Utilizing Sound Business Principles - BPAAcdn.bpaa.com/Training/Bowl-Expo-2011/Utilizing... ·...
Transcript of Utilizing Sound Business Principles - BPAAcdn.bpaa.com/Training/Bowl-Expo-2011/Utilizing... ·...
Utilizing Sound Business Principles to Increase Your Profit in Today’s
Challenging Bowling Market
By: Brent Sims
Kegel Training Center Coordinator
MBA Graduate
Biography
• Started bowling in High School for fun because my mother bowled a league (1994)
• Working at Kegel from 95-2000 & 2001 - current
• Attended community college for 1 year and transferred to Webber International (prior to the bowling team)
• Finished Bachelor’s Degree w/a focus in Management and minor in Finance
• Graduated MBA in 2010
Quick Survey
• How many have been in the business
– Less than 5 years
– 5-10 years
– 11+ years
• How many shops do you own?
– 1
– 2
– 3 or more
Outline
• What does it take?
• Marketing
• Management
• Accounting
• Free Money
What does it take?
• Machinist
• Salesman
• Marketer
• Manager
• Finance Expert
• Accountant
• Janitor
• Chemist
Marketing
• 4 Ps
– Product
– Price
– Place (Distribution)
– Promotions
• Social Marketing
Marketing
• 4 P’s
– Product
• What you sell Balls, Bags, Shoes, Accessories
Price Points
(Entry, Mid, and Premium in each)
Lessons
Adults, Kids, Seniors, Groups
Labor –
Plug & Redrill
Resurfacing & Rejuvenation
Marketing
• 4 P’s – Product
• So what Does that mean? – You can select the brands and price points that meet your
needs
» If you have a lot of entry level bowlers you better have a lot of entry level stock on hand
• Ball, Bag, & Shoe Specials
• Used Equipment
» If you have a lot of competitive players you will need to have more mid and upper stuff
• SST Shoes
• Quick Access to Orders
Marketing
• 4 P’s – Price
• How much you sell the products for.
• High End Balls – Internet Pricing
– $179 – 130 cost = $49 per ball
– Premium Pricing
– $229 – 130 cost = $99 per ball
YOU HAVE TO DRILL TWICE AS MANY BALLS!
The Key to this is you have to be good at what you do!
Marketing
• 4 P’s
– Placement (Distribution)
• How do you sell the product? – In Shop
– Online
» Closeouts
Marketing
• 4 P’s
– Promotion
• How do advertise to your customers? – In Shop – Signage, Ball Talkers, Pricing, Hours
– In Center – Flyers, Overhead Displays, Posters
– Yellow Pages
– Website
– Search Engines – Google, Bing,
Marketing
• Internet Usage
Source: http://www.internetworldstats.com/top20.htm
United States: 77.3%
Marketing
• Internet
– 72% - 4.4 hrs
– Social
– 46% - 4.6 hrs
– Shopping
– 12% - 1.8 hrs
Source: www.marketingpilgrim.com
Marketing
• Social Media • Survey in March 2010
– Facebook – 78%
– Twitter – 75.6%
– Others – 29.3%
Source: www.practicalecommerce.com
Overall Marketing
Below Average
• Cluttered
• Hand Written Signs
• Old Tattered Posters
• Window Covered
• Some Pricing Missing
• Poorly Lit/Lights Out
Professional
• Signs Laminated
• Only Current Posters
• All Prices Easily Read
• Bright Lighting
• Flyers w/Sales
Management
• Planning
• Organizing
• Staffing
• Directing
• Controlling
Management
• What it really means!
– PLAN!
– Use your Time Wisely!
– Customers are sometimes unpredictable so always be ready to drop working on something when you are in the shop
Accounting
• Find a good CPA
– Prepare Your Taxes and bookkeeping
– Budgeting
– Project Cashflow
– Help Locate Additional Funding
– Someone who will look out
for you year-round
Source: www.settlesmart.com
Accounting
• Cost of Goods – Cost of product / Sale Price after Discounts
• Balls – Overall – 55% – High end 65%, Mid Price 50%, Low End 45%
• Bags, Shoes – 50% (Sometimes Higher)
• Accessories – – Big – 50% Small – 30%
• Overall – 50%
• NEVER LEAVE MONEY
ON THE TABLE!
Accounting
• Financing
– Take advantage of terms offered
• Requires planning both for Sales & Cash
– Know what your inventory number can afford to be and manage it. Avoid having to use Debt to extend it unless you are rewarded for it!
Accounting
• Smart Purchasing
• Specials
• Example – Ball A – Special $25 off
– Normal Price $130 – New Price $105
– Ball turns out only ok…Sell 1 for $220, Sell other 3 for $150 ….total Profit 115 + 45 x 3 = $250
– Total profit normally on a $220 ball = 90
– Total profit normally on a $150 ball (assume $80 cost)
= 70 x 3 = 210 + 90 = $300
Sales Cycle
Source: http://tynerblain.com
Accounting
• Shop Close Out Lists
– Just because a ball didn’t sell at $220 doesn’t mean it wont sell at $150 for more margin than your $150’s!
– Look for items like Discontinued Plastic or Entry Level colors
– Don’t be fooled by what looks cheap
• 16# Balls! Size 6 Ladies Shoes!
Freight
• ALWAYS take advantage of free freight offers when possible!
– Usually as much as 10% of the cost of the invoice!
– So on a $500 order it could be as much as $50
Free Money
• Grips & Slugs
• Lots of shops give them for free because they are cheap. Nothing is free!
– Even if you only charge $20 per ball
• 200 balls a year = $4,000 per year
• 500 balls a year = $10,000 per year
• 1000 balls a year = $20,000 per year!
Free Money
• Sanding – Cost of Abralon - $3-4 per pad!
– 3 per night at $3 x 5 nights per week • $2340 per Year!
• Polishing – 3 per night at $5 x 5 nights per week
• $3900 per Year!
• We all know modern balls perform better with regular maintenance!
Sales Process
Source: http://www.better-sales-and-selling.com/salescyclesteps.html
Demographics
• Veterans – Age 65+
• Baby Boomers – Age 42-64
• Generation X – Age 26-41
• Generation Y/Millennials – Ages 6-25
Veterans
• Loyal
• Conservative – Avoid Risk when possible
• Appeal to their new desires and ways to help them improve
Baby Boomers
• Into Status symbols
• Tend to champion causes that are important to them
• Expect to be Serviced! Don’t mind paying but they expect the full service experience
Generation X
• Individualistic and Adaptable
• Only interested in the items that are specific to their needs
Gen Y/Millennials
• Multitasking is a way of life
• Respect has to be earned
• Technology is expected
• Like to do things in groups w/friends
• Appeal to their desire to use technology
Q & A
• Any questions?
• To Contact me later:
– Brent Sims
– 863-734-0296