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

[R-Soul]

One of my clients has operating costs of just 3% of it's gross fundraising income. In other words they raise 32 times more money than they spend. Effectively an operating profit of 97%! All of which goes to needy children. If they placed less priority on return-on-investment (profit), then they'd have less money for the children they help. And would be less effective at achieving their stated mission.

Awesome- now thats the kind of charity that can do real good and that I would not mind contributing to. Too often half of what you contribute to them is lost on "administration costs".

[T.W.R]

Yes, actually using grammar does help in the comprehension of written English. That's why it exists. You see, from where I'm sitting, I can't actually hear the inflection in your typing.

So it seems that you meant to ask:

"If things aren't doing well, are you're going to keep your profit margins up?"

To this question, I would answer: yes, most definitely. Hold your margins if you can. Slashing margin will only create a downward spiraling price war with your competitors, and more importantly, may result in you working twice as hard for half the reward.


Quite the reverse. I understood perfectly. It's just I happen to know that what you said is wrong.

You said: "A successful business will always cut it's profit margin when things are looking grim so they can keep afloat in order to survive.....a successful business is continually adjusting to the economic environment."

The highlighted part of this statement is simply not true. A successful business will try to hold it's margin during tough times. It may add value in the form of promotional offers, it may try to find or establish new markets, it may increase advertising spend in order to capitalize on the drop in spending of others, but a truly successful business will try to resist the temptation to compromise on price and/or margin. Check out the companies that are posting healthy profits at the moment - they're the successful ones.

P.S. I forgot to mention earlier that return-on-investment (i.e. profitability) is also the greatest imperative for Non-Profit orgs. Because if it costs more to run their operations than the amount of funds they raise, then they'll have no money for their beneficiaries.

One of my clients has operating costs of just 3% of it's gross fundraising income. In other words they raise 32 times more money than they spend. Effectively an operating profit of 97%! All of which goes to needy children. If they placed less priority on return-on-investment (profit), then they'd have less money for the children they help. And would be less effective at achieving their stated mission.

Same goes for the commercial world too.

Well you answered a lot in that bit of tripe and confirmed what I said about you before your ideals are locked in a era from the last century..... you view of a business is the outdated mechanistic structure to a tee.

People like Walter A. Forbes would leave you dead in the water and Market researchers like J.D Power & Associates would consider you a dinosaur

[Brian d marge]

I smell red

you kow I love the red

Opera on iphone awesome

Stephen

Dont foget Tude ,,,, I get tired of the tude when i go into bike shops

some customers have a wee bit of experience and cant deal with the tude

[Skyryder]

Product knowledge and a greetings a bloody good place to start,that and a total ban on cunts that wear baseball caps the wrong way round and bad acne wearing "i am Rossis bitch T shirts"behind the counter.

Ya got that one right. Never could get this base ball cap 'bakc' to front thing. Next they will be wearing 'kaditcha' boots.


Skyryder

[T.W.R]

Just to add some clarity to the arguement here and to inspire some thought for what the thread starter wanted to achieve before the gunslingers tried shooting it to bits.

The bloke I mentioned in post #336 : Ray Kroc was the founder of McDonalds (everyone knows how sucecessful they are as a global operator), well in the early 80s Kroc had the same mentality as Scorp even though the 42% hold they had on the american domestic fastfood market was dwindling, Kroc's approach was just as Scorps mentality towards keeping profit margins up and McDonalds was slowly destroying itself until senior management with some foresight and nounce got Kroc to realise reducing the profit margin & increasing turnover would be the best way to fight to survive.......Well Look where they are now

And Walter A. Forbes is someone that all the naysayers should investigate and someone Conquiztador should look at for inspiration: Walter A. Forbes is the founder of Comp-U-Card (CUC international Inc) a business that is exactly what has been invisaged here, Forbes had the seed of an idea in the late 70s and in the 80s made it happen. At the time of the case study I'm quoting from (1998) CUC International Inc had two dozen small operations servicing 68 million people and Forbes had just launched netMarket an electronic superstore offering 250000 brand name products. Against all the bollocks that was set towards his ideas & dreams he's the one laughing in the face of the dinosaurs that said it wouldn't work.

Just like the outdated robots the aired the same opinions here

[Robert Taylor]

Just to add some clarity to the arguement here and to inspire some thought for what the thread starter wanted to achieve before the gunslingers tried shooting it to bits.

The bloke I mentioned in post #336 : Ray Kroc was the founder of McDonalds (everyone knows how sucecessful they are as a global operator), well in the early 80s Kroc had the same mentality as Scorp even though the 42% hold they had on the american domestic fastfood market was dwindling, Kroc's approach was just as Scorps mentality towards keeping profit margins up and McDonalds was slowly destroying itself until senior management with some foresight and nounce got Kroc to realise reducing the profit margin & increasing turnover would be the best way to fight to survive.......Well Look where they are now

And Walter A. Forbes is someone that all the naysayers should investigate and someone Conquiztador should look at for inspiration: Walter A. Forbes is the founder of Comp-U-Card (CUC international Inc) a business that is exactly what has been invisaged here, Forbes had the seed of an idea in the late 70s and in the 80s made it happen. At the time of the case study I'm quoting from (1998) CUC International Inc had two dozen small operations servicing 68 million people and Forbes had just launched netMarket an electronic superstore offering 250000 brand name products. Against all the bollocks that was set towards his ideas & dreams he's the one laughing in the face of the dinosaurs that said it wouldn't work.

Just like the outdated robots the aired the same opinions here

Selling fast food is a little different to ( for example ) selling highly technical products that require specialised knowledge and experience, plus parts backup etc.

Everyone knows that McDonalds is a crap product and in part they can only sell at the low price because they employ cheap labour. Its quick, convenient and like polyfilla will fill up your stomach, but maybe a little more agreeably.

But not every industry wnats to devalue its workforce and its product.

Maybe he has made a lot of money but there are other forms of satisfaction than just doing that!

[PeeJay]

Selling fast food is a little different to ( for example ) selling highly technical products that require specialised knowledge and experience, plus parts backup etc.

Everyone knows that McDonalds is a crap product and in part they can only sell at the low price because they employ cheap labour. Its quick, convenient and like polyfilla will fill up your stomach, but maybe a little more agreeably.

But not every industry wnats to devalue its workforce and its product.

Maybe he has made a lot of money but there are other forms of satisfaction than just doing that!

Same difference when it all comes down to it. You can turn your nose up a McDonalds because they're not "highly technical products that require specialised knowledge and experience" but I bet they sell more $$$ worth of burger at a better margin than you do selling ohlins.
Instead of slagging them off maybe look at their business with an open mind?
Whats the worst thing that could happen? you might learn something?
While we are at it, I presume you are talking Ohlins when you say "highly technical products that require specialised knowledge and experience"
Compared to other shocks that may be true but on a scale of technical complexity requiring specialised knowledge they would hardly rate a mention. A sim card would more technically complex than a truckload of shock absorbers.

[T.W.R]

Selling fast food is a little different to ( for example ) selling highly technical products that require specialised knowledge and experience, plus parts backup etc.

Everyone knows that McDonalds is a crap product and in part they can only sell at the low price because they employ cheap labour. Its quick, convenient and like polyfilla will fill up your stomach, but maybe a little more agreeably.

But not every industry wnats to devalue its workforce and its product.

Maybe he has made a lot of money but there are other forms of satisfaction than just doing that!

Don't be such a narrow minded bigot
business operating principles apply to any form of BUSINESS

Just think your beloved Ohlins wouldn't be where it is now if Yamaha hadn't brought into the company
you've just got a chip on your shoulder with me from what I said you not long after you arrived here on KB, and it still rings true........the almighty push for your franchise despite what a poster really wants to know.....a few weeks ago the guy with the TT250 yamaha wanting fork oil capacities for the bike and you charged in saying to throw ohlins parts at it :slap: the bike in the states where the poster was from would be worth nics...... real bright to throw ohlins at it sure the forks would be better but it'd show up all the deficiencies of a nigh on 30yr old trail bike....you don't care as long as you push your product

[Grubber]

Don't be such a narrow minded bigot
business operating principles apply to any form of BUSINESS

Just think your beloved Ohlins wouldn't be where it is now if Yamaha hadn't brought into the company
you've just got a chip on your shoulder with me from what I said you not long after you arrived here on KB, and it still rings true........the almighty push for your franchise despite what a poster really wants to know.....a few weeks ago the guy with the TT250 yamaha wanting fork oil capacities for the bike and you charged in saying to throw ohlins parts at it :slap: the bike in the states where the poster was from would be worth nics...... real bright to throw ohlins at it sure the forks would be better but it'd show up all the deficiencies of a nigh on 30yr old trail bike....you don't care as long as you push your product

I am only using this one quote as an example so don't take it personally. While i do agree that whilst in business one does have to broaden their horizons, i also agree with Robert Taylor. I am sure Robert being in his business for some years would have some idea of the inside workings rather well. In most cases he would know better than those that sit on here with their degrees etc and throw large quantities of advice to someone that is , and has been in the game for some time.
I have spent 30 years in my own business and have learnt over those years that there are 2 things that should not be compromised. 1) your quality of work and 2) your price margins. I have found over time that if you retain your service levels to a premium and your loyalty to your customers you will hang on to your profit margins easy. My 5 cents worth.

[Robert Taylor]

Don't be such a narrow minded bigot
business operating principles apply to any form of BUSINESS

Just think your beloved Ohlins wouldn't be where it is now if Yamaha hadn't brought into the company
you've just got a chip on your shoulder with me from what I said you not long after you arrived here on KB, and it still rings true........the almighty push for your franchise despite what a poster really wants to know.....a few weeks ago the guy with the TT250 yamaha wanting fork oil capacities for the bike and you charged in saying to throw ohlins parts at it :slap: the bike in the states where the poster was from would be worth nics...... real bright to throw ohlins at it sure the forks would be better but it'd show up all the deficiencies of a nigh on 30yr old trail bike....you don't care as long as you push your product

Please quote where I said to throw Ohlins parts at a TT250 set of forks?????????????!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!! Its real bright to misquote

[Robert Taylor]

Same difference when it all comes down to it. You can turn your nose up a McDonalds because they're not "highly technical products that require specialised knowledge and experience" but I bet they sell more $$$ worth of burger at a better margin than you do selling ohlins.
Instead of slagging them off maybe look at their business with an open mind?
Whats the worst thing that could happen? you might learn something?
While we are at it, I presume you are talking Ohlins when you say "highly technical products that require specialised knowledge and experience"
Compared to other shocks that may be true but on a scale of technical complexity requiring specialised knowledge they would hardly rate a mention. A sim card would more technically complex than a truckload of shock absorbers.

Well I dont care much about knowing all about sim cards, as much as a good many people wont want to know about the complexities of the inner workings of shocks. But they do want to know they can get good service by people ultra familiar and experienced with the product, heck that sounds reasonable to me. Of course you can pick up all the knowledge and experience in 3 minutes flat.
The business models between fast food and a specialised product business may have similiarities but there are a heck of a lot of dissimilarities as well. That is the point I was trying to fairly make.

[bogan]

Of course you can pick up all the knowledge and experience in 3 minutes flat.

oh sweet, linky?

[Robert Taylor]

oh sweet, linky?

Yeah apparently everything is posted on the net and because its on the net its all correct. You dont need to deal with nasty business people because they all rip you off.

[bogan]

Yeah apparently everything is posted on the net and because its on the net its all correct. You dont need to deal with nasty business people because they all rip you off.

no linky handy then? Maybe you just got PR issues.

[IdunBrokdItAgin]

Just a point here.

Who honestly believes that a MacDonalds hamburger is not a "highly specialised product"? If you do then you are fooling yourself.

Mass produced every day in 100+ countries around the world to the same exact standard. I would probably say that it is one of the most techincally refined items ever created by humankind. If you don't beleive me then just try making one yourself from scratch, then make another 10 million and see how they turn out - all in one day.

Seems wierd I know but I would honestly say that the common big mac (for example) has gone through more design iterations and anlysis than an ohlins shock.

I'm not posting this to annoy Robert Taylor just highlighting the fact that:
MacDonalds created their market out of a standardised product which was able to be delivered by a simplified & standardised process (their kitchen design was their real market winner for those who read up on this stuff).

This is how MacDonalds dominated their industry. I thought this thread was about how, theoretically, a bike shop could dominate their local market - in the opinion of the customer?

I think I misread the title of the thread though, it should read "Who knows the most about business models and wants to prove it?"