There’s no money in that.

Ok, so I bought 2 vintage bikes at the Tonka Bike & Ski annual used bike sale.  For what, I’m not sure.  I have become a freak about internally geared rear bike hubs lately and these two are three speeds.  I bought a Sturmy Archer (new) rear wheel for my daughter’s bike and it works great!  Anyway, One is a $15 Sears model in good condition.  The other is a $30 Beacon (?)   The Sears is good as  is; therefore, I didn’t feel compelled to mess it up.  The Beacon on the other hand called to me:  “I need to be cleaned up and loved”  Therefore, I began spending way too much time and money fixing it up.  I’m not sure  what the end result was supposed to be.  I have a friend who needs a bike, so maybe it was for him.  I was also going to be hanging out in a cabin by the lake for a couple of days, so I needed  something to do.  I spent over $60 on tires and innertube, a bunch more on paint  stripper, paint, etc.  So now I have about $150 in this thing.  I spent a bunch of time today at various bike shops looking for accessories.  This time gave me a few gems of insight.

1.  There (aint) no money in fixing up bikes.  The first clue was when I asked a bike shop guy for an upgraded bike caliper and he said it would probably be better to just upgrade with a better bike.  The second clue was asking how much The Hub Bike Coop would pay me for my project bike:  $82; $100 if I fixed the shift cable.  After all that work and I apparently didn’t add any monetary value.  Granted, this is selling to a bike  shop who will then ask at least twice that for their customers, but still…

2.  Bike parts are expensive.  Does this mean high profit margin?  I hope so.  This validates my idea for an online bike shop a little.  I paid some attention to what brands would be good to have: Surley, Shimano (especially the internal geared and electric generator hubs, Park Tools, Brooks… 

3.  I Need to disect the bike and come up with a matrix of bike parts and manufacturers for use in my venture.  In general, come up with an entire list and then narrow it down to only those that I think would be a good fit for my business.

4.  Theres this thing called Bike School (I can’t remember the  real name).  There are course you can take on fixing up bikes, making bike frames, and running a bike shop.  Not sure if this applies to this business venture, but it might.

At the end of the day, I felt a little bummed.  My wife reminded me that fixing them up provided entertainment for me.  Perhaps.  But, when my daughter came home, I spent time with her instead of the bike.  A correct priority for a change.

A place to start

Based on my groupings earlier, the most promising is an online reseller of bike components with the future expansion into custom frame manufacturer.  The knowledge gained from this test site can be used in a number of different ways if opportunities arise.  Some of the  types of components that I could sell include:  Surley products (I think that they do not currently have an online shop?), hubs, wheels, cranks, sprockets, chains, bars, etc.  I should first start out with a list of target suppliers and components of theirs that I would like to sell.

Business Groupings

When looking at my original list of business ideas, there were several groupings that could make up larger businesses.  I would start in one area and expand into the other.  Here are my thoughts:

1. Bike Related:  I could start out as a bike manufacturer and expand into the component sales area; however, this would likely produce a large inventory of bikes with a poor sales outlet.  It is better for me to create a bike component sales website and perfect this.  Then I will have low cost  component sources set up for a manufacturing system.
2. Management Related:  It would be better to start out with a knowledge based website with advertising revenue before the consulting business because, the website would generate a much needed Marketing arm and a start for presentation material.
3. Database Related:  MS Access database consulting could become a “second job”  I would rather come up with something that helps me with my other business ventures and then make a more professional version of it for clients.
4. Art ecommerce site:  I think the market is small here especially in a recession; at least for the art that I create personally.  It is better for me to perfect an ecommerse site in some other area and replicate it in this area later.
5. Real Estate:  I have a fear that this would take me away from my family time too much.

Business Selection Criteria

Now that I have a list of businesses that I could get into, I will list out my selection criteria narrowing down the list.  My Corporate Venturing class taught me the “Real, Win, Worth It” criteria, and I have used this for selecting projects at my “day job;” therefore I will use this as a rough outline:

Is there a REAL customer need?

1. How big is the market?
2. Is the business model higher or lower fixed cost percentage?

Can I WIN at this business?

1. How strong is the competition?
2. Can I find a niche with loyal customers?

Is it WORTH IT to me if I do win?

1. How much will this cut into my “Family Time”
2. What is the likely profit margin?
3. Is this a “set it up and watch it run” kind of business; or is it a “Second Job”
4. Do I love it?

Next Steps:   Use this criteria to judge some of the business models.

Business Ideas

Ok, so here are my business ideas: 

1. Custom bike/trike/velocycle/e-bike manufacturer:  I really enjoy biking and have lately been thinking a lot about electric assist motors.  I have a degree in Mechanical Engineering, and would know how to run this business.   I would design, but not manufacture the components.  I could; however do the final assembly.
2. Bike related ecommerce website:  I could act as an online bike shop
3. Knowledge Center on managment expertise with advertising revenue
4. Managment/6Sigma/Lean Consultant
5. Small business ERP systems
6. MS Access Consultant
7. Online Art Gallery
8. Real Estate: Buy and sell condos and houses

Ok, thats probably enough.  These are all things I could do.   Next Steps:   Come up with some criteria for why I would select one or the other.

The beginning

I am taking some time off from MBA school to absorb what I have learned so far and apply it to both my “day job” and a business venture.  I am not quite sure what this business venture is; however, I would like to start an adventure.

I went for a bike ride tonight west along the midtown greenway past Carlson, down Nicollet Mall and to the Spyhouse Coffee shop.  Riding gives me time to think about what direction I am headed and allows my mind to wander.  During this trip, I decided to start an ongoing blog using my newly established JasonMoe.com website.

My intent is to log my journey in business creation.