Spoke and Chain Bicycle Shop

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Executive Summary

Spoke and Chain Bicycle Shop is a neighborhood bicycle shop in Vermont. We sell new and used bikes for commuting, recreation and kids, fix and tune every kind of bike and carry helmets, locks, lights, clothing and parts. Customers find a mechanic who listens, a salesperson who asks how they ride and a shop that is open to anyone who wants to roll.

Why this fits. People ride for fitness, fun, commuting and saving money, and families want safe bikes for children. Big stores sell bikes that are poorly assembled and offer no service. A local shop that builds, fits and repairs bikes properly earns loyal customers, and repairs bring people back several times a year. Group rides, clinics and kids' events build a community that supports the shop.

Here is what our numbers show. In Year 1 we plan to sell about 360 bikes, complete 1,500 repair and tune-up jobs and sell 3,000 helmets, accessories and apparel. That brings in sales of $486,900, growing to $1,119,876 by Year 5. We expect a profit of about $23,100 in Year 1, then a profit of about $82,400 in Year 2, $121,200 in Year 3 and $193,900 by Year 5. Inventory is our largest startup cost, and the plan counts all of it.

We need $165,000 in total. Of that, $112,900 is startup costs (shop tools and repair stands, display racks and counters, a point-of-sale and inventory system, the opening stock of bikes and parts, the lease deposit, permits, signs and insurance), and the rest is cash for the first months and the slow winter. I am putting in $65,000 of my own savings and asking for a $100,000 SBA 7(a) loan.

I am Sam Whitcomb, the owner and store manager, with ten years in bicycle retail, including six as a shop mechanic and four as an assistant manager. These numbers are estimates based on the assumptions listed at the end of this plan, not promises.

Company Description

Spoke and Chain Bicycle Shop is a small, independently owned bicycle shop in Vermont, planned as a limited liability company (LLC). We serve riders of all ages and abilities in our town and the towns around it from a leased storefront with a repair shop in the back.

Our mission. To get more people riding and keep every bike safe, comfortable and running well.

What we believe. A bike should fit the rider. We ask how and where a customer rides, set the bike up for them and explain what we did. We assemble every new bike by hand and test it, tell customers what repairs are needed and what can wait and never sell a bike we would not ride ourselves. We welcome every rider and never talk down to a beginner.

What we offer:
- New and used bikes. Commuter, road, mountain, gravel, electric and kids' bikes from trusted brands, plus trade-ins and refurbished used bikes.
- Repairs and tune-ups. Flat fixes, brake and gear adjustments, wheel truing and full overhauls, usually within a few days.
- Accessories and apparel. Helmets, locks, lights, racks, bags, tools and clothing.
- Community events. Group rides, kids' skills clinics and free maintenance classes.

Who we serve. Commuters, families, students, recreational riders, racers and people who want to start riding.

What we do not do. We do not sell a helmet we cannot fit, ignore a safety issue to make a quick sale, work on a bike that is unsafe to ride without telling the owner or promise parts that we cannot get.

How we are run. I am the owner and store manager. A bike mechanic and a sales associate work with me from Year 1. A second sales associate joins in Year 2 and a second mechanic in Year 3. An accountant keeps the books.

Where things stand today. We have toured two storefronts and have a lease offer on one, dealer applications in progress with three bike brands, a quote for the tools and display fixtures, a repair and sales waiver reviewed by an attorney and early interest from a bike club, two schools and a coffee shop that would host rides. (Replace this with where you really are.)

Problem & Opportunity

Many people would ride more if bikes were easier to buy, fit and fix. Big stores sell boxed bikes that may be poorly assembled, with no one to adjust them. Online sellers ship bikes that arrive partly built, and buyers do not know how to finish them. Repairs at some shops take weeks, and customers may feel talked down to if they do not know bike terms.

Safety matters. Brakes, tires and helmets protect riders. A bike that is the wrong size or poorly adjusted is harder to ride and less safe.

Running a bike shop is also hard. Inventory is costly, and bikes and parts sit on the floor for months. Sales swing with the seasons. Brands expect dealers to buy in advance and carry minimum stock, and online prices pressure margins.

For a new owner, the hard parts are the cost of opening inventory and the lease, getting dealer agreements, building a base of repair customers and keeping enough cash during the winter.

We want to be clear about what we know and do not know. Bike shops that build a community and offer good service stay in business. We do not know how fast our customers will build, so our plan starts with a small profit and keeps a cash cushion for winter. We will use current local numbers on cycling and competing shops in our final plan and will not overstate them.

Products & Services

Spoke and Chain Bicycle Shop will sell the right bike, set it up well and keep it running.

How it works, step by step:
1. Ask. A salesperson asks where and how the customer rides, their budget, their height and what they want to carry.
2. Fit. The customer tries bikes and the salesperson adjusts the seat, handlebars and brakes to fit.
3. Build and check. Every new bike is assembled and checked by a mechanic before it leaves, and used bikes are inspected and serviced.
4. Send home safe. We fit a helmet, show the customer how to use the gears and brakes and offer a free first tune-up.
5. Repair. Customers drop off bikes online or in the shop, get a written estimate and a promised date and approve the work before we start.
6. Return and explain. The mechanic explains what was done and what to watch for, and the customer pays by card.
7. Community. We host group rides, kids' skills clinics and free maintenance classes, so customers meet others.
8. Remind. We send a seasonal reminder for a spring tune-up and a winter storage offer.

Why this approach is strong. A bike that fits and works well makes riding fun, and fun brings customers back. Regular repairs and events turn a one-time sale into a long relationship.

Market Analysis

Who we serve: commuters, families, students, recreational riders and racers in our town and the towns around it.

Our primary group is adult riders and families who ride for fitness, fun and transportation. Our secondary group is students, club riders and people who want an electric bike. We will use the most recent local numbers on cycling, trails and competing shops in our final plan.

How we sized our plan. We plan to sell about 360 bikes, complete 1,500 repair jobs and sell 3,000 accessories and apparel items in Year 1, growing to 670, 3,600 and 5,900 by Year 5. Our Year 1 prices are about $640 per bike, $95 per repair job and $38 per accessory or apparel item, rising about 3% a year.

Demand data. Early interest from a bike club, two schools and a coffee shop that would host rides covers part of the first months. We do not count on any one customer. Sales are highest from spring through fall and lower in winter, when repairs and storage help.

We do not take every customer on every request. We refer riders who need custom frames or race-level service to specialists, and we decline to work on bikes that cannot be made safe.

Competitive Landscape

Other choices for riders, and what makes us different.

- Big-box stores and sporting goods chains. They sell cheap bikes with little service. We offer proper assembly, fit and repair.
- Other independent bike shops. Some are excellent. We compete on friendliness, speed of repairs and community events.
- Online bike sellers. They offer price and selection. We offer a bike you can test, a fit and a mechanic.
- Mobile mechanics. They are convenient. We offer a shop with parts and tools on hand.
- Doing it yourself. Many riders do. We offer classes and the parts they need.

What makes us different.
- Every new bike is built and checked by a mechanic.
- Written estimates and promised repair dates.
- A free first tune-up and free maintenance classes.
- A welcoming shop for beginners, families and kids.

What we do not claim. We are new. Larger shops have more bikes and brands. We plan to earn loyalty one ride at a time.

Marketing & Sales Strategy

How we will reach customers.

Grand opening and community rides. A grand opening weekend with a free community ride, a bike safety check and a first-day discount on helmets.

Clubs, schools and employers. We will meet bike clubs, school staff and employers, offer group rates and give free safety talks and kids' skills clinics.

Online. A website with online repair booking and a bike finder, a Google business listing, reviews and social media with weekly ride photos, with permission.

Partners. We will ask cafes, breweries and trailheads to host group rides and display our flyers.

Seasonal offers. A spring tune-up special, a back-to-school helmet sale and a winter storage and tune-up package.

Pricing. About $640 per bike, $95 per repair job and $38 per accessory or apparel item in Year 1, set to be fair compared with nearby shops.

Operations Plan

How the business will run.

Setup (the 3 to 4 months before opening). We will form the LLC, get an EIN and open a business bank account, sign the lease, get the business license and sales tax registration, apply for dealer accounts with bike brands, install the tools and displays, set up the point-of-sale and inventory system, order the opening stock, hire and train staff and plan the first rides.

The shop. A leased storefront of about 2,000 square feet with a showroom, a repair shop and storage. Rent is $39,600 a year in Year 1.

Staffing. In Year 1: I serve as owner and store manager. A bike mechanic, paid $36,000 a year, and a sales associate, counted as a full-time equivalent and paid $27,000 a year, work with me. Sales associates grow to two in Year 2 and three by Year 5. A second mechanic joins in Year 3.

Costs. Bikes, parts and merchandise cost about $455 per bike, $22 per repair job and $21 per accessory or apparel item in Year 1. Utilities are about $4,800 a year, insurance about $3,600, card processing fees about $7,500 and marketing, group rides and events about $6,000.

Inventory. Inventory is the largest part of our startup cash. We buy in stages, track what sells, discount aging stock and keep a mix of fast-moving bikes and accessories. Dealer terms may require minimum orders, which we will confirm before we sign.

Safety. We follow brand assembly instructions, check recalls, torque bolts to specification, require signed repair waivers and keep a written plan for emergencies.

Payments. Almost all sales are paid at the counter by card, so cash arrives the same day.

Insurance. We carry general liability, property, product liability and workers' compensation.

Management & Organization

The people who will run Spoke and Chain Bicycle Shop.

Sam Whitcomb, owner and store manager. Ten years in bicycle retail, including six years as a shop mechanic and four as an assistant manager who ordered stock and managed staff. He leads buying, sales, staffing and finance. (Replace this paragraph with your own background.)

Bike mechanics (from Year 1). Assemble, repair and tune bikes to a checklist. A second joins in Year 3.

Sales associates (from Year 1). Fit bikes, advise customers and run the checkout.

Outside advisors. A bike club leader, an accountant, an attorney, an insurance broker, a brand sales representative and a free mentor from SCORE or the Small Business Development Center.

Staff pay in this plan is a full year per person: owner and store manager $44,000, bike mechanic $36,000 and sales associate $27,000 per full-time equivalent. Replace them with the pay you can offer where you live.

Milestones Narrative

Our goals and when we plan to reach them.
- Before opening (3 to 4 months ahead): sign the lease, get the business license and dealer accounts, install the tools and displays, order the opening stock, hire and train a mechanic and a sales associate and plan the first community ride.
- Year 1: about 360 bikes, 1,500 repair jobs and a first group ride each month; $486,900 in sales and a profit of about $23,100.
- Year 2: a second sales associate, about 470 bikes and 2,300 repair jobs; $691,439 in sales and a profit of about $82,400.
- Year 3: a second mechanic, about 560 bikes and 2,900 repair jobs; $866,008 in sales and a profit of about $121,200.
- Year 4: about 620 bikes and 3,300 repair jobs; $1,000,378 in sales and a profit of about $160,800.
- Year 5: about 670 bikes and 3,600 repair jobs, with three sales associates; $1,119,876 in sales and a profit of about $193,900.
Growth depends on winning and keeping customers, so treat the later years as goals, not promises.

What we check every week: bikes sold, repair jobs and turnaround time, accessory sales, inventory on hand and its age, reviews and cash in the bank.

Funding Request

How much we need and how we will use it. Total we are raising: $165,000.

How we got that number. The Funding Need Calculator in this plan adds up three things:
- Startup costs of $112,900, listed item by item in the Startup Costs section: $9,000 for repair stands, truing stand and a full set of shop tools; $7,000 for display racks, counters and shelving; $3,500 for point-of-sale, inventory software and a computer; $2,500 for parts washer, air compressor and shop furniture; $70,000 for opening stock of bikes, parts, helmets and accessories; $6,600 for lease deposit and first month of rent; $600 for business license and sales tax registration; $3,200 for attorney and accountant: lease review, LLC and books; $5,500 for sign, branding and a website; $5,000 for insurance down payment and grand opening.
- The cash the business uses before it breaks even, about $4,700. Opening inventory and the lease are paid before sales build, and winter sales are slow, so cash is needed to carry the shop through the first months.
- A cash cushion of about $45,200: three months of Year 1 operating costs.
- Together, the cash used before break even and the cushion come to about $50,000, and the three pieces add up to about $162,850, rounded up to the nearest $500: $163,000.
We are raising $2,000 more than that, $165,000 in all, to cover a slower first season than planned and the second sales associate added in Year 2. With this funding, the lowest year-end cash balance is about $123,700, at the end of Year 1.

Where the money comes from:
- My own money: $65,000.
- SBA 7(a) loan: $100,000.

Kind of funding we are looking for. An SBA 7(a) loan from a lender that finances small retail businesses, backed by my own savings and the inventory and equipment as collateral.

How we will pay it back. We expect a profit of about $23,100 in Year 1, a profit of about $82,400 in Year 2, a profit of about $121,200 in Year 3, a profit of about $160,800 in Year 4 and a profit of about $193,900 in Year 5. With this funding, the business has money in the bank at the end of every year of the plan. Our loan is the SBA 7(a) loan at 12.5% over 10 years, about $1,464 a month. That payment is already included in our cash flow. We chose these as cautious planning rates; ask the lender for the real rates, which may be lower or higher.

What we are offering the lender: the inventory and equipment and my personal guarantee.

A smaller first step, if needed. If we cannot raise the full amount right away, we can start smaller and grow into this plan:
- Phase 1: open with a smaller stock of bikes, one brand and fewer accessories, with a smaller space and one fewer sales associate, which lowers startup costs and the loan.
- Phase 2: once the shop builds repeat customers, add brands, more stock and the second associate and follow this plan.
To plan the smaller start, make a copy of this plan (use Duplicate) and lower the numbers to match.

All numbers in this plan are estimates. We will update them as real results come in.

Appendix Notes

Documents to attach before you send this plan:

- Your resume and a personal financial statement (a list of what you own and what you owe; lenders usually provide a form).
- Business registration papers and your EIN (your business tax number from the IRS, free at irs.gov).
- The lease or a letter of intent from the landlord.
- Dealer applications or letters from bike brands.
- Quotes for the tools, displays and point-of-sale system.
- Your repair waiver, estimate form and price list.
- Letters of interest from clubs, schools and partners.
If you don't have any of this yet, no worries - let's continue.

The assumptions behind our numbers (change them in the Financials section to match your own):
- Bicycle Sales (per bike): about $640 in Year 1, rising to $720; about $455 in direct costs, rising to $512; about 360 in Year 1, growing to 670.
- Repairs and Tune-Ups (per job): about $95 in Year 1, rising to $107; about $22 in direct costs, rising to $24.76; about 1,500 in Year 1, growing to 3,600.
- Accessories, Helmets and Apparel (per item): about $38 in Year 1, rising to $42.77; about $21 in direct costs, rising to $23.64; about 3,000 in Year 1, growing to 5,900.
- Inventory is counted as about 28% of the year's cost of goods sold, which is why startup cash includes an opening stock of $70,000. Prices rise about 3% a year.
- Equipment ($22,000 in Year 1) covers shop tools, displays, the point-of-sale system and furniture, and later years replace tools and add displays.
- Pay (a full year, per person): owner and store manager $44,000; bike mechanic $36,000; sales associates (full-time equivalents) $27,000.
- Other yearly costs in Year 1: rent $39,600, utilities $4,800, insurance $3,600, card processing fees $7,500, marketing, group rides and events $6,000, accounting and legal $3,400, payroll taxes $9,000. These grow between 3% and 12% a year.
- Startup equipment and later purchases ($22,000 in Year 1, then $2,000, $2,000, $4,000 and $2,000) are spread evenly over five years in the plan's books.
- Customers and payers pay about 4 days after service, so at the end of Year 1 about $4,869 is still owed to us. Income tax at 21%.
- Every dollar amount is an estimate. Replace them with your own quotes and research.

Startup Costs