Small-Business Success Story: Propel Electric-Assisted Bikes
This Army veteran built a million-dollar business selling electric-assisted bicycles.
Kiplinger's spoke with Propel Bikes' founder and owner Chris Nolte (pictured at left), 34, of Brooklyn, New York, about how he used a $20,000 loan to create a million-dollar business. Read on for an excerpt from our interview:
What is an electric-assisted bike? You pedal it like any other bike, and it amplifies your efforts by 50% to almost 300% with an electric motor. Prices start at about $1,500, but most of the bikes sell for between $2,000 and $5,000.
You bought one for yourself? I drove fuel trucks in the Iraq war and injured my back. After I received a medical retirement from the military in 2005, I was pretty inactive for several years. In 2011, to get moving again, I ordered a kit and converted my bike to an electric-assisted bike. I discovered it’s less intimidating if you don’t have to do all the work yourself. I didn’t worry about whether I could handle a certain distance or terrain.
Was it a stretch for you to go into sales? Not really. I'd worked in retail since I was young, most recently with a luggage business. At the time I started Propel Bikes, I was running my own Web development and marketing business and earning my bachelor’s degree in information technology.
How did you start? I found manufacturers of high-quality bikes that were willing to ship bikes to customers after I made the sale. I already shared office space in an industrial building on Long Island. I designed my own Web site (www.propelbikes.com), and I wrote a business plan with the help of a local Small Business Development Center [part of the U.S. Small Business Administration].
How did you finance your start-up? I used a $20,000 Patriot Express Loan, designed for veterans, with a six-year term and 8% interest rate, to buy a small inventory of bikes. Once I proved that I could sell bikes, manufacturers were willing to let me buy on credit. To open our Brooklyn storefront location in 2015, I borrowed $30,000, with a three-year term and a 4% rate, from an SBA-approved microlender. I used that to outfit the space and to bring in some additional product.
How have you grown? In 2011, we sold bikes from three manufacturers and had gross sales of $50,000. In 2015, we sold bikes from 10 manufacturers and grossed $1 million. We expect to do about the same in 2016.
Are you making a living? I receive some disability income from Veterans Affairs, and I take a small salary. One of my greater successes is that I can provide a living for my two siblings, and that makes me pretty happy. My brother, Kyle, who is 25, is my right-hand man. My sister, Catherine, who is 28 and lives out of state, handles Web marketing.
What does the future hold? The potential for growth is pretty great. More people are thinking about going green, traffic is getting worse, and bicycle infrastructure is growing. An electric bike works excellently if you want to bike to work without getting sweaty.
Do you still ride? I'm pretty busy, and I live only a block and a half from work. But I ride for pleasure when I can.