Business models that should come to Toronto – I

When the conservative Financial Times starts writing about a trend you know it’s serious mainstream.

There are more than 5 bike cafes in my area of London, most of which have sprung up in the last year.  Two more are expected by end of summer.  I’ve written about my favorite one a few times and have visited two others.

The concept:

Combination of bike workshop and cafe.   The workshop can be staffed or DIY.  Cafe can offer just coffee and sweets, or also include beer and wine.  Pitchfork-approved soundtrack and skinny jeans required.

Why it works:

Has anyone ever gotten wealthy from operating an indie bike shop?  Doubt it.  I get the impression they’re run as labours of love and almost always hemmorage cash.  Owning one is more a lifestyle choice than a financial decision.  Similarily, coffee shops are run in much the same way – they need a good location which means sky high rent, and you make your money back a few dollars at a time.  Successful ones with staying power and multiple locations, such as the Dark Horse and possibly Red Rocket Coffee in Toronto, are the exception rather than the rule.

Combined, they use the same space which decreases overhead.  One part of the business can cross-sell the other.  The demographic for a bike shop and a cafe are very similar – urban, environmentally aware,  hip young professionals (this is me except for the hip part).  The neighbourhood these cafes are in has a lot in common with Cabbagetown or Riverdale – it’s a small-l liberal stronghold that begat Tony Blair/New Labour and loves the BBC.

My favorite spot, LMNH, also serves beer and while it’s a cafe I favor beer/coffee at a 4/1 ratio, dropping GBP3 per pint every time I go.  I can only assume it’s making money because it’s full morning to night even on weekdays.

The risk with this kind of business is that while it’s hard enough to do one thing really well, doing two things well is much harder.  

 Toronto Examples:

Dark Horse + Urbane.  For more attitude, Mercury + Jet Fuel.


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