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Start Your Own Bowling Alley Fifth Edition

Start Your Own Bowling Alley

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Page 1: Start Your Own Bowling Alley

Start Your Own Bowling Alley Fifth Edition

Page 2: Start Your Own Bowling Alley

Start Your Own Bowling Alley! ii

Other Titles of Interest from 125aday.com Publishing Company, Inc. Helping Small Business Do More Business! More Bowling Alley Related Products

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Start Your Own Bowling Alley Fifth Edition Starting a successful bowling center operation takes careful planning. You may have a large business operation in mind that would encompass a complete entertainment venue. This type of venture requires tighter controls than a small bowling center operation. This book contains the information that you need to plan, start, operate and manage a profitable bowling center operation. Dustin Murray 125aday.com Publishing Company, Inc. PO Box 2432 Frisco, Texas USA 75034 866-900-7887 www.125aday.com

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Publisher: 125aday.com Publishing Company, Inc. Cover Design: Amy White Photographs Copyright © 2007 Justin Clark This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering professional services. If legal, account, medical, psychological, or any other expert assistance is required, the services of a competent professional person should be sought. ADAPTED FROM A DECLARATION OF PRINCIPLES OF A JOINT COMMITTEE OF THE AMERICAN BAR ASSOCIATION AND PUBLISHERS. Copyright 2004-2007 by 125aday.com Publishing Company, Inc. All rights reserved. Reproduction or translation of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful. Requests for permission or further information should be addressed to the Permissions Department, 125aday.com Publishing Company, Inc. 125aday, 125aday.com, Business Talk and ProBP (business plan software) are trademarks of Dallas Distribution and Publishing Company, Inc.

Third-Party Materials and Linked Materials - The publisher is not responsible for the content of those "third-party" materials which are not directly related to the publisher, and not under its control or auspices. Further, the publisher makes no representations regarding the content, products, services, advertising or other materials available from "third-party" materials and is not responsible for the legality, decency, copyright compliance, or accuracy of information provided by those individuals/companies which have paid to be linked to this material. Additionally, the publisher will not be held liable for damage or loss (caused or alleged to be caused) in connection with the use of a "third party" material. Please be advised that when you use affiliated services or third-party materials, you may be subject to additional terms and conditions. As with a multitude of other web materials, we ask that you exercise due diligence in browsing any "outside" vendor page.

Trademark Notice - The words contained in this text which are believed to be trademarked, service marked, or otherwise to hold proprietary rights have been designated as such by use of initial capitalization. No attempt has been made to designate as trademarked or service marked any personal computer words or terms in which proprietary rights might exist. Inclusion, exclusion, or definition of a word or term is not intended to affect, or to express judgment upon, the validity of legal status of any proprietary right which may be claimed for a specific word or term.

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Table of Contents

PREFACE............................................................................................. 7

INTRODUCTION.................................................................................. 8

STARTUP SUMMARY................................................................................8 Initial Investment Costs ..................................................................8 Ongoing Operation Costs.................................................................8 Other Profit Centers........................................................................8 The Steps to Building a Sound Investment .........................................9

CHAPTER ONE .................................................................................. 11

GETTING STARTED...............................................................................11 The Business Plan ........................................................................11 Products and Services...................................................................11 Determining Your Market...............................................................12 Financing ....................................................................................14 Choosing a Name .........................................................................15 Choosing Your Location .................................................................16 Bowling Alley Layout and Design ....................................................22

Example of Six Lane Bowling Alley Layout.....................................23 Example of Ten Lane Bowling Alley Layout....................................24

Guidelines to Establishing Pricing....................................................24 Target Customers and the Retailing Mix .......................................25 A Price Level Strategy................................................................26 The Relationship between Product Prices and Costs........................26

Licenses, Permits and Regulations ..................................................27 Licenses ..................................................................................28 Permits....................................................................................29 Regulations ..............................................................................29

CHAPTER TWO.................................................................................. 30

MANAGING YOUR BOWLING ALLEY OPERATION ..............................................30 Developing New Accounts and New Customers .................................30

Customer Development Program.................................................31 Computer Software ......................................................................32

Retail Operations ......................................................................32 Center Computer Software .........................................................35

Insurance....................................................................................36 Marketing/Advertising ...................................................................37 Internet/Website..........................................................................37 Signs and Your Business................................................................37

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Planning Your Advertising Budget ...................................................38 Market Analysis............................................................................39

Market Analysis Components ......................................................41 Your Marketing Plan......................................................................46

CHAPTER THREE............................................................................... 54

ACCOUNTING/BOOKKEEPING ...................................................................54 Cost Control ................................................................................55 Projecting Your Sales Potential .......................................................56 Cash Control Systems...................................................................57

CHAPTER FOUR ................................................................................ 66

INFORMATION PERTAINING TO EMPLOYEES ...................................................66 Position Your Image......................................................................66 Planning......................................................................................66 The Hiring Process........................................................................66 Training ......................................................................................67 How to Keep Your Employees.........................................................68

CHAPTER FIVE.................................................................................. 69

PUBLICATIONS ...................................................................................69 TRADE SHOWS ...................................................................................69

CHAPTER SIX ................................................................................... 70

ASSOCIATIONS...................................................................................70

CHAPTER SEVEN............................................................................... 71

GOVERNMENT AND STATE WEBSITES..........................................................71

INDEX .............................................................................................. 73

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Preface If you are serious about starting your bowling alley, the information in this book will help you plan, start, operate and manage your operation. This book is only one of many resources you should consult before starting the business. The more information and knowledge that you have about what it takes to start a successful, profitable bowling center, the better prepared you will be to address all of the business challenges you will face in your venture. You probably have an idea of what you want your bowling center to be; the image, the layout and what you will offer your customers. Hopefully, the information in this book will expand on your ideas. I hope that this book brings up new interest in offering more to your customers and providing you more opportunities to create revenue and profits. I approached the task of presenting this information in a more factual style than in a “do this, don’t do that” format. I also approached presenting the information without assuming that you are an experienced bowling alley owner/manager or that you have knowledge in the bowling center industry. I purposely designed the book for the new entrepreneur; the first time business owner. If you have experience, some of the information might seem elementary. Embrace this information as it will never hurt to review the basics of business ownership. Your bowling center will be unique. There will be no operation exactly like your operation. As I present the information pertaining to the possible retail products and center services, I am attempting to encompass all of the possibilities. For instance, in your operation, you may want to offer only limited concession offerings. Other center owners may want to offer an upscale grill and a specialty dining area, like a pizzeria or a bar with expanded menu options. You might decide to expand your operation; if not in the beginning, maybe later. The information in this book can help you now and later on in the business venture. So for now, you will find yourself picking and choosing the information you will apply to your center operation. Don’t be too quick to ignore or eliminate the possibilities of the products and services you can offer.

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Introduction Startup Summary

Initial Investment Costs

Initial investment costs are affordable for serious investors, but discourage casual investors. Approximate cost in U.S. dollars is $100,000 to $120,000 per lane (includes land, building and bowling equipment), depending heavily on land cost. These figures are based on building space requirements of 1,000 square feet or 92.9 square meters per lane. The investment is capital intensive only at the outset. Once the center is built, the assets maintain their value for two decades or more, so the business requires little ongoing working capital.

Ongoing Operation Costs

Bowling is essentially an all-cash business. Cash flow from bowling, shoe rental and food and beverage is immediate.

Profitability is very high. Pre-tax profits in many places can be 30% or more of revenue. In emerging markets, payback on Initial investment is often reached in as little as 1 to 2 years. Variable costs associated with bowling center operations are so low that gross profit can be more than 90%. Once the bowling alley’s relatively fixed operating costs are covered, incremental sales go straight to net profits. Little or no inventory is required, allowing for maximum use of space and capital.

Other Profit Centers

Bowling is not the only profit center in a bowling center. Pro shops, food and beverage sales, shoe rentals, arcade rooms, vending machines, billiard tables and league bowling fees also contribute to already strong profitability

The larger size of your center, the most potential for additional profit center

• Additional profit centers can include: • Snack bars • Vending machine areas • Billiard tables • Arcade-type games

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Pro shop sales of items ranging from bags, shirts and shoes to a wide range of the latest bowling balls and accessories Percentage of revenue

• Bowling 61% • Food & Bar 23% • Amusement 7% • Shoe Rental 6% • Other 3%

(Typical North American Center)

The grand opening of your bowling center - or perhaps a chain of bowling centers - could be sooner than you think.

A bowling center isn't a stadium or a sports arena with a year-long construction schedule. For example, once the basic building is complete and lane surfaces installed, your equipment supplier can install lane equipment at the rate of one day to day-and-half per lane. That translates into about three weeks for an entire 20-lane center to go form floor, walls, lane surfacing and ceiling to fully operational for automated bowling.

Building a Sound Investment

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BOWLING ALLEY Costs per square foot of floor area

Building Parameters: 1 Story, 14 Ft Story Height, 20,000 Square Feet

Exterior

Tilt-up panels, steel frame $ 86.50

Concrete block, steel roof frame $ 87.70

Decorative concrete block, steel frame $ 88.00

Stucco on stud frame $ 74.20

Wood siding on stud frame $ 74.70

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Chapter One Getting Started Contents of the Getting Started Section:

1. The Business Plan on page 11 2. Products and Services on page 11 3. Choosing Your Market on page 12 4. Financing Your Bowling Alley on page 14 5. Choosing a Name for Your Bowling Alley on page 15 6. Choosing Your Location on page 16 7. Bowling Alley Layout & Design on page 22 8. Guidelines to Establishing Product and Service Pricing on page 24 9. Licenses, Permits and Regulations on page 27

1. The Business Plan A business plan is often a requirement to getting bank loans, investor funds and/or government money/grants. These entities need to know that you have a well planned business model and a full understanding of the business venture that you are undertaking. If you don’t have a business plan for your bowling alley, you should immediately consider doing the business plan before proceeding with your business. There are many business plan products available today in retail office supply stores and online. Some of the best sellers are Business Plan Pro, BPlans.com, BizPlans.com & ProBP Business Plan Software. You can purchase a customized business plan template for a bowling alley entitled The Business Plan for Your Bowling Center. This business plan was prepared with the ProBP Business Plan Software, the professional business plan software solution, at the following link: www.125aday.com/business-plan-bowling-center Beware of free business plan software programs. You get what you pay for and these business plans are usually a waste of your time. 2. Products and Services Individual Play League Play Instruction Retail Sales Playroom Charges Snack Bar

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Beverage Bar Parties Catering Special Events Retail Pro Shop Dining Options Bowling Balls

AMF Brunswick Circle Columbia Dynothane Ebonite Hammer Rotogrip Storm Track

Bowling Shoes Circle ABS Shoes Dexter Men's Dexter Women's Etonic Men's Etonic Women's

Bowling Bags Columbia Ebonite Hammer KR Strikeforce Storm

Gloves/Supports Cleaners/Polishes Ball Inserts Accessories Bowling Towels Bowling Shirts Drilling Service (Back to Contents of the Getting Started Section on page 11)

3. Determining Your Market

Tools For Choosing Your Concept:

• Demographic Survey - This will help you to pinpoint a market that is appropriate for your bowling alley. This would be obtaining information concerning:

Ages of customers, ethnic groups, occupations, income levels, size of your market (how many will be interested in your product or service), geographic region (where your customers are located), interests and what products and services does the market need? Is your concept for your bowling alley something these people will use?

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Some web sites for finding demographic information are: US Census Bureau http://www.census.gov/ FedStats http://www.fedstats.gov/ Claritas http://www.clusterbigip1.claritas.com/claritas/ PopNet http://www.popnet.org United States Bureau of Labor Statistics http://www.bls.gov Demographics Now www.demographicsnow.com

• Target Market Analysis

This will show who your main projected customers are and where they are located.

• Competitive Analysis

This will help you understand who your competition will be. You should compare your product prices with your potential market competitors. Simply perform some market research by visiting these competitors and taking note of their product prices. Use this competitive pricing analysis as a test of reasonableness to determine whether your products and prices are in line.

The search for information on your competitors should begin by finding their names and locations. Online directories such as www.superpages.com and www.qwestdex.com can help you find competitors in your area. Just choose the category and the number of miles around a city you'd like to search. Visiting the competitors' web sites will help you decide what marketing strategy would be best for you.

Remember the concept of your bowling alley will affect:

1. The type of equipment you will need. 2. Employee attire 3. Interior building size 4. Amount of staff 5. The size and exterior of your building 6. Your signage

(Back to Contents of the Getting Started Section on page 11)

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4. Financing Financing Your Business Most banks and lenders require you to put some of your own money into the business. Experience is a major factor for lenders. So the more experience you have, the better. If this is a new venture for you, you might consider taking a job in a bowling alley and/or take some classes to help you succeed in getting the funding you need.

Places you can get financing are

• Small Business Association http://www.sba.gov/financing/sbaloan

• Personal resources - Savings, IRA accounts, credit cards, home mortgages and personal assets (including family or friends).

• Private investors - also known as "angel investors". Go to angeldeals.com (http://www.angeldeals.com/) for more information. "Angel investors" are the largest pool of capital in the United States. Typically entrepreneurs find "angel investors" through net-working with people across the industry.

• Commercial finance companies, such banks and equipment leasing companies.

• Friends and relatives (be careful to arrange the loan in a business-like manner). Draw up papers stating the loan repayment schedule and interest to be charged.

• Real-Estate assets. You may have enough equity in your home to finance your business.

• Life Insurance - You may carry a life insurance policy that has a loan value. You can borrow on the cash value at a low interest rate.

• Housing and Urban Development - Sometimes the Federal Government's HUD will provide loans to restore and rehabilitate buildings in certain areas. They won't finance your business, but may provide renovation funds.

The basic loan application includes a written statement in which you describe your business plan (see page 11). You will need to include how this business will generate income, define at what points you will need an injection of cash and explain how you will use the requested loan proceeds. Also, include an explanation of how the loan will be repaid.

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It is best to have the money in place about six months before you need it, including in it enough cash to carry you through two months of business operation of your bowling alley.

Financing Tips

1. Shop around for the best interest rate and terms. 2. Get your financing before you negotiate your lease. 3. Get your loan agreement in writing. 4. Hire an accountant or lawyer to review your agreement before signing. 5. Make sure there is no prepayment penalty. 6. If you choose a venture capitalist, make sure you maintain control running your business. 7. If you get a construction loan, make sure you only pay interest on the commitment as you use it. (Back to Contents of the Getting Started Section on page 11) 5. Choosing a Name

Choosing the right name for your business is important. A good name can help you attract more customers, so take your time. Discuss it with your friends and family and do some research before deciding what to name your bowling alley.

Your business name should fit the vision of what you want your bowling alley to be. You will want your name to tie into your decor, concept and the market you are targeting. Your name should be distinctive and easy to remember. Choose a name that is easy to spell. Think of your customers writing checks to your business or trying to find your business online or in the phone book.

Your name should represent the type of bowling alley products and any services you will offer and should set you apart from your competitors.

Registering Your Name:

You will need to register your business name with your state. You can do this by contacting the Secretary of State's office and requesting the forms that you will need to fill out. Also, ask them how to search for state trade marks to

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see if any part of your name is registered. You may also need to do this in your county at your county clerk's office. Check to see if any part of your name is a Federally Registered Trademark; enter your name on this website: http://tess2.uspto.gov/ Resources

Thomas Register http://www.thomasregister.com/

Niten Research Corporation http://www.niten.com/

Mahtta Trademark Company http://www.mahtta.com

Legalname.com http://www.legalname.com

Mark Monitor http://www.markmonitor.com/

US Patent Office http://www.uspto.gov

(Back to Contents of the Getting Started Section on page 11) 6. Choosing Your Location Choosing the right location for your bowling alley is important. Considerations include the needs of your bowling alley, where your customers and competitors are, and such things as taxes, zoning restrictions, noise and the environment. For most bowling alleys, an appropriate location is critical. The choice of your location has a profound effect on the entire business life of your bowling alley. A bad choice may all but guarantee failure while a good choice can contribute to your success. This book takes up site selection criteria, such as retail compatibility and zoning, which the bowling alley owner-manager must consider after making basic economic, demographic, and traffic analyses. It offers questions that you must ask (and find answers to) before making the all important choice of the bowling alley location. The first step in choosing your business location takes place in your head. Before you do anything else, define your type of bowling alley in the broadest terms and determine your long term objective. Write them down. This exercise will help you greatly later in choosing the best location possible for your bowling alley.

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In picking the site, many bowling alley owners believe that it's enough to learn about the demographics ("people information" like age, income, family size, etc.) of the population, about the kind of competition they will be facing, and about traffic patterns in the area they are considering. Beyond a doubt, these factors are basic to all bowling alley location analysis. Once you have spotted a tentative location using these factors, you have only done half the job. Before you make a commitment to moving in and setting up, you must carefully check several more aspects of the location to help insure your satisfaction with -- and, most importantly, your success at -- the site you've chosen. Retail Compatibility How important is retail compatibility? For a bowling alley in its first year of operation, with limited funds for advertising and promoting, retail compatibility can be the most important factor in the survival of your business. Will you be located next to businesses that will generate traffic for your bowling alley? Or will you be located near businesses that may clash with yours? Merchants Associations Most first time bowling alley owners have no idea how effective a strong merchants association can be in promoting and maintaining the retail stores in a given area. Always find out about the merchants association. The presence of an effective merchants association can strengthen your bowling alley business and save you money through group advertising programs, group insurance plans and collective security measures. A strong merchants association can accomplish through group strength what an individual retail store owner couldn't even dream of. Some merchant associations have induced city planners to add highway exits near their retail stores. Others have lobbied for -- and received -- funds from cities to remodel their retail stores, including extension of parking lots, refacing of buildings, and installation of better lighting. Merchants associations can be particularly effective in the promotion of retail stores using common themes or events and during holiday seasons. The collective draw from these promotions is usually several times that which a single merchant could have mustered.

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How can you determine if the business location you are considering has the benefit of an effective merchants association? Ask other retail store owners in the area. Find out:

How many members the merchant association has? Who the officers are? How often the group meets? What the early dues are? What specifically, has it accomplished in the last 12 months?

Ask to see a copy of the last meeting minutes. Determine what percentage of the members were in attendance. What if there is no merchants association? Generally, a shopping area or center without a merchants association (or an ineffective one) is on the decline. You'll probably see extensive litter or debris in the area, vacant stores, a parking lot in need of repairs, and similar symptoms. You should shun locations with these warning signs. With a little on-site investigation, they are easy to avoid. Responsiveness of the Landlord Directly related to the appearance of a retail location is the responsiveness of the landlord to the individual merchant's needs. Unfortunately, some landlords of retail business properties actually hinder the operation of their tenants' businesses. They are often, in fact, responsible for the demise of their properties. By restricting the placement and size of your signs, by forgoing or ignoring needed maintenance and repairs, by renting adjacent retail spaces to incompatible businesses -- or worse, other businesses offering bowling alley products and services similar to what you offer in your bowling alley--, landlords may cripple your attempts to increase business. Sometimes landlords lack the funds to maintain their properties. Rather than continuing to "invest" in their holdings by maintaining a proper appearance for their buildings and supporting their tenants, they try to "squeeze" the property for whatever they can get. To find out if a landlord is responsive to the needs of the retail tenants, talk to other tenants before you commit to moving in yourself. Ask them:

Does the landlord return calls in a reasonable period and send service people quickly?

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Is it necessary to nag the landlord just to get routine maintenance taken care of? Does the landlord just collect the rent and disappear, or is he or she sympathetic to the needs of the tenants? Does the landlord have any policies that hamper marketing innovations?

Zoning and Planning Your town's zoning commission will be happy to provide you with the latest "mapping" of the retail location and surrounding areas that you are considering. Here are some questions to consider: Are there restrictions that will limit or hamper your bowling alley operations? Will construction or changes in city traffic or new highways present barriers to your bowling alley? Will any competitive advantages you currently find at the location you're considering be diminished by zoning changes that will be advantageous for competitors or even allow new competitors to enter your trade area? Most zoning boards, along with economic/regional development committees, plan several years in advance. They can provide you with valuable insights to help you decide among tentative bowling alley locations. Leases Directly related to zoning is your intended length of stay and your lease agreement. Before you enter into any rigid lease agreement, you must get information on future zoning plans. Then you will be able to decide how long you wish to remain at the location under consideration. To help you, ask yourself:

• Do you plan to operate the bowling alley in your first location indefinitely or have you set a given number of years as a limit?

• If your bowling alley is successful, will you be able to expand at this location?

• Is your lease flexible, so that you have an option to renew after a specified number of years? (On the other hand, is the lease of limited duration so, if need be, you may seek another location?)

Study the proposed lease agreement carefully. Get advice from your lawyer or other experts. Does the agreement:

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• Peg rent to sales volume (with a definite scaling) or is rent merely fixed?

• Protect you as well as the property owner? • Put in writing the promises the property owner has made about

repairs, construction and reconstruction, decorating, alterations, and maintenance?

• Contain prohibitions against subleasing?

There are other factors that you should take into consideration before selecting your location. The following questions may help you decide on your business location:

• How much retail, office, and storage or workroom space do you need? • Is parking space available and is it adequate? • Do you want special lighting, heating or cooling, or other installations? • Will your advertising expenses be much higher if you choose a

relatively remote location? • Is the area served by public transportation? • Can the area serve as a source of supply of employees? • Is there adequate fire and police protection? • Will sanitation or utility supply be a problem? • Is exterior lighting in the area adequate to attract evening customers

and make them feel safe? • Are customer restroom facilities available? • Is the store easily accessible? • Will crime insurance be prohibitively expensive? • Do you plan to provide pick up or delivery? • Is the trade area heavily dependent on seasonal business? • Is the location convenient to where you live? • Do the people you want for customers live nearby? • Is the population density of the area sufficient?

Help in Choosing the Location Choosing your location can be a risky undertaking. Considering the consequences of choosing a location that proves to be unsuitable, it pays to get as much assistance as possible. You may wish to hire a consultant to analyze two or three locations that you have selected. It costs less if you provide the consultant with pre-selected potential locations than to have him or her initiate an open-ended search for the business location. The business school of a nearby college or university may also be able to provide help. Other sources of information on potential business locations include bankers and lawyers, who may have been in position to have observed over an

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extended period of time many bowling alley locations where other clients previously did business. Realtors can also provide information on location. Remember, though, their compensation is based upon commissions for renting property. Take Your Time in Selecting the Location Selection of a retail location requires time and careful consideration. It should not be done in haste just to coincide, say, with a loan approval. If you haven't found a suitable location, don't plan to open your bowling alley until you are sure you have what you want. Put your plans on hold and don't just settle for a location you hope might work out. A few months delay is only a minor setback compared to the massive -- often fatal -- problems that occur from operating a bowling alley in a poor location.

Characteristics of a Good Location

The characteristics of a good location are:

Traffic: Drivers passing your bowling alley will become familiar with your location. You can get traffic counts from a real estate firm, demographic firm, planning commission, or highway department. You will want to pick a location that has high traffic counts during peak business hours. One inexpensive way to do this is to park at the site at different times of the day, including week-ends, and count the traffic yourself.

If you are in a downtown area, you will need to access the foot traffic. The type of foot traffic will also have a bearing on the business concept you choose.

Visibility - If potential customers can't see you, they may not stop. A corner location is great. And even better is a free-standing building on a corner lot! If you choose a strip mall, a location at the end is best.

Signage also increases visibility; especially a sign with a read-a-board that allows you to advertise your products. If you are in a downtown location, a curb site gives you more visibility.

Readily Accessible Parking - This is a must. Customers need to be able to find a place to park or they may consider it to be more hassle than it's worth, especially if they are in a hurry.

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Strong Population Back-Up – These are areas near a high school, college, university, office buildings, dense residential areas or high traffic commercial areas.

Accessibility - Customers need to be able to get to your bowling alley with ease. Median strips that don't allow for a left-hand turn make it hard for your customers to get to your bowling alley. Highly congested traffic areas may also discourage your customers.

Size - Will the site handle the projected amount of customers you are planning on having?

Price - Make sure the price of the site or lease amount fits your projected break-even or you may just be buying a lot of work with no pay.

Condition of the Site – If land is available, how much money will it take to build? If it is an existing building, how much money will it take to remodel or repair? Always check with the highway department and local agencies to see what improvements or changes are planned for the areas. Another thing to consider is whether or not this is a high crime area. People may not stop if they don't feel safe. Destruction of property, robbery and employee safety are other considerations to take into account. (Back to Contents of the Getting Started Section on page 11) 7. Bowling Alley Layout and Design Practical and Useful Layout Features Aim for a practical, useful layout, while setting the mood. Make sure you have:

• good retail space traffic flow in the store for products, cashier area, rest rooms;

• one or more areas from which you can view the entire bowling alley; • lighting, signs and obstacle-free traffic flow;

Designing your layout will include the items above and décor design, bowling alley displays, fixtures and designing visual merchandising appeal.

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Example of Six Lane Bowling Alley Layout

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Example of Ten Lane Bowling Alley Layout

(Back to Contents of the Getting Started Section on page 11) 8. Guidelines to Establishing Pricing To establish pricing:

• estimate your revenue - counter-balance higher cost items tagged with lower markup, with higher markups on lower cost items; maintain a desired overall net profit percentage, usually• 33-40% of gross sales, and a normal margin of profit; balance items ranging in popularity - mo• nitor high demand items which can determine your success.

Setting the right price can influence the quantities of various product and service that your customers will buy, which in turn affects the total revenue

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and the profit in the your bowling alley. In the end, the right price for the product and service is the price that the consumer is willing to pay for it. Hence, correct pricing decisions are a key to successful bowling alley management. Systematic and informed decisions regarding pricing strategies must be made while considering a wide range of issues.

A major step toward making a profit in your bowling alley is selling the bowling products and providing whatever services you decide to offer for

oduct and service used in calculating markup consists of the cost of providing the product and service plus any other

is is that when other operating

The fol that should be considered:

to price as it relates to your otential bowling alley customers.

duct and service very important to your rget consumers? You need to know your customers' desires for different

ervices? What is the high and low price that the products and services will

gies would be compatible with your usiness’ total retailing mix that includes merchandise, location, promotion

onsiderations

more than it has cost you. The difference between the wholesale cost of the bowling products and the retail price of those products is called the mark-up. These are the dollars that are now available to pay the operating expenses of your bowling alley. When establishing the markup on a product and service, two points should be noted:

1. The cost of the pr

indirect cost of providing the product and service minus any quantity or cash discounts given by the seller. 2. The price, rather than cost, is ordinarily used in calculating percentage markup. The reason for thfigures such as wages, advertising and profits are expressed as a percentage, all are based on retail price rather than on the cost of the product and service being sold.

lowing points will highlight issues Target Customers and the Retailing Mix In this section, your attention is directedp Is the price of this particular protaproducts and whether price is an important issue in their purchasing decision? Have you established a price range that people will pay for your products and shave to fall within for someone to buy? Have you considered what price strateband services? Competitor C

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This set of questions looks outside your bowling alley operation to the ompetitive factors that you cannot directly control.

price wise? o you regularly review competitors' ads to obtain information on their

trategy?

how will you deal with their reactions?

f prices, while considering the competition, is a key trategic decision. Should your overall strategy be to price at the prevailing

licies

verall pricing policy and the message that you want to onvey will be considered. Setting the price must be compatible with your

e more appealing to your ustomers than even-ending prices?

upons be used in newspaper ads or mailed to selected consumers on

tent with the bowling alley image you are seeking?

? ther business

he Relationship between Product Prices and Costs

c Do you know what your direct competitors are doing Dprices? Do you do comparison shopping of competitors to obtain information on their pricing sHave you considered how your competition will react when you enter the market place, and A Price Level Strategy Selecting a general level osmarket prices or do you want to work at an above-the-market or below-the-market strategy? Should competitors' temporary price reductions ever be matched? Pricing Po In this section, ocestablished pricing policies and your store concept. Will odd-ending prices such as $1.98 and $44.95, bcWill consumers buy more if multiple pricing, such as 2 games for $8.50 is used? Should any loss leader product pricing be used? Will coany occasion? Will holiday gift giving season be a major advertising and sale opportunity for you? Would periodic specials, combining reduced prices and heavier advertising, be consisHas the impact of various sale items on profit been considered? Are these product and service at the peak of its popularityWill customer services such as delivery, gift certificates and oservices be free of charge to customers? T

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To keep costs in line, it is important to have consistently in pricing control.

is method does not include labor or other costs)

f 0.33:1 means that for every

s and services. Then you add a percentage for profit.

dy and compare

osts and competition. It then tries to balance the prices of

ion

Factoring Method Pricing - Multiply the cost of the product by three (th

Gross Margin Pricing - The formula is gross profit minus cost of goods sold divided by net sales. A gross profit margin odollar in sales, you have 33 cents to cover your basic operating costs and profit. Prime Cost Pricing - The formula is to add the cost of labor and cost of your productCompetitive Pricing - Competitive pricing seeks to match what others charge for the same product or service. Conduct a market stuthe prices to similar ones that you intend to offer in your bowling alley. That means pricing your products and services are neither above nor below what others charge. Combination Pricing -This method considers all methods, factoring, gross margin, prime cthe competition with your costs and needs. (Back to Contents of the Getting Started Sect on page 11)

. Licenses, Permits and Regulations

new businesses must comply with re licenses, permits and regulations. When creating a business, the

ment has the authority to issue its own business censes within its jurisdiction. Since there is no uniformity throughout the

required for your bowling alley. usiness licensing requirements vary from city to city, county to county and

9 One area of rules and regulations that allaentrepreneur must contact the municipality involved, along with the state and federal governments. Each municipal governlicountry regarding municipal licenses for businesses, you should consult with the appropriate local officials to determine whether your business will be affected by local regulations and licensing requirements. Businesses (including home-based businesses) must also meet the zoning by-laws that control property uses in their municipalities. There may be various licenses and permits Bstate to state. Some require all businesses to register and they collect annual business licensing fees. Others don't require licenses or registration for unincorporated businesses unless you are doing business under a fictitious name (also known as a DBA or "doing business as").

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You may need a license or permit for occupancy, sanitation, and fire safety. Your first step should be to check with your city or town clerk for any local

quirements. You should also check on zoning and sign regulations that may

e, but are not limited to:

• municipal business license pancy

• sanitation

ou need to apply for is Federal Employer Identification lication. You can access the information at the following

link:

reapply to your business and location. Examples of licenses, permits and regulations that could apply to you when starting your bowling alley may includ Licenses

• occu

• fire safety

The first thing yNumber (EIN) App

http://www.irs.gov/pub/irs-pdf/fss4.pdf

Business Licenses - Some cities charge a percentage of your gross sales nd some only charge a fee to operate your business in their city.

nd type of sign you can use. Also get written approval from your landlord.

your business that is copyrighted without a license, you can be fined from $5,000 to

a

Sign Permit- Before investing in a sign, contact your local municipality to find out if there are any restrictions on the size, location, lighting a

Music License - Any business that plays copyrighted music whether you have live music, music on hold for your phone or play CDs in

$20,000 dollars. Fees for these licenses are collected by the American Society of Composers, Authors and Publishers, Broadcast Music, Inc. (http://www.ascap.com/index.html) and Broadcast Music, Inc. (http://www.bmi.com/).

Fire Certificates - You may be required to be inspected by the fire an open for business. Your local fire department

should be able to inform you of the regulations you need to follow. department before you c

SBA Link for Where to Obtain Business Licenses

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The SBA has a page titled, WHERE TO OBTAIN BUSINESS LICENSES for your state and you can access the information at the following website link: http://www.sba.gov/hot list/license.html Permits

• vendor permit

Police Permit - Your business may require police clearance or a permit.

Sellers Permit - This is also known as a resale permit. It allows you to avoid

ou can go to the following link for a list of states and the required permits:

ttp://www.irs.gov/businesses/small/article/0,,id=99021,00.html

• building permit

paying sales tax on merchandise when you purchase it from wholesalers. This permit is issued through the state entity that is responsible for taxes. Y h

uilding Permits And Zoning Permits - These permits are regulated by

egulations

• health regulations and requirements

You can get permit, license and regulation information by contacting your

Byour local city or county planning department. Call your local building department and ask them what is required. R

• fire safety standards or regulations • retail sales tax • zoning by-laws

local city hall, town or village office or rural municipal office. Contacts for Federal and US State Governments can be found in the Government and State Website Listings, found in this book on page 71. (Back to Contents of the Getting Started Section on page 11)

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Chapter Two Managing Your Bowling Alley Operation Developing New Accounts and New Customers The problem of developing new accounts and new customers is a common one. A frequent lament of sales managers is "we just don't have enough new accounts to provide the volume we need." In most companies, a five percent improvement in sales volume will have a most favorable profit effect. It will equal or exceed, for example, a comparable percentage improvement in costs of material and services, productivity, inventory management, or control of receivables. How to acquire the new accounts and new customers to provide added volume becomes a matter of prime importance for survival and growth. In many businesses, small and large, the matter of new customer acquisition is approached in a haphazard, intermittent, unplanned and uncoordinated way. The results are understandably often less than satisfying, more expensive than expected and generally inadequate from the standpoint of contribution of profit. Useful insight into the problem of getting new customers can be obtained by considering the sales department as a purchasing function, spending company resources by investing in customers and sales volume. The controls, systems, thought and effort devoted to finding the right source of materials, provide for the most effective and evident management concern relative to its purchasing activities. Disciplines are established and controls are in place to measure supplier and purchasing effectiveness. Alternate bids are secured and potential suppliers critically tested for quality and service. Capital expenditures are closely evaluated. Yet the problem of investing to get a new customer, one who is expected to deliver profitable sales over an extended period of time, is often reduced to a simple charge to the sales department of 'more customers'! In most cases the investment in customer acquisition is heavy, scattered, unmeasured and unplanned. The money spent on this type of effort consists of advertising dollars, sales, salaries and expenses, phones, samples, administrative time and often expensive engineering costs. The alternative approach to customer or account development is usually less expensive and substantially more productive. It involves some straightforward initial analysis and planning; inexpensive enough for the smallest business. It may likewise involve a change in attitude and emphasis

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that says that the business of investing in a customer ought to be a selective, investigative, consistent, and planned process; worthy of the closest attention of the managing sales executive. Finding and developing a worthwhile customer is a different objective from simply 'more sales’ or 'more accounts'. There is more to getting new customers than just chasing the volume they produce. Obviously the quality of the volume is more important. Measure your required standard, not just for the amount of volume, but for the profit yield of the volume and the trend for the future. Customer Development Program Your Customer Development Program should involve at least six (6) steps: Step One – Fully Understand Your Business and Your Customer’s Needs. You must know exactly what your customers need from your bowling alley and how your bowling alley will meet those customer needs. Step Two – Know Who Your Potential Customers Are. You must know who your potential customers are, where they live, why they would buy your product and service. Step Three – The Market Research. When many business owners hear the words “Market Research”, many just felt that the task is too great or too complicated to even tackle. The level of market research that needs to be done must be determined. Step Four – How To Get Your First New Customers. As an entrepreneur, you know that the sooner you get customers knocking on your door, the greater the likelihood that you can sustain your business. Like any other business, you can only succeed if you have enough business to sustain you. Step Five – Implement a Successful Marketing Program. The amount of business you get is highly proportional to the amount of effort that you put in marketing your bowling alley. Step Six - How To Keep Your Customers. Your existing customer base is a goldmine. These are people who already know your bowling alley and are familiar with you. These are people who have already established a relationship with you by buying your product and service.

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Computer Software Retail Operations Automated Point-of-Sale http://www.automatedpos.com Automated Point-of-Sale develops and markets premier inventory control/POS software and hardware solutions for small to medium Retailers. 866-931-3291 Coresense http://www.coresense.com Small and mid-sized retailers rely on CORESense On-Demand Retail Software to manage their entire retail business, from sales channel to customer doorstep. 125 High Rock Avenue, Saratoga Springs, NY 12866 866-229-2804 Toll Free 518-306-3043 CounterPoint SQL Enterprise http://www.synchronics.com/products/cpsql.htm CounterPoint SQL Enterprise is a powerful and flexible retail management solution for businesses with one store or hundreds of stores. By harnessing the power of Microsoft® SQL Server, CounterPoint gives you speed and control over every aspect of your business—point-of-sale, inventory, customers, purchasing, sales history, and much more. Nearly every aspect of CounterPoint—its appearance, content, and behavior—can be customized. Retail Division, 1727 Kirby Parkway, Memphis, TN 38120 Office: (800) 852-5852 (901) 681-2800 Fax: (901) 681-2802 CounterPoint SQL Express http://www.synchronics.com/products/cpsqlx.htm CounterPoint SQL Express is ideal for small, single store businesses that want a powerful yet economical solution. Express utilizes the same cutting edge technology found in the Enterprise edition and includes many of the same great features— point-of-sale, inventory, customers, purchasing, sales history, and much more. Express fits your business now and will grow with you as your business grows. (For contact information, see CounterPoint SQL Enterprise, above) CounterPoint V7 http://www.synchronics.com/products/cpv7.htm CounterPoint V7 is a feature-rich retail management solution suitable for businesses of all sizes. With plenty of options, CounterPoint V7 is ready to expand when you are. And with full support for a broad range of operating environments, CounterPoint V7 works with whatever platform you do.

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(For contact information, see CounterPoint SQL Enterprise, above) CPOnline http://www.synchronics.com/products/cpol.htm CPOnline is an affordable and powerful ecommerce service that allows you to connect your existing CounterPoint inventory and customer information to your online store. Integrated retail and ecommerce doesn't get any easier! CPOnline gives you a customizable storefront, "real-time" online credit card authorizations, automatic shipping calculation, powerful marketing tools, email newsletters, visitor statistics, Froogle™ submissions, member pricing, and more. Compatible with the entire CounterPoint family, CPOnline lets you open your store to the world. (For contact information, see CounterPoint SQL Enterprise, above) CPGateway http://www.synchronics.com/products/cpgw.htm CPGateway is a secure, reliable, and affordable service that enhances credit card processing for Synchronics merchants. CPGateway uses your Internet connection to provide lightning-fast credit, debit, and check authorizations in under 2 seconds. Compatible with the entire CounterPoint family, CPGateway keeps your lines moving and your customers happy. (For contact information, see CounterPoint SQL Enterprise, above) Electronic Retail Software http://www.eretailsoft.com For small to medium independent retailers. Benefits of the software include: Improves inventory management and control, Complete customer information, including purchase history, Easy-to-learn, easy-to-use point of sale and Extensive reporting capability. 20101 Birch St, Suite 150-K, Newport Beach, CA 92660 Phone: (949)660-6333 Fax: (949)660-6334 Island Pacific.com http://www.islandpacific.com Retail Pro (http://www.islandpacific.com/RetailPro2.htm) is the global leader in retail management systems. Retail Pro helps retail businesses around the world run more profitably and achieve impressive returns on their technology investments. The software is an integrated system for POS and store operations, merchandising planning and analysis, and customer management / CRM. 400 Plaza Drive, Suite 200, Folsom, CA 95630 Phone: 800-738-2457 Fax: 916-605-7201 JPMA Retail Software Solutions http://www.jpma.com

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JPMA is a worldwide supplier of Point-of-Sale software to the retail industry. The cash register software operates on Microsoft Windows systems and can handle different languages (Spanish, French, German, Japanese, and more), currencies, tax regimes etc. 1626 Cole Blvd., Suite 250, Lakewood, CO 80401. 303-232-3700 Keystroke POS http://www.keystrokepos.com Specialized Business Solutions began developing Keystroke Point Of Sale software nearly 20 years ago. Today, thousands of retail, wholesale, and service businesses use Keystroke POS to manage sales and control inventory. Telephone: (800) 359-3458 (970) 262-1720 PO Box 2019 Dillon, CO Microsoft http://www.microsoft.com/smallbusiness/products/retail-software With Microsoft Business Solutions for Retail Management System, you get an easy-to-use, affordable solution that streamlines business processes, integrates with other applications, and adapts to meet your specific retail needs. (800) 426-9400 Positrac 5 Software http://www.positrac.com Since 1983, designing, writing, and assisting dealers install retail systems throughout the U. S. and Canada. Positrac Software is designed for retail stores desiring a Point of Sale and Inventory Control System. 4 different Inventory programs: Grocery, Liquor, Convenience, and Retail versions. Each version is uniquely written for the specified market. The software is very flexible and easy to use. Track inventory usage, costs, and profits with the click of a few buttons. Operating systems supported are Windows 95, 98, ME, NT, 2000, XP, and XP Pro. 1209 Whispering Pines Rd. Albany, GA 31707 Phone 229-883-2398 Fax 229-420-5999 Progress Application Partners http://www.progress.com The Global Solutions Directory contains hundreds of business applications and solutions developed by Progress Application Partners. Offerings range from enterprise solutions to niche applications solving the most complex business needs. 14 Oak Park Drive, Bedford, MA 01730, USA Tel: 781-280-4000 Toll Free: 800-477-6473

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QuickStore POS http://www.waspbarcode.com Wasp QuickStore is the easiest, quickest way to checkout customers and manage inventory. Simple and powerful, the point-of-sale and inventory control features are ideal for stores such as a bowling center. Wasp Barcode Technologies 214-547-4100 1400 10th Street, Plano, TX 75074 VAI software systems http://www.vaisw.com S2K Enterprise for Retail is a comprehensive retail point of sale software solution specifically designed for the retail industry. VAI’s S2K for Retail is a system designed for the larger retail end user with multi-locations and more than five POS registers. 1-800-824-7776 Center Computer Software A-2 Technologies http://www.a-2technologies.com/ Mechanics software for the bowling industry Ball Call Eliminator System http://www.ballcalleliminator.com/ Patented new product for Brunswick A,A2, Factory A-2 & Jetback Bowl 101 http://www.bowl101.com/ Bowl101 will handle all of your bowling league stats. Windows 95/98, Windows 3.1 and Dos versions available. Unlimited number of leagues, almost any scoring system with up to 58 teams with 15 bowlers per team and 100 subs. Weekly and yearly awards and a full array of sorts Bowlers Map http://www.bowlersmap.com/ BowlersMAPTM Motion Analysis Program was developed to combine the power of video instruction with the technology of computers CDE Software http://www.cdesoftware.com CDE Software provides Windows 98/95/NT solutions to center management. Software offerings include Bowl-o-Dex, a master bowler database that can import from the premier league secretary software, BLS-X/32

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C.S.P. Inc Bowling Software http://www.bowlcsp.com/ Makers of complete and easy to use Tournament Software with Brackets and complete Pro Shop Software (Windows 95/98) DownTime Manager http://www.nhuntsoftware.biz/ DownTime Manager keeps track of your equipment downtime Fox Trot Computer Systems http://www.foxtrotcs.com/ Call Sheet/Parts Inventory software for pinsetter mechanics Pinsetter http://www.pinsetter.com FREE internet based league secretary software. Pinsetter makes it easy for league secretaries to manage scores and for league members to browse current standings and statistics Sleltronic USA Scoring System http://www.steltronic.com/ Steltronic automatic scoring for the bowling business Voice Link Corporation http://www.voicesoft.com/ Phone Reservation and Scheduling System. Frequent Bowler Reward Debit Card System Wollop Computer Solutions http://www.wollop.co.uk/ Wollop Tenpin Reservations, advanced reservations and lane management software Insurance Insurance needs for businesses vary greatly. It is best to choose an insurance agent or broker familiar with your size of business and, in particular, an agent familiar with your type of bowling alley operation. If you don't have an insurance agent, it could be a wise decision to ask other business owners in your area to recommend one. The following list is included to remind you not to overlook the complex areas of business insurance. It is best, however, to discuss your specific requirements with your insurance agent.

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Basic Insurance:

• fire insurance (extended coverage on buildings and contents); • liability insurance; • burglary protection (theft coverage); • dishonesty insurance (covers thefts by employees).

Marketing/Advertising Word-of-mouth advertising and good public relations are often the best ways of promoting your bowling alley. Depending on your market and its size, also consider flyers, newspapers (especially for holiday promotions), radio, TV, the Yellow Pages and the Internet. Also remember that a satisfied customer is good advertising. Internet/Website A Web site should have details to describe the location (your business’ address, telephone and fax numbers, and directions on how to get to your bowling alley), hours of operation, products and services, and anything else you think may be of interest to potential customers. However, once you launch a Web site, you must update it on a regular basis. Signs and Your Business Have you considered the impact that your sign has on your bowling alley business? This section discusses signs, what they can do for your business and how they can be used to your advantage. Signs index the environment so people can find you. This is especially true for travelers, new members of your community and impulse customers. A primary source of customers for your bowling alley is the large number of people who are new to your community. Your sign is the most effective way of reaching this mobile or transient group of potential customers. Signs can correct a poor location by substituting effective communication for poor site characteristics. If your bowling alley is located on a site which is not visible or in a building which does not correspond with the products and services offered, your sign can overcome this disability. For example, most buildings are not built to conform to the design needs of any particular type of tenant. Without an effective sign, it is often impossible to determine what type of business is being conducted in a given building. In addition, when your site is located off a busy traffic artery or in an area which is not easily accessible, your sign can communicate to people who are passing on a busy

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street several blocks away. If you are located off a busy freeway but far from an exit, your sign becomes your main device for directing people to your bowling alley. Planning Your Advertising Budget Advertising costs are a completely controllable expense. Advertising budgets are the means of determining and controlling this expense and dividing it wisely among departments, lines or services. This section describes various methods (percentage of sales or profits, units of sales, objective and task) of establishing an advertising budget and suggests ways of applying budget amounts to get the effect you want. If you want to build sales for your bowling alley, it is almost certain that you will need to advertise. How much should you spend? How should you allocate your advertising dollars? How can you be sure your advertising outlays aren't out of line? The advertising budget helps you determine how much you have to spend as well as how you are going to spend it. What you would like to invest in advertising and what you can afford are seldom the same. Spending too much is obviously an extravagance, but spending too little can be just as bad in terms of lost sales and diminished visibility. Costs must be tied to results. You must be prepared to evaluate your goals and assess your capabilities - a budget will help you do precisely this. Your budget will help you choose and assess the amount of advertising and its timing. It will also serve as the background for next year's plan. Methods of Establishing a Budget Each of the various ways in which to establish an advertising budget has its problems as well as its benefits. No method is perfect for all types of businesses nor is any combination of methods. Here, concepts from several traditional methods of budgeting have been combined into three basic methods: percentage of sales or profits; unit of sales; and objective and task. You will need to use judgment and caution in choosing your method or methods. Percentage of Sales or Profits The most widely used method of establishing an advertising budget is to base it on a percentage of sales. Advertising is as much a business expense as the cost of labor and should be related to revenue. The percentage-of-sales method avoids some of the problems that result from using profits as a base. For instance, if profits in a period are low, it might not be the fault of sale or advertising. But if you stick with the same

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percentage figure, you will automatically reduce your advertising allotment. There's no way around it: two percent of $10,000 is less than two percent of $15,000. Such a cut in the advertising budget may very well lead to further losses in sales and profits. This in turn will lead to further reductions in advertising investment, and so on. By using the percentage-of-sales method, you keep your advertising in a consistent relation to your revenue volume - which is what your advertising should be primarily affecting. Here is the explanation of the different percentage’s you can utilize with the percentage-of-sales method: Past sales: Your base can be last year's sales or an average of a number of years in the immediate past. Consider that changes in economic conditions may cause your figures to be too high or too low. Estimated future sales: You can calculate your advertising budget as a percentage of your anticipated revenue for next year. The most common pitfall of this method is an optimistic assumption that your bowling alley will continue to grow. You must always keep general business trends in mind, especially if there is the chance of a slump. Remember to assess the directions in both the industry and your own bowling alley operation. Past sales and estimated future sales: The middle ground between an often conservative appraisal based on last year's revenue and an often overly optimistic assessment of next year's is to combine both. This method is generally more realistic during periods of changing economic conditions. It allows you to analyze trends and results as well as predict future sales with a little more accurately. The more complex methods are Unit of Sales and Objective and Task methods. We will not cover those. If the percentage-of-sales method does not work for you or you want to go another route, do your research on the Unit of Sales and Objective and Task methods. Market Analysis Successful businesses have extensive knowledge about their customers and their competitors. Acquiring accurate and specific information about your customers and competitors is a critical first step in market investigation and development of a marketing plan. In developing a marketing plan, your primary functions are to understand the needs and desires of your customers select or develop a product or service that will meet customer needs, develop promotional material that will make the customer aware and ensure product or service delivery.

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Developing a business plan (for more information, see page 11) for an existing business or conducting a feasibility study for a new venture requires a thorough analysis of market conditions. Market conditions in your area have a significant impact on the profitability of your bowling alley. The strength of the local market affects how many customers you will serve and the prices that you can charge. This section will help you analyze your market so that you can gauge the potential of your existing or proposed operation and make more informed operating and investment decisions. On the pages that follow are a series of checklists to help you collect and analyze information as part of your market analysis. The checklists will serve as a learning tool to help you understand the many market factors that influence your profitability. Types of Questions Answered by the Market Analysis By conducting a market analysis, you will be able to answer questions such as: What trends are emerging in the bowling alley industry? What are the strengths and weaknesses of my competition? Is my location suitable? Does my concept fill a niche in the market? What is the potential number of customers for my bowling alley per year? Application of the Market Analysis Data This information will provide you with a market analysis format that can be used in a feasibility study, business plan or marketing plan. The following will help analyze the market potential of an existing operation, an expansion or a new development. Existing bowling alley operators can use a market analysis to identify opportunities to improve sales. The analysis can provide valuable information on market conditions to help in forecasting and budgeting. It also provides a foundation for an effective marketing plan. Prospective bowling alley operators can use a market analysis to project sales volume for a new bowling alley venture. Using your market analysis findings, you can estimate the financial potential of your venture by creating financial projections. If you are a prospective bowling alley owner, these projections will help you determine if your venture is feasible.

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Market Analysis Components Industry Trends on page 41 Location and Facility on page 42 Competition on page 43 Location on page 44 Concept Refinement on page 46 I. Industry Trends Studying industry trends is one of the first steps in conducting a market analysis. It will help you identify opportunities and threats in the industry that may affect your profitability. Studies on consumer buying patterns are available from various sources. Such studies report recent changes and trends in consumer attitudes and behaviors regarding your bowling alley products. They can identify changing trends before they become apparent in your local market. The following are some of the sources of industry trends data available to you:

National Associations (see page 70) State and Local Associations (see page 70) Industry Groups Industry Publications (see page 69)

Industry Trends Checklist The following industry trends checklist provides a sample of topics you might want to study as part of your market analysis. Market Demand

Economic trends Consumer confidence Demographic trends

Success Factors

New and popular concepts/themes Customer service innovations Pricing practices Labor saving techniques

Back to the list of Market Analysis Components on page 41

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II. Local Market Area Demographic and economic statistics will help you determine the bowling alley sales potential of the market area you plan to serve. By comparing these statistics with those of other areas and the state, you will be able to evaluate the strength of your market area. The first step in this analysis is to define the geographic size of your market area. Be reasonable in estimating how far people will travel to reach your bowling alley. Once your geographic market area is defined, you should obtain demographic data that describes the people who live and work in the area. Descriptions of the population's age, income, education and gender will help you understand the market area you plan to serve. Obtain economic statistics such as business growth trends and tourism visitation data. They indicate the overall economic health of the market area. Data on your market area is available from various sources such as:

o Bureau of Census, U.S. Dept. of Commerce; o Private marketing data entry forms; o State and local economic development agencies and State Data

Centers; o Small Business Development Centers; o County Extension offices; o Local Chambers of Commerce o Library resource materials such as: Sourcebook of Zipcode

Demographics and Sales and Marketing Management In addition to studying economic and demographic data, you should also determine the buying behaviors and preferences of local residents. “Lifestyle Segmentation Reports” provided by marketing group data firms provides a useful source of consumer behavior information. Market Area Checklist The market area checklist will help you collect data to evaluate your market area. Geographic Market Area

• Market area radius (one, two, three miles, etc.) • Market area

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Demographic Characteristics

• Population • Age distribution and median age • Gender • Ethnic groups • Household income distribution • Marital status • Dwelling types • Households with children • Education

Economic Characteristics

• Employment levels • Types of employment • Number of and growth in business establishments • Local developments planned • Seasonality and tourism visitation

Back to the list of Market Analysis Components on page 41 III. Competition Existing market area competition can provide valuable information to help you analyze demand and market opportunities. You can assess their competitive strengths and weaknesses and learn from their successes and failures. First, identify how many bowling alleys are in your market area. Then, identify those businesses that appeal to the types of customers (market segments) that you plan to serve. You should also identify all other businesses located in your immediate area because they can also influence your business. Refer to the Yellow Pages and your local Chamber of Commerce for listings of area bowling alleys. It is important to identify any market area bowling alleys that have closed and for what reasons. Also, learn what new bowling alleys are planned for the market area and determine how they might affect your proposed operation. After identifying your competition, visit and evaluate each bowling alley. Speak with the manager of each operation if possible. Use the following checklist to complete this part of your market analysis.

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Competition Checklist Location

Community traffic patterns Proximity to sources of demand Accessibility Visibility Surrounding neighborhood Parking availability Sign visibility

Appearance/Comfort

Exterior appearance and theme Interior appearance and theme Atmosphere Cleanliness Heating and ventilation

Service

Days open Hours of operation Service style Quality of service Speed of Service Extra services offered

General Information

Franchise affiliation Local reputation Advertising and promotion methods used

Overall

Strengths Weaknesses

Back to the list of Market Analysis Components on page 41 IV. Location Location is a critical consideration because it affects your ability to draw customers. It is important that your site be visible, accessible, convenient

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and attractive to your market. How you evaluate your location will depend on the type of bowling alley you are planning and the type of customers you hope to serve. Two major choices face prospective bowling alley owners: What kind of bowling alley should I open and where should I open it? Typically, you will have already selected either a location or a concept for your bowling alley. It is important that your location and concept complement each other. It is critical that a site be chosen based on market factors and not because of a low price. Different types of bowling alleys will have different location requirements. However, certain elements should be analyzed regardless of the type of bowling alley you are planning. Use the following checklist to complete this part of your market analysis. Location Checklist Description of Immediate Area

Residential and commercial profile Adjacent land uses Proposed developments Safety Special appeal of location Map of area (identify sources of demand, competition and other

relevant landmarks) Proximity to Customers and Competition

Major demand generators (retail, offices, lodging, hospitals ...) Number of potential customers by segment within one-, two-, three-

mile radius, etc. List of direct bowling alley competitors

Traffic Volume

Street and road patterns Speed limit and traffic signs/lights Highway/Street traffic counts Pedestrian traffic counts Peak and off-peak traffic periods

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Accessibility

Proximity to major streets and highways Ease of entrance and exit Parking (guests and delivery) Pedestrian accessibility Americans with Disabilities Act (ADA) compliance

Visibility

Visibility from road Effectiveness of sign "Curb appeal" of building Landscaping Exterior lighting

Other Issues

Zoning Environmental Issues Easements and restrictions Growth Patterns of Surrounding Areas

Back to the list of Market Analysis Components on page 41 V. Concept Refinement and Evaluation An effective concept establishes your business’ identity. It distinguishes your operation from others in the market area and allows the business to attract particular customer groups. Understanding customer preferences is essential in developing an appropriate concept. It is important to realize that concepts appropriate for one area may not be appropriate for another. Concept involves the entire shopping experience, not just the type of product and service offered. Elements that define your concept include decor, lighting, service, price, location and size. Even the name of the establishment conveys a sense of the concept. To help refine your idea, describe your proposed bowling alley in one or two sentences. Back to the list of Market Analysis Components on page 41 Your Marketing Plan Every how-to book on the market has a different take on the essential elements of a marketing plan.

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This section outlines the key elements you need to include in your bowling alley marketing plan. No matter how it's ultimately organized, your marketing plan should be a straightforward, easily understood company document. It should provide you with a clear direction for your marketing efforts for the coming year and it should give an incisive look into your company for all readers. The Marketing Plan section is broken down into nine (9) parts: Preparing to Write on page 47 Market Situation on page 48 Threats and Opportunities on page 48 Marketing Objectives on page 49 Goal for Your Marketing Plan on page 49 Marketing Goals on page 50 Budgets on page 50 Controls: Tracking Effectiveness on page 51 Executive Summary on page 52 Preparing to Write Your Marketing Plan Before you begin to write, pull together some information you'll need. Getting the information first avoids interruptions in the thinking and writing process. Have on hand:

• Your company's latest financial reports (profit and loss, operating budgets and so on), the latest sales figures by product and service and the records for the current and the past three years or, if less, for however long you've been in business

• A listing of each bowling alley product in the current line, along with target markets

• An organization table (if you can count your employees on one hand, you can probably omit this.)

• Your understanding of your bowling alley marketplace: your competitors, geographical boundaries, types of customers you market to, latest and most useful demographic data, any information on trends in your market(s) (both demographic and product and service related)

(Return to Market Plan Parts) on page 47

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Market Situation The "market situation" section should contain your best and most clear-headed description of the current state of the bowling alley marketplace (this is no place for hunches).

• What are your bowling alley product and service lines? • What is the dollar size of your markets? • What is your sales and distribution setup? • What geographic area do you sell to? • Describe your audience in terms of population, demographics, income

levels and so on. • What competitors exist? • Historically, how well have your bowling products sold?

Much of this information may exist in your head. But now is when you write it down. For example, how much information do you have in your office—right now—on your competition? Your marketing plan gives you a chance to pull all this relevant information together in one place, to spur ideas and justify actions.

Consider each of your bowling products up against the matching products or services of your competitors. How well do you stack up? Is there any significant market opportunity for you that neither you nor your competitors are currently exploiting? (Return to Market Plan Parts) on page 47 Threats and Opportunities This section is an extension of the "market situation" section, and it should focus on the bad and good implications of the current bowling alley market:

• What trends in the marketplace are against you? • Are there competitive trends that are ominous? • Are your current products and services poised to succeed in the

market as it now exists? • What trends in the marketplace favor you? • Are there competitive trends working to your benefit? • Are the demographics of your market in your favor? Against you?

There are lots of places to go to get information on the trends in your bowling alley market. City and state business publications frequently publish overview issues; you can talk to local business reporters; and local chambers of

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commerce publish projections, as do associations of manufacturers (the names are different in various parts of the country). Talk to your professional association and read your trade journals. (Return to Market Plan Parts) on page 47 Marketing Objectives In the "marketing objectives" section, you paint your picture of the future: What marketing objectives do you want to achieve over the course of the plan? Each of your marketing objectives should include both a narrative description of what you intend to accomplish along with numbers to give you something concrete to aim for. Just to say you want to start the best bowling alley in the marketplace isn’t providing much guidance. Saying you want to go from 0 percent to 8 percent of the local market in two years is easier to understand—and verifiable. If you're not sure of the size of the local market, then aim at a dollar figure in sales. Your accountant will let you know whether you've succeeded or not. (Return to Market Plan Parts) on page 47 Goal for Your Marketing Plan If you're new to developing a marketing plan, how do you set a quantifiable goal? Start with your past. Review your past sales numbers, your growth over the years in different markets, the size of typical new customers, and how new bowling alley product introductions have fared. If over the last five years you've grown a cumulative 80 percent in gross revenues, projecting a 20 percent to 25 percent increase in the next year is reasonable; 45 percent is not. Make a low but reasonable projection for what you’ll be able to accomplish with marketing support toward your new marketing objectives. Set modest goals to start, until you get a feel for the terrain.

You should make it a point to limit the number of marketing objectives you take on in a given year. Let's face it, change can bring stress, disorient staff and sometimes even confuse your target market. Keep your objectives challenging but achievable. Better to motivate yourself with ambitious but worthy targets than to depress you by failing at too many enthusiastic goals.

Here are some typical marketing objective categories:

• Introduce new bowling alley products • Extend or regain market for existing bowling alley products • Enter new territories for the company

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• Boost sales in a particular bowling alley product, market or price range. Where will this business come from? Be specific.

• Cross-sell (or bundle) one bowling alley product with another • Raise prices without cutting into sales figures • Refine bowling alley products

(Return to Market Plan Parts) on page 47 Marketing Goals Here's where you spell out how you're going to make things happen. While your spreadsheet has shown increasingly stunning profits each time you bump up the market gains, now you're in the real world. Gains must be earned by marketing brains and brawn. Each marketing objective should have several goals (subsets of objectives) and tactics for achieving those goals. In the objectives section of your marketing plan, you focus on the "what" and the "why" of the marketing tasks for the year ahead. In the implementation section, you focus on the practical areas of who, where, when and how. The key task is to take each objective and lay out the steps you intend to take to reach it. If your objective is to build a bowling alley in Anytown, USA, you have to put together concrete goals to make it happen. (Return to Market Plan Parts) on page 47 Budgets Whether done well or poorly, business activity always costs money. Your marketing plan needs to have a section in which you allocate budgets for each activity planned. This information should be in writing with the individual carrying overall program responsibility. People responsible for portions of the marketing activity should know exactly what funds are available to them. In fact, you would be wise to involve them in planning those budgets.

Be as objective as you can about those costs you can anticipate. For things with which you have no budget experience, add 25 percent to your best estimate. Your budget should allocate separate accounting for internal hours (staff time) and external costs (out-of-pocket expenses). Make sure to enter the budget on a Lotus or Excel spreadsheet so you can manipulate it during construction to see which variant works best.

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Your budget section might look something like this:

Gross sales $142,000

Budget for annual marketing efforts $7,045

Yellow Pages $2,600

Sales letter mailing to prospects $625

Clerical help on mailing list $125

Advertising in local business magazine $500

Advertising in newspaper business section $1,200

Brochure design and copywriting $380

Brochure printing $315

Registration for business exhibitions $145

Attend training session $930

Purchase new mailing label software $225 (Return to Market Plan Parts) on page 47 Controls: Tracking Effectiveness To track progress on your marketing plan throughout the year, establish a regular schedule of meetings and spell this out in writing. How will you make adjustments to your plan midstream? How will you monitor progress in sales/costs to make changes during the year? You can't leave yourself without this capability.

The reason you pick measurable marketing objectives is to have the ability to track your progress toward reaching them. Too many marketing efforts aren't quantifiable, with the result that the achievements of your marketing campaigns aren't satisfactory, or they're just plain illusory.

All your marketing efforts will benefit from the classic feedback loop: Act, observe, adjust and act again. Scheduling quarterly meetings is best. At these meetings, responsible individuals should report on what they've accomplished in the last quarter, including how much of the budget has been spent. Reports should be verbal, with a printed summary for the record.

As your bowling alley business activity moves forward over time, you'll doubtless find the need to adjust the timing, the budget or the tasks themselves. At these points you must decide whether to intensify your efforts, add more tactical steps to pick up the pace or scale back your objectives. Make your changes in an organized manner, adjusting all the

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dependent tasks so that the plan shifts as a whole. Whatever your decision, make sure to update your marketing plan document. Put in writing your understanding of why you didn't reach your goals. Keep the original and date and number all changes. Your plan must be dynamic, but it shouldn't lose its sense of history. All this information will be extremely useful when you create next year's marketing plan.

Marketing isn't a science, but it is a skill in which you can make steady incremental improvement.

Your effectiveness section might look like this:

A) Annual gross sales from the previous year $129,750

B) Marketing expenditures planned during the current year

$6,000

C) Anticipated impact of marketing expenditures on gross sales

$16,500

D) Actual marketing expenses during the current year

$4,875

E) Annual gross sales at the end of the current year

$145,650

F) Percentage of the actual difference between this year's sales and last year's sales that can be fairly attributed to the marketing effort

60%

(Return to Market Plan Parts) on page 47 Executive Summary Put a brief summary at the front of your marketing plan binder. On a single page, sum up (with key financial numbers) in no more than a single page the contents of your marketing plan. Use bullet points, short sentences and bold type for major points, and stay focused on the big issues. What does someone have to know about your plan to have any sense of it?

This summary gives plan readers a concise description of what your bowling alley plans to do in the coming year.

Your plan must address two different time frames: the short-term (one to 12 months) and the long-term (over 12 months). Most of your document should focus on the coming year, which is the most important for the majority of small and medium-size businesses. Marketing typically demands the

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performance of a number of short-term actions planned in unison, which together bring about change. Once you've outlined the major year-end goals, the analysis will largely focus on the mechanics of media, mailing and promotion. But you shouldn't stop your serious thinking at year-end. Stretch beyond your business's immediate needs and envision the next two or three years. What are you ultimately reaching for? Write this down, briefly and in general terms. Questions you might answer could include: How many employees do you envision adding over the next few years? Will your need for office space stay the same? Will there be major equipment purchases? Will you be able to hire a manager? Are there specific training courses or certifications you'd like to put your staff through? Does a manufacturer or one of your wholesales offer special product training? Will your profit margin stay constant or do you think you'll be able to better it? Will you become active in local, regional or national trade groups? How will the market demographics affect your business in the coming years? Keep track of how your larger vision changes over time as well. (Return to Market Plan Parts) on page 47

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Chapter Three Accounting/Bookkeeping A good record keeping system should be simple to use, easy to understand, reliable, accurate, consistent, and designed to provide information on a timely basis. The legal requirements concerning financial records specify only that they be a permanent, accurate and complete record of your daily income and expenses. There are many types of record books and bookkeeping systems available. For example:

• double entry bookkeeping; on page 54 • commercial bookkeeping systems; on page 54 • one-write systems; on page 54 • computerized systems; on page 54 • single entry bookkeeping. on page 54

Double Entry Bookkeeping Systems - this is the system taught in most high school and college bookkeeping and accounting classes. Each transaction is recorded twice, one account is credited with the given dollar amount and a second account is debited by an equal dollar amount. This is an excellent system. But often formal training and practice will be needed to understand and master it. Commercial Bookkeeping Systems - these are available through stationery outlets and are usually a package system with instructions and forms to use. One-Write Systems - these are copyrighted systems that are set up using carbon-backed checks. As you write the information on a check, it also transfers the data to a record system. Computerized Systems - there are several excellent programs available. These programs offer the speed and capacity of computers as well as the ability to produce daily updated financial statements. One should be careful, however, that they are not buying expensive software programs or computer equipment that has more capacity than they need. Most small businesses grow into the need for a computerized system; usually as a means to control larger volumes of inventory or transactions. Single Entry Bookkeeping Systems - a single entry system means every dollar transaction is recorded only once, either as income or expense, an asset or a liability. All entries are recorded on a one page synoptic journal or also called a revenue and expense journal. The system is simple, easily understood, and thus requires little training.

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You should seek professional advice in this area. A good accounting professional can advise you on the accounting system that is best for your bowling alley. Furnishings and Equipment Before you open your bowling alley, you will need fixtures and furniture for your bowling alley. For assistance in this area, you may get the advice of a sales representative or consult trade publications and manufacturers' Web sites. In addition to your office set up, you will need a design of your bowling alley layout, tables and chairs, counters, and any concession stand equipment you need if you plan on providing this service. List that equipment and its cost to you. An important factor to consider when choosing equipment is the after-sales service and repair and their affordability. Used Equipment - Consider buying used equipment as a cost-saving measure. Sources of used equipment could be bowling alley that is closing or dealers in second-hand equipment. The drawback to this approach is that, often, there are no guarantees with the purchase. Leasing Equipment - Another alternative is to lease equipment to help keep start-up costs down. Cost Control In the bowling alley business, you must have procedures for controlling inventory and costs. Ask people in the industry for information about the procedures for:

Purchasing - Most of the time, purchasing is done over the telephone, by fax, or online. Often no contract is signed between the purchaser and the supplier; therefore, it is essential that you choose your supplier carefully. You will have multiple suppliers supplying your bowling alley. Each one will have different terms, conditions and payment options.

Develop specifications on product brand names, size, quantity, grade/weight, delivery time/place, emergency deliveries, availability and policies for substitutes or damaged goods. Entertain bids from multiple sources and get the best product for the lowest price. Use a Purchasing and Receiving Form.

Receiving – Check all deliveries against the Purchasing and Receiving

Form, focusing on three things: quantity, price and quality; packaging

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should be intact. Make sure specifications are met. Careful recording will show short shipments, price variations and weight differences.

Budgeting and Projecting – Establish a cash budget and maintain cash

flow projections on a continual basis.

Calculating Monthly Product Costs – Determine the actual cost of products purchased wholesale and the actual cost of products sold. This is a combination of opening inventories, purchases, adjustments and closing inventories. This ratio should remain relatively constant.

Projecting Your Sales Potential If you have completed your market analysis, you have completed your data collection. You have analyzed industry trends, market area demographics, economic statistics, competition, suitability of your location and your bowling alley concept. You are now ready to estimate your sales potential based on these factors. A key indicator of future sales performance is past sales performance. Existing businesses can rely on their historical records for this information. Prospective operators must look to comparable bowling alleys for data on their past performance. While there are no formulas for calculating your sales potential, your prior research will help you make more informed and reasonable estimates. The information that follows will help you estimate your sales potential. 1. Review Your Competitive Position A review of your business’ relative strengths and weaknesses will help you to determine your competitive position in the market area. Compare your bowling alley operation with your competition using the criteria below. Be sure to keep in mind your concept and the types of customers you hope to attract. Strength Weakness Concept/Theme Proximity to Customers Traffic Volume Accessibility Visibility Atmosphere Service Quality Reputation/Reviews

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Franchise Affiliation Pricing Hours of Operation Management Financial Projection Once you complete your market analysis, you will be better equipped to developed realistic financial projections for your proposed bowling alley. These projections will help you determine the financial feasibility of your venture and should be constructed in the process of a complete business plan. Cash Control Systems The industry averages show that between 2-4% of sales are lost to theft or cash mishandling. You need systems to keep track of the money from the time it leaves the customers hands until the time it is deposited in the bank. Have a written cash/credit handling policy. Have forms that employees can enter refunds given to customers and mistakes made. This form should have the time, date and employees signature. Limit access to the safe. The safe should be kept locked at all times. Most safes have envelope size areas allowing money to be dropped in (drop safe). Keep the opening and closing cash, used to make change for the customers, the same all of the time. Make sure the money is counted at opening and closing. Keep cash stores kept to a minimum. Paid-outs entered on a form with time, date, signature and receipt stapled to it. Paid-outs should be deducted from a petty cash fund if possible and not from the daily deposits. Do a cash drop for each shift. One person should be responsible for each shift deposit. Have them enter a log with the amount of the deposit, total sales for the day, date, time and signature. Also have them put this on the envelope that is to be dropped into the safe. Make bank deposits daily keeping each days deposit separate and attach the bank deposit slips to daily cash reports

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A key and safe combination access log should be maintained. Keys should be numbered and a log should be kept with information on the person having the key. Have written standard cash register procedures - what types of checks to be taken and if it should be for the amount only, etc. Use registers with a cumulative register reading - This is like an odometer on a car, keeping a running total of the sales, coupons, etc. Incorporate theses readings in the daily sales report. Use a register that has the transaction visible to the cashier and the customers. Secret shoppers take note of these transactions to make sure the employees are not under-ringing sales. Sales should always be rung up at time of the transaction and a cash receipt should be given to the customer. Cashiers should place customer's money on register ledge until the change is made. This way if the customer says he gave a larger dollar amount, the cashier has it right there to confirm it. Cash registers should not be left unattended. Money should not be exchanged from register to register if multiple registers are used. Do a Z reading each day. This clears the register of the previous day’s sales. This reading should be attached to the daily cash report. Follow up on your banks deposits to make sure your money has been credited to you account. Go through your bank statements line by line and check to see that no deposits are missing and each one is entered accurately. Banks do make mistakes. Employee Theft It has been estimated that about $52 billion a year is lost due to employee theft and that approximately 95% of all businesses experience employee theft. So, what are the symptoms and what can you do to protect your business? Watch for these signals from your employees. Early Warning Signals of Internal Dishonesty Signals from Personal Behavior 1. Inconsistencies by a staff member explaining discrepancies or errors.

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2. Bad temper or unpleasant behavior that tends to discourage questions. 3. Warning signs of substance abuse. An employee with a substance abuse problem will need extra money to finance a habit. 4. Habitual borrowing of store money or property without permission. 5. Expensive habits (drinking, extra marital affair, etc.) 6. Spending more money than earned or what salary can support. 7. Disgruntled, belligerent attitude, complaining about management or job to others. 8. Admission of theft from prior employer. 9. Concealed family relationships or cohabitation among employees. Signals from Employee Activities: 1. Secretive conversations among employees, phone conversations that stop abruptly when you approach. Any one engaged in sending or receiving cryptic messages. 2. Excessive loitering of around your business of off duty employees, ex-employees or friends. 3. Frequent "shortcuts" in security procedures to expedite deliveries. Rapid checking in of some deliveries while others take much longer for no legitimate reason. 4. Bringing large shopping bags or wearing unusually loose clothing to work regularly. 5. Attempting to distract or hold the attention of a supervisor for no good reason while another employee is in the work area or signaling by hand gestures, whistling, etc. when a supervisor approaches. 6. Repeated violations of such security regulations as use of unauthorized exits or keeping personal packages in the work area. Finding an employee in an area he/she has no legitimate business in. 7. Signing another employee's name or signing illegibly on invoices or packing sheets. 8. Habitually returning to the work area after others have left to retrieve something left behind. 9. Complaints by employees or customers that personal effects are being lost or stolen. 10. Frequent cash shortages on the same employee's shift. An unusual eagerness to "make up" the shortages rather than relinquish cash handling responsibilities. 11. Frequent cash overages on the same employee's shift. This may indicate that an employee is stealing cash at the register but not "light ringing" sales enough to totally cover it. 12. Unusually high number of "no sale" transactions registered on any one shift. 13. Excessive undocumented voids on any one shift or voids left unrecorded until the end of an employee's shift.

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14. Numerous receipt slips held by an employee until the end of a shift or notes found in the trash indicating that the employee was keeping a secret count of transactions. 15. Unusually low sales factor on any one shift (shift sales divided by number of items sold). 16. Make excuses for theft. Employees who steal, rather than believing theft is wrong, may condone the acts of dishonest employees as, "It's no big deal. It was only a few bucks." 17. Employees who violate bowling alley policies and procedures should be watched. 18. Overzealous work habits. Employees who work through their lunch breaks, seldom take a breather and never ask for time off may be running a game with the cash register. Also, employees who refuse to go on vacation may be afraid that their substitute will discover their dishonesty. Signals from Customers and Outsiders 1. Frequent customer complaints of shortages or substitutions in orders. 2. Unusually large or frequent credits or refunds by one employee. 3. Anonymous phone calls or letters concerning theft. 4. Unusually friendly relationships or loyalty between employees and outsiders. 5. Any customer who insists that only a certain employee handle their sale. 6. Gifts or favors given to an employee from suppliers or customers. 7. Presence of delivery drivers, repairmen, etc. in restricted areas. 8. Frequent hang-up phone calls to a substitute employee working a shift normally handled solely by another employee. 9. Customers who visit your business an unusual number of times daily or who loiter in your business for an excessive amount of time. 10. Customers who meet with employees regularly at unusual times, such as at closing. What You Can Do: You can inform employees about internal security measures, e.g., surveillance and inventory checks, and the likelihood and consequences of being caught stealing. Many employees steal because they think they can easily get away with it. Limit employee access to the building to the hours that they are scheduled to work. (1) Cash Control Provide a receipt for every transaction. Encourage customers to expect a receipt by posting signs at each register.

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Put one employee in charge of setting up cash drawers. Have another double-check the cash count. Make each employee responsible for his/her own cash drawer. Issue one cash drawer per on-duty employee. No other employee should at any time (during lunch, breaks, etc.) be allowed to open or use another's cash drawer. At the end of each shift each cash drawer should be balanced by the employee and double-checked by another. Require that the cash register drawer be closed after each transaction. Never leave a register unlocked when not attended. And never leave the register key with a register. Identify each over-ring and under-ring. Managers should sign off all voids and over-rings. Check signatures against those on file. Limit the amount of accumulated cash in any register. Use a drop-safe. Check cash-to-sale ratios. These, along with unusually frequent refund transactions, can indicate employee theft. Keep tendered bills on the register until the transaction is concluded. Short-change artists frequently use large bills to pay Conduct only one transaction at a time. Do not be intimidated into rushing. Check for counterfeit currency. The look of the paper and its "feel" are usually the most obvious signs. A common counterfeiting practice is to "cut corners" off large bills and affix them to small-denomination bills. Inexpensive devices are available to aid detection of counterfeit bills. (2) Get Your Employees Involved - Offer rewards to employees who report theft. Ask your staff for their suggestions on how to eliminate theft. (3) Employee Background Checks - Contact previous employers to find out if this person has a theft problem before you hire. When employees are not screened properly, you spend more time and money training new employees to replace dishonest ones. (4) Secret Shoppers: Secret shoppers or mystery shoppers pose as customers and watch employee behavior and situations that owners can't always observe. Secret shoppers are trained to look at how customers are treated, the type of service provided, efficiency, honesty, sales techniques as well as misbehavior. Secret shoppers go to your bowling alley, observe employees and customer service. They gather information, which may take several visits, record their observations and rate your employees. They look for speed of service, friendliness, suggestive selling, whether the sales were rung up properly, and the bowling alley and employee cleanliness.

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You can use these reports for training and rewarding employees for performance. Recognizing employees who perform will motivate other employees to improve. Develop or buy "secret shopper forms" that include these areas: bowling alley appearance, friendliness, knowledge, helpfulness, efficiency of the service, suggestive selling and honesty. Have your bowling alley secret shopped several times so you can look for trends, loopholes, and areas needing improvement. Most secret shoppers charge between $20 - 40 an hour. To locate a secret shopper service, look in the Yellow Pages under shopping, market research, market analysis, market consultants, or sales training. Check with your local chamber of commerce or university marketing programs. Let your staff know that you plan to use a secret shopper. Some bowling alley owners will have the secret shopper hand the employee money such as a $20 bill when they meet a certain criteria, giving an instant reward. (5) Survey Cards: Give your customers a short survey card to complete or place one on your web site for customers to fill out. Offer recognition and rewards to employees who consistently provide exceptional customer service. (6) Video Surveillance: Often just installing cameras will cause employees to think twice before stealing. But in order for them to be effective, you need to let your employees know you check these by offering them feedback (Positive or Negative) based on their job performance by viewing these videos with them. (7) Cash in Sheets: Have employees do a cash in sheet for every shift. This would be a control sheet where the employee would take the gross sales, subtract paid outs, adjustments and credit sales (adjusted gross sales). Count down the cash drawer, leaving the change fund amount (usually $100.00). Subtract this from the adjusted gross sales and this will give you your over and shorts. This should always be within 90 cents. Too much money could mean a customer was short-changed and being short money could mean a customer was given too much change or possibly employee theft. Have them place the money in an envelope, date and sign it and place it in the safe. Keeping the cash register drawers low in cash also helps to deter would be robbers. When they see only a small amount of cash in the register, they are less likely to take the risk of getting caught and going to jail.

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(8) Do a Product Inventory and Usage Sheet: Conduct inventories often and at irregular intervals. Also make routine spot checks. Inspect records of purchases and sales at the beginning and end of each shift. Define individual employee responsibilities for inventory control. This establishes a climate of accountability Post signs to indicate areas that are open to the public and those that are for employees only. Install locks on all doors to interior work areas to control public and employee access. Doors to storage and supply rooms, and individual offices should be locked to limit access (9) Trash Control: Keep trash dumpsters inside during business hours. Check bins at random times for pilfered goods that might have been placed in them for pick-up after the trash is taken out. Use clear plastic trash bags. Inspect contents for pilfered goods. Keep lids of outside trash dumpsters locked during non-business hours. If practical, keep the lids locked whenever the dumpsters are not being filled or emptied. Have employees work in pairs in emptying trash. Or have different employees empty the trash from day to day. If You Suspect Theft Despite your best efforts, dishonest employees can find ways to steal. If you suspect theft, call your local police department. Don't play detective and try to solve the crime. And do not jump to unwarranted conclusions. A false accusation could result in serious civil liability. How You Can Protect Yourself from Counterfeit Money You can buy a counter detection pen, which is easy to use and requires no training. A clerk at a cash register uses the detector pen to put a small mark on the bill. If the bill is counterfeit and the paper is wood-based, the iodine in the pen solution will react with the starch and leave a dark brown or black mark. If the bill is authentic and the paper is fiber-based, there won't be any starch and the pen will not leave a mark. A detector pen costs between 5-10 dollars and can screen up to 3,000 bills. Another option is a scanner used to check each bill, but this may tie up lines and your customer service may suffer. To find out how these scanners work, you can go to the following website for more information: http://ritecount.com/home/mc1/learn_main.html. For more information regarding counterfeit money, go to the Secret Service Web Site at the following link: http://www.ustreas.gov/usss/know_your_money.shtml

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Bad Checks How to Handle Bounced Checks: 1) Send it through the bank a second time. 2) Try to contact the check writer and give a time limit on payment. 3) Sign a complaint at the City Prosecutor’s Office. The Prosecutor’s Office will handle it from here. Any bad check in excess of $200.00 is considered to be a felony offense. Several checks written within a 90 day period that total over $200 may constitute a felony. It is easy to get a fictitious name and identification, allowing criminals to open bank accounts and obtain credit cards. Training your employees how to accept checks to be alert to some common signs is your first line of defense.

• Always ask for an ID (A driver’s license is best) and compare the photo and signatures.

• Ask for a date of birth. • Do not accept a two party check. • Look for low numbered checks – A lot of bad checks are

numbered below 200. • If only a P.O. Box is listed on the check, ask for a residential

address. • Make sure written and numerical amounts agree. • Make sure check is dated same day you receive it. • Post check limits. • Poor print quality of the check. (Counterfeit checks sometimes

have poor print quality). • Signature that goes beyond the signature line (the forger has

limited experience writing someone else's name and the signature will often extend past the signature line).

• Legitimate checks should have one perforated edge. If you have received a check you think is a forgery, take it to the Police Department. All forged checks are felonies, even if the amount is under $200. Credit Card Fraud Never accept a credit card which is broken, cut, damaged, or expired. Witness the signing of the sales draft. Ask for supporting identification and compare signatures and/or photos.

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Train employees to check for: • Holograms badly faked with tiny bits of aluminum foil. • Misspellings on the card. • Alterations on the signature panel. • Discolored, glued or painted cards. • Cards that appear to have been flattened and re-stamped with

different numbers

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Chapter Four Information Pertaining to Employees I. Position Your Image Before you find, hire and train your bowling alley employees, you need to have a plan. It should start by determining and positioning your image. Decide what you want your bowling alley to be “known as.” What type of image do you want to present to your customers? What is your theme? What message do you want to convey? Are you going to provide nametags or smocks? Are they all going to be wearing uniforms? When your employee has on a uniform or a nametag, it makes them approachable. Your customers need to feel that they can turn to your employees with questions and concerns. Your customers are the life-blood of your business, so your employees need to be your first line of defense. Your employees need to be you when you aren’t in the business. II. Planning The second step is planning. You need to start by developing an employee job description. Your employees need to be an extension of you, so planning is very important. How many employees are you going to hire? Are they going to be full-time or part-time employees? Are you going to have employees throughout the entire day or just at peak periods of time? How much are you going to pay them? Do you want them to be bilingual? Will they all be employees or will they be independent contractors? These are all areas you need to examine. III. The Hiring Process The third step is the hiring process. This starts with your advertising. Are you going to run a help wanted ad in the newspaper? Decide where you are going to advertise, how long you are going to advertise, and what types of advertising you are going to choose. It may be as simple as hanging a banner in your store, capitalizing on word-of-mouth advertising, or putting flyers on cars. After you have collected the applications, you can now start the pre-screening process. Things to look for on the application include: completeness of the form, work experience, reasons for leaving their last position, and their availability to work and other work employment. When pre-screening, it is a good idea to hire someone from within the area. It is okay to hire customers

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as well. These people are going to know the area and the people coming into your bowling alley. Perform a reference check on each potential employee. Make a few phone calls to see if your interviewee is credible. Ask four or five basic questions and then listen for a negative or hesitant response. Next, plan the interview process. Put the interviewee at ease during the interview process. Start by explaining the interview process. Describe the job and ask them questions about items on their application. There are some questions you can’t ask. Unacceptable inquiries include: How old are you? Have you been arrested, convicted or spent time in jail? Do you have children under 18? Do you plan to have children? Acceptable inquiries include: Verification of age, for legal reasons, request for felony conviction (if you indicate that such a conviction is not an automatic barrier to employment). You can also inquire as to what languages the applicant speaks fluently, but only if the qualification is job related. When you are asking questions, make sure you listen twice as much as you talk. Get the interviewees talking about themselves so you can find out if they will be a good match in your bowling alley. In closing, invite questions from the applicant. IV. Training The fourth step is proper training for the employees. The training process should begin with industry education. Most people don’t know a lot about the bowling alley business. You need to help them with the terms and vocabulary. If your employees aren’t doing what you would like them to be doing, it is because you didn’t train them properly. In the training process, describe to your employees what constitutes an emergency. If there is a physical injury, what steps should they take? Are you the first one they call? Have forms ready and emergency numbers posted to assure they will handle the situation correctly. If there is a power outage or a water problem, do they call you or the repair man? Your employees need to become your eyes and ears when you are not present in your bowling alley. Dealing with complaints is a touchy subject. If your employees are properly trained, they can handle some of the complaints for you. If there is a complaint they can’t handle, have them document the complaint. It is also a

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good idea to have a number posted that customers can call if they have a complaint. The most important part of training falls under the employee’s job description. If your employee works a seven hour shift, they need to be working all seven hours. Clearly state the employee’s responsibilities. Have a bowling alley inspection checklist with a daily report form. It is a good idea to have an employee walk to the exterior and the interior of your building daily. Have them check the parking lot, the sidewalk and check for trash. Have a checklist for them when they are reviewing the interior. Is everything clean and in working condition? Visually, do the aisles look clean? If they run out of any supplies you should have a form that they can leave for you so you know when to re-order items. When you walk into the bowling alley, are they always busy doing something? An employee’s responsibility list should include these items: Assisting customers with their shopping, emptying trash cans, sweeping floors, removing larger debris from the floor, refilling empty retail product space, clearing carts from aisles, cleaning countertops, folding tables, checking facilities for graffiti, and moping floors when needed. Other daily items include: Sweeping the parking lot, cleaning the restrooms, scrubbing the floor tiles, and washing the windows. V. How to Keep Your Employees The last step is learning how to keep your employees. If your employees are properly trained, they will take pride in their job. Help your employees learn and they will help your bowling alley business grow.

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Chapter Five Publications Bowling This Month Magazine http://www.bowlingthismonth.com/ Bowling This Month is the technical magazine for high average bowlers. Bowling Center Management http://www.bcmmag.com/ Bowling Center Management, the official publication of the Bowling Proprietors' Association of America, is the only magazine written and edited solely for the benefit of bowling center operators. International Bowling Industry http://www.bowlingindustry.com Monthly publication focused on every facet of the bowling business. Trade Shows East Coast Bowling Centers Convention http://www.eastcoastbowl.com/ Great Lakes International Bowling Showcase http://www.bowlingshow.com/

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Chapter Six National Bowling Associations National Bowling Association http://www.tnbainc.org/ 9944 Reading Road, Evendale, Ohio 45241-3106 513 769-1985 American Bowling Congress (United States Bowling Congress) http://www.bowl.com 5301 South 76th Street, Greendale, Wisconsin 53129 1-800-514-BOWL (2695) Bowling Proprietors Association of America http://www.bpaa.com 615 Six Flags Dr., Arlington, TX 76011 800.343.1329 Fax: 817.633.2940 Professional Bowlers Association (PBA) http://www.pba.com/ 719 Second Avenue, Suite 701, Seattle, WA 98104 (206) 332-9688 Fax: (206) 654-6030

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Chapter Seven Government and State Websites United States Government - http://www.firstgov.gov/ Individual US state websites Alabama http://www.alabama.gov

Alaska http://www.state.ak.us

Arizona http://www.az.gov

Arkansas http://www.state.ar.us/

California http://www.ca.gov

Colorado http://www.colorado.gov

Connecticut http://www.ct.gov

Delaware http://www.delaware.gov

Florida http://www.myflorida.com

Georgia http://www.georgia.gov

Hawaii www.ehawaiigov.org

Idaho http://www.accessidaho.org

Illinois http://www.illinois.gov

Indiana http://www.state.in.us

Iowa http://www.iowa.gov

Kansas http://www.accesskansas.org

Kentucky www.ky.gov

Louisiana http://www.state.la.us

Maine http://www.state.me.us

Massachusetts http://www.mass.gov

Maryland http://www.maryland.gov

Michigan http://www.michigan.gov

Minnesota www.governor.state.mn.us

Mississippi http://www.mississippi.gov

Missouri http://www.state.mo.us

Montana http://www.state.mt.us

Nebraska http://www.nebraska.gov

Nevada http://www.nv.gov

New Hampshire http://www.state.nh.us

New Jersey http://www.state.nj.us

New Mexico http://www.state.nm.us

New York http://www.state.ny.us

North Carolina http://www.ncgov.com

North Dakota http://discovernd.com

Ohio Oklahoma

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http://www.state.oh.us

.govhttp://www.ok

Oregon http://www.oregon.gov/

ovPennsylvania http://www.pa.g

Rhode Island http://www.state.ri.us

.myscgov.comSouth Carolina http://www

South Dakota http://www.state.sd.us

/www.state.tn.usTennessee http:/

Texas http://www.state.tx.us

w.utah.govUtah http://ww

Vermont http://vermont.gov

nia.govVirginia http://www.virgi

Washington http://access.wa.gov/

wv.gov/West Virginia http://www.

Wisconsin http://www.wisconsin.gov

http://wyoming.gov/Wyoming

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Index

A

Accessibility. Also See Location Accounting, 54

Cash Control Systems, 57 Commercial Bookkeeping

Systems, 54 Computerized Systems, 54 Cost Control, 55 Double Entry Bookkeeping

Systems, 54 One-Write Systems, 54 Projecting Sales Potential, 56 Projecting Your Sales Potential,

57 Single Entry Bookkeeping

Systems, 54 Advertising. See Marketing Advertising Budget. See Marketing Angel Investors, 14

B

Bookkeeping. See Accounting Business Plan, 11

C

Certificates Fire Certificates, 28

Choosing. See Location Claritas, 13 Competition, 43

Competition Checklist, 44 Competitive Analysis. See

Marketing Computer Software, 32

Center Operations, 35 Retail, 32

Concept, 46 Refinement and Evaluation, 46

Condition. Also See Location

Customer Acquisition. See Customers

Customers Customer Development

Program, 31 Developing Customers, 30 Developing New Accounts, 30

D

Demographic Survey. See Marketing

Demographics Now, 13

E

Employee Theft, 58, Also See Employees Cash Control, 60 Cash in Sheets, 62 Early Warning Signals, 58 Product Inventory, 63 Signals from Customers and

Outsiders, 60 Signals from Employee

Activities, 59 Signals from Personal Behavior,

58 Survey Cards, 62 Trash Control, 63 Video Surveillace, 62

Employees Background Checks, 61 Hiring Process, 66 Image, 66 Keeping, 68 Planning, 66 Training, 67

Equipment, 55

F

FedStats, 13 Financing, 14

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Financing Tips, 15 Furnishings, 55

I

Insurance, 36 Basic Insurance, 37

Internet. See Website

L

Landlord. See Location Layout. See Store Leases. See Location Legalname.com. See Name:

Resources Licenses, 27, 28

Business Licenses, 28 Business licensing, 27 Music License, 28 Obtain Business Licenses, 29

Local Market Area, 42, Also See Marketing

Location Characteristics of a Good

Location, 21 Choosing, 16 Landlord, 18 Leases, 19 Location Checklist, 45 Merchants Associations, 17 Price, 22 Zoning and Planning, 19

M

Mahtta Trademark Company. See Name: Resources

Mark Monitor. See Name: Resources

Market Analysis, 39 Market Analysis Components, 41

Market Demand, 41, See Marketing Marketing

Advertising, 37 Advertising Budget, 38

Competitive Analysis, 13 Demographic Characteristics, 43 Demographic Survey, 12 Economic Characteristics, 43 Geographic Market Area, 42 Location, 44 Market Area Checklist, 42 Target Market Analysis, 13

Marketing Plan, 46 Budgets, 50 Controls, 51 Executive Summary, 52 Goals, 49 Market Situation, 48 Objectives, 49 Threats and Opportunities, 48 Writing, 47

Merchants Associations. See Location

N

Name Registering, 15 Resources, 16

National Bowling Associations, 70 Niten Research Corporation. See

Name: Resources

P

Parking. Also See Location Permits, 27, 29

Building Permits, 29 Police Permit, 29 Sellers Permit, 29 Sign Permit, 28 Zoning Permits, 29

PopNet, 13 Pricing

Combination Pricing, 27 Competitive Pricing, 27 Factoring Method Pricing, 27 Gross Margin Pricing, 27 Guidelines to Establishing, 24 Price Level Strategy, 26

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Pricing Policies, 26 Prime Cost Pricing, 27

Publications, 69

R

Registering. See Name Regulations, 27, 29

Municipal Government, 27 Retail Compatibility. See Location

S

Sales Bad Checks, 64 Counterfeit Money, 63 Credit Card Fraud, 64

Secret Shoppers, 61, Also See Employee Theft

Signs, 37 Size. Also See Location Small Business Association, 14 Store. Also See Location

Accessibility, 22 Condition, 22 Design, 22 Layout, 22 Parking, 21 Size, 22 Traffic, 21 Visibility, 21

T

Target Market Analysis. See Marketing

Thomas Register. See Name: Resources

Trade Shows, 69 Traffic. Also See Location

U

United States Bureau of Labor Statistics, 13

US Census Bureau, 13 US Patent Office. See Name:

Resources

V

Visibility. Also See Location

W

Website, 37 Websites

Government, 71 State, 71

Z

Zoning. See Location

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Notes

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Notes

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Notes