<Business Name> is a retail bicycle store offering competitive prices and expert advice. Advice from former road and mountain cross champions combined with full services means customers maximise use of their bicycles. Available products include mountain bicycles, road bicycles, flat-bar bicycles, cruisers, and a massive range of accessories.
<Business Name> is targeting two core markets, the budget conscious and the serious enthusiast. In two to five years the aim is one store will grow to several, in and around the greater metropolitan area. This will be achieved by continuing to offer Melbourne's best prices matched with expert advice, in conjunction with an extensive advertising campaign.
<Business Name> offers both products and services in order to fully maximise its selling potential. Products include bicycles, accessories, clothing and parts. Service includes repairs, custom builds and free tune-ups for every bicycle sold.
While <Business Name> hopes to cater for most of the central business district population, it will be targeting two different buying types, the budget conscious and the serious enthusiast who keeps up to date with the latest cycling trends.
<Business Name> has undertaken extensive surveys with bicycle clubs and customer / street surveys. The results showed families are looking for bargains, while serious and professional riders voted expert advice as their number one priority.
In part, the local market is driven by the lack of parking. Bicycle transportation is more economical, as well as time and space efficient in the CBD. The location also caters for white collar employees who prefer to ride to work than travel by public transport. According to our surveys these potential customers are looking for a bicycle store close to their work rather than near home, as they prefer to spend time on weekends with their families.
<Business Name>'s marketing strategy seeks to optimise its prime advantage of location, as well as offering the unique selling proposition of advice from former road and mountain cross champions. Our research has shown both location and expert advice is the main motivators for our customer base.
Customer research has been carried out by surveying local cycling groups and associations. Market research has been done through IbisWorld to show industry retail statistics and figures and gives our business a comparison to our competitors.
The key financial objectives have been developed using previous months' data for the existing store, tracking trends in revenues and expenses. A five-month track of sales, accounts receivables and payables, and inventory from a year-end benchmark were also utilised.
The key financial objectives are:
to reduce the bank loan repayment interest rate from 10% to 7.5%
to reduce the overdraft from $250,000 to $150,000
The <Business Name> operates as a <Business Structure> for the following reasons:
any business income will be taxed separately from personal income and partner Herb Oppenheimer will continue to work part-time as an accountant when the business first starts
selling the business will be easier in the future if we become successful
this structure enables us to be classed as employees for WorkCover purposes as some of the work in the store is physically demanding and risk of injury is high
<Business Name> has also registered its trademark and the websites www.cbdbicycles.com and www.cbdbicycles.com.au in order to fully protect intellectual property.
The exit strategy is to continue unless the business falls below our minimum targets for three consistent months. At this point we will close and sell our assets.
Director - <Your Name>
Has extensive experience in retail. With a strong sales background, he has worked through the ranks of store assistant and manager, to retail store owner. He brings knowledge of the retail industry and has strong people skills.
Director - Herb Oppenheimer
Combines experience as a former Australian road champion with strong accounting skills, having formerly run a small accounting firm. Will be involved in day-to-day running of the business, and act as key contact for manufacturers, companies and staff alike. Herb will undertake financial and partner management.
There are currently six staff. Two full-time, one permanent part-time and three casuals. All are trained in-house and combine excellent cycling knowledge with a passion for the cycling industry. Level of remuneration is in accordance with Federal awards. We have also implemented a staff bonus scheme which operates when the store hits set targets and budgets.
The objectives for <Business Name> are to:
maintain and expand our reputation for high quality service and sales, creating an internal training and skills development program for staff
maintain a financially healthy business by exceeding break-even targets by at least 10%
repay the start-up loan provided by family members within the first year
achieve monthly and yearly sales target
aim to improve sales of bicycle specific clothing and rainwear over the year by 10%
begin marketing to new consumers and competitor's existing supporter base through mail-outs and promotions to maintain current growth in sales and service revenue
<Business Name> has undertaken extensive customer and street surveys and has utilised information from IbisWorld retail statistics and figures.
According to IbisWorld, the leisure industry (which includes bicycles) will experience an average annualised increase of 3.7% over the next five years. This gives <Business Name> a strong platform for growth.
Competitors have been consistently increasing profits from $276,000 in 2003 to $390,000 in 2007. Projected profit figures are $415,000 for 2008. The <Business Name>'s main competitor has a 10-12% marketshare, while the rest are at or below 2% market share. Given <Business Name> will offer improved customer service and a broader range of stock in a prime location we aim to take at least 2% of the market share by the end of 2008.
The CBD location has two distinct markets - business employees and university students.
The <Business Name> has undertaken extensive research through customer and street surveys and found the following attracts this market:
students are drawn to athletic pursuits and close proximity to bicycle trails in areas such as the You Yangs and Lysterfield; therefore, day rides will be offered to attract new customers
there is a growing enthusiasm for retro Cruiser bicycles, and higher tech cruiser-style bicycles with multiple gears, good brakes, etc. among the middle-class 20+ market
students are the main market for racks, locks, pannier/bags, fenders, rainwear, etc
there is also a consistent 25% turn-over of potential new customers as new students enrol every year
students seek convenience for sales and service
White collar employees
While there is limited growth and turnover in this market, office workers provide a stable source of income. They are willing to commute by bicycle to work. Through extensive research and customer surveys the <Business Name> found:
employees seek a stable, comfortable bicycle and a full range of accessories. When their bicycles need service and maintenance, local drop off/pickup convenience is important. They have families who ride bicycles also, and will patronise a shop that gives personal service
in the greater Melbourne population, this segment has a choice of going to any bicycle shop in metropolitan Melbourne, and are likely to choose a shop located close to their place of business. Although they are not the main target market segment of <Business Name>, we will market to them casually, with a view to increasing marketing activities as the store expands
In addition to the discount department stores, who only stock a limited range of bicycles, <Business Name> has the following direct competitors:
1 local multi-sport store at the local main shopping mall
1 used bicycle store with a strong business reputation, dealing strictly in used bicycles
3 local, including the oldest shop in town
None of these competitors is within two kilometres of the universities, giving <Business Name> first access to one of our chosen market segments. One of the local shops has chosen to target the burgeoning young road racer segment; another is focusing on sit down bicycles and folding travel cycles.
The strongest competitor is the Big Bike Shop, which has established itself as a Melbourne tradition.
We have carefully costed our stock to ensure we offer the most competitive prices. <Business Name> also stocks a wider range of product and accessories, will promote more heavily and smartly and distribute accordingly to match its aggressive approach.
<Business Name> will contend against its main competitors in the following ways:
multi-sport store at the local main shopping mall offering cheap bicycles. <Business Name> will offer six months free service on top of bicycle purchase
used bicycle store with a good reputation for dealing strictly in used bicycles. <Business Name> offers trade on used bicycles when purchasing a new bicycle.
the oldest shop in town with a name and reputation. <Business Name> will create a strong branding campaign to ensure it becomes a name people recognise
st<Business Name> offers both products and services in order to fully maximise its selling potential.
1. Bicycles. <Business Name> sells new bicycles from recreational road and mountain bicycles, retro-cruisers, and sport/touring/racing road bicycles. It also sells used bicycles, which are taken in on trade as a service to customers who are buying new bicycles from us. Brands include Giant, Avanti, Apollo, Malvern Star, Diamond Back, Salmon, Kona, KTM, Schwinn, Fort, Gitane, Omega, GSR, Huffy, Wolf, CVC, Yuba, ZEM and Raleigh
2. Accessories. a wide variety of accessories are offered. Locks, computer speedometers, fenders, cargo racks, comfortable seats, headlights, helmets, water bottles, panniers/back packs/messenger bags, child seats and trailers, bicycle storage racks, and auto roof rack systems all fall into this category. It is not possible to carry every accessory, so choice is based on which will be most useful or desired by our target markets. When special requests for a new item are received, we will order several to test the local demand, and if adequate, will add it to the regular stock.
3. Clothing. Clothing appeals to all cyclists, whether it is a logo emblazoned t-shirt or a piece of waterproof rainwear. At <Business Name>, the clothing is rotated based on the seasons. Just before autumn is jackets and Gore-Tex while in winter we offer helmet covers and liners, insulated jerseys and pants, gloves, and shoe covers. When spring arrives summer tops, jerseys, and racing shorts are displayed.
4. Parts. Parts generally refer to the pieces or materials necessary to the basic functioning of the bicycle. Usually, parts are installed during service and are an additional charge beyond regular service fees. Some items, such as cranksets, pedals, tyres, derailleurs or brakes, are both integral parts and upgrade accessories. Others, such as headsets, bottom brackets, spokes, chains, cables, and cable housings are strictly maintenance, though some will be sold to cyclists who prefer to work on their bicycles themselves.
<Business Name> is a full-service specialised bicycle shop. The services include, but are not limited to:
free 30-day/150-kilometre tune up with every new bicycle sold
quick repairs for flat tyres, broken chains, brake cables etc
scheduled tune-ups, replacement of all bearing surfaces, repacking of lubricants, and adjustments of derailleurs and brake systems
installation of all accessories
authorised warranty repairs on the bicycles
custom wheel building
Frameset repairs are outsourced to Le Blaze custom frame builders.