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
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
