Switchback Cyclery

Switchback Cyclery is a full service bike boutique nestled in the Riverside neighborhood on Queen Street East. We offer a complete line of urban, city and commuter bikes with an emphasis on quality along with expert servicing of all bikes. We also offer a good selection of accessories and a collaborative-build option in which we work together with the customer to choose the components and then to build the bike.

Switchback Cyclery is owned by Sanctuary Ministries of Toronto and employs members of the Sanctuary community. Many people we support have disabilities and/or are from low-income background. We believe in long-term relationships: our goal is to provide a supportive working environment and dignified employment for people to continue working with us.

Community Background

Switchback has its origins in Sanctuary Ministries, a Christian charitable organization that welcomes people who, for the most part, have known only rejection and abuse. A majority of people we employ joined us through Sanctuary Ministries, and some came from word-of-mouth. What we offer them is simple friendship and a chance to rediscover the joy and dignity that comes from having a meaningful and purposeful occupation. We call it “propelling community” and it’s our way of giving back to this wonderfully stimulating and diverse neighbourhood that we are fortunate to serve. In our experience, we’ve discovered that by propelling community, our lives become so much richer when we move into the slow lane and get to know and work with some of the men and women who make our city unique.

Development History

Switchback Cyclery operates under the umbrella of Sanctuary Ministries, a church organization that provides space for people to come in for meals and participate in various programs. The idea of our social enterprise originated as our parent organization wanted to create a program that provides employment for which people we have already built relationships. Sanctuary Ministries used to run a woodworking shop program, which closed down, but resulted in valuable learnings about what makes a business model viable.

It took over a year to develop the concept for Switchback. Around 2010, our team brainstormed and explored various ideas for a social enterprise, including a catering business or social innovation field. We felt the community in the downtown core could benefit from a bike shop, and this type of business offered a lot of client interaction opportunities for the people we support. The key people working on social enterprise start-ups were Sanctuary staff, with two of them being bike enthusiasts. They brought in their passion, technical skills, and connections to the biking community. One person on our team had managed a multimillion-dollar business, which gave us insight into the retail sector and the financial/accounting aspects of business.

After deciding to start a bike shop, our team started applying for funding. The Toronto Enterprise Fund workshops we attended tremendously helped develop the concept and examine the viability of the proposed model. We did extensive research, confirming market potential as there were few bike shops in Toronto’s East End. To figure out the numbers, we also asked different bike shops around the city things like, how much money the average person would be willing to spend on bike stuff or how many tune up services we could expect a year.

Our grant application was successful. The grand opening in 2013 made us feel welcomed by community members who were excited to have a bike shop in their neighbourhood. To our delight, Switchback was voted as Toronto’s best bike shop by NOW magazine readers in 2014. Things have been going well; we hit the financial targets set for the first year as part of Toronto Enterprise Fund requirements.

Revenue Model

Our customers are individuals who often live and/or work in the neighbourhood. Switchback earns money through retail sales and services. Most of our revenue comes from services: repairs, check-ups, and tune-ups. An average tune-up/check-up ranges from $50 to $80. When a bike needs a lot of work, we charge between $100 and $200. Many purchases of bike accessories are small, but some people buy a bike at our shop, spending anywhere from several hundreds to over a thousand dollars. We try to grow a base of repeat customers.

After one and a half year of operation, we are still learning and making adjustments as we go. One thing we want to pay closer attention to is the revenue pattern over the calendar year. We make more money in the spring and summer. Understanding seasonal demand would help us plan our purchases and inventory better.

Challenges

A major challenge that remains is inventory control. Since what sells in one season may not sell in another, Switchback needs to keep up with trends. To prepare for the season, we also have to know how many tires we need in stock so there are not too many left for storage in the winter.

We constantly strive to improve our mechanical skills. This is important to run the store efficiently; we have to repair bikes in a short time upon arrival. During the slow season, our employees attend as many mechanic bike courses as possible. We pay for their training, considering it a good investment as our staff members become faster and more efficient.

To assist us with some administrative and computer challenges, Switchback uses outside consultants.

Lessons Learned

Budgeting and managing financials is critical to be sustainable. Even if the goal is not to make a profit, bills and rent have to be paid.

Researching ahead of time has helped us a lot. In addition to investigating the business model viability, we tried learning anything related to the industry at tradeshows and seminars.

Building resources can be achieved through reaching out and trying different approaches. We found sending out people for training very beneficial, but it requires paying attention to what works for our employees. They have strengths and weaknesses, and we adjust to accommodate their needs and preferences, for example by trying different training courses and styles.

Building good relationships with your employees is crucial. We try to pair up our employees with someone else who provides one-on-one mentorship, with whom they can always talk about their problems. We really want to nurture a support network for our employees where they feel respected and know that someone truly cares about them.

Needed Support

TEF workshops really helped us in the start-up process, as did having a large network to draw from. We were also blessed to have the support from Sanctuary and friends in the community.

Organization Structure

Switchback is part of Sanctuary Ministries even though we are physically located in a different building. The parent organization pays for staff salary. We try to keep social enterprise financials separate from Sanctuary.

Partnerships

Our staff’s personal network has benefited the social enterprise through connections to the biking community. Good relationships with other bike shops in Toronto played significant role in creating our advisory board that shares industry experience and provides guidance to us.

Impacts & Outcomes

Switchback currently employs one fulltime and five part-time individuals with disabilities and/or from low-income populations. We have seen very positive impacts of employment on their personalities. At Switchback, they become more social, hopeful, and excited to go to work. We hope to continue to see growth in our employees. The more stability in their life, the more they are able to face obstacles and continue working with us.

Vision for the Future

Currently, Switchback is working towards meeting targets set in our five-year plan. Our goal is to become financially sustainable. We also want to continue working with employees, hire more people, and keep providing service to community.