BUSINESS LOCAL SERVICEBUSINESS PLAN - basic

BUSINESS DETAILS

Business Information Details

Business Name North Coast Cycles

Description We sell and service BMX, Road and Mountain bikes.

Business Structure Sole Trader

ABN 15 203 509 342

Business Address 23 Sharpe Avenue, Karratha WA 6714

OWNER PROFILE

Category DetailsWhat part of your working and personal life will help you succeed in this business?

I have worked 15 years in retail selling bikes, BBQ’s, electrical goods, and I managed Comp Bikes for the past 4 years. I have a Business Management Certificate, and been a bike enthusiast for the past 20 years. Until recently, I competed in annual trail bike competitions and am still actively involved in the sport.

LICENSES, PERMITS, AND INSURANCES

Question DetailsDo you have the licences, permits and insurances to operate your business?

I have public liability and workers compensation insurance

HUMAN RESOURCES

Position Title

Employee Status Wage Training Retention

Manager Craig Redmond

Full Time $57,000

Business operation and management

Franchise his own store in the future

Salesman Sonja Jones Full Time $39,000

Store management

Prepare her to become store manager

Salesman Ethan Collins

Casual (summer)

$20,000

N/A N/A

PRICING AND PAYMENT STRATEGY

Strategy Details

How do you price your products and services?

We will add a margin to our Cost of Goods Sold This margin is larger for cheaper products and

becomes less as the product increases in price

Are you prices similar in value to your competitors’ prices?

The final price for our bikes are similar to our competitors’ prices

How will your customers pay you?

They will pay cash, Eftpos, credit card, bank transfer or cheque

If purchasing online they can also use PayPal

What payment terms will you offer? (30, 60, 90 days)

All sales require full payment before delivery

OVERVIEW OF PRODUCTS

Product Price Range

Description Unique Features

Benefits to Customer

GiantGFR Series(BMX)

$350 With its dialled in geometry and tough components, GFR is designed to help young BMX riders get rolling—and to grow with each rider as his skills advance

Strong high-tensile steel frame

Durable 6.55-inch steel handlebar

Simple single-speed drivetrain with a rear hand brake

The bike is strong and sturdy and can handle excessive wear and tear

HaroFLC Series(MTB)

$3,800

Designed for riders favouring high XC performance and fast rolling 29" wheels, Pro features incredibly light Sram X01 drivetrain, RockShox Reba RL fork and Ritchey components.

Carbon fibre frame

RockShox forks

SRAM gearing 29” tyres

With its high performance technology and lightweight frame, the customer gets the satisfaction of owing a powerful bike that can handle the toughest terrain

Malvern StarHeritage Series(Road Bike)

$990 Going back to its heritage, Malvern Star’s new line blends nostalgic good looks of its rich past, with modern materials, fine build quality, and contemporary design cues.

Retro Style Lightweight Shimano

Gearing Hydraulic Disk

Brakes

Customers get the satisfaction that there are no bikes similar to this on the market

FUTURE GROWTH

Strategy Details

How will you grow your business into the future?

We will work to build the business to the standard set by the national chain

We will request to become a franchisee once their standards are met

What products and services will you introduce in the future?

We will introduce the following:o non-traditional bikeso a BMX and MTB racing schoolo mobile bike servicing

When will you introduce these products and services?

We will introduce non-traditional bikes and mobile bike servicing in 2018

The bike racing school will be introduced in 2019

Do you wait for your competitors to sell new products first, or are you a market leader?

We will strive to keep updated on all new products and request to sell them through our store before our competitors

INDUSTRY ANALYSIS

Category DetailsPolitical New government initiative to drive health and fitness

Urban development of new cycle-ways Promoting online shopping May remove penalty rates for weekend work

Economic Exchange rate is depreciating Economic growth is steady Interest rates are falling Unemployment rate is holding steady

Social Traffic is causing people to consider alternative transportation methods

Consumers are focusing on health and fitness There is an increase in social cycling type events

Technology Growth in e-commerce Consumers are purchasing direct from foreign countries Logistics to deliver goods quickly is improving Aluminium welding becoming easier 3D printing is becoming more widely used

Industry The move to online shopping is increasing Increasing use of electric cars Bicycle manufacturing costs are decreasing Suppliers are consolidating There are no real barriers to entry

Competitors We have the rights to distribute Haro bikes in the region. These are high performance bicycles considered to be world class

My competitors have access to brands that are similar in quality and price

COMPETITOR ANALYSIS

Category North Coast Comp Bikes Bike Masters Biggy’s Bikes

Price Range $120 to $7,300

$100 to $3,200

$65 to $1,400 $99 to $4,750

Size Kids Men’s Women’s

Type BMX Road Bike MTB Hybrid Electric Skate Cruisers Folding City Recumbent Tandem Tricycles

Bike Servicing Yes Yes Yes YesMobile Servicing

No No No No

Online Presence Store

Puncture Repair

Yes (free) No No No

Delivery No No Yes NoRacing School No No No No

SWOT ANALYSIS

Strengths Weaknesses Previous bike store management Co-president of the Trail Bike

Association Good parking Large area for bike testing Business Management Certificate Low rental cost

Located in old area Lack of marketing experience Several bike stores within 5km No supplier relationships Limited start-up capital No checkout facility on website Staff lack experience

Opportunities Threats Promotion through sporting

associations New government initiative to drive

health and fitness Re-development of area in 2017 Partnering with local groups/schools

to promote bike safety Online shopping

Suppliers are consolidating Rent increase after development in

2017 National brand may open in the

future Regional economic growth Online shopping

STRATEGY SUMMARY

Strategy PriorityReduce business expenses to assist with the rent increase 1

Build up to franchise standards 2

Education and training: bike servicing, selling, customer service (see likes and dislikes), bike assembly

1

Checkout facility on website. Determine postage costs for bikes and add to website

2

Marketing: promotion through sports associations, partner with local governments and schools, and be actively engaged in local events

1

Implement risk assessment prevention plans 1

HR: commence training in business operation and store management. Marketing training for Bruce

3

Introduce mobile bike servicing and new products 4

Introduce racing school 5

Implement re-order points for products. Implement policy to ensure weekly inventory check is completed and orders processed

1

Install an answering machine explaining they are with customers, and then call back within two hours

2

BUSINESS GOALS

Goal Steps to Achieve Goal Responsibility Due Date

Reduce business expenses 5% by June 2017.

Reason: SWOT analysis determined rent increase after redevelopment

1. Analyse financial data to discover where savings can be made

2. Implement them where possible

3. Evaluate supplier agreements to determine if discounts are available

4. Review and fix operational wastage

5. Review and monitor expenses regularly

Bruce June 2017

Build business up to franchising standards by May 2019

Reason: SWOT analysis determined national brand may move into the area.

1. Determine franchising standards of national chain by Jan 2017

2. Develop plan to build business to these standards by July 2017

3. Implement plan in July 2017

4. Review and update plan regularly to ensure on track for May 2019 completion

Bruce May 2019

CUSTOMER SERVICE STRATEGY

Strategy DetailsIn-Store 1. We will take bikes out of the racks and wheel them out of the

store2. We will adjust the seat and handle bars for the client before

test riding the bike3. We will adjust the bike to suit the customer once it is

purchased4. We will give the customer a brief run-down on the bikes

functions5. We will help load the bike into the customers car6. We will attempt to show three types of bikes that would suit

the customers’ needs7. Any new customers must be served or acknowledged within 60

seconds of entering the store8. Sales staff will question customer to determine their needs,

then sell a product that meets them9. Always be honest with customers, do not take kickbacks from

suppliers10. Not allowed to use mobile phones when customers in store,

if using one it must not be on showroom floorAfter-Sales 1. Any issues with a bike will be fixed the same day where

possible, and we will visit the customer to fix it if possible. A small gift is to be provided

2. Follow up call within one week to ask how it is going3. Free puncture repair to clients4. Email customers any events and competitions coming up

Out-of-Stock 1. If a bike is out of stock it must be ordered the same day2. Once the bike has arrived it will be prioritized to be assembled,

no more than 24 hour turnaround3. Keep customer updated every 48 hours with ETA

Servicing 1. First service will be free2. Every service thereafter will be charged. Discounts will apply

to members of our loyalty programDatabase 1. We will keep a database of our customers, which will include

serial numbers, so they do not need to keep receipts for warranty purposes

2. We will use the database for promotional purposes

TARGET MARKET

Category Target Market 1 Families

Target Market 2 Non-Enthusiasts

Target Market 3 Enthusiasts

Characteristics 30 – 49 years $100,000 to

$150,000 Live within 5km Family rides

~1/month Price and

function Not part of a

club

15 – 39 years $0 to $50,000 Live within 5km Bike used for

transport Functional bike Not part of a

club

29 – 39 years $100,000 to

$150,000 Live within 15km Ride

competitively Spend big on

bike products High-

performance bike

Part of a club

Appeal to this Target Market

Our kids bikes are known for their sturdiness

Price is about average compared to other products

Free puncture repair

We have a good range of functional bikes at average comparable prices

Larger rims on bikes making them easier to ride long distance

We sell Haro which is sought after by sport enthusiasts

We have a strong connection to bike racing

We know what they need to compete

Marketing Avenues

Direct Mail Sponsor

children’s events, school events

Word of mouth

Direct Mail Sponsor

corporate events Networking

Sponsoring sporting events

Promote through the Trail Bike Association

Social Media

PROMOTIONAL STRATEGIES

Method DetailsOnline 1. We will set up a website. Eventually we will sell and

ship products2. We will advertise on Google search and maps3. We will start a Facebook page and cover cycling events

Networking 1. We will continue to be part of the Trail Bike Association 2. We will work with local schools to teach bike safety and

sponsor events

Printed Material 1. We will not produce or distribute brochures, flyers, or business cards except for direct mail purposes

2. We will develop a loyalty program for our enthusiasts segment

3. We will produce banners for sponsored events4. Merchandise: we will produce shirts and hats to give out

at eventsDirect Marketing 1. We will direct market to customers by sending

advertising brochures through the mail (within a 5km radius)

2. We will not cold call potential customers3. We will work with government agencies to promote

health and fitnessPublic Relations 1. We will not write media releases

2. On occasion we will offer products for prizes and competitions through the local schools and the Trail Bike Association

3. We will not attempt to be interviewed on the radio or TV4. We will support sporting and community based events

Advertising 1. We will advertise in the local paper 2. We will advertise online through Facebook and Google3. We will not advertise on local radio or TV

PROMOTIONAL TIMELINE

Promotion Due DateSet up a website July 2016

Advertise on Google search and maps July 2016

Start a Facebook page and cover cycling events July 2016

Continue to be part of the Trail Bike Association Ongoing

Work with local schools to teach bike safety and sponsor events

Approach September 2016

Develop a loyalty program for our enthusiasts segment October 2016

Produce banners for sponsored events July 2016

Merchandise: we will produce shirts and hats to give out at events

October 2016

Direct market to customers by sending advertising brochures through the mail (within a 5km radius)

October, November, December 2016 and February, May 2017

Work with government agencies to promote health and fitness

Approach September 2016

Offer products for prizes and competitions through the local schools and the Trail Bike Association

As required

Support sporting and community based events As required

Advertise in the local paper October, November, December 2016, and February, May 2017

Advertise online through Facebook and Google Ongoing

CASH FLOW FORECAST

Disclaimer: Liability limited by a scheme approved under professional standards legislation.

Explanation July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Year TotalBeginning Bank Balance This is how much you have in the bank on the 1st of the month $20,000 $6,008 $5,856 $4,612 $11,053 $29,853 $66,227 $55,537 $54,228 $48,891 $47,886 $44,849 $20,000

Sales: BMX How many bikes you think you will sell for the month. Remember you are likely to sell more bikes in summer than winter, and don’t forget Xmas 8,050 8,400 8,050 13,300 19,600 26,600 7,000 9,450 8,750 8,400 8,050 8,050 133,700

Sales: Road Bikes How many bikes you think you will sell for the month. Remember you are likely to sell more bikes in summer than winter, and don’t forget Xmas 9,900 10,890 9,900 15,840 23,760 31,680 8,910 10,890 9,900 9,900 8,910 8,910 159,390

Sales: Mountain Bikes How many bikes you think you will sell for the month. Remember you are likely to sell more bikes in summer than winter, and don’t forget Xmas 11,400 11,400 11,400 19,000 26,600 34,200 7,600 15,200 11,400 11,400 11,400 7,600 178,600

Interest earned Some people may have a large cash amount in the bank so how much interest did they earn? 25 23 26 29 45 75 70 55 45 32 28 22 475

Dividend payments Any dividend payments from shares goes here. Normally they are paid twice a year 1,250 0 0 0 0 1,700 0 0 0 0 0 0 2,950

Grants & sponsorships Did they win any grants etc. Note: You may or may not get the grant so you should test this forecast without it. A grant should be considered as a bonus to your income 0 0 0 0 0 0 0 0 0 0 0 0 0

Other income This could be selling of shares or property or any other form of income, e.g. selling shares 0 0 0 0 0 0 60,000 0 0 0 0 0 60,000

Cash Available This is the total of the above including the amount you have in your bank $50,625 $36,721 $35,232 $52,781 $81,058 $124,108 $149,807 $91,132 $84,323 $78,623 $76,274 $69,431 $555,115

Payments

Accounting and legal fees Accounting, BAS statements etc. 2,500 0 0 500 0 0 500 0 0 500 0 0 4,000Advertising and promotion Radio adverts etc. Rule of Thumb: 3- 5% of sales, advertise more around

summer/ xmas? 1,500 0 0 1,500 3,500 3,500 0 0 3,500 0 1,500 0 15,000Business loan payments Principle and Interest payments to a bank 350 350 350 350 350 350 350 0 0 0 0 0 2,450Drawings (owner's wages) Depends if Sole Trader or Company. In a company the owner would be on salary 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000Equipment lease and hire purchase Car hire, any equipment they hire for their business 0 0 0 0 0 0 0 0 0 0 0 0 0Franchise fees If they are a franchise put the fees here 0 0 0 0 0 0 0 0 0 0 0 0 0Freight If they didn't order enough stock and had to pay for shipping you could put it here 0 0 0 1,325 0 0 0 0 0 0 0 0 1,325Insurance Income Protection, contents insurance, freight insurance etc. 0 0 0 75 0 0 0 0 0 0 0 0 75Interest and bank charges Credit card interest, bank fees, overdrawn fees 7 23 55 26 7 7 7 7 7 7 7 7 167Printing, postage, stationery, packaging Printer paper, pens etc. 45 0 0 0 0 45 0 0 0 35 0 0 125Rent of business premises Don’t forget bond in the very first month 4,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 26,000Other business premises costs In the first month you might pay refurbishment costs, then build shelves in the

future etc. 8,000 0 0 0 0 0 0 0 1,500 0 0 0 9,500Repairs and maintenance, cleaning Do you pay to have the lawns mowed outside? Window cleaning? 125 0 125 0 125 0 125 0 125 0 125 0 750Superannuation This will be the current amount of super paid to everyone 750 750 750 950 1,100 1,100 1,100 1,100 750 750 750 750 10,600Supplier payments Payment of bikes 8,805 9,207 8,805 14,442 20,988 27,744 7,053 10,662 9,015 8,910 8,508 7,368 141,507Taxes PAYG, GST, any other taxes paid 250 250 250 275 350 350 350 350 250 250 250 250 3,425Telephone 75 75 75 75 75 75 75 75 75 75 75 75 900Utilities - electricity, gas 125 125 125 125 125 125 125 125 125 125 125 125 1,500Vehicle operating costs Any costs associated with a vehicle if it is used for business purposes 85 85 85 85 85 85 85 85 85 85 85 85 1,020Wages and salaries Wages and salaries, including director if the business is a company 8,000 8,000 8,000 10,000 12,500 12,500 12,500 12,500 8,000 8,000 8,000 8,000 116,000Other Expenses Any other expenses, e.g. paying off a loan 0 0 0 0 0 0 60,000 0 0 0 0 0 60,000

Total Payments This is the sum of all the expenses $44,617 $30,865 $30,620 $41,728 $51,205 $57,881 $94,270 $36,904 $35,432 $30,737 $31,425 $28,660 $514,344

Ending Bank Balance Cash Available minus Total Payments $6,008 $5,856 $4,612 $11,053 $29,853 $66,227 $55,537 $54,228 $48,891 $47,886 $44,849 $40,771 $40,771