If the owner is also a mechanic, does it create problems if he does some of the work? What about the free one year tune-ups and new bike builds? These are time consuming but can be done by someone other than a hyper experienced wrench. (You have a great idea}.
Tom Demerly, what do you do in your state when one of the internet sellers domiciled in your state, 2 storefronts, sells a popular high end Canadian bike, not Guru, for about $300 under the suggested retail?

Bob Sigerson

I agree - keep your day job. Small business ownership is not the way to have an enjoyable life. Instead you are faced with the tyranny of the consumer which is far more demanding and merciless than any boss you will ever have.

There are 2 primary opportunites today 1) with the internet you can produce things that are of very narrow interest and only viable now that there is access to a global market (luxury goods basically, like AX lightness saddles etc.)

2) the tried and true local service business that is fairly essential, NOT being met currently or being done very poorly (like plumbing, remodeling, etc). There is a residential roofer where I live that has done very well because he runs it like a real business, everything on time, as spec'd, if there are cost overages he eats them, and if anything is not satisfactory it's fixed by the end of the next day. Has done very well entirely through word of mouth.

Unfortunately bike repair is about as non-essential as you can get, hence the reluctance to pay. The BMW people pay because that's how they get to work (and measure their worth as human beings).

Hi Sig, What do I do when someone sells a popular brand of bike for $300 under the acceptable selling price? That's a good question.

In general, it is not a good idea to fight fire with fire. If a given customer perceives price as the most tangible variable in the buying equation, they don't recognize the tangible benefits of buying a bike from a full service retailer with unique skills and expereince to offer.

I don't think there is anything wrong with that. It is a free market economy. If a guy is selling the same prduct as me down the street for less then it is incumbent on me, as a business owner, to determine a compelling reason for him to buy from me.

One of the difficult realizations I have had to come to is that Tom Demerly will not sell every triathlon bike sold in the world. Not everyone is our customer. Many good cutomers don't see the value in what we do. They are excellent customers for someone else.

Our skill set is finite: Good fitting, good assembly, good service (occasional screw-ups associated with being human notwithstanding). Our skill set does not include the type of buying power, skill, savy and financial might to leverage discount, bargain basement prices. We'll never be that. I have no interest in it.

Also, capitalism is like the jungle: Mistakes can be survived, but repeated mistakes are fatal. Discounting can be a mistake for most retailers. Usually a fatal one. If a dealer in town has a reputation for discounts brands that maintain their value elsewhere the best thing to do is let them continue down their own path of destruction. If they have to resort to discounting hot bike brands to sell them, their days are numbered anyway. Best thing to do to speed their departure, let them discount. Don't try to compete.

"The greatest victory is won through inaction" Sun Tzu, The Art of War.

---

Tom Demerly
The Tri Shop.com

Lee,

I live in Brooklyn. Where are you opening your shop? Would always love to find an alternative to the other lbs, if you know what I mean.

Dan

[reply]I'm looking for a low risk business plan. My thinking is this, create a revenue stream with little risk and move into the retail side as the shop becomes more established. Just thinking right now...it's slow at work and i feel as if i need a change.[/reply]

Stop comparing money, start comparing fit. If the industry fits you, enter it :-)

As for surviving on service alone, there is a shop called Vecchio's in boulder whose business plan is just that. They don't sell bikes, they tell their customers to buy a bike elsewhere and they will put it together properly. they charge top dollar for a premium fit, are booked three weeks in advance and seem to thrive. No inventory, all wages are directly related to service work done, no receivables (much easier to get people to pay on the spot for $100 in service than $3000 for a bike).

I am sure their contact info is on the web somewhere, give them a call and maybe they'll share some info with you. Or maybe they'll tell you it was not such a hot idea after all.

---

Gerard Vroomen
3T.bike
OPEN cycle

Sun Tzu, The Art of War. Every battle is won before it is ever fought. If your enemy is superior, evade him. If angry, iritate. If equally matched, fight, and if not split and reevaluate.

---

"You're guaranteed to miss 100% of the shots you never take" - Wayne Gretzky

"This is so scary. Does this guy have a minimum of $1,000,000.00 liability insurance (that's a minimum, I have $5 million)? Does he have a tax i.d. number? For the shop that is "farming out" excess work to him, who carries his workman's compensation insurance? These things are mandated by law for a reason. State sales tax paves the roads you ride on. Don't like paying the tax? Then don't bitch about the crappy roads. For the bike shop that farms their work out to this guy, what are they going to do when a brake cable slides through the clamp and a customer overshoots a busy intersection and gets killed? Happens with alarming frequency.

Come on guys, this is full-on shady. What if you took your new Lexus to the dealer to have the work done and found out it was really done by some guy's buddy in his garage? Aside from the obvious liability/tax/legal issues it is downright misleading. "


Tom,

It sounds to me like this guy is self employed running a side business out of his garage. He, as well as all of us, have a tax ID. It is called your SS#.

Being self employed I wouldn't think he needs workers Comp. Not sure if he can even get workers comp being self employed. Just like he cannot get unemployment insurance being self-employed

If the customers are bringing in the parts there is no Sales Tax involved. No sales tax required on Services. The person paying the sales tax is the person who buys the parts...the customer.

I didn't read it that the bike shop was sending bikes over for him to work on but rather they wre sending their customers to this guy. So the customer knows who is working on their bike. THe Lexus example would not apply in this case.

I would bet many a bike shop got started this way.

Willy in Pacifica

---

.
Willy in Pacifica

"It sounds to me like this guy is self employed running a side business out of his garage"

Willy, you're describing it right. Tom misinterpreted my original post.