Starting A Bike Shop - The Basics
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- Опубликовано: 16 июн 2024
- Today we're sharing my personal experience opening a bike shop, there's no hard and fast rules on how to start a shop but based on everyone I've talked to everyone agrees.... You better want it a lot to make it work.
While this video does self admittedly confuses start up costs with operating costs the message is the same regardless.
If you're considering starting a business, the business planner below works great! (yes you need to create an account but it's free)
www.futurpreneur.ca/en/#
www.smithcreekcycle.ca
Filmed by:
@intuitioncinema5048
Huge thanks to the BDC Futurepreneur program for helping us get our shop off the ground! If you qualify for their program in Canada it's 110% worth it.
Thank you for this. I think more people need to understand this. Bike shop owners and their staff are local businesses that are just trying to send their kids to a summer camp or dance lessons and typically not trying to own a second million dollar home. Stop asking for discounts and get to know your LBS. It’s a passion of love type business, let’s appreciate their dedication to the craft. They need our support and they will keep us on our well tuned bikes happy and riding!
Was thinking about starting my own bike shop. Watched the whole video. Thanks for showing me that it's not worth it.
And this is why there has to be margin in retail. This also doesn’t cover carrying costs, stale inventory, theft/shrinkage etc…. Not an easy gig but an awesome one if you can make it work!
I had someone tell me the numbers I gave we’re optimistic 😅. Stale inventory SUCKS! But we’ve been trying to keep our SKUs super tight now that there’s an abundance of stock. Theft luckily for us isn’t a big problem but I know in larger shops it can be a big issue
Great overview. I started working at a bike shop in 1978 and own several since 2004. For the most part we all started in this industry because we love bikes and money was secondary. Since we now own a Bike business, we have to treat it like a business and knowing your numbers is crucial. Your cost of doing business breakdown is very realistic and is a great starting point for anyone thinking of going down this path. Obviously location will alter some of the fix costs. I'm in a 80 to 120 $ per sqft area, so 1/2 a mil is our break even point. Fortunately our industry is cyclical and sales follow a weather correlated curved. In our case it is dual peak bell curve. The bulk of the sales happen between late march and early September, So my rule of thumb is that for every employee we have, the shop has to ring up $500 daily. Therefore from April to September that number should be closer to $1500 to cover for the off season. glad to share more insights, just ask.
Got my first bike shop job in 1972 and I've seen many many shops close up since then. Paying rent is the surest way to go under. Just like home ownership vs renting. You don't build up any equity with rent that will increase. Watched a few other shops fail due to over spending on advertising such as race team sponsorship.
The entire history of bicycles has been booms and fads. Each new design spurs another boom that fades out. 2020 was a record sales year, like the early 1970s when every bike you could get sold fast. The pandemic bike boom is over. The 2019 bicycle tariff increase from 10% to 25% is the main reason prices are up while demand has crashed. Now would be a poor time to open a new shop in many areas.
One owner I knew built oversized new buildings and rented out the extra space that paid for the buildings so the bicycle business didn't. Other retail and upstairs apartments covered the bank loan payments. Banks are more likely to loan money for something they can repossess and resell like a building. What are they going to do with specialty fixtures excess inventory.
Multiple locations. Yoiks. Two stores means double expenses just so customers won't have to drive as far. Save that for when you are making a lot of money. You will spend more time calling the other store(s) to see if item X is available. Tell the customer "we will have it here in a couple days" and they won't return. Enlarging a single location will bump up some expenses but not all of them.
My pet peeve "We can order it..." Yeah in this age of the www so can the customer and it will be delivered to their door just as soon and probably for le$$.
Yeppers you hit the nail on the head! That is why I run my shop on my own. Support your local shop and don't ask for freebies or discounts!
Your accounting of starting and maintaining a bike shop is very similar to my business I started 10 years ago. I have a scuba shop in the Florida Keys, every time you said bike I heard scuba.
Small business is very rewarding and very challenging all in the same day. Brick & mortar way of doing business is threaten with online shopping, however I do repairs and service scuba gear which is my ace. They use to say the first 5 years are the make or break period on a small business, well I believe it's now the first 10 years and soon it'll be the first 15 years. Cycling is one of my favorite ways of exercise and escaping the grind . Good luck to you.
I can build and fully maintain a MTB, gravel or road bike. I ALWAYS go to my LBS for quarterly maintenance, I will buy parts and tools et’al when they have them on sale and I will ALWAYS refer them to other people, either new residents or new to the sport etc. YES, it may eventually cost me a bit more more but I am contributing to a viable, healthy, local economy that gives me back the most precious asset of all that no currency can pay: quality life, smiles, banter, socialising, networking and meeting new people! Support your local bike shops folks; support Brian man! Ride on! 🤟
Why pay for milk when you own a cow? Listening to shop owners bleating about people putting them out of business by buying parts for less than wholesale from online sellers is tiresome, and for them, dishonest. Do a better job if you want to compete against talented backyarders.
Hello Brian . Wow! Incredibly transparent , I own a small bicycle repair shop out of my garage and it is very real everything you said about the cost of setting up a bicycle shop. One of the biggest head aches is doing the taxes at the end of the year. I am retired and thought it would be good to start up a bicycle shop so I enrolled in the Central Alberta Bike School and the instructor Brian was very clear and helpful on the work involved to run a bicycle shop. Three years into the project and I have never worked harder but it does have it's rewards which are wonderful. Wish you well in your endeavors. Did find the Shimano S-TEC courses helpful. My favorite tool for truing wheels is the Islandix wheel truing machine from Victoria BC which saves tons of time truing wheels.
Fun Fact 10 times more bike shops in Quebec than the rest of Canada 10 times more bicyclists than the rest of Canada. Saludos John
Some of the stech is great, some of it is marketing disguised as training. Generally speaking I’m a fan of
Still a great video! When I describe how my shop is just not profitable (I eek out a sub $40k living), while also required taking on a certain amount of debt and moving it around constantly, they are flabbergasted. I send them here, you explain better than me.
Nice delivery of practical numbers......Cheers 👍🏻
Thanks for making this video and being transparent. Super 👍
I relate to this video so much, been running my small bike shop in Brazil since 2016 and the struggle is real! I've never had a business before and now i've Been trough all sorts of challenges, lost a shop due to an ebike fire, changed cities and started all over again....
Learning every day a little bit and trying to make my business better!
Great video, watched every bit of it and saved in my playlist!
Thanks
Absolute gold thanks enormously I have studying the bike industry for 3 years and this extremely informative.
I'm 13 so I don't really have a choice but to use my dad's garage. It's not fully started up tho. But I have ads and a business number. I'll probably be fixing other people's bikes and fixing up old bikes to sell for a profit. I already have 2 on sale. I'll probably get some sales once school starts up.
You have to start somewhere! Nice work
Invest in tools every chance you get. They never really loose value and you'll be able to earn a living anywhere in the world with your own bike tools and the skills to use them.
I hope you do well!
Thanks for the video and honesty in the breakdown of the figures. I started a small (workshop based) shop 18months ago on my own dime, and have been very patient gauging the business before expanding into a showroom next spring. Great to see information from some 1st hand experience
thnx for the insight of how a bikeshop works :) i just resign from my 8-5 work at a bikeshop and planning to start my own shop very helpful video thnx alot
Love your videos. Hope you get more popular.
I think for a lot of customers, the experience you get at a bike shop kinda determines if you try to get a deal, and if you come back or not. I know of the 2 bike shops in my town, one won me over with their helpfulness and willingness to just help out, while the other just kinda let me wander around without trying to help (I'm one of those $3000 bike guys, but I ride 3 or more times a week haha). Service is huge for you guys, and I feel like most shops understand that.
Wow! Interesting. Thank you.
I totally agree with you as a bike shop owner point of view. If you don't hit the target. Break even doesn't apply, Struggle is real.
Solid breakdown
Eye opening… thank you!
Solid vid - super lean budget.
Cameraman makes me feel like I'm actually there which is nice, natural movement. Only thing that's missing is looking at random things when I turn my head to listen better. Oh and thank you for all this S-tier information.
Thanks for the info!
That is mind-blowing.
Very helpful validates my numbers
Awesome video thank you!!!!!
I thought I wanted to own a bike shop until I worked in a few. Forget it. High stress, razor thin margins and often the customers are insufferable to deal with.
Ouch! Thanks for breaking it down. That's why I have a garage shop. Yes, it has its own challenges but is way more profitable. I used to work at Retail Tool Kit, and poor inventory management will kill you!
Facts. Solid video.
I worked in two shops as a student, both had skis & snowboards for the winter season.
I loved the student gig but I knew for sure it was a cut throat business and not for me 😂
great info
I’m starting my own shop soon. Good content. I’m hoping U.S. insurance is less expensive. I think with this I’ll be able to stick to my budget. I also don’t know what kind of tax write offs are available in Canada.
Less volume was cheaper insurance for sure, the states tends to have more options on everything so I’d hope there is more choice.
Dropping a comment for the algorithm.
That's pretty sobering. My two LBS are in a smaller city in a low cost of living state, which probably helps on rent at least. I have certainly seen the price of parts and service go up significantly, which is to be expected over the 33 years I have been buying stuff. Still, there was a significant jump in all facets after the pandemic. I don't blame the shops at all. Although I am able to absorb these increases many customers are flabbergasted by the cost of a new "entry" bike or the price of a repair. Often, they bought used through Craigslist or something equivalent to a department store bike where the repairs can cost as much as the bike.
I appreciate your honesty. I love bikes and have since I first rode a two-wheeler down the street in 1961. My baby boomer colleagues all rode bikes everywhere and many of us graduated into European road bikes in the early to mid-70s. Before I retired from teaching, I discovered that many of my college students had never ridden a bike or experienced the pleasure. I find that very sad.
Thanks. Good luck in 2024.
It's going to be interesting, that's for sure!
COGS (inventory)?
Would love to see a video about determining if your area warrants opening a new shop. The area I live in has one large shop with 2 stores, another small Tr*k takeover shop, a co-op/consignment shop, and another brand new mtb focused shop. I don't know much about your situation, but I have to imagine the market in BC is pretty saturated given the riding quality in the area. Did you have any trouble breaking into the market when starting?
Ohhh let’s do it! What city do you live in?
I started a small repair shop and one of the first things I did was screenshot a map of the city. Then I put 1 mile and 2 mile radius circles around every shop. Gives you a good idea of saturation. A lot of customers want something close by.
@@kingcardbeard1471 Was that in North America or EU?
@@dvoob North America.
@@dvoob North America
No tax?
How about heat/air conditioning, water as well?? Shop owner here as well....
Ours is covered under our triple net.
Tip #1: don't make a tool board out of unfinished softwood plywood. It will get filthy and look skanky in a very short time.
That plywood is actually finished ;)
If he had a RUclips channel, he could put out a video every month, randomly, that subscribers could watch, to get a service or part from his store at 20% off.
How many bikes do you have to sell in a month to be sustainable?
Such a hard question to answer. Us personally? Are we talking 10K Plus bikes? Are we doing service work? Are we assuming we do nothing but sell bikes?
Yes both sales and service work. Price of bike, maybe average sale price?
Why should you have to have brick and mortar to sell sram or shimano
Cause their regional distribution manager isn't going to sell a few thousand dollars worth of inventory to some kid with a van. These are HUGE corporations who demand that their products are sold in top tier locations/establishments. Their image is more important to them than your passion.
So I'm able to get them to "open" me? what does that mean? I'm opening a shop as an independent
also this REALLY put a lot in perspective for me
It means you can order some or all of the brands they stock. Otherwise the door stays shut. If you’re in the USA I’d expect things to be easier to get off the ground
I'm looking at buying a new mountain bike. Something in the $6k-7k range. I've probably spent $3.5 in part, service, repairs, and accessories at one local shop over the last 3 to 4 years. This shop has a manufacturer's sale on some bikes, and the bike that I like is a bit above my price once you add pedals, taxes, and a few other things. They seem to have no interest in giving a little to make the sale and keep a good customer. I'm not saying I want a massive discount, but some recognition of the amount I've spent would be nice. Throw the pedals or give a small shop credit, perhaps.
Am I being unreasonable?
If I can be super candid here. I spend roughly 14,000 bucks a year at my local grocery store and they never offer me any personalized discounts above what they typically put on sale. Comparing industries makes for a bad time, but you get my drift.
The business isn’t a high margin business, it’s super easy to let your margin erode and really really hard to maintain. Throw on that manufacturers typically want their bikes sold at MSRP or in this case the discounted MSRP and as a shop it can be a slippery slope real quick.
It’s hard to comment on the deal without knowing all the details but it could also be a matter of they have limited supply and if they discount it for you even further then they can’t sell it to someone else, especially if it’s already a good value.
I hope that helps explain it from the other side of the counter, I’d also as a consumer look at what they do locally. Do they donate to trail organizations? Do they run group rides? Host events? Can you justify it to yourself based on what they do locally?
@Smith Creek Cycle Thanks for candid feedback. I really do appreciate it. I'm not suggesting that they discount the bike any further than what the manufacturer has authorized. I'm saying throw in something to acknowledge that I have been and would continue to be a good customer.
I'm not loyal to any particular grocery chain. Some stores offer reward points to get stuff for free (I do realize that's built into the pricing structure).
I guess my point is if the shop is going to treat me the same as the person who walks in, never having purchased anything there before, I can treat them like any other shop. I do like the service, and I spend the vast majority of my mtb budget there.
@@briannyob7799 I will say buying a bike will likely help strengthen the relationship. Maybe offer to pay cash/Debit instead of credit if they throw in the pedals. Visa and Mastercard fees suck!
@@smithcreekcycle that is an excellent suggestion. Thanks. Sincerely.
'Promosm' ☺️
That punching noise got tired after the second time l heard it. Ugh.
Man, this guy doesn't know anything about anything.
Basically the worst.
The brick and mortar stores no matter what business it is in trouble. The delivery to your door model is having a huge success. Most things are disposable and not worth repairing and that's what the bike industry is aiming for with carbon bikes and components. I know right now it doesn't look that way but sooner or later the dumbasses paying $10,000 for a bike will disappear, they usually only make that mistake once, or twice if they are hardheaded. The prices of bikes will come down or people won't ride them. But back to the bike shop, do we really need a bike shop? No. A simple set of directions that come with your bike could be enough. Heck, lots of furniture that you have to put together comes with tools to complete that task, why couldn't a bicycle. The industry is trying to make bikes more complicated with hydraulic brakes, tubeless tires, hidden cables, but we don't need that on our bikes. Go back to rim brakes and putting a tube in the wheel, and exposed cables and anybody can repair a bike enough to keep it rideable. I haven't been to a bike shop in a long time, I do all my own service even brake bleeds. If I don't have the tool I need for the task I buy it because taking my bikes to a shop would probably cost me more in the long game. I bought my last frame from a frame builder here in the US and working with him I now have a bike the fits me better than any bike I ever had and I've had a lot of bikes. It's the only route I would go for future bikes. I have no need for a shop anymore.
There's so much to unpack here. I'll keep my counter comment short. Not everyone wants to do their own service, even if they can. I personally know my way around my truck, but would rather pay someone else to do it.
The door delivery is something our shop capitalizes on. We actually do a good amount of ecommerce.
On the "dumbasses paying 10,000" Comment. If someone wants a high end bike let them have it. I'm not sure what makes them a "dumbass" for wanting something nice.
I hope the hate you carry for the industry you can let go of at some point.
Cheers,
Brian
Excellent way to answer that comment. Points for providing an answer as well. I could do business with you and your shop!@@smithcreekcycle
I heard that every store that sells WR! convergence wheels, instantly succeeds. Anecdotally, of course ;)
Ironically enough we don’t sell WR, I’m a huge fan of NOBL wheels!
@smithcreekcycle to each their own. With the prices where they are, reviews as rabid as they are for wr1, and the fact that one company manufactures nationally and supports north america and the other overseas, it's an easy decision to me. I'm biased, though.
@@BuffiestFluff I’ve got my reasons for using NOBL. Generally speaking I hate warranty issues, and I see almost zero issues with NOBL so I don’t have a need to change it up. Relationships count to me too, and NOBL really has been a great partner for us.
Nothing against WR I’ve been to their factory and met a few of their staff, all great people doing really cool stuff.