- Investment sought:
- Equity offered:
Brother Cycles is a London based company offering a selection of hand built steel bicycle frames. The company is run by brothers James and Will, who painstakingly design and test each product themselves. James’ technical background and Will’s experience in marketing and events meant they were well prepared for the company’s launch in 2010.
They began with the release of a single product, a classic steel track frame. This was rapidly stocked by leading independent bicycle retailers across the UK and Europe and was sold out by the end of the first season. Since then the product range has increased year on year to incorporate a number of different cycling disciplines.
The popularity of Brother Cycles has been down to the quality of design and honesty of the products, and an English heritage in a market dominated by companies from Europe and the USA. With a continued focus on product development and growth of the Brother brand, the company can only go from strength to strength.
Brother was born through the belief that we could take what other brands already do, and do it better. This confidence in our own work is apparent in everything we do. It was our own personal experiences with cycling, and the desire to improve on the products available, which led us to start Brother Cycles.
As keen cyclists we have always followed the maxim that we should only build and sell products that we would want to own ourselves, rather than trying to second guess what other people may be looking for. This gives us the confidence that our products are perfectly designed for their intended purpose.
Every detail of our products is the result of a conscious decision and subsequent testing to ensure its effectiveness. It is this attention to detail that separates us from the competition and creates the 'honesty' behind the brand.
One of the key personal goals for Brother Cycles is to create and share amazing experiences through the use of our products, and inspire our customers to do the same. This is evident through our impressive dialogue with customers on social media. When a customer shares their experiences with us, and our followers, they encourage others to do the same.
This open communication with our customers, combined with the honesty behind our brand and products, creates a business which is in touch with the customer and transparent in its actions. Something which is not always common in the marketplace. It allows us to respond to customer reactions and therefore constantly evolve and improve over time.
Substantial accomplishments to date
In the 5 years since launch we have developed a close working relationship with our frame manufacturer in Taiwan who themselves have over 25 years of experience in the bicycle manufacturing industry.
Sales of Brother Cycles products have been impressive from our launch, with a steady growth year on year:
- The business is currently operating at a net profit of approximately 10%
- Brother Cycles has seen average annual revenue growth of 30% since launch*
- Stocked in over 30 retailers across the globe
Press/Media coverage so far:
- Esquire Magazine
- The Times Luxx Magazine
- Time Out
- Huck Magazine
- Design Week
- Levis Jeans
- Albam Clothing
- 2,300 Facebook followers
- 2,500 Instagram followers
- 1,800 Twitter followers
and regular consumer generated content through #brothercycles
Last but not least, Guy Ritchie is a proud Brother Cycles owner, often pictured riding his bike around London!
*Source: unaudited management accounts
Brother Cycles has already been successfully trading for over 4 years. The business has a proven sales history and is currently running at a healthy profit.Our aim at the moment is to grow the business to a point that it can be our main source of income - below is how we aim to do this.
There are three keys areas that the business will focus on in order to guarantee substantial growth throughout 2015/16:
Firstly, When the business first launched, the products were sold direct to consumers through the Brother Cycles website. 5 years later and we also now sell to retailers and small distributors. It is this shift towards working with distributors that is key to the growth of Brother Cycles in the future.
Working directly with consumers and independent retailers has been useful in growing the Brother brand, and will continue to be in the future, however selling stock in greater volume is necessary for greater profitability. Creating partnerships with a European, N American and Asian distributor, who would sell Brother Cycles products on our behalf, will be the main focus for Brother throughout 2015.
Additionally we would seek to increase sales volumes through an expansion in the product range. We have proven in 2014, with the release of the Kepler frameset, that the brand can find big success outside of the urban cycling market. In 2015 and beyond we intend to continue this expansion into other areas of cycling with a strong focus on product development.
As a final point, Brother Cycles currently only produces bicycle framesets which consumers and retailers use to build custom bicycles. In 2015 we will begin development of the first Brother Cycles complete bike. Offering a complete bicycle will allow the brand to be stocked in far more retailers. Equally a complete bicycle offers better profit margins and is therefore essential to the growth of the company.
Use of proceeds
2015 will see a considered increase in marketing and advertising spend, continued development and broadening of the product range and most importantly a focus on increasing its routes to markets round the world, mainly through building relationships with North American and Asian distributors.
We believe that the setting up of new distribution channels, business development and increased sales activity can be achieved without the need for additional staff. To date we have grown the company with only a very limited amount of time, typically no more than 2-3 days a week in total. To be able to commit fully to the company will drastically increase what we can achieve and the speed with which we can achieve it.
In order to do this the we are looking to raise capital to allow us to commit 100% of our time to the company and to invest in the areas of the business that need growth as outlined above:
- Salaries and professional fees 50%
- Product development and testing 10%
- Advertising and marketing 15%
- Trade shows and promotional activity 5%
- Increase in stock levels 20%
Historically our target market has been the urban cyclist, the key demographic being males aged 18-35 that were health and style conscious. This market lends itself well to large cities where young and successful cyclists live and work. True to this a majority of sales since we launched have come from cities such as London, Paris and Berlin.
The recent and continued expansion of our product range opens Brother Cycles up to different markets. Our most recent product, the Kepler, takes us away from the urban environment and into the outdoor and adventure market. This not only expands the key demographic of the brand but also appeals strongly to the North American market which we're currently making a name for ourselves in.
However, regardless of age, sex or location Brother Cycles appeals to the more discerning cyclist. They haven't just bought a convenient off-the-shelf bike to commute on. Rather they have chosen a Brother Cycles bike for the quality of the product and strength of the brand. Cycling to them is a way of life, as well as a form of transport, and they are heavily involved in the cycling community. As a result of this every Brother Cycles owner becomes an ambassador for the brand, this is clearly shown in our strong social media presence. Many of these cyclists own more than one bike and as such we've seen a number of repeat customers, showing a strong brand loyalty.
Characteristics of target market
The global bicycle market is one which has enjoyed healthy growth over the last couple of decades and seems to be immune to negative outside influences such as the recent economic recession.
A recent study by Global Industry Analysts, Inc. shows that the global bicycle market is set to exceed US $77 Billion by 2015 - this is mainly due to increased environmental concerns from the consumer, rising fuel/energy prices and an increased emphasis on health.
In the UK specifically the bicycle market has seen a huge boom as cycling is now viewed as a preferred leisure activity - this is due to a number of factors including the UK's successful sporting cyclists such as Chris Hoy and Bradley Wiggins.
With 4 years already operating in the market we are confident that we not only have a deep understanding of it but have also made good steps in solidifying Brother Cycles' place in this market.
Brother Cycles already has a strong market presence and distribution network in place. This has given us a solid and loyal customer base. However awareness is currently somewhat confined to the niche independent stores and 'enthusiast' cyclists. A broader product range, including an 'off the shelf' complete bicycle, will make our brand more accessible to discerning but perhaps less experience cyclists (or simply those that do not have the time or inclination to build a bike from scratch).
The more complete range of products, combined with strong promotional activity that includes event sponsorship, brand collaborations and targeted advertising should enable us to secure distribution in key markets in North America and Asia. We believe this will lead to a marked increase in sales volume.
We have already developed relationships with brand ambassadors in some of the key regions we are looking to expand into (New York, Los Angeles, Singapore etc) and will leverage these contacts to help promote the brand. Making use of these and other contacts in various cycling networks in which we have a positive following should enable Brother Cycles to further develop a global presence from our modest base in the UK.
Why have so many customers already chosen Brother over the last 4 years? We offer a quality product with a very strong brand and we are open and honest in the way we run the business. There are not many bicycle companies whose websites so openly feature the owners and their day to day work, and who still personally respond to every email. We feel this personal touch sets us aside from the competition and builds a trust with our customers.
With growth we are aware that it's easy to lose this personal feel to a brand, a key to our success will be to maintain the personality of the company.
This is why we've turned to crowdfunding as a way of growing Brother Cycles, as essentially it is the ultimate connection with our customers. It is their investment and support of the company that will ultimately allow us to grow and eventually this in itself will differentiate us from the competition.