The chance of a lifetime: You are asked to start a bike shop. How should it be done?

[Scorp]

And that is the sad thing here. Personally I was looking forward to input from all and sundry re how they would do it without any consideration to logic or reason. My plan (if that is what it could be considered) was to carry on this for a while, then spend some time trawling through the whole thread and write down ALL things the customer wanted. Then I was planning to start a new thread with a heading like "Industry, this is what your customer wants", ask the trade to have alook at all the wishes and ideas, and in that thread ASK them to comment on each and every idea. Until only one or two wishes/ideas were left that all/most considered worth contemplating and perhaps taking aboard.

Perhaps none of the ideas/wishes could ever have been used. Perhaps the only one/two of them that held some merit were already in place. Who knows. But what has come out from this is that the active trade chaps/chapesses on KB have felt very threatened by the comments on here. The reason for THAT in it self is worth pondering on.

Actually, I think you'll find there's a huge number of positive contributions on your thread from people with very real suggestions about what they'd like from "the perfect bike shop". The vast majority of which have not been knocked or naysayed by anyone. So perhaps you should trawl through and do as you planned. Be a shame after all everyone's effort if you let the intended purpose of your thread go to waste.

[T.W.R]

You can "keep afloat" on a small profit margin, but without one, you sink. Reducing margin is one thing. But if a business has to cut it's margin to the extent that it isn't actually making a profit, it's not a successful business. It's about to fold. That's why I said that profit is king. Because if you're not making a profit, you're making a loss. And if you're making a loss, you're on your way out of business. Simple maths.


Only if it's also making a profit. Otherwise it's just continually dead.

Don't be so naive.......there's been plenty of businesses that have started from scratch and run in the red for substantial lengths of time before even looking like making a hint of a profit and with passion & dedication for what they're trying to achieve have weathered the storm to become leaders of business.
making profit is the end goal of business, there's far more important factors involved to becoming established and successful.
Making profit your be all & end all is just a focus fuelled by greed

[Robert Taylor]

If you are worried about parallel importers. you need to look closer at what intellectual property can do for you.

Good point but Id like you to elaborate a bit further. As far as product knowledge and experience is concerned we of course have very much the upper hand.

[R-Soul]

Good point but Id like you to elaborate a bit further. As far as product knowledge and experience is concerned we of course have very much the upper hand.

Of corse each case needs to be looked at on its won merits, but there are possible ways to obtain exclusive rights to use particular trademarks/designs/copyright in NZ so that even parallel importers may not be able to use them. Of course you would need the cooperaton of the licensor for this. You should talk to an IP lawyer.

[Scorp]

Don't be so naive.......there's been plenty of businesses that have started from scratch and run in the red for substantial lengths of time before even looking like making a hint of a profit

Me naive? Ha-ha! I said "trading" at a profit. Sure you can borrow a million and take 10 years to pay it back, but only if you TRADE at a PROFIT. What the hell did they teach on your business course?!

Making profit your be all & end all is just a focus fuelled by greed

I agree, and the profit imperative is about as far away from my personal philosophy as you can possibly get. But we're not talking personal philosophy here, we're talking about business. And if a business cannot turn a long term trading profit, it will fold. Simple maths.

[Pixie]

I remember it well. But I never did know what FAB Virgil actually stood for!

Fuck All Brain

[R-Soul]

Look Scorp is not saying that a business should milk its customers- because that is also a way to lose business. He is just saying that there is just no way to pay loans, salaries, and stock unless you are making at least the same or more than you are paying for it. and if you are making the same, then why bother? You could just as easily sit on your bum at home and make nothing.

[T.W.R]

Me naive? Ha-ha! I said "trading" at a profit. Sure you can borrow a million and take 10 years to pay it back, but only if you TRADE at a PROFIT. What the hell did they teach on your business course?!

obiviously a bit more than what you were taught....the core of this thread is about starting a business from scratch not operating an existing business

I agree, and the profit imperative is about as far away from my personal philosophy as you can possibly get. But we're not talking personal philosophy here, we're talking about business. And if a business cannot turn a long term trading profit, it will fold. Simple maths.

true but a successful business in the long term has whats called "an adaptive culture" which involves a high percentage of forecasting & planning and strategic handling to influence their operating enviroment...... a business such as what is suggested here established a "trade association" in order to survive enviromental uncertainty ie: a learning organisation. What is suggested here is essentially a "greenfield venture" operating in a virtual enviroment which is high risk but with the potential to be successful

[onearmedbandit]

There's talk of passion etc being more important than profit, and from a personal point of view that is correct. But if I was in the position of owning my own business, that also happened to be my passion, I could do it a lot easier if I could pay my bills and have enough left over to make it worth my time.

[Scorp]

obiviously a bit more than what you were taught....

Evidently not. See what R-Sole wrote above. He was spot on.

the core of this thread is about starting a business from scratch not operating an existing business

I know... but if you can't demonstrate from day one, that your new business can trade at a profit - no bank, no investor, no one at all in their right mind - is going to back your venture. And if you ever plan on sinking your own personal finances into a venture without first having established how to make a trading profit, I would kindly ask you to give your money to a worthwhile charity instead.

... a successful business in the long term has whats called "an adaptive culture" which involves a high percentage of forecasting & planning and strategic handling to influence their operating enviroment......

All true. But the "adaptive culture" of a successful business does not include trading at a loss. Not unless it wants to adapt out of existence.

a business such as what is suggested here established a "trade association" in order to survive enviromental uncertainty ie: a learning organisation. What is suggested here is essentially a "greenfield venture" operating in a virtual enviroment which is high risk but with the potential to be successful

The key words from your above statement are: "potential to be successful". If you cannot show on paper that you can pay wages, pay rent, lease equipment, promote your brand, buy stock, pay insurance, sell your product... and turn in a trading profit, your idea has zero potential for success.

Successful = Profitable.
Unprofitable = Fail.

Do you get it now?

[T.W.R]

Scorp you & R sole are talking in the realms of a business on an industrial scale...which is quite a bit different to what Conquiztador & Bogan are suggesting ie: a small business operating via the internet. It's still a very complicated operation but still quite possible.....around the world hundreds of small businesses open every month and on the scale of things small business ventures are becoming more equitable than large scale operations.
You may have overlooked a piece of one of my earlier posts saying: it's hard to see the forest when looking at an individual tree. There are a lot of influences that they may not have considered and are yet to realise but it doesn't give some of the detractors the right to shoot the idea down in flames....if every idea people have had over the years for fledgling businesses hadn't been allowed to grow to fruition then we'd be in a pretty sad place these days....an acorn grows into an oak if it's given a chance

[Scorp]

Scorp you & R sole are talking in the realms of a business on an industrial scale...which is quite a bit different to what Conquiztador & Bogan are suggesting ie: a small business operating via the internet.

No... what we're saying applies to all businesses. I run a one man band business, it's just me. If I don't turn a profit month in month out, my family doesn't eat. That's not 'industrial scale.'

Same goes for Conquiztador's & Bogan's ideas. Do you really think either of those guys will go for it if they don't think they can make a profit? They aren't proposing to set up NZ Biker's Charity Stores, they're proposing businesses. Both of them have worked out a way to minimize their risk (i.e. not actually stocking parts), whilst still making a profit. If they do their sums right, it could work. But if they can't operate at a profit, all they'll be doing is giving away their own money (and/or the banks) to motorcycle owners.

....around the world hundreds of small businesses open every month and on the scale of things small business ventures are becoming more equitable than large scale operations.

Do you actually know the failure rate for small business start ups? From memory I think it's about 90% within 3 years. Try googling it.

There are a lot of influences that they may not have considered and are yet to realise but it doesn't give some of the detractors the right to shoot the idea down in flames....if every idea people have had over the years for fledgling businesses hadn't been allowed to grow to fruition then we'd be in a pretty sad place these days....an acorn grows into an oak if it's given a chance

I agree wholeheartedly. But if you track back to where this discussion over profit began, you'll see it had nothing to do with the guys' ideas, but with a post you made that knocked bike shops for making a profit. That's all. All small businesses, including your local bike shop and "Find-a-Bit"... have to make a trading profit to survive. Simple fact.

[Headbanger]

I know... but if you can't demonstrate from day one, that your new business can trade at a profit - no bank, no investor, no one at all in their right mind - is going to back your venture. And if you ever plan on sinking your own personal finances into a venture without first having established how to make a trading profit, I would kindly ask you to give your money to a worthwhile charity instead.

So, how do you do that with a startup company?

Its easy enough to write down how many customers/sales you need a week to cover expenses but how does that equate into real world figures? It may take 2 years to build up a customer base that is big enough to sustain your business,...but 2 years would be just as much a wild guess as anything else. And until you open your doors....who the hell knows?

Alternatively I could start a Civil contracting business, How would you realistically demonstrate you will win contracts?, or what time frame to return a profit?, does this mean no one should ever start a civil contracting business?

[Scorp]

So, how do you do that with a startup company?

You have to write yourself a business plan - full of market research, real world examples, realistic trading projections, opportunity and risk assessments and supporting data - that's strong enough, realistic enough, and promising enough to convince a bank/investor.

Either that or you wing it.

Alternatively I could start a Civil contracting business, How would you realistically demonstrate you will win contracts?, or what time frame to return a profit?, does this mean no one should ever start a civil contracting business?

How many Civil Contracting businesses do you think are started by individuals from scratch. My guess is that most are started by existing organizations with years of relevant experience, excellent contacts, and contracts lined up and almost in the bag.

Please don't think I'm suggesting no one goes into business, just that people think long and hard about it first. Especially those who don't think profitability is an issue.

[steve_t]

So, how do you do that with a startup company?

Its easy enough to write down how many customers/sales you need a week to cover expenses but how does that equate into real world figures? It may take 2 years to build up a customer base that is big enough to sustain your business,...but 2 years would be just as much a wild guess as anything else. And until you open your doors....who the hell knows?

Alternatively I could start a Civil contracting business, How would you realistically demonstrate you will win contracts?, or what time frame to return a profit?, does this mean no one should ever start a civil contracting business?

If you go to the bank to borrow money, that's exactly what you have to do. Sit down and project sales figures with margins and expected profits considering all expenses. Obviously knowledge of the industry is paramount and the projected figures have to be realistic. The bank will look at other businesses in the industry and of a similar business model to determine how realistic your business plan is. They obviously don't want to lend a great deal of money (without huge guarantees) to high risk businesses.

Edit: Damn you speedy Scorp