"Participation is a great way to sharpen your saw..."
"I frequently use the knowledge I have gained..."
"It's helping us guide our business decisions..."
"Simply, the best investment of my time ever!"
"...The best single thing, business-wise, that I’ve ever done!"
The NBDA Profitability Project, referred to as P2, improves business for participating specialty bike retailers!
The format is similar to that of groups like "20 Groups", that have been so successful in the automobile, motor sports, RV, and camping industries or Mastermind Groups, Dealer Groups and YPO (Young President's Organization). Each group is made up of non-competing dealers who meet to learn, compare, network, examine and analyze specific data from their business to help and support each other in business operation and strategy. Each group will meet 2x per year in alternating member locations and there is an administrative fee to participate, however the value will far outweigh the fee.
What is P2?
The Profitability Project is the ultimate Group Experience for the Specialty Bicycle Retailer. This dynamic process brings together successful industry leaders to learn, brainstorm, evaluate and create a more successful business model. Those who participate have a track record of successful business, but they’re looking for more; more sales, more profitability, a better customer experience and a distinctive legacy of retail success.
What Can I Expect Out of P2?
This program will improve the bottom line for those Specialty Bike Retailers who participate. Each group is made up of non-competing dealers who meet to learn, compare, network, examine and analyze specific data from their business to help and support each other in business operation and strategy. The format is similar to “20 Groups”, Mastermind Groups and the Young President’s Organization that have been so successful in many comparable industries for over 25 years.
Initial P2 Group Meeting, 2006
The following chart displays examples of Key Performance Indicators (KPI's) that are analyzed for each of the participating retailers:
|Sales per Square Foot||Gross Sales divided by Total Square Feet||
Too many retailers only “count” their selling space—which gives them a false sense of their retail performance. The fact is, you pay rent, taxes, utilities, etc. on ALL of your space. So you should calculate your sales per square foot against all of your space. This is optimized when you can compare your dollar performance against the group average. It’s a true measure of how you’re doing...and reduces the disparity between markets and store size.
|Payroll Percentage of Revenue||Gross Payroll/less owners gross pay divided by Gross Sales (do not include payroll taxes or benefits)||
Payroll productivity is an increasing priority. Payroll is usually your second highest investment, behind inventory. Therefore you must have some measure for how productive your payroll is. Employees must generate the revenue needed to drive the business profitability. But how much should you pay? Too much salary equals low profit. Not enough salary usually equals poor or absent customer service. Comparing your business percentage to the group average can keep you focused in the right direction.
|Inventory Turn||Cost of Sales divided by Average Inventory||
Average inventory is computed by summing the last 13 months of inventory value at cost and dividing by 13. Use 13 months of inventory data because it will include starting and ending inventory. We like to do this by category—or at least, for bike and non-bike. Inventory performance data is crucial. Do you have enough inventory on hand to fuel expected sales during peak times? Are you carrying too much of some categories? Time for a markdown? Inventory turn gives you the information you need to make decisions. Comparing your numbers against the group average helps you stay aware of trends and opportunities.
The P2 group work is facilitated by professionals and will focus squarely on growing your bottom line. We target business practices, store performance evaluation, operations, financial performance and best practices. There is tremendous sharing of ideas and strategies along with creating new ones that will become the Gold Standard for operating successfully in this industry
Each group will meet 2 times per year in alternating member's locations and this occurs once in the spring and once in the fall. Key metrics are shared by you and kept very confidential so that a comparison for these key metrics can be made across the group. There is an administrative fee associated with joining the group ($1,500 for each 6 month period) and as the following endorsements show, the value of P2 participation far outweighs the investment fee.
Being able to sit at the same table as some of the smartest bicycle retailers in the industry, much less being privy to their best practices and greatest ideas, is an opportunity many would not pass up” - Rick Snyder - Mike’s Bike Shop
“Participation in a P2 group is a great way to sharpen your saw. As much as you might think you are on the right track, many minds are still better than one!” - Randall G. Clark - Bicycle Garage Indy
“Simply, the best investment of my time ever! Sharing KPI's with fellow non-competing dealers along with a visit and critique of the host bicycle store has consistently moved us along to the next level. When another group forms, sign up. You won't regret it.” - Doug Newman - The Bike Route
I appreciate having the P2 group to compare critical financial numbers and to bounce new ideas off of. It’s helping us guide our business decisions for higher levels of accountability and profitability.” - Jay Graves - former owner, The Bike Gallery
“Especially in the smaller shops, we tend to spend so much time on our own businesses that it’s hard to step away sometimes and see the big picture. Joining the Profitability Project was probably the best single thing, business-wise, that I’ve ever done.” - Mike Nix - Liberty Bicycles
Email Fred Clements, Todd@nbda.com.
To join P2, follow this link to the on-line application.