Thank you for this. I think more people need to understand this. Bike shop owners and their staff are local businesses that are just trying to send their kids to a summer camp or dance lessons and typically not trying to own a second million dollar home. Stop asking for discounts and get to know your LBS. It’s a passion of love type business, let’s appreciate their dedication to the craft. They need our support and they will keep us on our well tuned bikes happy and riding!

Great overview. I started working at a bike shop in 1978 and own several since 2004. For the most part we all started in this industry because we love bikes and money was secondary. Since we now own a Bike business, we have to treat it like a business and knowing your numbers is crucial. Your cost of doing business breakdown is very realistic and is a great starting point for anyone thinking of going down this path. Obviously location will alter some of the fix costs. I'm in a 80 to 120 $ per sqft area, so 1/2 a mil is our break even point. Fortunately our industry is cyclical and sales follow a weather correlated curved. In our case it is dual peak bell curve. The bulk of the sales happen between late march and early September, So my rule of thumb is that for every employee we have, the shop has to ring up $500 daily. Therefore from April to September that number should be closer to $1500 to cover for the off season. glad to share more insights, just ask.

Yeppers you hit the nail on the head! That is why I run my shop on my own. Support your local shop and don't ask for freebies or discounts!

Your accounting of starting and maintaining a bike shop is very similar to my business I started 10 years ago. I have a scuba shop in the Florida Keys, every time you said bike I heard scuba. Small business is very rewarding and very challenging all in the same day. Brick & mortar way of doing business is threaten with online shopping, however I do repairs and service scuba gear which is my ace. They use to say the first 5 years are the make or break period on a small business, well I believe it's now the first 10 years and soon it'll be the first 15 years. Cycling is one of my favorite ways of exercise and escaping the grind . Good luck to you.

And this is why there has to be margin in retail. This also doesn’t cover carrying costs, stale inventory, theft/shrinkage etc…. Not an easy gig but an awesome one if you can make it work!

I can build and fully maintain a MTB, gravel or road bike. I ALWAYS go to my LBS for quarterly maintenance, I will buy parts and tools et’al when they have them on sale and I will ALWAYS refer them to other people, either new residents or new to the sport etc. YES, it may eventually cost me a bit more more but I am contributing to a viable, healthy, local economy that gives me back the most precious asset of all that no currency can pay: quality life, smiles, banter, socialising, networking and meeting new people! Support your local bike shops folks; support Brian man! Ride on! 🤟

I'm 13 so I don't really have a choice but to use my dad's garage. It's not fully started up tho. But I have ads and a business number. I'll probably be fixing other people's bikes and fixing up old bikes to sell for a profit. I already have 2 on sale. I'll probably get some sales once school starts up.

I'd imagine Retail bike shops have a massive uphill against online dealers with bike parts but make up with bike fits, servicing and repairs etc. but I've just started cycling this year, I went to my first credible bike shop and what a difference it makes the experience of me not fully understanding everything but the guy did. Very clued up and left a good impression. And I'll surely be using again and supporting my lthe local and maybe smaller but professional businesses.

This is eye-opening. I'm in the UK and now have a better understanding of why so many bike shops are failing.

Hello Brian . Wow! Incredibly transparent , I own a small bicycle repair shop out of my garage and it is very real everything you said about the cost of setting up a bicycle shop. One of the biggest head aches is doing the taxes at the end of the year. I am retired and thought it would be good to start up a bicycle shop so I enrolled in the Central Alberta Bike School and the instructor Brian was very clear and helpful on the work involved to run a bicycle shop. Three years into the project and I have never worked harder but it does have it's rewards which are wonderful. Wish you well in your endeavors. Did find the Shimano S-TEC courses helpful. My favorite tool for truing wheels is the Islandix wheel truing machine from Victoria BC which saves tons of time truing wheels. Fun Fact 10 times more bike shops in Quebec than the rest of Canada 10 times more bicyclists than the rest of Canada. Saludos John

I relate to this video so much, been running my small bike shop in Brazil since 2016 and the struggle is real! I've never had a business before and now i've Been trough all sorts of challenges, lost a shop due to an ebike fire, changed cities and started all over again.... Learning every day a little bit and trying to make my business better! Great video, watched every bit of it and saved in my playlist! Thanks

Absolute gold thanks enormously I have studying the bike industry for 3 years and this extremely informative.

Got my first bike shop job in 1972 and I've seen many many shops close up since then. Paying rent is the surest way to go under. Just like home ownership vs renting. You don't build up any equity with rent that will increase. Watched a few other shops fail due to over spending on advertising such as race team sponsorship. The entire history of bicycles has been booms and fads. Each new design spurs another boom that fades out. 2020 was a record sales year, like the early 1970s when every bike you could get sold fast. The pandemic bike boom is over. The 2019 bicycle tariff increase from 10% to 25% is the main reason prices are up while demand has crashed. Now would be a poor time to open a new shop in many areas. One owner I knew built oversized new buildings and rented out the extra space that paid for the buildings so the bicycle business didn't. Other retail and upstairs apartments covered the bank loan payments. Banks are more likely to loan money for something they can repossess and resell like a building. What are they going to do with specialty fixtures excess inventory. Multiple locations. Yoiks. Two stores means double expenses just so customers won't have to drive as far. Save that for when you are making a lot of money. You will spend more time calling the other store(s) to see if item X is available. Tell the customer "we will have it here in a couple days" and they won't return. Enlarging a single location will bump up some expenses but not all of them. My pet peeve "We can order it..." Yeah in this age of the www so can the customer and it will be delivered to their door just as soon and probably for le$$.

I think for a lot of customers, the experience you get at a bike shop kinda determines if you try to get a deal, and if you come back or not. I know of the 2 bike shops in my town, one won me over with their helpfulness and willingness to just help out, while the other just kinda let me wander around without trying to help (I'm one of those $3000 bike guys, but I ride 3 or more times a week haha). Service is huge for you guys, and I feel like most shops understand that.

thnx for the insight of how a bikeshop works :) i just resign from my 8-5 work at a bikeshop and planning to start my own shop very helpful video thnx alot

Still a great video! When I describe how my shop is just not profitable (I eek out a sub $40k living), while also required taking on a certain amount of debt and moving it around constantly, they are flabbergasted. I send them here, you explain better than me.

Nice delivery of practical numbers......Cheers 👍🏻

Cameraman makes me feel like I'm actually there which is nice, natural movement. Only thing that's missing is looking at random things when I turn my head to listen better. Oh and thank you for all this S-tier information.

I thought I wanted to own a bike shop until I worked in a few. Forget it. High stress, razor thin margins and often the customers are insufferable to deal with.

Great stuff. I've owned several not bike shop retail stores over the last decade. Got tired of people and closed them all. Obviously these numbers vary depending on one's own market, but pretty much spot on.

Thanks for the video and honesty in the breakdown of the figures. I started a small (workshop based) shop 18months ago on my own dime, and have been very patient gauging the business before expanding into a showroom next spring. Great to see information from some 1st hand experience

I worked in two shops as a student, both had skis & snowboards for the winter season. I loved the student gig but I knew for sure it was a cut throat business and not for me 😂

I totally agree with you as a bike shop owner point of view. If you don't hit the target. Break even doesn't apply, Struggle is real.

Thanks for the brutal honesty. I hope you can keep on serving the Kelowna community. One thing to look forward to is that we've hit peak car, and e-bikes are likely to become the sustainable transportation choice in the face of Climate Crisis and the economic tumult that comes with it. I know the bike industry is feeling much pain this year. I wish people could see tge forest through the trees and start investing in cargo and other e-bikes to help get to where I feel we'll eventually all be. That would also remove the seasonality that I'm sure is disruptive to your shop and your employees.

I had one from 2011-2024. I only took in bikes that I knew I could fix easily for max profit. If someone brought in a complicated fix I told them NO. If someone brought in a Schwinn Varsity or other restoration the cost was $125/hr. Swing at pitches you can hit. No bogged in complicated BS. New bike sales NEVER pay for the space needed to heat, display, build, ship, insure. Fixing 10 yr old Giant mtbs is easy big profit.

Wow! Interesting. Thank you.

Thanks for making this video and being transparent. Super 👍

Ouch! Thanks for breaking it down. That's why I have a garage shop. Yes, it has its own challenges but is way more profitable. I used to work at Retail Tool Kit, and poor inventory management will kill you!

That is mind-blowing.

Дякую хлопці. Було дуже цікаво

Solid vid - super lean budget.

Love your videos. Hope you get more popular.

Dropping a comment for the algorithm.

That's pretty sobering. My two LBS are in a smaller city in a low cost of living state, which probably helps on rent at least. I have certainly seen the price of parts and service go up significantly, which is to be expected over the 33 years I have been buying stuff. Still, there was a significant jump in all facets after the pandemic. I don't blame the shops at all. Although I am able to absorb these increases many customers are flabbergasted by the cost of a new "entry" bike or the price of a repair. Often, they bought used through Craigslist or something equivalent to a department store bike where the repairs can cost as much as the bike. I appreciate your honesty. I love bikes and have since I first rode a two-wheeler down the street in 1961. My baby boomer colleagues all rode bikes everywhere and many of us graduated into European road bikes in the early to mid-70s. Before I retired from teaching, I discovered that many of my college students had never ridden a bike or experienced the pleasure. I find that very sad.

Eye opening… thank you!

Awesome video thank you!!!!!

I make a decent living and I love to just splurge at my local bike shop and I don't return anything. It's hard enough to find an honest good small local business in the US these days, why would you not support them?

Solid breakdown

Very helpful validates my numbers

Thanks for the info!

Facts. Solid video.

I’m starting my own shop soon. Good content. I’m hoping U.S. insurance is less expensive. I think with this I’ll be able to stick to my budget. I also don’t know what kind of tax write offs are available in Canada.

great info

If this is the thought process for opening a bike shop it’s no wonder why it’s a “high fail” industry. *where’s the face palm button on this thing?*

Tip #1: don't make a tool board out of unfinished softwood plywood. It will get filthy and look skanky in a very short time.

So essentially, you need to service 3 to 4 customer every day

Thanks. Good luck in 2024.

COGS (inventory)?

No tax?

How about heat/air conditioning, water as well?? Shop owner here as well....

Would love to see a video about determining if your area warrants opening a new shop. The area I live in has one large shop with 2 stores, another small Tr*k takeover shop, a co-op/consignment shop, and another brand new mtb focused shop. I don't know much about your situation, but I have to imagine the market in BC is pretty saturated given the riding quality in the area. Did you have any trouble breaking into the market when starting?

Why should you have to have brick and mortar to sell sram or shimano

So I'm able to get them to "open" me? what does that mean? I'm opening a shop as an independent

250k to start a shop?? Just invest that in real-estate. Buy the building and just open up the doors for business. Hopefully the building has an apartment on the second floor for income. This way your double invested. You have real-estate and you have a business. Forget employees, just hire a part-time mechanic if you can't handle the workload. Another option is to buy an established bike shop. You can never know what will come . Any business you have to be able to take risk, otherwise you'll never get started.

How many bikes do you have to sell in a month to be sustainable?

If he had a KZfaq channel, he could put out a video every month, randomly, that subscribers could watch, to get a service or part from his store at 20% off.

I'm looking at buying a new mountain bike. Something in the $6k-7k range. I've probably spent $3.5 in part, service, repairs, and accessories at one local shop over the last 3 to 4 years. This shop has a manufacturer's sale on some bikes, and the bike that I like is a bit above my price once you add pedals, taxes, and a few other things. They seem to have no interest in giving a little to make the sale and keep a good customer. I'm not saying I want a massive discount, but some recognition of the amount I've spent would be nice. Throw the pedals or give a small shop credit, perhaps. Am I being unreasonable?

'Promosm' ☺️

You gotta love it when a Shimano 105 Group from QBP is $200 more wholesale than one shipped free from England. I kicked Shimano out of my shop in 2013 and only used Sram, Microshift, etc. Worst company ever.

That punching noise got tired after the second time l heard it. Ugh.

Man, this guy doesn't know anything about anything.

The brick and mortar stores no matter what business it is in trouble. The delivery to your door model is having a huge success. Most things are disposable and not worth repairing and that's what the bike industry is aiming for with carbon bikes and components. I know right now it doesn't look that way but sooner or later the dumbasses paying $10,000 for a bike will disappear, they usually only make that mistake once, or twice if they are hardheaded. The prices of bikes will come down or people won't ride them. But back to the bike shop, do we really need a bike shop? No. A simple set of directions that come with your bike could be enough. Heck, lots of furniture that you have to put together comes with tools to complete that task, why couldn't a bicycle. The industry is trying to make bikes more complicated with hydraulic brakes, tubeless tires, hidden cables, but we don't need that on our bikes. Go back to rim brakes and putting a tube in the wheel, and exposed cables and anybody can repair a bike enough to keep it rideable. I haven't been to a bike shop in a long time, I do all my own service even brake bleeds. If I don't have the tool I need for the task I buy it because taking my bikes to a shop would probably cost me more in the long game. I bought my last frame from a frame builder here in the US and working with him I now have a bike the fits me better than any bike I ever had and I've had a lot of bikes. It's the only route I would go for future bikes. I have no need for a shop anymore.

I heard that every store that sells WR! convergence wheels, instantly succeeds. Anecdotally, of course ;)