Go Ride Ltd
By Matthew Reed and Daniel Hall
Recipient: Ivo Chakarov and Geoff Leese
Abstract
This Report details our business idea and how we intend to set up our
business. Our company is called Go Ride Ltd and we are a bicycle rental
company based in Manchester. With recent closures of bus routes we
hope to give people in the Manchester area an alternative mode of
transport. This report runs through our idea, our business and financial
aims, our target market and our competitors. It also includes financial
documents including a Cash Flow Forecast, Profit and Loss account and
Break even analysis.
1
Contents
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 12
Page 18
Page 19
Page 29
Page 36
Page 54
Our Business Idea
Type Of Business
Our Business and Financial Goals
Our Unique Selling Proposition and Our Market
Our Customers - Customer Profile
Our Customers - What they will Value
Our Shop, Website, Service, Price and Location
Our Competitors
Purchasing Bicycles
SWOT analysis
Marketing Plan
The Risks and Opportunities Report
Appendices
Explanation of individual contribution to the group
Terms of Reference
The Purpose of this Report is to outline our business idea. It will detail
how we are going to set up our business, who we will target our
company at and our possible competitors. It will include financial
documentation to help us assess our business idea and how successful it
could be. The report will also specify the risks and opportunities that will
face our business when it is up and running. This is an important report,
as it will run through the setup of our new business.
2
Business Plan
Our business idea
The current state of the economy is affecting the bus services in Manchester
city centre. The constant rise of petrol prices has caused bus services to inflate
their prices and even close down some bus routes all together. One of these
cancelled bus routes is the route from the city centre to the university. It is a well
known fact that many students are living on a very small amount of money and
so the bus is the ideal way for many of them to travel cheaply and easily.
We feel that many students are going to be negatively affected by this service
closure and so we are proposing an alternative means of transport.
Baring in mind that students do not have a lot of spare cash our idea needed
to be low cost. We have come up with the idea of providing bicycles to rent on
an hourly/daily basis.
In the last few years it has been common knowledge that global warming is
on the increase. Bicycles are a clean and cheap mode of transport and we feel
this can only enhance our business’ success.
The Resources, Expertise and Equipment we need
Of course, we will need bicycles. We will be starting with a small number but
will be looking to increase our stock as our business progresses. The bicycles will
be mountain bikes as we feel that they are both versatile and desirable to our
target market. We will also be renting a small warehouse in Manchester to store
our stock and to use to front our business. We will need some help running the
business so we will be employing some casual labour during our opening hours.
In terms of expertise, we have both studied business studies and feel we have
the drive and knowledge to make our business succeed.
Loan
In order to inject more capital into our business, we have approached Barclays
Bank for a Loan. They have agreed that we can have a loan equal to the amount
we are investing. This will give us a combined capital of £4000. We will also be
looking at bringing in shareholders to bring in more capital to inject.
The date our business will start
We hope to have our business ready to go with all our finances in place by May
31st 2009.
3
Type of Business
When deciding on which type of business setup we would have we thought
of either a partnership or a public limited company.
A partnership seemed like a viable option due to their only being two people in
charge of the company. In a partnership their can be between two and twenty
partners and we could write up the contract and agree to its terms between
ourselves.
It is very easy to set up a partnership. We would use our own money to fund
the business and the responsibilities would be shared.
However there are disadvantages to this kind of business organisation.
Firstly, unlimited liability is a major concern. If our business does not succeed,
as a partnership, we would be liable for the company’s debts. This could mean loss
of our personal assets.
Secondly, if one of us gets into debt then the other is liable for that person’s
debt.
Finally, and quite a big disadvantage, is the lack of potential capital. Capital is
needed by every business to be successful and to expand. With a partnership, capital
is limited to whatever the two partners can input. With only a start up capital of
£2000, and no money from us, capital would be low.
As a result of our discussions and the disadvantages of the partnership
organisation, we have decided to become a Private Limited Company.
Many small, family businesses are Private Limited companies. They are
owned between two and fifty shareholders. The benefit of having shareholders is the
greater prospect of capital. Being a small business, with limited finance, starting
from scratch, capital is vital for us to expand and survive. People would buy our
shares and own part of the business. The money coming in from selling company
equity could be used to expand and stabilise our company. At the end of the year
however, these shareholders will want a reward for their investment and we would
need to pay out dividends.
As a Private Limited company we would have limited liability. This means that
if we fail to succeed with our business, the shareholders would only lose the money
they put into the business and not their personal assets. This would mean that
potential shareholders would be more likely to invest into our business.
Finally, the business would be safe from takeovers. This is because our shares
would not be up for sale to the general public. A small business like ours would not
welcome a takeover because we would lose everything we worked hard for to set up
the business. Also the new owner may decide to take the business into another
market or change our company values.
There are a couple of disadvantages to Private Limited companies. Firstly,
although there would be more capital invested, compared to a partnership, Capital is
still limited. Public Limited companies can have as many shareholders as they like to
input capital, but Private Limited companies can only have a maximum of fifty to
invest.
Secondly, with the size of the business and the smaller sums of capital
injected, it would be hard for us to achieve economies of scale.
4
On balance, we feel it is right to set our business up as a Private Limited
company and aim to bring shareholders on board to inject capital into our business.
> Business Values
Our short-term business goals
In the short-term we will be looking at promoting our new business and bringing in
our first customers. Although we may not make a good profit in the first few months
it is key that we make some sales to cover are initial setup costs.
Our short-term financial goals
Short term, our financial aims are to spend money promoting our business. We aim
to cover the costs of our initial start up and promotional expenses through making
sales.
Our long-term business goals are:
Long-term, our goal is to establish our company and to expand. Our goal is for the
business to be stable and we aim to increase our stock levels. With the increase in
our stock (bicycles and parts etc) we aim to increase our customer base, maybe
promoting our business to other audiences.
Our long-term financial goals are:
As our business matures we aim to be making a good profit. As we expand, our costs
will increase but with the growth we hope to increase our sales numbers. We would
like to, by this point, bring on board some more shareholders to finance our growth
and expand the company.
The unique selling Proposition of our service
From our research (see appendix 1) there is only one Bike Rental Company operating
in Manchester City centre at this moment in time. This means there won’t be too
much competition. It is always good to have some competition because it keeps you
on your toes and means that you’re always looking at ways to make your service
more appealing.
5
Our service will offer a better deal than this company however by offering
promotions to our target market. The company in question has no real offers to
entice consumers in. We hope to get consumers attention with good offers.
Our service will also be run by students and we feel this will give us an edge as
students will use and support our business ran by fellow students.
We hope to create a good website to boost our brand image and awareness. We are
living in a modern world and technology is vital to a successful business. Our target
audience are big users of the internet and will be more likely to use a company with
a good quality website.
The situation with the bus route closures and the need for cheap alternative
transport will give our business a good chance of success. The market we are aiming
at are typically very health conscious and so our service will have appeal.
> Our market
The number of customers available to our business
There are 34,458 students at Manchester University and there are a further 34,000
at Manchester Metropolitan University. So theoretically the number of customers
available to our business is around 64,000. Obviously the true number of customers
will be far less than this figure. We will be based near to Manchester Metropolitan
University so we foresee that most of our customers will come from that source. We
will therefore focus the majority of our promotion around that university. We will
look to expand our promotion as the company expands.
Our market is currently undergoing growth
Due to media attention regarding global warming, we feel that eco-friendly transport
is a growing market. People are becoming more aware of their carbon footprints and
are exploring new, environmentally friendly transport. Big companies are spending
huge amounts of money on developing expensive eco-friendly motor vehicles but in
our market, our target audience do not have the cash to be able to afford such
things. Therefore we will be offering a cheap, eco-friendly means of transport, that
students can easily afford.
6
The demand for our service
We are hoping that consumers will see our service as a facility they can use on a
regular basis. Whenever they travel around we hope that they will think of us and
hire one of our bikes to get to their destination.
Our Typical customer profile and their needs
Age: 18-25
Sex: Both
Income Bracket: Limited (student)
A cheap way to travel over short distances
Many students do not have an income and most live on their student grants and
loans. Therefore they do not have a lot of cash to spend on cars/taxis etc. Also with
the bus routes that have closed down, there are no bus routes operating to the city
centre and back.
A quick and reliable service
Young people tend to be impatient and will expect a service that will be quick and
reliable. They will not want to hang around waiting for their product or service. This
means that we must make sure the way in which our bikes are hired is quick and
hassle free.
Quality Goods
Many young people are very concerned with how they look. They will not want to be
seen on an old fashioned, poorly made bicycle for example. We cannot afford top of
the range bikes but it’s important that we find bikes that are of a good quality, look
good and are cheap.
How would our typical customers tend to buy products and
services?
We feel that most of our sales will be made in cash. Most of our sales will be in the
region of £20 or less so we would assume that our customer will use cash rather
than credit/debit cards. We will have a chip and pin service in place however so that
our customers will not be let down if they don’t have any cash and need a bike. This
will mean more expense but it will help our brand image if we give our customers a
good, reliable service.
Customers will use our service for
With the closure of a few major bus routes in the city we hope that our customers
will use our service as an alternative to the buses. We feel this will bring in most of
our customers but we hope we will bring in other customers for other reasons.
7
These may be customers hiring them for recreational use. But mainly our customers
will use our service to get around the city.
What they will value most about our service
We think that they will value our customer service the most. Many of our customers
will be students and we feel they will appreciate that the business was set up and is
ran by fellow students.
They will also appreciate that our service will offer good quality bikes to hire for very
little money.
Our store will be easy to get to as it is going to be situated in the city centre and very
close to the Manchester Metropolitan University.
Finally we think they will appreciate the speed of the service. It will only take a few
minutes before they can ride out and have a mode of transport for however long
they like.
What our customers will value but don’t really get from
existing businesses in the area
From our research (see appendices) we have found that there is only one other bike
hire company in Manchester City Centre. This means that we have competition and
therefore need to have something that stands us out as the better company.
Bicycle boutique doesn’t have any promotions or special offers. One way in which
we can stand out is to offer our customers offers and promotions. Maybe buy 2 days
of hire and get the third free or something along those lines.
Also Bicycle boutique has not promoted itself as well as it could have done, so our
aim is to come into the market with a really good marketing campaign. We hope by
doing this we will get good brand awareness and step ahead of our competition.
Price is another factor. If we can get our prices lower than that of bicycle boutique
and keep the same quality of service then that will be another edge we have over
them.
Our business will also offer a quick and friendly service focusing on the needs of
students. At the moment our competition seems to be aiming its service at day
trippers. However our service will be an answer to the more long term issue of
student transport. We will be looking at hiring bikes so that students have a more
reliable service for their transport needs- an alternative to buses and cars.
8
Our shop
Our shop will be situated close to the Manchester Metropolitan University. We feel
that this will be the best place to set up our shop as our main customers will be
students. The shop will be close to the city centre as well therefore giving us the
opportunity to expand our customer base to more markets other than the students.
Above is the floor plan we have created for our shop.
9
Our Website
The internet is one of the most powerful marketing tools there is now a days. The
majority of people in the country have access to it and many use it regularly. Having
a good quality website will help promote our company. The website will have our
company details, our offers and contact/location details. We will be designing the
website ourselves as we have experience from our A Levels. This will also save us
money. See appendix NUMBER
Buying our service will be a repeat purchase
We hope that once a customer has used our service they will see it as a regular
answer to their transport needs. Our service is offering an alternative to buses and
taxis so we hope that whenever our consumers need to get somewhere they will
come to us and hire one of our bikes.
The after-sales service they will expect from us
Our customers will expect a few things from us after they have hired a bike. They will
expect that our shop will be open during the day as we specify in our agreement so
that they can return their hired bike. This means that we or a member of staff need
to be at the shop during the specified hours.
Customers will also expect that the bikes they are hiring are in good condition so
when a bike is returned by a customer it is essential for us to check the bike over and
clean it if it is dirty.
Price
Our main competitors (bicycle Boutique) currently charge £8 for half a day and £15
for a full day (see appendix 1). To be competitive we need to price our service
similarly. However we also need to bear in mind our profits so it can’t be too low.
After some discussion and looking at our questionnaire results (see appendix 10) we
have come up with the following. Our half day rate will be £7.50 and our full day rate
will be £14. These prices are competitive with bicycle boutique and they also will
give us enough of a profit to be successful.
10
The Location
Are shop will be situated a couple of minutes from Manchester Metropolitan
University. This is so that we can be close to our target market and give them easy
access to our service. Since the closure of the bus service from the university to the
city centre we feel that students will be looking for an alternative mode of transport
to get around the city.
The advantage of this location is that our target market can access our service with
ease. As we are not actually on the university campus we can still appeal to other
markets as well. But we will be focusing on the student market.
See appendix 11 for details on how we chose the area.
11
Purchasing Bicycles
After researching on the internet and enquiring in a local bicycle shop every option
we had was an expensive one, giving us a problem when aiming to reach a profit as
soon as possible. Our business plan was to utilise the cheapest good quality bikes we
could find and rent them for a competitive price.
After gathering much information we decided that the best idea would be to buy our
stock from the mass retailer ‘Toys R Us’
Above is the male version of the bicycle we would be purchasing at £79.99 each. To
begin with we would purchase 8of these bikes. Although this seems like a low
amount we feel that it would be adequate amounts to kick start our business in its
first year.
£79.99 x 8 = £639.92
£639.92 would be the price of 8 of the bikes intended for our male customers.
12
We would also purchase 8 bicycles for our women customers which would give us a
total of 16 bikes.
£79.99 x 8 = £639.92
£639.92 would be the price of 8 of the bikes intended for our male customers.
Accumulating the 16 bikes will cost the partnership £639.92+£639.92= £1279.84
£1279.84
Within the first year of GO RIDE we would focus on drumming up demand for our
bikes and would start to buy more bicycles as profits and demand rises.
13
As helmets are a legal requirement we will provide our customers with a standard
sized helmet which can be adjusted to fit the head, we have found that the cycle
store offers the best quality helmets which would provide the customers with a
good level of safety while riding. We would require one helmet per bike so in total
would require 16 helmets which we could order from this website (as shown
above)
£7.34 *16= £117.44
Again another requirement for bicycles is Lights which would aid in visibility
which is dependent on weather conditions and time of day. We have chosen
to go for LED lights which at first are more expensive than normal lights,
however hoping to future proof outgoings we realise that LED’s batteries last
longer. The purchase of these types of lights will help in cutting costs and also
aid in our environmental duty, stopping us from using and throwing away
more batteries than necessary.
£5.81*16=£92.96
14
Again the front lights are crucial for
the safety of our customers.
£5.58*16=£89.28
Total expenditures
£1279.84
£117.44
£92.96
£89.28
£1579.52
With most of our original budget being spent on the equipment we would expect a
deposit to be placed down when the equipment is rented out. As well as the stock
we would initially buy we would look to expand the range of Bicycles we would rent
out.
Another way of expanding the original business idea would be to sell or rent out
further bicycle accessories, however we would have to do so when the business is in
clear profit and it makes business sense to do so.
15
Competitors
At this point in time there is one bike hire company operating in Manchester city
centre. We need to compare our business with theirs. There are companies selling
bikes that we should also look at.
Our Business
Evans Cycles
Bicycle Boutique
Product/Service
Bicycles to hire
Price
£7.50 for half a
day, £14 for a
full day
“The UK’s largest
quality cycle retailer”.
This company sells
quality bicycles.
Top of the range
bicycles from £136.99
to £7,094.99
Availability
Limited
availability
Bicycles to hire, new
and 2nd hand bikes
for sale, servicing,
spares and repairs
1/2 day = £8 single,
£16 tandem. Full day
= £15 single, £30
tandem
Limited availability
Reputation
N/A (We have
not started our
business yet so
consumers are
unaware of our
business)
Delivery
We will have a
website but will
be selling via
our shop in
Manchester
Option of buying instore or online with
home delivery.
Location
Close to
Manchester
Metropolitan
University
20% off for
students. 3 for 2
on full day
rentals.
Close to Manchester
city centre. Other
stores nationwide
Special offers
UK wide company.
Have hundreds of bikes
to choose from. They
have stores and
websites.
They have a nation
wide reputation of
quality service and
products.
Ken Foster’s
Cycle Logic
Sells bicycles
Prices start
around the
£200 mark.
Good number
of bikes in
stock
Small company
doesn’t spend a lot
on promotion. Brand
awareness is low
Good
reputation.
Not very
widely known
though-small
family
business.
They have a website, Home delivery
but not a very
available as
advanced one, their well as sales
main focus is selling made from
over the phone and
their shop in
in person.
Manchester.
5 minutes from
Manchester
Manchester city
centre
Ride2work (see
None
appendix 2) - they have
introduced a scheme
that means people can
get up to 50% off new
bikes if they buy
through their
companies. This is to
encourage healthy
Have a 25%
sale on
bicycles at the
moment.
16
After-sales
service
Bikes are
checked and
cleaned
living. It is backed by a
government scheme
called the green
transport plan.
They offer bike
servicing.
They offer bike
servicing
Have received
a good review
regarding their
after service –
“They have
good after sales
service as well,
offering a
service on your
new bike after
the first 2
months to make
sure it's still at
it's best” (from
Google maps
see appendix 3)
Strengths
The company is
run by students
and the
businesses main
target market is
students.
Promotes
fitness.
No real direct
competitors at
this point in the
area.
Good business
theory
knowledge.
Their website has been
voted within the top 10
of sports and fitness
websites in 2006 &
2007.
Ride2work scheme.
Huge range of bikes for
sale.
Has a large distribution
centre.
Offer a wide range
Good friendly
of services-hire, buy, service. Good
servicing etc.
stock levels.
Located in city
centre. They seem to
be going down the
day trip roadoffering packed
lunches and cycle
route maps.
Weaknesses
Not a lot of
capital at this
moment in time.
Little
experience.
Have lost their
personal/friendly
service due to their
size
Poor website.
Limited availability.
Poor brand
awareness.
Unique selling
proposition
Special offers
for target
market.
Nationwide company
with a huge range of
bicycles.
At this point- the
only bike hire
company in
Manchester
Small family
business.
Have not
promoted
their business
very well.
No real unique
selling pointjust a normal
small, family
run bike shop
17
Promotion/sales
20% off for
students. 3 for 2
on full day
rentals.
20% of servicing.
Regular sales and
ride2work savings.
No sales or
promotions
25% sale on at
the moment
Swot Analysis
Swot analysis is a good way to assess the position that a business is in. We have
assessed our business and produced this SWOT analysis. It covers our strengths and
weaknesses and the opportunities and threats that face our company.
From our business plan we have been able to assess our strengths and weaknesses.
The opportunities and threats sections will be covered in more detail in the risks and
opportunities report.
STRENGTHS






Cycling is a good form of exercise
and many people like to keep fit
Only one real competitor in the
area
Two big international universities
with thousands of young people
to target our business at
Our company is run by students
and aimed at students
Bus routes in the area have been
lost
Good shop in a good location for
only £200 a month
OPPORTUNITIES




The internet will be a good way to
promote
Local cycling events and charity
events will boost our reputation
Manchester has some nice
countryside that we can use to
bring customers in
Possibility to bring in investors to
expand our company
WEAKNESSES




We don’t have a lot of capital to
inject into our business to start
with
Our one competitor is established
with a lot of experience in the
market
It is the first time we have run a
business
Our prices have to be low
because our target market have a
low income
THREATS



One established competitor
Buses/taxis are another way for
people to get around
Loss of staff due to illness could
cause problems
18
Marketing Plan
The Market
Due to the recession the amount of money people have to spend is very limited.
Taking this into account we have figured that this particular factor may act as a
positive as our business could offer a cheap alternative to travelling around
Manchester. Our business will focus on giving students cheap alternatives to public
transport, parking and driving. Another driving force that will be of benefit to our
business is the growing concern over global warming, we would aim to raise peoples
awareness of the issue and in urge them to start using bicycles on a regular basis and
perhaps take part in charity cycle events using our bikes to participate.
Our intended audience will primarily be young university students; however we
would look to keeping our audience as wide as possible and hope to attract people
of any ages and any socio economic groups to rent our bikes. The group of people
we are primarily aiming our marketing plan at usually spend on average around £15
per week on transport. We would have to compete with public transport prices in
order to make our business a success.
Initial Research
To kick start our idea for the business we thought it would be a good idea to gain
professional opinion and advice. We chose to visit a bicycle business located in
Heywood, a small town just outside of Manchester. The owner made it clear that
special offers would be the way to attract new customers, deals such as three for
two deals and half price off after renting once. These techniques are used to bring
customers back to the shop more than once, gaining a regular cliental
We asked questions such as “what insurance would be needed for a company like
ours” He answered that we may not need to have full insurance for users as simply
getting them to sign a disclaimer would be an appropriate cause of action to prevent
spiralling costs.
In terms of finding good quality bikes for the right price the owner advised us of a
website which listed all the bicycle suppliers and in price order.
As well as visiting a local bike shop we also conducted a survey where we asked
various students (our intended customers) to fill out a questionnaire that we had
created so we can see what answers a small group of people would give. There
answers would indicate what we would need to do to gear the business towards
there needs.
19
Above is an example of a questionnaire we had filled in. More are scanned in at
appendix 14. (Refer to appendix 14)
We gave 20 students/ people aged 18-24 the questionnaire. 60% of them lived close
enough to consider cycling to university/work on a daily basis.
The people who lived further than 4 miles away tended to say they wouldn’t
consider cycling to university/work as it is too far.
20
Competition analysis
As Manchester is one of biggest and most populated areas in the United Kingdom
there are many forms of competition which range from public transport, car leases
and other bicycle rental shops. These competitors can be classified as different
types of competitors, for example other bicycle rental shops would be our direct
competitors whereas public transport and other forms of transport rental could be
regarded as our indirect competitors. There are currently over 40 bicycle shops
which offer rental and/or purchasing of bicycles.
Competitors
Direct competitors
At this point in time there is one bike hire company operating in Manchester city
centre. We need to compare our business with theirs. There are companies that are
selling bikes that we should also look at.
Our Business
Evans Cycles
Bicycle Boutique
Product/Service
Bicycles to hire
Price
£7.50 for half a
day, £14 for a
full day
“The UK’s largest
quality cycle retailer”.
This company sells
quality bicycles.
Top of the range
bicycles from £136.99
to £7,094.99 (refer to
appendix 15)
Availability
Limited
availability
Bicycles to hire, new
and 2nd hand bikes
for sale, servicing,
spares and repairs
1/2 day = £8 single,
£16 tandem. Full day
= £15 single, £30
tandem (refer to
appendix 1)
Limited availability
Reputation
N/A (We have
not started our
business yet so
consumers are
unaware of our
business)
We will have a
website but will
be selling via
our shop in
Manchester
Delivery
Location
Close to
Manchester
UK wide company.
Have hundreds of bikes
to choose from. They
have stores and
websites.
They have a nation
wide reputation of
quality service and
products.
Option of buying instore or online with
home delivery.
Small company
doesn’t spend a lot
on promotion. Brand
awareness is low
They have a website,
but not a very
advanced one, their
main focus is selling
over the phone and
in person. (refer to
appendix 1)
Close to Manchester
5 minutes from
city centre. Other stores Manchester city
Ken Foster’s
Cycle Logic
Sells bicycles
Prices start
around the
£200 mark.
Good number
of bikes in
stock
Good
reputation. Not
very widely
known thoughsmall family
business.
Home delivery
available as
well as sales
made from
their shop in
Manchester.
Manchester
21
Special offers
After-sales
service
Metropolitan
University
20% off for
students. 3 for 2
on full day
rentals.
Bikes are
checked and
cleaned
nationwide
centre
Ride2work (see
appendix) - they have
introduced a scheme
that means people can
get up to 50% off new
bikes if they buy
through their
companies. This is to
encourage healthy
living. It is backed by a
government scheme
called the green
transport plan.
They offer bike
servicing.
None
Have a 25%
sale on
bicycles at the
moment.
They offer bike
servicing
Have received
a good review
regarding their
after service –
“They have
good after sales
service as well,
offering a
service on your
new bike after
the first 2
months to make
sure it's still at
it's best” (from
Google maps
see appendix)
Strengths
The company is
run by students
and the
businesses main
target market is
students.
Promotes
fitness.
No real direct
competitors at
this point in the
area.
Good business
theory
knowledge.
Their website has been
voted within the top 10
of sports and fitness
websites in 2006 &
2007.
Ride2work scheme.
Huge range of bikes for
sale.
Has a large distribution
centre.
Offer a wide range
of services-hire, buy,
servicing etc.
Located in city
centre. They seem to
be going down the
day trip roadoffering packed
lunches and cycle
route maps.
Good friendly
service. Good
stock levels.
22
Weaknesses
Not a lot of
Have lost their
capital at this
personal/friendly
moment in time. service due to their size
Little
experience.
Poor website.
Limited availability.
Poor brand
awareness.
Unique selling
proposition
Special offers
for target
market.
Nationwide company
with a huge range of
bicycles.
At this point- the
only bike hire
company in
Manchester
Promotion/sales
20% off for
students. 3 for 2
on full day
rentals.
20% of servicing.
Regular sales and
ride2work savings.
No sales or
promotions
Small family
business.
Have not
promoted their
business very
well.
No real unique
selling pointjust a normal
small, family
run bike shop
25% sale on at
the moment
Bicycle boutique acts as a massive threat to our business, the way to compete with
this type of competitor is to gain more publicity and undercut their prices. Despite
being placed nearby a university the actual shop is tucked away in a backstreet and is
not easy to find if people are not familiar with the area whereas ours is located
centrally and in clear view which gives us an advantage from that perspective.
Indirect competitors
Our indirect competitors are any other travel service that is on offer, for example the
magic bus service that runs through central Manchester or the first bus service which
runs nationwide. Our idea would be to attract students who use the bus to have a
cheaper form of travel for and a cheap way of keeping fit.
Our Business
Bicycles to hire
First buses
Provides a regular bus
service (transport)
Price
£7.50 for half a
day, £14 for a
full day
Availability
Limited
availability
Reputation
N/A (We have
70p per journey for
students.
Average of £2.50 per
journey for non
students
UK wide company.
Have many buses
which travel to various
locations around
Manchester
Reputation of
Product/Service
Magic Buses
Provides a regular
bus service
(transport) direct to
universities
80p per journey for
students
Not as regular as
first buses but travel
direct to universities.
(refer to appendix 5)
Usually on time but
23
Location
Special offers
After-sales
service
Strengths
not started our
business yet so
consumers are
unaware of our
business)
Close to
Manchester
Metropolitan
University (See
appendix 2)
20% off for
students. 3 for 2
on full day
rentals.
Bikes are
checked and
cleaned
The company is
run by students
and the
businesses main
target market is
students.
Promotes
fitness.
No real direct
competitors at
this point in the
area.
Good business
theory
knowledge.
providing a nation wide always full and often
service but is often
has to drive past
ladled as unreliable.
people waiting for
the bus. (small
buses)
Operates in and around Operates centrally
Manchester city centre. and direct to
universities
£90 pound monthly
pass which allows
travel using any first
bus service
(refer to appendix 6)
N/A.
None
N/A
Large company and has Bus service
many services available specifically for
for people of all ages
students attending
Manchester
university and takes
them right outside
the main building.
Convenient for
students
Weaknesses
Not a lot of
Famous for Unreliable
capital at this
service which is often
moment in time. late.
Little
experience.
Limited service in
comparison to first
bus service.
Unique selling
proposition
Special offers
for target
market.
Offers direct service
to university
Nationwide company
24
Promotion/sales
20% off for
students. 3 for 2
on full day
rentals.
Price Plan of competitors
Our direct competitors vary in prices; many of them sell bikes rather than rent bikes
out. The cost of buying a bike can range from £150 to £2000 Per bicycle (refer to
appendix 15). (These prices are correct after research undertaken on the 1 ST APRIL
09.) Bicycle Boutique is the only company local to our business that rents out
bicycles ranging from £8 to £30 per bike; this includes tandem bikes. All the
competitors of ‘Go Ride’ offer competitive prices with a very good standard of
bicycles for sale.
Go ride’s marketing strategy involves offering mainly students a friendly service run
by fellow students with reasonable pricing located centrally in Manchester, making
the service convenient for the needs. Our rental company will offer competitive
prices which will be cheaper than our main competitor. The quality of our bicycles
will not be compromised by the cheaper price.
Market share
Within the first year of business Go Ride will focus on breaking even however the
long term goals of the business is to access as much of the market share as possible
which would result in substantial profits. The aim of our business is to maximise all
opportunities to create a profit. In terms of the national bike rental market we will
only be looking at securing a few percent of the market. However in the Manchester
area we hope to obtain a third of the bike rental market by two years.
Why Manchester?
Manchester was an obvious choice for our business not just because it is one of the
commercial cities in the UK but because of the masses of opportunities to expand
our profits and exceed any expected market share we first thought was achievable.
There is a massive student population within central Manchester, with two
universities less than 4 miles apart where we will base our business. With the city of
Manchester council looking to cut down on pollution levels and prevent increasing
congestion, there are many new cycle routes being built. As well as the new routes
opening up, our business would benefit from a possible low interest funding from
the council.
25
The area in which we will be based is populated primarily by young professionals and
students which will be our target audience. Our central position would also allow us
to tap into the tourism market which is thriving as the city is home to the Arndale
shopping centre and massive bicycle events which take place every year. Events such
as Manchester – Blackpool, Manchester to Liverpool and other similar events will be
huge catalysts in the success of our business.
Promotional plan
For any business to be successful a promotional plan will have to be in place to allow
word to spread about the businesses services. Initially we plan to spread the word
about our business by posting leaflets at the university and to the university dorms
and at the fresher fair for the university.
To focus on the relationship we have with our intended customers we will set up a
stall at the university fresher fair attracting people to our product with free energy
drinks given to people who are interested. We would also offer a chance to sign up
to a charity cycle to Blackpool using our bikes at a discount price. This would be a
good way of attracting our first lot of business and wouldn’t end up costing a huge
amount of money.
Other than this initial drive for publicity we would also take part in advertising to
raise the profile for our business.
Advertising
Our advertising will aim to inform the potential customers of the service we provide.
It will also inform the people that the business aims to ensure the best in customer
service, the cheapest prices and good quality bikes.
In order to maximise the market penetration we would advertise in local free
newspapers and online websites which would ensure that a large number of local
people would hear about our business. Rather than waste money on large scale
advertising the company would be better focusing on free advertising on websites
such as Facebook and twitter.
Main advertising features
 Cheaper than competitors

Run by students for the students

A range of bicycles available to rent
26
Costs of marketing
Below are some details regarding the prices of various promotional activities we
have looked in to. We hope to use some of these to create some brand awareness.

Newspaper advertisement- Manchester Met Daily paper (given away free all
across Manchester)
Cost £200 for half a page
Duration: One day

Leaflets
A3 Glossy paper
300 copies
70p each

Printed low quality leaflets
500 copies
10p each

Internet advertising
Facebook (creating an account for the business informing other users of
events and special offers)
£0
Continues publication

Internet advertising
goriderental.com
£20 per two years
Publicity
One way to raise the profile of the business without spending any money is to entice
as many students as possible to take part in various charity events; this would get
the business a good reputation and most probably get the business mentioned in
bicycle magazines or publications for no cost.
The website
Websites are now a crucial part of any business. We intend to make a simple but
attractive website which is user friendly. Having a user friendly website will help
attract potential new customers and potentially increase our market size. Making a
27
website look professional like we intend to, would show that we are a forward
thinking company with the customer in mind at all times. Websites not only allow
anyone in the world to find the information about the business but they are online
24/7 unless there are technical difficulties. Our website will be primarily an easy
access term of reference with all our contact details available online as well as tariffs
and biking events which are taking place.
Picture of
Manchester
MET
University
Easy
access
links to
crucial
data to
drum
up
busines
s
Using publisher we designed a draft for the homepage of our business GoRide
The website we would set up could be called goriderental.com this webpage would
cost a two yearly fee of £19.98 but offers us an easy to remember name for our
website domain.
Conclusion
Despite the tough market conditions the UK is currently suffering our business model
is based around people saving money and getting fit for a low price. We feel that
with our business model we could go forward and generate a profitable company.
Our business would be based in Manchester located not far from the universities
Manchester Met and Manchester University; this ideal position would allow us to be
in full reach of our intended, young, consumer.
28
Our initial research included visiting other bicycle companies and seeing what they
had to offer. We also developed a questionnaire to help us gauge a small group of
our target audience. The group we asked came back with results which gave us the
confidence our business could be a success if marketed and publicised in the right
way.
One problem we would have in creating a new business would be competing with
existing already established businesses like Evans cycles and bicycle boutique. To
establish ourselves against the competition we will have to use all the publicity and
advertising tools we can afford for example the use of Facebook.com and local
newspapers.
Using these marketing tools we would hope to gain a third of the market within the
first two years of operation. If this number was achieved our business would be
deemed profitable and a success.
For a full map of the Manchester area and its cycle lanes see (appendix 16)
29