Bike shop profit margins?

[Winston001]

Can I put the boot on the other foot.

If you had taken say $300,000 to buy a bike shop. Worked 12 hours a day 6 and (Mt eden MC as an example) 7 days a week what would you want back out of it?

Before risk/return money exists, you have to pay yourself a wage. That needs to be equivalent to what you'd earn working for wages elsewhere in a position of responsibility. As a business owner, you have a lot more to do than if you were only running the workshop or sales. But lets be realistic rather than optimistic - say $60,000 wage. The average single income in NZ is about $45,000.

Next you'd need a risk/return on use of capital on $300,000 so lets say 12.5% = $37,500pa.

You might accept not seeing that as cash in the bank each year if you did well and increased the value of the business to $400,000 in 3- 4 years time.

So ideally you'd have a taxable income of $60,000 + $37,500 = $97,500.

I can tell you that I have seen people spend around $300,000 on a business and earn $45,000. Why do they do it? Independence, pride at being self-employed, lack of other choices, naively believing they are really doing better, there are many many reasons. Ultimately there is a value in owning your own business which isn't measured in money.

[Winston001]

I was going to go through the thread and pick out the nuggets of good advice but farg it.....

The rules for a bike shop are the basically the same for any business:

1. Every customer is the most important person you deal with. Think of them that way and treat them that way. This is similar to "the customer is right" but we know that isn't always true. If later they turn out to lose your respect, you tried. Don't diss them, keep your dignity and just be firm.

2. Business is about relationships. Buyers deal with people they like.

3. The key to good business is service. Deliver more than the customer expects - go the extra mile.

4. Funnily enough business isn't about price. Yes, for a few customers it will be but my experience is that the ones who chisel every cent out of you, are the ones who also complain and moan. You'll never have a happy relationship with them.

5. Everyone loves a bargain. So, if possible make them feel like they have got a great deal by throwing in something for free - or adding value in some context.

6. Try and remember customers names - it makes a person feel special to be recognised when they walk in.

7. Make people feel welcome but don't climb all over them. Kiwis don't like pressure selling.

[sidecar bob]

I can tell you that I have seen people spend around $300,000 on a business and earn $45,000. Why do they do it? Independence, pride at being self-employed, lack of other choices, naively believing they are really doing better, there are many many reasons. Ultimately there is a value in owning your own business which isn't measured in money.

Ive discovered three main types of small business owner, Those that are too clever to work for someone else, Those that are too stupid to work for someone else, & those that are plain dangerous in charge of an invoice book.

[madbikeboy]

Continental Cars was bad? I have to spend some serious coin on the Alfatoy soon and I've been wondering where's a good place .

Worse than bad, appalling. Once I went to drop some coin on a GTV6 (had one in the UK, so thought, fuck it, I'll buy one here), sales guy wouldn't let me drive the one he had (double the mileage of my UK one). Then years later, bought a Audi Quattro there, had loads of problems with their service (and the car for that matter). Next Audi, same story. It had a problem, (simply wouldn't start), so they charged me for a new computer etc etc, $7,000 later, still no go. So, trailered to Giltraps, they got it going in less than 15 minutes. Got about $5000 back from Conti's, but had to throw a tantrum... I've had Italian Auto centre do most of the work on my Alfa's (I've owned a few) and they're really good and reasonably priced, but the last one - I got some fool in Cambridge to do some work - his work was shit, he wiggled out from any responsibility, ended up selling the car out of frustration - went and bought the most vanilla car I could find, figuring that no one could fuck up working on a BMW... But the thing is so boring to drive, I've had it 8 weeks, and I'm going to sell it and buy something new when I get back to NZ...

The car is a grudge buy....

[retro asian]

1. Every customer is the most important person you deal with. Think of them that way and treat them that way. This is similar to "the customer is right" but we know that isn't always true. If later they turn out to lose your respect, you tried. Don't diss them, keep your dignity and just be firm.

This is a very old mentality, if I did this at work I'd never get anything done...
So many timewasters out there...

You gotta show customers respect, but quickly work out if they are possibly going to buy something or not before you put in the hard yards, and give up other better opportunities that might be in the shop.


It's all about the Benjamins...dorra dorra bill yaarrr!

[wickle]

GST has no net cost to a business.

While your business will likely end up with net GST inputs (which you then remit to the government) it doesn't actually cost your business anything. You collect the GST from your customers and pass it on to the government i.e. it isn't coming out of your pocket.

except the time involved in the paper work, making shore your return is right as the Dept wacks a heavy penatly on any mistakes "business are unpiad tax collectors"

[Winston001]

This is a very old mentality, if I did this at work I'd never get anything done...
So many timewasters out there...

You gotta show customers respect, but quickly work out if they are possibly going to buy something or not before you put in the hard yards, and give up other better opportunities that might be in the shop.

Agreed - the point is to understand about treating all customers with respect. Its a tricky balance between spending time with a customer and getting on with getting something achieved.

The trouble is, quiet casually dressed people can easily be dismissed as timewasters. That can be your loss.

[DMNTD:Me]

The trouble is, quiet casually dressed people can easily be dismissed as timewasters. That can be your loss.

Yep...one bought a new 1098S off me on Thursday just been.
Most certainly not a time waster and I have more than a dozen new customers that I would've lost if I viewed them as such

[Gman71]

I went back into the bike shop where I bought a brand new bike 6 weeks beforehand. Salesman loked straight at me, didnt even recognise or acknowledge me.

Another one came and asked if they could help me. Saying "You already did" dindn't even give him the clue that I had already spent a considerbale amount of dosh with them. He just wandered off.

Very very disappointing form a well known shop that many poeple say nice things about.

Guess where I'm not buying my accessories

It's not that fucking hard people to remember your customers.

[sidecar bob]

The trouble is, quiet casually dressed people can easily be dismissed as timewasters. That can be your loss.

How can you tell what someone is worth by what they wear or drive?
I can assure you that the '85 Hi Ace im regularly seen pootling around in, wearing jeans & woorkboots is not a great indicator of my net worth.
I kind of use that get up as my "fuckwit detector" if they dont want to deal with me because of that then thats fine, it saves me and them a lot of time.
I am wary of people that feel they need to dress up to gain your respect, and equally wary of people who will not respect you unless you are dressed up.

[tri boy]

"Stealth wealth" is the best wealth indeed.
Keeps the bludgers at bay.

[Ocean1]

"Stealth wealth" is the best wealth indeed.
Keeps the bludgers at bay.

Yeah, but that potato sack and trash bag ensemble is taking the whole thing a bit far dude.

[geoffc]

1) They all just make me feel like I have some value to them. 2) They are always straight with me. No bullshit. 3) I can wander in and ask a question and get an answer without being made to feel I'm taking up their valuable time. 4) They are all, to fault, just damned nice people.

So I don't mind paying a bit extra.

I up dated my bike a fortnight ago. The dealer I chose to make the transaction with fits the 1 to 4 above. Yes I could have bought & sold on Trademe & saved a few bucks but I know I can expect a fair deal and good service from this guy. He employs like minded people. In the long term I know I am better off.

[retro asian]

The trouble is, quiet casually dressed people can easily be dismissed as timewasters. That can be your loss.

Not about how they look... more about how you ask them the right questions upon first meeting them...

[Jantar]

Not about how they look... more about how you ask them the right questions upon first meeting them...

Many years ago when I was looking at buying my first ever NEW car I went to a Nissan agent (also the Shell service station) in a large North Island town to enquire about a Sentra. He looked me in the eye and said I couldn't afford one. So I went across the road to the Toyota dealer, and bought a new Corolla instead. I still enjoy the look on his face every time I went there to fill up the Corolla.