By Ed Benjamin

Questions to consider before buying or starting a bicycle store…

By answering these, you will create a list of concerns, information, and goals that you can use to start your business plan.

Goals and Lifestyle:

1. What are your personal, long, and short term goals? Describe them in both lifestyle and dollar terms.

2. How long will the contemplated business serve these goals?

3. What is unique about you or your situation that will enable you to be successful in this business?

4. How much money do you have to invest?

5. What would be the consequences of losing that money?

6. What about this business would make it attractive to other investors?

7. What return do you expect?

8. What return do you think your investors (if any) will expect?

9. Where is your expertise?

10. What do you like to do the most?

11. What do you like to do the least?

12. In what areas do you need other’s expertise?

13. Are you willing to work longer, harder hours?

14. Are you willing to work on weekends?

15. Are you wining to forgo vacations, or time off, perhaps for years?

16. How will longer harder hours, and few holidays affect your family or other relationships?

17. Who will help you?

18. How will you feel if your business is not successful?

19. What will you do, if your business is not successful?

Research:

1. What is the population within a 15-minute drive?

2. What is the income, and age demographics of that population?

3. What sort of bicycle facilities such as bicycle paths, BMX tracks, etc. exist?

4. What is the economic base of the community?

5. How many bike shops exist in the area?

6. How well are they doing?

7. How big is the local bicycle club?

8. Is there racing in the area?

9. Is there a local triathlon(s) every year?

10. How rapidly is the community growing (or not)?

11. What bicycle brands are represented by local shops already?

12. What brands are not represented?

13. Have you compiled an analysis of each bike shop? (including years in business, size of the store, number of employees, the volume of sales)

14. Have you talked to the local reps for any of the bike lines?

15. Have you considered franchising?

16. Have you considered buying an existing store?

17. Have you talked to the staff of existing stores?

18. Have you considered hiring any of them?

19. Check the yellow pages, add to these information clippings of newspaper ads, Google search ads, and notes about any other advertising the other bike shops are doing. What conclusions have you come to about advertising in this market?

20. Have you subscribed to the bicycle trade magazines?

21. What trade shows have you attended?

22. Have you acquired the NBDA studies on the bike business?

23. Have you investigated banks, do you have a potential line of credit arranged?

24. Do you qualify for any Federal or State assistance programs?

25. Have you investigated SBA loans?

26. Have you talked to merchants in similar businesses, in the local community, about their business experiences?

27. Do you have a mentor(s) that can help you with the bike business?

28. Do you have a CPA and a lawyer that you are comfortable with, and who have successfully worked with other small merchants for many years?

29. Do you have an insurance agent and advertising agency (or consultant) that you are comfortable with, and have successfully worked with other small merchants for many years?

30. What market share do you think existing shops have?

31. Have you made a list of every place that sells bikes in the area? (include grocery stores, sporting goods, bike shops, hardware stores, used bicycle outlets, everything)

32. What complaints do local cyclists have about existing stores?

33. Is any local store participating in the Catalyst Super Sale?

34. Is any local store participating in the Catalyst Cycling Guide?

35. Are any local stores parts of Bike Line or Performance??

Planning:

1. Have you defined your business in 50 words or less?

2. What will you name your business?

3. Are you convinced that business planning is an absolute necessity?

4. Have you made a financial plan that defines the capital you will need, projects your sales, and projects your profits?

5. Do you have a computer? Are you competent with spreadsheets?

6. What business structure do you plan to use?

7. Have you prepared your current financial statements?

8. What is your current personal credit rating?

9. Do you have substantial personal assets to collateralize loans to the business?

10. What is your marketing plan?

11. What is your mission statement?

12. What trends in this business are forecast for the nation?

13. What plans do you have to acquire additional training for yourself?

14. How will you train your staff?

15. What vulnerabilities do you think you will have? What are your plans to deal with them?

16. Are there plans by local or state governments that will affect your business? (example: widening a road in front of the site)

17. What is happening with the increase or decrease in supp1iers to the bike business?

18. How do you expect to exit this business? (sell it, liquidate it, die, etc.)

19. Have you investigated possible alternative locations?

20. Describe the basic lease terms offered or purchase price?

21. Have you talked to merchants who rent from this landlord, or are in the same immediate area about their experiences?

22. What marketing position do you expect to occupy?

Now take the information that you have accumulated by answering these questions and:

1. Describe the present situation of yourself and the market you want to enter.

2. Describe your objectives in starting this business, and how you will know if you reach them.

3. Describe the management team and organization you will create.

4. Describe the products you will offer, both merchandise and service.

5. Describe what equipment and facilities you will need

6. Analyze and describe the market.

7. Describe your marketing strategy.

8. Using a spreadsheet, create cash flow projections for five years.

9. Review all of the above, and write an executive summary.

WARNING

There are a lot of people, including myself, who would tell you that the bike business has been good to them. The vendors, the dealers, and the customers are better than an average bunch. They love what they do, they are healthy and pleasant. A well-run bike shop can make money, and while no one ever got rich, a lot of dealers have been very comfortable.

But, this is a flat out warning. Going into business is dangerous to your lifestyle, your net worth, your relationships with family and friends, and to your peace of mind.

If I seem to overstate this, it is because I believe that I am doing you a favor by giving you simple honest advice that being an Independent Bicycle Dealer is not for everyone. And it may not be for you.

Before entering into a business, you should contemplate the following:

You are probably in a pretty good situation right now. You probably have adequate income, and you probably enjoy your life and the relationships you have around you. By starting a business, you may alter the fabric of your life so much that you will lose all the friends you have, and be taken over by the interests of your business to such a degree that you (and others) will find your life monotonous or stressful to an unpleasant degree. You may make money, but you may also lose everything you have, and wind up bankrupt or with crushing debts.

You do not have to start a business, it is a choice. If you choose not to start a business, that may be the better of the two decisions.

You must believe this to the point where if the plan does not shape out to meet your goals, you will drop the business idea, and smile while you do so.

People who find problems in the planning stages and go ahead anyway are usually doomed to failure. By telling yourself it is OK to not start the business, you make your chances of a successful business much more likely.

Once upon a tune, a friend came to me and said, “Ed! I need your help.” When asked what was the matter, he replied: “I bought this bike shop, and now I have to start work long before starting time, and I have to stay long after quitting time, and I have to work weekends, and now my wife has to help me!”

“So?” I inquired.

“And I’m not making any money,” he complained.

“Welcome to being self-employed,” I replied.

Want more?

Get some one-on-one time with a successful shop owner! Our P2 Consult program is perfect for people just getting started. We’ve partnered with David DeKeyser, author of the Positive Spin series on Bicycle Retailer and Industry News, to provide you with personalized business coaching that is relevant and specific to the bicycle retail industry.

The post Business Planning appeared first on National Bicycle Dealers Association.

Constantly Evaluate And Experiment

Constant evaluation and experimentation with the product mix is a good thing. What I mean by this is always to be tinkering with your product mix to validate your choices and not become stale. What was hot a few years ago may have cooled, and you didn’t realize how much a particular product sales have slowed. An example would be cycle computers. What was an item I recall always being a no brainer, slowly lost traction to cell phone holders, and GPS. Retailers may add another item(s) to the product mix without realizing that those new products are replacing the need for the prior products or, at the least, lessening your inventory needs for the obsoleted product. You also want to be experimenting with pricing on items to verify you are getting what the product is worth. Often retailers will settle for the MSRP or MAP pricing on things that are not price-sensitive and can be sold at much higher margins. Again, experiment continuously. We slowly replaced our best selling bottle cages with a very competitive and incredibly similar model that delivered twice the profit, which on such a high volume item can add up quickly. You may also want to pare down color selections on certain things until you find the happy medium. Now you can go a little deeper on fewer SKUs while maintaining sales. Apply this to product selection as well. You may not need an array of choices when a good, better, best approach may work best. Or even “this is the only model we carry” can, at times, for the right item be the best approach. The “right” amount of selection can vary from store to store, so always be fiddling to find the right balance.

Negotiate In Your Best Interest

Sadly many retailers can become defined solely on the product/brands they carry and may overlook or avoid opportunities that could be advantageous to the bottom line. While I am well aware of the ‘quotas” many retailers have to contend with when it comes to product selection, due to supplier’s programs and demands, always be negotiating in your business’s best interest. You still want to use your data to back up your negotiations. If nothing else, do not become complacent in your vendor and product selections. The wrong vendor or product mix can wreak havoc on your product supply, turn over, and bottom line. When you have picked the right product and mix for your business, not only is it suitable for the company, but it makes the whole experience for you and your customers much smoother. Many retailers, even the successful ones, may become complacent in this area. There are many ways to work on your store’s profitability, operational efficiencies, staff training, and many other aspects, but inferior product and vendor selection can make for an uphill battle for your business. Things change over time; make sure you are too.

Remove Emotion From Your Product Buying

Finally, when discussing product selection, be careful not to make knee jerk decisions based on your feelings. I can think of several product examples where we were making excellent margins and experiencing very fast sell-through. These brands were also being sold through various online channels at or below our wholesale pricing. The obvious, at the time, the decision was to kick these bad actors to the curb. Over the next season, we struggled with the replacement items, not having the brand name, quality, and sometimes availability of the previous bestsellers. Somewhat begrudgingly, we went back to the products experimentally, and fearful we would be called out as overpriced to see what happened. In the dark recesses of the internet forum and Facebook pages, the word was we would be suffering the wrath of showrooming customers within minutes of these products hitting our floor, and worse yet, supporting those who do not help us. While this may be the case with certain products, I can think of two very poignant examples of selling these products at full margin, with no blowback and even better, selling far more of the products than the replacements. The moral of the story with vendor and product selection is to validate your feelings on the sales floor. Would you rather be right, or profitable? Developing strong vendor relationships can be an incredible help to your success, but verify things occasionally. Of course, it may be necessary to move some product to stay in a vendor’s good graces, but only if they are delivering tremendous value to you across a wide swath of your business.

Words by David DeKeyser

David DeKeyser and his wife Rebecca Cleveland owned and operated The Bike Hub in De Pere, Wisconsin, for nearly 18 years. In 2018, they sold the business and real estate to another retailer based in a nearby community. David now writes the Positive Spin series on Bicycle Retailer and Industry News and he writes articles for the NBDA’s blog, Outspokin’. David also provides business consulting through the NBDA’s P2 Consult Program.

The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

The post Vendor and Product Selection: How To Run A Profitable Bike Shop appeared first on National Bicycle Dealers Association.

Profitability

One of the problematic parts of talking profitability is also what an owner wants from their store. Many are continually investing back into the business with store remodels and refreshes, continuously upgrading tools, and many carry far too much inventory but do so by choice. Some have high payrolls due to long-tenured employees who are like family, and some are family. Some have high rents or mortgages but would not consider another location as they may feel the place defines them. The point of all this is that profitability is almost always possible. Still, sometimes it may not be the goal of each business owner to absolutely maximize the potential of the business in those terms. Bicycle retail stores are very personal for many owners. Consulting retailers in regards to profitability, this becomes clear very quickly.

Defining Profitability

As we move ahead with this series, please understand that there is no judgment involved in defining profitability. The purpose is to show what is possible and ways to get there. For a store that is grossing under $300,000, things will be much different from a multi-location, multi-million dollar operation. The basic principles, however, will always remain the same. For the smaller business, some of the things you can do to help yourself grow and become more profitable may seem like overkill but are essential if you hope to scale up your sales and profits. Much of what we will cover for the larger businesses is already old news and may feel a bit rudimentary. The bicycle retail industry has a wide variety of stores, and one shoe does not fit all in terms of operations. I hope that all will find at least inspiration to try and improve the bottom line. I cannot stress enough that even if you are okay with your current profitability, becoming more profitable is always a good thing. Someday you will exit the business, and your past profits will be the primary determining factor to how that exit goes. It will also determine the life you can live in retirement.

Inventory

The first topic we will cover will be inventory and how to determine the correct amount and go a bit into depth on how to dial it. After that, we will dive into more topics related to both store operation and the effects on profits, along with covering expenses and where you can make adjustments to make gains. The main themes will generally be how to install guardrails on specific costs and were to maximize profits regarding services and pricing. It will also be essential to cover some basic operational best practices that every retailer should be doing. There are so many little ways to add dollars to the bottom line and the obvious and most commonly discussed. Get your calculator out and pencils sharpened!

Words by David Dekeyser

David DeKeyser and his wife Rebecca Cleveland owned and operated The Bike Hub in De Pere, Wisconsin, for nearly 18 years. In 2018, they sold the business and real estate to another retailer based in a nearby community. David now writes the Positive Spin series on Bicycle Retailer and Industry News and he writes articles for the NBDA’s blog, Outspokin’. David also provides business consulting through the NBDA’s P2 Consult Program.

The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

The post A Series Introduction: How To Run A Profitable Bike Shop appeared first on National Bicycle Dealers Association.

Number of locations: One

Years in business: 26

Number of employees: 28

Describe your business in terms of what type of bicycle retailer you are? Specialist? Generalist?

We are a generalist cycling retailer catering to cyclists of all ages and abilities.

Tell us a little about your unique attributes.

We genuinely enjoy helping people get out and enjoy all that cycling offers.

Tell us how you got your start in bicycle retail and how you made the transition to owning your store(s).

My husband was friends with the previous owner, who was not passionate about the business or his customers. While on a cycling trip together, they started discussions about selling the company to us. We desired to run a bike shop that welcomes all customers and helps them achieve their goals. My husband’s experience in retail management and my administrative assistance served to guide us as business owners. Still, nothing really could have prepared us for owning a retail bicycle shop.

What do you think the secret to your success has been?

Treating others as we like to be treated. We meet customers where they’re at in their journey whether they’re just riding bikes for a fun activity, setting out on a ride across America, or have a schedule of races set for the season. Our passion is just seeing people enjoy being out on their bikes.

Tell us about how you built your team to help you succeed?

We have several employees that have been with us for 10, 20, and 25 years. They share our passion for cycling and community, and we continually look for others that display that passion for bringing on board. We provide them the training tools to be successful at their jobs and provide generous benefits to keep them motivated.

What role does your shop play in your community?

We choose to take more of a supportive role in our community. While we don’t currently lead rides or have a cycling team, we support all local cycling events by providing staff support, prize donations, and/or monetary support. We are the main sponsor and ride support for our local “Trek the Trails,” a weekly ride that explores various segments of our 100-plus mile trail network. The main question we ask ourselves before considering participation, in any event, is, “does it get butts on bikes?”

What has been your biggest challenge or obstacle to owning a bicycle retail store?

It has been challenging to keep up with all of the responsibilities an owner needs to maintain: marketing, human resources, bookkeeping, inventory management, building maintenance coordinator, training, industry knowledge, and keeping pace with changing products. Always great if you’re lucky enough to have a person on staff to delegate these duties, but if/when they move on, it falls back to the owner.

In your opinion, what could/should the bicycle industry do better to address your concerns and needs better, but your customers as well?

If the industry as a whole could provide better margins to their dealers, we, in turn, could offer better pay to our staff, make improvements to our stores, and invest more in our communities. I believe that bike shops are integral components of their communities but often overlooked by our local municipalities.

Any advantages you feel your perspective gives you to gain a competitive edge?

Having been in the bike industry for over 25 years, we have experienced a wide variety of situations with customers, finances, road closures, economic issues, and staffing. Each has taught us to hang in there. There’s always blue sky beyond the clouds. We continually adapt to new trends, whether it’s the way customers shop or new cycling technology.

How do you see your business evolving in the future?

I see continued success for Summit City Bicycles and Fitness in the future. With our proximity directly on the extensive trail network in our community and the work we’ve done over the years to improve our staff training, customer service, and operations, we continue to look for new opportunities to meet customers’ needs. We’ve also significantly invested in our building to create a more modern and inviting space that will help facilitate an exceptional customer experience, business growth, and sustainability for years to come.

The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

The post Sheri Mann: Shop Owner Profiles appeared first on National Bicycle Dealers Association.

Email Marketing

Try and aim for at least a monthly email newsletter highlighting what is new in the shop, items that may need to be moved at a discount, and any other news that you feel sharing. Highlighting new employees is always fun. Keep it brief in the newsletter, but include a link to your staff page on your website to drive a little traffic to your site. I was always impressed by how much traffic the About Us – staff page garnered. People like to know who they are buying from, so help them learn! Make sure that items you are highlighting are linked to your site as well. Try to drive traffic to your website as e to keep the email recipient engaged as long as possible.

Social Media

Again, it may seem easy to get lax on your posting due to your busyness, but now is the time to capitalize on all the great content possibilities! All the “new bike day” posts, fresh new items getting unboxed, etc. can drive extra customers. I have noticed that many shops post more when it’s slow and then go silent when they are busy. Make sure to drive traffic to your store by showing how active and exciting your business is. Again, people are finally looking – speak to them.

Keeping Website and Social Media Seasonally Relevant

Having seasonally relevant content on your website and social media pages may be the one simple thing that drives a customer to your store. Imagine logging onto a few local shops’ websites and pages, and you see outdated seasonal content for winter on one, and the other is exciting and oriented to spring. Who would you feel is the more professional business? It is these little things that can separate you from the competition. Highlighting key holidays such as Easter, Mother’s Day, Memorial Day, Father’s day, etc. can make your sites stand out. Stay on top of the seasons and holidays.

Say Yes To The Media Requests

Have you ever had a media outlet call looking for an interview on a story? Say yes!! Make sure to tell your entire staff that the answer is always yes if you are tied up. I have heard from newscasters/reporters that it is shocking how many businesses turn down media requests. Do not turn down free advertising!

Shop Dress Codes

While shops are all over the map regarding dress codes, I believe that having some form of shop shirt or apron is a big plus. Professionalism starts with what you and your staff are wearing. Make sure that staff is not wearing faded or out of date shirts as well. Spend a few dollars on some fresh new shop attire this spring to help energize the team and look sharp. It is hard to quantify, but a great looking shop shirt will add confidence for you and your team, and I guarantee your customers will notice. Making the attire available to customers for purchase as well – it is great advertising!

Bonus Points

If you are doing flat repair clinics, group rides, or a new product or service being offered, write up a press release and fire it off to the media outlets, and bike clubs. You may not get anywhere, or you may get a free story or article about it. Many papers have a local business “heard on the street” column that may run your content. You may be surprised how easy it is to get some free publicity.

I understand that when it’s busy, you can feel overwhelmed, but do not neglect to keep your foot on the gas with your marketing regardless of how active you are. Staying in front of your customers is always essential. Even more so when they are making decisions about where to buy.

Words by David DeKeyser

David DeKeyser and his wife Rebecca Cleveland owned and operated The Bike Hub in De Pere, Wisconsin, for nearly 18 years. In 2018, they sold the business and real estate to another retailer based in a nearby community. David now writes the Positive Spin series on Bicycle Retailer and Industry News and he writes articles for the NBDA’s blog, Outspokin’. David also provides business consulting through the NBDA’s P2 Consult Program.

The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

The post Stay on Top of Your Marketing this Spring appeared first on National Bicycle Dealers Association.