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

– Facebook

– Twitter

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

– Email

– Website

– Search Engines – Google, Bing,

Marketing

• Internet Usage

Source: http://www.internetworldstats.com/top20.htm

United States: 77.3%

Marketing

• Internet

– Email

– 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

– Brent.sims@kegel.net

– 863-734-0296