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Monday, March 13, 2000
2000 Small Business profiles

Velo Bike Shop

by Dori Stubbs
Seattle Times business reporter

At Velo Bike Shop, the owners can be seen holding the brooms while the employees take the bike by the bars and run the store.

It's a new philosophy for the 32-year-old-business, which closed three outlets in 1995 but managed to keep the 8,000-square-foot Capitol Hill location open because it has a larger sales volume.

"It was an enormous setback," said co-owner Glenn Tamura of the closures. "Regaining the market share has been very difficult."

He and his brother, Lloyd Tamura, started renting bikes in the late 1960s in a small gas station near the Arboretum, the University of Washington's horticulture preserve in the Madison Park and Montlake neighborhoods.

The bike boom of the '70s found them selling more two-wheelers than they rented. They took a business plan to a large Seattle bank for a loan to open more outlets.

The loan officer checked out their plan, left his job at the bank and opened a bike shop near theirs.

"Talk about unscrupulous," Tamura said. "The only time we talked to him was about 10 years ago, when he tried to get us to help him prevent a bike shop from opening across the street from his. We, of course, had a good laugh about that one."

But they got their loan and opened three shops in Seattle, moving onto Capitol Hill in 1985 when they lost their lease on another location.

In the mid-'90s, however, stores such as Sports Authority, Oshman's, Costco and other small bike shops saturated the market, Tamura said, and they were forced to close three stores and revamp their business.

They turned their organization chart upside down: The owners would take out the garbage and sweep the floors. The part-timers would be made to feel important and given specialized tasks. The managers would set policies, select products and hire employees.

"There is a famous quote by a famous retailer," Tamura said. "What a retail store needs to do is to 'hire the best people available, then get out of their way.' It sounds easy to do, but believe me, it's not."

He described the plan as an assembly line: The part-time people hold important production positions while the owners and managers supply them with parts and haul away their garbage.

The shop supports four full-time managers, who work four-day weeks, and seven to nine part-timers.

If the new management concept works, the two brothers may start expanding the business again, Tamura said.

But they acknowledge few things have gone as planned, and they even had to re-evaluate their target market a few years ago.

They started by marketing to anyone who wanted a bike. They advertised on the radio and in the daily newspapers.

"We now know we made a mistake," Tamura said. "We should have targeted our local residents first, people who work in the area second and students who go to the area colleges third."

The refocus on Capitol Hill means the brothers and their employees know their customers' names, what models of bikes they ride and what accessories they need.

"We might see a person once every couple of weeks throughout the season," Tamura said. "The most important thing a small business can offer over larger-volume competitors is customer service."

They've discovered that more personal contact helps ride them through their off-peak months, which are most of the year. Half their yearly sales come from April to July.

"We had rain from January to June in 1999," Tamura recalled. "That totally devastated our season and almost brought us to our knees."

If their employee plan works, they hope to offer a percentage of the business to some of their employees.

"We have come to realize that our business will only be as good as our best employees, but without good employees, the chances will be quite slim," Tamura said.


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