Jonathan Staniforth & Zayd Ali
Introduction to Business Concepts
By
Jonathan Staniforth
Zayd Ali
Recipient: Ivo Chakarov
Abstract
The area of Watford has so many places within it that are a great place for people to go and ride around. With this gap in the market we have produced a business plan to start up a bike rental company in the heart of Watford Town Centre. To find if this is profitable we have conducted market research within the town to see if the idea is one that people would want, and then went about creating a business plan to try and get a loan from a bank to help with start up costs. We have learnt what is needed of ourselves to make the business work by the creation of the plan as well as spreadsheets to show what money can be made. It has been shown that the running of this business is far more easier than what we had expected, although this might just be when you are looking at it on paper as there is still a lot that needs to be done which is shown by this plan.
Acknowledgements
None
Contents
Acknowledgements………………………………………………………………………………………2
Contents……………………………………………………………………………………………………….3
Terms of Reference………………………………………………………………………………………4
Forward……………………………………………………………………………………………...4
Aim………………………………………………………………………………………………………4
Objectives…………………………………………………………………………………………..4
Introduction………………………………………………………………………………………………….5
Method………………………………………………………………………………………………………….6
Business Plan……………………………………………………………………………………………….7
Summery……………………………………………………………………………………………9
Business Overview……………………………………………………………………………10
Business Strategy…………………………………………………………………………….11
Marketing………………………………………………………………………………………….13
Team Management Structure………………………………………………………….15
Financial Budget and Forecasts……………………………………………………….17
Conclusion………………………………………………………………………………………………….18
Appendix…………………………………………………………………………………………………….19
Terms of Reference
Forward
This report will look into what will be needed to do for the set up of a Bike Rental company that will be based in Watford Town Centre and if it is possible to be profitable
Aim
- We should determine whether creating a Bike Rental company shop in Watford is something that could be achieved.
- Whether the business will actually be profitable.
- If there is room for expansion.
Objectives
- To create a business plan that shows what work needs to be put into the creation of a small business
- To see what else would need to be considered if the business was to expand
Introduction
This report has been created to show what would be needed by people trying to set up a small business. The report consists of a business plan that would be submitted to a band to try and get them to give us a loan to help with the set up. There are also financial forecast documents to show how the business will pan out.
Method
We went about writing the Business Plan by following the information that was acquired from HBSC’s Small Business Start-up guide. All of the information that is held within the Business Plan was gathered by finding out what was required of a small business and by market research about the creations of a business that rents bikes in Watford. The financial documents were all created with theoretical predictions of how the business will progress
Business plan
Your business logo
Lifecycle
37 Lower High Street
Town Centre
Watford
WD17 2DJ
01923 230381
079830831263
(Under Construction)
Contents
Page
1. Summary………………………………………………………………………….9
2. Business overview...... 10
Introduction
Current position
Competitive advantage
3. Business strategy...... 11
Tactics
Strategic issues
Core values
4. Marketing……………………………………………………………………….13
SWOT and critical success factors
Market research
Distribution channels
E-commerce and technology
Tactical promotion plan
Marketing budget
Credibility and risk reduction
5. Team and management structure………………………………………15
Skills, experience, training and retention
Advisors
Management systems
6. Financial budgets and forecasts…………………………………………17
Profit and loss forecast
Cash flow forecast
Balance sheet forecast
Capital expenditure budget
Break-even analysis
- Summary
We are seeking to obtain a £2.000.00 loan as to help the setting up and initial running of Lifecycle. We have already obtained £2.000.00 via family but another £2.000.00 would help take care of a lot of the set up costs. We would like the loan repayment to span over the first two years of the business. You will see from this plan that we are very secure in the market as we are the only business in this area that offers the service we are.
The shop is going to be run and owned by Jonathan Staniforth and Zayd Ali, it will be based in Watford Town Centre on the High Street where it will have easy access for all customers. It will allow for its customers to rent bikes for going on rides around the Watford area, such as the bike path and wooded areas. It will be open every day of the week 10am-7pm with possible extended hours during the summer. The shop will allow people to rent bikes by the hour or by days.Each hire comes with puncture repair kit and spare inner tube and pump. Maps of the local area are available for a nominal charge for you plan your route around the Watford Area.
This location is just where the business is going to start; we have plans to expand into the surrounding areas. If that all goes to plan we will branch out further and become a more national company rather that just local to the Hertfordshire area.
The location of Watford is perfect for a Bike Rental business due to the lack of competition. The other bike shop in the immediate area is a bike sale shop and not one that does rental. Thus not people a direct competition but one we will have to keep an eye on.
2. Business overview
Introduction
Going for bike rides has often been used as a way of relaxing and brinigng people together. Riding round a wooded area or by a canal is a perfect way for the family to spend a sunny evening during the summer, or for a weekend getaway, or simply just a way to explore the area in which you live away from the busy roads full of cars.
The idea behind the creation of Lifecycle is that in the Watford area there are not any Bike Rental places. There are some bike shops in Watford but only that in which you have to buy the bike. We feel that a bike renting service will be very profitable if it was set up in the town of Watford. We believe there is a gap in the market of bike rental as there is no service that offers this in the area. There are some bike shops but none that actually offer abike renting serivce. Watford has lots of woodlands and fields with public paths that are ideal for people to ride around.
We aim to offer the best bike hiring service that can we can. Each hire comes with puncture repair kit and spare inner tube and pump. Maps of the local area are available for a nominal charge for you plan your route arround the Watford Area.
We shall be open every day of the week with opening hours set at 10am-7pm. These hours as during the summer months people will want to do some evening riding.
Current position
So far we have £2000 that has been given to us as a start up fund. We have a small warehouse in Watford that we can use for the business that is costing us £200 a month. The business is currently in its introductory phase of our retail industry business but with plans to get underway very shortly and grow to be very profitable.
Competitive advantage
Within the Watford Town Centre there is only one other bike shop that could be classed as competition. This bike shop is called Cycleopedia ( their main mode of business is servicing bikes as well as selling them. Seeing as our bikes are going to be rental and no forsale then we would be doing our own services on them.
As we have to offer bike rental over sale we will have repeat customers as well as people who are just wanting a day out or a bike ride with their family. Cycleopedia will gain most of their money from repairs but not actually sales as once someone has a bike they don’t need to buy another. Whereas with rental they will need to rent another for another day of riding.
Once the business gets up and going we may move into the market area of selling bikes while still allowing people to rent. This way we will get those customers who just want a ride, but also for the customers who will find it easier to buy than keep renting we shall keep.
- Business strategy
In our first year of business its going to maining getting a good footing in the Watford market. Making a great name for ourselves and giving our customers a great service that they are paying for. Our prices we will have at a reasnonable level but we do want to breakeven by the end of the first year. Throughout the first year there is going to be heavy advertising around the Watford Area and as much as we can do on the internet. We will be handing out flyers in the Town Centre of Watford and try to get an advert in the Watford Observer as well as Mercury Radio. With all of this we hope to have build a strong customer reputation as wel as a business reputation.
We would then like to continue along this path into the second year and aim for making a profit.
Three years into the business we will have completed all of what we set out for the first and second years and be looking to expand our business into more than just a Bike Rental facility. As we will be making profit by this point we will be aiming to put this back into the company so we can move into the market of Bike Sale and not just rental.
With having repeat customers it will get to a point where for them is is more cost effective to buy and not just rent. To facilitate to this need we will start to sell bikes to our customers.
Also by this point we will be looking into an expansion of the business by opening other shops in locations like Watford where we can see a benefit in bike rental due to a heavily wooded region that is perfect for bike riding. Places we are looking into inclue Stevenage and St. Albans.
Tactics
The key things we have to do before we have reached our one year goal is mainly the advertising and creating a business reputation. Once we have got the word around what out business is and what we have to offer with the help of the different mediums, we will have people who will come to our business. This will create a customer reputation which will inturn create one for the business itsself. With this we should be on track to breakeven and progress as a viable business in Watford.
If things are looking good in the second year with a good amount of profit likely to be collected we would then need to start looking at places like Stevenage or St. Albans for a location for another place to set up shop.
With the selling of the bikes as well as renting, all that would be needed is aquiring more bikes that would be there for people to buy.
Strategic issues
Threats to the completion of the aims for the first year are mainly to down to advertising problems. If the right amount of people don’t get word of the business then it could hinder the client base that would be developed and then so on the business itsself. This why the advertising campaign will be faught on several fronts to make sure the work is out there.
If by the third year not a lot of profit has been made then it could stop the expansion of the business. We would not be able to obtain premisises in other locations.
I don’t see any real threat to the sale of bikes in the third year as well as hire. Even if profit isnt that high it is still possible to do sale on the bikes to make some additional profit.
Core values
As a business here at Lifecycle we strive for excelence in customer service and well to the best of are ability serve the customer for what it is they require in Bike Rental. In doing so we shall keep our customers happy and so to have repeat business. With this it will create a worthwhile business to run and make the staff want to go that extra mile and get a sale.
- Marketing
SWOT and critical success factors
Strenghts: The strenghts in our business is that we are the only company in the local area in our part of the market. There are no other companines in the area that offer Bike Rental to their customers. We aim to fill this gap in the market.
Weaknesses: As we are a new business we will need to advertise well if we aim to breakeven or make an profit in the first year. Getting the word out there and making publicisty for the business are the biggest shortcoming we might have.
Opportunities: The biggest opportunity for the business is expansion and being able to open shops in other locations to help maximise the companies earnings.
Threats: The biggest threat to the company is that customers will not hear about us due to the wrong people hearing of the business in the advertising part of our start up.
For the business to susceed we are aiming for breakeven or even a slight profit within the first year, or as close to this as possible. Being still at a loss going into the second year would put the business at a disadvantage and make the subsequent years more difficult.
Market research
To find out how much of a need there is for a business like Lifecycle is wanted or needed in Watford we have conducted some survays in Watford highstreet seeing if people would find it benificial to have a Bike Rental service in Watford.
After every rental we will ask if the customer wants to fill out a review sheet of their service to see if there is anything they didn’t like and want us to improve on and what was done well. All feedback we receive will be used to improve the business and customer service, we want to give the best service that we can.
Distribution channels
Lifecycle is currently just in the local market situated in the Watford area. Over the first two years it will not be moving much further out than this as people who are wanting to use the bikes in Watford and its surrounding area are our prime customers. In the third year if all goes well then the business will be branching out towards other locations such as Stevenage and St. Alban, but this would still be a local market. It would be a few years down the line untill Lifecycle is in a national market.
E-commerce and technology
We have plans to build a website for Lifecycle further down the line of the business, but at the moment as we are just situated in Watford we don’t need a website to help drive sales. When the business expands then we will work on the creation of a website.
Tactical promotion plan
Our customers are reached via the advertising we have done on Watford Highstreet via leaflets that have been handed out, adverts in the Watford Observer which is going to cost us £26, adverts on Watford’s Merucy Radio which comes to £350 and we are printing 1,000 leaflets for £76 to distribute around Watford.
Marketing budget
We have set aside £5,000 a year for marketing, thisi is there to cover all the advertising we are going to do through the mediums that have been stated above. This is monitered by the figures being entered into our Balance Sheet.
- Team and management structure
Skills, experience, training and retention
The team here at Lifecycle consists of Jonathan Staniforth and Zayd Ali who will be running the business as partners. Jonathan is a 6th form graduate who left school with seven GCSEs in Maths, English, Science, History and ICT and 3 Alevels in Applied ICT, Psychology and Sociology. Zayd is a collage graduate who left school with 7 GCSE’s in Maths, English, Science, Business Studys and Design Technology and got a BTEC in Business.
The motovations behind the business is that it is the only business in this niche market and so if is highly profitable. With this in mind it will help drive for results in making the staff at Lifecycle do their best to suceed to retain this market for them so no one else will start a business that could be a threat.
During the summer months we will most likely hire some more staff as these are most likely to be our busy months due to people wanting to go bike riding due to the weather. So taking on more staff would be beneficial for the business. The training for these new staff will be a few days shadowing the current staff to learn how the business works and what the protocols for working are.
Advisors
We have been getting advice from an accountant we know for financial advice, his input has been very insightful for all where we are spending our money and how we can achieve breaking even at the end of the first year if not making a profit. Every quarter we pay him £150 for his services.
For general business advice we have gone to banks and seen their documentation on starting a small business to make sure we are going forward in the best way possible
Management systems