This document discusses tools and strategies for operating a profitable bike shop or small business. It emphasizes the importance of understanding profit and loss statements, balance sheets, and using metrics like margins, expenses as a percentage of sales, and comparisons to budgets and prior years to analyze business performance. The document provides examples of income statements, balance sheets, and multi-year analyses to illustrate how to track financial metrics and identify trends over time that could help or hinder profitability.

1. Turning a
wrench into
turning a profit
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1

2. How many tools does it take to play
golf?
 How many tools does it take to
service a bike?
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2

3. How many tools does it take
to profitably operate a bike
shop?
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3

4. The two most attended
classes within the industry?
How to sell
How to repair
The least attended?
Anything to do with profitably
owning a business
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4

5. www.profitsplus.org
5

6. Tools needed to properly
operate a business
#1 Profit and loss
statement/income statement
Created monthly
Each location have own p&l
plus p&l for business as whole
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6

7. Income Statement
Cash Sales
Cost of Goods Sold
Gross Profit
Gross Profit Percentage
Problems
No logical
arrangement
Not easy to
read
Historical and
static
Not easy to
understand
like a pie
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62,000
39,370
22,630
36.5%
Operating Expenses:
Wages
Payroll Taxes
Property Taxes
Rent
Telephone & Utilities
Repairs
Advertising
Accounting & Legal
Automobile
Bank Charges
Computer Operations
Dues & Subscriptions
Insurance - General & Workman's Compensation
Licenses & Taxes (not sales tax)
Office & Store Supplies
Outside Services
Travel
12,000
960
8,000
2,400
150
1,575
200
140
210
175
300
800
100
300
250
1,000
Total Operating Expenses
28,560
Operating Income
(5,930)
Other Income and Expenses:
Miscellaneous Income
Interest Income
Interest Expense
Net Income Before Taxes
265
(5,665)
Federal Income Tax
-
Net Income (Loss)
(5,665)
7

8. Sales
Inventory
Payroll
Occupancy
Advertising
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8

9. Month in dollars
Categories in percentages
Year to date
Same month last year
Year to date last year
Budget for month
Budget for year
Variance in budget month and year
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9

10. Month
Sales
COGS
Gross profit
YTD
Month last year
YTD last year
Budget
100%
100%
100%
%
%
%
%
Accounting
Balancing account
Bank and merchant service fees
Depreciation
Dues and subscriptions
Freight
Business Insurance
Legal
Loss
Meals and entertainment
Miscellaneous
Office expense
Office supplies
Merchandising
Printing
Postage and shipping
Returned checks
Software support
Business & Personal Property Taxes
Travel
Total operating expenses
%
%
%
%
Net income
%
%
%
%
Variance
100%
Operating expenses
Advertising expense
Advertising
E-Newsletter
Website
Advertising subtotal
Occupancy expense
Building repairs
Maintenance
Rent
Utilities and telephone
Occupancy subtotal
Payroll expense
Benefits
Owner draw
Payroll taxes
Wages and salaries
Workman's Comp and Health Insurance
Payroll subtotal
10

11. 12/31
ASSETS
#2 Balance sheet
Also monthly
Also for each
location
Frequently incorrect
due to current/long
term allocation
Current Assets:
Cash on hand
Checking Account
Savings Account
Accounts Receivable
Bank Card Receivable
Inventory
Total Current Assets:
Investments:
Cooperative Stock
Cooperative Notes
$1,500.00
$17,500.00
$3,050.00
$14,215.87
$1,340.34
$275,654.23
$313,260.44
Total Investments:
$23,125.46
$12,597.47
$35,722.93
Long Term Assets:
Property and Equipment:
Fixtures and Equipment
Building
Total Property and Equipment:
$126,245.11
$325,465.88
$451,710.99
Accumulated Depreciation:
$207,950.25
Total Net Property and Equipment:
Other Assets:
Utility Deposits
$117,515.63
$1,700.00
Total Other Assets:
$1,700.00
Total Assets:
$468,199.00
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable
Building mortage - current
Note payable - current
$47,850.00
$24,000.00
$45,000.00
Long Term Liabilites:
Building mortgage
Note payable
$62,000.00
$84,000.00
Total Liabilities:
Stockholders' Equity
Capital Stock
Retained Earnings
Current Income
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$262,850.00
$65,000.00
$114,664.00
$25,685.00
Total Stockholders' Equity
$205,349.00
Total Liabilities and Equity
$468,199.00
11

12. Current asset/current liability Changed to cash within 365 days
or bill paid within 365 days
Current or fixed asset/long
term liability Not to become cash within 365
days or bill paid after 365 days
Only includes interest if past
due
Items can be split in current
and long term
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12

13. Running a business with
these two is like working on a
bike with these three
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13

14. So what has been happening?
Sales
COGS
Year 1
$
$
-
Year 2
$
$
-
$
Operating expenses
Advertising expense
Advertising
Contributions
Donations
Other
Other
Other
Other
Race Team
Telephone book
advertising
Website
Advertising subtotal
Occupancy expense
Building repairs
Internet
Other
Other
Renovations
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-
%
Current
year
$
$
-
Year 3
$
$
-
$
-
%
$
-
%
$
-
$
$
$
$
$
$
$
$
-
$
$
$
$
$
$
$
$
-
$
$
$
$
$
$
$
$
-
$
$
-
$
$
-
$
$
-
%
-
$
$
%
$
$
$
$
$
$
$
$
$
-
-
$
$
$
$
$
$
-
-
%
$
$
$
$
$
$
-
-
%
$
$
$
$
$
$
-
-
%
$
$
$
$
$
-
14

15. #3 Giant multi-year analysis
Look at three full years and
year to date
Looking at percentages; not
dollars
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15

16. Three years plus year to date
Input your numbers
Sales
COGS
Advertising
Payroll
Other expenses
Miscellaneous income/expenses
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16

17. Looking for trends in
percentages in margins,
advertising, occupancy, payroll,
other expenses, income
Analyze expenses according
to Fixed, Variable, Controllable,
Uncontrollable
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17

18. Tells you what aspects of
business management you
should be paying attention
Looking at trends that might
not be apparent month to
month
Looking for signs of discipline
– payroll and advertising
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18

19. Net income
$ 107,450.00
6.31%
$114,203.00
6.28%
$ 125,624.00
6.78%
$137,686.00
6.88%
Looks good in dollars; except
that
advertising + .25%
occupancy +1.30%
payroll
+1.75%
Total
+3.30%
Net would be 10.18%
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19

20. Annual Operating Expenses:
Payroll:
Benefits
Incentives
Office Wages
Other
Other
Other
Ownership Wages
Service Wages
Wages
Workman's Compensation Insurance
Total Payroll Expenses:
Occupancy Expenses:
Building repairs
Internet
Other
Other
Renovations
Rent
Security
Telephone
Telephone - cell
Utilities
Total Occupancy Expenses:
Advertising Expenses:
Advertising
Contributions
Donations
Other
Other
Other
Other
Race Team
Telephone book advertising
Website
Total Advertising Expenses:
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Accounting
Automotive expense
Bad debt expense
Bank service charge
Other
Other
Other
% of Sales
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
20

21. Sales 1
Sales 2
Sales 3
Sales 4
$0.00
$0.00
$0.00
$0.00
Other
Outside services
Postage and delivery
Printing and reproduction
$0.00
$0.00
$0.00
$0.00
Sales 5
Sales 6
Sales 7
Sales total
Cost of goods sold
Gross profit
$0.00
$0.00
$0.00
$0.00 0.00% Credit Sales %
$0.00
$0.00 #DIV/0! Maintained Gross Margin %
Reconciliation discrepancies
Taxes
Taxes
Tools shop
Trade show
Travel and entertainment
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Total operating expenses
Net Profit
Taxes
Net Profit after Taxes
#REF!
#REF!
#REF!
#REF!
#REF! Operating Expenses %
Taxes % of Net profit
#REF! Net Profit %
Average Inventory on Hand
Ending Accounts Receivable
Other Current Term Assets
Total Current Term Assets
Long Term Assets
Total Assets
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Current Liabilities
Long Term Liabilities
Total Debt
Net Worth
$0.00
$0.00 #DIV/0!
$0.00 #REF!
$0.00 #DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
0 #DIV/0!
#REF!
Square footage
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#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#REF!
Total Operating Expenses
Ending inventory
Ending inventory
Ending inventory
Inventory turnover
Ending inventory
A/R collection days
Ending inventory
Ending inventory
Gross margin return on inventory investment Ending inventory
Ending inventory
Asset Turnover
Ending inventory
Return on Assets
Ending inventory
Ending inventory
Financial Leverage
Ending inventory
Return on Investment
Acid ratio
Current ratio
Debt to equity ratio
Owner's position
Sales per square foot
Payroll% to operating margin
month 1
month 2
month 3
month 4
month 5
month 6
month 7
month 8
month 9
month 10
month 11
month 12
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
21
%

22. #4 Giant Financial Analysis
Calculator
Your total annual payroll by
subcategory
Your total annual occupancy by
subcategory
Your total annual advertising by
subcategory
Annual other expenses
Ending monthly inventory from last
12 balance sheets
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22

23. Annual sales
House charge accounts percentage
COGS – Cost of goods sold
Tax percentage
Year end a/r balance
Year end current assets (excluding
inventory)
Year end long term assets
Year end current liabilities
Year end long term liabilities
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23

24. Total square footage – include
sales
floor, office, restroom, warehou
se, all storage
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24

25. Your maintained gross margin
– Gross profit dollars / gross
sales dollars
Operating expenses
percentage – Total operating
expenses / gross sales dollars
Net profit percentage – Net
profit dollars / gross sales
dollars
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25

26. Inventory turnover – Gross
sales / average inventory
Average a/r collection - 1.5
times your terms
GMROII – Gross margin
return on inventory investment
– Sales/average inventory *
maintained gross margin
Asset turnover – Sales/total
assets
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26

27. Return on assets – Net profit % *
Asset turnover
Financial leverage – Total assets /
net worth
Return on investment – Return on
assets / financial leverage
Acid ratio – Non-inventory current
assets / current liabilities
Current ratio – Total current assets
/ current liabilities
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27

28. Debt to equity ratio – Total
debt / net worth
Owner’s position – Net worth
/ total debt
Sales per square foot - Gross
sales / total square footage
Payroll % to operating margin
– Payroll % / maintained gross
margin
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28

29. Taxable sales
Non-taxable sales
Sales
COGS
Operating expenses
Advertising expense
Advertising
Contributions
Donations
Other
Other
Other
Other
Race Team
Telephone book advertising
Website
Advertising subtotal
Occupancy expense
Building repairs
Internet
Other
Other
Property Taxes
Renovations
Rent
Security
Telephone
Telephone - cell
Utilities
Occupancy subtotal
www.profitsplus.org
Month 1
$0.00
$0.00
$0.00
$0.00
Month 2
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Month 3
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
Month 4
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
Month 5
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
%
$0.00
%
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
%
$0.00
%
29

30. Month 1
Net ordinary income
Month 2
#REF!
#REF!
Month 3
#REF!
#REF!
Month 4
#REF!
#REF!
Month 5
#REF!
#REF!
Other income
Other
Other
Other
Total other income
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Other expense
Other
Other
Other
Total other expense
99 Net income
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$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
$0.00
#REF!
30

31. #5 Giant Budget and Cashflow
planning
Your profit and loss statements from
the past 12 months and a pencil
Row by row, change historical to your
expectation of the next 12 months
Sales entered by taxable and nontaxable
Examine margins, subcategory totals,
net profit (row 99)
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31

32. The budget is the same
information that appears on
your reformatted profit and
loss statement
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32

33. Month 1
100
106
107
108
109
114
115
123
www.profitsplus.org
Net income
Sales tax rate
Month 2
#REF!
Month 3
#REF!
Month 4
#REF!
Month 5
#REF!
#REF!
0.00%
Cash on hand beginning of month
Add Net Income
Add cost of goods sold
Add sales tax collected
Add commission for sales tax collection
Add cash infusion
Add cash from fixture/equipment sale
Add accrued expense amount not paid
Add accrued expense amount not paid
Add accrued expense amount not paid
Add amortization (not a cash item)
Add depreciation (not a cash item)
Less cash from fixture/equipment purchase
Less cash for inventory purchases
Less cash for additional vendor payments
Less inventory prebook payment
Less inventory prebook payment
Sales tax paid
Less accrued expense actually paid
Less accrued expense actually paid
Less accrued expense actually paid
$0.00
#REF!
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
#REF!
#REF!
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
#REF!
#REF!
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
#REF!
#REF!
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
Anticipated cash on hand end of month
#REF!
#REF!
#REF!
#REF!
#REF!
33

34. B100 – Sales tax rate
B101 – Cash on hand beginning of
period
Row 106 – Sales tax commission
received
Row 107 – Any input of cash
Rows 108 and 114 –
Fixtures/equipment sale or purchase
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34

35. Rows 109 – 111 Add accruals
not paid
Row 112-113 Amortization
and depreciation added (noncash expense)
Row 115 – Inventory paid for
in month
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35

36. Row 116 – Any additional vendor
payments
Rows 117-118 Inventory prebook
payments
Cell B119 – Sales tax paid from
previous month
Row 120-122 Accruals actually
paid
Row 123 Anticipated cash end of
month
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36

37. Month 1
100
106
107
108
109
114
115
123
www.profitsplus.org
Net income
Sales tax rate
Month 2
#REF!
Month 3
#REF!
Month 4
#REF!
Month 5
#REF!
#REF!
0.00%
Cash on hand beginning of month
Add Net Income
Add cost of goods sold
Add sales tax collected
Add commission for sales tax collection
Add cash infusion
Add cash from fixture/equipment sale
Add accrued expense amount not paid
Add accrued expense amount not paid
Add accrued expense amount not paid
Add amortization (not a cash item)
Add depreciation (not a cash item)
Less cash from fixture/equipment purchase
Less cash for inventory purchases
Less cash for additional vendor payments
Less inventory prebook payment
Less inventory prebook payment
Sales tax paid
Less accrued expense actually paid
Less accrued expense actually paid
Less accrued expense actually paid
$0.00
#REF!
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
#REF!
#REF!
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
#REF!
#REF!
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
#REF!
#REF!
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
#REF!
$0.00
$0.00
$0.00
$0.00
$0.00
#REF!
$0.00
$0.00
$0.00
Anticipated cash on hand end of month
#REF!
#REF!
#REF!
#REF!
#REF!
37

38. With the completion of each
month compare actual to budget
Adjust future months as dictated
by the variance in actual and
budget
Add one month so that the
projection continues to be for 12
months
www.profitsplus.org
38

39. 1 Re-aligned profit and loss
statement
2 Properly categorized balance
sheet
3 Multi-year comparison
4 Financial analysis
5 Budget and cashflow planning
www.profitsplus.org
39

40. When you want to sell the business
Five years advance notice
Look for cycles as to when
businesses sell for the most
Prior to five years – minimize
profits, delay profits for as many
years as possible
With the anticipated sale, with legal
and financial consultation, make the
business as profitable as possible
www.profitsplus.org
40

41. Valuation of the business
Landed cost of inventory
Fair market value of fixtures and
equipment
Valuation of the lease
2-5 years of profit
‘Blue sky’ or ‘goodwill’
Additional explanations of financial
statements decreases the valuation
www.profitsplus.org
41

42. Collateral for any loan should not
be the business itself
Why would a buyer pay cash for a
business when the cash can
leverage?
Delay/minimize taxes by way of a
payout plan, consultation,
restatement of valuation of
individual items
www.profitsplus.org
42

43. Category
3
Total
categ
Month Month Month Month Month Month Month Month Month Month Month Month ory
1
2
3
4
5
6
7
8
9
10
11
12 Sales % of Total Sales
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
BMX
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
MTB
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
Comfort
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
Road
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
Folding
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
Frame MTB
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
Frame Road
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
Bike Gear
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
Component
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
Rider Gear
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
Service Gear
14
Juvenile
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Anticipated total sales:
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0#DIV/0!
Total Anticipated
$0 Sales (retail)
#6 Giant Inventory Booking
The man who said dating was bad
Sales plan by category and month
(if possible) (Rows 3-14)
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43

44. 18
29
32
Sales percentage by vendor:
Juvenile
BMX
MTB
Comfort
Road
Folding
Frame MTB
Frame Road
Bike Gear
Component
Rider Gear
Service Gear
43
Juvenile
BMX
MTB
Comfort
Road
Folding
Frame MTB
Frame Road
Bike Gear
Component
Rider Gear
Service Gear
44
Total Giant purchases (cost)
www.profitsplus.org
Giant
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Giant
MGM
Brand #2
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
$ purchase
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
Brand #3
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
% Prebook
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Brand #4
Total Sales (must equal 100%)
0.00%
0%
0.00%
0%
0.00%
0%
0.00%
0%
0.00%
0%
0.00%
0%
0.00%
0%
0.00%
0%
0.00%
0%
0.00%
0%
0.00%
0%
0.00%
0%
$ Prebook
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
$ Reorder
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
44

45. Percentage of sales plan by vendor
in each category (Rows 18-29)
Giant MGM plan and percentage of
prebook plan (Rows 32-43) Totals in
cells C44 and E44
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45

46. Brand #2
47
58
59
Juvenile
BMX
MTB
Comfort
Road
Folding
Frame MTB
Frame Road
Bike Gear
Component
Rider Gear
Service Gear
Total annual purchases secondary brands
Annual
purchase
MGM
s
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
#REF!
Brand
#3
MGM
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Annual
purchas
es
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
Brand
#4
Annual
MGM purchases
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
0.00% #REF!
#REF!
Maintained gross margin of
secondary vendors and amount of
purchase from secondary vendors
(Rows 47-58)
Row 59 - Total purchases from
secondary vendors
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46

47. Just because someone extends you
a line of credit, doesn’t mean you
should use all of it
Would you do it with a personal or
business credit card?
www.profitsplus.org
47

48. Take the information from rows 44
and 59 of the Giant Inventory
Booking Calculator (Giant and
secondary vendors total orders) to
the Giant Budget and Cashflow
Calculator to see if any changes are
necessary to either.
The total of rows 44 and 59 do not
equal any cell on the Giant Budget
and Cashflow Calculator but give an
idea of inventory to be paid for.
www.profitsplus.org
48

49. Cell O15 in the Giant Inventory
Booking Calculator should be the
same as cell Z5 in the Giant Budget
and Cashflow Calculator
www.profitsplus.org
49

50. D
Month 1 Month 2 Month 3 Month 4 Month 5
3 Inventory - Beginning of Month
$0
$0
$0
$0
4 Anticipated Sales
P.O.
P.O. Written
#
To:
6 Purchase Order #1
Purchase Order #2
Purchase Order #3
Purchase Order #4
Purchase Order #5
Purchase Order #6
Purchase Order #7
Purchase Order #8
Purchase Order #9
Purchase Order #10
Purchase Order #11
Purchase Order #12
Purchase Order #13
Purchase Order #14
www.profitsplus.org
50

51. #7 Giant Category Open to Buy
Calculator
Inventory is more an opportunity than
something to control
This is a category – not the entire
shop
Cell D3 – Inventory on hand at cost
Row 4 – Anticipated sales
Row 6-55 - Purchase orders number,
vendor, dollar amount in correct month
www.profitsplus.org
51

52. D
Month 1
3
Purchase Order #42
Purchase Order #43
Purchase Order #44
Purchase Order #45
Purchase Order #46
Purchase Order #47
Purchase Order #48
Purchase Order #49
Purchase Order #50
Total Purchases
62
Inventory Available for Sale
Maintained Gross Margin
Cost of Goods Sold
Inventory (Actual)- End of Month
Desired Inventory - End of Month
64
Open to Buy for this Month
59
www.profitsplus.org
Month 2
Month 3
Month 4
Month 5
#REF!
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#REF!
#VALUE!
#VALUE!
#VALUE! #VALUE! #VALUE!
52

53. Row 59 – Anticipated gross margin
Row 62 – Desired end of month
inventory at cost
Row 64 – Amount of inventory
purchasing budget remaining
Understanding that frequent
purchases are not allocated on a
single month basis
www.profitsplus.org
53

54. #8 Giant Overview Open to Buy
Calculator – 12 copies of the Giant
Open to Buy Calculator with an
‘overview page’ to total all 12 copies
N3 (anticipated total sales) needs
to match Z5 of Giant Budget and
Cashflow
www.profitsplus.org
54

55. #9 Giant Advertising, marketing,
promoting
What is the purpose of your
advertising?
How do you measure the success
of your advertising?
How have you determined your
advertising in the past?
www.profitsplus.org
55

56. What components does your
advertising budget include?
How have you been making these
decisions?
The Giant multi-year Analysis
Calculator shows a pattern over 3+
years
www.profitsplus.org
56

57. B
3 Sales
(Previous or anticipated)
5 Overall budget
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7
$
$
- $
-$
- $
- $
- $
0.00% As a percentage of sales
- As a dollar amount
0.00% Percengage of overall budget set aside for unplanned opportunities
$
- Total contingency budget for year
Percentage of overall budget for traditional
0.00% advertising
Total advertising budget for
$
- year
Percentage of overall budget for Image, cause, social
0.00% media
Total
marketing
budget for
$
- year
0.00% Percentage of overall budget for speaking only to existing customers
$
- Total promoting budget for year
0.00% Must equal 100%
$
7 Contingency budget
Advertising budget
11 Marketing budget
13 Promoting budget
Total budget
The money you save with the media
by planning
Sales – past or anticipated (Row 3)
Percentage of sales (Cell B5)
www.profitsplus.org
57

58. Traffic
Price image
Competition
Store awareness
Sales volume
www.profitsplus.org
58

59. Contingency budget – % of overall
budget (Cell B7)
A deal comes along
Do you budget for it or let the
budget go into excess?
www.profitsplus.org
59

60. Marketing budget – % of overall
budget (Cell B11)
Image – year books, donations,
contributions, cause marketing,
social media
Other expenses?
www.profitsplus.org
60

61. Promoting budget - % of overall
budget (Cell B13)
Speaking only to existing
customers
Advertising is talking to the public;
promoting is talking to your
customers
How can you tell your existing
customers the new models have
arrived?
What can you do to ‘talk’ to your
customer?
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61

62. 65% of the customers that go
elsewhere do so because they think
you do not care
www.profitsplus.org
62

63. What is a
customer worth
calculator
63

64. Budget for each month:
Month 1 Month 2
Month 3
Month 4
Month 5
Month 6
17
Contingency budget
#VALUE! $
- $
- $
- $
- $
- $
-
18
Advertising budget
#VALUE! $
- $
- $
- $
- $
- $
-
19
Marketing budget
#VALUE! $
- $
- $
- $
- $
- $
-
20
Promoting budget
#VALUE! $
- $
- $
- $
- $
- $
-
Rows 17-20 give a month by
month breakdown of contingency,
advertising, marketing and
promoting budgets
www.profitsplus.org
64

65. Advertising budget - % of overall
budget (Cell B9)
Column A is where you name the
individual media
Divide the remaining ‘pie’ among
the traditional media (Rows 23-41,
column B) by percentage
How do you select each?
Why do you select each?
www.profitsplus.org
65

66. A
B
Monthly advertising budget percentage
23
41
www.profitsplus.org
Newspaper #1
Newspaper #2
Newspaper #3
Radio #1
Radio #2
Radio #3
Television #1
Television #2
Television #3
Direct mail #1
Direct mail #2
Direct mail #3
Groupon
Living social
Other #1
Other #2
Other #3
Other #4
Other #5
Total must equal 100%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
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66

67. For contingency, marketing and
promoting
How many cells have a budget too
small to spend?
Revising the monthly expenditures
for advertising
Column C through N, rows 64-66,
can be combined, deleted, shifted so
that the expenditure is significant
Column O must equal Column B
www.profitsplus.org
67

68. 64
65
66
www.profitsplus.org
Newspaper #1
Newspaper #2
Newspaper #3
Radio #1
Radio #2
Radio #3
Television #1
Television #2
Television #3
Direct mail #1
Direct mail #2
Direct mail #3
Groupon
Living social
Other #1
Other #2
Other #3
Other #4
Other #5
Total monthly
advertising
Total monthly
contingency
Total monthly
marketing
Total monthly
promoting
Total monthly
expenditure
B
Adjusted
total
#REF!
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C
Month
1
#REF!
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D
Month
2
#REF!
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E
Month
3
#REF!
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F
Month
4
#REF!
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G
Month
5
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H
Month
6
#REF!
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I
Month
7
#REF!
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J
Month
8
#REF!
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K
Month
9
#REF!
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L
Month
10
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M
Month
11
#REF!
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N
Month
12
#REF!
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#REF!
O
Total for
media
#REF!
#REF!
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#REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF!
#REF!
#REF!
#REF!
#REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF!
#REF!
#REF!
#REF!
#REF!
#REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF!
#REF!
#REF!
#REF!
#REF!
#REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF!
#REF!
#REF!
#REF!
#REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF!
68

69. Create the weekly plans for the
next 52 weeks
Enter the dates for column B, Rows
69-120
Column D – Event name, details,
comments, results
www.profitsplus.org
69

70. A
Dates
69
82
www.profitsplus.org
D
Event
Week #1 (1st Quarter)
Week #2
Week #3
Week #4
Week #5
Week #6
Week #7
Week #8
Week #9
Week #10
Week #11
Week #12
Week #13
Week #14 (2nd Quarter)
Week #15
Week #16
Week #17
Week #18
Week #19
Week #20
Week #21
Week #22
Week #23
Week #24
Week #25
Week #26
70

71. Take this information to the Giant
Budget and Cashflow Calculator to
see if changes need to be made to
either
Total Sales (Cell O3) of the Giant
Advertising Marketing Promoting
Calculator should equal Cell Z5 of
the Giant Budget and Cashflow
Calculator
www.profitsplus.org
71

72. Total Advertising Budget (B5) of
the Giant Advertising Marketing
Promoting Calculator should equal
Z20 of the Giant Budget and
Cashflow Calculator
Row 67 of Giant Advertising
Marketing Promoting Calculator
should match row 20 of Giant
Budget and Cashflow Calculator
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73. What is your time line for
implementation?
What percentage of sales did you
allocate for the advertising budget?
What percentage of sales did you
budget for net profit?
How much effort does it take to
earn that net profit?
How much time do you spend
creating the advertising plan?
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74. 1 Re-aligned profit and loss
statement
2 Properly categorized balance
sheet
3 Multi-year comparison
4 Financial analysis
5 Budget and cashflow planning
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75. 6 Inventory booking
7 Open to buy
8 Overview open to buy
9 Advertising, marketing promoting
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76. What is your time line for
implementation of these seven
calculators? And reworking the first
two?
These are owner/manager
responsibilities – not to be relegated
to others; not to be put aside for
other tasks
You can make more money making
the right decisions than you can as
the best salesperson in your shop
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77. Being good in business is
the most fascinating kind
of art. Making money is art
and working is art and
good business is the best
art.
Andy Warhol
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