In greek mythology—or, for those familiar with the Harry Potter series, in Dumbledore’s office—there are phoenix. These mystical birds age and ail, at which point they burst into flames, only to be reborn from the ashes of their past.
It’s a moving metaphor for human existence. Throughout the course of our lives, we’re met with a series of seemingly insurmountable obstacles and pitiless circumstances; and yet, we survive and thrive. We grow through those experiences, becoming better people—or, in this case, better businesses—because of it.
We spoke with Steve Donahue of Seattle’s Recycled Cycles, who shared his own personal phoenix story. The business owner was on the verge of breakdown, his debts stacking higher than his profits, just a year ago. Today, he’s back in action, thanks to some personal reflection, hard choices, and help from the Shimano Dealer Panel and The Mann Group.

Steve and the Recycled Cycles Staff
1. How did you get your start in specialty retail? And when did you know this was the career for you?

I got my start at Bicycle Village when I was in high school. I was always tinkering with bikes and my mom encouraged me to ask at my local bike shop if they needed any help. I swept floors, did minor repairs and built bikes. I had no idea that this would turn into a career; it was just fun. I worked for the legendary Mel Pinto, who always encouraged me to be thrifty and do quality work. After a stint at a big sporting goods retailer I was back in the bike shop at The Bicycle Exchange. That store was a big player run by Jim Bellas. He preached that profitability and good customer service can go hand in hand. This is where I first thought of the bike business as a career. After college and a move across the country, I was in a position to do something unique and open Recycled Cycles in Seattle. The career had begun!

2. What struggles have you and Recycled Cycles come against? What steps did you take to address those issues?
Our biggest struggle exposed itself last year in September. We were at the point of cash flow disaster. We were on credit hold with almost every vendor in the bike business. We were coming up short for payroll. We were consistently late with our rents. Our operation had become unsustainable.
In order to get a handle on things, we had to make some very tough decisions (by we, I mean me—it is amazing how alone you feel when decisions like this have to be made.) We were at the end of a lease at our second location; the store was massive and included warehouse space. I decided not to renew and close it. Our main store has been in the same spot for 23 years and has lots of foot traffic. I wanted to simplify my business and get things under control. With the closure, I had to lay off half of my staff and ask my vendors for yet more patience. Clear and honest communication with these vendors is paramount in situations like mine. We told them that we had no money to make payments in November BUT would resume payment plans come December and beyond. Which we did, reducing our old debt by 40%! We are not out of the woods after a year, but we are on much firmer footing.
3. Tell us about your experience with the Dealer Panel. How did that panel help change your experience in specialty retail?
The dealer panel has been a truly great experience and influence for me and Recycled Cycles. It is a safe place where I did not feel alone (as stated above). A place where likeminded people who understand the bike business share ideas and experiences. When I brought up the situation my business was in, I felt supported. Many very successful retailers approached me to share their similar stories. Their struggles and solutions gave me renewed inspiration that after some grit and hard work, we would come out of this.
4. What are some of the tangible successes you’ve experienced as a result of recent changes?
The Mann Group has also been involved in our company development of our strategic plan. We worked with Dan and Leslie last February in a workshop where I was able to share the burden of responsibility with key staff members. It is through this process we came up with the vision of our business. “Creative solutions for our community” has become our mantra around the shop. We look at every situation, interaction and decision with this in mind. When you define your community and have a consistent yardstick to measure everything, change comes from the right place.
5. Sometimes it’s difficult to change, but why is it so necessary in the specialty retail business?
The changing retail environment is on the mind of everyone in retail. It is my belief that a resurgence in retail will come with time. What we do is special and does matter. We are that special third place for those in our communities. We need to embrace this role.
6. What recommendations would you give to other specialty retailers struggling with the changes in retail?
That old saying comes to mind: when you are given lemons, make lemonade. Define who you are and why you do what you do. It is important to remember that your business is unique and believe in it. Changes are hard but important. When you are presented with a situation, be sure to weigh your options. It is important to bounce ideas off others and even more important to listen attentively to others who have gone down that road before you. My involvement with the Shimano Dealer panel and The Mann Group have saved my business. Last fall was a blur of stressful situations. It is nice to look out the window this October and actually notice the fall colors.