We started Brother Cycles from a shared passion for designing and riding bicycles, and a belief that we could build a business that would grab the industry's attention.
What started with the launch of a single bike frame has since grown into a selection of products that span a range of cycling disciplines and a brand that is recognised throughout the industry. Our products are sold online, through our website, and from an ever growing number of top independent retailers in the UK and mainland Europe.
After our successful Seedrs round in 2015, and our private investment round in 2017, we are now operating at a net profit.
We feel we have proven the quality of our product and its popularity within the market place. We are hoping this next round of funding will enable us to continue growing the business and consolidate Brother Cycles’ reputation as a significant player in the UK bicycle industry.
Bicycles have brought us a wealth of positive experiences, from avoiding congested public transport to getting out into nature and travelling the world. We believe it's these experiences that build us as people - a key motivation behind Brother Cycles is encouraging our customers to get out there and do the same.
We're doing this through a combination of well designed, honest products and a strong brand to back them up.
- Expertly designed hand-made steel bicycles.
- Designed in-house with a focus on quality and performance.
- A constantly developing product range, responding to the current consumer market.
- Strong 8 year working relationship with our manufacturing factory.
- A small company with a big impact.
- Customers are buying into the Brother brand as much as the product.
- Working with some of Europe's top independent retailers - trend leaders within the industry.
- Impressive market traction shown by our loyal social media community.
Substantial accomplishments to date
We've seen the business go from strength to strength since our first Seedrs round in 2015 - here's a snapshot of our key achievements to date:
- Successful Seedrs round in 2015 - 126 investors, over-funding by 26%.
- More than doubled turnover in the year following the 2015 Seedrs round.
- Successful private investment round in 2017.
- 119% increase in turnover following private investment.
- Our strongest ever sales period in 2018 means the business is now operating at a net profit.
- Welcomed Rob Murphy as a non-executive director in 2018. He brings with him a wealth of experience working with growing businesses such as uSwitch, Forward 3D and Eidos.
- The Launch of our B2B website in Summer 2018, allowing stockists to place orders directly online - we had 40+ accounts signup within the first week.
- The growth of our cycling festival Brother in the Wild - 180 cyclists joined us in 2018 and we hope next year's event will be even bigger.
- Our engaged audience of social media followers continues to grow - nearly 14k followers across Facebook and Instagram.
- David Beckham was even spotted riding a Brother!
We've implemented a successful growth strategy following each investment round and as a result the business is now operating at a net profit.
This impressive growth is due to our efforts in three key areas:
Development of the Product Range
- new products have helped us improve our profit margins and open up new sectors of the industry.
Increasing B2B Sales
- Bringing in new trade accounts and thereby securing a more reliable revenue stream.
Online Direct to Consumer Sales
- Maintaining healthy B2C sales with favourable margins.
We feel we've proven the effectiveness of our business model and now plan to build upon this. We hope to build upon the profitability we've achieved this summer and take the business into a period of sustainable growth. This will also give us access to working capital facilities to further support growth in the future.
Use of proceeds
Demand for Brother Cycles is at an all-time high and we need to produce a breadth of products to satisfy this demand. The main use of the proceeds will therefore be on the continued development of our product range - the key element in our plan for sustainable growth.
2019 will see us launch two new products - a high end road bike and a technical adventure bike. The planned expenditure breakdown to support this is as follows:
Please note, Brother Cycles has a business loan with Lloyds Bank of £25,000, of which the current outstanding balance is £17,147.34. This loan accrues interest at 8.9% p.a. and is repaid via fixed monthly payments of £1,140.98 until December 2019. Funds raised in this campaign will not be used to finance this loan.
Over the years we've developed a deep understanding of our target market, what they're looking for and how they behave.
Historically our typical customer has been been:
- The Urban Cyclist.
- 88% male.
- Aged 25-34.
- They are health, lifestyle and image conscious.
- The bicycle is used as a form of transport.
However, as our product range widens, so does our appeal. As such we've seen our customer base expand to now include a broader age range (18 - 44), a more even gender split and an appeal to those living outside major cities with an interest in the outdoors and adventure - their weekends and holidays will often be spent on their bike.
The above trend with our customers is mirrored by the retailers we now work with - a broader product range has generated an increase in trade inquiries - this year alone we've started working with new shops in France, Spain, Finland, Switzerland and Denmark. While in the UK we've seen an expansion into retailers outside of urban areas.
Characteristics of target market
The global bicycle market is set to expand by 38% in the next 6 years - to a total of $62 Billion - as consumers make a shift towards healthier lifestyles and have a growing awareness of global warming and the exhaustion of fossil fuels.
We mostly operate within the EU - with the UK and Germany being our largest markets. According to a Mintel market report the UK bicycle market is worth an approximate £1.5 billion - £800 million of which is 'New Bike Sales.'
It is estimated that Independent Retailers make up 40% of this figure - which means the size of the market that we directly operate in (in the UK alone) is an impressive £320 million - and this has been growing at a rate of around 5% per year for the last few years.
The bicycle market does not differ to the rest of the retail industry in that there has been a noticeable shift towards online sales - and the development of our e-commerce website means we're well positioned to take advantage of this.
We've already achieved an impressive level of brand awareness and will aim to build upon this using a mix of traditional and new marketing methods:
Traditional marketing methods:
- Industry press product reviews - Singletrack, BikeRumor etc.
- Displaying at trade shows in the UK and Europe.
- Sponsoring events - most recently '13 Hills' in Sweden.
- Collaborations & cross promotion - most recently Restrap and Pannier.cc.
- Rider ambassador programme - a big focus for 2019.
New Marketing Methods:
- regular posts to nearly 14k followers on Instagram and Facebook.
- bi-monthly newsletters going out to mailing list of +5K.
- Trade newsletter to over 100 retailers across Europe.
- Google ads.
- Facebook/Instagram promotions.
Most importantly our many happy customers now do the talking for us, each one an invaluable brand ambassador, #brothercycles on Instagram is a perfect example of this...
We operate within a busy marketplace, however, although crowded we believe there's a huge opportunity as discerning consumers move away from the obvious mainstream brands.
So, why do we think so many customers have chosen Brother Cycles thus far?
- Well designed products that stand out from the mainstream.
- A strong brand that they're proud to support.
- An honest & personable service.
We won't lose sight of the above as it's what's given us our competitive advantage. However, now we need to look at the times where a customer may not have chosen Brother.
Our close working relationship with our retailers gives us invaluable insight into this and allows us to directly address it.
Key feedback so far has been:
- Expand the range to include more premium product options.
- Offer demo and sample bikes - allow customers to 'try before they buy'.
- Use industry influencers to promote products.
2019 will see us address these opportunities to improve our appeal and get even more customers on a Brother bike.