Opening A retail Business??? Business owners come on in!!

[Rick D]

So I have a question? I am thinking of opening a retail store, but I have never been down this road in retail. I have run several body shops and part owner of a shop so I know about what's involved in running and owning a business.

My question is in retail what's the best way to get capital for the inventory and such. I know for the start up cost what I need at least as far as setting up the place, phone, build out, signage, fixtures. I know what and how to get that done (at least I think I do :lol: ). But at the beginning how do I go about the working capital? Loan from a bank ok that one is easy, but do I look for investors?? If so how would I go about that? My brother-in law as over 20 years in retail all the way up to regional manager for Home Depot, he has shown an interest in getting involved in this project but again he has worked for major corps with their own capital, (or at least they had their investors already) so not much help in that department.

Just looking for some ideas on what others have done?? So please let me know what you think good or bad? :cheers:

[NAPA 68]

If you don't mind me asking, what type of retail business? Many franchise type companies have financing programs to qualified individuals.

Tim

[Flash68]

Savings is a good way to fund a business. You don't have to give away ownership/profits to investors.

Of course if you want to spread your risk around and not take on all the financial risk (whether you have the savings or not) then investors/partners are an option.

Partners = some level of involvement.

Investors = passive = no involvement (or minimal at least, depends on how much they invest/own)

I have an SBA loan (not for startup costs, but for saving us after the 2009 slowdown in my industry). It is a lot of red tape but it is a great loan program.

For any kind of a bank loan you will likely have to show your background in the niche you are getting into. That's where the question above comes in - what kind of retail business? Do you have the experience?

Small business is the heartbeat of America. :cheers:

[Rybar]

Well, from my experience. I used my own captal. Which does limit what you can do as far as advertising, merchandise and stock.

You should really budget for advertising and a lot of it. Lots of money can be wasted on different forms of advertising.

Also, try to keep your overhead as low as possible. Otherwise if your prices are too high its tough to be competetive. And if you start dropping your pants to get sales its a losing battle.

The other thing about retail is expect to work a lot of hours. Work weekends, evenings. And if you hire someone you still have to be there to oversee daily operations. Its a customer driven business so you or your employees need to sit there and wait for people to walk in the door. How you get people into your store and its location and PARKING are crucial. I would also target local people in your area or locate the store near other business that have a lot of traffic to generate more exposure. Like I said advertising can cost huge dollars and you have to be repetetive with it or it won't work. Depending on your products you might not see the fruits of yours ads for a few years.

Anyways, good luck with it. Everyone I know it retails knows its a very tough go. Esp. The long hours and remember the customer is ALWAYS right, even if you have to lose money to make them happy.

[Sieg]

Well, from my experience. I used my own captal. Which does limit what you can do as far as advertising, merchandise and stock.

You should really budget for advertising and a lot of it. Lots of money can be wasted on different forms of advertising.

Also, try to keep your overhead as low as possible. Otherwise if your prices are too high its tough to be competetive. And if you start dropping your pants to get sales its a losing battle.

The other thing about retail is expect to work a lot of hours. Work weekends, evenings. And if you hire someone you still have to be there to oversee daily operations. Its a customer driven business so you or your employees need to sit there and wait for people to walk in the door. How you get people into your store and its location and PARKING are crucial. I would also target local people in your area or locate the store near other business that have a lot of traffic to generate more exposure. Like I said advertising can cost huge dollars and you have to be repetetive with it or it won't work. Depending on your products you might not see the fruits of yours ads for a few years.

Anyways, good luck with it. Everyone I know it retails knows its a very tough go. Esp. The long hours and remember the customer is ALWAYS right, even if you have to lose money to make them happy.
Good info.

Can you leverage your suppliers for start up inventory extended terms or dated flooring?

How much and what type of advertising are you planning? If you don't have a location with high traffic count you need to reach out to your potential customers with reasonable frequency.

Graphic designers, websites, social media, email lists, direct mail, print, TV, radio, billboards, in-store signage, etc. use up cash fast. What can you get for co-op from manufacturers and suppliers?

[John510]

A bank will not loan you money if you have no experience in that industry especially the SBA. SBA will want a track record in that industry. Banks will want a UCC filing also on all of the assets which may not be a lot in a retail store. I have had 2 SBA loans and each one took over 6 months to fund.

You can also use a hard money lender. They typically charge 20-25% and you have to pay them back in 6 months to a year. I would only recommend something like that as a LAST resort. Ive used these guys twice. http://www.ondeckcapital.com/ One for 60K and the other for 75K. They fund you in 2-3 days.

If you get rejected for every loan possible there are always credit cards you can advance cash from.

Negotiate with the landlord and have them pay the TI's. (You will most likely have to pay up front then they reimburse you)

I would not partner with anyone whether it be a friend or family member. It will kill your relationship with the person especially when there is money involved. Plus, who wants to give away half of the profit?:willy:

When I open a new store I plug everything I need in full detail on a spreadsheet. I factor in inventory, equipment, construction, permits, etc. As far as working capital goes you should have capital coming in as soon as your are open. Use that money to pay for new inventory, bills, etc.

Advertise, advertise, advertise. Plan to spend 3-5K a month on some decent mailers, coupons, etc to get your name out there.

[Rybar]

Good info.

Can you leverage your suppliers for start up inventory extended terms or dated flooring?

How much and what type of advertising are you planning? If you don't have a location with high traffic count you need to reach out to your potential customers with reasonable frequency.

Graphic designers, websites, social media, email lists, direct mail, print, TV, radio, billboards, in-store signage, etc. use up cash fast. What can you get for co-op from manufacturers and suppliers?

Seig, I bought my retail space and own it. Also did all the TI's like John mentioned and that is a huge cost. Let's just say that used up most of my capital lol. It has given me a huge break for monthly overhead costs. However, because I wanted to own it limited the locations I could choose from. I would recommend to really research and put a lot of thought into the location, it's a major part of a retail store.

I've done most of those forms of advertising. My family is in that field of business it helps me out a lot with what to do. The best ads for me have been ads on the sides of the transit buses.

Mfg's offered me very little for co-op. my business is all about volume and I can't compete with the volume that the big boxes do to negotiate lower cost. You can buy product by the container but then you tie up lot of capital on inventory you're not sure when you will ever sell :lol:

Good luck Rick, if you need any help shoot me a PM.

[Flash68]

Nothing against you other guys, but IMO a lot of this advice is moot until we hear WHAT retail business Rick is considering going into. Not all retail is created equal.

[Vince@Meanstreets]

Hi Rick,

As a fellow small business owner I feel your pain. Partnerships are tough. Stay away. I lost big trying to help a partner through tough times. Mind you this is someone whom I have known and trusted for 20 years. Bit me in the ass. Trying to get a loan is a bigger joke. I gave up. I had a credit score of 800 +, $25K in the bank, 90K in equipment, own a home, have a car collection worth at least $80K and it made no difference or did it help. If you figure it out clue me in please.

My suggestion is to look back at what you have to offer and start there. Use what you have to create the capital. Start small, use companies like Keystone to create your inventory. Look at your area, what do people need. Look to other small companies that may put product on your shelves on consignment.

Some manufacturers/suppliers may offer cash incentives to stay loyal to a product. Similar to what body shop supply stores do. You may have to take a small hit but it can pay out in the end.

Let me know when you get up and running, I may send you some products to sell as soon as I get back to manufacuring.

[GregWeld]

I was always on the wholesale side of the retail trade. Not to be a Debbie Downer - but there's no way I'd start a retail business without having adequate capital to fund the inventory. In a wholesale business you can sell your receivables (I never did but that avenue is available) at a discount to fund yourself.

You need to sell the inventory to pay rent - salary - overhead etc.... and you need to REPLACE that inventory at the same time... There's no way you can catch up if you don't start out with 100% of your inventory out of your pocket.

IMHO you'll need to also have enough capital to pay all your living expenses for at least 6 months because the business will have all manor of unaccounted for expenses for the first few months and that will have to come out of cash flow or capital. People never allow enough for this. You'll have plenty of miscellaneous expenses that will be double and triple what you allowed for and like building our cars --- things tend to get the "well... as long as I'm here...." Such as shelving - walls - fixtures - lighting - signage - office equipment - deposits for phone and other services - expenses for legal (skip this at your own peril).

[GregWeld]

Just wanted to add this as long as you have me thinking...

You'll only get a loan if you don't need one to start with. These days - nobody is going to finance retail inventory without a long history.. and even then it'd be tough.

[DOOM]

Rick. One thing I can tell do as much as you can on your own ! NO PARTNERS!!!!!! It doesn't work trust me....

[Z10ROD]

other than getting your wholesale suppliers to front some stock I don't see any other way I would do it.
I would not want any partners/investors forsure.

If you can pull it off I wish you all the luck in the world .

[fesler]

Not to rain on your parade but run right now I would not start something in this economy. Things need to turn around before you start something on your own that you can’t afford to run for the next year till you can get things going. It is very difficult to start a business at any point but when the economy is off it will be very hard to keep it going. You have to consider taxes, rent and products they will kill your profits. This is where our government comes into play because they are against all the small businesses and anyone that thinks they are here to help please show me where. They take take take and did I say take from us daily and make it almost impossible to keep things going. It’s a fight that is almost impossible to win because they don’t care about you or anyone else they just want the money. The government talks about how they are here to help people but daily they are closing small businesses down with their rules and regulations and that is not helping anyone. More power to you if you can start this up and keep it going but let me tell you it will be a fight and I don’t want to tell a fellow car guy not to do something but be prepared to fight and fight hard. Like Greg said have some money to survive on for a period of some time that you feel comfortable with.

Also have a business plan that will kick some ass pay to have one done if you don’t understand it because without it a bank will just laugh at you. Like others have mentioned if you figure it out clue us in because some of us have been at this for years with perfect everything and they just take the credit lines away with no questions because they don’t like what they see coming. They are not here to help as I said they just want to act like they are while they sit on their billions of dollars not doing anything with it.

The banks need to loan the money and let businesses get back to work and save our country.

[John510]

Economy schmonomy!!!!

Just because the economy is bad does not mean you will fail....

I opened a restaurant in 2009 when the economy sucked and it is one of the highest grossing stores in the franchise.

It all has to do with HOW its ran and customer service/product. If you can stand out from the competition you will win. Every Single Time.

I will use Matts Bowties as an example since we are talking retail (Kim if you want me to remove this I will). I was buying parts from vendors all over the map previously. Mostly because some were selling the parts cheaper than others. Well now I ONLY buy my stuff from Matts. Are they the cheapest? No. Do they have the most amazing service and can I trust them with 100K$ order in parts and not worry if it will disappear? YES.

On top of that I just had a baby and when I went in to get more parts Kim bought my daughter a present. How cool is that?

Its the little things that separate mediocre stores from GREAT stores.


Now that being said... Rick you should see # 5 on this list.

TOP TEN REASONS BUSINESSES FAIL
1. The math just doesn’t work. There is not enough demand for the product or service at a price that will produce a profit for the company. This, for example, would include a start-up trying to compete against Best Buy and its economies of scale.

2. Owners who cannot get out of their own way. They may be stubborn, risk averse, conflict averse — meaning they need to be liked by everyone (even employees and vendors who can’t do their jobs). They may be perfectionist, greedy, self-righteous, paranoid, indignant or insecure. You get the idea. Sometimes, you can even tell these owners the problem, and they will recognize that you are right — but continue to make the same mistakes over and over.

3. Out-of-control growth. This one might be the saddest of all reasons for failure — a successful business that is ruined by over-expansion. This would include moving into markets that are not as profitable, experiencing growing pains that damage the business, or borrowing too much money in an attempt to keep growth at a particular rate. Sometimes less is more.

4. Poor accounting. You cannot be in control of a business if you don’t know what is going on. With bad numbers, or no numbers, a company is flying blind, and it happens all of the time. Why? For one thing, it is a common — and disastrous — misconception that an outside accounting firm hired primarily to do the taxes will keep watch over the business. In reality, that is the job of the chief financial officer, one of the many hats an entrepreneur has to wear until a real one is hired.

5. Lack of a cash cushion. If we have learned anything from this recession (I know it’s “over” but my customers don’t seem to have gotten the memo), it’s that business is cyclical and that bad things can and will happen over time — the loss of an important customer or critical employee, the arrival of a new competitor, the filing of a lawsuit. These things can all stress the finances of a company. If that company is already out of cash (and borrowing potential), it may not be able to recover.

6. Operational mediocrity. I have never met a business owner who described his or her operation as mediocre. But we can’t all be above average. Repeat and referral business is critical for most businesses, as is some degree of marketing (depending on the business).

7. Operational inefficiencies. Paying too much for rent, labor, and materials. Now more than ever, the lean companies are at an advantage. Not having the tenacity or stomach to negotiate terms that are reflective of today’s economy may leave a company uncompetitive.

8. Dysfunctional management. Lack of focus, vision, planning, standards and everything else that goes into good management. Throw fighting partners or unhappy relatives into the mix and you have a disaster.

9. The lack of a succession plan. We’re talking nepotism, power struggles, significant players being replaced by people who are in over their heads — all reasons many family businesses do not make it to the next generation.

10. A declining market. Book stores, music stores, printing businesses and many others are dealing with changes in technology, consumer demand, and competition from huge companies with more buying power and advertising dollars.

[Z10ROD]

dam that was good:cheers:

[uppster]

An SBA loan is not a loan from the government, it is from your bank, it is backed by the government. If you decide to go that route ck a Low Doc loan.

[69znc]

Without a proven track record in a buisness the avaible amount of an SBA loan is more tied to the assets you own to execute and deliver in the business.

[EBMC]

I might add that finding good employees is extremely hard in any business. When you do find them they need to be taken care of because they are in short supply. They talk about high unemployment but I had 10 times the applicants 4 years ago than now. ( for any position, including cleanup kid) a friend of mine in a completely unrelated field, the same thing. The only thing I can think of is that the our govt. Has made it so easy for people to sit around and get paid for doing nothing that people have become accustomed to that lifestyle. Back in my day ( and im only 44!) unemployment ins was a last ditch thing and only very temporary. The only thing keeping alot of small businesses (automotive or not) from expanding is these crazy govt regs, taxes and finding qualified, motivated employees. I feel very fortunate to have the talented crew I have and am busier than ever but cannot expand and still produce the kind of product i want due to these reasons. Small businesses are not part of the current govts. agenda. :mad:
PS, sorry for the rant but I'm sure any small business owner can relate!

[Tony_SS]

Good post John!

[GregWeld]

Excellent post John! Even if you did steal it, fair and square, from the New York Times! :lol:


And by the way -- I totally agree with the statement about the economy. There are MORE businesses started during downturns in the economy vs when things are rolling fine. People are sometimes forced to do something "different" during downturns.

The key take away I got from the original question/post - is that there is a significant lack of capital ---- and that should be the key concern because even in the best of times cash is king... and the lack thereof can't be overcome easily. Read #5 in John's post.

[Flash68]

I might add that finding good employees is extremely hard in any business. When you do find them they need to be taken care of because they are in short supply. They talk about high unemployment but I had 10 times the applicants 4 years ago than now. ( for any position, including cleanup kid) a friend of mine in a completely unrelated field, the same thing. The only thing I can think of is that the our govt. Has made it so easy for people to sit around and get paid for doing nothing that people have become accustomed to that lifestyle. Back in my day ( and im only 44!) unemployment ins was a last ditch thing and only very temporary. The only thing keeping alot of small businesses (automotive or not) from expanding is these crazy govt regs, taxes and finding qualified, motivated employees. I feel very fortunate to have the talented crew I have and am busier than ever but cannot expand and still produce the kind of product i want due to these reasons. Small businesses are not part of the current govts. agenda. :mad:
PS, sorry for the rant but I'm sure any small business owner can relate!

Amen, Steve. Too many people are allowed and actually encourage to sit and home and NOT actively look for work. It's real bad around here.

[realcoray]

I might add that finding good employees is extremely hard in any business. When you do find them they need to be taken care of because they are in short supply. They talk about high unemployment but I had 10 times the applicants 4 years ago than now. ( for any position, including cleanup kid) a friend of mine in a completely unrelated field, the same thing. The only thing I can think of is that the our govt. Has made it so easy for people to sit around and get paid for doing nothing that people have become accustomed to that lifestyle.

While I agree completely about finding good employees, and I think that it's one of the most important aspects involved in being successful, we got a lot more people applying for our jobs that were open a few months ago.

What I would say is I'm glad that someone who is happy to sit around all day and get paid to do nothing, are self filtering themselves out, because I don't want to be the poor bastard who inadvertantly hires someone who turns out to be terrible.

[Tony_SS]

Excellent post John! Even if you did steal it, fair and square, from the New York Times! :lol:

Busted! :lol:

[John510]

Excellent post John! Even if you did steal it, fair and square, from the New York Times! :lol:



Yup I have it up to where I can read it all the time.

[69znc]

Why is this thread still open if the original opener, Rick, cannot provide anymore detail? The rest of the advice is a guess and many in this thread have stated. The options are interesting but may be completely irrelevant. Why would someone open a thread and not engage?

[Flash68]

Why is this thread still open if the original opener, Rick, cannot provide anymore detail? The rest of the advice is a guess and many in this thread have stated. The options are interesting but may be completely irrelevant. Why would someone open a thread and not engage?

So we should just close this thread? :lol:

But I do agree that Rick needs to provide some feedback and more info to create a better path for this thread to flow. :thumbsup:

[Sieg]

Why is this thread still open if the original opener, Rick, cannot provide anymore detail? The rest of the advice is a guess and many in this thread have stated. The options are interesting but may be completely irrelevant. Why would someone open a thread and not engage?There's a good chance it's an eye opening experience thanks to a lot of good information being shared (speculated) and a little of this :brix: may be taking place right now?

Having been in retail for 35 years I'm amazed at how many "educated business" people I know that are relatively clueless to all that's involved in retail operations.

[Rick D]

Sorry guys I have been crazy busy all week with my job :lol: First I need to go rest from this crazy week and then I will have a response as some things have changed from my orginal idea! :willy:

Oh and thanks for all the great responses you guys are the best!! :thumbsup:

[Flash68]

Sorry guys I have been crazy busy all week with my job :lol: First I need to go rest from this crazy week and then I will have a response as some things have changed from my orginal idea! :willy:

Oh and thanks for all the great responses you guys are the best!! :thumbsup:

Well welcome back to your thread! :rofl:

[Rick D]

First thanks again for all the responses and information, you guys are great. :thumbsup:

So many have asked what type of business? Well ever since I was a kid I have loved and been into bikes (bicycle). When I was a kid we went to the Schwinn factory that used to be here in Chicago before moving off shore :mad: . Also growing up I used to go to a bike shop in Lincolnwood IL called Lincolnwood Schwinn, I still remember all the BMX bike frames lining the top of the walls. It was really cool.

So fast forward to last weekend when I was out for a ride on the bike trail close to my house, there is a building that came up for rent. So I start to think that this would make a great place for a bike shop, but it is a little bigger then I would need so then I start to think what about an outdoors type place?? The building is right on a main street and two blocks over from the Fox River!! Lots of stop and go traffic goes by every day, still waiting to here back how many cars a day go by.

Well then I think of the big box competition, you know the names, in both bikes and outdoor gear. So then I start to think they all had to start somewhere also so maybe I'm not crazy :willy: am I??

So that's where the idea for this thread came from to see where and what some of you have done to get started. As for the bike deal I could get that off the ground, well at least I think I could, but then when I started to think about getting into more of an outdoor type place well that's getting way out of my comfort zone.

As I stated before if I was to open a shop I know what where and how to do that ten time over!

I get what most are saying about partners and yes not looking for that :willy: I've done that on other things and yes it is hard to do. So that is where I was thinking of some kind of loan SBA as stated or maybe an investor, but that is also hard to come by as I'm not coming up with the latest and greatest so also hard to come by?

Not sure what I am going to do at this point, I started to build my business plan so I will finish that up and then will see. Let me know what you think now that you see my idea??

Thanks guys!! :lateral: :lateral:

[Sieg]

Being from Eugene, OR there are a lot of small bike businesses. If you do it right in a niche neighborhood you have a chance. Service/maintenance and repair department could stay busy and bring in consistent revenue with good seasonal marketing plan. If there's an REI or Performance Bike close they could make it tougher. We have an REI and there are still 4 smaller shops within a ten block radius that are doing alright but REI definitely made a dent in their service volume and accessories margins. Eugene has a very large bike population though. Might be worth a trip up here to investigate the shops.

I have a good friend that just retired last week and was an agent for Bianchi, Look, Continental, Eston, Bell Sport and more for 20 years. REI and Performance we're his accounts with Bell unbelievable numbers (7 figures) in just Gyro and Bell helmet sales. You might be able to bend his ear a little.

[John510]

My 2 cents....

Research Research Research. Ask a LOT of questions to owners of other bike stores. I would even go work at one if I was you so you can learn everything.

Also, how many people ride bikes where you live? In Dublin, CA I see bikers constantly. In fact there are so many of them they get in the way. However in Hayward I never see any. So a bike store in Hayward wouldn't do nearly as well as Dublin.

Also, if you don't have assets the bank will not give you a SBA loan. You will either need home equity or equipment for them to put a lein or UCC filing.

[WSSix]

You need to get a hold of John (NotATA) also known as the number 14 car. He used to own a bicycle business. He might be able to help you with more details specifically about where and how to focus your attention and products/offerings.

Good luck Rick. I think ultimately I'm going to end up in a small business as either and employee or owner. I'm not really enjoying this corporation crap at the moment. So I need more people like you and others out there willing to make a small business happen.

[Rick D]

Being from Eugene, OR there are a lot of small bike businesses. If you do it right in a niche neighborhood you have a chance. Service/maintenance and repair department could stay busy and bring in consistent revenue with good seasonal marketing plan. If there's an REI or Performance Bike close they could make it tougher. We have an REI and there are still 4 smaller shops within a ten block radius that are doing alright but REI definitely made a dent in their service volume and accessories margins. Eugene has a very large bike population though. Might be worth a trip up here to investigate the shops.

I have a good friend that just retired last week and was an agent for Bianchi, Look, Continental, Eston, Bell Sport and more for 20 years. REI and Performance we're his accounts with Bell unbelievable numbers (7 figures) in just Gyro and Bell helmet sales. You might be able to bend his ear a little.

Thanks Sieg, at some point that would be awesome to have a chat with your friend, I'm still in the beginning stages of planing and seeing just what is need to get this off the ground. There are a couple of other bike shops along the trail and I would be in the middle of both, so I need to go check them out (which I plan todo today). Service and accessories are key from the research I have done already. In the end I may just start with the bikes and then move to other areas if it makes sense. The owner of the building is really willing to work with me to get it rented so will see how that goes.

[Rick D]

My 2 cents....

Research Research Research. Ask a LOT of questions to owners of other bike stores. I would even go work at one if I was you so you can learn everything.

Also, how many people ride bikes where you live? In Dublin, CA I see bikers constantly. In fact there are so many of them they get in the way. However in Hayward I never see any. So a bike store in Hayward wouldn't do nearly as well as Dublin.

Also, if you don't have assets the bank will not give you a SBA loan. You will either need home equity or equipment for them to put a lein or UCC filing.

Thanks John, yes I get what you are saying about the demand for the product, yes there are lots and lots of bikes along this trail it really goes on for like a 100 miles or so. I plan todo lots of research on the industry, also I get what you are saying about the SBA loan, I have looked into that before for a body shop, lots of assets in that industry but yes not so much in this one so I will see where that goes. Thanks for write up you posted very good stuff there :thumbsup:

If I go with just the bikes to start out then I won't need the loan to get it started, where I was thinking I would need more capital was getting into the whole outdoor kind of store, but as I stated before I may start with just the bikes and see about the other in the next stage of the business.

[Sieg]

I wonder if there is decent start up money you could qualify for playing the alternative energy/carbon/environmental angle?

[Rick D]

You need to get a hold of John (NotATA) also known as the number 14 car. He used to own a bicycle business. He might be able to help you with more details specifically about where and how to focus your attention and products/offerings.

Good luck Rick. I think ultimately I'm going to end up in a small business as either and employee or owner. I'm not really enjoying this corporation crap at the moment. So I need more people like you and others out there willing to make a small business happen.

Awesome Trey I will get a hold of John, see I knew this thread would be good for some info. I also get what you are saying about the corporat deal, I work for a 27 billon in sales corporation, but I really do love me job:D I really love getting up every day and doing my job, but this is something I have always wanted to do. In the beginning I will stay working for the current employer until the time that it would make sense not to. Still working out the details on that part.

[Rick D]

I wonder if there is decent start up money you could qualify for playing the alternative energy/carbon/environmental angle?

:yes: :yes: :yes: :yes: :thumbsup:

Yuuuup already looking into that and the short answer is yes there is but how you go about it is key.

[Sieg]

Here's the best shop in town: http://www.hutchsbicycles.com/
I remember going there as a little kid in the 60's, dreaming and wanting.
Pay attention to the elements and focus of their site.
Hutch's lon-time competitor which they bought a couple years ago: http://collinscycleshop.wordpress.com/
For the earthy nap-haired crowd in Eugene which is huge: http://bicycleway.com/

[Sieg]

:yes: :yes: :yes: :yes: :thumbsup:

Yuuuup already looking into that and the short answer is yes there is but how you go about it is key.Non-profit grant that pays the key employee six figures? :D That's pretty popular in Eugene, especially if you have an aid enabling business. Everyone should be entitled to reasonable personal transportation. :unibrow:

[GregWeld]

For the earthy nap-haired crowd in Eugene which is huge



NO....... Say it ain't so! :rofl:


OMG... Eugene is the spawning ground for Birkenstocks - hairy legged woman - and tie-dye...

[Sieg]

NO....... Say it ain't so! :rofl:


OMG... Eugene is the spawning ground for Birkenstocks - hairy legged woman - and tie-dye...

Birkenstocks are make a statement dress shoes for the rich in this town, like U of O profs, city officials and staff for starters.

On topic - Rick can you handle (enjoy) the culture of the core bike customer in your area?

[Rick D]

On topic - Rick can you handle (enjoy) the culture of the core bike customer in your area?

Well that is a loaded question :lol: We have it all (well maybe not the long hair earthy types :lol: ) but we have the hard core in big groups all the way down to the matching his and hers for young and old! We even have the REALLY hard core that run what we call the Barrington run which is a road run though a very high end part of N/W burbs of Chicago. Minimum 5 acres to build your house, and we are talking some VERY big houses.

Ok so the short answer to your question is yes I think I can, as I have to do that now in my current job roll. I deal with body shops that are anywhere from a 2 man shop up too a million a month in sales. And let me tell you that is some very different thinking going on there :willy:

[Vegas69]

I love the "Not in this Economy" and "In this Economy" talk. The bloods in the water, opportunities are abundant. You just have to find the opportunities and capatilize on them. That means doing the research and making smart decisions based on facts instead of passion.

[Rybar]

Rick I would do alot more research if I were you. I've seen too many people open a business because they love it or it is a hobby and have failed. Retail is alot of hours, working evenings and weekends because you need to be open with the majority of other people are off work. So don't forget to factor in the loss of your free time especially in the initial start up possibly even the first 5 years or so like John510 said.

[Rick D]

Well did some more research and the guy that owns the building is a little off his rocker, at least from my stand point. He what's a triple net lease ok that's normal, I don't like it from a renters point of view but ok. Then he tells me he wants a letter of guarantee from my bank stating I have the full 5 years of rent in the bank at the time of signing the lease :lol: So I told him if I had that kind of money just sitting in my bank I wouldn't be looking to rent his place, then he says well it can deminsh over the life of the lease as to reflect what's left. Also wants a personal guarantee on the lease will not just let me use my corporation for the lease? Is this guy nuts or have I been away from renting a building that long? :willy: Any way was way to big to start out with anyway. Still doing more research on the business side of the bike shop but not looking like the greatest of margins in this business. Will see!

[96z28ss]

I know there isn't a shortage of bicycles here in Portland, Oregon. I just did the Providence Bridge Pedal here it was 35 miles of weaving through the city to cross all 10 bridges. There were 18,000 participants and thats not counting the kids. You need to look at opening a bike shop here. The city caters to them, Bike lanes everywhere.

[Rick D]

Went and did some more research today with my kids, 16 miles on our bikes today :cool: . Well let me tell you I found a few yes few more bike shop along the bike path today that I didn't know where there :willy:

I went in to two of them, nice places clean very friendly and seemed to know their stuff about bikes. Neither owner was in, or at least wouldn't admit thery were the owner if they were. One was low end and used bikes, the other had some middle to higher end stuff and a few tradins.

The one thing I did see was that neither stocked much of anything in the way of parts (small stuff yes) but no wheels, hubs, cranks,! Mostly just tires and tubes and a few seats and a couple of bars. My daughter needs a taller set of bars but they didn't have a 3" rise in black in stock.

So the research continues. But I am starting to rethink this idea? I have another idea for the industry I know very well. Anyone know anything about setting up to be a franchiser (the one doing the franchising) :unibrow:

[John510]

He is not nuts at all. You will have to pay triple net, you will need a personal guarantee, and the reason he is asking to make sure you have 5 years is to check your net worth. Normally they don't ask for 5 years of rent in the bank but they WILL want a minimum net worth to make sure that you can afford the place to begin with. It is not like renting a house. If your credit is bad or you have a very small net worth then it is also common for them to make you have multiple personal guarantors on the lease. The triple net can and may have a 3% increase each year.

Were both of those bike stores super busy? Busy enough to justify a third bike store? Maybe they don't stock stuff because it doesn't sell. Bikes are not something people buy everyday.

I can tell you how to franchise a store but you will need a successful store first. People aren't going to buy a franchise unless they can make money from it. Once you get a store you will need an attorney to do the Franchise Disclosure docs for you. This is NOT cheap. 30-50K in attorney fees (you were asking at the beginning where to get money for inventory, where would you get the attorney money?)

[GregWeld]

Good info John!


It's the oldest saying in the world --- it takes money to make money....


:cheers:

[Rick D]

He is not nuts at all. You will have to pay triple net, you will need a personal guarantee, and the reason he is asking to make sure you have 5 years is to check your net worth. Normally they don't ask for 5 years of rent in the bank but they WILL want a minimum net worth to make sure that you can afford the place to begin with. It is not like renting a house. If your credit is bad or you have a very small net worth then it is also common for them to make you have multiple personal guarantors on the lease. The triple net can and may have a 3% increase each year.

John I understand the net worth, and I asked that same question to him. If you are looking to see my assets list I can provid that, but his answer was No I have
had the last two business go out because they couldn't afford the rent when times got slow. No can flow?? I understand the personal guarantee most everyone wants that today, I'm ok with that. But he wants to see almost $400k in the back liquid?? Or he won't rent out the building. It really don't matter on that part as the place is really to big to start out any. As far a triple net Im good with that, that's just how renting goes today, was just stating what he wants :thumbsup:
Were both of those bike stores super busy? Busy enough to justify a third bike store? Maybe they don't stock stuff because it doesn't sell. Bikes are not something people buy everyday.

It's hard to say it was a Friday in the middle of the day, so know they were not "busy" but both had a few customers in them. I understand on inventory of the bikes but not much in the way of accessory, which is where most of your day to day cash flow would come from in this type business. Also both shops were on the smaller side so their over head would not be as much as a bigger store.

I can tell you how to franchise a store but you will need a successful store first. People aren't going to buy a franchise unless they can make money from it. Once you get a store you will need an attorney to do the Franchise Disclosure docs for you. This is NOT cheap. 30-50K in attorney fees (you were asking at the beginning where to get money for inventory, where would you get the attorney money?)

First the reason I was asking about the money for inventory was I would need what I have to get the place off the ground and be able to keep the place going for awhile, as you know it takes time for people to start to come in and for the cash to coming back in. So I was looking for what others have done with this. I should have been more specific on what I was looking for! And yes I know it takes money to make money!! :lol:

As far the franchise deal, of corse I would have to have a successful business model first, but in the industry that I'm from I could get that up and running and successful rather quickly, that's why I have been thinking of just staying the industry I have been in for the last 25 years. As far attorney go that's not an issue life long friend :yes: He doesn't charge me full retail :lol:

Oh and not two bikes shops try 6 in three towns along the bike trial :willy: Yes I would be rethinking where to start the place up if I stay on this path.

Thanks for all the info good stuff for sure. And John thank you for your in depth answers :thumbsup: