The business plan: need and want

What is a simple formulation of the business

The company is a bicycle brand that combines the selection, convenience and price of the Internet with the community, service and support of the independent bike store. It is the next generation bicycle company.

What evidence is there of a market need or want?

The consumer wants the best of both worlds: the selection, price and convenience of the Internet and the the support, service and community of the independent bike store. The consumer wants the advantages of buying bicycles and equipment on line, but does not want to alienate or isolate their local independent bicycle store. In most cases, the consumer wants to support their local IBS. However, the consumer cannot justify paying IBS prices for some items when the same items are available from an online retailer for less (the consumer ends up subsidizing the local IBS, which can lead to complacency). The consumer wants the comfort of knowing that the local IBS is going to service their bicycle when it needs servicing. The consumer does not want to feel obligated to buy bicycles from the local IBS when there is unlimited selection on the Internet; and the consumer most certainly does not want to feel guilty when bringing in a new bicycle purchased on line to the local IBS, who might even sell the same brand of bicycle, for repairs or servicing.

The IBS wants a recurring relationship with the consumer. This traditionally means selling a bicycle to the same consumer every other year or selling a bicycle to a consumer’s family members or friends. The IBS also wants the opportunity to compete with online retailers. The IBS develops its consumer relationships and competes with online retailers by providing a more personalized, accessible and value-added service and by providing discounts that match the prices of online retailers. The IBS is not always given the opportunity to compete with on line retailers by the consumer; the consumer doesn't always ask. Meanwhile, The IBS needs to maintain good cash flow and manageable operating expenses; this is difficult to do when the IBS is required to order a full inventory of bicycles (and accessories) each year, rent a place large enough to store and display them and hire staff to assemble and service them. Seasonality does not make it easier. The limited selection of the IBS is a function of an unwillingness or inability to invest in inventory. Indeed, of all the items that hang on the wall at an IBS, only a few actually sell regularly; the rest are stocked because of discount incentives, vendor requirements or a desire to create the impression of “full selection”. This approach ties up capital in inventory and is an inefficient use of resources.