Busness plan, bicycle retailing

Rtl Cycl
Mustahid Ali
MBA 3, 1334
Instructor: Prof. Bibhas Basumatray
Universal Business School, Karjat
By
Business Plan Generation Model
E-Strat Project
All in one BYCYCLE RETAIL STORE

“Rtl Cycl” All in one RETAIL BICYCLE STORE
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Acknowledgement
I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals. I would like to extend my sincere thanks to all of them.
I am highly indebted to Professor Bibhas for their guidance and constant supervision as well as for
providing necessary information regarding the project & also for their support in completing the
project.
I would like to express my gratitude towards my siblings for their kind co-operation and
encouragement which help me in completion of this project.
My thanks and appreciations also go to my colleague in developing the project and people who
have willingly helped me out with their abilities.

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Table of contents
Particulars Page No.
Executive Summary ………………………………………………………………. 3
1. Objective ……………………………………………………… 4
2.1. Start-up Summary ……………………………………………………………. 4
2.2. Start-up Requirement .………………………………………………………………. 5
3. Company Location And Facilities ………………………………………. 6
4. Products and Services ………………………………………………………. 6
5.1. Market Analysis Summary ……………………………………………………………. 8
5.2. Porter’s Analysis .………………………………………………………………. 8
5.3. Swot Analysis …………………………………………………………. 10
5.4. Market Segmentation ……………………………………………………………. 11
6.1. Competitor Analysis …………………………………………………………. 13
6.2. Competitive Comparison …………………………………………………………. 13
7. Marketing Strategy ………………………………………………………. 14
8. Marketing Mix ………………………………………………………. 14
9. Pricing Strategy ……………………………………………………. 18
10. Sales Strategy ………………………………………………………. 19
11. Business Model Canvas ………………………………………………………. 20
12. Financial Plan …………………………………………………………. 22
12.1. P&L A/C for 3 years ………………………………………………………. 23
13. Action Plan …………………………………………………………. 24
References …………………………………………………………. 25

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Executive Summary
Indian Bicycle Industry is very large with India producing almost 10% of total Bicycle production of
the world and exporting around RS200 million of it. Out of the complete sales of bicycle, around
13% is constituted by the kids segment with CAGR (Compounded Annual Growth Rate) of around
20%. With many brands present in the bicycle industry, a new approach towards marketing is
needed and also to penetrate competitive market cost competitiveness is required. The kids
segment of bicycle is mostly unorganized with very few companies focussing on this quickly
growing and lucrative section. Most of the parents who have higher purchasing power and less
time to spend with their kids are mostly looking towards buying things online. This provides a good
opportunity to provide various designs of hi quality kids bicycles online for the parents to buy and
free them off of going to the market themselves as free home delivery is provided by the company.
Also since many of the kids are very choosy and would like to customize the cycle with various
models, designs and also different accessories, the online portal will provide a platform for the
various people to come and select their unique cycle in terms of colour and accessories. Currently
in the marketplace, a prospective customer usually goes out on their own to hunt for a bicycle
either for themselves or for the kids. This usually involves dedicating some time and energy along
with the money spent in transportation to and from the market and home respectively. Also
transportation of the cycle to home is also a major problem. But with home delivery of the cycle
along with customization of accessories and an option of Cash On Delivery with almost the same
price as that with the retailer, this service provides an additional value that customer can drive out
of the company. Although the online e-portal is a good way to enter the marketplace, the bulk
sales in the beginning will have to be made by the retailer’s dealer network where both a discount
and a credit period will have to be provided to the retailer to promote the sales. But in the long
run it not only creates a valuable dealer network but also a loyal direct sales network with benefit
of both the models.
This report explains the business plan for launching a bicycle retail shop name as “Rtl Cycl “I have
chosen bisociation technique (bicycle and retailing). To knowing the target customers I have used
segmentation and targeting .I have also tried to find out its competitors. I have also paid special
attention to the price, product, place, promotion and its design. I have also decided how to
promote it and where.

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1. Objectives
The objectives of this business plan are:
1. Continue to provide the high quality of sales and services.
2. Manage a seamless transfer of ownership.
3. Maintain a financially healthy business and validate the trust and advocacy of other people
in support of this business purchase.
4. Repay the start-up loan provided by family members within the first year.
5. Achieve monthly and yearly sales equal to or better than the previous year under the
former owner.
6. Aim to improve sales of bicycle specific garments and rainwear over the year.
7. Focus marketing on new student influx to maintain current growth in sales and service
revenue.
2.1 Start-up Summary
The price existing store fixtures, tools, and mobile leasehold improvements. These included bicycle
wall racks, display cases, track lighting, repair and assembly tools, supply cabinets and storage
shelving, air compressor, etc., and are part of the purchase price.
Inventory, accounts payable, and invoices were tracked for five months to determine an accurate
price of current inventory and amounts of accounts payable assumed.
We are investing some of our own money, partially a home equity loan, in the company. An
additional amount is being invested, as short-term interest free loans, by family members. This
plan calls for these loans to be repaid in the first year.

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2.2 Start-up Requirements
Start-up Expenses (In Rupees)
Legal 96000
Stationery 15000
Promotional Materials 18000
Consultants 48000
Insurance 21000
Down Payment 600000
Total Start-up Expenses 798000
Start-up Assets Cash Required 5500000
Start-up Inventory 1020000
Other Current Assets 480000
Total Assets 5000000
Total Requirements 13596000

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3. COMPANY LOCATIONS AND FACILITIES
“Rtl Cycl “ will be going to locate in Chandigarh, and also in other metropolitan’s cities. Outdoor
recreation is very popular in the area; there are bicycle friendly country roads leading to parks and
lakes, as well as an extensive array of mountain biking trails for the more adventurous.
The store is 2,000 sq. ft. of interior space with covered outside space adjacent to the heavily
trafficked sidewalk. Used bicycles are displayed in this space. One or two new bikes are displayed
as well as a visual draw. All are secured with lock and cable. As a service to all cyclists, a hose from
the air compressor and a pressure gauge are present under the overhang next to the sidewalk. This
primes the pump for quite a bit of spontaneous walk-in business.
4. PRODUCTS AND SERVICES
4.1. Retail Sales
1. Bicycles. We sell new bicycles, predominantly in the mountain bike style, retro-cruiser is a
close second, and sport/touring/racing road bikes a distant third. We also sell some used
bikes which we take in on trade as a service to our customers who are buying new bikes.
2. Accessories. We offer a wide variety of accessories. Locks, computer speedometers,
fenders, cargo racks, comfortable seats, headlights, helmets, water bottles, panniers/back
packs/messenger bags, child seats and trailers, bike storage racks, and auto roof rack
systems all fall in this category. It is not possible to carry every possible accessory, so we
try to carefully choose those which will be most useful or desired by our target markets.
When we receive special requests for a new item, we'll often order several to test the local
demand, and if adequate, will add it to our regular stock.
3. Clothing. Clothing appeals to all cyclists, whether it is a logo emblazoned T-shirt or a piece
of waterproof rainwear. We rotate our clothing based on the season. Just before the
autumn rains we stock jackets and Gore-Tex. Come winter we offer helmet covers and
liners, insulated jerseys and pants, gloves, and shoe covers. And when spring arrives and
the first crocus appears through the melting snow, we start displaying summer jerseys, and
racing shorts.
4. Parts. Parts generally refers to pieces or materials necessary to the basic functioning of the
bicycle. Generally, parts are installed during service and are an additional charge beyond

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the service fees. Some, like crank sets, pedals, tires, 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 bikes themselves.
4.2. Service
“Rtl Cycl” is a full-service specialized bicycle shop. Our service offering includes, but is not limited
to:
 Free 30-day/100-mile tune up with every new bike sold.
 Quick repairs for flat tires, 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.
 Authorized warranty repairs on the bikes.
 Custom wheel building.
4.3. Future Products And Services
The bicycle industry is a mix of old and new technologies. Frame sets are made of various
lightweight materials: T-6 aluminium, 4130 chromium-molybdenum steel, titanium, and/or carbon
fibre matrix mixes. And yet the drive train is still a linked chain moving over cog gears, on axles
supported by ball bearings.
Wheels can be anything from wire spokes to aerodynamic discs. Clothes range from high-tech
moisture wicking synthetic fibre jerseys and Gore-Tex rainwear to traditional wool or cotton
shorts.
Each year the major component companies such as Shimano, Mavic, and Campanology introduce
new parts groups. The marketing has become as strident as that of the automobile industry. This
means that the bike shop must maintain replacement parts to repair old groups, stock parts for
early replacements of new models, and have an inventory of high priced groups for the equipment-
focused bike nobs who want to upgrade their bikes with the newest and greatest. Additionally, the
shop must regularly order manuals and specialty tools to service the new bikes and components.

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Following the trends in technology and futuristic products is as much fun as it is work for Hub and
his staff. They work on bicycles because they love bicycling.
5.1. MARKET ANALYSIS SUMMARY
The predominant market segment for “Rtl Cycl” is the university student population, sport person,
adventures population, kids. We also cater to the university staff, local business employees, and,
along with every other bicycle shop in town, the greater Metro population.
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 university neighbourhood. Part of the market is price
constrained and another part is hooked on the latest fad, be it frame style, number of gears, or
portrayed image. As long as new students arrive each year at the small metro city, our market
segment growth is assured.
5.2 PORTER’S ANALYSIS FOR BICYCLE INDUSTRY

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Rivalry among Existing Competitors
• Main competitors include Hero Cycles, Firefox, Atlas Cycles
• It has long history and established significant market size
• Increasing rivalry expected as more firms enter the attractive market (both
domestic and foreign import).
Threat of New Entrants
• Expectation of long term demand for bicycles for kids segment remain strong
• However, increased competition into the market from imports from the China
makes it less profitable for new entrants
Threat of Substitutes
• Kids Bicycles are common and range in prices
• Different styles and makes are widely available through many outlets
• Alternative recreational equipment widely available
Bargaining Power of Buyers
• Buyers demand depends on discretionary income for recreational equipment
• Variety of distribution channels
• Higher income households comprises a major portion of the market
• Buyers demand depends on level of real disposable income and health of household
Bargaining Power of Suppliers
• Primary Assembly unit is located in Ludhiana so the supplies of raw materials in
assembling the cycles take less time.

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5.3 SWOT ANALYSIS
Strengths
The Indian bicycle industry is almost entirely self-sufficient, with more than 95% of bicycle
components supplied from domestic sources. It also obtains most of its raw materials, such as steel
tubes, from within the country. It concentrates on producing a simple, cheap, and rather old-
fashioned roadster model. The could be seen as a deliberate attempt to satisfy the basic
transportation needs of the less affluent segment of the population. The industry is capable of
producing roadster model at highly competitive Price. It has made minimal use of foreign
technology, creating or adapting most of the technology it employs and emphasizing labour-
intensive production techniques. Although it procures a substantial volume of its components
from a large number of small producers, final production is strongly concentrated.
· More than 90% of its exports are directed towards other developing countries where the basic
transportation needs of large numbers of less affluent people are far from being satisfied.
Weaknesses
The Indian share in the global bicycle business is around one percent, this too is in the low cost
and low quality products. For producing higher end bicycle for global and domestic market, there
is need for overall improvement in vendor base as well as in the basic infrastructure and resolution
of logistic issues. The Indian Industry, however, recognizes that the quality of its bicycles has to be
improved in order to increase its competitiveness in foreign markets. Upgradation of technology
and quality has to b3 built in every part, every dimension of bicycle within this context,
opportunities for foreign collaboration exists, although mainly for the production of certain types
of components.

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Opportunities
Enormous potential to operate in a global market, though challenges of quality, cost delivery are
equally large. Germany will source its tyre requirements for global market from Metro Tyres in
Ludhiana.
Many of the Cycle entrepreneurs are aware or the emerging global challenges and are in the
process of leveraging and upgrading their units by undertaking value addition, instituting cost
cutting measures and setting up websites. The United Cycle & Parts Manufacturing Association
(UCPMA) is organizing a virtual exhibition on Internet as a part of its upgradation mission. The
online exhibition will also feather a virtual buyer-seller meet.
Threats
Increased competition from foreign producers especially China, which competes on the basis of
lower costs of production. Fluctuating demands as a result of economical changes. The specials
would be majorly affected , as they are priced higher.
5.4 MARKET SEGMENTATION
The adventures people and kids & teen agers are our main target market.
Adventures and sporty segment.
1. Athletes
2. Hill station living people
3. Tourist
4. Tracker
Kids segment.
1. Small kids 5- 7 years
2. 8-15 years, teen agers and younger children’s
University/college students are another prime market segment.
1. They are mostly undergraduates, so there is a 25% annual turnover.

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2. The lack of parking in the university area and the general ease of bike mobility & motivates
them to use bicycles as inexpensive transport. Athletic pursuit’s draw them, and the nearby
areas for use of mountain and trail bikes provides a great place to ride.
3. There is a new enthusiasm for retro Cruiser bikes, and higher tech cruiser-style bikes with
multiple gears, good brakes, etc. among the college age population.
4. Also, main market for racks, locks, throughout, pannier/bags, fenders, rainwear, etc.
5. They want convenience for sales and service.
Employees/ Working professionals
1. Small growth and turnover, but on the whole, the group is pretty stable.
2. Are willing to commute by bicycle to work.
3. They want a stable, comfortable bike and a full range of accessories.
4. When their bikes need service and maintenance, local drop off/pickup convenience is
important.
5. They have families who ride bicycles also, and will patronize a shop that gives personal
service.
The Indian bicycle market comprises two segments: “standards” and “specials”. Standards are the
workhorses of the rural economy. These cheap and rugged bicycles have remained unchanged for
decades. The specials or “fancy” segment comprises new generation bicycles, which are more
expensive. Differentiation is the name of the game here.
Specials Out-pacing Standards: Standards, which accounted for over 90% of the market in the early
2000s today account for only 66% of cycle sales in the country. This is mainly because:
A new class of bicycles called juveniles, which are categorized in the specials segment, have over-
taken the standards. The juvenile is, in effect, a standard bicycle with a more urban look, which is
targetted at the rural and semi-urban youth. Its popularity can be gauged from the fact that while
standard bicycles registered a compound annual growth rate (CAGR) of 2.7% between 2006-2007 and
2012-2013, juveniles raced ahead at 12.6% in the same period.
Manufacturers have also increasingly attempted to wean away consumers to the specials segment
through greater marketing push and by attractively pricing specials. This has, to an extent, hurt
standard sales in semi-urban areas.

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6.1. COMPETITOR ANALYSIS
MAIN COMPETITORS
Setting aside the discount department stores,”Rtl Cycl” has the following direct competitors.
 local multi-sport store at the local megamall
 State-wide chain of bicycle shops which started out as Schwinn-only shops, but has had to
take on other brands and products.
 Local, including the oldest shop in town.
 Local multi-location chain that has specialized in opening shops in small local malls in areas
of new housing development.
 Several garage mechanics offering service only.
6.2. Competitive Comparison
The domestic bicycle industry is oligopolistic in nature, dominated as it is by three organized
players: Hero Cycles Limited (Hero), Tube Investments of India Limited (TI) and Atlas Cycles
(Haryana) Limited (Atlas). These players account for over 90% of the country’s total bicycle sales.
Fringe players include Avon Cycles and Hamilton. While TI is the clear market leader in the specials
segment, Hero, which is also the largest bicycle producer in the world, is a clear leader in the
standards and in the overall domestic market. As TI has the largest presence in specials, and as this
segment has registered the fastest growth in recent years, TI’s volumes have recorded the highest
growth. Although Hero has a large base of standard bicycles, it has achieved moderate, albeit,
consistent growth through its strong focus on increasing its specials volumes. Of the three majors,
Atlas is the most dependent on standards. Hence, its volumes have faced the greatest pressure in
the current environment. The ongoing dispute in the promoter family over the division of the
company’s assets has further added to Atlas’s woes .According to industry estimates, the bicycle
market in India is 14 million units a year, of which 5-7% belongs to the premium segment, growing
at 25-30% annually. Firefox is one of them, which has a manufacturing facility in Sri Lanka from
where the bicycles are imported. The Trek products are imported from China and the US. While
the Firefox range is priced between Rs 4,000 and Rs 18,000, the Trek's bicycles are priced at Rs

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20,000-85,000. Firefox Bikes claim that they plan to capture 2.5-5% of the total bicycle market in
India by growing at the rate of 40% per year.
7. Marketing Strategy
Our marketing strategy seeks to optimize our advantage of prime location. We want the university
population to see us as their bike shop, even our name says so “Rtl Cycl” We want them to see us
as part of their daily experience, and a shop they can depend on for quick repair and maintenance
service.
8. MARKETING MIX:
A. PRODUCT:
In the first year of operation we would be launching cycles for kids up to the age of 9 years. We
will have special bicycle ranges for boys (superhero series) and girls (bubbles series). Superhero
series will have Batman Black, Spiderman Red, Hulk green etc and bubbles series will have bubble
red, bubble blue and bubble green etc.

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Customization options in terms of colors, seats etc. would be made available.
By the third year we plan to extend our offerings to adults as well through our ranges – Outdoor
fun (Adventure Series), For racers (Pace series) and for city riding (Joy series).
B. PRICE:
Our strategy is to be cost leaders in the bicycle business but we won’t be compromising on quality
and our prices would be the best prices available in the market.

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C. PLACE:
Initially our target market would be concentrated in northern India especially Ludhiana and Delhi.
We would be selling our bicycles through retailers and through our online portal. Amongst the
retailers our main targets would be exclusive multi brand cycle stores, sports good stores etc.
D. PROMOTION:
Since our budget is limited we will go for cost effective promotion strategy.
D.1. Advertise for free by word of mouth
Word of mouth is the best way to advertise for free. Word of mouth advertising depends on
reliability of the brand and for that quality is must. There are two ways to promote your business
by word of mouth:
 Get others to talk about - The best way to do this is to surpass customers’ expectations.
This may include free gifts with each product, taking feedback from customers using our
product etc. Another way to get people talking is to provide extra information like
information about the history of our business. Other methods include:
o Sending thank-you, birthday and seasonal cards
o Offering special sales for loyal customers.
o Handling customer complaints quickly and to their satisfaction
o Being professional and respectful to all customers
o Offer discount coupons in fliers
o Offer free evaluations or consultations.
o Giving free T-Shirts having company’s logo and name with our products.
 Talk about yourself. (explained in detail)
D.2 Press Release
A well written press release is an excellent way to make the public aware of our product or
company. We can submit a press release to local and national newspapers, radio, television,
magazines and trade publications both online and off. Making our press release attention grabbing,
truthful and newsworthy to get an editor’s attention is necessary. For best results focus of the
articles should be on a targeted audience instead of a wide readership.

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D.3 Print Media
 Advertising in local free shopper magazines.
 Distribution of fliers through newspapers etc.
D.4 Sponsor contests
Another way to receive free advertising is to offer to sponsor a contest for a community event or
large publication Community Involvement can be done in many ways:
 Having a "happening" -- contests, parties or picnics for our customers.
 Giving cycles or service donations to a charity auction.
 Giving free talks to community groups on the health benefits of cycling.
 Running booths at local fairs.
 Attend local business groups' meetings and business card exchanges.
D.5 Local Television:
Advantages of Television advertising:
 Television permits us to reach large numbers of people on a national or regional level in a
short period of time
 Independent stations and cable offer new opportunities to pinpoint local audiences
 Television being an image-building and visual medium, it offers the ability to convey our
message with sight, sound and motion
D.6 Mailing Lists:
The internet has hundreds of thousands of mailing list that we can subscribe to and sell your
product or service. Even if the list group does not allow you to sell your product, it is common
practice to have a 6-8 line "signature line" that is automatically put at the bottom of all outgoing
messages, e-mail responses and forwarding e-mails. It is easy to find specific mailing lists like biking
groups etc.
D.7 Mobile Marketing:
We would send SMS to retailers to advertise our products and various schemes.
D.8 Social Media:
Social media sites are great for building customer relationship and offer an incredible reach and
the opportunity to connect with customers in an entirely new way. They also offer a wide reach,
with its potential for viral marketing and traffic generated can be extremely targeted. Moreover,
Social media tools are relatively inexpensive.

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 Facebook: With millions of members with most being young and thus our potential
customers, Facebook is must to advertise about our products. Easiest way is to create a
Facebook page of the company and constantly update it with all the events and new
products.
 Twitter: Twitter is yet another social media tool which can be used for protmotion of our
products. Our company can make an account and people can follow it to know about the
latest happenings in the company.
D.9 Website:
 E-portal - Our website will host an e-portal for dealing directly with customers and to cater
to people who want to buy bicycles online. It will provide customization options and 360
degree view of final selection. Users will have the option to pay online or opt for Cash on
Delivery.
 Blog – Another section of the website will incorporate a blog which will provide bicycle
enthusiasts to communicate with each other, share their experiences and offer help to
newbies.
9. Pricing Strategy
Retail
Pricing of bicycles is very tight with a markup of between 30% and 40% depending upon the brand
and model. Many people believe that bicycles are priced like automobiles and are open for
negotiation, and make almost insulting offers. The shops have little leeway here.
Parts and accessories are generally keystone priced. Some small items cost more in handling and
sales than they do to buy from supplier. These can be double and triple keystoned, because
customers won't buy them if they don't have a minimum perceived value. On the plus side, these
are great "throw-in" items used to close the sale of a bike. When new technology arrives in
bicycles, and if the supply is limited, almost any price can be demanded. This was the case in the
mid-1990s when RockShox introduced suspension forks for mountain bikes. The bike nobs would
pay whatever was asked just to get those forks. Of course, in this type of situation the price, both
wholesale and retail, lowers.
Other accessories, such as step-in pedals, pannier racks, helmets, or headlights are sometimes
heavily marketed by the manufacturers. While this drives demand and brings people into the shop
to get these items, the suggested manufacturer's retail price may limit markup.
The markup on clothes, shoes, jackets, gloves can vary from keystone to triple keystone,
depending upon product, manufacturer, country of origin, and customer perception of value. Pearl
Izumi and Burley Design rainwear can demand premium prices as top-of-the-line garments, but

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many budget conscious students can only afford a RS35 nylon windbreaker. It has been and always
will be a demanding job for us to adequately stock garments at the various price points.
Service
We try to maintain a basic "Hourly shop rate" at Rs200/hour. Standard repairs are then priced
based upon an average time for completion. Some repairs, such as a flat tire, are limited by
customer perception of difficulty.
All parts used in repairs are priced at keystone, and added to the labor service charge.
With several other bicycle shops in the city, there are some price constraints based on competition.
Coupons and specials can balance price ceilings by drawing in customers.
10. Sales Strategy
Sales vary season to season and with the academic school year. Surprisingly, summer is the slowest
season because there are fewer students in town. Business picks up in August with the return of
the students and staff, and flourishes in September. Accessories and rainwear sales increase in the
autumn and early winter. Repairs and maintenance are steady. Holiday sales are brisk, though
generally leaning again to accessories, parts, rainwear, gloves, helmets, headlights, etc. Winter
sales are moderate, and then pick up in springtime as people put away their skies and look forward
to local outdoor activities, longer daylight hours, and drier weather.

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11. Business Model Canvas
Key Partners Key Resources Customer
Relationship
Channels Value
Propositions
SUPPLIERS MANAGING
TEAM/ENGINEER
ORDER THROUGH
WEBSITE/ FREE
DELIVERY
OWN STORE
NEW PRODUCT
PUBLIC AND
PRIVATE PARKING
HELPER PARKING
NETWORK
INFORMATION
WEB SITES
CHEAP PRICE
JOINT VENTURE WORKER PROMOTION &
FORUMS/
BIKER’S EVENTS
TV/NEWSPA
PER BELONGING TO A
CYCLIST
COMMUNITY
WHOLESALERS DELIVERY STAFF FRONT STORE
HOME
DELIVERY SUSTAINABLE
BRANDING AND
VALUES
AD AGENCY RAW MATERIAL SAFETY
WHOLESALE
R BRAND
SPORTS CELEBRITIES SUPPLIER GIFT/ LOYALTY
PLANS
BUS/CAR
DEMO

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Customer Segment Revenue
Stream
Cost Structure Key Activity
ADVENTURES PURCHASES BY
THE NEW
TARGET
SALARIES DELIVERY
KIDS USAGE/ONLINE
SALES
DELIVERY SELLING THE
SERVICES
TEENAGER WORD OF
MOUTH
RENT/PROMOTION
& CAMPAIGN
COSTS
RECEIVING ORDERS &
INSCRIPTION
SPORTY SALES/ PARTS
&
ACCESSORIES
SALES
MARKETING MARKETING
UNIVERSITY/COLLEGE
GOING
PERSONAL
SALES
RAW MATERIAL AWARENESS
EMPLOYEES/WORKING
PROFESSIONAL BRAND
AWARENESS
SUPPLIERS
PAYMENT
AVAILABILITY MAP

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12. FINANCIAL PLAN
This financial plan was developed based upon previous years' 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 was made.
The seller, buyer, and the accountant worked together on the plan to balance optimism with
reality.
An attorney was consulted on specifics of the sale contract.
The topics which follow present specific projections.
Important Assumptions
Payment days are averaged at 45. This is an average figure used for planning purposes. Bicycle
manufacturers and some accessories suppliers offer dating programs where shops order product
at the annual trade show in September for delivery in February or March so that new product will
be available to customers at the beginning of the cycling season. Shops are invoiced for payment
due, depending upon the program, somewhere between May and July.
The financial projections presented here are based on the assumption that suppliers will continue
their current invoicing programs with University Cycle Works. We are thankful for the active
support and advocacy of the various sales representatives who deal with us.
Other products are ordered on a monthly basis to replace items sold, such as tires, tubes, aptitude
and cages, ball bearings, drive chains, etc. These are invoiced at net 30. Some special orders are
C.O.D.
We also assume that:
 Interest rates will fluctuate only slightly.
 The level of discretionary income will remain steady or increase.
 The current enrollment at the university will continue at or above its current level.
 That the lack of auto parking in the university area will continue.
 That gasoline prices will continue to encourage alternative transportation, e.g. bicycle commuting.

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12.1 Profit and Loss for 3 years projection:
(All terms in Rs* 100, in hundreds)
Year 1 Year 2 Year 3
Sales RS501,200 RS576,380 RS662,837
Direct Cost of Sales RS177,680 RS204,332 RS234,982
Other RS0 RS0 RS0
Total Cost of Sales RS177,680 RS204,332 RS234,982
Gross Margin RS323,520 RS372,048 RS427,855
Gross Margin % 64.55% 64.55% 64.55%
Expenses
Payroll RS123,900 RS135,450 RS162,828
Sales and Marketing and Other Expenses RS24,866 RS27,420 RS30,521
Depreciation RS12,000 RS13,500 RS15,000
Leased Equipment RS1,800 RS1,800 RS1,800
Utilities RS3,600 RS3,600 RS3,780
Insurance RS4,200 RS4,500 RS4,725
Rent RS88,000 RS88,000 RS88,000
Payroll Taxes RS30,975 RS33,863 RS40,707
Other RS0 RS0 RS0
Total Operating Expenses RS289,341 RS308,132 RS347,361
Profit Before Interest and Taxes RS34,179 RS63,916 RS80,494
EBITDA RS46,179 RS77,416 RS95,494
Interest Expense RS8,433 RS6,730 RS5,040
Taxes Incurred RS6,445 RS14,296 RS19,178
Net Profit RS19,302 RS42,889 RS56,276
Net Profit/Sales 3.85% 7.44% 8.49%

24
This business plan is giving a sustainable profit per year, even giving the
net profit of 3.85% to 8.49 % within first three year, so it is a feasible and
viable model, investor can invest in this model.
AAA
13. ACTION PLAN:
Phase I
First and very important during the Launch all primary activities of retail store , would be taken
care off, as in matter of location, space, design of store, Contract with Vendor, logistics, Website
Development, and all primary requirements. The store will primarily serve as a bicycle retail store,
but with a whole lot of Augmented Activities.
Even the Promotional Part would be kept simple with the main focus on sponsherships, games
events and also online promotions using IMC.
The Duration of the Phase I Action Plan is around One Year. The main objective here is to create
as much awareness as possible for store and its Touchpoints, and also Customer Retention and
Loyalty.
Phase II
In Phase II the plan is to take Store to another level. This will happen with the Launch of the online
and mobile application to make sales easy, then providing the demo. The Mobile App and online
videos demo’s will add more Value to Customers.
In Phase II we are also increasing our work force and as such Man Power Cost is increasing.

25
Promotional Activities are same as that in Phase I with a little addition of Events into the scheme
of things. Some more time in the future store has plans to tie up with cycling sport celebrities and
collaboration with top cycling and accessories companies like Shimano gears, Cycleurope , Accell
Group to handle national and international Delivery. At this moment it is happy with Chandigarh
being the prime Business Location as it is a sport hub, having enormous number of universities and
colleges and near to hilly areas like Uttarakhand, Himachal etc, to make easy in distribution. Store
can also create a more user friendly platform to make it a social media channel and also start up
its own Sports and Training Academy.
References
 Philip Kotler- Marketing Management
 Business Plan Generation Model
 Google
 www.entreprenuership.com
 www.bplans.com
 www.Canvasbm.com

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