How to start a used bicycle business & earn lakhs?

Introduction.

Used bicycle business: Today I will explain how selling used bicycles can be a profitable and structured business. You may not be aware that 50.04% of households in India own at least one bicycle. As per AICMA ( All India bicycle manufacturer association), India sold 4180945 bicycles from May to Sept 2020….what made it possible? 

Because, covid has made people aware of their health and immunity, and at the same time, they have realized the importance of social distancing in public transport, finally, a segment of them have found bicycles as the best means of transportation at an affordable cost. Taking this context into consideration, we can imagine what could be the contribution to this in rural India by the low-earning people.

The journey continues, this is my second post, and by the time you read it, I probably have posted more than 50 articles on this blog site. I have started posting unique business ideas and business tips in this space to help first-time entrepreneurs. I promise that all the ideas will be unique and based on the problems we face in our daily life. Please be assured that none of the ideas will be like pet care/catering/house cleaning, and yes…no big talks. Please comment in case you have any suggestions for me.

Finding Your Niche in the Used Bicycle Market

The bicycle, being the most common means of commuting, became a must-have product for the low-income group. On the other hand, buying a bicycle is expensive for a person who earns less than 10K per month. And almost 57% of regular employee in India gets less than 10K in salary in a month, hence, to address the solution we need a source that will make the transaction affordable.

Example

My salary is 10K INR if I buy a new Bicycle my family may miss one meal every day for a month. If I get the opportunity to buy half of my salary in five months installments will be a great help, and I will get one immediately. 

Now suppose you have opened a shop that will deal with the used bicycle business in a suburban place wherein the periphery of 10 Kms fifty thousand households present. And the business will have the following features.

• The shop will sell only second-hand Bicycle
• The shop will operate in suburban areas only
• At least 3 shops to be put in 20 KM difference
• The business will cater to three segments Classic/Ladies/Children (Tri & Bi)

Developing a Business Plan for Your Used Bicycle Venture

1. Businesses will procure used bicycles @ 75% cheaper than a new one from urban markets Via OLX/Quicker/Bicycle Repairing Shops
2. Business will procure by conducting a “buy camp” in flats/apartments.
3. The business will repair and refurbish the procured bicycles
4. The Business will keep a 30% profit per Bicycle
5. Business will render 3 months of free service to the buyer.
6. Business will render 2 to 3 installments of payment to the buyers.

Can the used bicycle business be a profitable venture?

Approximately Rs 9 Lakhs is required for this used bicycle business. [This is a rough estimation based on my discussion with repair shops, olx price, and pieces of information collected from various sources regarding rent cost]

• Workshop/Central space in an urban market (For sourcing and refurbishing) @ 20K (In a non-posh/noncommercial area)- 60 K Advance (3 months rent advance or security deposit).
• Three Shops- Security deposit of 60K (20K each).
• Interior/Branding 45K (15K each).
• Inventory of 75 Bicycles (25 in each shop). Total Value Rs 3 Lakhs.
• Working capital Rs 3 Lakhs.
• Gadgets & tools Rs 60K (20K each).
• Others Rs 75K 
• Total Rs 9 Lakhs

Cost (Monthly for 3 Units)

• Rent: Rs 40K (1 Workshop, 3 Showrooms)
• Salary: Rs 110K (11 Employees: 3 Shop keepers, 5 Mechanics, 2 Helper, 1 Accountant)
• Electricity: Rs 10K
• Travel & Transport: Rs 20K
• Refurbishing: Rs 1K each cycle X 50 units [Expected sales No]
• Procurement: Rs 3K each X 50 Units [Expected sales No]
• Total: Rs 3.8 Lakhs

Income

• 90 cycles X Rs 6K [30 sales in a month from each showroom]
• Total: Rs 5.4 Lakhs

EXPECTED GROSS PROFIT: Rs 1.6 Lakhs/Month

Not bad against an investment of Rs 9 Lakhs

I just shared the Idea that clicked in my mind, you may now take it forward/improvise

If you have the capacity to invest more or have a source of external funding can turn this used bicycle business idea into a medium-scale enterprise by setting up multiple showrooms (10 to 20 Nos).   You can also check different financial support schemes being rendered by the Government of India like MUDRA, STANDUP INDIA.

Conclusion

In conclusion, the next 20 years give a fantastic opportunity to launch a used bicycle business in a developing economy. You can position yourself for success by adhering to the crucial principles described in this essay. Important first steps include identifying your market, creating a strong business plan, and locating high-quality used bicycles.

Keeping customers happy requires careful inventory management and efficient fulfilment procedures. Additionally, forming alliances and working together within the community can offer important support and open up fresh growth opportunities. By providing inexpensive and dependable used bicycles, you may grow your business as demand for affordable transportation options rises.

Keep in mind that beginning a business needs commitment, effort, and flexibility. To remain competitive in the changing environment, keep up with market trends, and consumer preferences.

The following articles will help you further to create a solid business plan, I suggest you go through the topics before you start a used bicycle business.

1. How to make a business plan?
2. How to avail financial support for small businesses?
3. 90 days success plan for a home-based business.
4. How to calculate the selling price?
5. Keys to business success, for small business owners
6. Brand creation for a small business
7. Business idea validation guide.

Dream big, think big, start small, and grow. Good luck as you pursue your entrepreneurial dreams!