I'd like a little help here

Discussion in 'Touring and recreational cycling' started by phillman5, Dec 24, 2019.

  1. phillman5

    phillman5 New Member

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    I've been an occassional reader/poster here on bike forums, but would like your help.

    My family run local bike shop is closing. The original owner and his son have decided to take it easy now after working almost non-stop for 45 years. Both the father and the son are great, helpful, and honest people. If many of the people here in the cycling community wrote them a short note of congratulations I am sure they will be tickled pink to get letters from all over the US and even abroad.

    Thanks in advance,
    Paul

    https://www.abqjournal.com/1403116/cycle-cave-closing-up-shop-after-46-years.html
    https://www.cyclecave.com

    I've been doing business with them for 35 years, and have bought 7 bikes through them for myself, wife, and three boys. Just the other day, talking to Hervey, he remembered the first bike I bought through him, and the color no less. Bob and Hervey are extremely nice and very helpful, full of advice, and have helped me several times for free. If you want to drop them a congratulations/condolences note I am sure they would appreciate it. I just think it would be neat for them to get notes from all over.

    Cycle Cave
    5716 Menaul NE
    Albuquerque, NM, 87110
    505-884-6607
    [email protected]
     
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  2. Froze

    Froze Well-Known Member

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    Why didn't they sell the place if it was that great of a bike shop? Or instead of just closing and losing all the money on the place at the very least give the shop to someone who could run it. The only mom and pop shops I knew that closed like the one you know is doing was due to many years of not making any money or were losing out to another competitor that offered something better, either better service which is the downfall of most businesses, and or better product lines.

    So why do you think they don't want to sell the business?
     
  3. phillman5

    phillman5 New Member

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    One of the articles I read said they were open to selling the shop. A few friends have mentioned they wish they could buy it (one definitely has a more lucrative job). Bob, the son, who is my age, early 60's, has two children, and I haven't heard, but I guess they don't want it, both have worked there in the past. They've had plenty of competition here, with big boys Trek, Performance, Sports Systems, . . . and I guess no possible buyers saw a small shop as viable with that sort of competition. You mentioned giving the shop to someone, and I guess they saw it as more lucrative to sell all the inventory as better for them. I think they earned a decent living owning the shop, but they certainly weren't living a fantastic life, I've seen Hervey's house. One article mentioned what Bob got most out of it was spending time with his parents. The shop, while clean, was pretty outdated.

    I have dealt with so many slimy, underhanded, crooked, lying, businesses I hate to count. Bob and Hervey are two of the most honest, helpful, thoughtful, hard working business people I have met. Hervey's wife also worked at the shop for years, she had Alzheimer's later in life and died ~ two years ago.
     
  4. phillman5

    phillman5 New Member

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    time expired on my edit, grrrrr.
    FYI: According to Dunn and Bradstreet, the shop had about $1 million in revenue, with 10 employees (which I think is ludicrous as I never saw more than 5 people working including Bob and Hervey. So take away the cost of inventory, say they were making 30% profit, and paying 3 employees $30K each, and I am sure there were many other costs, that's AT MOST $200K/yr split between the two of them. Less than I was making ten years ago as a middle level engineer working for the gov't.
     
  5. Froze

    Froze Well-Known Member

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    So they have inventory, so they give the shop to another owner, they put into the sales contract that they have to pay back the current value of the inventory over the next 5 years, so now, at least in my way of thinking, it's a win win situation, the new owner gets an established business with inventory and clientele, what's called a turnkey business, and the only payment is on the inventory spread out over 5 years, and those terms should be a monthly payment. Also put a clause in the "sale" that if the new owners for some reason can't keep it going for 5 years and are forced to close then the remaining inventory would be liquidated and whatever is owed the original owners on the balance of the inventory the new owners were paying on would be paid first.

    If that sounds too risky they could sell the business for just the cost of the inventory, the new owner would then have to get a business loan for that amount and pay the bank instead of the previous owner taking the previous owner out of any risk. I like this scenario better, but it wouldn't be the first time that a house or a business was sold and there was no loan company involved, the previous owners were the loan company and the payments are made to them.

    Just a thought. It sounds like it was good business, and if sales were not steadily decreasing due to the big boys in town then that should be a good business for someone, and to get a turnkey business for nothing more then to pay back on the current inventory, well heck there should be people jumping at the chance. Of course wisdom would have to come into play to make sure that it isn't sold to someone who has no business sense or no cycling and mechanical experience.

    I'm sorry if I sound crazy about all of this but a million dollar a year in sales is not chump change business and it should be given a chance to survive, I don't understand just throwing this away.
     
  6. phillman5

    phillman5 New Member

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    As I said, one article quoted Bob as saying they were open to selling the shop. And I'll bet they first offered it to Bob's kids then current employees. I doubt they did not look for buyers. I am also sure they had some financial advice.

    That aside. Financing someone else to take over is rout with problems, same as holding paper on your own house. If the new owners trash it, don't make required payments, you can be digging your self into a big hole. If people were trustworthy, then yes, that would be the way to go, but if non-trustworth people take over and just play you for a fool, it can become very expensive on your part, there are liability concerns. As far an inventory, payments on that would be transferred to the new owners, which I believe would the least of the worries.
     
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