Re: [CR]Start Your Own Small-town Bicycle Shop, ca. 1974

> Looking for info on old bike shops, I came across this
> aricle by Gary Holmes about starting your own bicycle shop,
> >From "Mother Earth News" No.26, March/April 1974.
>
> Those were the days - all you needed was $5,000...
>
> Aldo Ross
> Middletown, Ohio
>
> "How To Start Your Own Small-Town Bicycle Shop"
>
> Here-for all the folks who want to get out of a big city
> and start a little business in a friendly, peaceful spot-is
> yet another small-town self-employment suggestion: Become a
> bicycle dealer in the small town of your choice. My wife,
> Sharon, and I have run a bike shop for a year now and feel
> sufficiently expert to pass on a few basics (enough, we
> hope, to help you decide whether or not this trade will suit
> you as well as it suits us).
> First, why a bicycle shop? Because-as you probably know-a
> "bike boom" is underway. In 1972, two-wheelers outsold
> automobiles for the first time in modern history and someone
> has to market and service all those millions of machines.
> (Incidentally, one satisfaction of the business is the
> knowledge that you're providing your customers with
> non-polluting transportation.)
>
> And why a small-town location? Partly, of course, to give
> you that relaxed, pleasant life you're after but also
> because the smaller community is a good potential market for
> well made bicycles, and one that's been neglected because of
> the direction the boom has taken.
>
> Increased demand for bikes has brought more and more
> manufacturers into the field: some with fine products and
> some with junk designed to be sold cheaply to Americans who
> don't know what makes a good machine. These larger
> producers-with a few exceptions-seem to be concentrating on
> urban sales, with much of their output retailed through
> department stores and discount houses. So it happens that
> the resident of the average small town can buy a bicycle
> only through the local chain outlet and in most cases his
> acquisition will be of poor quality. Which adds up to a fine
> opportunity for you, the independent small-town dealer, to
> profit by offering-without competition, usually-better goods
> than those in the department stores. You won't have a
> monopoly on local bike sales, of course: Many people will
> buy the cheaper products from large outlets just to save
> money. But when their purchases fall apart (as they
> inevitably do), you'll get the repair jobs.
>
> CAPITAL
>
> The amount of money you'll need to start a bike business
> depends on the scale of your plans. Ten thousand dollars
> will launch a very large operation, $5,000 an adequate one.
> Sharon and I began on $3,500 and could probably have got by
> with a little less.
>
> Whatever your initial grubstake, it's best if you don't have
> to borrow the money to start with. Today's interest rates
> could easily make the difference between success and
> failure.
>
> LOCATION
>
> Before you rush out to open a shop in some village with a
> population of 49, let me say that by "small town" I mean a
> community of at least 10,000. Independence, Kansas-our own
> location-has about 12,000 people and provides enough volume
> to support our business but I wouldn't want to try it
> anyplace much smaller.
>
> Although almost any building will do (at least to start
> with), it's best to find one that can be divided easily into
> a small showroom and a service area. When to start looking
> for that ideal place is a tricky question: You don't need a
> store until you have goods to sell but you don't want to
> fill your house with bicycle cartons while you hunt for a
> shop, either. Sharon and I initially chose to live with the
> boxes and I used our living room as an assembly area. After
> three or four days of tripping over bike parts, however, we
> found a location for our soon-to-be business and moved
> frames, wheels, pedals and all over there. A bit of
> hindsight: If you aren't native to the town in which you
> open your shop, it's easy to choose a poor spot. Our first
> building (which was small and rented for just $60.00 a
> month) was only two blocks from the main intersection of
> Independence, and-since that's a short distance by city
> standards-we assumed we were "downtown". To the local
> people, however, our place was on the outskirts of the
> community and we had very little walk-in business for a few
> months (until we moved to a roomier, better-located shop
> that costs us a monthly $125). What you want is a small
> building in the very center of town. An old gas station
> (easy enough to find these days) on a good site would be
> perfect.
>
> SUPPLIERS
>
> Before your Grand Opening, you will-of course-have to line
> up wholesale suppliers to furnish you with bicycles, parts
> and accessories. This, too, calls for careful timing: During
> the summer months you may have trouble finding sources whose
> merchandise hasn't been sold out to existing dealers.
>
> For this reason, I think it's best to open a new bicycle
> shop in the fall when the height of the season is over and
> most distributors will welcome new business. That way you'll
> also have time to become familiar with the operation before
> spring rolls around, and the local people will have some
> months to get used to the presence of your store.
>
> The easiest way to find suppliers is by going to your local
> telephone company office (which probably has, or can get,
> phone books for every major city) and thumbing through all
> the Yellow Pages. Start with centers of commerce close to
> you, because the nearer your wholesale source, the less
> you'll have to spend for freight charges.
>
> We've dealt with several supply houses and have found that
> they range in quality from excellent to terrible. The
> following are the best we've traded with:
>
> Gitane Pacific
> 4925 West 147th Street
> Hawthorne, California 90250
>
> Alpine Distributors
> 328 Link Lane
> Fort Collins, Colorado 80521
>
> Beacon Cycle Supply
> 1801 East Bolivar Avenue
> Milwaukee, Wisconsin 53207
>
> D-I-N Industries, Inc.
> 2224 Old Middlefield Way
> Mountain View, California 94040
>
> INITIAL EXPENSES
>
> Right! You've tracked down a building and contacted your
> suppliers. Now, how do you spread your money around so
> you'll have the best chance of making that new bicycle shop
> a going concern?
>
> Let's say you begin with a total of $4,000. From that amount
> you should set aside $500 to cover your non-merchandise
> overhead for the first couple of months. (After that length
> of time the shop ought to be generating sufficient income to
> pay these expenses as they arise.)
>
> Next, reserve another $200 for initial advertising. This
> isn't much, but it goes a long way in a small town where
> rates are generally low. We spent about that amount-mostly
> on modest sized, straightforward newspaper ads surrounded by
> heavy borders-just to let everyone know we were open for
> business. Now that we're established, we find that the same
> simple, direct advertising approach still works best for us.
>
> STOCK
>
> With the remaining $3,300 of your original investment you'll
> buy everything else you need, including $1,500-$2,000 wort h
> of bicycles. This should get you 17 to 21 medium priced
> 10-speed machines which will retail for about $125 each. The
> average markup on bicycles is 30-35%, not a lot compared to
> that on other types of goods. Fortunately, you'll do
> considerably better on parts, accessories and service. Other
> dealers have told us that new bike sales pay their expenses
> while all their profit is derived from other areas. Not so
> with us we place a priority on selling new machines and let
> the sidelines develop in proportion.
>
> Your initial supply of bicycles should allow the customer a
> choice of at least two brands. Your suppliers can help you
> decide on the best colors and frame sizes to start with. As
> long as you're dealing with reputable firms, you shouldn't
> have to worry about being oversold on any style. The
> wholesalers may, however, try to sell you their more
> expensive bikes (which retail at $200-$500 each). In the
> beginning it's best not to tie up your limited capital in
> such items but do get brochures on the distributors' entire
> lines in case someone wants a higher-priced model than you
> have in stock.
>
> PARTS AND ACCESSORIES
>
> You now have $1,300-$1,800 left to invest about $400 of
> which you should put into parts and accessories. That's not
> a lot, but it will buy most of the items your customers are
> likely to want at this point. Since the usual markup on such
> merchandise is 100%, this expenditure can bring you a return
> of $800. In our shop, however, we think it helps business if
> we hold our percentage down a little. (You'll find this
> wise, particularly if other stores around you sell cyclists'
> supplies.)
>
> Space doesn't permit a list of the specific parts you'll
> need but here's a good working principle: Especially at the
> beginning, don't try to stock every component for every
> machine made it can't be done. Concentrate instead on
> replacement items and accessories for the bikes you handle
> and maybe other popular brand sold in town. They'll probably
> fit other lines also, since many parts are interchangeable
> among good 10-speeders. Remember, if you don't stock a
> certain article you can always order it when you need it.
> That's better than having odds and ends gathering dust on
> your shelves.
>
> If possible, assemble a couple of bicycles before you order
> parts so you'll be familiar with the various bits and
> pieces. Then-if you still have trouble selecting from the
> wholesale catalogs-talk to at least two of your suppliers.
> They should be able to give you plenty of help (and may even
> go so far as to make up lists of suggested merchandise for
> you). After a while you'll learn what to order and what not
> to, and your inventory will grow until you can give your
> customers just about anything they need. And don't neglect
> the parts-and-accessories end of the business: Such sales
> will make up a large part of your income.
>
> TOOLS
>
> Obviously, you'll need tools to put bicycles together and
> keep them that way but there's no need, in the beginning, to
> spend more than $100 on this equipment. First, get a set of
> metric wrenches, some adjustable wrenches and a few
> screwdrivers. You'll be amazed at the repairs you can do
> with these few items alone. You'll also need some tire
> repair tools, plus a few gadgets made especially for bike
> work. The rear gear cluster (or freewheel) on a 10-speed
> model, for instance, can be removed only with a special
> piece of equipment and different variations of the tool are
> necessary for various brands of the cluster. Again, your
> supplier can tell you what to order. The more expensive
> articles such as movable repair stands and air compressors
> can come later, as your business grows.
>
> ASSEMBLY AND REPAIR
>
> When you're just getting into the trade, putting bicycles
> together can teach you almost everything you need to know
> except the best way to go about it. At the outset, just to
> assemble a modern 10speed machine may seem an impossible
> task. The first one I tackled took me the best part of two
> days before it was fully adjusted and ready to go. Now I can
> do the same job in about 15 minutes.
>
> The best solution to assembly and repair problems is to get
> a good book on bikes and read it as you go along. My own
> favorite and the manual I learned from-is Derailleur 5, 10
> and 15 Speed Bicycle Repair ($3.95 from XYZYX Information
> Corporation, 21116 Van Owen, Canoga Park, California 91303).
> Some distributors hold regular "repair schools" and if you
> can get in on one of these, so much the better.
>
> Since a good portion of your income will come from bicycle
> service, you'll need to know how to charge for the jobs you
> do and that's where some outside help comes in handy.
>
> You'll find it well worth $25.00 a year to belong to the
> National Bicycle Dealers Association (29025 Euclid Avenue,
> Wickliffe, Ohio 44092). Among other advantages, your
> membership will bring you a service rate book that tells how
> long a specific repair or adjustment should take and how
> much you should ask for the work in your area. The
> Association will also send you a listing of bicycle and
> parts suppliers all over the United States. By all means,
> join . you'll save yourself hours of frustration.
>
> RESERVE FUND
>
> What's left of your original $4,000 should be held in
> reserve just in case you need it. If a customer walks in and
> wants five or six bikes for his grandchildren, for instance,
> and you don't have them in stock at least you'll be able to
> order the machines.
>
> While most businesses are new and growing it's usually best
> to plow every penny of profit back into the operation and a
> bike shop is no exception. In fact, it's a good idea not to
> try to depend on your fledgling enterprise for a living
> until it's firmly established.
>
> PROFITS
>
> How much can you expect to make from a small-town bike shop?
> It's hard to say. We've always felt that a good part of our
> income isn't measured in dollars, but in the satisfaction of
> meeting the good people who ride bicycles. That much we can
> promise you: The rest depends on how hard you work at
> learning and operating the business. Unless you open a large
> establishment in a big city, you can't expect to get rich
> but if you're satisfied to work hard at your trade in quiet,
> peaceful surroundings, good things will come your way.