I. EXECUTIVE SUMMARY
Recycle-A-Bicycle, a thriving 501(c)3 nonprofit, has a dual mission: to provide youth development opportunities to at-risk populations in New York City and to promote environmental stewardship. The nonprofit operates two successful full-service used bicycle shops that employ young people trained in bike repair and mechanics. Through these bicycle shops, Recycle-A-Bicycle offers affordable and environmentally sustainable transportation options for commuters, recreational bikers and messenger/delivery persons. As a social enterprise, Recycle-A-Bicycle has a triple bottom line in which the social and environmental missions are balanced with financial returns.
Since 1997, Recycle-A-Bicycle has salvaged bikes from the waste stream and refurbished them to sell to the public. Recycle-A-Bicycle also trains young people to fix bikes and assists them in acquiring the soft skills required in today’s competitive job market.
Working closely with the Henry Street Settlement and Children’s Aid Society, Recycle-A-Bicycle integrates financial, social and environmental concerns into a successful business model. Recycle-A-Bicycle currently operates two retail stores, one in the East Village of Manhattan, the other in dumbo, Brooklyn, New York. Toward these goals, Recycle-A-Bicycle:
- Collects donated bicycles destined for dumping.
- Trains at-risk youth for positions as bike mechanics and sales people, builds skills in basic business concepts and computer training, and provides a safe alternative that is a positive influence on their development.
- Refurbishes used bicycles through a training program.
- Sells the bicycles to the community as an affordable, quality transportation option.
- Employs graduates of the training program.
- Operates retail stores that also sell accessories and repair services that diversify the revenue stream and create additional profit.
- Offers classes to adults on bicycle repair.
Recycle-a-Bicycle is at a critical juncture in its growth. While the business is currently profitable, the potential for further growth is significant.
To better serve its mission and to address the demand for used bikes, Recycle-A-Bicycle plans to create a new production facility, fill key staff positions and enhance its infrastructure. By pursuing these strategies, Recycle-A-Bicycle can increase its youth outreach* by more than 100% in the next two years as well as create an organization that is sustained on its operating cash flow, thus reducing dependency on corporate grant funds.
*Outreach refers to the number of youth involved in any RAB activity, including both youth training and organized youth bike rides
MARKET OPPORTUNITY
The demand for cycling is strong. Bicycling is the seventh most popular sport among adults in the United States. Recent studies show that in the Northeast, 28% of adults participated in biking activities during a one-year period. New York City boasts a healthy cycling community consisting of commuters (over 100,000 people commute by bike each day), bike messengers/delivery persons and professional and recreational riders.
Used bicycles are in demand in New York City. The high rate of bike theft in New York City results in many cyclists wanting to purchase an affordable bike as well as one that is less likely to be stolen. The prohibitive cost of a new bike also generates business at used bike stores. Demand has outpaced Recycle-A-Bicycle’s capacity for the past three years.
Despite the demand, used bike stores are not prevalent in New York City. Within Recycle-A-Bicycle’s trade areas, there are few other used bike sellers due to the high costs associated with used bikes including labor to repair, inventory system requirements and insurance.
The supply of used bikes is also strong. National trends in cycling report that the number of bicycles purchased each year remains relatively constant while the number of people riding is declining. This indicates that more bicycles are being consumed per rider.
| 1995 |
16.2 |
56.3 |
0.28 |
| 1998 |
15.8 |
43.5 |
0.36 |
| 2001 |
16.7 |
39.0 |
0.42 |
Source: National Bicycle Dealers Association Data Capture, U.S. Bicycle Market 2001
Ridership refers to the number of people aged 7 and over who rode a bike more than once during the year.
Consumption refers to the number of bicycles purchased.
COMPETITIVE ADVANTAGE OF RECYCLE-A-BICYCLE
Recycle-A-Bicycle offers a unique product and service. Its social and environmental missions make it the only socially responsible bicycle retailer in New York City.
Recycle-A-Bicycle has built a trusted brand name and its products are well known as quality alternatives to traditional new bicycles. Customers often say these bicycles are better than new, referring to both the quality and the social mission. Many customers are attracted by the low prices but feel much more compelled to purchase when they learn of the social and environmental stewardship that the organization embodies.
Recycle-A-Bicycle bicycles are one of the most affordable modes of transportation in New York City. Because of low labor and materials costs, Recycle-A-Bicycle is able to offer bicycles at very affordable prices, most at 50% less than a comparable new bicycle.
The youth programs inspire young people to make better life decisions and touch many aspects of their lives. To the youth participants, Recycle-A-Bicycle offers improved health and well-being, provides a goal-oriented social structure (earning their own bike by helping fix others), and helps improve self-esteem. An “I can do it” attitude pervades Recycle-A-Bicycle.
MANAGEMENT TEAM
The management team consists of three highly skilled and dedicated staff with over 10 years of experience in bicycling retailing, 13 years in transportation advocacy, and over 7 years experience in youth education. The team has proven its ability over the years and is continuing to develop new strengths. The three key staff members are:
- Karen Overton - Executive Director
Ms. Overton is the founder and leader of Recycle-A-Bicycle. Ms. Overton worked as the Bikes for Africa Project Director at the Institute for Transportation and Development Policy; a consultant for the World Bank, in the International Development Bank, African American Institute; and Pedals for Progress.
- Jared Bunde - Manager, DUMBO Shop
Mr. Bunde is an expert mechanic and amateur bicycle racer. His cycling career began in 1997 as a messenger. Before joining Recycle-A-Bicycle in 2002, he was employed for over three years as a bike mechanic at Bike Works, a high traffic shop in Lower Manhattan that sells used bicycles. He has also excelled in his racing career, winning a silver medal for the NY State Track Cycling Championship in 2000 and 2002.
- Yoandy Ramirez - Manager, East Village Store
Mr. Ramirez started his career with Recycle-A-Bicycle as a Summer Youth Employment student in 1999. Based on his hard work, Mr. Ramirez was promoted to Assistant Manager in June 2002 and most recently became the East Village Store Manager. He will graduate high school this summer and aspires to pursue a degree in computer science.
Members of the Board of Directors complement the skills presented by the management team. The Board consists of dedicated individuals from the following professions: education, finance, social work and transportation advocacy. Each Board member brings enthusiasm, a unique skill perspective and a broad network of contacts to the organization.
SOCIAL AND ENVIRONMENTAL IMPACT
To date, Recycle-A-Bicycle has worked with over 4,500 youth and staffed an average of 15 positions per year.
Recycle-A-Bicycle improves the lives of at-risk youth in the New York City metro area through a hands-on, formal training program in bike repair, small business and environmental education. After completing the training program, many youth fill the part- and full-time positions available at the Recycle-A-Bicycle retail stores. In addition, some secure positions in other bike shops across New York City. The organization’s strategic partners provide qualified youth counselors that recruit and work with young people who need assistance with basic job readiness skills and who can intervene in the case of serious issues regarding the social or mental well-being of participants.
In 2002, Recycle-A-Bicycle worked with 772 youth through its training program. Over the next five years, the organization will increase its youth impact by 54%.
In addition, Recycle-A-Bicycle has a strong impact on the environmental conditions of New York City. In 2002, Recycle-A-Bicycle recycled over 14 tons of material destined for New York City’s landfills. Recycle-A-Bicycle expects to increase the amount of materials recycled to over 27 tons in 2007.
| Youth participants to be trained |
780 |
850 |
950 |
1050 |
1200 |
| Number of positions to be filled |
22 |
28 |
31 |
34 |
37 |
Tonnage of material to be removed
from the waste stream |
17 |
22 |
24 |
26 |
27 |
FINANCIAL OVERVIEW
Recycle-A-Bicycle plans to make three key investments over the next three to five years to expand its programs and create opportunity for revenue growth:
- Acquire a production and training facility that will provide an expanded and dedicated space for training youth as well as refurbishing bikes, therefore meeting more of the demand for used bikes in New York City;
- Acquire a van and hire transportation staff to allow for more strategic and coordinated pick-up of donated bikes as well as transfer of inventory between production facility and retail stores; and
- Hire additional staff to enable the organization to raise capital from institutional grantors for business expansion as well as for increased training and youth program services.
Recycle-A-Bicycle projects net operating losses in 2003 while development and fundraising efforts are invigorated, and the marketing, internet sales capacity, retail signage/merchandising, and other critical corporate infrastructure projects are further developed. The results of this investment will be greater sales revenue and significant improvement in net margin.
Recycle-A-Bicycle is facing growing supply and demand for its products. It has a solid track record of growth and is now looking for capital in order to expand the social and environmental outcomes and develop more sustainable systems within the business.
Recycle-A-Bicycle is a thriving enterprise that has proven itself as a successful bicycle retailer and small business in New York City. The organization serves a triple bottom line, benefiting the at-risk youth and the New York City environment through a business model that is moving toward sustainability. Recycle-A-Bicycle is seeking to increase its effectiveness in all three areas – social, environmental and financial. As one of the leading organizations combining youth education, recycling and bicycling, Recycle-A-Bicycle has the capability to expand locally as well as develop a national reach.
For more information on Recycle-A-Bicycle, please contact Karen Overton, Executive Director at 718-858-2972 or
KO@recycleabicycle.org.
