How this bike company survived the pandemic by adding new revenue streams
Here’s how a bike hire company that relied heavily on tourists changed its business model and created more opportunities to grow.
At a glance
A small business loan from Prospa provided Francisco Furman from Manly Bikes the much-needed funds required to:
- Pay promptly for new stock
- Bypass lengthy waiting periods for a bank loan
- Continue to expand the business’s offerings
When Francisco Furman bought Manly Bikes in December 2019, the bike hire company was thriving.
Located just 15 metres from the popular tourist area of Manly Wharf in Sydney, the business boasted the largest range of rental bikes in the area since first opening in 2007.
Francisco, who emigrated from Argentina to Sydney eight years ago, had worked in the store for several years before buying the business and was excited to start his journey as an entrepreneur.
His initial plans were to open more bike hire locations. But when the pandemic struck, tourism and travel came to a halt and Manly Bikes’ longstanding business model suddenly no longer worked.
“It was very rough”, says Francisco. “Pretty much 100% of our revenue came from tourism. Even though we were hiring bikes, we were basically in the tourism industry.”
A new business model
Determined to do whatever it took to save his newly-acquired business, Francisco turned the company into a bike shop, selling bikes and e-bikes along with parts and accessories, as well as offering services and repairs. He also bought a range of e-bikes to hire to food delivery companies for their drivers.
But even though more people wanted bikes during the pandemic for both travel and exercise, the demand has led to a shortage of both bikes and parts. This resulted in Francisco stepping up the repair side of the business.
It was a learning curve that required putting in long hours. “I already knew the basics of bike mechanics but there was a lot I didn’t know,” he admits. “But I got help and became a mechanic. I worked by myself for eight months, seven days a week to save the business.”
Another challenge came in December 2021 when two high-end bicycles were stolen from the store. This put the company in a difficult situation because Francisco had committed to pay for new stock by a certain date and needed funds (that would have come from the sale of the two bikes) quickly.
That’s when he decided to look into a bank loan. The bank told him it would take two months to review the paperwork. “I couldn’t wait that long,” he says.
A friend recommended Prospa and Francisco filled out the application form online. “It only took 20 minutes,” he says. “The loan really helped me to solve a particular incident that no one could have predicted. Prospa saved the day.”
Francisco was able to pay for his stock on time and sold it. This meant he was able to repay the loan quickly. “I didn’t want to owe my suppliers any money,” he says.
While this was the first time Francisco had taken out a loan with a financial lender, he did previously borrow from his uncle to buy Manly Bikes. But he admits this was a stressful experience. “Even though my uncle and I signed a contract and I even paid interest, the fact that you owe somebody that you know means it’s more pressure on your shoulders, especially if it’s family. My experience with Prospa was so much better.”
All of Francisco’s hard work has started to pay off. Today, Manly Bikes is developing a solid reputation as an all-round bike shop.
With a degree in marketing, Francisco recognises the need for outstanding customer service and he credits this with the continued success of the business. Unlike competitors, the shop is open seven days a week and Francisco prides himself on providing fast turnaround at affordable prices.
“Word of mouth marketing is so important,” he says. “If a friend tells you something good about a brand, you remember that and it’s way better than a review or anything that you read.”
While the pandemic and subsequent lockdowns brought challenges for the company, it also brought opportunity. As well as continuing with bike hire, it’s added extra streams of revenue. Francisco plans to open bike shops in other locations and to expand online to tap into the national market.
“The only way to make something happen is to do it,” he says of his entrepreneurial journey. “Once you’ve taken the first step, you’re already on the boat. You have to tell yourself that there’s no alternative but to start sailing.”
Want to expand your offering and tap into a new demographic? Ask Prospa about a funding solution that keeps your small business moving.
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