Business Plan - Swan Taxi - Essay Example

Business Plan: Swan Taxi By: Yanallah-Yousef-Mansour-Khalid Address: 56, Wind Street, Swansea, West Glamorgan, SA1. Telephone No: 20207000 Facebook page: https://m.facebook.com/?hrcswantaxi Twitter: https://m.twitter.com/?hrcswantaxi Executive Summary The economy of Swansea is advanced and diverse, with principal contributions from manufacturing and services sectors. In a 2010 report by Business Register and Employment Survey, services sector alone employed about 85% of the total workforce in the region. This finding is important because the concentration of workforce in any particular sector denotes the growth and viability of that sector. Transport and communications employs about 5% of the workforce. Transport sector, in Swansea particularly, does not have any dominant local player such as, Yellow Cabs, Citytaxi and Eastside Cabs. The report presents a business plan for Swan Taxi, a £75,000 proposed taxi service based out of Swansea, Wales. It has been conceptualised by four key partners Yanallah, Mansour, Yousef and Khalid. It would also have representatives from two equity and two debt investors, through which Swan Taxi would raise the initial capital. The target market of Swan Taxi would be urban commuters, who move in and out of Swansea for work, with special focus towards people with disabilities. The target market of the business also includes the students who form an integral part of the population. Swansea would maintain a fleet of 10 vehicles and would position itself just between big and local players. Table of Contents Executive Summary 2 Table of Contents 3 Team formation 5 Idea generation 7 Business Strategy 7 Legal structure of the business 7 Business concept and viability 8 Protection of intellectual property 9 Marketing Activities 9 Competitors and target markets 9 Pricing 10 Promotion 10 Financial considerations 10 Cash Flow Statement 10 Other financial forecasts 12 Business support available 12 Team and management structure 12 Stakeholders of Swan Taxi 12 SWOT Analysis 13 Future plan 14 Reference List 15 Team formation Team formation is a very difficult process since it requires selecting right talent along with skill. The team for the company will be formed in such a way that the business succeed in long run (Aileron, 2013). The team will be built in such a way that it should remain updated with the latest developments in the markets (Goltz, 2012). Swan Taxi will be owned by four partners Yanallah, Mansour, Yousef and Khalid. The company will employ five chauffeurs, who will be responsible for driving the passenger taxis, and few staff who will be engaged in daily office works. The name and skills of the team members are as follows: Name Designation Skill Responsibility Yanallah Owner – Financial Manager Excellent accountancy knowledge. Have 10 years experience in a FMCG company as an accountant. Manages the financial transactions that are taking place daily. Responsible for preparing the profit and loss account at the end of every month and keep track of the asset and liability value. Mansour Owner – Marketing Manager Have efficient marketing skill, deep knowledge regarding the different aspects of marketing. Have the ability to market the services even in cash constraints. Has the convincing power to attract more sponsors. Involves in promoting the business among the mass. Prepare marketing plan to execute strategies that will help to expand the business. The marketing plans are elaborated to the sponsors who have the interest to invest in the company. Yousef Owner –HR manager Excellent HR skill. Have 5 year experience as HR manager in FMCG company. Recruitment of new employees. Formulation of HR policies. Khalid Owner- Management Have the capability to get adapted to flexible situations and leading the company through the prosperous and hard times. To monitor the performance of company regularly and see whether there is any customer complaint or not. If there are any problem with the services corrective actions are formulated by him. Gives training to chauffeur to provide the best behaviour and service to the passengers. Imran Chauffeur (West) Excellent driving knowledge and road knowledge. Provide passengers with smooth ride and behave properly so that they are satisfied with the services and select Swansea Taxi again on road. Latif Chauffeur (West) Excellent road knowledge and have ten years of driving experience in the streets of Swansea. Provide passengers with smooth ride and behave properly so that they are satisfied with the services and select Swansea Taxi again on road. Alfaz Chauffeur (East) Excellent road knowledge and have ten years of driving experience in the streets of Swansea. Provide passengers with smooth ride and behave properly so that they are satisfied with the services and select Swansea Taxi again on road. Ratul Chauffeur(North) Excellent driving knowledge and road knowledge (University of Surrey, n.d.). Provide passengers with smooth ride and behave properly so that they are satisfied with the services and select Swansea Taxi again on road. Kabir Chauffeur(South) Excellent driving knowledge and road knowledge. Provide passengers with smooth ride and behave properly so that they are satisfied with the services and select Swansea Taxi again on road. Arbaaz Office staff Good communication skill and proficient in office works. Responsible for executing all the paper works that is done in the company. Communicate issues to the operations head. Sohail Office staff Good communication skill and proficient in office works. Looks after the customer request for the taxis. Irfan Office staff General skills Responsible for daily office work like the work of peon. The key skills, attributes and behaviours are must-haves for every entrepreneur in today’s society, since the chances of business failure have gone significantly higher. The business environment has become increasingly complex with intense competition, innumerable product substitutes for customers, restrictive governmental regulations and higher customer expectations due to globalisation. Idea generation The economy of Swansea is advanced and diverse, with principal contributions from manufacturing and services sectors. In a 2010 report by Business Register and Employment Survey, services sector alone employed about 85% of the total workforce (Swansea Bay, n.d.). This finding is important because the concentration of workforce in any particular sector denotes the growth and viability of that sector. The idea of starting taxi business in Swansea gained prominence with increase in demand for taxis by the passengers. It has been noticed that about 16,000 people regularly travel out of Swansea and about 26,000 people travel inside the city for their different purposes. It can be inferred from the data that transport business is lucrative in these market. Thus, the plan for staring a taxi business is profitable in this market by considering the demand of the same. The number of students who travel to Swansea for the purpose of their study has increased over the years which have augmented the demand for transport (Swansea Bay, n.d.; Avis, 2014a; Europcar, 2012; Local World, 2014). Business Strategy Legal structure of the business The legal structures that a business can operate under are sole proprietorship, franchise and joint venture partnership. For Swansea taxi, partnership form will be the right option. There will be four owners and they will invest their money in the business which will help the same to raise enough capital. The partnership business will help them employ individuals with diverse skills and have the opportunity to continue a flexible operation. The profit and losses will be shared among the four partners. Thus, all four of them will bear the risk of losing the business. Challenges are easy to undertake since the partners are responsible for the decision making. The partnership company has the opportunity to undertake unlimited liability and thus it will enjoy excellent credit offers and can obtain loans easily since the creditors have the option of realising the loan amount from the private property of the partners. Business concept and viability Since transport and communications is a significant business in Swansea with no dominant market players, it has a relatively favourable competitive environment. As per 2010 market data, 16,000 people regularly travel out of Swansea to nearby places for work, while 26,000 people travel from nearby places to Swansea (Burrows Communications, n.d.). Judging by this figure, around 84,000 trips are made in and out of Swansea everyday (32000 by people of Swansea and 52,000 by people around Swansea). Evidently, the transport market is extremely lucrative and has the potential to generate great profits. Thus, the business chosen is Swan Taxi, a taxi service company based in Swansea, chiefly targeting people travelling in and out of Swansea for business purposes. Primary market research conducted by the team at Oxford Street, High Street and Salubrious Place suggests that one of the biggest problems encountered in existing taxi services is the lack of disability-friendly facilities. Based on this finding, Swan Taxi would also target the sub-strata of disabled persons by modifying its fleet of taxis to make them disability-friendly. The partners conducted a survey to understand the needs of the people and provide them with the exact facilities that they want from them. The survey contained a number of questions which reveals the requirements of the respondents who are the local area people of Swansea. Swansea taxi will have the option of providing seats for four people apart from the chauffeur. Each chauffer will make at least ten trips in a day near or far from the city. The estimated number of people using the taxi services is about 50 per day. They will be paying the cheapest fare that is afforded by all. One way trip will cost £75 which is the lowest fare that is charged by Swansea in comparison to their competitors. Protection of intellectual property The most important intellectual properties of the business would be the Swan Taxi trade mark, logo and the livery of its fleet and uniforms. Swan Taxi would protect its intellectual properties by registering them at the Intellectual Property Office, a government agency based in Newport, South Wales (Intellectual Property Office, n.d.). Marketing Activities Competitors and target markets Competition in the taxi business sector of Swansea would come from smaller players such as, Yellow Cabs, Citytax and Eastside Cabs (Yellow Cabs, n.d.; Citytax, 2010; Eastside Cabs, 2014a). The competition will also come from buses, trams and hacking cars which are prevalent in London. The buses and trams will provide with hard competition to Swansea taxi since the passengers prefers cheaper fares. The buses and trams charges low fares for a long route and thus they are preferable for the community. However, the concept of taxi is quite tempting among the urban people thus Swansea taxi will have its own market. The company will tie up with the restaurants and give their customers taxi services. The customers who come out of the restaurant after a pleasant dinner or lunch have to loiter in the streets to get a taxi to home. Thus, Swan taxi will provide immediate taxi services to those customers and make them comfortable after the pleasant meals (IBISWorld, 2014). As stated earlier, the prime target of Swan Taxi would be urban commuters who move in and out of Swansea for work, with special focus towards people with disabilities. Swansea would maintain a fleet of 10 vehicles with modified specifications such as, wheelchair access, low floors and one spare foldable wheelchair per car. The services are also provided to the students who form an important part of the population. They are provided with students discount whenever they are travelling in the taxis. The services are also provided to those who need taxi in times of emergency. The services also help the restaurants to deliver the foods at the right time. The company provides with membership cards for those who travel in taxi almost every day and this membership card gives them the privilege of getting discounts and special offers during festive occasions. The taxi provides with Wi-Fi connections so that the travellers get attached to the web. The taxi is connected to the GPRS system which shows the exact location of the taxi in the screen. The travellers also have the option to pay the fare through their credit cards. Pricing Swan Taxi plans to compete with its competitors by charging slightly higher than the charges demanded by Yellow Cabs, Citytax and Eastside Cabs. This would not only position Swan Taxi as an affordable taxi service, but also prevent it from being perceived as the cheapest option possible. For example, a one-way trip from Swansea to Cardiff costs £84 with Avis and £70 with Eastside Cabs (Avis, 2014b; Eastside Cabs, 2014b). On the other hand, Swan Taxi would charge £75 for the same route, much lower than Avis, yet higher than Eastside Cabs. Promotion For promotional purposes, Swan Taxi would associate with Wales tourism board, UK tourism board. The association is for recommending Swan Taxi services to the travellers in Swansea and Wales. It would also employ advertisements through hoardings, print media and online websites. Lastly, it would offer a loyalty program, where a customer returning to Swan Taxi services would earn back £1 for every £7 spent, which is redeemable any time. For easy accessibility, Swan Taxi would rent its office space at Swansea centre, with an owned garage space in Swansea suburb. It would maintain a unique website, www.swanseataxi.com and a unique toll free number that would be available all over UK for 24 hours. Swan Taxi would also partner with GloverSure of South Wales for the launch of a mobile application, which would enable customers to book cars online and manage their bookings (GloverSure, 2013). Financial considerations Cash Flow Statement A 12-month cash flow statement for Swan Taxi is presented in the separate sheet titled, “Calculations”. To prepare this cash flow statement, the following initial expenses were assumed for the first month: Expense Type Amount (£) Staff expenses 15,000 Billboards 2,600 Print media 3,600 Digital media 2,500 TV and radio 1,200 Profit-sharing with promotional partners 1,600 Office rent 15000 Equipments and furniture 20000 Vehicles 100000 Garage 50000 Reserve cash to absorb operational risks 50000 Total 2,61,500 For the fleet, it was assumed that 10 Toyota AYGO vehicles would be purchased, each worth £10,000 (£8,000 vehicle price + £2,000 worth of additional fitments, paint job and disability-friendly modifications) (Toyota, n.d.). Figure 1: Cash at the end of each month (Source: Author’s creation) From the above figure it is observed that the business will encounter increase in month end cash balance which indicates the fact that the business is lucrative. Other financial forecasts A Profit and Loss forecast and a Sales Forecast are presented in the separate sheet titled, “Calculations”. Business support available Swan Taxi would require an initial investment of £ to start operations. For this, each of the four team members would invest £5,000 and £10,000 totalling to £50,000. The remaining £50,000 would be raised through debt and equity in equal proportions. The exact capital make up is demonstrated below (Dot Zinc Limited, 2014): Source Amount (£) Yanallah, 5,000 Mansour 5,000 Yousef 5,000 Khalid 10,000 M&S Bank 12500 Tesco Bank 12500 Goldman Sachs 12500 Berkshire Hathaway 12500 Total 75000 Team and management structure Stakeholders of Swan Taxi The primary stakeholders of Swan Taxi would be the four business partners Yanallah, Mansour, Yousef and Khalid. Another group of primary stakeholders would be the members appointed by equity investors, Berkshire Hathaway and Goldman Sachs and by debtors, M&S Bank and Tesco Bank. Together, the four partners and representatives of the investors and debtors would constitute the board of directors. The other stakeholders would be the employees of Swan Taxi, such as, chauffeur sand office staff. The external stakeholders would be the customers and promotional partners, namely the tourism boards of UK and Wales. SWOT Analysis The following are the strength, weakness, opportunity and threat of the business: Strength Swan Taxi charges their travellers the cheapest fare with respect to the other competitors in the market. The business is observed to earn positive cash flow after each month of operation. The taxi services of Swan Taxi provide its traveller the opportunity to get Wi-Fi connection within the taxi. This service is not provided by any other competitors in Swansea. Weakness The company does not provide services to all parts of Wales. It believes in targeting a segment of the society rather than the whole society. Opportunity The company has the opportunity to spread its business outside Wales since the business is expected to receive positive response from the travellers. The company has more markets to hook into where they can earn profit and serve the people as far as possible. Threat The competitors are the only threat for the business which includes local players like Yellow Cabs, Citytax and Eastside Cabs. Future plan Swan Taxi plans to expand its business to cover all of Wales by 2017. It plans to initiate operations in England by 2018, covering the entire country by 2020. By 2025, it plans to cover the entire span of Great Britain, after entering Scotland in 2023. Eventually, Swan Taxi plans to initiate the first continental Europe operations in France, with the target year of 2030. Reference List Aileron, 2013. The Top Skills Every Entrepreneur Needs. [online] Available at: [Accessed 20 January 2014]. Avis, 2014a. Swansea Car Hire. [online] Available at: [Accessed 20 January 2014]. Avis, 2014b. Pricing and Optional Extras. [online] Available at: [Accessed 20 January 2014]. Burrows Communications, No Date. SWANSEA: ECONOMY. [online] Available at: [Accessed 20 January 2014]. Citytax, 2010. CITYTAX THE COMPANY. [online] Available at: [Accessed 20 January 2014]. Dot Zinc Limited, 2014. Compare Loans. [online] Available at: [Accessed 20 January 2014]. Eastside Cabs, 2014a. Services. [online] Available at: [Accessed 20 January 2014]. Eastside Cabs, 2014b. Fares. [online] Available at: [Accessed 20 January 2014]. Europcar, 2012. SWANSEA Car Hire. [online] Available at: [Accessed 20 January 2014]. GloverSure, 2013. Mobile App Development South Wales. [online] Available at: [Accessed 20 January 2014]. Goltz, J., 2012. Six Attributes of Successful Entrepreneurs. [online] Available at: [Accessed 20 January 2014]. IBISWorld, 2014. Taxi Services in the US: Market Research Report. [online] Available at: < http://www.ibisworld.com/industry/default.aspx?indid=1951 > [Accessed 20 January 2014]. Intellectual Property Office, No Date. Need to contact us? [online] Available at: [Accessed 20 January 2014]. Local World, 2014. Swansea City fans split over free Valencia tickets for DVLA. [online] Available at: http://www.southwales-eveningpost.co.uk/Fans-split-free-tickets-DVLA/story-20226445-detail/story.html [Accessed 20 January 2014]. Swansea Bay, No Date. Major employers in Swansea Bay. [online] Available at: [Accessed 20 January 2014]. Toyota, No Date. New AYGO. [online] Available at: [Accessed 20 January 2014]. University of Surrey, No Date. Entrepreneurial behaviour. [online] Available at: [Accessed 20 January 2014]. Yellow Cabs, No Date. Yellow Cabs. [online] Available at: [Accessed 20 January 2014]. Read More