1 Management of SME & Entrepreneurial Activity Group No. 5 Group Members Um e Laila Hina Naveed Business Name: A ride for HER Class Section: A Semester: (Spring/fall) Submission Date: 10th May, 2020 Submitted To: Ms. Tania Hasan 2 Table of Contents Executive summary......................................................................................................................... 5 Industry Analysis: ........................................................................................................................... 7 Industry size, growth rate and sales projection: .......................................................................... 7 Growth rate and sales projection............................................................................................. 7 Industry structure: ....................................................................................................................... 7 Threats of substitute: ............................................................................................................... 7 Threats of New entrants: ......................................................................................................... 8 The Bargaining power of suppliers: ........................................................................................ 8 Bargaining powers of the buyer: ............................................................................................. 8 Rivalry among Existing Firms: ............................................................................................... 8 Nature of participants:............................................................................................................. 9 Industry trends ............................................................................................................................ 9 Environment trends ................................................................................................................. 9 Business trends: .................................................................................................................... 10 Long-Term Prospects ................................................................................................................ 10 Company history and Description ................................................................................................ 11 Mission statement ..................................................................................................................... 11 Products and services ................................................................................................................ 12 Current status ............................................................................................................................ 12 Legal status, ownership & key partners .................................................................................... 12 Market analysis ............................................................................................................................. 12 Market segmentation and target market selection .................................................................... 12 Buyer Behavior ..................................................................................................................... 13 Competitor Analysis ............................................................................................................. 13 Estimates of annual sales: ......................................................................................................... 14 The economics of the business ..................................................................................................... 14 Revenue drivers and profit margins .......................................................................................... 14 Fixed Cost and variable cost & Start- up cost........................................................................... 15 Fixed Cost ............................................................................................................................. 15 Variable Cost ........................................................................................................................ 15 Operating leverage and its implications:................................................................................... 16 3 Break-Even Chart and calculation ............................................................................................ 16 Marketing plan .............................................................................................................................. 16 Overall marketing strategy ........................................................................................................ 16 4 Ps of marketing .......................................................................................................................... 17 Product, price, promotion and distribution ............................................................................... 17 Sales Tactics.................................................................................................................................. 17 Design & Development plan. ........................................................................................................ 18 Development status and tasks: .................................................................................................. 18 Tasks: .................................................................................................................................... 19 Challenges and Risks ................................................................................................................ 19 Product improvement and new products................................................................................... 20 Projected Development costs .................................................................................................... 20 Proprietary issues ...................................................................................................................... 20 PATENT: .............................................................................................................................. 20 TRADE MARKS: ................................................................................................................. 21 Licenses: ............................................................................................................................... 21 Brand name ........................................................................................................................... 21 Management team and company structure ................................................................................... 21 Management teams ................................................................................................................... 21 Company structure ........................................................................................................................ 23 Operation plan ............................................................................................................................... 23 General approach to Operations................................................................................................ 23 Behind the scene activities ........................................................................................................ 24 Front stage (what the /riders experience) .................................................................................. 24 Business locations ..................................................................................................................... 24 Facilities and Equipment........................................................................................................... 25 OVERALL STRUCTURE............................................................................................................ 26 Financial projections ..................................................................................................................... 27 Sources and uses of funds statement ............................................................................................. 27 ASSUMPTION SHEETS ......................................................................................................... 27 LIST OF ASSUMPTIONS: .................................................................................................. 27 Pro forma financial statements.................................................................................................. 28 4 Income statement .................................................................................................................. 28 Balance sheet ........................................................................................................................ 29 Statement of CASH FLOWS ................................................................................................ 30 APPENDICES .......................................................................................................................... 31 5 Executive summary This business plan details about the launch of a ride hailing App Company, especially designed for women. The purpose for launching a ride service exclusive for women is that women faces my challenges while using transport services whether it be local transport service; where women has to stand long hours at bus terminal waiting for the bus, or if it is on-demand other car ride services available they have to pay heavy bills for their journey and problem surges if there is rush hours and fares spike due to peak-hours extra surges. To curtail all these problem, I and my 50% business partner came up with an idea of A scotty ride service for women and its unique point will be that scotty riders will be female also keeping in mind the eastern culture of our society. These rides can be called by any girl from anywhere in Lahore, where we initially plan to launch our service, through her phone via an APP- A ride for her- this App could easily be downloaded from IOS and play store. Further for women those who can afford car ride services but are reluctant to share a ride with make drivers, for them we will provide car ride services drive by women driver. The market we chose to launch our services is Lahore city which is highly attractive market, because of large No. of young women those who are college, university and office going. Operating in this market is also beneficial as there are large no. of women who has developed the trend of riding bike and Scotty, hence we would not be in-short of contract rider. Investments for these online business are minimal, mainly expenses goes into developing an app and advertising the business. If these fixed cost are efficiently covered, variable cost of operating a business is less; majority of the rides will be not fueled by company but riders themselves as company will only provide the platform for riders and customer to connect and company will deduct 30% commission for every ride taken. This plan mentions the detail analysis of how company will break-even its investments with minimal time of 7-8 months if things goes according to forecasted assumptions. All the cost are covered by two partners equally. Later when business flourishes and we plan to expand to other locations we may call for creditors and inventors to put capital in our business. As a start-up. We estimate that company require $22620 for the launch of the company before the first year cash flows are generated. Out of which $19070 will spend during the set-up of the 6 business and reset $3550 will be kept in account to spend throughout the year for marketing and other expenses. We forecast that sales revenue for the first year will be around $332464 and after deduction of all expenses company would earn the net income $254107.6. Our forecast project Net worth is $254107.6 during first year and $279857.424 in the second year. 7 Industry Analysis: Industry size, growth rate and sales projection: “A ride for HER” is a ride-hailing app service business idea. To have a hint of how successful this idea will be and its future growth we have to study how other similar business are running in same market. A glimpse at competitors: Careem was started by Sheikh and Olsson with an initial investment of $100,000 – equally shared between the two partners. Later, it raised to $1.7 million worth project was funded by many investors including Mercedes Benz. So here we can have an idea that initial investment for a ride-hailing app service cost around 15million. But careem was a project on very large scale initiating in Dubai. So our business plan will start from small scale covering Lahore market initially. So an estimate of around ¼ of last quoted value would be needed; that is 3 million. Initial startup cost will be high due to marketing expenses, office set-up, and app creation expenses. Soon after we would be able to capture good number of riders and vehicle, we would be earing service charges without any resource expenses. We would be paying just maintenance and regular wages expenses. Growth rate and sales projection The average pay of drivers associate with Careem/ UBER is 25000 to 35000 which has increased twice from previous years which reflects that each year market of ride-hailing apps is being increased tow-times. This is a good sign to initiate a business in growing industry rather than saturated industry. As looking at these figures we also expects the growth rate of 2 times annually after a market of this changed trends establishes. Loss in these e-cab business is pretty less since they doesn’t own any of the cars and the drivers are not employees. They just offer them a platform. The whole business model is based on the concept of asset-utilization. Most of the budget goes in the fleet of drivers and on vendors. By fleet, it means fleet acquisition, onboarding, and training, optimizing captain-earnings, building captain-support, and building captain-loyalty. To provide unparalleled transparency to the captains; to have a 24/7 active team dedicated to solving issues of drivers and customers. Industry structure: Analysis of competitive market of local and public transport involves a deep look at Porter’s five forces Model. A successful porter’s analysis let us determine the profitability of business in this industry. A general approach to determine the industry profitability is to find our “Average rate of return” on investment we make in business. Average rate of return= Net-income/ Total assets A business which uses the minimum resources and make good net-income is earning good net on investments. Threats of substitute: An industry where many firms are providing same services / product is inevitable to threat of substitute. A substitute firm is one when customer can switch from one firm to other very easily. 8 If he finds one firm’s service/ product is not available or one price is high he easily switches to other firm without a second thought. Our chosen public conveyance industry is already concentrate with incumbents like; Uber, Careem, Shahsawari which are direct competitors. There are many indirect competitors like; Airlift, SWVL and government provided local transport service (HOV, LOV). Surviving in the concentrate industry like that require unique competitive advantages, which limit customers from switching to competitors. The competitive advantage in transport industry can be lower unit cost, quality of service and safety of the service. The competitive advantage of “HER” service is female bike, sooty and car drivers, which allows female customers to enjoy cheap and safe bike rides. Threats of New entrants: An industry where new firms can easily come in and open up their business is not very much attractive industry. There must be moderate barriers to restrict the entry of new entrant .A high barrier industry have incumbents that operate on economies of scale, can give unit cost of service/ product very low , which make survival of new firms very hard. In Lahore, transport industry is inevitable to threats of new entrants, every other day new firms appears. The profitability of industry is high dependent upon government taxes, petroleum rates. Incumbents are earning good profits because of cost advantage they have, so new entrants must come up with different and unique idea so that customer are ready to pay comparatively little more. As “Her” service sooty and bike rides can cost little more than bike rides of Uber but those rides are solely for male; Female are helpless but to travel through expensive car ride. The Bargaining power of suppliers: Suppliers includes all the intermediaries and resource providers that make it possible for the firms to successfully do their business. Our suppliers are drivers, vehicles lend by people to be used. Since there are many potential female drivers and bike riders in Lahore and changed culture of our society. Possibly we will have potential suppliers so that our business will not be exploited by limited suppliers. Business those have limited suppliers can get easily exploited by their suppliers and resultantly loss their profitability. Bargaining powers of the buyer: Buyers are the main source of the firm profitability. The firms with limited number of buyers, customers can easily stop using the service of the firm and rather themselves enter into supplier industry. An industry with standardized product/ services which customer cannot find elsewhere have less bargaining power of the buyers. Possibly customer cannot find cheap female bike ride service elsewhere, so bargaining power of the buyers is fairly less. Rivalry among Existing Firms: An industry where there are many competitors, no balance between competitors, less differentiation between firm’s services and slow growth rate in an industry. Rivalry among firms is not for profitability in the industry. Differentiation and low fixed cost firms are less inevitable to involve in firm’s rivalry. 9 Nature of participants: One should know who else sells in your market .You can’t easily describe a type of business without describing the nature of the participants. Some industry have few big firms serving in that industry, these big giant consolidate the small new entrants appear in that industry. So an industry with big leaders serving is hard for firms to survive unless they come up with some unique features to it. Transport industry in Pakistan is very concentrate, as mentioned before. Following are participants serving in Lahore transport industry: Local private transporters; Auto-Rickshaw, Taxes, Vans Government local transport: Speedo buses, LOV, HOV, metro buses Transport companies serving: UBER, CAREEM, DAEWO-CABS, SHAHsawari Key success factors: Transport industry is overall very attractive industry in Lahore division. Possible reasons are: 1. Lahore have high number of migrants those who have come for studies, job purposes. This has considerable increase the demand for transport service 2. Increase in petroleum rates that people find it expensive to use their own vehicles 3. Increase in female migrants to Lahore for studies and job purposes, resultantly increase the demand for safe transport service by women 4. Women have recently become more independent , increase trend of women towards driving and surprisingly towards bike riding 5. Increase use of smart phone and easy excess of people to mobile apps to call the conveyance rather than to hail a taxi. 6. Internet-linked transport services have bills calculated through fixed standards rather than self-employed driver those charge fair of their choice unless they face close competitor near-by 7. Public buses and Mini-buses have their fixed stops, so one who has to go further away from that fixed stop would call for a ride to drop them to doorstep Industry trends Another aspect to examine carefully before opening up a firm in an industry is to deep study its Environmental Trends and Business trends. Environment trends The strength of an industry often surges because of environmental trends shift in favor of product and service sold by firms in the industry. Transport industry have favorable social trends, especially if we talk about giving transport facility particularly to women. Women in Pakistan society were reluctant to use taxi and other local transport previously and especially if they have to try alone. But ride-sharing app services was the promise of empowerment for many women – predominantly those working long hours outside the home – who tended to avoid public transport over security concerns. Women are more comfortable and feel secure to travel alone 10 thanks to these app-rides. So we come up with business idea to exploit the change social trend of women and indeed increase demand of the women for cheap transport service. Technology trends also favors the business idea of “Her” transport service. As everyone has excess to smart phone and they can easily use their mobile phone to call a ride anywhere anytime. Lack of a respectful public transport system, growth in smartphone penetration with the arrival of 3G/4G services, and a young population increasingly moving towards ‘on-demand services’ such as Netflix and Airbnb meant there was more than enough room for ride-hailing apps .Political and regulatory changes must be seen before entering an industry, Government has imposed 5% taxes on app-ride services which is a drawback. Scotty and bikes for women are new product in Pakistan market, so currently these are not charged much. Even government are giving Scotty to women on low installment rates to encourage women to use cheap alternative source of conveyance. Hence economic and political trends favor business idea of “a ride for HER” transport services. Business trends: Ride-sharing app services are dependent on multiple resources that are particularly outsource, owner and managing team of the company act as intermediaries connecting driver with passenger. Hence recently firms in this industry have increasing profits trends because more and more people are connecting themselves with these ride-sharing app to earn themselves alternative to job good amount of income. Drivers earn good amount of income while intermediates (owner of the services provide) earn services charges without any resource (fuel, car) cost of its own. Online business requires limited need of big offices and not too many employees except good IT-teams so business trends are always in favor of these online app businesses. Long-Term Prospects Many ride-haling apps are emerging every other day to call for rider to provide pick and drop services and all delivery services. This industry has still some space but soon it will be concentrated and be no more an attractive market to invest it. As competition will rise and distribution of profit will be spread out between different services providers, each earning minimal earnings. Our business idea though serve in this same ride-app industry but has competitive advantage that is unique to “a ride for Her” services. That in particularly focus on the niche market of women, who are still unable to avail the advantage of cheap bike rides for daily travelling. Bike/scotty rides cost comparatively half the price of the mini car services. To sum it up, long term prospectus of our business idea is to exploit new markets in different cities of Pakistan; big cities like Karachi Islamabad where there is high ratio of working and college going women. Also in future, we aim to train our own women drivers and bike riders so we are not in-short of resources we need for our service. This idea will open up job opportunities for many women who want to support themselves and work shoulder-to-shoulder to men; hence a socially and economically beneficial idea 11 Company history and Description In the modern world with the changing trends each day the mindsets of the people have also altered. We live in a world where people especially females go through a lot of hardships every day. I being a girl myself have experienced some serious transportation and security issues as well. We hear a lot of cases of girls being harassed by the uber/ careem drivers every other day, my friend’s sister being one of the victim. He reported that his sister was travelling in an uber and the driver harassed her and to avoid any hassle with the police they did not file a report either. Recently I faced a transportation issue due to the lack of budget, men these days are offered a motor bike option by Uber and for the same route the car service charges triple as compared to the bike service. And due to the similar issue I had to walk home. After a fruitful conversation with a bunch of my friends’ one of my friend; Umme Laila reported that she has faced similar issues. We conducted surveys through questionnaires and personally interviewed different categories of females. By doing so we discovered a new market gap in the transportation industry. Targeting this niche was something that would benefit a lot of female citizens in our country. To terminate the fear factor we decided that are unique selling point would be “females being the drivers”. But for that this service being in our country; Pakistan there would have been a lot of security issues. To overcome this problem we had something in mind e.g. introducing the help line a tracking system and mini headquarters near every offices and also for the physical security we will provide the Scotty drivers a helmet which also overcome the problem of “hijab” in our country. We sale the share in stock market to earn the capital. Surprisingly we got handsome amount of money to start this business. My sister being in a transport business. She offered us a range of customized Scotties that also became our unique selling point. However initially buying only 20 cars on lease by the capital and started the trail of our company and took the feedback of the campaign “a Female driver for a female rider”. We got good response hence we decided to dwell an app and marketed through with social media and hired a celebrity as our company ambassador as took an initiative to support to this new project. In a modern day female drivers driving a Scotty or a car is not consider a big deal hence many women took an initiative and joined the training session for this business. And after all this our company “Her” came in to being. Mission statement “To bring the transportation for her everywhere & to build a secure organization that inspires” As our mission statement also states that our main purpose is to provide a safe transportation service to all those women in need out there and also to provide a new employment opportunities for them. Moreover this in order to be successful this our motto is to provide a saver working environment that would set an example for all other companies operation out there and also to encourage women empowerment. 12 Products and services Our service is a service that provides all the females out there to enjoy a safe and friendly ride. “A ride for HER” is a service that involves downloading an app “Her” that connects a female rider with a female driver, also this service requires all the details of the ones who signs in into this app. The scotty service being the unique selling point is the service that provides a ride on the low prices as compared to the car service which is similar to the bike service provided by the well-developed companies ie. Uber. Our services will also include calling security at one call and a helpline that would connect the passengers and the driver in need to the security. Current status This project has currently started on a small scale and is still in progress. Currently marketing campaigns have being held and in order to expand and also to progress and expand into international market we’re seeking more investors to invest within our country. Legal status, ownership & key partners Legal status: private limited company Owner ship: owned by both the partners with a ratio of 1:1 Key partners: Umme Laila & Hina Naveed All the profits and losses are shared by both of the partner along with all the responsibilities and all the management and other expenses. Market analysis The taxi market is expected to show an annual growth of 9.22% and it is a highly competitive market. In Pakistan in recent years there have been up to more than 50% online ride bookings among the taxi users. Uber and careem has already captured a big share of Pakistani market. Though there are many small players in the market swvl and airlift concentrating on specialized market segment. Increasing the market share and providing more specialized and customer focused services. Market segmentation and target market selection Interesting fact is that almost 35% of the passengers using the online taxi service are females and since there are no specialized bike service for females and due to our social customs females cannot use motor cycle rides which are less than half the price of the car rides due to the male drivers. “A ride for HER” will focus on this market segment with an aim of providing low cost specialized rides for females with female drivers. The trend in females for bike riding is increasing in Pakistan. Government is also promoting female bike riders and many bike manufacturers are also making exclusively designed bikes for females with a wide range of colors, designs and technological features. 13 Transportation is a major problem for many females especially in big cities kike Karachi. Where government has not provided enough public transport facilities exclusively design facilities for females. 50% of Pakistan’s population consists of females and therefore focusing this neglected market share would be a great opportunity to explore this market gap. Female riders seems to be very excited about launch of such an online service that not only give them opportunity for extra earning while going to their own destinations with a very little or no extra cost of providing this type of service. But this type of service would only focus three major cities in the beginning that are Karachi Islamabad and Lahore only. Buyer Behavior Female would 100% prefer a female rider than travelling with a male riders as starting analysis shows. The would also be more interested in this service because it would cost them 40% less than a car ride to ride a bike with a female driver along with trust safety and confidence. Not only female travelers would prefer such female bike rides but also their families would be more relaxed and confident while they would be using such a ride. Competitor Analysis Competitor Name Strengths Weaknesses UBER A long established business with a wide experience of this type of market. Operating as a multinational business. Very strong advertising on social media Part of a large international business venture Large amount of finance is available Threats to Us: Competitors are well established in terms of availability No focus on market segmentation and providing specialized services to particular market segments Careem Ride for HER No market segmentation Opportunities for Us: Can be successful as being the pioneer Unique Selling Point Friendly and well established app Market leader Strong Brand name and brand loyalty 14 of finance and market experience and exposure and can jump into our market segment for providing exclusive cab service for females being managed and operated by females Estimates of annual sales: Company would charge 10% from the rider per kilometer and a fix charge of Rs 20 per ride. There is an estimate that in first year there would be 100,000 kms of ride and a total 100,000 rides per year. 10% of 100,000 KMs@ PKR5/Km 100,000rides @ PKR 20 /ride Earnings for In-app adds Total Revenue PKR 50, 000 PKR 2,000,000. PKR 50, 000 PKR 2, 000, 0000. Thus business would have a market share of 2% in first year of its operations. The economics of the business Revenue drivers and profit margins This ridesharing mobile app connects riders with drivers in just a couple of clicks and charges the rider’s credit card automatically. No cash or currency is exchanged in the vehicle. This business model is a more convenient and affordable way to get around than a traditional taxi cab. Plus, it’s a way for drivers to earn some extra money on the side, while driving their own vehicles. “A ride for HER” connect riders with drivers and take a percentage of all transactions. But at the end of the day, “HER” is just a mobile app. Users download it from the Apple App Store and Google play store. App will connect the rider with the customer. Once the trip has been done, software will credit the rider account with 75-80% of the fare amount and rest 20% will go the account “HER” business account. Base driver revenue is determined by a fare structure similar to that of a taxi, with a fixed minimum fare and variable pricing based on time and distance. However, at least three other factors may change what a driver earns: A) fare multipliers which raise prices in real time based on supply and demand of drivers, B) pooled rides in which a driver makes multiple pickups and drop-offs in a single route, and C) elaborate bonus structures which offer drivers either reduced commission or cash bonuses for driving longer hours. On the cost side, drivers must bear all expenses associated with vehicle operation including depreciation, insurance, maintenance, repairs and fuel, which may vary widely from driver to driver or vehicle to vehicle. 15 Hence, there are high profit margin as company is not consuming any asset (petrol, vehicles) but just earning service charges to be an intermediary. Transportation network company operators know exactly what they pay each driver, but they do not know whether drivers earn additional wages from a competitor and they know nothing about what drivers actually spend to operate their vehicles. If the App gets popular, company may earn extra money through app by running paid advertisement on the App. Main revenue drivers: Encouraging rider to cover a set number of ride target per day. More rides are taken by the rider more profit does the company earn. Offer bonuses for the riders who fulfil the set target of ride. Revenue earned by running advertisements on the app. Fixed Cost and variable cost & Start- up cost The business’s initial set-up cost is high in comparison to running cost. Set-up cost comprises of: Fixed Cost Building a simple App for the business= $2000 to $5000 Setting Up an office in commercial plaza rest = $700/ month Initially to encourage the female to join us as drivers we may have to give them bike/ scotty on rent 6 Scotty/ bike cost= $700*6 = $4200 Employees’ wages cost (Call center representative, for maintenance) = $260/ month Legal cost to set up partnership business= $350 Total fixed cost = $19070 Variable Cost Marketing of the business (Advertisements, online marketing) = $1400 Annual 5% sales taxes paid= $2500/ year Total Variable cost = $3900/ year It is important to note that these variable cost are depictive of 1 or 2 year of running the business. Later when our business will be strongly established our Marketing expenses will be less to be three- fourth = ($1400*3)/4 = $1050 Total variable cost will be= $3550 16 Operating leverage and its implications: Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue. A business that generates sales with a high gross margin and low variable costs has high operating leverage. Operating leverage = Fixed cost/ Total cost. = 19070/ 3550+19070 =84.3% Our business has high operating leverage, as we have initial high fixed cost but as business continues to grow variable cost increase but that is very small in comparison to fixed cost. It means we can cover our fixed cost by increasing our sales of services without increasing too much of the variable cost. Break-Even Chart and calculation Break Even Analysis in economics, business, and cost accounting refers to the point in which total cost and total revenue are equal. A breakeven point analysis is used to determine the number of units or dollars of revenue needed to cover total costs (fixed and variable costs). Formula for Break Even Analysis The formula for break-even analysis is as follows: Break even quantity = Fixed costs / (Sales price per unit – Variable cost per unit) If we apply this formula to our business model. Total number of vehicle in Lahore city= 50 Each vehicle cover target rides of= 7/ day Estimate Earnings per ride by driver= Pkr 200= $1.32 Total revenue earn by driver= 1.32*7 = $ 9.24 Total revenue earn by Company= $9.24 *0.20 = $ 1.848/ day Total revenue earn by company per month= 1.848*30*50= $ 2772/ month Total revenue per year= 2772*12= $332464 Break Even Quantity= 19070/332464-3550= 0.65 year= 7.7 month (8 months) Marketing plan Overall marketing strategy In order to be successful in the market by earning sufficient revenue and by gaining competitive advantage over the competitors it is important to see who are the customers that we are trying to cater are and what is the target market. After conducting an industry analysis using helpful framework of analysis an efficient marketing plan needs to be developed. Not only wisely selecting the target market is important in-fact it is important to keep in mind that what will actually attract the target customers both in the short run and the long run. 17 The segment that we are targeting are basically women and mostly the students and the working women. We already have strong internationally developed competitors in the market such as Uber and Careem. However the target market that we are targeting is the niche within the car service industry. As a successful strategy in order to attract the target customers be it the females we have introduced the female drivers as after the research we found out that woman drivers being our unique selling point will target a lot of customers as so many females don’t get the similar benefits as the men. Scotty rides are also one of the USP as men are offered bike services in the 3X cheaper price but now onwards there will be no such discrimination. The success of the business depends on the position that the product or service occupies in the minds of their consumers. Marketing tactics we are planning to follow: Advertisement: Extensive advertisement on YouTube, Facebook and Instagram pages. Also pamphlet in newspapers will be distributed Colleges and universities promotion will be done by conducting shows and direct marketing to students. Especially in only girls colleges and universities e.g. Kinnard World-of-mouth marketing: Cobranding with multiple brands can be done, especially brand relevant to girls ; pads brand, make-up brand 4 Ps of marketing Product, price, promotion and distribution Our product is the car service, a ride hailing app that connects the rider and the passenger everywhere and anywhere. Female drivers and scooty rides being the unique selling points offers great advantages for the females such as the cheaper rides on the scooties which was not previously available for the females whereas men enjoyed the advantage of the cheaper bike rides and females restricted themselves due to the male drivers. The promotional strategy that we are catering is advertising through the social media E.g. Instagram, Facebook, snapchat and YouTube. Word-of-mouth would be our key asset for marketing service, as satisfied customers would convey positives review of our services to their friends and family. There is not such distribution channel as the location depends on the need of the service need wise. Lahore is the destined location where we plan to operate initially. Sales Tactics A sales tactic is any action you take to put your sales strategy into action. It is how you deliver your message to consumers. For example, creating business brochures or a website and 18 generating leads are tactics. Whereas strategy explains your purpose, tactics show the process you use to move forward. Our strategy is too have 35% of customers in our target market of Lahore within one year. To achieve this strategic goal with need to develop certain sales tactics and work on it to accomplish them Firstly we need to appoint large number of riders on contract so that there is minimum weight time and customer spread positive views about our brand compare to other competitors Resolve customer complaints as quickly as possible, and make sure their problems don’t arise in future, in this way we can improve our services and attract more customers Listen patiently and calmly to sometime aggressive customer complaints, this helps in growth of company Offer discount on routes where there are minimum no. of rides are called. Loyal member cards, coupons are offered to customers those who often use the service Offer option so they may pay on cash as well on the card and can add balances in their accounts, Update your app as new ideas comes into mind, and promote innovative culture in your company so that employees good ideas could be put-in the business Design & Development plan. The purpose of the design and development plan section is to provide investors with a description of the service/product's design, chart its development within the context of production, marketing, and the company itself, and create a development budget that will enable the company to reach its goals Development status and tasks: A ride for HER is in its beginning development phase. After we have finalized the target market , customers we are going to serve , competitor analysis have been done and possible economics of the business ( profits, breakeven cost) has been found out, next step is to take initial steps to put the plan into action. Following bullet points need to be covered in development status and tasks What is the current status of your product, and what needs to be done before it is market ready? o Current status of service is that its idea has been properly grasped by the founders and their employees. Target market and customers have been found out. An application to be downloaded from IOS and android app store is in its completion stage o We have to now attract the female contractors those who will be registered under our brand name and provide ride service to our customers. A complete data base 19 of our contractors needs to be developed so that we can share that information with our customer as they call a ride for their safety and comfort. o Extensive marketing and promotion of our service needs to be done so that it becomes a house hold name in ride hailing app industry 1. 2. 3. 4. What is the estimated amount of time to complete each phase or task? (State the time in hours, days, or months, not elapsed time.) o If ever thing goes fine, no uncertain mishaps occur e.g. corona-Virus Lockdown, political unrest, it would take around 1 month and 10 days to be exact to complete the above mention tasks and make the service available for the customers. o Marketing of the service would be continuous process and will done on side-byside to reinforce the brand in the minds of the customer. Will you need any special engineering facilities or capital expenditures to complete your product? o We will be needing IT-engineers expertise to develop a user friendly app for our business. And train our employees to troubleshoot any technical issues if occur and to update the app to add-in new features according to the need and advances in the company. Tasks: Develop an user-friendly app and make it available for customer to download from IOS & google-play store Advertise for female riders contractors to offer their vehicle and ride services for our company customer. And sign contract with them Marketing of the business Start the business by acting as intermediator party connecting the customer and riders Challenges and Risks Any business when comes into operations it has to face multiple challenges and risks which includes threats from competitors, new entrants, risk of getting default bankrupts, what if expenses exceed than predicted sales. So a successful business need to anticipate the possible future threats and how to overcome those risks. Do you anticipate any problems in the design and development of your product? How will you overcome these? o First hurdle that needs to be overcome is to get our business marketed as soon as possible before the business idea is copied but big fishes in the market like uber careem. For that we need to extensively publicize our company on YouTube, Facebook pages, through word-of-mouth and in the future look to buy mega-tags 20 from google to appear on the top of search results of google if someone types for a ride service. Have you looked into patents, licenses, trademarks, or copyrights for your product? o Other Possible difficulties in the design and development of the plan is looking for the trademarks, logo for the app, name of the service that is unique and cannot be claimed to be copied from another brand. For that we need an extensive research on the google to check for unique name. After we have finalized the name we have to get it registered as partnership in SECP and get company name registered. “A ride for HER” was unique name that we have chosen for our business o Since it’s a unique idea in the history of Pakistan, we can also claim for a patent to protect our business from being copied for some years if possible. Product improvement and new products As it will take time to influence the psyche of the Pakistan society. Our target market of Lahore is advance in a way that we see many women riding the bikes on the roads. But leveraging on this change by utilizing it in a business ideas needs further influencing the target customers. Once the market becomes established, our next step will be to further enhance the business. From serving sooty ride to our customers we will serve them car service with female riders. Further if the business goes smoothly we may provide luxury car ride services to our customer. Projected Development costs Development cost of our business idea mainly comprise of 1) App development cost 3) renting out an office 2) marketing our business 3) salary cost of IT employees, employees for maintenance of offices. o As has been mentioned in economic analysis of the business initial fixed cost for development of the business is around Total fixed cost = $19070 o With added on marketing cost for the service before the launch of the service = $ 600 o Total cost for the product development equals to $19670 o But at the beginning founder (us) has to have the cash more than required amount with contingency of 20-30% to avoid any trouble in cash flow. Proprietary issues PATENT: Since our business idea is a unique in the history for Pakistan we are planning to apply for patent in the near future, so that we can solely work on this business idea and earn reasonable profit before “big fishes” like UBER. CAREEM take-on our idea. 21 TRADE MARKS: This is the logo and trade mark that will be reserved for our business. This logo will appear on the ride hailing Application of our company. We have to get our trade mark registered under The Trade Marks Registry (TMR) which is subsidiary of IPO (Intellectual property organization of Pakistan) Licenses: We must take license from the government and SECP to practice our business smoothly. Further we have to issue licenses for the drivers, who can work under our business name. To capture the license: Rider must be trained and have 2 to 3 years riding experience Must be female of age more than 21 years or so but less than 55. Rider must be properly weight not too much fat so that there are enough space for the customer to sit and bike doesn’t lose its balance, however there will not be such condition for the car drivers. Brand name We will register our company as partnership with brand name “A ride for HER” under partnership registration firm. We will sign a partnership deed, with 50-50% profit and loss sharing between partners Management team and company structure Management teams A management team plays an important role in the success of the business as it consists of a group of people who deal with the different departments within the company each one with a specific skill required for a specific requirements. The management teams vary from business to business. As for our business which is a transport service run through a car hailing app which connects the passengers with the riders would have a completely different set of management teams most important being the IT team as our business majorly depends on the technology. HER does not consist of Board of directors as it comprises of a partnership. A ride for HER was funded by the two partners which are as follows: 1) Hina Naveed (Founder) Current status: Masters of Business administration BSc. Business Administration with marketing Experience in dealing with business projects in family business 22 2) -Deals with the marketing department in HER Ume Laila jatoi (Founder) Current status: Masters of business administration Chemical Engineer Previously experienced in this field Dealt with marketing projects with Shaukat Khanam -Deals with operations department in HER The management team also includes: 3) Ibrahim Rauf Current status: BSc business administration with economics and finance Studied IT subjects in Alevels Experienced in graphic designing Dealt with marketing project with HR consultant PAK Has sufficient knowledge for app and web development -Deals with the App development which is the main component of our business, also deals with the customer feedback and queries. 4) Saanya Tanveer Current status: Master of business administration BSc. Business administration in finance Experienced in working with bank Al Falah and State Bank of Pakistan -Deals with the finance department in HER 5) Nasrum Nisar BSc. Business administration with Human resources Has experience in this field -Deals with the HR department in HER. Recruiting selection and signing the contract with the drivers comes under his duty. Our business majorly revolves around the availability of the drivers especially the signing contracts with female drivers. He will make sure that the females who volunteer as drivers as safe and do not face any difficulties. We have different headquarters located I different corners of the city and helplines are provides to both the drivers and the passengers booking the ride as their security matters for our business to be successful. Trackers are installed in every vehicle that we allow to enter the business as it is our top priority to make this business a safe platform for both employees and the customers The major decisions are made by Ms. Jatoi md Ms. Naveed such as those related to budgets, finalizing the new advertising strategies, Marketing campaigns, sponsorship, hiring hew drivers 23 and signing contracts with them. We personally deal with training of the drivers and taking driving tests and checking their licenses. We make sure that there are no legal barriers in the future. On the second level of the hierarchy come the heads of human resources, finance departments and the IT department run by Mr. Rauf, Ms. Tanker and Mr. Nisar respectively. They make sure that that the departments under them are running properly. There are no heads for operations and the marketing department as they are under the founders themselves. Then after all the heads come the supervisors that deal with different things that come under their departments. Human resource department deals with the drivers, their salaries, healthcare, shifts and long term or short term contracts. And finally at the bottom of the hierarchy come the maintenance workers e.g. sweepers, guards etc. Company structure Structure tells briefly who report to whom. Operation plan The operations section of your business plan is where you explain – in detail – you company's objectives, goals, procedures, and timeline. An operations plan is helpful for investors, but it's also helpful for you and employees because it pushes you to think about tactics and deadlines. The strategy plan deals with the mission of the business, what is your business plan to achieve, while an operational plan outlines the steps you'll take to complete your business mission. General approach to Operations Operation plan can be divided into two portions, “backstage” or behind the scene activities and ‘front stage” or what the customer see and experience. 24 Key back stage and key front-stage activities of our business idea are as follows. Behind the scene activities 1. Selecting our riders on contract 2. Developing and upgrading “ridehailing APP” 3. Relationship with our contractors and division of rides-charges between contractors and company 4. Relationship with our if-any future investors and government 5. Marketing of the business and to achieve goals of target no. rides 6. Relationship with suppliers of rides which company own and give to riders on contract Front stage (what the /riders experience) Experience of comfortable and inexpensive rides Customer service and 18 hours call center service to help solve the customer query Access to application: to call the ride, keep track of rider location, see driver profile and choose the driver and ride Head-offices visit Brochures, pamphlets and all advertisements published for marketing Feedback and ratings Business locations Deciding of the business location is very crucial for any business. Many business earn a great deal of the profits because of the prime location they had chosen and on the other hand many good business ideas couldn’t do well because of the location and target markets they have chosen are not appropriate. Prime reason for choosing the Lahore as first business location to operate business are as follows: Availability of the riders: Lahore is one of the major and busiest cities of the Pakistan. Mentality of Lahori people are broad compared to other cities as later have people with conserve mentality. We see many women riding bike and Scotties on roads, hence we believe we will not be in-short of riders if we operate our venture here. Availability of Customers: In Lahore, there are many universities, colleges and employment opportunities. Students and employees especially female comes from all over the Pakistan come to Lahore to pursue their studies and majority of them are hostelite and feel and immense need for an in-expensive and safe on demand transport services. I can claim 25 this with 100% percentage certainty because I can relate this being a hostelite for 6 years and counting. GPS services Lahore enjoys fast 3g and 4G internet services hence GPS runs smoothly and connection between rider and customers can be easily made and locations can be easily tracked. Concept of the business The ride-hailing app is already working in Lahore under many competitors e.g. uber careem. So launching this business would be easy in Lahore compare to other locations since marketing cost would be less. We plan to expand the business to other locations with similar facilities available like Karachi, Islamabad and Faisalabad as business grows. Facilities and Equipment This section of business plan is important as it tells about what are facilities and equipment needed for your business and how will you obtain these facilities , either buy it or lease it . Among the most crucial facilities needed for the business are 1) Space rented out to make the head-office of the company. Head-office must be located in the commercial area of the business. 2) Company owned Scotties bought from the suppliers are equipment’s 3) User friendly application is the most important weapon of the company, on the basis on it whole concept of the business has been established on. So company must develop the app and obtain the license of it to work smoothly without any legal issues. 4) As mentioned above, our riders will be outsourced, they will provide ride services to the customers and they will earn around 70% of the ride and 30% of the charges will be earned by the company. Hence our riders are not our employees, we are not bound to pay them salaries. They will earn more if they have more no. of rides per day and this will profit the business proportionally. 26 OVERALL STRUCTURE The Idea of a ride service solely for women conceived in the mind of Hina Naveed when she attended a cycling race in her old college. She conveyed the idea as a business concept to me and we formed a 50% partnership business. Following are important steps in establishing of business 1. Idea conceived 2. Formation of partnership in one month time 3. First and foremost important step was taken to give a contract of establishing of the app to an IT-tower Lahore. 4. Next step is to look for sponsors those can provide us scotty on discounted rates for that we contacted a friend of our who does business in imported scotty 5. Finally some vital step of advertisement for the female riders would be given 6. This will take us 4 months period to finalize the appropriate riders and to sign contract with them. 7. Company will start to launch business on Aug-2020 with a mega event organized. We plan an event of bike riding race for women. And girls will be given invitation through Facebook event page, colleges and school. Winner will be some prize. We will look for sponsors from brand like Always, make-up city to conduct the event. This will play the major role in company publicity 8. Finally hopefully company will provide its first ride service through APP on September. 27 Financial projections Financial projections use existing or estimated financial data to forecast your business’s future income and expenses. They often include different scenarios so you can see how changes to one aspect of your finances (such as higher sales or lower operating expenses) might affect your profitability. If you’re starting a business, financial projections help you plan your startup budget, assess when you can expect the business to become profitable, and set benchmarks for achieving financial goals. Startup business owners often wonder how to create financial projections for a business that doesn’t exist yet. Financial projections are always educated guesses. To make yours as accurate as possible, do your homework and get help. Use the information you unearthed in researching your business plan, such as statistics from industry associations, data from government sources, and financials from similar businesses. An accountant with experience in your industry can be useful in fine-tuning your financial projections. So can business advisors such as SCORE mentors. Sources and uses of funds statement Our business idea is being with small investments and main source of funding is done by founders themselves. Capital is being used in Making of the App Renting out an office Advertising the business ( looking for riders and customers both) Hiring management team and their salaries. Estimate cost for all these expenses is around $ 22620 for first year. Each of two partners will pull in 50% of total expense required. ASSUMPTION SHEETS All financial projections are based on business plan assumptions. It is important to consider some assumptions that might affect our financial statements in future and their number vary from what we have stated in the business plan. LIST OF ASSUMPTIONS: Sales and marketing Demand for the ride will rise with the changing mind-set of Lahore society More number of female riders Economy of the country remain stable No political unrest or any martial law 28 Increase in No. of college going and university going female students These above mentioned forecasted assumptions will have a very positive effect on the sales of our services hence increase company profitability. Inflation and foreign exchange No drastic change in inflation rate No pandemic disease will spread out Improvement in Pakistan economy is expected No recession is excepted , people will spend money Tax rates will stay constant, no too much taxation on transport industry Pro forma financial statements We prepared the financial statements of our future business using the data from the financial statements of our competitor brand. Income statement 29 Balance sheet 30 Statement of CASH FLOWS Ratio Analysis 31 APPENDICES https://propakistani.pk/2018/05/24/uber-is-raising-600-million-at-a-62-billion-valuation/ https://www.uber.com/en-PK/newsroom/uber-in-the-economy/ https://www.geo.tv/latest/232303-pakistan-is-one-of-ubers-fastest-growing-markets-ceo https://shopsy.pk/scooty http://www.incorporation.pk/partnership.html https://propakistani.pk/2019/06/28/sindh-adds-a-5-tax-on-careem-uber-and-other-ride-hailingservices/