Bike shop business plan template

Executive Summary

Business Overview

A Bicyclette will be a bike store located in the city of Caen, specializing in the sale and repair of racing bikes.

We will offer a wide range of racing bikes, accessories, and spare parts. We will also offer our customers a repair and maintenance service.

At A Bicyclette, we'll constantly be on the lookout for the latest trends in the world of cycling. We will use our knowledge of the industry to build customer loyalty and help each customer find the bike adapted to their needs.

We will be located at 25 rue Saint-Jean in the heart of the downtown shopping district and on a road that is very popular with cyclists since it provides access to the north end of the city.

Our bike store will be a limited company with a capital of €10,000. Antoine C. will be the CEO and Alice D. will act as general manager.

Both of them have experience in the cycling and repair business, making them an ideal team for the running of the store.

Antoine C. is originally from Caen and holds a Professional Qualification Certificate in bicycle maintenance and repair. He has completed internships that have allowed him to specialize in several fields, and has 10 years of experience in various bicycle stores in the Caen region as a mechanic and then as a workshop manager.

Alice D. is a native of Caen and has a sports management degree with a specialisation in cycling. Her 8 years of experience in tourism management and her enthusiasm for cycling have provided her with good knowledge of the field, including at the technical level.

The two partners got to know each other through the French Cycling Federation, both having attended cycling events organised by the body. Their shared passion for cycling was what led them to set up this business together.

Market Overview

Domestic Market

The cycle market has been growing since 2013, with the sector reaching total revenue of €2.1 billion in 2018.

The parts and accessories segment is growing steadily. On the cycle side, the market is driven by price inflation: sales volumes are relatively stable, between 2.7 and 3 million, but the popularity of electric bikes is driving prices up.

Electric bikes have been very popular amongst consumers and now account for 40% of sales by value.

In terms of distribution channels, the market is dominated by specialized retailers, which hold more than half of the market share in value, followed by large sports brands.

When it comes to sales volume, large multi-sport retailers are dominating, since nearly two out of three bicycles are sold by these chains, compared with only one out of five in the independent retail sector.

The average price for a bicycle varies according to where it's sold. The average price of a bike will be around €1,320 at an independent shop compared to €159 in a large sports shop.

Prices can also change significantly depending on which type of bike is being purchased. By opting for an electric bike, you have to pay around €1,564 in comparison to around €330 on average for a mountain bike.

According to carfree.fr, the average budget for a bike is €600 per customer, excluding the insurance costs of about €200 per year. As far as upkeep is concerned, around €240 is required per year for regular maintenance and possible repairs.

Local Market

According to INSEE, 2% of Calvados inhabitants use mountain bikes and electric bicycles when cycling, which is equivalent to the national average. Calvados appears to be the most developed county in Normandy in terms of cycle networks.

Caen, which has 103,830 inhabitants, has a developed urban network and self-service bicycles which were set up by the city council in 2018. There are a total of 220 bicycles spread across 22 docking stations in the city.

Numerous bicycle facilities are located on the outskirts and in downtown Caen to allow free movement for cyclists. The bicycle network covers a total of 101 kilometers with 2,550 bicycle racks, as well as 125 dual bicycle lanes providing cyclists with a safer route.

In addition to city bikes, events and bike paths, the city also offers financial assistance to residents keen to buy a bike by covering 25% of the bicycle purchase.

Normandy benefits from a large number of cycling competitions, allowing sportspeople to participate and track their performance. In particular, Caen has a branch of the French Cycling Federation with 6,804 members in the Normandy region.

Financial Highlights

Key Figures

We expect to be profitable in our first year of operation. We expect to achieve sales of €281,750 and EBITDA of €7,341 (or 2.61 % margin) for the year.

We believe that the customer loyalty actions planned in our marketing plan, in addition to word of mouth, will allow us to continue to develop our business in years 2 and 3.

We expect a 6.94 % increase in sales in year 2, amounting to €301,300 with an EBITDA of €17,395 (or 5.77 % margin).

In year 3, we expect to achieve sales of €325 070 (or 7.89 % growth), with EBITDA of €26,050 (or 8.01 % margin).

The improvement in EBITDA margin in years 2 and 3 will come from a better absorption of fixed costs as a result of sales growth.

We expect our cash flow to be positive over the entire plan.

The cash flow generated by the company should cover loan repayments, while keeping sufficient headroom to maintain our equipment and deal with any contingencies.

Our Ask

The opening of our A Bicyclette store requires an initial investment of €75,000.

The associates have planned to contribute €30,000, i.e. 40% of the total amount, and we would like to obtain a loan of €45,000 to finance the rest of the sum.