Detailed Business Plan for NSH Transportation Services, June 2018

This document is a comprehensive business plan for NSH Transportation Services, detailing their approach to the app-based car sharing market. It includes an executive summary outlining the company's mission, vision, products and services, competitive advantages, and marketing plan. The plan further delves into the background of the business, service offerings, strategic analysis including market, competitive, and environmental analyses, and a SWOT analysis. The marketing plan focuses on target markets, customer management, and channels. The operational plan covers suppliers, hours of operation, technology, payment methods, warranties, and human resource plans. The personnel plan outlines the organizational structure, culture, and ownership. Finally, a detailed financial plan is presented, including start-up costs, sales forecasts, income statements, cash flow statements, balance sheets, and key financial ratios. The plan aims to establish NSH Transportation Services as a leading app-based car sharing company in Australia.

Running head: ENTREPRENEURSHIP
Business Plan
NSH Transportation Services
June 2018
Authors:
Xiangyuan Hou 97103600
Liran Song 11902552
Nuo Chen 11926666

ENTREPRENEURSHIP
Foreword
Authors of Plan
This document was prepared by:
Sections Sub Section Responsibility
Executive Summary Team NSH
Background Team NSH
Products and Services Team NSH
Direction Team NSH
Strategic Analysis Market Analysis Team NSH
Competitive Analysis Team NSH
Environment Analysis Team NSH
SWOT Analysis Team NSH
Marketing Plan Team NSH
Operations Plan Team NSH
Personnel Plan Team NSH
Financial Plan Team NSH
We would like to be marked as a team.
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Version Control
Version No. Version Date Amendment Details
1 19/04/2018 Document & Format created
2 01/05/2018 Add Personnel Plan & Format
3 04/05/2018 Add Background, Service, Market Analysis,
Competitive Analysis, Marketing Plan & SWOT
Analysis
4 09/05/2018 Add Environmental Analysis
5 13/05/2018 Add Operations & Peer Review
6 16/05/2018 Add all Revised Sections and formatting
7 20/05/2018 Add Financial Plan & Related Tables and charts
8 02/06/2018 Finalise the Business Plan Report & Submit to
Turnitin
Notices
This document contains forecasts. All forecasts are subject to uncertainty and unexpected events,
many of which cannot be controlled. According actual results are likely to differ from the
forecast. This document has been produced mainly from the organisation’s internal information
and historical data. A more complete assessment of the forecast requires external market
validation. No representation or assurance is or can be given that the forecasts will be achieved.
This document contains confidential information and no part of this document may be
reproduced, transmitted or in any other way made available to any person or used for any
purpose without the express written permission of the owners of this document. This document is
to be immediately returned to the owner upon request.
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Table of Contents
Foreword
Authors of Plan..............................................................................................................................1
Version Control..............................................................................................................................2
Notices.............................................................................................................................................2
1. Executive Summary...............................................................................................................7
1.2 Mission and Vision................................................................................................................7
1.3 Product and Services..............................................................................................................8
1.4 Competitive Advantage.........................................................................................................8
1.5 Direction................................................................................................................................9
1.6 Marketing Plan.......................................................................................................................9
1.6.1 Target Market.....................................................................................................................9
2. Background..........................................................................................................................10
3. Service...................................................................................................................................13
4. Direction...............................................................................................................................15
5. Strategic Analysis.................................................................................................................16
5.1 Market Analysis...................................................................................................................16
5.1.1 Market Size..............................................................................................................16
5.2 Competitive Analysis...........................................................................................................19
Porter Analysis.......................................................................................................................19
5.2.1 Suppliers.......................................................................................................................20
5.2.2 Customers.....................................................................................................................20
5.2.3 Substitutes.....................................................................................................................21
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5.2.4 Entrants.........................................................................................................................21
5.2.5 Competitors...................................................................................................................22
5.3 Environment Analysis.........................................................................................................22
5.3.1 Political.........................................................................................................................22
5.3.2 Economic......................................................................................................................23
5.3.3 Society..........................................................................................................................23
5.3.4 Technology...................................................................................................................24
5.3.5 Legal.............................................................................................................................25
5.3.6 Environment.................................................................................................................25
5.4 SWOT Analysis...................................................................................................................26
5.4.1 Strength.........................................................................................................................26
5.4.2 Weakness......................................................................................................................26
5.4.3 Opportunities................................................................................................................27
5.4.4 Threats..........................................................................................................................28
5.4.5 Competitive Advantage................................................................................................28
6. Marketing Plan....................................................................................................................30
6.1 Target market...................................................................................................................30
6.2 Customer management....................................................................................................31
6.3 Channel............................................................................................................................32
6.4 Relationship with the partners.........................................................................................32
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7. Operational Plan..................................................................................................................33
7.1 Suppliers..........................................................................................................................33
7.2 Hours of Operation..........................................................................................................34
7.3 Software and Technology................................................................................................34
7.4 Mode of Payment.............................................................................................................34
7.5 Warranties and Refunds...................................................................................................35
7.6 Human Resource Plan......................................................................................................35
8. Personal Plan........................................................................................................................37
8.1 Structure...........................................................................................................................37
8.2 Organizational Structure..................................................................................................39
8.3 Culture.............................................................................................................................39
8.4 Integration........................................................................................................................40
8.5 Ownership........................................................................................................................41
9. Financial Plan.......................................................................................................................41
9.1 Start Up Cost:..................................................................................................................41
9.2 Sales Forecast:.................................................................................................................43
9.3 Income Statement:...........................................................................................................43
9.4 Projected Cash Flow Statement:......................................................................................46
9.5 Balance Sheet:.................................................................................................................48
9.6 Common Financial Ratios:..............................................................................................49
10. Bibliography.........................................................................................................................50
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1. Executive Summary
1.2 Mission and Vision
Mission
The mission of the company has been to provide low cost transportation services with
effective quality to their customers with the help of which the company would be able to enhance
their profits and business.
Vision
The vision of the company has been to create competitive edge with the help of which the
company will be able to provide effective and quality services to their customers and accordingly
look to become one of the leading companies in Australia.
Cab on Time is a new app-based car sharing company that has established itself in the
market just few months back and the company is the lookout for establishing themselves in the
market by offering the customers with quality services at a much reasonable price. The company
in order to compete in the market has been looking to maintain their price at a much lower level
and offering additional services with the help of which they would be able to attract customers
and accordingly would be able to make a mark for themselves in the market.
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1.3 Product and Services
The company is looking to provide app-based car services to their customers with the
help of which the company can give out quality services and satisfy the customers. The company
provides customised as well as pool services to their customers and even provides pool services
to the children and employees. The app that has been designed for cab on Time has various mew
features that are not available in the other apps that are used by the rival companies. The app
constitutes of several kinds of features and it is seen that the company looks to make use of these
features in order to develop their business and accordingly maintain competitive edge and profit
for the company. The company provides discount coupons and passes to their customers with the
help of which the company is able to attract customers.
1.4 Competitive Advantage
The company has the oath of arriving at the destination on time which means the
company maintains the arrival with respect to the expected time of arrival that is shown in the
app. In case the cars are unable to reach the destination within the expected time of arrival, then
the company levies a discount on that trip and provides another discount for the next one trip.
This is an attractive offer and therefore the customers are getting attracted towards.
Competitive advantages of the company have been that they take extensive care of their
drivers as they are the representatives of the company to the customers. The management of the
company therefore takes serious good care of the drivers by providing them with rewards and
incentives according to their performance and even taking training and interactive sessions with
the help of which the drivers would gain extra knowledge and would even get to know better
about the company where they perform. Several events and programs are held with the help of
which the drivers receive some sort of entertainment and recreation and thereby are able to
motivate themselves with the help of which the drivers can perform in a better way.
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1.5 Direction
The rise in the extent of sales leads to the development of a better customer base and
accordingly would increase their level of market share. The direction in which the company
wants to move forward has been to make them the number one app-based car sharing company
all over Australia.
1.6 Marketing Plan
The evaluation of the market is undertaken by taking assistance of the functional
activities of the competitive organizations. The assessment would be helpful in creating an idea
about the desires and the wishes of the suppliers and the partners and thereby construct plans
policies in order to maintain a cordial relationship. The desires and the feedback of the customers
is taken with the help of the feedback that is provided by the customers after the completion of
every ride where the ride experience, as well as the review of the drivers are even provided.
1.6.1 Target Market
The target market of the customers comprises of all the segments of the society with the
help of which the company is able to expand their business and is able to satisfy their customers
and maintain profit as well.
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2. Background
The development of science and technology has led to the introduction of new and
innovative kinds of products and services globally. All the tools and the technologies that are
being introduced are for the betterment of the human beings. In the modern days, one of the most
significant issues that have existed has been ease and comfortable mode of travelling. Therefore,
there has been few companies who have been dominating the market with app-based rides that
have eased the transpiration issue of human beings.
In Australia, the use of app-based rides has increased as the demand for them has
increased significantly. The customers now days are well inclined to make use of these services
as the cars would pick and drop at the location where the customers ask, and everything can be
done just by sitting at home with the help of their app. The development of the market has led to
the introduction of new companies into the market as well.
In the same manner, a new company is looking to enter the business and being a start-up
company, it is essential to construct a business plan with the help of which proper and effective
functioning is possible in the market.
Cab on Time is a new app-based car sharing company that has established itself in the
market just few months back and the company is the lookout for establishing themselves in the
market by offering the customers with quality services at a much reasonable price. The company
in order to compete in the market has been looking to maintain their price at a much lower level
and offering additional services with the help of which they would be able to attract customers
and accordingly would be able to make a mark for themselves in the market.
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The background of this business in the market is very prospering because of the fact that
the customers prefer to make use of these apps rather than taking the effort of making use of their
cars when they are travelling for any parties and occasions. Cab on Time is looking to be an
effective and easy to use ride sharing app. The company along with the other companies have the
benefit of creating a pool service with the help of which the passengers who are travelling in the
same direction can book the same cab and can travel together at a much lower cost in accordance
to the cost that had to be paid if they had travelled alone. The company provides a space between
the passengers and the drivers to pair in order to communicate logistics and thereby function
with the help of the GPS with the help of which the drivers can drop off the passengers at their
desired destination.
The management of Cab on Time got the inspiration of establishing this business by
looking at the developing market in this arena, along with the rise in traffic and their concerns
towards the environment. With the help of the clean and precise interface and the maximisation
of the driver-riding process and the rise of their usage, the company is looking forward to
influencing a huge number of users so that the company as well as their app can perform in an
effective manner in the market.
The company is looking to fight with the increased cost in the transportation market and
therefore is looking to maintain their prices much lower than their competitors. With the
promotion of car-pooling the company is looking forward to reducing the frequency of cars on
road and thereby this would be helpful in mitigating the issues that are related to the environment
as well as the traffic. The sharing of the rides even has the power to reduce the cost of the
passengers and therefore the number of passengers who are riding in one car would reduce the
aggregate cost of travelling as well. The company is in the lookout for huge amount of incentives
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for the individuals who are looking forward to doing business with them by offering their cars
and drivers in this business and therefore this can lead a better ownership culture among the
owners and their cars.
The idea with the help of which this business has been incorporated has been by looking
at the pool services that are given by the multinational companies to their employees who are
coming from the same location. This led to a bigger perspective because of the fact that this
service can be helpful in the development of pooling services for the general public and would
even provide customised services for the passengers even when they require the same. The entire
operation can be controlled by the customers with the help of the app that is installed in their
electronic devices. At the current scenario, being a start-up, the main intention of the company
has been to make its mark in the economy and the market and therefore it becomes essential to
study the market before constructing the other plans and processes.
The analysis of the market has explained the fact that most of the ride sharing companies
provide their services within the urban areas and has fewer services related to the interstate areas.
The companies offer only pool and customised services to their customers and at a price that is
mentioned to the customer right at the time when they have confirmed the ride. The demand for
this kind of services has been significantly high in the market and therefore as the demand is
increasing these companies have been increasing their prices as well. The app-based companies
at the current time period does not take care of the riding partners who are the ones who are
providing their cars and the ones who are driving the cars. This creates a demand as well as a
scope in the market with the help of which a new company can enter the market and establish
them effectively. The market in Australia is a developing one as more and more rural areas are
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changing into the urban areas and therefore individuals are looking for these kinds of services in
order to make their life a better one.
3. Service
Cab on Time is looking to provide app-based ride services to the customers and therefore
their activities are mostly service related. The company has primarily understood the market and
the needs that are existent in the market and accordingly has constructed their plans with the help
of which the companies can operate their business in a much effective way. The management of
the company has primarily prepared a ride-based app with the help of an external software
technology and this company prepares customised applications for their customers according to
their needs and desires. The app that has been designed for cab on Time has various mew
features that are not available in the other apps that are used by the rival companies. First of all,
this app has each and every single location of Australia and therefore it makes it easy for the
drivers to reach the locations. One of the significant features that this app has is that this app
even shows the roads that are closed for construction and the roads that one way in the morning
and becomes two ways later on. This is extensively useful for the drivers as they are well aware
of the roads and therefore reduces the chances of any kind of penalties and charges by the police
on road.
The app on the perspective of the drivers provides with the idea about the number of trips
they have completed within a day and the number of trips they need to complete in order to attain
their daily, weekly and monthly targets. On the other hand, the app on the perspective of the
customers has various kinds of features as it is seen that there has been a rise in the level of use
with the availability of these features. The customers can log in with their unique passwords and
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ids and can book a cab by providing their destination location and the location of pick up. Unlike
the other companies who charge higher rates during the peak time of the day, Cab on Time does
not charge the same way and charges the standard rate at any point of the day. The customers
would be getting to know the name of their driver, the years of experience in driving and their
actual location as well. There are even other safety measures within the app as well because if
the passengers feel unsecured or any mishaps are taking place within the time of the ride they
can directly press the “Need Assistance” button provided within the app with the help of which
there would be an auto switch off the ignition from the company’s end and a message would be
forwarded to the police station near the car. This is a new installation that has been made in our
end in order to maintain security and safety within the time of ride. The cars when they are used
by our company are installed with an electronic device that is connected directly with our
servers. The device has the power to turnoff ignition automatically in case of any emergency and
assistance required by the passenger and the driver will not be able to turn on ignition unless the
device is switched on from the side of the company.
The firm has been looking forward to attracting more and more customers and therefore
has even prepared passes for the customers who look to travel on a daily basis and therefore they
have created passes where a minimum amount is paid to the company which actually reduces the
overall price of the fare of the travel. For instance, if the fare from one place to the other at a
standard rate is $6, then the use of the pass would reduce the fare to $3.5 and this what attracts
the customers more. Cab on Time even has prepared the plan for introducing a new kind of
service that is known as “Hire Me” where the customers would be able to hire the cab and use
for several hours by just paying a price for it. The price that is paid is based on the destinations
that would be covered by the car and the duration of the hours, the car would be used. The
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maximum duration that a car can be kept for use is 6 hours. The company unlike their rivals even
offers products to their customers as they sell merchandises like shirts and caps that are available
in the car itself and the passengers can purchase directly from the drivers. One of the key aspects
that is desired by the customers is quality and comfortable ride and the management of cab on
Time provides the same as well as they have their personalised radio and movie watching app
that is pre-installed in the cars and therefore the passengers can enjoy this experience even while
making their travel. These experiences are the unique ones and once the customers get a taste of
it, it would be hard for them resist the same. The company is even looking forward to increasing
their business by offering new and innovative services and this can be done once the company
has been able to establish themselves in the market properly. Cab on Time even assesses the
activities that are performed by their competitors and accordingly makes plans to improve their
operational activities as well. As services are their main feature, therefore feedback from the
customers become essential as well with the help of which the desires and the grievances of the
customers can be known and accordingly measures can be taken with the help of which these
issues can be improved.
4. Direction
The direction refers to the course where the company wants to reach. Being a new start
up the company wants to move ahead by creating short term plans and accordingly taking the
aim of fulfilling them one by one in order to establish themselves in the market and thereafter
make plans with the help of which the company would be able to attain their long-term
objectives. The direction in which the company wants to move forward has been to make them
the number one app-based car sharing company all over Australia. However, the management
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has discovered that in order to do so they have to attain their short-term goals. One of the goals
has been to promote themselves in the market so that the customers become aware of the
company and their services and accordingly take measures and steps with the help of which they
can increase their sales. The rise in the extent of sales leads to the development of a better
customer base and accordingly would increase their level of market share. Once these objectives
have been fulfilled the company looks to increase their level of profit with the help of better and
quality services which simultaneously would increase their level of sales and customers. The
company in this way would be able to reach its direction in a better and effective manner.
5. Strategic Analysis
5.1 Market Analysis
5.1.1 Market Size
According to the Statista Data, the revenue in the Ride Sharing segment amounts to
US$447m in 2018; it is expected to show an annual growth rate (CAGR 2018-2022) of 3.8%
resulting in a market volume of US$519m in 2022. Additionally, in the Ride Sharing segment,
the number of users is expected to amount to 2.0m by 2022. This kind of innovation is what we
are aiming for NSH to be known for in the future.
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As Figure 1 depicts, the “Revenue” box shows the forecasted revenue development of the
selected market for each year. In general, the bar chart shows that the ride -sharing market
presents a very attractive and steady growth trend. This means entering the industry with an
innovative idea and high functionalities give better probability of the business doing well and
entering the industry successfully.
5.1.2 Market Trend
In the last few years, mobility platforms, such as Uber, Lift share, and Drivy, enjoyed
rapid growth due to significant investment. The arrival of autonomous vehicles will further speed
up the growth in this market as it will simplify car and ride sharing practices and open up new
opportunities for these platforms.
In a driverless world, the distinction between car‐sharing and ride‐sharing platforms will
no longer exist. Autonomous vehicles will be just a few smartphones clicks away, ready to come
pick you up and drive you anywhere you want, whenever you want, over short or long distances.
In order to meet travellers’ needs, mobility platforms will therefore have to adapt to offer the
right cars at the right time and the right place. In addition to optimising vehicles’ trajectories,
they will have to offer a real travel experience (a bicycle in the boot, a ready-made picnic, space
for bags, etc.). Dispatching, data engineering and branding are new competencies to master in
order to become an important player in the future mobility ecosystem.
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5.1.3 Market Economics
Ridesharing provides a variety of benefits to consumers who use the service. These
benefits primarily arise from the differentiated services, and the average lower cost of
ridesharing rides.
The point-to-point transport market in Australia remains dominated by the taxi industry.
In 2014, taxis performed a total of 227.2 million rides. As seen in Figure 2, this figure has
continued to increase since the introduction of Uber in Australia.
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Figure 2 Total number of annual taxi jobs completed 2004-2014
In contrast, UberX has facilitated approximately 10 million UberX rides in Melbourne,
Sydney, Brisbane and Perth since its inception in April 2014. UberX facilitated approximately
1.2 million UberX rides in the month of August 2015 alone, and estimates based on annualising
this data suggest that Uber now facilitates 14.5 million rides per year in these four cities.
Nevertheless, Uber represents a small portion of the overall market, with an approximate 6 per
cent market share in the national point-to-point transport market. Additionally, the revenue of the
company is directly proportional to the number of services that HSN undertakes. Thus,
increasing the number of services will directly increase the revenue of the company and vice
versa. This means that it imperative that there are enough orders to keep all the working close to
one-hundred percent active.
5.2 Competitive Analysis
Competitive Analysis is one of the key aspects that Cab on Time Needs to look into in
order to construct their plans in an effective manner. It is seen that with the rise in competition
the company needs to adjust and alter their plans as well in order to create a better and a quality
experience for the customers. The process of competitive analysis is done within the market in
order to enhance the level of efficiency and reduce the extent of expenses and assists the
customers to enhance their selections. But, in circumstance of free market competition, there are
more harm done than good and it is due to this factor that competition is not regarded to be
effective as mitigates the share of profits for the companies. In case the level of competition is
high then it would be lead to fall in the level of profits. Therefore, in order to mitigate their
expenses and enhance their level of profits, it becomes essential for the companies to construct a
barrier all around them in order to fight and surpass the extent of competition. The competitive
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analysis would be undertaken with the help of Porter’s Fiver Forces as this process would be
helpful in assessing each and every aspect that are existent in the operational activities of Cab on
Time.
Porter Analysis
There are five aspects in accordance to which Porter Analysis takes place and each and
every aspect would be evaluated in a critical manner in order to have an understanding about the
level of competition that is existent for Cab on Time.
Figure 3 Porter Analysis Five Aspects
5.2.1 Suppliers
The bargaining power of the suppliers refer to the power and the authority that the
suppliers have on the company with respect to the supply of the services and the products that
are essential for the companies to perform their business.
In case of the app-based services, it is seen the suppliers comprises of the software
developers who are taking care of the applications and maintains the applications on behalf of
the companies. Therefore, their level of bargain is much higher in comparison to the others. The
other suppliers consist of the ones who are giving their cars for such services and therefore as
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there are other companies that are operational as well, there are chances that their bargains are
higher and therefore can lead to several issues and problems.
5.2.2 Customers
Cab on Time being a new start up is not very well known in the market and therefore for
them the bargaining power for the buyers would be high. It is due to the fact that there are
already few companies that are providing similar services and they have a well-established
market. By looking at the overall industry, the buyers till pose the bargaining power because of
the fact that the industry is a developing one and once the prices get increased the customers may
switch their mode of transpiration and accordingly can make their travels with the help of their
own cars or buses or other modes transportations. Therefore, the company has to create plans and
policies with the help of which they would be able to satisfy their customers and create customer
loyalty.
5.2.3 Substitutes
The issue related to new substitutes refers to the development of alternate products and
services that can have an impact on the operational activities of the companies. There have been
observations that this kind of market may not have any kind of substitutes as app-based rides are
the only source with the help of which the customers can receive quality and comfortable mode
of transpiration. Hence, it is seen that the extent of new substitutes are low and thus companies
can look to sustain their business in a proper manner and even look to improve their level of
business with the help of new and improved strategies that would be fundamental in satisfying
the customers and accordingly maintain the level of profit and maintain their share in the market.
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5.2.4 Entrants
The economy of Australia is a developing one and with the advent of science and
technology, new and innovative products and services have been created. In the same way, the
app-based rides are a new source of business and income and the demand for this kind of
services is very high. Therefore, the threat of new entrants is high as well as it is seen that new
competition leads to attainment of the market share and there are development of new processes
and approaches with the help of which desires and needs of the customers can be fulfilled in a
better way. The entry of new entrants brings in the chances of rise in the commitments towards
the resources. The new entrants lower the prices and diminish the margins that can hamper the
business big time. It is seen that threat of new entrants is high and therefore extensive plans and
policies have to be constructed with the help of which the company would be able to maintain
their shares and hold their level of profits.
5.2.5 Competitors
The extent of competition and rivalry is another aspect that is taken into consideration in
the process of undertaking competitive analysis. It is seen that the extent of business is relatively
high in the market of Australia as there are several other competitors who are functioning in the
market as well. The pressure from the competitors is significantly high and therefore each and
every company has been taking measures with the help of which they are able to improve their
services and accordingly satisfy the customers as well as the market. The competitors are bigger
players and therefore they have extensive plans and policies with the help of which they can
advance their business in a much proper way and therefore Cab on Time has to understand these
measures and accordingly prepare their plans in order to stay in line with their competitors.
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5.3 Environment Analysis
The environment analysis comprises of looking into the environment where the company
operates and accordingly assess the same in order to understand the current scenario with the
help of which extensive plans and policies can be constructed in order to improve the level of
operational activities. The environment analysis is undertaken with the help of PESTLE analysis.
5.3.1 Political
The political aspect of Australia is a prosperous one in order to undertake investments in
the market. There are several rules and regulations that have been laid down by the government
in accordance to the services that are offered by these kinds of businesses. In order to safeguard
the sentiments and the safety of the passengers the rules and the policies ask the companies to
maintain a proper record of their drivers and maintain all the safety and security aspects that are
essential for the app-based riding services to be maintained. These strict rules and regulations
have been helpful in keeping a check over the companies with the help of which the customers
would be satisfied companies would be able to offer proper and effective services. The
companies need to maintain all the licenses and the certificates that are essential to run these
kinds of businesses and it is the duty of the companies to look into these aspects as once any
breach of license takes place the company can face severe consequences.
5.3.2 Economic
The Australian economy is a developing one and has been helping all the companies that
are functional within it. The economy has been looking and encouraging the development of the
new businesses with the help of which the companies would be able to start their new business
and maintain a new line of business for themselves. The economy is a prosperous one in making
business in this line as it is seen that customers are looking for innovative services that would
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make their life much easier and simple. In this respect it is seen that investments from the
economy in this line of business can be high and therefore the companies can expect a rise in the
level of external investments. The economic scenario of the country even motivates the company
to take on additional loans with the help of which they would be able to expand their business
and accordingly have the scope of earning more profit from the investments. The companies
within their line of business have been making progress as well and this in a way is even
assisting the economy of the country to prosper.
5.3.3 Society
The development of a business is totally dependent on the society where the company
functions. The society determines the culture that is existent and accordingly it is the duty of the
companies to understand the culture and accordingly plan their operational strategies. The
Australian society is a positive and a creative one in which there are cultures coming from
different part of the words as there are people residing from several countries. The society is in
the lookout for development and is open for new kind of products and services that are offered to
them. They are ready to give out opinions and therefore are helpful in improving the products
and services according to the desires of the customers. The development of the app-based rides
are very much welcomed by the society as they feel that this would be able to increase their
mode of transportation and would even be helpful in the development of economy and the
society as well. The mode of travelling becomes faster and accordingly the companies can
function in the business by providing effective and quality app-based services. The society even
accepts the fact that the company takes payment with the help of various modes and not only by
cash as this reduces their burden of carrying cash and they can travel light to their destinations
with a free will. The development of the society with the help of these services would be helpful
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as the customers can book their cabs from home without any extra efforts and do not have to wait
in any kind of queues in order to wait for a cab or a bus.
5.3.4 Technology
The development and the advent of technology has been one of the significant factors that
have led to the development of these kinds of businesses. Australia is developed country and
therefore the extents of technologies that are available in the market are high. There has been
development of information technology and software as well and this has led to the automation
of several kinds of businesses. The development of app-based car services is an outcome of the
same and therefore all the activities that are related to this business are based on software and
therefore the level of back office manpower is relatively low. All the activities related to the
services are managed with the help of the software and the customers as well the business
partners are able to communicate with the company with the help of the app. The apps are
continuously upgraded in order to provide better and free flowing services. The customers as
well as the business partners are happy with these kinds of services as their time of use lowers
and they have exert less time on booking the cabs and making payments for the same.
5.3.5 Legal
The government of Australia have laid down several rules and regulations in order to
keep a check on the operational activities on this kind of businesses. In order to safeguard the
sentiments and the safety of the passengers the rules and the policies ask the companies to
maintain a proper record of their drivers and maintain all the safety and security aspects that are
essential for the app-based riding services to be maintained. These strict rules and regulations
have been helpful in keeping a check over the companies with the help of which the customers
would be satisfied companies would be able to offer proper and effective services. The
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companies need to maintain all the licenses and the certificates that are essential to run these
kinds of businesses and it is the duty of the companies to look into these aspects as once any
breach of license takes place the company can face severe consequences. There are legal
obligations in accordance to the vehicles act as well and therefore the companies need to train
and make their drivers aware of the traffic rules in order to provide an effective and free flow
services. All the rules are clearly disclosed by the government and therefore the companies need
to be aware of them and even discloses the same to the drivers and each and every car has a copy
of the rules in order to assist the drivers.
5.3.6 Environment
The environment plays a key part in the operational activities of the business as it is seen
that the companies have the obligation to take care of the environment as well. The Australian
environment is ideal for these kinds of businesses and it is seen that as the country is large in size
and there are several cities and states within it, the company has a huge scope expanding their
business all over the nation. The companies have been looking to exploit the entire country and
therefore assesses the environment of the entire country as each place as their unique
environment. The company maintains environment plans and policies in order to take care of the
environment and therefore maintains eco-friendly vehicles that would pollute the air less and
even undertakes environment related programs and events in order to make the customers aware
of the kind of understanding and concern the company has towards the safeguard of the
environment.
5.4 SWOT Analysis
The SWOT analysis is undertaken in order to assess the overall potential of the company
and thereby bring out the strengths, weaknesses, opportunities and threats. This would be helpful
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in creating a better knowledge to the business with respect to their negative and the positive
aspects in relation to which they can construct their plans and take measures in order to improve
their extent of business.
5.4.1 Strength
The strengths of the company are inclusive of the fact that company has the advantage of
a convenient location where they would be able to operate their business in a better way. Cab on
Time is a developing brand and therefore would be providing greater service and scope to their
customers. The company provides quality services and along with that provides free water and
confectionaries to their customers. The cars that provide these services are of grater quality with
experienced drivers and even greater ambience. The prices that are offered are reasonable and
lower than the market price that is offered. The drivers are very friendly and jovial and therefore
are more inclined towards the safety and the transportation with ease.
5.4.2 Weakness
There are several weaknesses that have been recognised as well. As the company is new
in this line of business, there are several aspects that the company is not aware of and therefore
has problems in understanding the same. The employees working in the back office have lower
level of experience in this line of business and therefore have issues in understanding certain
aspects in one go. The software with the help of which the entire business operates is purchased
from an external provider and therefore the company has no control and authority over the
software and therefore at any future course of time issues related to the software may take place.
The company being a new one has not been able to create a mark in the market and the
customers are yet not well accustomed to the services that are given out by them.
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5.4.3 Opportunities
There are greater opportunities for the business as it is seen that the company has the
potential to expand their business to certain other parts of the country as well as the business
would start to perform in a better manner. It is seen that the customers are mostly dissatisfied
with the traditional cabs as their waiting time is higher and the prices are high as well and
therefore the company capture these customers. The company can make use of the new and
growing markets and can even enter the sub-urban areas in order to increases their line of
business. The increase in the number of drivers would be useful for the development of better
services as the expected time of arrival for the cars would be lowered. The rise in the value of the
company would attract new and potential investors to undertake investments, which in a way
would expand their business as well. The company is even looking to make use of electric cars
and in order to reduce the extent of cost and accordingly increase revenue as well as take care of
the environment as well.
5.4.4 Threats
The threats are the factors that the company takes into account in order to improve their
line of business. One of the threats has been entry of new companies in the market that would
reduce their profit margin. The other threat has been rising in the level of frauds and scandals,
which can have an impact on their brand image. The rise in the level of competition would lead
to the fall in the level of prices and this may make the drivers dissatisfied as their profit margin
would get lowered as well. The other threat can be that the skilled and the experienced drivers
may move away from this company and may join a new one as they would be receiving higher
salaries and incentives. The issues that are related to the operational activities in the near future
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are considered to be the risks and therefore extensive steps and measures needs to be taken by
the companies in order to mitigate the level of risk and thereafter increase the level of sales with
the help of which better performance can be attained.
5.4.5 Competitive Advantage
The competitive advantage for Cab on Time has been the business framework that is
being used by the management of the company. The company maintains an extensive structure
that comprises of nine aspects and they have been value proposition, channels, key activities,
partners, cost framework, customer relations and segmentation of the customers and the
streaming of the revenue. The business model that is maintained by Cab on Time is a unique one
and this model is not maintained by any other app-based car companies within the country.
The other advantage that the company has been able to maintain has been in accordance
to the name of the company, which has been coming “on time”. The company has the oath of
arriving at the destination on time which means the company maintains the arrival with respect
to the expected time of arrival that is shown in the app. In case the cars are unable to reach the
destination within the expected time of arrival, then the company levies a discount on that trip
and provides another discount for the next one trip. This is an attractive offer and therefore the
customers are getting attracted towards. However, there is certain clause as well as it is seen that
some of the customers confirm their pick up stop to be something and they wait somewhere else
and, in this case, they are not entitled for the discount that has been explained earlier.
One of the other competitive advantages of the company has been that they take
extensive care of their drivers as they are the representatives of the company to the customers.
The management of the company therefore takes serious good care of the drivers by providing
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them with rewards and incentives according to their performance and even taking training and
interactive sessions with the help of which the drivers would gain extra knowledge and would
even get to know better about the company where they perform. Several events and programs are
held with the help of which the drivers receive some sort of entertainment and recreation and
thereby are able to motivate themselves with the help of which the drivers can perform in a better
way. The company in the future course of time has even thought of providing insurances to the
drivers who have worked for more than 2 years in the company in order to safeguard their life
and create a better future for their families as well. These aspects make the services and the
offerings of the company much better than the other rival companies.
6. Marketing Plan
The marketing plan that has been constructed by the company would be strategies their
marketing functions in a better way. The evaluation of the market is undertaken by taking
assistance of the functional activities of the competitive organizations. The assessment would be
helpful in creating an idea about the desires and the wishes of the suppliers and the partners and
thereby construct plans policies in order to maintain a cordial relationship. The desires and the
feedback of the customers is taken with the help of the feedback that is provided by the
customers after the completion of every ride where the ride experience, as well as the review of
the drivers are even provided. The customers even have the option of providing feedback in
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accordance to the aspects that can be taken into consideration in order to provide a much better
and effective experience to the customers.
6.1 Target market
Cab on Time wishes to serve every community in the nation with their extensive and
quality transportation services. The results have even indicated the fact that the each and every
member irrespective of their age can be making use of their services. The employees and the
businessmen can travel to their offices from home with the help of booking these cabs and the
businessmen and the other employees can even go for their client meetings and other business-
related jobs by taking assistance of these cabs. Pool services given to them offer lesser price and
a quality journey and therefore this service is accepted cordially among the customers. The
service can be taken even by old age men and women who have health issues and even have
problems with walking. They can even book these cabs and according to the culture that is
maintained within our company, our drivers take special care of them and looks after these
people until someone else arrives to take attention for them. The cab service is even rendered to
the tourists who are new to the country. The tourists are mainly the ones who are in need of these
services and therefore special care is taken for them. It becomes easier for the tourists to make
their travels with the help of these app-based cars as they do not have knowledge about the route
and the places where they want to visit. Therefore, they can book the cabs wait for their arrival
and can reach their destination without any hassle at a fixed price as well. There have been many
fraudulent incidents where the tourists have been priced highly by the regular cabs and therefore
use of these cabs makes their stay and travelling faster and easier. The company provides their
services to the kids, housewives and other members of the community as well as anyone of any
age has the power and the license to book cabs and go for a trip where ever they desire.
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The development of these services has even rendered extensive help to the people who do
not have their own cars and therefore they can go for trips and events by booking these cars. It
was seen earlier that a single person when booking regular cabs had to pay for the entire cab.
However, the development of the app-based rides has made life easier for them as well as they
can book a cab pool and pay only for itself and share the ride in order to reach their destination.
In this way, the company has been able to attract all the members of the society and therefore
their target market is very big. The company with the help of these services are able to offer
values with the help of which they are able to expand their business and make a name for
themselves in the market.
6.2 Customer management
As discussed earlier, the demographic of the customer has a range from age 8 to the age
of 80 and therefore an effective customer management service needs to be maintained with the
help of which the relationship with the customers can be maintained in a healthy manner. The
feedback that is taken from the customers after the completion of the trips assists the company in
order to have an idea about the areas and the aspects on which better performance and
developments can be done with the help of which extensive services can be rendered to them.
6.3 Channel
The company maintains a proper medium or channel with the help of which they are able
to improve their services how their services are carried out. This is done extensively with the
help of advertisements that are done by the company with the help of several mediums like
newspapers, hoardings, internet sources, television advertisements etc. The company creates a
plan for this as well and promotes their services and activities with the help of these mediums so
the market as well as the potential customers has an idea about the services rendered and
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understand their USP in accordance to the other rival companies. Word of mouth even plays a
significant role in the development of promotions for the company as these influences the
customers to make use of their services more frequently if they find that the others are receiving
satisfaction with the help of these services.
6.4 Relationship with the partners
The relationship with the partners has an essential role to play for the development of the
businesses. The partners of the business refer to the drivers and the owners who are offering their
cars or have been functioning with the company. There are several packages that are available to
the partners and it is seen that the partners choose their package according to their own needs.
The partners are given incentive in accordance to the service they offer and therefore this
motivates the partners to give their best and in the same time improve the services that have been
rendered by the company to the customers.
7. Operational Plan
Cab on Time offers extensive services by providing app-based services and accordingly
giving transportation services with the help of which the customers can have safe and better ride
and the company can maintain quality services to the customers. The company has a single
server on basis of which the overall GPS services would be maintained and all the cars that are
operating in the market can be monitored and controlled. The operational services of the
company is inclusive of looking into the fact that drivers are driving in the mentioned course are
picking up the customers at the right time and dropping them at the precise location. The main
server records all the activities and the company has different departments with the help of which
the company is able to look into all the activities. The issues that are related to the customers are
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handled by a separate department and on the other hand the issues related to the partners and the
drivers are managed by a different department with the help of which everyone associated to the
operational activities of the business is maintained in an effective manner.
7.1 Suppliers
The main suppliers of the company have been software developers who have been
providing these services with the help of which the app-based services can continue in an
effective manner. The relationship with the suppliers if maintained in a cordial and jovial way
would improve the services that are provided by them and in the same way would be helpful in
the development of the aspects and the activities that would lead to a better performance for the
business.
7.2 Hours of Operation
The company is operational for all the time of the day as their services are available for
24 hours. This is one of the attractive features of their services because of the fact that the
customers can take their assistance at any point of time. The company therefore has several shifts
and within those shifts they appoint different employees who perform their duties. In the same
way the drivers and the cars are allocated according to the shifts and in order to motivate the
drivers to work at late nights through the early morning, extra compensation is paid to the drivers
are working in that shift. The packages that are prepared for the drivers and the owners are
constructed in such a manner so that they look attractive and lucrative with the help of which the
drivers would be motivated to work additional hours over their shift times.
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7.3 Software and Technology
The business of the company is totally dependent on the technologies and the software
that are being used and therefore use of technologies are vital for them. The company has their
own personalised app with the help of which the customers can book their cabs and the drivers
would get the location of the customers and accordingly the entire service can be completed. All
the activities that are taking place are recorded within the software and therefore all the
transactions and the activities are recorded for future reference.
7.4 Mode of Payment
Being a technology-based software, it is seen that the company makes use of technologies
and therefore payments are made with the help of credit and debit cards and even through other
online payment apps that makes the transactions in a much better way. The customers can make
their payments with the help of cash and even with the help of credit and debit cards. The
payments are even made with the help of e-wallets with the help of which customers can even
make payments. Discount coupons are offered to the customers with the help of which the rate of
payment reduces and the customers can make lower payments.
On the other hand, while making payments to the car owner and their drivers, the
payments are made on a monthly basis and the payments are only done with the help of bank
transfers. The money is directly transferred to the registered bank accounts of the business
partners in order to reduce the chances of any kind of frauds and incidents.
7.5 Warranties and Refunds
The company has their own and effective refund and warranty policies and there is a
separate department with the help of which they can manage and handle these issues. The issues
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that have been identified are examined and thereafter assessments are made in order to find out
whether the complaint that has been made is justified and once the complaint has been found to
be justified then refunds and warranties are given out to the customers.
7.6 Human Resource Plan
Cab on Time requires employees as it is seen that human resource has an essential role to
play in the development of the operations and the performance of the business. The company is
in need of supervisors, IT experts, managers and other employees who would be functioning in
the several departments of the company with the help of which the company can perform
effectively and accordingly would be helpful in satisfying their customers. A proper recruitment
process has been maintained with the help of which employees from different genres can be
selected and accordingly aims and objectives of the company can be attained. The company
takes assistance of the recruiting companies with the help of which the potential employees can
be appointed and accordingly the company would be able to develop their business in a much
better way. the company even makes use of internal referencing with the help of which existent
employees refer potential candidates and examination of these candidates according to their
merit leads to the selection of the candidates. Advertisements are even given out the company in
order to post their vacancies with the help of which the company would be able to recruit the
correct employees for their companies.
The selection process is very strict and tough because of the fact that the employees who
would be employed needs to be competent and should be able to perform their designated tasks
in an effective manner. The specifications of the job have been explained with the help of which
the potential candidates can have knowledge about their roles with the help of which the
potential candidate perform their job in an effective manner. The company has their own
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management and communication structure with the help of which the company is able to
communicate their decisions to their subordinates and accordingly the company would operate
their business in an effective manner. The two-way process is existent with the help of which the
management can convey their message and the employees can even express their views as well.
The selected employees are given proper training after they have been selected and
thereafter all the rules and regulations that are associated to the companies have been laid down
so that the new employees can have knowledge of the same and accordingly perform their
activities within the business. The first six months are considered to be the training period of the
new employees and after the satisfaction from their performance, they are considered to be the
permanent employees.
The management of the company are laid down as follows:
Mr. Wilson Alters - President and CEO.
Mr. Jackson Bird, Senior Vice President - Operations.
Ms. Amanda Jones, Call Centre Supervisor.
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8. Personal Plan
8.1 Structure
Cab on Time has thirty five internal employees and four outsourced positions. The
structure has been prepared by the top level management and the office has sufficient space in
order to accompany all the employees.
Internal:
 Operations Manager: 1
 Relationship Manager: 3
 Call Centre Manager: 1
 Call Centre Employees: 25
 IT technician and manager: 5
External:
 Accountant
 Network and software administrator
Cab on Time has appointed 35 employees out of which 6 of them are managers and the rest
of 29 are employees who have been designated in several departments. Being an app based car
sharing company, the company has most of their employees appointed in the call centre
department where the employees interact with the drivers as well as the customers in order to
maintain a balance and effectiveness within the point of pick up, allocation of the cars to the
customers, charges that would be levied for the trip and handling the grievances and the
complaints that have been posted by the customers as well as the drivers.
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The operations manager of the company has the role of taking care and monitoring the
overall operational activities of the business with the help of which the company is able to
function in a proper manner and accordingly maintain their competitive edge.
The relationship manager has the role and the duty of managing proper relationship
among the employees and the management along with the relationship with the customers and
the organization. The relationship manager looks into all the aspects and accordingly constructs
and plans and policies with the help of which assessment can be done and thereby better
performance can be achieved.
The role of the call centre manager has been to supervise the call centre employees and
look over the process and the ways the employees communicate and interact with their
concerned personnel and accordingly create a better working environment.
The role of the IT technician and the managers of the department takes care of the aspects
that are associated to the software and the application in order to function the app in a suitable
manner. The managers consider the aspects that are associated with the applications so that the
application is functional and is able to satisfy the aims and objectives of the company.
8.2 Organizational Structure
The company has a simple organizational structure as the President is on top of the
management followed by the Vice President and the other managers who are heading different
departments. The decision making process is centralised in nature as the top level management
constructs and imparts the decisions relate to the business and accordingly constructs plans that
would be influential for the business. The organizational framework that is maintained within a
company has been helpful in the development of the company and their activities as well.
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External Employees
The external employees comprising of the accountants have the role of preparing the
financial statements in accordance to the transactions and the operational activities with the help
of which the financial records can be maintained and accordingly better understanding of the
financial scenario can be understood in a better way.
The network and the software administrator has the role of preparing the software with
the help of which the overall business would move forward and accordingly the development of
the business would be possible. They have the role of maintaining the app and making necessary
upgradation in order to develop the app as well as the business.
8.3 Culture
The company performs predominantly with respect to the task they perform with the help
of which the company develops and focus is given to their customers because of the fact that
business development is dependent on the word-of-mouth and reputation. The company has an
increased level of focus towards their strategy and they focus mainly on attaining the certain
tasks and the main objective has been to satisfy their customers and provide with quality
services.
Management Culture
The management maintains similar culture in accordance to the culture that is maintained
within the office and thereby better a balance among the employees and the management culture
and thereby better relationship and business is maintained. The management works with a logical
mindset and therefore their works have been in accordance to the demand that is seen in the
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market. The goals related to the company is united and therefore the amount of fragmentation is
low.
8.4 Integration
The key objective for the company has been to look into the happiness of their employees
and their welfare with the help of time management which would be helpful in the increase in the
productivity of the employees. The company has not been able to generate the time frame within
which these objectives can be maintained but the company is looking to implement the same
within this year. The company is looking forward to maximise the level of productivity with the
help of usage of time so that optimum productivity can be attained and thereby target related to
productivity can be achieved and cost minimisation related to training and hiring can be attained.
The company even maintains a comparison with the industrial benchmarked with the help of
which the current business activities can be understood and steps can be taken with the help of
which better performance can be attained.
8.5 Ownership
The name that is registered with the Australian Business registration is: Cab on Time and
the company would commenced their operations six months earlier on 02/01/2018. The company
constitutes of a single proprietorship and the CEO of the company currently holds all the shares
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of the firm. The company does not have any intellectual property and the company looks for
most effective outcome with the help of the services they render.
The board of directors comprise of the President, Vice President and the Call Centre
Supervisor and they are the one who take all the responsibilities in order to enhance their
business. The information that is related to bonus plan has not been constructed and meetings
related to the same would be undertaken in the first annual general meeting.
9. Financial Plan
The costs and the expenses that are associated to the operations of the company are even
laid down in order to have a comprehensive idea about the activities that would be performed
with the help of which the financial scenario of the company can be understood in a better way.
9.1 Start Up Cost:
Start Up Expenses
Start-up Expenses
Fixed Costs Particulars Amount ($)
Application development cost $32,500
Device Cost $17,500
License cost $3,500
Office rent $7,500
Internet $3,500
Wages and salary for three month $10,000
Staff training cost $2,000
Marketing and sales cost $20,000
Office equipment $6,500
Computers and equipment $20,500
User manuals and handbooks $1,500
Insurance $7,000
Working capital $68,000
Total Fixed Costs $2,00,000
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Average Monthly Costs
Rent $2,708
Interest on loan 8% $292
Postage & Telephone $542
Repairs and Maintenance $1,708
Gasoline and Oil $833
Salaries / Wages $1,458
Total Average Monthly Costs $7,542
x Number of Months: 12
Total Monthly Costs $90,500
Total Start-up Expenses $2,90,500
Start-up Assets
Sources of funds
Owners Fund $1,25,000
Total Owner Funding $1,25,000
Loans
Bank Loan $1,00,000
Other
Total Loans $1,00,000
Total Start-up Funds $2,25,000
Assets
Computers $ 20,500
Furniture $24,500
Vehicles $42,000
Equipment’s $28,000
Total Fixed Assets $1,15,000
Total Start-up Assets $3,40,000
9.2 Sales Forecast:
The sales forecast of the company has been laid down for the next three years in order to
have an understanding of the development of the sales for the firm.
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(1) SALES FORECAST
Year 0 1 2 3
Projected Sales 3,25,000 4,06,250 5,07,813
(b) Cost of Sales 1,11,000 1,38,750 1,73,438
Figure 4: Figure Representing Sales
9.3 Income Statement:
The income statement for the concerned company for the next three years has been
explained as follows:
(4) PROFIT AND LOSS FORECAST
Pre-open
Year 0 1 2 3
Revenue 0 3,25,000 4,06,250 5,07,813
Cost of sales 0 1,11,000 1,38,750 1,73,438
Gross profit 0 2,14,000 2,67,500 3,34,375
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Year 1 Year 2 Year 3
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$325,000
$406,250
$507,813
Sales
Sales Linear (Sales)
Axis Title
Revenue

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Gross Margin 2,85,615 3,39,896 4,11,940
Expenses/overheads
Leased Premises Rent 21,785 23,964 27,558
Wages 40,500 44,550 51,233
Administrative Expenses 2,950 3,245 3,732
Communication Expenses 21,500 23,650 27,198
Marketing Expenses 12,500 13,750 15,813
Rates 10,500 11,550 13,283
Insurance 8,500 9,350 10,753
Other general expenses 7,000 7,700 8,855
Interest 4,000 4,400 5,060
Web Hosting Expenses 8,000 8,000 8,000
Prelim expenses 12,500 13,750 15,813
Lease payments 8,000 8,800 10,120
Total expenses/overheads 1,57,735 1,72,709 1,97,415
Profit before tax 56,265 94,792 1,36,960
Tax @ 30% 16,880 28,437 41,088
Profit after tax 39,386 66,354 95,872
Transfer to reserves 39,386 66,354 95,872
Figure 5: Profit after Tax
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Profit After Tax
0
20000
40000
60000
80000
100000
120000
39386
66354
95872
Profit After Tax
Year 1 Year 2 Year 3

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ROC
0%
10%
20%
30%
40%
50%
60%
70%
80%
39%
53%
70%
ROC
Series1 Series2 Series3
Figure 6: Figure representing ROC
Year 1 Year 2 Year 3
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$214,000
$339,896
$411,940
Gross Margin
Figure 7: Figure representing Gross Margin
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9.4 Projected Cash Flow Statement:
(2) CASH FLOW FORECAST
Pre-open
Year 0 1 2 3
CASH INFLOWS
Cash from Sales 3,25,000 4,06,250 5,07,813
Directors loans 1,00,000 1,00,000 1,00,000 1,00,000
Capital Employed 1,00,000 1,25,000 1,37,500 1,51,250
Other cash inflows
TOTAL CASH INFLOW 2,00,000 5,50,000 6,43,750 7,59,063
CASH OUTFLOWS
Payments for materials 1,11,000 1,38,750 1,73,438
operating expenses ( ) 0
Premises (rent, rates) 0 21,785 23,964 27,558
Wages and salaries 0 40,500 44,550 51,233
General expenses 0 2,950 3,245 3,732
Interest and bank charges payable 0 8,000 8,800 10,120
Corporation Tax 16,880 28,437 41,088
Market survey costs 0 12,500 13,750 15,813
Other preliminary expenses 0 2,950 3,245 3,732
capital expenditure
Plant and other capital expenditure 0 1,15,000 1,43,750 1,79,688
financing repayments
Loan repayments 8,000 8,000
TOTAL CASH OUTFLOWS 0 3,31,565 4,16,491 5,14,400
Cash flow summary
NET CASH FLOW FOR PERIOD 2,00,000 2,18,436 2,27,259 2,44,663
OPENING CASH BALANCE 0 2,00,000 4,18,436 6,45,695
CLOSING CASH BALANCE 2,00,000 4,18,436 6,45,695 8,90,357
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Year 1 Year 2 Year 3
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
418,436
645,695
890,357
Cash in Hand
Figure 8: Figure representing Cash in Hand
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9.5 Balance Sheet:
Balance Sheet
Assets FY-1 FY-2 FY-3
Current Assets
Cash $74,436 $65,604 $15,072
Accounts receivable $3,25,000 $4,06,250 $5,07,813
Total current assets $3,99,436 $4,71,854 $5,22,885
Fixed (Long-Term) Assets
Computers 20,500 25,625 32,031
Vehicles $42,000 $52,500 $65,625
Furniture $24,500 $30,625 $38,281
Equipment $28,000 $35,000 $43,750
(Less accumulated depreciation) $20,550 $18,775 $17,816
Total fixed assets $94,450 $99,350 $1,29,840
Total Assets $4,93,886 $5,71,204 $6,52,725
Liabilities and Owner's Equity
Current Liabilities
Accrued Rent $21,785 $23,964 $27,558
Bank Charges Payable $8,000 $8,800 $10,120
Income taxes payable $16,880 $28,437 $41,088
Accrued salaries and wages $40,500 $44,550 $51,233
General Expenses $2,950 $3,245 $3,732
Current portion of long-term debt $1,00,000 $92,000 $84,000
Total current liabilities $1,90,115 $2,00,996 $2,17,730
Long-Term Liabilities
Long-term debt $1,00,000 $92,000 $84,000
Less: Loan Repayment $8,000 $8,000
Total long-term liabilities $1,00,000 $1,00,000 $92,000
Owner's Equity
Owner's investment $1,25,000 $1,37,500 $1,51,250
Net Profits $39,386 $66,354 $95,872
Reserve and Surplus $39,386 $66,354 $95,872
Total owner's equity $2,03,771 $2,70,208 $3,42,994
Total Liabilities and Owner's Equity $4,93,886 $5,71,204 $6,52,725
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9.6 Common Financial Ratios:
Common Financial Ratios
Debt Ratio (Total Liabilities / Total Assets) 0.59 0.53 0.47
Current Ratio (Current Assets / Current Liabilities) 2.10 2.35 2.40
Working Capital (Current Assets - Current Liabilities) 2,09,322 2,70,858 3,05,154
Assets-to-Equity Ratio (Total Assets / Owner's Equity) 2.42 2.11 1.90
Debt-to-Equity Ratio (Total Liabilities / Owner's
Equity) 1.42 1.11 0.90
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