small business start-up and loan questions

[truth]

What if we all just sent him our extra stuff and got him some startup inventory? Clean out the closets?

I bet shmoe could help him out.

[marshalolson]

dang nice cheap shot.

but thanks for all the offers of help. actually super overwhelmed with all of the kind offers. i'll talk to all y'all here over the next bit. i;d love to hear what everyone's take is, and cull the best ideas from the bunch of ya.

thanks again!

[Hugh Jass]

Just here to wish you luck and provide encouragement - I'd be a patron for sure. And I'm sure you've already pinged Larry for his thoughts on this.....

Also - I can relate to and agree with the below 100%

I was hoping that Alpenglow was gonna become my go-to shop once it moved in right down the street from me. But, after an EXPENSIVE mount that took too long and blah employee interactions, I decided that they wouldn't get my ski business anymore. The Bent Gate (they're cool) just opened up a new bike shop on Washington and Big Ring (THEY SUCK!...REALLY) opened up a shop on Ford.

[nurbs]

well having your own business can be interesting.... I like it and it has its advantages but it is not for everyone. I can say that in order to start my busines si had to work another job at night to keep the cash flow going. I gave up about 6months of my life to get my business up and going. many many..18 hour days.

i often think along the lines of what Telehoar said, and i miss punching a clock, but its not me and i wouldn't be happy doing it.

Be careful of partners but at the same time try to groom someone who can manage on there own. Have policies worked out about snow days, for instance If it snows more that 6" maybe you dont dont open untill 6pm. Remember to take time for yourself and family. I like how bentgate is closed on saturdays.

Keep in mind most SBA loans will require you to have a good percentage of capital to secure a loan. Wether your putting your house up or you have 20K in cash. If you have 20-25% of the startup capital you should be in good shape. Dont be discouraged by being turned down, i can gurantee you will be, keep knocking on doors and it may happen. Start Looking at retail space and see what it costs figure between, $24-$34 per square foot per year for good retail space, your also responsible for all tenant improvements, if your lucky you might get them to cover 15% of construction costs, and even luckier if they roll it into the lease, even super lucky if the space is ready to go.

unaccounted for overhead will blow your mind, electric, phone, commercial liability insurance, internet all twice what you would spend at home, because your commercial, advertising is insane, get some pricing on what it takes to run a n advertisment in the paper or even a little 3x5 in the yellowpages. make sure to try to account for everything beforehand, banks do not like you to come back and ask for more...and BTW a big mistake in most peoples business plan is to not account for paying themselves...

also if your female they want to see what about your plans for motherhood (we ran into this when starting my wifes business).

good luck, ask alot of questions and work hard

[Jax]

You may want to offer the best deal, but consider the obligations of adhering to structured retail prices during "in season". If you fall below minimum pricing, you risk losing vendors because you didn't adhere to their strict pricing policies, especially within the ski market- boots and skis in particular.

While I admit, there certainly is a market lacking in the Denver area, Golden is not the place I would look for two reasons. First, Golden, while growing at a fast pace, cannot support the type of growth you are looking for in a business- yet. Bent Gate and Alpenglow are already growing at a tremendous pace and have plans for continued growth. Second, think about their existing buying power. Much of Bent Gate's success is based off their web sales. Unless you go into that market with shit tons of cash, there is no way you can garner the same type of margins they acheive. Not to mention trying to get a rep to open you up as a dealer without risking their current business with Alpenglow (Christies) or Bent Gate. Keep in mind most of this applies to ski industry- I've been in the bike industry, too, but not as a buyer or a rep. But I'm pretty sure distribution rules may still apply.

I highly suggest looking into metro Denver. As a rep, I am still amazed that no one has come in and taken that specialty market. It's ready for the right shop. Just be prepared to spend a lot more than you think. And be prepared as 'the little guy' to compete with the lower prices that the big boxes can afford to offer. You may win some sales up front by offering a lower price, but in the long run trying to compete with them will cost your money and your business. Think about all the shops that used to be in Denver and why they closed their doors.

The good news is word will spread around here like wildfire. If you pick your product right, and offer something truly specialized and unique that the big guys don't want to touch- then you may have yourself a winner. I think you will have folks fishbowling at your doors before you can even open them.

Good for you and best of luck!

[BallsDeep]

^Jax provided some great thoughts, as did many others.

I don't have much advice to offer regarding building a business, but I do know a thing or two about branding/marketing/publicity...something you'll want to think about at some point down the road.


Oh, and I'll definitely patronize your shop...especially if it's in Denver.

[Bart T]

good advice here. i would add that you _must_ control your real estate. i know some folks here who started a shop, busted their ass and now have to move because their jackoff landlord doubled their rent. so, if you must lease space for financial reasons, get renewal options out the yingyang. maybe one of the lawyers here (colorado based, for obvious reasons so not me) can send you a form with the typical rent bumps etc... so you know how the deal works in a commercial lease.

[smolakian]

You may want to offer the best deal, but consider the obligations of adhering to structured retail prices during "in season". If you fall below minimum pricing, you risk losing vendors because you didn't adhere to their strict pricing policies, especially within the ski market- boots and skis in particular.

While I admit, there certainly is a market lacking in the Denver area, Golden is not the place I would look for two reasons. First, Golden, while growing at a fast pace, cannot support the type of growth you are looking for in a business- yet. Bent Gate and Alpenglow are already growing at a tremendous pace and have plans for continued growth. Second, think about their existing buying power. Much of Bent Gate's success is based off their web sales. Unless you go into that market with shit tons of cash, there is no way you can garner the same type of margins they acheive. Not to mention trying to get a rep to open you up as a dealer without risking their current business with Alpenglow (Christies) or Bent Gate. Keep in mind most of this applies to ski industry- I've been in the bike industry, too, but not as a buyer or a rep. But I'm pretty sure distribution rules may still apply.

I highly suggest looking into metro Denver. As a rep, I am still amazed that no one has come in and taken that specialty market. It's ready for the right shop. Just be prepared to spend a lot more than you think. And be prepared as 'the little guy' to compete with the lower prices that the big boxes can afford to offer. You may win some sales up front by offering a lower price, but in the long run trying to compete with them will cost your money and your business. Think about all the shops that used to be in Denver and why they closed their doors.

The good news is word will spread around here like wildfire. If you pick your product right, and offer something truly specialized and unique that the big guys don't want to touch- then you may have yourself a winner. I think you will have folks fishbowling at your doors before you can even open them.

Good for you and best of luck!

I agree with your assessment of Golden, thats kinda what I was trying to say. But, Bent Gate in terms of skiing isn't in the Alpine market (they do do pretty good tunes though). Alpenglow has the lock on Boulder ski traffic (PERFECT location IMHO). But, we don't have a core shop anywhere West of the city. If you opened something up near Denver West / CO Mills with easy access from 6th and I70 you would totally get the business. There a are real skiers in Denver that want to go to a place that isn't a chain. I want to know that if beer or a bud accompanies my skis when I drop them off I'll get preferential treatment and remembered the next time I come in (and not get the cops called on me). We also want a shop that carries skis from the smaller companies and that doesn't lag behind the trends of shape and fatness. BIG skis are hard to find in any of the suburban stores and that makes me really distrust letting them mount or work on them. It also seems like the people that work at a lot of these stores aren't really that INTO skiing/riding either.

[300hp]

High-end custom stuff down one side of the shop...

well priced good used gear down the other.

Basically TGR gear swap in a well managed storefront with helpful employees

That would be sweet.
Hunter

[TyWebb]

I thought about doing the Mulyi-Multi quote, but I'll just leave it at - There has been a lot of good advice. One book I would recommend reading before getting too deep into this is:

Getting Real

Its a PDF book that you can download and print out. I just put mine in a 3 ring binder. The guys that wrote it are aquitances of mine and in my industry (web applications technology), but do NOT let that scare you. The book is absolutely worth a read and does a phenominal job talkibng about starting a business with the least possible overhead and captial. Truly applicable to any industry.

Long story short, you shoudl get out of it with the realization that just getting IN is the most important thing. You can always buy your own shop building, you can always expand, there will be lots of time to grow and adjust. The most important thing to do initially is get in the game.

[hutash]

You may want to offer the best deal, but consider the obligations of adhering to structured retail prices during "in season". If you fall below minimum pricing, you risk losing vendors because you didn't adhere to their strict pricing policies, especially within the ski market- boots and skis in particular.

While I admit, there certainly is a market lacking in the Denver area, Golden is not the place I would look for two reasons. First, Golden, while growing at a fast pace, cannot support the type of growth you are looking for in a business- yet. Bent Gate and Alpenglow are already growing at a tremendous pace and have plans for continued growth. Second, think about their existing buying power. Much of Bent Gate's success is based off their web sales. Unless you go into that market with shit tons of cash, there is no way you can garner the same type of margins they acheive. Not to mention trying to get a rep to open you up as a dealer without risking their current business with Alpenglow (Christies) or Bent Gate. Keep in mind most of this applies to ski industry- I've been in the bike industry, too, but not as a buyer or a rep. But I'm pretty sure distribution rules may still apply.

I highly suggest looking into metro Denver. As a rep, I am still amazed that no one has come in and taken that specialty market. It's ready for the right shop. Just be prepared to spend a lot more than you think. And be prepared as 'the little guy' to compete with the lower prices that the big boxes can afford to offer. You may win some sales up front by offering a lower price, but in the long run trying to compete with them will cost your money and your business. Think about all the shops that used to be in Denver and why they closed their doors.

The good news is word will spread around here like wildfire. If you pick your product right, and offer something truly specialized and unique that the big guys don't want to touch- then you may have yourself a winner. I think you will have folks fishbowling at your doors before you can even open them.

Good for you and best of luck!

^^^All good info and advice. I agree about finding a little specialty niche. Friends of mine run a bike shop here in soCal. Just a run of the mill shop, mountain bike, BMX, tools et al, and that is good for cash flow, but they also have the best pro road bike shop in soCal, and build more $5,000+ road bikes then you can imagine

[Tap]

whatever you do, make it cool, with a lifestyle part of the shop and all, so you can keep people hanging around....isn't there a shop in Seattle that was just profiled in Powder that was like that?

[cj001f]

whatever you do, make it cool, with a lifestyle part of the shop and all, so you can keep people hanging around....isn't there a shop in Seattle that was just profiled in Powder that was like that?

EvoGear.

In Portland ExitRealWorld is similar (but snow/skate only no skiing) at least when browsing Exit they seemed to get more walkin traffic and more people willing to drop full price on accessories/fashion items than your average shop.

[dbldmnd]

Check out the leading edge class at the SBDC in Boulder or Longmont. It's a 10 week class that covers the basics. Their goal is for you to have some type of business plan at the end of the series. And while attending the class you can attend the other business classes at the chamber of commerce for free. At the end you are eligible for free consulting time with various consultants.

I took the class last spring and it was worth the effort. Much of it is common sense, but it gets you thinking about all aspects of a business. I've now got a lead consultant and am working through my free consulting time.

[marshalolson]

High-end custom stuff down one side of the shop...

well priced good used gear down the other.

Basically TGR gear swap in a well managed storefront with helpful employees

That would be sweet.
Hunter

hammer, meet nail head

thanks again all. lots of good stuff here. really appreciate it

i've got alot of work to do here, and will be hitting a bunch of you guys up when the time arises.

[Jax]

I agree with your assessment of Golden, thats kinda what I was trying to say. But, Bent Gate in terms of skiing isn't in the Alpine market (they do do pretty good tunes though). Alpenglow has the lock on Boulder ski traffic (PERFECT location IMHO). But, we don't have a core shop anywhere West of the city. If you opened something up near Denver West / CO Mills with easy access from 6th and I70 you would totally get the business. There a are real skiers in Denver that want to go to a place that isn't a chain. I want to know that if beer or a bud accompanies my skis when I drop them off I'll get preferential treatment and remembered the next time I come in (and not get the cops called on me). We also want a shop that carries skis from the smaller companies and that doesn't lag behind the trends of shape and fatness. BIG skis are hard to find in any of the suburban stores and that makes me really distrust letting them mount or work on them. It also seems like the people that work at a lot of these stores aren't really that INTO skiing/riding either.

Like I said, both of these stores are slated for continued growth- I'm talking upwards of 40% for the next few seasons. They are looking at new niche lines, especially in alpine and alpine crossover/AT. Without actually spelling it out, I know what the buyers are looking at and the direction they want to take their respective businesses. With no disrespect to your thoughts on a new shop in that area, unless I had VERY deep pockets with not much to lose, I wouldn't touch that market with a ten foot pole.

[xtrmjoe]

Everone has there own definition of success. Figure yours out, it is basically a balance between time and money. Often small business fails due to lack of money and the owner working to many hours. Include your salary in your business plan. Be honest pay yoursealf what you are worth! Dont work 7 days a week for 12+ hours a day for an extended period of time. You will get burnt out and not be on top of your game. Keep to your strenghts and pay others for thiers, consultants, lawyers, accoutants, etc. You can do a lot but not it all.
I wish you the best of luck and I am sure there are plenty of mags to help you get things going as well as a lot more to buy stuff!
I work in the wine industry and have helped a many small family wineries recover from near bankrupcy. I as well have my own winery in the works. Just got trademark and the rest of the permits and will be launcing web site soon and releasing wine in May.

[p.blz]

Good Luck Man.....It takes guts and dedication but it'll be worth it.

Tons of good info in this thread.

I'm 5 years in now and it was the best decision of my working life. I was too much of a chickenshit to get a loan, had some money saved, went strictly consignment at the start, built or bought 2nd hand equipment & fixtures, did pretty much everything myself, and managed to get the ball rolling for around 10k.

The first few months were TIGHT and I worked a LOT, and then gradually as funds permitted, I started getting into closeouts, new retail, repairs, mass quantities of ex-rental / heli skis. Now, consignment is prolly about 30% of my total annual sales, everything in the store is paid for, and i'm making a comfortable living working no more than 40hrs a week. This type of progam may not be possible in the big city but food for thought.

From my experience:

Learn to do your own bookeeping and do it religiously.

Be careful with hookups and bro deals.

Try not to buy anything unless you have the $$.

Get into bike P&A and repairs.

Try to keep it small enough so that you don't really need staff and expect to be there pretty much every day the store is open (your customers are gonna want to see YOU anyways).

High-end bicycle suppliers seem to have a problem with consignment stores (at least around here).

I could go on all night, but if you have any q's feel free to PM.

Go For It

[JeffreyJim]

Marsh,

I don't know how I missed this thread. Congrats! This is huDge!

Anyway, I'm willing to help out in any way possible until I leave for Jackson. Coming from a family who has tried (and failed/succeeded) on starting retail operations I know how much work can go into this. (my extended family has done a lot with Quiznos)

Regardless, I'm in to help build the shop, bounce ideas off, put together a business plan, contact banks, whatever(hopefully you have some source of equity...there is certainly a higher "price" on debt as of late)

Just let me know

-Jeff-

[freshie247]

Congrats & good luck! Be prepared for lots of hassles & hours.

[mnflyfish]

whatever you do, make it cool, with a lifestyle part of the shop and all, so you can keep people hanging around....isn't there a shop in Seattle that was just profiled in Powder that was like that?

Evogear is the shop that was profiled. Brice has a great shop. How about taking it one step further and if a person happens up to the counter and says "Got Change for a Nickle?" the person behind the counter hands over a PBR. A nice touch I would say.

Jay

[fondigley]

Good to hear you are making change happen in your life. First a shop change, now a business idea. Best of luck to you. For a solid guy like yourself with the respect of the maggot community, you shouldn't have too much trouble getting on your feet. Anytime I have a bad experience with a shop, I am ready to never go back. And it seems like this is pretty regular. Just the other day, actually Tuesday, I took my broken rear wheel to a bike shop in town and they told me it was done, nothing they could do to help me. I was like what, are you kidding me the wheel looks fine for the most part, some of it has to be salvageable. So I take it to another shop and they are like, yeah we can send that back no problem. I would have at least been appreciative if the first shop tried something. It seems like everytime I talk to you, you always have advice on what part to get and the appropriate cost. That is why I pretty much quit going to the big bike shops in town. They just suck. If you open it, we will come.

[Fritz]

PM on the way

[Rideski]

Hey Dude, I can't write a formal business plan, but I can give you tons of marketing advice. I can also hook you up with a micro business lending company that would probably help you write the business plan for free or low cost. They loan only up to $60k though.

[mr_gyptian]

open a shop in Summit. the Glide shop is the only place wortha shit and they don't retail much of anything.