RIDING HIGH
Biking enthusiast pedals his way to $6 million a year.
By Stan Roberts
|
David Sanborn found a way to turn his passion for biking into a moneymaking opportunity. It is the American Dream come true! He worked in a bike shop on a part-time basis and learned how to run the shop, but it wasn't until David opened his own that these skills really surfaced. He went on to purchase other bike stores and his goal is to become the largest independent bike retailer in the nation. |
Infatuated with bicycles since childhood, David Sanborn dropped out of high school to become a professional racer, but he changed career gears when he discovered that he had another special talent: pumping new life into failed cycle shops.
Since launching David’s World Cycles in 1989 with a $15,000 loan from his grandparents, Sanborn has recycled five defunct bicycle shops in Central Florida and steered them to sales of $6 million. Here is how he did it.
To support himself while trying to make it as a racer, Sanborn took a part-time job repairing bicycles in a small shop. Customers heard about Sanborn’s expertise as a rider and started picking his brain.
“I would ask them what kind of riding they wanted to do—on-road or off-road,” he said. “I made sure they bought the right bike, got the right fit and clearance over the bar.”
Soon Sanborn was the store’s top salesman. Word spread about this boy wonder and when a national cycle chain opened in Orlando, Sanborn was offered the manager’s job. He was 17. “My age didn’t concern them,” explained Sanborn. “Everything was done from corporate headquarters. They wanted my expertise and local connections.”
Sanborn’s store was successful but the rest of the 98-unit chain was failing. Sanborn thought about trying to take over the Orlando store but he realized he wasn’t ready. “The chain did the planning for its stores and supplied inventory,” he said. “I didn’t have relations with suppliers, credit or business know-how. I had to learn things like forecasting—looking six or seven months ahead for style changes, trends in designs and equipment and accessories. You don’t want competitors bringing out something for Christmas that you don’t have on your floor.”
Sanborn concluded he needed to run his own store to learn these skills, meet suppliers and establish credit. He quit his job, scraped cash together from savings and leased a 600-foot store on a month-to-month basis. After he paid cash for a few months, suppliers gave him credit.
When the 98-store chain filed for bankruptcy, as Sanborn expected, he closed his small shop and raced to his grandparents, who had promised to loan him $15,000 to take over the defunct store. The landlord of the failed store, who admired Sanborn’s initiative, gave him a lease.
The $15,000 went fast—store rent, deposits on utilities, telephone, insurance and Yellow Page ads. With a line of credit in place, Sanborn easily got inventory; he hired bike-riding colleagues as salespeople. “We focused on personal customer attention and offered service like rechecking bikes 30 days after purchase,” said Sanborn.
As an example, when Dr. Linton Hutchinson, a prominent Winter Park psychologist, had his bike rechecked, the sales staff replaced the seat with a better fit—at no charge. As word spread in cycle circles, the store sold 200 cycles within months. By 1995 sales reached $500,000 and topped $1.3 million in 2007.
In 1998, Sanborn got word that a franchised competitor in Altamonte Springs, outside Orlando, unexpectedly shut down. Sanborn saw an opportunity. Unconcerned about taking over a failed store, he signed a lease and brought in inventory. “The landlord was happy to get a tenant and for me it was a dream come true,” said Sanborn. “I knew the market was there; it just needed sales and service people who knew what they were doing.” In six months the 2,800-square-foot store posted sales of $425,000 and reached $1 million in 2007.
When the owner of a 25-year franchise operation in Casselberry, near Orlando, died, his widow closed the 7,000-square-foot store. Enter the confident Sanborn. He bought the freestanding building for $450,000 and assumed a $58,000 note for inventory. “This was big bucks and our first time in debt,” said Sanborn. In a year sales reached $800,000 and $1 million in 2007.
Sanborn heard about his next location while dining at a Lake Mary restaurant. He spotted a hand-written “For Lease” sign in a bike shop. Sanborn got a lease and bought the store’s inventory for 25 cents on the dollar.
Sanborn’s sales pros took over and the store posted sales of $780,000 in a year, and passed $1 million in 2007.
Sanborn hadn’t considered moving into the Tampa market until he heard that a Trek franchise store had closed. This intrigued him. He drove to Tampa and sized up the cycle market. “I saw a void I thought I could fill,” he said. He leased a 7,800-square-foot freestanding building near the closed Trek shop. He invested $330,000 in the build-out and used equity in his Casselberry store to borrow funds. This store is on track for $1.5 million in sales.
These days, Sanborn bounces from store to store but mostly keeps track of sales and inventory through computers. He keeps his own books, and pays bills himself. He has 19 full-time employees and 18 part-timers—all riders, of course.
Although the company’s website is its best marketing tool, Sanborn doesn’t take orders over the Internet. “People want to touch and feel what they buy,” he said. “Nothing can replace that.”
Looking ahead, Sanborn is scouring the U.S. in search of new opportunities. “My goal is to become the largest independent bike retailer in the nation,” he said. •
Advertise | Subscribe | Contact Us | Links | Bookshelf
Start a Biz from Home | Pros & Cons of Franchising
The Right Franchise | Investigate a Biz Opportunity
101 Tips | The Perfect Name