The Bike Kitchen business plan
Creators: name: Harrison, Josh
name: Kjellander, Sydney
name: Komolov, Pavel
name: Loza, Luis
name: Shah, Rahul
Publisher: name: The University of British Columbia
Year: 2014

description: A. THE BUSINESS The Bike Kitchen is a social enterprise bike shop located in the basement of the Student Union Building (SUB) on the UBC campus. Its primary purpose is to generate profits to support its parent organization, the non-profit AMS Bike Co-op, and its cycling advocacy and accessibility programing. The Bike Kitchen offers repair services, rentals, refurbished bikes, new and used bike parts and a limited selection of new bicycle accessories. In addition it also provides the space for a number of the Bike Co-op`s community services. B. THE OPPORTUNITY AND STRATEGY In September 2015, the Bike Kitchen will be moving to a more visible, more convenient and larger location in the SUB. This new space opens up a number of new business opportunities for the Bike Kitchen, including the potential to increase retail offerings, provide a higher quality of service and a catalyst to improve their brand image. In addition, there is an immediate opportunity to transition to a new business model – separated from the operations of the Bike Co-op – to both facilitate management and more clearly communicate their value proposition to customers. Lastly, there is an opportunity to better segment the market, and target year round customers in order provide more consistent net income and deliver greater impact towards their community goals. C. THE TARGET MARKET AND PROJECTIONS The UBC campus population consists of over 60,000 Staff, Faculty and Students, over half of which own a bike. 8% of this population regularly commutes to campus by bicycle. In addition, a portion of the campus population renews itself regularly due to incoming and outgoing students, which prevents market saturation and maintains high seasonal demand for bikes and related accessories. D. THE COMPETITIVE ADVANTAGES The Bike Kitchen receives free rent, utilities, and other support from the AMS. These subsidies allow the Bike Kitchen to provide some of the lowest rates in the City as well as offer unique educational programs, Do-It-Yourself (DIY) repair, and other community services. Their central location at the SUB, in the center of the UBC campus, provides the Kitchen access to the large captive market of the campus population. E. THE ECONOMICS AND PROFITABILITY Over the 5 year plan period containing future expansion recommendations, our financial analysis shows the plan to be healthy with good net income potential. Although the Bike Kitchen has stable yearly revenues of approximately $250,000, increasing costs have eroded their net income by approximately 40% over the last few years. This is mainly due to the gradual increase in employee wage expenses in conjunction with operations that are at capacity and cannot generate additional revenues to match wage increases. The expansion break-even scenario was calculated showing that revenue growth of 54% is needed in order to support the increased expenses post-expansion. A revenue increase of at least this much is well supported by the large captive market on campus, high unmet demand at the Bike Kitchen, and strong evidence in the market research that increased service offerings will provide value to the target market. Disclaimer: “UBC SEEDS provides students with the opportunity to share the findings of their studies, as well as their opinions, conclusions and recommendations with the UBC community. The reader should bear in mind that this is a student project/report and is not an official document of UBC. Furthermore readers should bear in mind that these reports may not reflect the current status of activities at UBC. We urge you to contact the research persons mentioned in a report or the SEEDS Coordinator about the current status of the subject matter of a project/report.”