At The Bike Shop

   I've been using some of the winter slack time planning for 2010. Our 2009 sales were even with 2008, even though the margins were slightly lower. That's pretty good given the overall economic climate. I'm basing 2010 forecasts on another flat year. 
  My retail career now is going into the sixth year. I feel like I have a PhD and an MBA from the University of Trial and Error. The current trend of the shop is toward a narrower selection of inventory. Things that I use and believe in and products I know will sell. Grant Petersen at Rivendell has always been about simplicity, and I am going to try to follow that paradigm even more closely this year. That means "niche", a word some people don't like. But I can either try to be all things to all people... an almost certain recipe for disaster...or I can focus clearly on a smaller market. I can also either try to compete on price or I can add enough value to what I do and sell, that customers may not be quite so focused on getting the cheapest price. Although it never ceases to amaze me when people buy stuff online for very close to the same as they would spend buying from me. There is some sort of conditioning going on there. Do they automatically think buying on line is a better value? Is it just more convenient? Do they buy from certain websites so they can feel as if they belong to some inner circle?
   My guy, Hugh Macleod talks about "social objects". I'm not sure if I'm getting it exactly right, but the idea is that things have no meaning by themselves. A bottle of wine sitting on a table or a bicycle sitting in a shop has no meaning. If one connects the thing with a memorable time they had while they happened to be sharing the wine or with a hint of adventure when they think about using the bicycle to go overnight camping, then the thing has value. Not sure where I'm going with that.
   When I bought the shop five years ago Sheila Spangler of Capital Strategies represented me. When I sat down with her earlier this year, I found out she spent the last several years learning everything she could about marketing. Now she consults with business owners to help them add value to their own businesses. She made me think about what business I am in and what I sell, and she cracked open a door.  
    Here's my thought process:
If I do a break-even analysis, my total sales will equal my direct costs plus my variable costs. I have some control over my variable costs; I can take advantage of vendor discounts and freight allowances and terms. I have less control over the fixed costs. But, if I call salaries and wages fixed costs and if I have a pretty good idea of what my total sales and associated variable costs will be, based on the last two years, I can work backwards and make some plans. One thing I think I have learned this last year is that I need to pay myself first, not only if there is some money left over. That means I will have less budget for employees. OK.
- I can not be open 7 days a week, because I can't work that much. Historically, I know which two days of the week are slowest and I can close on those days.
- I need to be selective in the type of service work we do, because we won't be able to take care of everything that comes through the door. How to filter this could be a little tricky. I'm open to ideas! I want to take care of good, loyal customers first.

Comments are welcome, in fact I'd really like to here what customers expect out of a brick and mortar bike shop.