What would the 'Books' of a LBS look like?

[Smokin Joe]

How to make a million pounds running a bike shop -

Start with two million.

 

[spandex]

I remember doing a stock take in one of the LBS in York yes it had been there for some time but the final figure was over £160.000 all in just in the workshop was £18.000+.

How they keep running with that amount cash just sitting there I do not know.

 

[tyred]

I hate my job and have toyed with the idea of a bike shop myself. I don't think it would be a good way to make money. There is only one proper bike shop left in my area and it is a very good one but the owner has a number of other businesses and I think it's them that prop the bike shop up as he runs it as a hobby. Think about it, a lot of money tied up in stock, with the current economic climate there will probably be less customers for high end bikes and nowadays, the uneducated masses go to the supermarket and buy a vaguely bicycle shaped object from there rather than buy a decent bike.

 

[ChrisKH]

I remember doing a stock take in one of the LBS in York yes it had been there for some time but the final figure was over £160.000 all in just in the workshop was £18.000+.

How they keep running with that amount cash just sitting there I do not know.

Depends how you value the stock. If it's at cost is it realisable? Is that realistically what you could clear if it was sold now? If not, then the stock is overvalued.

Also how much stock you have is no indication how much people have put in to the business. You have to look at the business as a whole. I don't know enough on the bike business to comment, however, a high stock level may be required because the turnover supports it. Key indicators would be how quickly stock is turned over not necesssarily the total 'value' of stock at any one time. You also need to consider other factors such as sale and return agreements with suppliers, whereby you don't take ownership of the bikes until sold.

All I know is that companies with deep pockets like Evans and Cycle Surgery are making a killing. The problem is, as with most businesses, you don't get something for nothing and you have to invest first to make money.

 

[grhm]

I'd also refer you to http://www.yehudamoon.com/index.php?date=2009-01-03 for a more comic take on the idea of running a cycle shop.

 

[cheadle hulme]

Depends how you value the stock. If it's at cost is it realisable? Is that realistically what you could clear if it was sold now? If not, then the stock is overvalued.

It's a retailer so IAS 2.22 would apply. ie take the ticket price and reduce by an weighted margin.

 

[swee'pea99]

As others have said, I suspect most LBSs are labours of love rather than big earners...but I'm sure there are exceptions. I think a lot of it comes down to location location location. If you're in the right place, and your local clientelle is lawyers and TV execs who are happy to shell out £2K for a bike and £200 for a 'Platinum Service', then there's probably proper - not vast, but certainly healthy - money to be made. If the locals work in B&Q, if at all, forget it.

The only other thing to consider right now is the economy. LBSs buy almost all their stock from overseas, exchanging pounds whose value has recently dropped through the floor, and they sell to punters who are really feeling the pinch. In short, I think a LBS can be a good, not spectacular, earner, at the right time. But this ain't the time.

 

[GrahamG]

I'd be far more inclined to set up a workshop that sells a few utility/commuter bikes on the side - that would probably be far more viable IMO, especially here in Bristol given the Cycling City project trying to get 250,000 more people cycling regularly.

 

[dan_bo]

I get the impression that to make a small LBS survive, you need a spread of bikes at all price points. My mate in moston has a load of kiddie's shitters (£50-£150), some mid range stuff (£300-£600) and some really nice colnago/klein/blah stuff. He's just had one of his best christmasses ever on the kiddie's stuff as well.


And he's been there since 1973.

 

[NickM]

I get the impression that to make a small LBS survive, you need a spread of bikes at all price points...

Well I have no business experience, but would have guessed just the opposite - that you need to find a niche and exploit it. Exotica with big margins (in the right location), triathlon/time trial equipment (the ageing time triallists with healthy disposable incomes who must have all the latest kit aren't all dead yet, are they?) or hard-to-find/NOS stuff sold over the web rather than from shop premises, for example.

 

[BigonaBianchi]

..wot about a mobile mechanic..one that rides on his bike to you and fixes your bike oin your own garage....hmm...let me think this through...

always only ever going to be a local job
mostly mtbs
mostly gear set ups
small ticket jobs
overheads would be tools and parts
seasonal...summer busy winter dead
need to be cheaper than LBS servicing
...need to know what I am doing

maybe not.

 

[bonj2]

..wot about a mobile mechanic..one that rides on his bike to you and fixes your bike oin your own garage....hmm...let me think this through...

always only ever going to be a local job
mostly mtbs
mostly gear set ups
small ticket jobs
overheads would be tools and parts
seasonal...summer busy winter dead
need to be cheaper than LBS servicing
...need to know what I am doing

maybe not.

i was thinking about doing that.
where would you advertise?

probably want to do it in a car though as you'd ideally have a bike stand. Fair few tools needed aswell.

 

[jay clock]

that's why you often have to wait for stock - the LBS just can't afford to have a few boxes of the latest bling sitting about !

...and when that happens, why would I pay LBS prices to have to wait for it to be delivered to the LBS, then go and collect it.

A good LBS in the right location does fine. We have two in Winchester, each part of 2 different small chains, and they sell lots of bikes and always seem busy, but it is a wealthy area.

 

[another_dave_b]

i was thinking about doing that.
where would you advertise?

A number of the sheffield stands in Reading town centre have been 'stickered' by a 'mobile bicycle mechanic'. No idea if he's earning a living from it.

 

[BigonaBianchi]

Ciclos uno advertise a job lot of stock for sale on there web site...dunno if it's any good...