New here - signed up for assignment help! Anyone own/work in/know about the running of cycle shops?

[CiaranMcK]

Hey guys,

Sorry if anyone feels like I'm misusing this forum, but I signed up here today because I need some help with a university assignment! I'm look for someone who works in/owns/knows about bicycle shops!

For my Entrepreneurship assignment I'm proposing to start a rent-a-bike style shop in Swansea (not a real company, but need to create a realistic business plan etc)... In order to do this I need to find trade prices on certain bike maintenece parts!

I understand people may not want to publish trade prices, so if anyone would be kind enough to help me out I'd be fine with them PM'ing me the figures etc, but basically I need to know the trade prices on...

Bikes I've chosen to use are Trek 7.0 FX/FX stagger (stagger is more female friendly, correct?) in sizes 17.5, 20, 22.5 (figures with a list price of 325, trade price exc VAT would be 195, plus buying 20 bikes could also find us with more of a discount, anyone disagree?)

Also need rough trade prices for:

100 - 200 puncture repair kits (larger kits, with simple tools etc)
30ish saddle bags
Inner tubes 40 in various sizes
25 portable bike pumps
25 - 30 schwalbe marathon tyres (predicting these will the most sensible tyres to use)

As far as work shop tools go I'd be thinking to go with Screwfix, again, anyone disagree?


ANY help you can give me would mean the world, I'm really passionate about this assignment, and if this fake company does get praise from my examinors, I may look at starting it as a real business, getting Swansea out of cars and onto bikes!

 

[Rickshaw Phil]

Hi Ciaran.

I'm afraid I can't offer any help with the trade prices but have a few thoughts:

Inner tubes: Are these just for the maintenance of your hire fleet or are you proposing to offer repairs to the general public as well. If the former, you'll only need 40 of the one size (probably 700x35c).

Tools: Your workshop will need a range of special tools for bike repairs, most of which are unlikely to be stocked by Screwfix. For the professional quality tools you'll need have a look at the Park Tools website.

Schwalbe Marathon are a very good hard wearing tyre. Good choice in my opinion.

100-200 puncture repair kits suggests you are planning to sell them. If this is the case, also consider other items that riders might want in an emergency, such as chains (which you'll also want for maintaining your own bikes at some point).

I hope this is of some use.

 

[CiaranMcK]

Cheers Phil...

The inner tubes, the idea was that with each bike we rent out will be included 1 saddle bag, containing a repair kit, a spare inner tube to fit the specific bike. Wouldn't be selling them separately.

Tool wise I'll check out Park Tool, ideally I'd just be buying a full kit, pricey but all inclusive!

Cheers for the help

Ciaran.

Hi Ciaran.

I'm afraid I can't offer any help with the trade prices but have a few thoughts:

Inner tubes: Are these just for the maintenance of your hire fleet or are you proposing to offer repairs to the general public as well. If the former, you'll only need 40 of the one size (probably 700x35c).

• Tools: Your workshop will need a range of special tools for bike repairs, most of which are unlikely to be stocked by Screwfix. For the professional quality tools you'll need have a look at the Park Tools website.
• Schwalbe Marathon are a very good hard wearing tyre. Good choice in my opinion.
• 100-200 puncture repair kits suggests you are planning to sell them. If this is the case, also consider other items that riders might want in an emergency, such as chains (which you'll also want for maintaining your own bikes at some point).

I hope this is of some use.

 

[Rickshaw Phil]

Cheers Phil...

The inner tubes, the idea was that with each bike we rent out will be included 1 saddle bag, containing a repair kit, a spare inner tube to fit the specific bike. Wouldn't be selling them separately.

Tool wise I'll check out Park Tool, ideally I'd just be buying a full kit, pricey but all inclusive!

Cheers for the help

Ciaran.

No problem.

If you are just going to be maintaining your own fleet you probably wouldn't require a full toolkit initially. I reckon you could probably do all the routine repairs/maintenance on the Trek 7.0FX with the following:

Ball ended Allen key set (including 2mm to 10mm sizes ideally)
Bottom bracket tool
Chain tool
Freewheel removal tool
Crank puller for square taper cranks.
Set of open ended spanners (8 to 17mm should cover most jobs)
Pedal spanner
Headset spanner (or 12" adjustable spanner)
Wheel bearing cone spanners (pair)
Spoke key (there are 3 standard sizes - check which one fits Trek)
Tyre levers
Socket spanner set
Extending wheel wrench with socket to suit your freewheel tool (this is what I use when removing my freewheel - works a treat )
Screwdrivers

You will need cleaning gear as well and don't overlook oil and grease for the chain and the wheel/headset bearings.

I hope I haven't missed anything there. I'm sure someone will pipe up if I have.

 

[ufkacbln]

Also don't forget the Muppet factor

People will never treat a hired bike with the same respect and care as their own.... Hence wear and damage will
be greater than for a normal bike

 

[CiaranMcK]

Cheers! Worked out start up as roughly 6000 per 20 bikes! BUT then worked out to make it viable we'd have to charge 6 quid per day, and have 30 bikes out per day (on average through the year) minimum by year 2!

Pretty glad this was just a hypothetical business so far!

Yeah people being rough with them because they don't belong to them, that's another factor we've taken mind of, One of the reasons we're going with the Trek FX, a nice simple bike, less to break!

Insurance on the bikes is something we need to work out too, with theft being one of the bigger of our worries!

 

[Rickshaw Phil]

Cheers! Worked out start up as roughly 6000 per 20 bikes! BUT then worked out to make it viable we'd have to charge 6 quid per day, and have 30 bikes out per day (on average through the year) minimum by year 2!

Pretty glad this was just a hypothetical business so far!

Some more thoughts:

£6 a day sounds almost too cheap. Locally I'd expect to pay around £10 to £15 per day for a similar bike (example). I think you could realistically up your price to around the same level.

What size have you estimated the fleet will expand to? An average of 30 bikes hired per day by year 2 sounds slightly optimistic to me. Obviously I'd hope that would be the case but personal experience says that estimated trade and actual trade can be two very different things. On a warm sunny summer's day you'd quite likely have the whole fleet out and get enquiries for more, but during a grey, damp, cold week in March you could be lucky to rent out 2 bikes per day. Does your plan allow for the disastrous days? I'd say that over a year having half the fleet out per day on average is probably realistic.

Who is your target market and how would you make them aware of your presence? With my own business, one of my biggest mistakes was not having enough advertising. This is something you'd have to make an allowance for in your hypothetical budget.

Insurance on the bikes is something we need to work out too, with theft being one of the bigger of our worries!

For hire bikes it might be prohibitively expensive to get insurance against theft.

You would certainly need public liability insurance though. When I was running my rickshaw I was paying about £525 a year for this. For a hire business it would probably vary according to the number of bikes in the fleet. You could do with contacting a friendly insurance broker to get an idea of a figure.

Something that occurs to me is that an insurance company would probably require you to offer helmets to the hirers, so you'd need to get an idea of prices for helmets. Most helmets will fit a range of head sizes but you might still need a couple of sizes to fit all the possible options.

 

[CiaranMcK]

Hey Rick, Cheers for the input

I've upped it to £8 for 24hrs, but the fact is we're marketing and planning to set up in an area which is half professionals and half students.

Fleet is 60, 60 bikes (was 20, but we've upped it), with the hope that we can average half fleet over the year! So thats inline with your thoughts! During snowy/icey days in winter I wouldn't be surprised to see no bikes out at all, and to be honest I wouldn't be sure I'd want to be hiring them out in bad weather!

Advertising I've got dialled, Marketing is my forte, Got endoursement from a couple of local gyms, and personal incentives for a few local personal trainers, who will refer people to us for bikes - Flyering (we will do personally, I've found hiring people to flyer is rarely effective) - We've got student unions onboard in the area to advertise and advise us due to the poor transport in Swansea. And quite a bit more.

Helmets, I actually hadn't thought about that, I'll get some quotes on buying helmets in bulk tomorrow, large and medium adjustable.

Liability insurance we have included, but we're having real trouble getting theft cover quotes because we're obviously not a real business.

One way we're tackling theft is by requiring renters to provide us with card details (which will be checked to confirm are working and real), and signing a form agreeing that if the bike isn't returned within a certain amount of time after the due date, we will concider it stolen, and be taking a £250? penalty from their accounts in compensation. If the card doesn't work, police.

Some more thoughts:

£6 a day sounds almost too cheap. Locally I'd expect to pay around £10 to £15 per day for a similar bike (example). I think you could realistically up your price to around the same level.

What size have you estimated the fleet will expand to? An average of 30 bikes hired per day by year 2 sounds slightly optimistic to me. Obviously I'd hope that would be the case but personal experience says that estimated trade and actual trade can be two very different things. On a warm sunny summer's day you'd quite likely have the whole fleet out and get enquiries for more, but during a grey, damp, cold week in March you could be lucky to rent out 2 bikes per day. Does your plan allow for the disastrous days? I'd say that over a year having half the fleet out per day on average is probably realistic.

Who is your target market and how would you make them aware of your presence? With my own business, one of my biggest mistakes was not having enough advertising. This is something you'd have to make an allowance for in your hypothetical budget.
For hire bikes it might be prohibitively expensive to get insurance against theft.

You would certainly need public liability insurance though. When I was running my rickshaw I was paying about £525 a year for this. For a hire business it would probably vary according to the number of bikes in the fleet. You could do with contacting a friendly insurance broker to get an idea of a figure.

Something that occurs to me is that an insurance company would probably require you to offer helmets to the hirers, so you'd need to get an idea of prices for helmets. Most helmets will fit a range of head sizes but you might still need a couple of sizes to fit all the possible options.

 

[lpretro1]

Suggest you also provide renters with a lock. Most rental business will require large deposit to be paid refundable on (safe) return of bike
Have you allowed funds for publicity - initial and ongoing. Also costs for website. Costs for use of credit card machines - these are not free.
Costs for your business bank account. Check out regs for storing people's credit card details and other personal info.
Buying cheaper bikes will mean you would likely have to renew the fleet annually - recoup some of this by selling off old ones.
Growth figures are too optimistic - you will not rent out many bikes between Oct half-term and Easter.