After a terrible night’s sleep (made better by the 4am text updates from my wife about the Giant’s victory in Game 1), we met Milton at the shop. He brought all of his financial docs and started in on some basic accounting. In his first 3 weeks, he’s sold 7 bikes – not bad for minimal marketing. At $850 (expensive given the condition of the city) per month in rent and $550 per month in total salaries (Milton and his two employees), plus smaller fixed costs, we estimated his monthly expenses at about $1800. Using the freight cost of his 400 bike container to calculate the “cost” of the bikes (even though we funded the transport charges), we determined he needs to sell 15 adult bikes and 10 kids per month to break even. This includes a small amount of labor, parts, and accessories. We determined his initial pricing strategy was too high for the market so we decided to lower the adult bike prices to a range of $100 - $400 for an average of $150. We also had a conversation about the repair part of the business and we were asking about the skill level of his mechanics. In one story about how one of the guys fixed a customer’s bottom bracket, Milton told us it’s common for people here to use cooking oil as grease or chain lube. With the lack of proper bicycle supply, the people here have had to make due. Hopefully, MK Cycles can change that and provide proper support.
We finished the day with a plan of attack for Monday, when everything opens back up for the week. He needs a proper workspace for repairs and some basic merchandising displays.
Quotes of the trip
“Enjoy Zim, Drink Up”
“There you will see Hooliganism of the worst variety”
Day 2: The "Warehouse”
We started our second day with a trip to Milton’s “warehouse”, or Boz’s garage. That’s where he’s keeping the extra bikes since he can only fit about 70 in the shop.