Local bike shop
Discussion
After 28 years in the same industry, 21 years running my own company I need a change of direction.
Have seen a local bike shop for sale, established about 10yrs, waiting for figures for the last 12mths but previous years accounts seem healthy enough (it's a Ltd Company) so if last years look similar I'll be tempted.
Great location though new lease will need to negotiated, 2 employees (so no skill req'd by me luckily!), low stock value currently.
Appreciate retail is NOT the business to be in, they do sell a few new bikes but profit mainly comes from repairs & 2nd hand bike sales.
Anybody got any experience or knowledge to help me make a decision?
Have seen a local bike shop for sale, established about 10yrs, waiting for figures for the last 12mths but previous years accounts seem healthy enough (it's a Ltd Company) so if last years look similar I'll be tempted.
Great location though new lease will need to negotiated, 2 employees (so no skill req'd by me luckily!), low stock value currently.
Appreciate retail is NOT the business to be in, they do sell a few new bikes but profit mainly comes from repairs & 2nd hand bike sales.
Anybody got any experience or knowledge to help me make a decision?
my advice - there is no money to be made in the bicycle industry UNLESS you make your own products - concentrate 100% on bike servicing or have the ££ to bypass UK distributors!
The business model of discounting and price-matching has killed our industry - DON"T DO IT!
I can buy stuff from Wiggle cheaper than the wholesaler - they deliver it next day, for free, do free returns and even refund your return postage too - nobody can compete with that from a price perspective!
Khushy
The business model of discounting and price-matching has killed our industry - DON"T DO IT!
I can buy stuff from Wiggle cheaper than the wholesaler - they deliver it next day, for free, do free returns and even refund your return postage too - nobody can compete with that from a price perspective!
Khushy
khushy said:
my advice - there is no money to be made in the bicycle industry UNLESS you make your own products - concentrate 100% on bike servicing or have the ££ to bypass UK distributors!
The business model of discounting and price-matching has killed our industry - DON"T DO IT!
I can buy stuff from Wiggle cheaper than the wholesaler - they deliver it next day, for free, do free returns and even refund your return postage too - nobody can compete with that from a price perspective!
Khushy
Looking at their accounts, servicing is the highest profit (& margin obviously), followed by new bike sales then in close 3rd is 2nd hand bikes (far higher margin than new). Accessory sales are at the bottom but still worthwhile. All 3 sales combined outstrip service income by almost 50%The business model of discounting and price-matching has killed our industry - DON"T DO IT!
I can buy stuff from Wiggle cheaper than the wholesaler - they deliver it next day, for free, do free returns and even refund your return postage too - nobody can compete with that from a price perspective!
Khushy
This is an established business with a great reputation, great online reviews & a great location. It has a long serving mechanic, is registered with all Cycle2Work schemes & is close to some VERY large local employers.
In most cases, I'd agree with you on starting from scratch, this may be worth making an exception for?
Is the owner currently actively involved in the shop - serving customers etc? If so, do you really want to tie yourself to a 52 weeks a year job? I am a big fan of and regular customer of my LBS - http://www.cycle-ops.co.uk/ I suspect it does OK from selling a few high end bikes and a lot of servicing but fixed costs must be high and the winters hard. I'd rather be a customer than an owner?
Are you a cyclist?! Like a really nerdy can discuss the relative merits of SRAM and Shimano sort? Maybe post something in the pedal powered section here for a wider variety of views.
Good luck if you go for it. We all need our LBS.
Are you a cyclist?! Like a really nerdy can discuss the relative merits of SRAM and Shimano sort? Maybe post something in the pedal powered section here for a wider variety of views.
Good luck if you go for it. We all need our LBS.
Apparently he's selling to take up another business venture, not sure if I believe that or not.
I have an MTB & a road bike, I used to MTB a lot years ago but have done very little in recent years, current owner does even less than me and is active on the sales side & buying used bikes etc. He claims he gets plenty of time off.
He is happy to admit the winters are tough & that retail is a struggle.
Having met the chap I can't now 'mystery shopper' them or I would for sure.
I have an MTB & a road bike, I used to MTB a lot years ago but have done very little in recent years, current owner does even less than me and is active on the sales side & buying used bikes etc. He claims he gets plenty of time off.
He is happy to admit the winters are tough & that retail is a struggle.
Having met the chap I can't now 'mystery shopper' them or I would for sure.
Frimley111R said:
I know/knew of a bike shop that made big (ish) money selling used race bikes, it depends on if you can get your hands on then of course but this was a good source of income and they did trade-ins too.
1 - where would you get used race bikes - bearing in mind there are at least 20 people infront of you looking for the same1a - racebikes are rubbish - been trashed, cracked, repaired, crashed and who knows what else - how would you warrant a race bike under the sale of goods act, morally etc etc
2 - who told you they made BIG money
3 - used bike trade in prices are pants
4 - its not like the car market
5 - you could buy a new bike that is better, cheaper
etc etc as a life long cyclist I would NEVER buy a used race bike from anyone - most are carbon and can be quite fragile after being binned
trickywoo said:
Ask yourself what would happen if even one of the employees left and started mending bikes from their shed at home.
If this was a business I owned and wanted to sell, the first port of call is to the more senior of the two employees. It would probably have to be an earn out of some sort.The fact that this hasn’t happened would raise red flags for me (although he could just not want more than a 9 to 5).
The Moose said:
trickywoo said:
Ask yourself what would happen if even one of the employees left and started mending bikes from their shed at home.
If this was a business I owned and wanted to sell, the first port of call is to the more senior of the two employees. It would probably have to be an earn out of some sort.The fact that this hasn’t happened would raise red flags for me (although he could just not want more than a 9 to 5).
The older/more senior chap just wants an easy life by the sound of it, like many folk.
OP are you a cyclist? Do you have any knowledge or experience of the market, the products and so on? Are you looking to be hands on ? The sales and accessories market is a race to the bottom with online retailers, the money is in servicing and custom builds. The two staff are key to the success of the business - are they in it for the long term? If one or both decides to leave how confident are you in interviewing and recruiting suitable replacements (since the business effectively depends on them). Are they both full time? Are they constantly servicing bikes? How full is the bookings diary looking? How scalable is the current operation - could you grow the servicing side with the existing two staff or are they maxed out already? What condition is the shop unit in and how long has the lease got to run? What's the appetite from the landlord to renew the lease? What do you if the lease renewal falls through?
What are you actually looking to achieve? It sounds like you are just swapping one set of "day to day running a business" problems for another?
A friends brother has a cycle shop in Ringwood he opened a couple of years ago I can find out his thoughts if you want some input from someone who has been there and done it.
What are you actually looking to achieve? It sounds like you are just swapping one set of "day to day running a business" problems for another?
A friends brother has a cycle shop in Ringwood he opened a couple of years ago I can find out his thoughts if you want some input from someone who has been there and done it.
Edited by 48k on Wednesday 17th April 19:21
Both staff f/t, 1 is an apprentice though. Yes, totally reliant on them but bike mechanics can't be that hard to find can they?
Not bothered about running a business, the industry I'm in know has been annihilated by the internet & changes in technology, I want/need a fresh start.
Vendor claims they normally have a weeks work booked in, I can only take his word for now but will do some discrete investigation.
Appreciate the retail side is never going to pay the wages, it's the service side I'm focussed on really plus the C2W aspect maybe? There are some very large public sector employers within a very short distance.
Not bothered about running a business, the industry I'm in know has been annihilated by the internet & changes in technology, I want/need a fresh start.
Vendor claims they normally have a weeks work booked in, I can only take his word for now but will do some discrete investigation.
Appreciate the retail side is never going to pay the wages, it's the service side I'm focussed on really plus the C2W aspect maybe? There are some very large public sector employers within a very short distance.
LordHaveMurci said:
but bike mechanics can't be that hard to find can they?
My eldest has just completed his apprenticeship as a bike mechanic. AFAIK the company that were delivering the apprenticeship itself has lost it's contract with the Govt. They were the only provider in our region, so unless someone else has won the contract, there may not be many more apprentices coming forwards.Even though he works here, he still had to go to Cytech in Stafford for a fortnight to get his Level Il qualification.
Whilst I'm absolutely confident in my own son's ability to work safely on bikes, it's your insurance and reputation that are on the line.
When I worked in the trade some 25 years ago, we often had bikes brought in that were damaged for insurance assessments, where they'd been put together wrong and someone had ended up having an accident.
It doesn't take many incidents like that to ruin a companies reputation, especially with the advent of social media.
Biggest issue for him now is that he's gone from a fixed hours contract at apprentice wages, to a zero hours contract at minimum wage!
I'd be wary about assuming that cheap labour is easy to acquire.
This is an industry I am in and run a successful online shop specialising in higher end products, primarily bike sales.
To be honest the industry, especially when you are starting is tricky.
As mentioned above you often find the some of the bigger online retailers (CRC etc) are just as cheap as the distributors, you are not tied down to large orders or pressure from sales reps. I very quickly found that buying from UK distributors and selling online would not work so carefully chose various distributors throughout Europe were we buy in stock much cheaper, often end of line, ex-demo and similar. This is a bit of a niche for us and a real win/win as we pay less and the customers do to, it gives us chance to compete with the big boys and often cheaper.
We still keep in with the UK distributors and the accounts we want are all now on premium/elite level with the lowest possible prices. A few distributors turned their nose up at us due to importing from abroad but its simply business, why pay more for a product I can get cheaper abroad. To be able to survive in this cut throat industry you need to have this mind set.
I strongly believe the market is going to be all online based in the future. A lot of our local high end shops have shut down and their mechanics and started their own pop up 'service centre' as they can see that online is purely sales focused but it does leave a small gap for them to make money on fitting/building, servicing, upgrades just not bike sales.
Feel free to drop me a PM, I would be happy to look over the shop online and give you some honest advice on their products and brands.
Alternatively I am weighing up the options with my company and could be tempted with a sale due to further ongoing projects (its not advertised anywhere). We have accounts with top companies which are on the elite level, finance providers (V12), great connections with dealers and distributors in the UK and EU plus courier accounts for low rate shipping. If I had more time I would look at opening a very small shop purely to showcase stock, bring in more brands & offer click & collect, it would also open the door to customers who aren't quite converted to online sales so would benefit from the lower prices but could collect.
Anyway feel free to PM me if you would like some advice (this wasn't an intended sales post either haha).
To be honest the industry, especially when you are starting is tricky.
As mentioned above you often find the some of the bigger online retailers (CRC etc) are just as cheap as the distributors, you are not tied down to large orders or pressure from sales reps. I very quickly found that buying from UK distributors and selling online would not work so carefully chose various distributors throughout Europe were we buy in stock much cheaper, often end of line, ex-demo and similar. This is a bit of a niche for us and a real win/win as we pay less and the customers do to, it gives us chance to compete with the big boys and often cheaper.
We still keep in with the UK distributors and the accounts we want are all now on premium/elite level with the lowest possible prices. A few distributors turned their nose up at us due to importing from abroad but its simply business, why pay more for a product I can get cheaper abroad. To be able to survive in this cut throat industry you need to have this mind set.
I strongly believe the market is going to be all online based in the future. A lot of our local high end shops have shut down and their mechanics and started their own pop up 'service centre' as they can see that online is purely sales focused but it does leave a small gap for them to make money on fitting/building, servicing, upgrades just not bike sales.
Feel free to drop me a PM, I would be happy to look over the shop online and give you some honest advice on their products and brands.
Alternatively I am weighing up the options with my company and could be tempted with a sale due to further ongoing projects (its not advertised anywhere). We have accounts with top companies which are on the elite level, finance providers (V12), great connections with dealers and distributors in the UK and EU plus courier accounts for low rate shipping. If I had more time I would look at opening a very small shop purely to showcase stock, bring in more brands & offer click & collect, it would also open the door to customers who aren't quite converted to online sales so would benefit from the lower prices but could collect.
Anyway feel free to PM me if you would like some advice (this wasn't an intended sales post either haha).
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