OPINION: Where’s my money?

Oliver Taylor
Owner, London Recumbents:
“We’re a slightly unusual case as our business features no High Street shop front. Nevertheless, we have two locations in London, Battersea and Dulwich, from which we run a cycle hire business, a shop and double up as a public convenience – one of the ways in which we save on rental costs. In a rent-saving deal with the local council, as long as we act as security to the public loos, then we shall be part-subsidised by the council.

Our hire scheme is a great source of revenue, even though it’s grown in popularity via word-of-mouth. At an hourly rate of £7, families come to us to enjoy the local parks without having to commit to anything more. In addition to this we carry several high-value child carriers, something parents are interested in investing in at the top-end.

Of the advice I could give to other retailers, Google can be one of the most effective ways of making yourself known. We actually had a trainee build our website and pack it full of links and buzzwords, something that the search engine loves.

Secondly, check that you’re paying business rates with your telephone provider. Three years ago we were on a standard BT package. Switching to a small business plan has saved us what I estimate to be three grand.”

Clive Gosling,
Owner, Bikelab, Dorset:
“During business growing pains around 18 months ago I had to really look at where my business was shedding money where it needn’t be. Aside from the obvious stuff, I had to look at the staff structure. It’s never easy laying people off, but it would have been much harder to do it further down the line.

Bike shops tend to be overstaffed, especially in the winter months when things are quiet. I began looking at the potential of temporary workers – all trained in retail and savvy mechanics, of course. There’s plenty of hidden talent out there.

It never hurts to look around to see who can provide the best credit card rates and then taking that figure to your existing source for negotiations.

Never compromise the quality of service. We use TNT couriers. The company is not the cheapest, but its pre-paid vouchers scheme costs are lower and its reputation for reliability is fantastic.

Bike sales are by far the most profitable part of our business and if we can spend an hour with a customer selling a high-end bike and making a good margin, it’s time better spent than earning £30 an hour in the workshop. However, our maintenance services are the highest priced in town, but we’re still fully booked.”

Willy Bain,
Bicycle Repairman, Glasgow:
“I SET up Bicycle Repairman five years ago now and quickly saw the benefits of going workshop only. Firstly, there are far fewer overheads and costs. For example, for product that I do buy in, there’s always going to be a follow-up fitting, meaning the margin I make on the product is always boosted by workshop revenue.

My advice to other retailers would be to optimise what you’ve got and not be afraid of the workshop. I’ve never had a complaint for charging what I’d estimate to be in the higher bracket for a service.

Secondly, don’t hide your mechanics away. The public can see through our front window that we are a bicycle repair outfit, so they don’t waste time calling to ask, they just bring their bikes and we book them in.

I’ve often thought it worth looking at the way other industries lay out stores. The cycle trade seems to be light-years behind other trades in how to successfully market a business and make stores attractive.

Last of all, don’t be afraid of your competition. Once in a while the local cycle traders from round here get together for a curry to discuss prices and trends.”

Mark Brown,
ACT / ActSmart:
"1. Know your profit and loss: Many small businesses do not have true insight into their real financial position. Having a view of your profit and loss on a daily or weekly basis is absolutely essential. Don’t wait for your accountant to finish your books to find out you’ve made less than you thought.

2. Review your overheads: From staff to insurance and banking you need to be analysing your costs to find ways of reducing overheads and gaining more value. ACT members have access to a range of competitive commercial services. Don’t just use our rates to get a better deal elsewhere. Leverage our buying power and expertise to save even more money and use our services to ensure long term benefits for all.

3. Look at your workshop pricing: Our annual workshop surveys consistently show many cycle retailers are not charging
enough for their specialist workshop services. With space being the biggest challenge for most workshops it is essential your pricing is as profitable as possible. Other ideas could include creating a fixed price ‘menu’ of services, selling ‘service plans’ with new bikes or adding new technical services and value-added offerings such as collection and delivery.

4. Make the most of the web: If you don’t have a website, seriously consider getting one. There are plenty of options available, including some fantastic free systems such as WordPress. It does not have to be big, flashy, expensive, or time consuming and you don’t have to sell on it if you don’t wish. Your best customers may not even know you exist until they find you on the web. I can also highly recommend Google Analytics for understanding how your website is being used. And that’s free too.

5. Maximise your people: If you do employ staff now is the time to make sure you are getting the most value for your investment. Cutting staff in tough times is obviously the quickest way to reduce costs, however it can also hurt your business by reducing quality of service and sales. Get all your staff focused on the bottom line. Consider new incentives for improving sales and turnover.