Who here owns a bike shop?

[oldpotatoe]

Got a question for an current owner, since I got immersed into the finances after getting screwed by a biz partner...about cash on hand using fixed expenses as a guide...

I'm small, 2 fulltime, 2 part time employees....

peter@vecchios.com

[stien]

Funny,
I was thinking of starting a bike shop with my brother. Would be interested to see what you have to say about it (stay away, tips, etc).

[oldpotatoe]

Funny,
I was thinking of starting a bike shop with my brother. Would be interested to see what you have to say about it (stay away, tips, etc).

email sent.

[Ken Robb]

There are retired executives who provide free guidance to business owners. I think the point of contact may be the SBA.

Under-capitalization is one of the biggest causes of failure of small businesses.

I think your questions/concerns apply to most businesses and an advisor with success in any retail business can give you guidance.

[oldpotatoe]

There are retired executives who provide free guidance to business owners. I think the point of contact may be the SBA.

Under-capitalization is one of the biggest causes of failure of small businesses.

I think your questions/concerns apply to most businesses and an advisor with success in any retail business can give you guidance.

Nice problem to have but I'm over capitalized and took a beating on taxes last year...I did see an advisor, told her of my situation(theft by a biz partner), showed her all the numbers, and asked about minimum cash on hand, as determined by what and her answers and 'advice' bordered on worthless. In other words, she didn't answer any questions I had, in spite of asking them. For her it was all about 'growing the biz', and when she mentioned a second location(no thanks), I ended the conversation.

My accountant doesn't have any real answers either, what are you comfy with, type thing but since I have only 1 year of experience, I have no comfort level. I tend to be cautious, conservative.....maybe overly so, don't know.

[Dave B]

Peter,

I don't know how familiar you are with the Vsalon, but contact Steve Pucci as he has a few decades of experience if I am correct. Just a thought.

[Ken Robb]

Under-capitalized in this sense means there isn't enough cash to provide adequate inventory, pay bills in time to get maximum discounts, pay sufficient staff, rent, etc. so you can hardly have too much you would just have bigger reserves. In California I think there is still an annual inventory tax so there is an incentive for business owners to reduce inventory and delay purchases until after the date of that tax. Does CO. have a similar tax and is that how you got hit hard by taxes?

Don't judge all consultants by one experience with one who couldn't or wouldn't listen and communicate with you.

[William]

Peter,

I don't know how familiar you are with the Vsalon, but contact Steve Pucci as he has a few decades of experience if I am correct. Just a thought.

He's an asshat but I would still talk to him. ;) :)



William

[weiwentg]

Funny,
I was thinking of starting a bike shop with my brother. Would be interested to see what you have to say about it (stay away, tips, etc).

How do you make a small fortune?

1. Start with a large fortune.

2. Open an LBS.

(Disclosure: not an LBS owner)

:banana: :banana: :banana:

[ald]

If you are over capitalized, then you could pay yourself a cash distribution, but there will probably be tax consequences. Your accountant should be able to advise you on the best way to do this.

Have you done a cash flow projection? It's worth the time to put one together.

I try to run my shop with a fairly lean (but comfortable) cash position, and then borrow from a line of credit at my bank when needed. For me this typically happens around February - April when invoices due are greater than sales receipts. It's usually pretty easy to pay off those loans as income improves with the warmer weather. I also keep my inventory as low as possible at the end of my fiscal year to avoid inventory tax.

A good cash flow projection will help you anticipate all the possible bumps along the road.

[Gummee]

Around here, the Chamber has a business somethingoranother 'board' for lack of a better term. Experienced folks that have helped/done it before. I'd say where you are, there *shoud* be someone around to ask.

Me? I'm coming in from the undercapitalized end of things. Like starting a 500-mi trip with less than 1/4 tank of gas and knowing that you've got to make $$ before you can finish the trip. It sucks, but there ya go.

Oh, and check yer PMs. I have contacts in/around CO

M

[RFC]

How do you make a small fortune?

1. Start with a large fortune.

2. Open an LBS.

(Disclosure: not an LBS owner)

:banana: :banana: :banana:

Kind of like vineyards.

[MadRocketSci]

Kind of like vineyards.

and commercial space tech....

[dd74]

How about franchises? Has anyone here started a franchise bike shop?

I've been mulling over the idea lately. The location will be in SoCal, very close to the beach.

[stephenmarklay]

I have always wondered how bike shops survive in colder winter climates...

[edl]

Nice problem to have but I'm over capitalized and took a beating on taxes last year...I did see an advisor, told her of my situation(theft by a biz partner),...

Sorry to hear about the theft, but in the truly unfortunate case that you have to deal with this situation again in the future you should consider getting Employee Dishonesty Liability Insurance. Basically protects the policyholder on internal theft.

Since you are small, what is your structure? You mentioned a business partner - if you're setup as a Partnership you use pass-through accounting for tax purposes. Taking a distribution/dividend will not result in a taxable event since you already paid taxes on any income earned. It's your call if you choose to leave the capital in the company or not.

[Ken Robb]

I have always wondered how bike shops survive in colder winter climates...
Cyclesmith in Mendon,NY. becomes a ski shop.

[stephenmarklay]

Cyclesmith in Mendon,NY. becomes a ski shop.

That makes all kinds of sense.

[LegendRider]

Cyclesmith in Mendon,NY. becomes a ski shop.

In Atlanta, there is a ski shop that becomes a patio furniture store in the summer!

[christian]

In Atlanta, there is a ski shop that becomes a patio furniture store in the summer!What do they become in the winter? :P

[Terry312]

I bought my first set of skis, Olin MkIVs, from a place that was a Patio Furniture store off-season.

[Crazychester]

I have always wondered how bike shops survive in colder winter climates...

Here in St. Louis, the bike shops seem to do well even in our harsh winters (global warming where are you when we need you?). STL has a pretty dedicated cycling culture and we ride year-round, subject to ice and snow of course, but that gets cleared from the road pretty quickly. Seeing groups of riders out in below zero temps is not uncommon here - I've joined a few myself over the years.

[Louis]

Seeing groups of riders out in below zero temps is not uncommon here - I've joined a few myself over the years.

0* F or 0* C ?

If it's the former you can be sure that I was not in that paceline...

[bike22]

in boston every shop stays as a bike shop during the winter, albeit with reduced hours/days open. plenty of people ride their bikes year round.

[Ken Robb]

I'm amused every Autumn when the Trek and Specialized shops advertise their "End of Season" sales here in SoCal. Yeah, those days where the high is 62F are brutal and they make me want to hang up my bike for the Winter.

[dave thompson]

I'm amused every Autumn when the Trek and Specialized shops advertise their "End of Season" sales here in SoCal. Yeah, those days where the high is 62F are brutal and they make me want to hang up my bike for the Winter.
Bite me!

[witcombusa]

I have always wondered how bike shops survive in colder winter climates...


They sell skis and snowshoes....

[SEABREEZE]

I have always wondered how bike shops survive in colder winter climates...


One Example
Sell winter sport items, skis, snowboards, Ski boots clothing. Ski tunning.

Have to do your homework , see what wintersports are popular in your geographic area.

[SEABREEZE]

I bought my first set of skis, Olin MkIVs, from a place that was a Patio Furniture store off-season.


Damm, I had a pair of Olins back in the day !!!

[Ken Robb]

Damm, I had a pair of Olins back in the day !!!
Me too--medium blue tops.

[fourflys]

if you own a shop, just hope this doesn't happen...

http://news.yahoo.com/video/us-15749625/raw-video-car-crashes-into-bike-shop-26626090.html