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Biggest Challenges Owning/Running a Shop

Old 04-28-21, 09:56 AM
  #1  
Josh_Craig
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Biggest Challenges Owning/Running a Shop

Hey everyone! Here's what's up:
  • New College Grad
  • I've Worked in a Bike Shop for a year and in other parts of the bike world (mtb summer camps, mtb junior devo team director, helped put on races for a few years)
  • Cyclist (Road & MTB) for 10+ Years
  • Curious about the world of what goes on behind the scenes to run a shop.

I've got some good friends who own shops (either bought-in or started it themselves) and have asked around, but also wanted to ask here:

(1) What are your top three biggest challenges in owning/running a shop?
(2) What are you striving for/what's your goal?
(3) What is the biggest thing in the way of that goal?

Thanks so much!!
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Old 04-28-21, 10:37 AM
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(1) What are your top three biggest challenges in owning/running a shop?
Coming to work with a hangover.
(2) What are you striving for/what's your goal?
Getting rich with minimal effort.
(3) What is the biggest thing in the way of that goal?
Drinking problems, and being lazy.

Seriously though, I own a engineering/manufacturing company and there are some things one must have and do to become successful.

1- Support. When I first started my business, I was fresh out of the US Army, and I lived with my parents rent free and started it in the backyard shop. I sold my car, and rode a bike exclusively for 6 years. My parents encouraged me along the way. I was also single. A perfect storm of support.

2- Are you prepared to be your own boss? Can you work 12-16 hour days 7 days a week without anyone forcing you to do so? For years?

3- Have a plan, but you don't have to plan too far ahead. Things will change along the way.

4- Your product must stand out (this applies to a bike shop too).

5- You have to get the word out. VERY DIFFICULT.

That is just for starters. Your questions are too vague.
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Old 04-28-21, 11:19 AM
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Perhaps you might try getting a summer job at a bike shop. If you're mechanically inclined, you can start fixing flat tires and work your way up over the summer. If not, perhaps you can run the cash register and help people find things in the shop, whether it's electrolyte mix or clothes that will fit. Come fall, the shop will let you go because of reduced demand, and you'll have a few months of personal experience to answer your questions.
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Old 04-28-21, 11:34 AM
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My experience is if you work in a bike shop, you would never want to own one.
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Old 04-28-21, 02:12 PM
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I'd have to think one of the biggest challenges of owning/running a bike shop is employee commitment. Locally, it seems like working at a bike shop is either a summer job for students, or a stepping stone to other employment.
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Old 04-28-21, 02:14 PM
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Originally Posted by unterhausen
My experience is if you work in a bike shop, you would never want to own one.
^This^ I've had people offer to support me if I wanted to open my own place...thank goodness I'm just smart enough to not want to do it.
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Old 04-28-21, 03:18 PM
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Originally Posted by UCantTouchThis
Very helpful seeing the OP has worked in a shop for a year already.
Oops, missed that.

Even more surprised he didn't learn anything from the experience.
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Old 04-28-21, 03:29 PM
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Originally Posted by pdlamb
Oops, missed that. Even more surprised he didn't learn anything from the experience.
I'm sure the OP learned lots' from their experience working at the bike shop. But owning/running a business is very different than dealing with customers or wrenching on bikes. I suspect most bike shop owners keep their cards very close to their chest as profit margins are notoriously low.
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Old 04-28-21, 03:31 PM
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IMO, own a bicycle shop is about like having a bowling ball shop. You'll need to sell other things other than bicycles & services for the bicycles. Bar & Bicycles. Make the first drink very strong. lol
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Old 04-28-21, 03:54 PM
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Congratulations! What is your degree in?
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Old 04-28-21, 04:20 PM
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"I've got some good friends who own shops (either bought-in or started it themselves) and have asked around, but also wanted to ask here:"
Maybe you should start here with telling us what your friends told you.

From what I've seen of LBSs where I live and bike near in a smaller town, the man behind the counter is probably shop owner and the other guy servicing bikes in the back probably his friend/employee or maybe owns the business with the guy behind the counter.

I think the impetus to start a business like that needs some starting point, like you happen to have or inherit some premises that call for doing some business in them and also there is not a bike shop in the area and you believe one could be here. Another impetus might be coming into the money somehow that you think of 'investing' into some business and you know something about bikes.

I guess it depends on whether you want to start small, tiny and grow, of start higher up which then requires some more significant capital investment.

Many years ago I traveled in states (I lived in Canada and that's where I am now also) and on some radio station there was this guy who people calling in were asking for advices on various things in life and his replies to them didn't spare them a bit, he could even be very rude to them and put them down hard (while having good reason for treating them like that) and I believe that's why he was so popular on the show (as I gathered after listening for a while). And it wasn't that listeners reveled in somebody being put down but the guy had very good common sense, real down to earth advice to the callers in.

This guy called in and said he wants to open a car servicing shop in a small town and how should he go about it. He was told if he doesn't have the capital to invest in it, he should first go and get two or even three jobs going for some years, sleep 4 hours and work the 20, to make loads of money first, and when the guys jaw dropped, since it became obvious that that wasn't the advice he was looking for, he was asked how old he was and then told that given his age, he could endure that, and that it still will be nothing compared to when he finally starts up that business of his. Maybe some of you might know such radio show.

Last edited by vane171; 04-28-21 at 04:28 PM.
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Old 04-28-21, 04:21 PM
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Don't go into the bike business because you love bikes; go into the bike business because you love business.
Your number one, two, and three headaches will be attracting, training, and retaining employees.
Personally, I'd choose something (anything) else.
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Old 04-28-21, 07:23 PM
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Bike shops are not something you want to get into. I love bikes, I love working in a bike shop and I have ideas for my own shop but it is expensive, you will lose a lot of money and you are now having to deal more and more with vendors not controlling who is selling their products and people selling well below MAP.

Working in a shop is very different from owning it you don't have to deal with any of the really important stuff that is usually boring and sometimes terrible. When you are selling or working on a bike you don't have to worry about paying the vendor or dealing with that employee who is always late or dealing with rent or your customer just got hurt on the bike and they want to sue. You just have to sell it and service it and you are done. No tax forums no stress about paying employees no worries about all the backend business stuff. I have managed several shops and done all sorts of different tasks and know a good deal of the backend nowadays just because I have been at my current company for a while and done a fair amount for them. I would not want to deal with most of that stuff. I remember thinking, yeah I want to write the schedule that would be great, I can work when I want to work and then realized it is a f'ing nightmare. Complete f'ing nightmare. I can't work on ever 3rd Tuesdays except on leap years then I can only do the 2nd Tuesdays unless there was a full moon then I can only do Fridays but can't come in till noon. Having to actually deal with the payroll side and employee conflicts and HR stuff holy moly pizza in a cannoli it is crazy.

Good luck if you do it, we always need more shops.
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Old 04-29-21, 05:57 AM
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Originally Posted by UCantTouchThis
My buddy own his own bike shop now. He used to race and ride plenty. Now he doesn't and everyday seems to be trying to keep his shop stocked and maintained. Never has time to ride any longer
When the weather is nicest, and you'd like to be out riding is exactly the time when the shop is busiest, and you don't have time to ride.
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Old 04-29-21, 05:59 AM
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I don’t have any bike shop experience other than as a customer, but it does seem to me— speaking as someone who has been hanging around in bike shops since the mid-‘80s— that the market is ripe for innovative, disruptive business models.

Also, in this market, bike shop employees seem to be constituted of a good portion of long-termers and lifers. From the outside, it doesn’t seem staffing is too serious a problem here, but I don’t really know.
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Old 04-29-21, 06:25 AM
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Question: What is the best way to make a small fortune in the bike shop business?
Answer: Start with a large fortune.
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Old 04-29-21, 06:52 AM
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Location, location, location.

Also, how much do you have to invest?

I see a lot of the little shops are one-guy operations that don't really sell bikes, but are really just repair shops or they sell a few used bikes. It helps to be next to a busy MUP or something if you have that very small shop strategy.

I suspect this would literally be the worst time ever to try to start a new bike dealership as getting any significant number of bikes in stock is going to require a lot of capital and even then, you may not find any.

I notice that Trek is buying up a lot of local dealership shop chains right now. I suspect lack of stock has cut too much of the cash flow of these businesses for the independent owners to keep going. You have friends with shops, how are they doing right now?
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Old 04-29-21, 06:54 AM
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I went to work for a new shop once, opening during the month of March, and the owner blithely thought he'd be taking two weeks off in September to go to Europe. As far as I know he never got to take that trip.
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Old 04-29-21, 07:22 AM
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I have a small wholesale/retail business.(not bike or sports related) More often than not, particularly in these times, that gig at Target is looking better and better. Capital to run the everyday operations of the business is always in short supply. The price increases from vendors are coming monthly now, sometimes more frequently than that. I'm not talking 1-5%, either. It's 10-30% across the board. Good luck with working on new business. The vendors have everyone on allocation based on past usage. Then there are the backorders. 3-5 months, 6-8 on certain products. I used to keep around a 2 week supply of the fast moving products. Now it's a 2 month supply or more and I still have to pay for it. Current customers come first. Some no name walks through the door with a boatload of money wanting to buy something because he can't find it anywhere else, too bad. I can't sell it to him if it will disrupt my supply for my regular customers. That's the way it is currently from top to bottom in all sales/product industries.

If you have a real passion for cycling, then get a part time job at a shop. Make your living in some other form of business. Otherwise, that passion will be gone/replaced by the responsibilities of running a cycling shop instead of being a cyclist.

BTW, the only reason I even have the business is because my parents got sick at the same time. I had to quit what I was doing and take over my father's business. That was over 20 years ago. I didn't really have a choice. Unless you own the land/building/and have a lot of assets, most small local businesses aren't even worth much money. Too many things you can't control.

On Monday night, I got price increase letters from my 3 main vendors. That will be the 4th price increase since the first of the year. Average increase of 9% with some popular products increasing by 25%. Now I have to contact customers yet again and work something out. Even worse, I have to find a way to pay for the stock while it's waiting to be sold. Fun times. That's the reality of being an owner.

Last edited by seypat; 04-29-21 at 08:02 AM.
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Old 04-29-21, 08:49 PM
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Originally Posted by seypat
I have a small wholesale/retail business.(not bike or sports related) More often than not, particularly in these times, that gig at Target is looking better and better. Capital to run the everyday operations of the business is always in short supply. The price increases from vendors are coming monthly now, sometimes more frequently than that. I'm not talking 1-5%, either. It's 10-30% across the board. Good luck with working on new business. The vendors have everyone on allocation based on past usage. Then there are the backorders. 3-5 months, 6-8 on certain products. I used to keep around a 2 week supply of the fast moving products. Now it's a 2 month supply or more and I still have to pay for it. Current customers come first. Some no name walks through the door with a boatload of money wanting to buy something because he can't find it anywhere else, too bad. I can't sell it to him if it will disrupt my supply for my regular customers. That's the way it is currently from top to bottom in all sales/product industries.

If you have a real passion for cycling, then get a part time job at a shop. Make your living in some other form of business. Otherwise, that passion will be gone/replaced by the responsibilities of running a cycling shop instead of being a cyclist.

BTW, the only reason I even have the business is because my parents got sick at the same time. I had to quit what I was doing and take over my father's business. That was over 20 years ago. I didn't really have a choice. Unless you own the land/building/and have a lot of assets, most small local businesses aren't even worth much money. Too many things you can't control.

On Monday night, I got price increase letters from my 3 main vendors. That will be the 4th price increase since the first of the year. Average increase of 9% with some popular products increasing by 25%. Now I have to contact customers yet again and work something out. Even worse, I have to find a way to pay for the stock while it's waiting to be sold. Fun times. That's the reality of being an owner.

I don’t own a business. I have read a lot of business books. 25 units away from a biz degree.

Do you think inflation is coming from asset price to CPI worse than the “experts” (AKA talking heads) are letting on?

You say most small businesses aren’t worth anything. Would you agree that’s because most small business owners own a job rather than a business? I heard a saying, “Work on your business, not in your business.”
IE, why would I want to own a business that is almost impossible to grow and sell, or grow to be more passive, when I could just get a good paying hourly job?

I realize it’s not black and white. And does someone find more enjoyment helping customers/clients vs kissing up to an employer, etc.
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Old 04-29-21, 10:39 PM
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owning any type of small business is a lot of work.
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Old 04-29-21, 11:11 PM
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Originally Posted by Rolla
Don't go into the bike business because you love bikes; go into the bike business because you love business.
Your number one, two, and three headaches will be attracting, training, and retaining employees.
Personally, I'd choose something (anything) else.
I agree 100%. Too many people believe because they have a passion for a hobby (biking, backpacking, cars, etc) that they can run a business in that field. Technical knowledge is one thing, but without a good business mind and most of all, excellent customer service, you're going no where.
First, thing for a business model, is how to compete online. I don't mean for repairs, but people search online for sales, service, free advice. And until the pandemic eases up, inventory is a huge challenge
Best of luck. Let us know what you do.
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Old 04-30-21, 08:40 AM
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Originally Posted by CAT7RDR
Congratulations! What is your degree in?
Thanks! Communication studies major and a minor in business. I've also taken a few online courses outside of school to learn more about business like accounting and marketing. I understand the world of running a shop is hard but I was just hoping to get an accurate read on what the biggest challenges are so I know what's realistic to expect
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Old 04-30-21, 08:50 AM
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Originally Posted by Rolla
Don't go into the bike business because you love bikes; go into the bike business because you love business.
Your number one, two, and three headaches will be attracting, training, and retaining employees.
Personally, I'd choose something (anything) else.
Hey Rolla! Happy to say I do love business. Studied communications and business in school and have taken online courses / read books on marketing, accounting, taxes, legal, etc. I'm fully willing to face the hardships about it but want to be smart about what big challenges there are. I can certainly imagine how getting, training, retaining employees is hard. Do you/Have you own[ed] a shop? I'm just curious to learn more about the reality of it. If you do own a shop (or know someone who does) what are you/they currently doing to attract/find employees? How well is it working? In the heart of just looking things head on and facing it, what problems does this challenge around staffing create?
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Old 04-30-21, 08:56 AM
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Originally Posted by MarcusT
I agree 100%. Too many people believe because they have a passion for a hobby (biking, backpacking, cars, etc) that they can run a business in that field. Technical knowledge is one thing, but without a good business mind and most of all, excellent customer service, you're going no where.
First, thing for a business model, is how to compete online. I don't mean for repairs, but people search online for sales, service, free advice. And until the pandemic eases up, inventory is a huge challenge
Best of luck. Let us know what you do.
Hey MarcusT. Appreciate the insight. Do you own a shop? I'd love to know what you think the biggest challenge is one you're at a point of owning and running it. I do really love business (in addition to bikes) and want to make sure I'm being smart here and know what to expect/what the reality is. I've taken an online course on business and read books and learned a lot about marketing, accounting, legal, etc. Not like I'm an expert, but I am aiming to know what I'm doing and not just make a "passion decision" here.

I appreciate any down-to-earth, realistic insight you can offer!
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