# How to start a bike shop?



## mark_8408 (Jun 1, 2006)

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.


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## crisillo (Jul 3, 2004)

interesting..I would like to know what others say... (subscribing to thread)


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## Godless Communist (May 8, 2007)

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!


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## flipnidaho (Aug 10, 2004)

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...


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## Dad Man Walking (Sep 7, 2004)

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.


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## fixedpigs (May 2, 2006)

Godless Communist said:


> 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...:thumbsup:


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## Stumpy_Steve (Aug 18, 2006)

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.


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## mtbjedi1 (Apr 9, 2007)

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, [email protected], 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.


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## Brutal Cycles (Feb 16, 2007)

1. Beat head on wall.
2. Repeat.


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## tvrbob86 (Aug 5, 2005)

Dad Man Walking said:


> 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?


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## Dad Man Walking (Sep 7, 2004)

tvrbob86 said:


> 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.


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## tvrbob86 (Aug 5, 2005)

Dad Man Walking said:


> 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.


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## rushtrack (Sep 7, 2006)

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...


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## mark_8408 (Jun 1, 2006)

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.


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## fixedpigs (May 2, 2006)

mark_8408 said:


> 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...


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## hollister (Sep 16, 2005)

*good answer*



Brutal Cycles said:


> 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.


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## Brutal Cycles (Feb 16, 2007)

hollister said:


> 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.


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## Stumpy_Steve (Aug 18, 2006)

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


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## Onie (Sep 15, 2005)

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!


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## jfkbike2 (Feb 8, 2005)

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.


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## rich.grandzol (Sep 20, 2005)

*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!


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## jarrodl (Mar 18, 2004)

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?


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## mark_8408 (Jun 1, 2006)

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.


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## xenon (Apr 16, 2007)

Dad Man Walking said:


> 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.


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## Ad Wizard (Feb 19, 2007)

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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## fixedpigs (May 2, 2006)

mark_8408 said:


> 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.


i have made it without any major players...my customers care more about my high level of service and trusting me that my bikes are just as good if not better than the big names...


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## accesspig (Mar 11, 2007)

*Finance will answer your questions*



mark_8408 said:


> 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.


There are some great gems in this thread.

Manager and owner are wildly different things. My manager manages a multi-million dollar store but at the end of the day her only risk is her paycheck. Like driving vs. riding in a Ferrari. You should be concerned about the retail end of the business. Your revenue stream will likely be tilted toward apparel, women's apparel.

Your questions are really finance questions. Initial number of bikes, sq. footage, etc. Those answer themselves after a thorough proforma analysis and variable/fixed cost analysis. Know your breakeven point. Your working capital and inventory ratios will tell you how many bikes to stock, not to mention vendor minimums. Your love of mtn biking may hurt you. You like Jamas, but what does your target customer like? Research all of your competition and strike at their weakness. Their brands and success at selling those brands will dictate your competitive position.

This could go on forever. Just do what none of our lbs's do: be competent and care. We'll keep coming back and finding reasons to spend money. 

Best of luck.


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## norcalchico (Dec 25, 2006)

Mark 8408 did you ever start up a shop?


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## Rocksuperstar (Mar 26, 2010)

Just remember one thing - if you turn a hobby into a job, you don't get yourself a dream job, you just lose a hobby.

Make it a chore and it takes away the magic, it's my get away, my relief from work. Nice idea to retire on but not yet. Not yet.

_edit: _just noticed the zombies wandering about in here - posting in three years dead threads are always creepy, it's like farting in a library.


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## kiwisimon (Oct 31, 2006)

Long thread an the subject: http://forums.roadbikereview.com/showthread.php?t=191264
Platy has tons to say.


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## Wild Wassa (Jun 4, 2009)

My LBS is very good. I shop there because their friendliness and service is first class. If I order something, if they don't have it, it is in the store the next working day.

This year they went further up market and had Giant designers come to Canberra to redesign the store. It now looks like a bike store in Japan. More of an fine furniture art work with bikes, than a local bike store.

During my last visit, I noticed that they have put this sign on the door.










Warren.


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## Straz85 (Mar 20, 2009)

The only way I would ever start my own business is if I had a huge sum of money so I would not hurt too bad if the business failed. I would also need enough to start the business without cutting many corners. I would want an ideal location, people knowledgeable in every aspect (bikes, accounting, business management, law, etc), a good brand to sell, plus a couple less popular niche brands, at least one very good bike mechanic. That's off the top of my head. I think many people say at one point in their life "I would love to open ____", but the reality of it is a fraction of those people have the knowledge and funds to succeed. At any given time, I have dreamed about how I would love to own a successful coffee shop, beer bar, bike shop, among others, but that whole time, I have known it will likely never happen unless I come into a lot of money.


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## oneplusone (Jul 25, 2016)

Ad Wizard said:


> 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.
> 
> ...


How is one happy and broke at the same time?


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## *OneSpeed* (Oct 18, 2013)

^ off to a rough start. i mean welcome. 

notice your commenting on a 6 year old thread. don't worry, practice makes perfect.


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## David R (Dec 21, 2007)

My advice, purely as a potential customer, is get a machine and learn how to make good coffee, install a couch and TV, sponsor events and trail builds, get as involved and immersed in the local scene as much as possible. You'll never be able to compete with CRC/Jenson etc on price so you have to offer what they can't. If people feel your business is an asset to the local scene they'll be a whole lot ore likely to support you.


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## BumpityBump (Mar 9, 2008)

oneplusone said:


> How is one happy and broke at the same time?


Oh, I don't know. Maybe surfing the web for happy topics you could contribute to in a meaningful and helpful way. Yet, alas, realizing another opportunity has slipped away... Mom! I NEED MORE CHEETOS DOWN HERE!!


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## jl (Feb 23, 2004)

This is what a good friend of mine, who use to own a shop use to say. He no longer owns it, but another friend took it over and is doing well, but he'll never be monetarily rich, but rich in other ways.


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## TX_Shifter (Aug 14, 2007)

David R said:


> My advice, purely as a potential customer, is get a machine and learn how to make good coffee, install a couch and TV, sponsor events and trail builds, get as involved and immersed in the local scene as much as possible. You'll never be able to compete with CRC/Jenson etc on price so you have to offer what they can't. If people feel your business is an asset to the local scene they'll be a whole lot ore likely to support you.


Yea its tuff market out there if you are one not to support your LBS or store fronts in general.

I know of one BS shop that currently closing down and I was in need of new Ice Tech pads and even at close out prices with discounts over 30% off the LBS ice tech pads were still $9 more per pad then I could get at Jenson. However, I sucked it up and paid $9 more for the pads. I wish that LBS owner a farewell thanks for trying.


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## misterbill (Aug 13, 2014)

oneplusone said:


> How is one happy and broke at the same time?


I cannot believe that you are asking that. When I was 19, I paid cash for a new GMC 4X4. There has never been a time in my life that I was more miserable than when I was 19.

Do you think if you marry 'the babe', have the 'dream house', the 'dream car' and the 'big money' job that you are going to be happy? 90% of the fun in life is trying to figure out how you are going to buy that cassette you have been dreaming of in the next three months. I took me three years to buy a $725 mountain bike. I am ecstatic, my wife even likes it.

Here is my free advise. Marry that blond waitress who always smiles at you, live in a trailer park near the factory and have lots of kids.

I have spoken.


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## laherna (Jun 14, 2009)

David R said:


> My advice, purely as a potential customer, is get a machine and learn how to make good coffee, install a couch and TV, sponsor events and trail builds, get as involved and immersed in the local scene as much as possible. You'll never be able to compete with CRC/Jenson etc on price so you have to offer what they can't. If people feel your business is an asset to the local scene they'll be a whole lot ore likely to support you.


Just curious, what do you think Jenson can't/doesn't offer?


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## MSU Alum (Aug 8, 2009)

What, no threads on opening Blockbuster stores that we can resurrect?


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## David R (Dec 21, 2007)

laherna said:


> Just curious, what do you think Jenson can't/doesn't offer?


Servicing/workshop, obviously, but also face-to-face interaction, advice from someone you know and trust, "need it right now" stuff etc.


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## laherna (Jun 14, 2009)

David R said:


> Servicing/workshop, obviously, but also face-to-face interaction, advice from someone you know and trust, "need it right now" stuff etc.


Maybe you had a bad experience with Jensen but in my opinion their excellent in all the things you say they're not. They have a professional workshop with very knowledgeable mechanics. The staff is very friendly and helpful. I have stopped by many times last minute and picked up parts. I feel lucky to have a lbs as good as Jensen.


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## mtnbikej (Sep 6, 2001)

David R said:


> Servicing/workshop, obviously, but also face-to-face interaction, advice from someone you know and trust, "need it right now" stuff etc.


I dunno.....Jenson is close enough to me, I can drive down and shop in the store. I still choose to shop online and have them ship it to me for free.

I have only had 2 encounters with the service dept....and they were not great. Myself and the mechanic didn't see eye to eye on a issue that was clearly a warranty claim, and blew it off. At the end, a warranty claim was submitted and fulfilled by Rock Shox.

But since I do my own wrenching, I don't need a service dept.


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