Thursday, March 13, 2008

Business Proposal

PRESTON MILES PER HOURPreston Miles Per Hour is a fun, friendly and easy to use car hire scheme for UCLAN students. We will rent out cars by the hour rather than the day, making it a cost attractive alternative to public transport, taking a taxi or staying home studying!

HOW WILL IT WORK?
Before renting a car for the first time, students will have to pre-register at least seven days in advance so we can carry out necessary checks regarding insurance, motoring convictions, etc. There will be a membership fee to join the scheme – either £25 (non refundable) or £100 (refundable after six months). Membership fees will provide working capital to help cover start up costs such as the purchase of insurance, renting of parking facilities, etc.

Advance bookings will be taken by telephone or text initially. As the business grows we will develop an online booking service. Payment will be taken by credit or debit card at time of booking, minimising our bad debts.

Cars will be bookable for a minimum of two and a maximum of twenty four hours. Our pricing structure will be such that renting a car for a whole day may be cheaper with a normal car hire company.

Cars will be available from parking bays in a secure town centre location (to be decided) and should be returned to the same place. The cost of fuel is included in the rental price.

The scheme will only be open to UCLAN students. We will not rent cars to students with motoring convictions or refused insurance.

START UP FUNDING
Funding for the business will come from four main sources:

a) Start up capital of £10,000
b) bank loan of £10,000
c) start up grants from Preston City Council/Lancashire County Council
d) membership fees paid by club members.

CAPITAL OUTLAY
The primary up front costs will be vehicle leasing and renting parking spaces.

REVENUE COSTS
Revenue costs will be:

a) fuel
b) staff costs associated with bookings/payments/queries
c) daily cleaning of vehicles
d) insurance
e) maintenance/repairs
f) breakdown cover.

MAINTENANCE/SERVICING OF VEHICLES
To maximise our return, we will clean and refuel vehicles during the period of least demand (between 6am and 8am).

VEHICLE DOWNTIME
There will be a 30 minute slot between each vehicle being booked in and being booked out again. This will allow for overruns because of delays due to traffic, etc. (although vehicles returned late will incur a charge equivalent to 15 minutes’ rental) and to deal with any minor repairs or cleaning issues.

PRICING STRUCTURE
To be decided, but we anticipate charging differential rates dependant on the time of day.

SWOT ANALYSIS
We have carried out a SWOT analysis .

  • STRENGTHS

    Unique opportunity
    No obvious competitor
    Cheaper than car hire or taxi
    Student friendly
    Low initial investment
    Can build business based on demand and scale up accordingly
    Link with UCLAN
  • WEAKNESSES

    Need critical mass
    Need to manage demand
    Insurance issues for under 25s
    Insurance issues for non UK students
    Insurance cost
    Need central parking/secure storage
    Demand not assessed
    Ongoing maintenance/build in down time
    Appetite for ‘membership’ idea unknown
    Can’t just ‘walk up and go’/need to pre book
    Will need phone based bookings to begin with
    Need to exclude those with motoring convictions

  • OPPORTUNITIES

    Book online
    Driving school link/referrals
    Link with local garage?
    Green image (use hybrid cars)
    UCLAN for marketing
    Advertising on cars/sponsorship
    Fun/friendly image – use Smart cars, Beetles, etc.
    Link with UCLAN
    Expansion to other towns

  • THREATS

    Public transport
    Existing car hire companies
    Lack of demand
    Weather conditions could impact bookings
    Out of term time/seasonal lows
    Car crashes/damage
    Theft of cars/sat navs
    Rising/fluctuating fuel costs
    Fuel duty escalator

SHORT TERM GROWTH POTENTIAL
Our business model assumes four cars available from Day 1. Subject to demand we would be able to increase the number of available vehicles at short notice through the acquisition or leasing of additional vehicles as necessary.

MEDIUM TERM GROWTH POTENTIAL
Subject to demand, this business model could be replicated or franchised in other university towns.




UNIVERSITY OF CENTRAL LANCASHIRE

LANCASHIRE BUSINESS SCHOOL

VENTURING & BUSINESS DEVELOPMENT


Module: MD4048

Tutors: Bob Ritchie & Wing Lam

Students: Driss Boussif
Siamak Esfehanian
Richard Houghton
Shweta Kharate


Submission date: 7th March 2008

Sunday, March 9, 2008