INTERNATIONAL INSTITUTE OF PLANNING & MANAGEMENT

A business plan on carvenience:Car rental firm

SUBMITTED TOPROFF. HARSHA

Submitted By

RAHUL GUPTAVARUN GOTI

TARUN.C

Contents

1.0 Concept testing2.0 Executive Summary

2.1 Objectives2.2 Mission2.3 Keys to Success2.4 Vision2.5 Company Summary

2.5.1 Company Ownership2.5.2 Start-Up Plan2.5.3 Company Locations and Facilities

3.0 Services3.1 service Description3.2 Sales Literature3.3 Future services

4.0 Market Planning4.1 Current Market Situation4.2 SWOT Analysis4.3 Objectives4.4 Market Trends & Growth4.5 Market Needs4.6 Market Strategy

4.6.1 Target Market4.6.2 Positioning4.6.3 Location4.6.4 Market Communication4.6.5 Market Research & Development4.6.6 Sales forecast

4.7 Market Programs5.0 Management Summary

6.1 Organizational Structure

6.2 Personnel Plan

7.0 Financial Plan7.1 Important Assumptions7.2 Key Financial Indicators7.3 7.4 Projected Profit and Loss7.5 7.6 Projected Balance Sheet7.7 Business Ratios7.8 Long-Term PLAN

Questionnaire for Concept Testing

1. Do you hire vehicles for all levels of executives?2. While hiring cars what would you give priority to cost or comforts

(quality service)?3. How frequently you rent a car

Occasionally Frequently

4. How do you decide from whom to rent a car?5. Which mode of payment you prefer?

Cash Credit

6. Which class of cars do you prefer to hire?7. Do you hire cars only for local use or even for long distance?8. Are you satisfied by the services provided by your current hirer? If

yes, why? And if not why?9. Do you prefer to hire Air-conditioned cars or non Air-conditioned

cars?10.For what purpose you rent a car

Test Results

In this survey we visited various corporate houses in Bandra Kurla Comlex like Workhardt, ICICI Bank, Bank Of Baroda,etc. In Andheri we visited Proctor & Gamble, Glaxo India an many companies in Seepz.

The outcome o the survey was positive for us. We found that there is a demand in corporate circle for hiring cars. They usually don’t prefer to have their own cars for all the executives. Instead they hire cars as that is more economical for them.

We even found out the choice of cars, which they prefer to hire, which gave us an idea of the composition of cars we should have. The corporate give more importance to quality service than cost but the cost should be according to the market rate.

They don’t mind trying a new rental agency if the service offered is better than the current service provider.

Based on the test results we conclude that starting a car rental agency is a feasible idea and could lead to a successful business.

Executive Summary

Carvenience Provides Corporate Clients with A+ Service!

No matter where your business takes you, the agencies of Carvenience will be there to take care of all of your needs! Carvenience welcomes all corporate clients with excellent rates, superb quality, and service you can count on each and every visit. Whenever you need a compact car for a quick day of efficient business traveling, the car rentals from Carvenience are sure to provide an excellent drive during your corporate stay! We aim to take care of corporate clients to make their business trip as smooth and as enjoyable as possible.

Corporate Clients

By definition, Carvenience believes that corporate clients are those drivers whose car rental is meant for the purpose of business needs or used during a period of corporate travel. This means that if you are traveling to a destination on business and require a rental car to drive when you get there, if you are staying in your hometown but need a car rental for corporate needs during the day, or if you are booking car rentals for visiting clients or employees, Carvenience considers its customers as corporate client! If business is involved, whether it be for thier private company or for a large national firm, we can combine the Carvenience expertise and guarantee to complement thier corporate driving needs.

We know the specific needs of corporate drivers and what they want - a quality car rental, fast and efficient service, friendly staff, and special corporate rates.

Objective To provide friendly and reliable customer service in order to establish a loyal customer base. To make the customer aware that hiring a car is the

next best option to buy a car. To effectively promote our service to a wide range of corporates.

Mission

A value driven customer experience that defines the character of the company through friendly experience, outstanding service and excellent value.

Keys to Success

Optimum utilization of resources Customer satisfaction Controlling costs

Vision

Our vision is to be a nationwide market share leader in each of the markets we serve.

We will try to attain this vision by providing our customers cost effective and quality service. We will add value to these services by providing legendary customer service through our uncompromising commitment to customer satisfaction.

Company Summary

Company Ownership

Carvenience is a partnership firm owned by seven partners with each pulling in Rs 3500000 and one pulling in Rs 4000000 as our initial capital.

Start-Up Plan

The following are the expenses incurred by Carvenience.

Expenses Printing & stationery Cars on lease Fuel Rent Parking charges Salary to staff Salary to salesmen Telephone charges ( incl mobile to chauffeurs) Electricity charges Salary to attendant Miscellaneous expenses Refreshments

Assets Air conditioners Computers Furniture and fittings Office premises

Company Locations and Facilities

Carvenience’s office will be located at the high profile area namely begumpet. The area hired is of 1000 sq feet for which a monthly rent of Rs. 50000 will be paid, the firm has tied up with 3 garages near petrol pumps to

Jublee hills secunderabad mehandipatnam

Services

Service Description

Carvenience provides its customers with a facility of hiring cars round the clock. It aims to provide its customers a mix of cost and comfort. Carvenience provides latest cars at competitive prices to meet the various requirements of its valuable customers. It has hired efficient chauffeurs to provide quality service to its customers as they come in direct contact with them.

Sales Literature

Main source of sales literature will be through our sales executives who will visit the corporates individually. All information pertaining to the company will be provided to our customers through brochures and direct mailing. It will provide the customer with detailed information about the different packages available. In the future as the company grows, we will be able to advertise in travel & auto magazines, newspapers, etc.

Future Services

Future services will correlate with the growing demand of a wider returning client base. Carvenience in its coming future can go in for collaboration with other travel agencies, hotels and expand its business and diversify into the sale of second hand cars.

Market Planning

Current Market Situation

Industry Analysis The vehicle rental market can be divided in terms of

Client type Location Rental schemes- car hire Car lease Self drive

Industry Participants

Multi national companies- hertz international National companies- autoriders and meeru Local players- mitra, auto cabs & orange The car rental companies may wholly be concentrated into car

rental services eg: -ketan travels pvt ltd or may be car rental + allied business eg- autoriders and aqsa

Allied business such as hotel reservations, airline & railway

ticketing, tour packages etc

The Carvenience Difference

Car rentals from Carvenience can meet your corporate needs in a number of different ways. Whether you need a single car for one employee or an entire fleet for a convention group let Carvenience show you the best car rental experience wherever and whenever you need it. There are many, many ways in which Carvenience rental cars can make your daily business easier and more

efficient and economical. Consider the following different suggestions on how Carvenience can serve your corporate needs:

Visiting Employees - No matter where your employees are

traveling on business, can rely on car rentals from Carvenience to get them there safely and on time! Consider Carvenience rental cars for employees traveling to other cities and employees traveling to your own city. Give your employees the A+ treatment they deserve by giving them the opportunity to enjoy driving freedom and pleasure in a quality car rental.

Potential Clients - If your business will be entertaining any

potential business clients in the near future, seriously consider an impressive rental car to get your meeting off to the right start. By offering a Carvenience car, you can show your potential business clients how important you believe their business is!

Local Traveling - Don't worry about having to pay employees

miles for using their own car in-town on business travel, instead, reserve one of our rental cars and get the best of both worlds! If any of your employees make daily drives around the region, consider a car rental from Carvenience to make their driving more enjoyable.

Convention Groups - Your business can benefit by providing

employees with car rentals during conventions or large meetings! Make your employees feel appreciated and give them the opportunity to enjoy our car rentals after the business day has ended!

Factors of Competition

The following factors of competition give carvenience a competitive edge over the other car rental companies.

Quality:

Quality of cars-carvenience strives to consistently offer dependable vehicles. Each car is thoroughly cleaned before every trip so that customers get a perfect car.

Quality services-carvenience accords highest priority to fast and friendly customer service, safety and comfort. It strives to offer prompt, personal attention to every client. Our chauffeurs are trained to attend the clients and always believe in giving service with a smile. Punctuality and promptness are the key qualities of our chauffers. Our chauffeurs are uniformed, well behaved, equipped with mobile phone ,well versed with the topography of the city and understand and speak English, Hindi and Marathi .The company is open for 24 hours throughout the year.

Price: Carvenience offers its customers car rental packages at a competitive price without compromising on quality or sacrificing company profits.

Convenience : All American Express, Visa,

MasterCard ,and BOB card are accepted. Carvenience makes car renting easy and hassle free for corporates by opening a Carvenience corporate account.

Competitive Description

Carvenience has an advantage over other the other car dealers due to its location, which is at the center of its market. Carvenience also has round the clock facilities to meet the requirements of the customer. Carvenience offers 4 categories of cars viz Mercedes, Lancers, Ford Ikon and Tata Indica to its prospective customers

Main Competitors

Airlines tie up : Hertz has a tie up with jet airways under which jet airways offers its domestic frequent flyers car hire facility of Hertz .

All India presence: Companies having all India presence e.g. autoriders enjoy higher patronage of outstation contracts as in case of car breakdown, alternate cars can be arranged quickly.

Allied services providers: Car rental companies providing car hire and also allied services such as hotel reservation, airline and railway ticketing and tour planning.

SWOT Analysis

Strengths

1. Quality service in terms of time, cost and comfort2. Proximity of location near to airports, and other corporate

houses.3. Organized manner of communication with drivers4. Niche market, initially only to corporates and hence less

competition

Weaknesses

1. The prices are fixed according to the market conditions (that is demand and supply)

2. Being a new entrant, it is more difficult to capture the market share

Opportunities

1. Online registration and booking2. Can cater to corporate in other metropolitan cities3. Providing new facilities like self drive4. Can cater to travel agencies, banks, hotels etc. apart

from corporates.

Threats

1. The car rental companies may wholly be concentrated into car rental services e.g.- ketan travels pvt ltd or may be car rental + allied business e.g.- autoriders and aqsa

2. Rise in lease charges in the market due to inflation

Objectives

Financial Objectives:

1. To reduce the loses in the first two years (introduction stage).2. To grow at a profitable rate after the introduction stage i.e. the

growth stage.

Marketing Objectives:

1. To create a brand name in the market.2. To create awareness among corporates.

3. To increase the sales revenue.4. To clearly define the target market.

Market Trends and Growth

There is an increasing demand of easy facility in traveling especially in a city like Mumbai. Different firms are coming up in the market to rent a car. Therefore it is important for Carvenience to differentiate its services from others to attract a larger number of potential customers. Bringing new ideas in this particular business is very much important, as customers are keen towards new types of affordable services.

Market Needs

In corporate world, need of hiring cars for their employees rather than buying them is more convenient. There are different levels of employees within a corporate world like top-level management or second level management. Therefore many companies will hire different types of cars depending upon the levels to which a particular employee belongs. Carvenience targets this variety in need and offers different types of cars depending upon the requirement. Though the company is hiring different cars for different employees but still Carvenience is taking care of all customers with a same concern. I.e. For Carvenience customer’s satisfaction is at highest priority no matter who they are.

Marketing Strategy

Target Market:

Carvenience plans to target corporate world customers, who expect to travel with good customer service and convenience.

We are segmenting the market on the basis of purchasing approaches, benefits sought and usage rate. Many companies have general purchasing policies that prefer hiring or leasing the cars for their top-level and second level employees rather than purchasing a car. Also they are benefited in many ways in terms of cost factor and quality service, which includes time factor and comfort factor.

Positioning:

Carvenience will appeal to all types of corporates who require the services of vehicles for their professional reasons.

Pricing strategy:

This company plans to be very competitive in its pricing strategy as it relates to other similar rental agencies. We will carefully establish prices so that they do not seem too high, while at the same time allowing us to obtain our business goals. We also have categorized the cars in terms of class.

Price grids

Car category Carvenience AutoridersRate per km Rate per km

Economy Rs 15/km Rs 19/kmIntermediate Rs 20/km Rs 23/kmFull size Rs 25/km Rs 35/kmLuxury Rs 75/km Rs 81/km

Car categoryEconomy Tata IndicaIntermediate Ford IkonFull size LancerLuxury Mercedes Benz

Location

We have tied up with garages near petrol pumps at three different locations

Jublee hills which is close to major corporate houses like Taj hotels, Hitech City ,etc

Secunderabad near the major crowd travelling markets. shamshabad near to the International Airport and major

Hotels.

Our cars will be available with chauffers carrying cell phones so communication with them is easy as the demand for service arises.Our office will be open for 24 hours with two operators on shifts so that customers can avail anytime of our services.Our parking spots will also have an attendant who will clean the cars take care.

Market communications:

Initially we are not spending much on advertising but we have employed smart sales executives who will visit the corporate houses individually and try to convince them to avail of our services. Our sales executives will help us in creating awareness among new customers and getting feedback from the existing customers.

Later on, when profits start rising we can advertise in business magazines and newspapers etc.

Direct mail-we will be sending pamphlets through direct mail to our prospective corporate clients.

E-mail- we will be promoting our organization by sending e-mails to prospective clients.

Market Research & Development

A regular feedback is needed from the customers, and an accurate study of customer satisfaction and identification of opportunities for future service development is needed from the feedback received from the customers. For this we have to take our chauffers into confidence,train them to take regular feed back from the customers,they arte the one’s who will help us build relationship with thew customers as they will be in direct contact with the customers.

Action Programs

Carvenience will utilize a variety of sources to promote their service. Through the Internet, telemarketing and direct mails, carvenience will be able to spread their company name to various people in the focused market segment. With the use of these sources as advertising agents we will be able to attract potential customers

Organizational Structure

Marketing & sales manager

Personnel manager

Accountant Accountant

DSE

Finance manager

Receptionist

Chauffeurs, attendants

Management Summary Organizational Structure

Carvenience is a private partnership equally owned by seven executive members. A few of the executives of the company share the responsibility in the decision-making process. Each member specializes in specific field within the company. The combination of each member’s skill allows our company to establish a successful conglomeration.

Personnel Plan  

2003 2004 2005 2006 2007Remuneration to partners

360000 360000 360000 360000 360000

Salaries to receptionist48000 54000 60000 60000 62400Salaries to peon 30000 33600 36000 36000 37200Salaries attendant 54000 72000 82800 82800 30000Salaries Telephone operator

60000 72000 79200 79200 81600

Salaries to accountant 48000 54000 27600 27600 60000Salaries to chauffeurs 420000 960000 1548000 1548000Salaries to salesmen 192000 216000 230400 230400 240000

Long-Term Plan

Our long-term plans are: To become market leaders in car rental business. To increase our name recognition To be recognized for our outstanding service

Income Statement - Summary of Years 1 to 5

2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Lease rental income 8,410,668 16,996,446 30,575,822 34,698,720 38,278,507

Total 8,410,668 16,996,446 30,575,822 34,698,720 38,278,507

Gross Profit 8,410,668 16,996,446 30,575,822 34,698,720 38,278,507

Operating Expenses

Salaries to chauffeurs 420,000 960,000 1,548,000 1,620,000 1,620,000

fuel 1,591,040 2,268,470 5,261,220 6,275,360 6,817,949

lease charges 7,440,000 12,060,000 17,520,000 14,040,000 14,040,000

mobile charges 39,600 79,200 118,800 143,640 143,640

parking charges 100,000 150,000 200,000 200,000 225,000

depreciation on mobile 2,500 2,500 7,500 7,500 7,500

permit charges 18,000 17,000 21,000 14,500 12,000

washing 12,000 12,000 20,000 25,000 25,000

office and administration Rent 960,000 960,000 960,000 -

salaries 240,000 285600 315,600 315,600 315,600

electricity 102,000 120,000 132,000 136,000 156,000

auditors remuneration 8,000 8,000 8,000 10,000 10,000

Subscription 25,000 25,000 30,000 35000 37,400

Telephone 120,000 144,000 160,000 170,000 180,000

refreshments 15,000 15,000 20,000 25,000 26,200

Office supplies 42,000 60,000 70,000 75,000 81,000

depreciation 46,250 46,250 293,750 2,837,083 2,769,000

remuneration to partners 360,000 360,000 360,000 360,000 360,000

Commission to salesman 16,500 40,000

selling expenses

salaries to salesmen 192,000 216,000 230,400 240,000 240,000

internet charges 12,000 12,000 12,000 12,600 13,000

Advertising 36,000

finance expenses

preliminary expenses 12,000 12,000 12,000 12,000 12,000

bad debts 14,986 14,836 30,283 68,098 77,280

Total Operating Expenses 11,772,376 17,827,856 27,330,553 26,638,881 27,244,569

Operating Income (3,361,708) (831,410) 3,245,269 8,059,839 11,033,938

Interest income 575,000 608063 643,026

Other income 330,000 800,000

Total Nonoperating Income 575,000 608,063 643,026 330,000 800,000

Income (Loss) Before Taxes (2,786,708) (223,347) 3,888,295 8,389,839 11,833,938

Income Taxes 0 0 1,394,926 3,009,855 4,245,425

Net Income (Loss) (2,786,708) (223,347) 2,493,369 5,379,984 7,588,513

less partners capital

partner 1 -398102 -31911 356199 768570 1690566 partner 2 -398101 -31906 356195 768569 1690562

partner 3 -398101 -31906 356195 768569 1690562partner 4 -398101 -31906 356195 768569 1690562partner 5 -398101 -31906 356195 768569 1690562partner 6 -398101 -31906 356195 768569 1690562partner 7 -398101 -31906 356195 768569 1690562

Balance Sheet - Summary of Years 1 to 5 Opening 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

ASSETS

Current Assets, loans, advces

Cash 8,789,468 6,474,062 4,027,230 8,010,486 18,825,789

Debtors 1,483,574 3,028,320 6,809,760 7,728,000 8,525,280

telephone deposits 12,000 12,000 12,000 12,000 12,000

fixed deposits 10,575,000 11,183,063 0

office deposits 1,000,000 1,000,000 0

Total Current Assets 0 21,860,042 21,697,445 10,848,990 15,750,486 27,363,069 Long-Term Assets

Computers 51,750 34,500 17,250 0 0

furniture and fittings 180,000 160,000 140,000 120,000 100,000

air conditioner 51,000 42,000 33,000 24,000 15,000

office premises 14,750,000 13,250,000 11,750,000

Vehicles 3,659,167 2,419,167

Mobiles 22,500 20,000 65,000 57,500 50,000

Total Long-Term Assets 0 73,500 256,500 25,854,240 32,861,153 14,334,167 miscellaneous expenses preliminary expenses 48,000 36,000 24,000 12,000 0

Other long-term assets

Total Assets 0 22,213,292 21,989,945 25,878,240 32,873,153 41,697,236

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Income taxes payable 0 0 1,394,926 3,009,855 4,245,425

Total Current Liabilities 0 0 0 1,394,926 3,009,855 4,245,425 capital a/c

partner 1 4,000,000 3,601,898 3,569,987 3,926,186 4,694,756

partner 2 3,500,000 3,101,899 3,069,993 3,426,188 4,194,757

partner 3 3,500,000 3,101,899 3,069,993 3,426,188 4,194,757

partner 4 3,500,000 3,101,899 3,069,993 3,426,188 4,194,757

partner 5 3,500,000 3,101,899 3,069,993 3,426,188 4,194,757

partner 6 3,500,000 3,101,899 3,069,993 3,426,188 4,194,757

partner 7 3,500,000 3,101,899 3,069,993 3,426,188 4,194,757

add/less net loss/profits

partner 1 (398,102) (31,911) 356199 768570 1690566partner 2 (398,101) (31,906) 356195 768569 1690562partner 3 (398,101) (31,906) 356195 768569 1690562partner 4 (398,101) (31,906) 356195 768569 1690562partner 5 (398,101) (31,906) 356195 768569 1690562partner 6 (398,101) (31,906) 356195 768569 1690562partner 7 (398,101) (31,906) 356195 768569 1690562

Total Shareholders' Equity 0 22,213,292 21,989,945 25,878,240 32,873,153 41,697,236

Total Liabilities and Shareholders' Equity 0 22,213,292 21,989,945 27,273,166 35,883,008 45,942,661