BEN’S BIKES
Comm 447-Business Plan
Ben Gotts
Executive Summary
Ben’s Bikes will be a retail store that focuses on: bikes, cross country skis and outdoor clothing located in
Castlegar British Columbia. Castlegar is the hub city for the South Columbia Region of BC, making it a
strategic location for a new business. Currently the residents need to travel 45 minutes to purchase and
repair their sports equipment which presents a good business opportunity. The premises for the
business will be centered on providing a sense of community around the store.
Castlegar is a market that has the right demographics, income and location to support Ben’s Bikes. The
average income is 5.6% lower than the provincial average, however the cost of living is 46% less than the
provincial average. This paired with the fact that mountain biking and skiing are a way of life for
Casstlegar residents make it a great location for a bike shop.
The business requires $310,000 in capital to start the business. This will be financed through $100,000 in
owners’ equity and a $210,000 bank loan. The majority of the investment goes into buying the retail
location for $230,000. The projected sales when compared to break even are very close in the first three
years, which is detailed in the financial section of the report.
Ben’s Bikes will not use the traditional forms of marketing as I believe other methods will reach our
target market more effectively. The marketing strategy for Ben’s Bikes will include involvement with
current community events and starting our own annual events in spring and late fall. The storefront will
also be a major source of marking as we will be located on a busy street.
The business plan discusses in detail the Operation, Human Resources, Marketing and Financial plan of
Ben’s Bikes.
Contents
Introduction .................................................................................................................................................. 3
Industry Analysis ........................................................................................................................................... 3
Mission Statement ........................................................................................................................................ 4
Goals and objectives ..................................................................................................................................... 4
1.0 Operations Plan....................................................................................................................................... 4
1.1 Location............................................................................................................................................... 4
1.2 Floor Plan ............................................................................................................................................ 5
1.3 Daily Hours .......................................................................................................................................... 6
1.4 Products .............................................................................................................................................. 6
1.5 Capital Budget ..................................................................................................................................... 7
2.0 Human Resource ..................................................................................................................................... 7
3.0 Marketing ................................................................................................................................................ 8
3.1Target Market ...................................................................................................................................... 9
3.2 Competitors ........................................................................................................................................ 9
3.3 Products .............................................................................................................................................. 9
3.4 Place .................................................................................................................................................. 10
3.5 Ben’s Bike Club .................................................................................................................................. 11
3.6 Community Events ............................................................................................................................ 12
3.7 Marketing Budget ............................................................................................................................. 13
4.0 Financial Plan ........................................................................................................................................ 13
4.1 Financing Structure ........................................................................................................................... 13
4.2Financial Analysis ............................................................................................................................... 14
4.3 Breakeven Analysis ........................................................................................................................... 14
Conclusion ................................................................................................................................................... 15
Reference List.............................................................................................................................................. 15
Appendix 1- Financial Model ...................................................................................................................... 16
Introduction
Ben’s Bikes is a retail store that specializes in bikes of all levels, cross country skis, snowshoes and
outdoor clothing. The store will also carry all the parts and accessories that complement our main
product offerings and have a service department to maintain and repair all of the customers gear. We
will be located in Castlegar, British Columbia which is in the South Columbia region of British Columbia.
We will be serving the entire community as we will be the only store of this type in the community.
Ben’s Bikes will offer bikes ranging from a toddler’s first bike to high performance models. Having
products for two distinct seasons will have cash flows all year long and enable us to have a keep a full
time employee year round. Our major source of income is from bike sales and repairs.
Industry Analysis
Castlegar is an ideal location for our new business as currently it is not serviced by an existing bike shop.
The city has a population of approximately 7300 people, have a passion for enjoying the outdoors and a
higher disposable income than the provincial average (City of Castlegar). The bike industry is growing at
a steady rate with more consumers prioritizing health and fitness. Castlegar has the only airport in the
area, tourists land in Castlegar to start their vacation. Although the majority of our cliental will be local,
this creates more sales opportunities when someone on vacation forgets something for their trip or
need a repair.
The cost of living in Castlegar is 46% below the provincial average and the average income is only 5.6%
below the provincial average (City of Castlegar). This is a favourable economic climate for our business
as customers have a high disposable income to spend on hobbies.
Biking and skiing are not just hobbies in this area it is a way of life. These activities are taken quite
seriously, the Castlegar Nordic Club has over 800 members (Nordic Club). If every member bought a new
pair of skis that is over 90 pairs of skis a season that would be sold. Mountain biking has an even higher
participation rate. There is a dedicated group of volunteers that meet weekly to build new trails and
make improvements as well as a group of three paid employees to improve trail conditions during the
summer months. The new trails have not gone unnoticed; the demand for trail maps at the tourism
office has gone from hundreds of inquiries to thousands a year (IMBA).
With the strong economic climate of Castlegar coupled with the growing trail infrastructure and
increased tourism are good indicators that Ben’s Bikes will be a feasible business.
Mission Statement
“Ben’s Bikes is a local bike shop that prioritizes: incomparable service, high quality products,
knowledgeable staff and community involvement.”
Goals and objectives
1) Have a reputation of having the most skilled and knowledgeable staff in the area
2) Make all customers feel comfortable in the store
3) Create a community within the store through our club
4) Gain customers from existing stores
5) Share passion of cycling and skiing with the community
6) Integrate our business into the community and contribute to community improvement
1.0 Operations Plan
The overall operation plan will be simple for Ben’s Bikes. Ben’s Bikes has two parts to the business, a
retail store and a service department. The main product lines we will be selling are:

Bikes

Cross Country Skis

Snowshoes

Outdoor Clothing

Parts

Accessories
1.1 Location
Ben’s bike will be located on 186 Columbia Ave, the main street that goes through Castlegar. The
location is currently listed at $229,000. This location will be convenient for customers, it is a central
location with many nearby businesses, ample street parking and close to two schools. This location is
very visible and will be easy for any potential customers to spot.
1.2 Floor Plan
Our floor plan will have two distinct layouts, one for the summer season and the other for winter. The
front of the store will have clothing and accessories on one side of the store and the other will have
bikes or skis, depending on the season this way both types of products are displayed in the window. The
back the store is broken into a storage room, service area and change room. I chose to locate the service
area at the back so when customers bring in repairs they have to walk through the store and see all our
inventory and maybe make a purchase. The service area will also have an espresso machine and small
bar fridge, detailed in the marketing plan. The rest of the store will have bikes around the outside walls,
a sales counter close to the front entrance and racks for clothing and accessories where space allows.
The overall layout is an open concept that allows lots of movement and facilitate conversation.
1.3 Daily Hours
Above is a typical weekly schedule for Ben’s Bikes. Having two people working for the majority of the
time should be enough to serve our customers. As our sales will be large purchases that occur less
frequently; staffing requirements will not need to be that high. We have scheduled our part time staff
for Fridays and Saturdays as these will be our busiest days.
1.4 Products
Our inventory will be purchased directly from the manufacturer for the majority of our products such as
bikes and skies. The smaller accessories will be supplied by two main distributers, Live to Play Sports and
Outdoor Gear Canada. The challenge for our business is having to stock large quantities of inventory and
slow inventory turns. This will be discussed in detail in the financial section.
1.5 Capital Budget
Below is a condensed capital budget, see Appendix 1 for more detail.
2.0 Human Resource
Bike shops always have a difficult time finding skilled and knowledgeable staff members because the
industry does not have as high of a pay scale as similar mechanic positions such as automotive
mechanics. People choose the career path because they have a passion for the sport. This implies that it
is first difficult to find the right staff member but once I do it is very important to keep them. Ben’s Bikes
will hire staff that are active members of the community and have a passion for biking and skiing. There
will be myself, owner/manager, a full time service manager and then 2 seasonal part time staff.
The manager will be in charge of running the day to day operations of the business such as: ordering
product and supplies, sales and service work as needed. This position will also entail planning for future
goals of the business. Benefits will be paid in the form of dividends as net income rises.
The service manager will be highly skilled and experienced in bike repair, and will be paid at a higher
rate to keep for long term employment. This staff member is vital to retaining long term customers; if a
customer’s bike is repair with care they will stay a loyal customer. If this individual stays for longer than
five years a profit sharing program will be put in place and will be negotiated at that time. This is
uncommon for a bike shop to offer but I believe this will be a payoff in the long run as it will encourage a
vital staff member to stay over the long term.
The two seasonal staff members will work part time an average of 15 hours per week for an average of
25 weeks a year during our peak times of the year. These staff members will be paid at a small premium
because of the required knowledge of the position. My part time staff will be responsible for both sales
and service roles depending on what is required.
Ben’s Bikes will provide employees with the standard required benefits and other perks to keep
employees satisfied. With the nature of a very seasonal business and cash flow a concern, I will provide
staff with benefits that will have little cost to the business. This will be in the form of staff outings,
discounts on product and most importantly a fun work atmosphere.
3.0 Marketing
The marketing plan will not consist of the traditional forms of marketing as less costly alternatives will
be just as effective. Our main sources of marketing will include: our bike club, community events, store
events and location. With little financial investment we will be able to market to our target market. With
having the business in a small community, word of mouth is very important. As mentioned in the HR
plan, hiring the right staff is high priority and indirectly is part of the marketing strategy. Social media
and a website will be used but it is not the focus of the marketing plan.
3.1Target Market
The target market for Ben’s Bikes will be from ages 16 to 50 with an active lifestyle and middle income.
There will be customers from other age groups but I believe this will be best suited to the products we
sell. This demographic will be able to afford our products, appreciate our customer service and buy our
products for their children. If Dad mountain bikes his kids will most likely will have bikes from us as well.
3.2 Competitors
Our direct competitors are approximately 45 minutes away and offer almost identical products and
services. Our competitive advantage will be convenience, customers will save 1.5 hours in travel time.
3.3 Products
At Ben’s Bikes we will specialize in all types of bikes, cross country skis and accessories and clothing that
complement our main product lines. I have decided not to carry any downhill ski equipment due to the
high inventory cost, lots of competitors and risk of poor snow years. The brands have been strategically
picked to exceed customers’ expectations of quality, value and technology. One of the major factors in
choosing brands will be if the company allows online sales. I will only purchase from brands that have
strict distribution policies. I do not want to have to compete with online discount retailers. The brands
we have chosen to sell are: Trek bikes, Rocky Mountain Bikes, Salomon skis, Alpina Skis, Arteryx clothing
and various brands for parts and accessories. The companies listed above all have strict distribution
policies and do not sell to online discount stores. I also made a point of choosing Canadian companies
when able, Rocky Mountain and Arteryx are both located in Vancouver. I believe customers would
prefer Canadian products when the product is comparable to the competitors.
3.4 Place
As mentioned, Ben’s Bikes will be located on 186 Columbia Ave in Castlegar, BC. The location is central,
close to the trail system that our customers use and located on the main street through town that many
travelers would drive on. This will be one of our main sources of marketing; since we are in a small city
we have most drive by our location every day. This will also lead to word of mouth advertising when we
first open up, the community will start talking about a new business in town. Having this location will
not only market to the local community but tourists as we are on the main road through town and
minutes from the airport.
3.5 Ben’s Bike Club
The club is going to be a major source of marketing for the store. The idea of having the club is to create
a sense of community around the store. This will be accomplished with weekly rides, events such as
BBQs, and the store as a meeting place.
How it Works:

To join the club a customer will have to purchase a store jersey with a large Ben’s Bikes logo and
a yearly fee of approximately $15. The jersey will be sold to the customer for cost. When the
club member is riding on the local trails they will be advertising to our target market on the
trails.

In return for the free advertising we offer the customer weekly rides, events such as BBQs, a
15% discount on parts and accessories and special promotions.

We will also advertise to the club members through email
3.6 Community Events
Community events will be very important to the initial marketing plan for Ben’s Bikes. There will be two
parts: supporting currents events and having our own.
Ben’s Bikes will support the current community events in Castlegar by donating both time and products
to these events. This will include annual cross country ski race, trail building days and other events in the
city.
Ben’s Bikes will also put on three events each year for the community. These will include: the spring bike
swap, Easter Scavenger Hunt bike ride and a beginning of the winter ski demo. The bike swap will occur
around late March each year and will allow residents to sell their used bikes. This will be targeted at
families to swap bikes when one gets too small. The event will happen over a day; bikes will be dropped
off from 8-10 am, then the sale goes from 11-3pm. Than at 3 the seller can check to see if their bike sold
and either collect the profits or get their bike back. The fee for selling your bike will be 10% of the selling
price, proceeds will go to the Castlegar Trail Society. The sale will be held down the street from the
store; if shoppers can’t find what they are looking for they will be directed to my store. The other two
events will be focused on getting customers excited about the next season. For the spring we will have
an event in early April that will encourage families to come out and ride the trails along the river. There
will be hidden items for children to find along the route and at the end I will have snacks prepared. An
assortment of bikes will be available for people to try out.
Our other event will be in mid-November at the start of the ski season. The event will have a chili lunch,
rental skis for customers to try out and instructors for those new to the sport. This event will get
everyone excited about the upcoming ski season and hopefully get some people skiing who have never
tried before.
3.7 Marketing Budget
The marketing budget will be small but efficient for Ben’s Bikes. Year one will have $1500 devoted to
website design, opening day event and other community events. The budget will drop in half the
following years and will cover website maintenance and an event budget.
4.0 Financial Plan
4.1 Financing Structure
Ben’s Bikes will use a combination of debt and equity financing. Owner’s equity will consist of $100,000
and a $210,000 bank loan will be used for the remainder of the financing. Detailed financial statements
are located in Appendix 1.
4.2Financial Analysis
I was able to use current bike shop owners to get accurate numbers for what my base case sales would
be. In my base case I have in the first year a projection of 160 bike sales and 60 pairs of ski sales, the rest
of the revenues are from clothing, parts, service labor and accessories.
Gross Payback
$124,205
Net Payback
$24,205
NPV
$-35,821
IRR
4.7%
As seen in the table above the financial indicators are not too compelling. This is due to the fact there is
a large amount of capital invested in the cost of the building. There are advantages to owning the
building such as a rental income of $9000 a year form the suite but overall I see renting as a better
alternative.
4.3 Breakeven Analysis
Break even analysis was done using an average of bike sales per day over the four spring and summer
months. Bike sales only consist of 48% of revenue but I believe this paints a good picture of what sales
are needed to be profitable.
Net Income Breakeven
Bike Sales per Day
2.50
2.00
1.50
1.00
1.33
1.53
1.16
1.18
1
2
1.86
1.95
1.20
1.15
1.14
3
Year
4
5
1.69
0.50
-
Conclusion
After analyzing all the parts of my business plan I believe this business can be successful based on the
customer demographics, location and affordability of the area. After analyzing my financial data I
believe there are other options of completing the plan that may prove to be more profitable but the
overall concept is feasible.
Reference List
Castlegar Nordic Ski Club. (2011, January 1). Retrieved January 10, 2015, from
http://www.castlegarnordic.ca/
Corporation tax rates. (n.d.). Retrieved February 9, 2015, from http://www.craarc.gc.ca/tx/bsnss/tpcs/crprtns/rts-eng.html
Cost of Living. (n.d.). Retrieved January 10, 2015, from http://castlegar.ca/invest-cost-of-living.php
Trailbuilding Kings and Queens of Castlegar, BC. (n.d.). Retrieved January 10, 2015, from
http://www.imbacanada.com/blog/trailbuilding-kings-and-queens-castlegar-bc
Appendix 1- Financial Model
See attached excel work sheet for financial model