect

Carbonator wrote:

I get the week to 10 day wait but surely they book you in to be done and you come back with your bike then.
If they genuinely were asking to take your bike from you there and then without telling you when it would be done then they sound mad/disorganised beyond belief and I would not want them to touch my bike anyway.

This is pretty much exactly my point.

compuwiz_uk

my local halfords can often do the book it in & keep it a while thing on you for repairs or anything above servicing that is the 6 week checkup or quick fixes like puncture repairs & brake/gear adjustments ( especially if they are busy ) basics like the last lot they often do while you wait in the order they served you if they can do etc.

they prioritise most staff to builds for sold units & new sales, then there is one poor mech chained up in the back doing all the service work taken in & if he's managed to escape then they still take in repairs/servicing but it just sits idle till they round him up again & chain him back up once again lol

most of the stuff i've had done that has had to stay has been done ready for the following day so often turnaround is not too bad if you dont needs bits ordering in.

cougie

Where will the shop be? Is it going to serve commuters or leisure riders?

I go into just about every bike shop that I see. I've got all the stuff that I ever would need but I try to buy something where I can. So don't go all top end. Smaller bits will sell.

Garry H

Bicycleworks; by far the best in Edinburgh

Midlands Grimpeur

Lots of sound advice given already.

Small businesses live and die by their cash flow, the most critical thing is having a clear (and realistic) idea of the numbers you need to do each month to break even. Don't have experience of the bike industry but our family business in manufacturing has been going for 90 years and I think are a few things applicable to most sectors:

- decide what type of business you are and who your customers will be and cater to them. No point selling £10k parlee's if 90% of your business is with commuters and local racers who aren't buying this stuff (sounds obvious but lots of people start the business they would want to shop at rather than the one their local customer base wants to shop at).

- keep a tight rein on stock. It's east to get carried away and fill the place with goods thinking they will sell, if they don't it's just wasted cash lying about the place. Also, quickly get to grips with what sells, I know my LBS sells far more accessories/clothing/components than actual bikes or other big ticket items like carbon wheels.

- get decent staff (In this case a mechanic!). Anecdotally, from a few of the bike shops I use, the owners have said the workshop accounts for a significant proportion of income for the shop. I suspect for some it generates more cash than actual sales.

Some other things specific to the bike industry, going on conversations with bike shop owners.

- bike retail has some of the lowest margins around, I have heard numbers of 10% on frames/complete bikes.
- returns/warranties. You'll spend a lot of time dealing with warranty claims. Work with brands and distributors you can trust to resolve these as hassle free as possible.

Basically running a business is a massive undertaking but has great benefits if you get it right. Do a lot of research and go into it with your eyes open if you do take the plunge.

jscl

- bike retail has some of the lowest margins around, I have heard numbers of 10% on frames/complete bikes.

That's tosh, for one.

Most margins on bikes and builds sit 20% + and some brands even give you up to 40%. I know for a fact that brands like Ridley give you near as damn it 50% markup on RRP if you're on best pricing.

Most suppliers will not give you any credit to begin with. You're going to need to get used to paying for things on proforma.

The best thing to do is think about your market (is it high end? is it commuters?) and see which distributors best fit with your model. Most larger distributors have regional reps (a dying trade) and will be able to get someone out to you to discuss product lines and obviously try to get you to order. This is your first order and if it's proforma, you should have some bartering power with reps because it reflect on them in their commissions too.

Also think about brands that are price protected. Certain brands such as Shimano, you just won't be able to compete with on a retail front, but obviously stocking these products in a workshop is a good idea, just don't waste valuable retail space. Certain brands are very strict on their price controls; Focus bikes being one of them, so maybe get in touch with a brand like Focus. It really helps you to sell a brand if you have an affinity with it too. If you've had a Cannondale in the past and really liked it, you are more likely to be able to talk passionately about it (and the brand) to a customer.

Next.. the size. Don't start too small, because growing becomes and issue. You should be looking for 3000sqft or upwards. Integrating a small coffee/cake section with some seating will go a long way towards getting cyclists in to your shop, but don't expect them to spend money there and then, because most of them won't. But there's a good chance they might come back in the future.

Don't worry about stocking up too much either. Most distributors offer really good next day courier delivery now if you get your order in early in the day, so you don't need to stock full size runs or ranges in products most of the time.

Get an ePos from Day 1. Don't cut startup costs by operating a basic till. Having an ePos and inventory management from Day 1 just makes ordering and management much easier going forward. It's 10x easier than needing to set one up once you're already trading.

There's no real order to the above, just my thoughts and knowledge as it came off my mind. It's a risky business, but it can be really successful in a retail environment still.

Monty Dog

How to make a million in the bike trade?

Start with ten million!

TBH if I was starting out, I'd find a job in the trade 'learning the business' and get paid at someone else's expense to learn the ropes - get to know the distributors/brands/products/margins and most importantly relationships. As others have said, in any business cash is king and the first few years the hardest. Biggest margins are in servicing and parts, so find yourself a good mechanic and learn the basics yourself. Mobile pick-up and drop-off for servicing is a good USP too.

cougie

I'd forgotten that there was a bike shop near me that opened a few years ago. It was more like a Bond Street fashion shop than a bike shop.

Superbikes. The best kit. Fantastic for the uber mamil but rubbish for anyone else. There was literally nothing of interest in there for me and I have a lot of bike kit...

They lasted a year or so. Completely out of touch with their market and area.

vinnymarsden

Just as a word of caution to the OP…the Edinburgh bicycle works cooperative whatever it was called here in Sheffield has recently closed, after less than 2 yrs trading.Big shop..but it didn't, in my opinion bring anything different to an already crowded market here. Giant opened a concept store reasonably close to where the EBC was and apparently business is very good..so, to me, one of the most important issues is..location…I pondered the idea of a coffee shop a couple of years ago..went to see a guy who designed/fitted them out…and his advice was location was the number one factor for success/failure, and I guess, when you are selling stuff that goes across the board. Whatever you decide..good luck, if you make it work, then Chapeau to you, and if its a burning itch that you need to scratch..do it… you won't spend the rest of your life wondering what if!!

keef66

The only bike shop where I live closed down earlier this year. They tried to cater for all but in so doing, I think they spread themselves and their stock levels / range too thin. Few road bikes, some MTBs, some kids stuff and some commuter bikes, very small selection of kit / clothing / tools / spares, and a servicing / repairs workshop. 90% of the time they didn't have what I was looking for, and what they did have was so much dearer than online.

They never opened outside of 9-5 Mon-Sat, and I think the writing was on the wall when a Halfords opened just a mile away. They might be crap but they are open before / after work and on Sundays.

LBS might have survived if it had concentrated on road bikes, opened a cafe, and extended their opening hours (that end of the high street is swarming with road cyclists on a Sunday morning)

flasher

I have zero expert knowledge, but I'll throw my tuppence worth in anyway. I'd be looking at a coffee and maintenance shop, with a few top end clothing kit makes such as Ale, Etxeondo etc. and a good selection of spares, tubes/tyres/bottles/energy supplies etc. I'd keep well away from bikes themselves, you'll get loads of tyre kickers wanting a test ride only to leave and buy online from the cheapest box shifter.

Good luck, reckon you'll need it!

markhewitt1978

Depends exactly where it's going to be located. Is it a potential destination for cycling? Because then making into a ride stop with a cafe seems to work well. e.g. I often go to Activ Cycles in Corbridge, previously it was just your ordinary bike shop, I went in once, but that was all as otherwise never had the need to go back. But then it turned itself into a coffee shop with some very nice cakes.

Problem is you're primary business is then running a coffee shop, the bike shop is very much secondary.

One thing I would say is - open Sundays! - For many Sunday is when they do their rides so you're more likely to want to shop then.

lostboysaint

There's a lot of good stuff on here but a few of the most obvious is missing:

Get a plan together to visit all the local businesses that you think are likely to use C2W and introduce yourselves and, most importantly, the products and concepts of C2W. You will generate business through that whilst also raising awareness of your new service for the existing cyclists within those businesses. You can tie it into a "free bike check" offer or "cheap service on your site" offer for added incentive.

Target local clubs - race, bmx, mtb, sponsor an event, provide freebie goodies (gels, High 5 tabs etc) for a race or meet.

Target local riders that actually have influence and can promote your business. Help them (even if it's just a bit of discount) to help you. They may not be racers, they may just be forum dwellers or social media activists, but be prepared to reward them if they are doing a good job promoting you.

DeVlaeminck

A couple of shops have opened and shut again here in the last few years and I have heard one of the big established shops is in trouble, it's certainly laid off some staff recently. On the other hand I know a guy who has opened a shop that seems to do OK - well enough that he was thinking of taking over one of those that shut down but he decided the rent was too high for the size of the shop.

One of those that shut down was the much heralded Park Bikeworks which I mention because it had a very nice (if expensive) coffee shop attached to it. Problem was the shop was owned and run by someone with little experience of cycling - he had a range of models that nobody wanted to buy and didn't fit with the upmarket image he was trying to create for the shop. They had a lot of PR on social media etc but that couldn't make up for the lack of knowledge and expensive prices - in other words you need the cake to be right as well as the icing. Another local shop that has opened in the last few years - cyclomonster - has a much better range of stock, cheaper but still high profile location, has established a club linked to the shop and got involved with a local road race team and whenever I've been in the staff have been knowledgeable and helpful without being pushy. I have no idea if they are making money but assuming they are it can be done you just need to do it better than the opposition.

boydster76

Thanks to you all for the thoughts and insight. I've considered quite a lot of it already, but there are some really interesting comments in there that I'll explore in more detail. I've got a couple of more specific questions that some of you may be able to help with/have a view on...

- Coffee stop - town centre location in order to pick up people post-ride, or slightly more rural to get people mid-ride? I can see obvious pros and cons to each. Town centre (with parking) is obviously going to be better for the bike shop side of things though. Just interested to know how people structure their rides.

- Does anyone ride in or around the Bournemouth/Poole area and fancy sharing some local insight?

DeVlaeminck

I don't think town centre is necessary IF that means higher rents, rates etc. If I want something for my bike I generally don't pick it up while I'm in town - OK if people work there they might but even then you'd have to be relatively close to nip in at lunchtime. If I'm buying a bike or taking mine in for a service out of town where parking is generally easier is an advantage. Out of town/edge of town but visible would be what I'd go for - so maybe next to a major route so people will know it is there. Security is also an issue of course - bike shops have a lot of nickable stock so a building that can be made secure is important - I have never been in retail but I imagine in some areas there may be restrictions on metal security shutters etc.

thegreatdivide

Garry H wrote:

Bicycleworks; by far the best in Edinburgh

GTD; by far the best in Edinburgh.

apreading

I called into a local bike shop in Caldicot a couple of weeks back, after my son hit a massive pothole half way through an 80 mile ride and the wheel needed truing.

The shop had just opened up and finding somewhere on the busy sustrans route was important to the owner and it obviously works because thats why we had just passed it a mile before the incident. A big 'A board' on the pavement ensured that we had both noticed and remembered it.

He was just starting out and slowly getting stock of bikes in. He said that he cant get some brands because they have signed deals with another shop which is exclusive within a certain distance - apparently all/most brands do this. So he had to choose his position carefully to be able to stock the brands that he wants and still there are some that cant/wont supply him. So this will be important for you to factor in.

navrig2

If you are aiming for large town location with existing competition such as Evans or Halfords then it will be difficult to make a place without something "extra". If you find that "extra" (coffee shop, custom builds, expert fittings, coaching, local guided rides) then you have to be excellent at providing it to get the repeat business you will need to survive.

I spent a while speaking to a LBS at the beginning of the year. He mentioned that there was a lot of change in the bike retail business - I am not a retailer so didn't understand ti all - things like Shimano spares being available within 24 hours (good I presume), the major distributor getting harder with their retailers (I think this was Madison who dropped or were dropping GoPro after they found grey imports selling retail at less than wholesale price - this left the retailers without longer term support of something). He gave me the impression retail was trying to fight back against the internet sales. This would be a hard task.