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Entrepreneurial research

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Research background: An avoid bicyclist is interested in opening a retail bicycle shop in an affluent part of town.

At this point the plan is conceptual, and he wants to know if such a business can be easily started on limited capital. He needs an industry overview on the profitability of bicycle shops.

Research budget: The client is willing to pay the researcher for an hour of his time ($100) but wants to limit the search to free sources.

Research strategy employed: Industry overviews can often be found online through trade associations, association newsletters, magazines, or journals.

These sites also often provide links to additional pertinent information. Government sites offer an abundance of statistical information, but lack of currency can sometimes limit its value.

The researcher begins with a search through Internet search engines in hopes of retrieving information from trade associations.

If that does not prove fruitful, she will try Firstgov.gov for government information. She starts with Google (http://www.google.com), where she uses the search term “industry overview” “bicycle shops.”

On AltaVista, she employs the term “industry overview” AND “bicycle shops.” (The default Boolean operator on most Internet search engines is AND, and AltaVista recently adopted that convention.)

Research results: Alta Vista returned four hits, the first of which is right on the mark: SIC 5941, Bicycle Stores (http://www.valuationresources.com/Reports/SIC5941BicycleStores.htm). The brief search description indicates that this industry overview is free of charge.

Upon visiting the Valuationresources.com Web sites, the researcher finds several more links to free or paid industry overviews.

This search identifies a trade association, the National Bicycle Dealers Association (NBDA), which offers a free industry overview (http://nbda.com/site/page.cfm?PageID=34). The site also has a relevant article titled “Want to Start a Bike Shop?” (http://nbda.com/site/page.cfm?PageID=70).

This article lists the pros and cons of starting a shop, the growth and loss of dealers since the 1980s, the profit margin necessary to operate a store, and the average net profit of bicycle stores.

Among the several links provided at the NBDA site is Bicycle Retailer.com. This site provides a Reports and Analysis section (http://www.bicycleretailer.com/cibycleretailer/reports_analysis), which presents a number of articles on sales, distribution channels, and trends.

One article from November 2001, titled “Managing Pays Retail Dividends, Survey Reports,” clearly says that a person can make money selling bicycles.

These sites provided a sufficient overview of the industry, and no additional research was required at this time

The Valuationresources.com and the NBDA site gave the client enough information to decide that he should explore the concept further.

USEFUL TIPS
• For industry overviews, check trade associations and government statistic sites.
• Encapsulate your search terms with quote marks (e.g., “industry overview’).
• At each site visited, look for links to additional sources.
 

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