Recycle used clothing and convert it into school uniforms

jhh19970724

ExampleBusinessPlan1-Team221.pdf

Home >Business & Finance homework help >Marketing homework help >Recycle used clothing and convert it into school uniforms

STUDENT EXAMINATION NUMBERS Y9998154

Y0000966

Y0076073

Y8528971

Y0071607

Y0077337

MODULE NO: MAN00001I

MODULE TITLE: Business Planning

Module Tutor: Dr. Alex Gillett

Essay Title: Group Business Plan

GROUP Number Group 2: MyTaxiBooker

or name

Word Count: 4,833

(excl. Executive Summary/Abstract, tables, figures, captions, table of contents,

references and appendices)

kj628

Rectangle

kj628

Rectangle

MyTaxiBooker

Business Plan

Serving your taxi needs in York and Leeds

Contents

Executive Summary………………………………………………………………… 4-5

1.0 Business Venture………………………………………………………………... 6-12 1.1 Product Offering

1.2 Nature of Demand

1.3 Mission

1.4 Vision

1.5 Values

1.6 Business Objectives

1.7 Strategic Capabilities

1.8 USP and Competitive Advantage

2.0 Market Analysis………………………………………………………………… 13-24 2.1 Macro Environment Audit

2.1.1 PESTLE Analysis

2.1.2 Porters Five Forces Analysis

2.1.3 Ansoff Matrix

2.2 Micro Environment Audit

2.2.1 The Market

2.2.2 Target Market Size

2.2.3 Customer Segmentation

2.2.4 Competitors

2.2.5 Perceptual Mapping

2.2.6 Suppliers

2.2.7 SWOT Analysis

2.2.8 Product Properties

3.0 Marketing Plan………………………………………………………………….. 25-31 3.1 Target Market

3.2 Brand Elements

3.3 Product Strategy

3.4 Advertising Strategy

3.5 Marketing Strategy/Marketing Mix

3.6 Market Growth

4.0 Operations Strategy…………………………………………………………….. 32-36 4.1 Information Systems and Information Technology

4.2 External Accountancy

4.3 Quality Assurance and Control

4.4 Premises

4.5 Advertising Locations

4.6 Clients

4.7 Equipment

4.8 Insurance

5.0 Legal and Industry Requirements……………………………………………... 37-39 5.1 App Considerations

5.2 Employment Considerations

6.0 Human Resource Strategy……………………………………………………… 40-43 6.1 Board of Directors and Workforce

6.2 Recruitment

6.3 Training

6.4 Strategies to Maintain Staff Morale

7.0 Financial Proposal………………………………………………………………. 44-46 7.1 Projected Profit/Loss Summary

7.2 Projected Cash Flow Summary

7.3 Balance Sheet Summary

7.4 Break-even Analysis

7.5 Key Performance Indicators

8.0 Risk Analysis…………………………………………………………………….. 47-53 8.1 Risk Assessment through PESTLE Environment

8.2 Risk Mapping

8.3 Strategic Risk, Operational Risk, Financial Risk and Commercial Risk

9.0 Beyond Start-up (Exiting or growing the business)…………………………... 54-56 9.1 Exit Strategy

9.2 Future Development

Conclusion…………………………………………………………………………… 57 References…………………………………………………………………………… 58-64 Appendices…………………………………………………………………………... 65-133

Executive Summary

MyTaxiBooker is a multi-functional smartphone app and accompanying website targeted at

locals and specifically the student population (over 85,000) in York and Leeds with the initial

launch planned for October 2014. The identified need is for a convenient, easily accessible,

cashless, intuitive, safe and cost-saving method of booking a taxi.

The increase in the market for travel apps by 149% in 2013 and the expected trend

continuation (Khalaf, 2014) combined with the general ‘technolisation’ of society (Walker et

al., 2010) exists in light of a shift in consumer preferences towards personal management of

travel at their fingertips. The opportunity arises from an array of issues that may be broadly

contained as two-fold in nature. From a student perspective, prolonged waits in undesirable

weather conditions are not uncommon, followed by arbitrary waiting times that beckon the

unwanted need to contact a taxi company on numerous occasions, often to discover extensive

waiting times. Further, many students feel the need to walk home late at night as a result of

an inability to justify journey prices, this raises safety concerns. From a company perspective,

lack of competition exists within these cities and the market is dominated by a few larger taxi

firms due to the incapacity of smaller firms to gain funds for efficient and effective

marketing. Moreover, currently there is no proof of purchase therefore taxi companies cannot

trace customers under the influence of alcohol for fare evasion. MyTaxiBooker targets these

issues. Confirmation from market research suggests strong demand at 85% for

MyTaxiBooker’s service offering. Furthermore, tuition fee increases and the upward trend in

cost of living imply that money saving and convenience techniques appear dominant on most

people’s priority list.

The company will exploit social networking as a cost efficient method of advertising to

ensure maximum customer usage and development of a strong brand presence within the

market. The company will utilise the ‘first mover’ advantage (Porter, 1980) as the first app of

its kind and the only region specific app in York and Leeds.

Rented office premises will be located in York city centre due to its close proximity to the

University of York, York St John and the railway station for easy access to Leeds.

Distribution staff will circulate promotional material, in and around the target regions

throughout the year, whilst the managing director will be responsible for negotiating deals

and managing day to day activities. Furthermore, suppliers will include external accountants,

lawyers, and website and app designers. An efficient outsourcing strategy will ensure low

fixed costs, the effective use of capital, increases in profit levels. Employee numbers will

increase so as to meet business expansion.

Six start-up shareholders will collaboratively inject £70,000 start-up capital (1 individual

investing £20,000, 5 others £10,000) in order to fund advertissing as well as design and

launch of the website and app and other start-up and initial running costs. As MyTaxiBooker,

is a technology based product, costs are relatively low and profit forecasts are; £56,421 after

year 1, £88,797 after year 2, and £106,039 after year 3. The company pays back within 1 year

and 2 months and breaks even within the second month of operations. These minimalistic

figures have been assumed from average assumptions extracted from market research and the

company have assessed any risks that may hinder financial success.

At termination of the three year period, the company will have sufficient understanding of the

sales trends and demand fluctuations in high and low seasons. App popularity within York

and Leeds should be such that a strong brand name will accompany the business aim of

expansion to Manchester and Newcastle with a long term vision to be present in 7 UK cities

by 2020.

1.0 Business Venture

1.1 Product Offering

MyTaxiBooker is the innovative idea of six university students who have identified and

confirmed through market research, a gap in the transport app market. MyTaxiBooker, a

distinctive smartphone app and accompanying website, will remodel the existing taxi booking

process and consumer experience. MyTaxiBooker ensures that students and locals in York

and Leeds can benefit from an efficient travel experience as a result of its intuitive taxi

booking system, coupled with the ability to earn ‘taxi miles’ through the app rewards system.

MyTaxiBooker serves as an insightful data collection tool for taxi drivers and companies who

list with the company; details of sales and demographics will be available through the app

system. However, it is company policy that no personal user information is shared with any

secondary parties.

York and Leeds possess abundant student populations, above 85,000 (Unistats, 2014) and an

estimated overall population of over 900,000 (ONS, 2011) which MyTaxiBooker aims to

capitalise on. The app will be available as a free download on the Apple App Store®, the

Android Marketplace®, and Windows Store®. Targeting current journey concerns, costly

fares, security fears, and waiting times epitomise the nature of MyTaxiBooker’s purpose.

(Please see appendix 4.0 for an extensive list of features and product information and

appendix 5.0 provides a process map of the service). Planning progress shall be hereby

outlined.

1.2 Nature of Demand

Demand for the product is ensured through identification and satisfaction of the needs of taxi

users and taxi companies. Market research (appendix 1.0) suggested that out of the 100 York

and Leeds students questioned:

78% use a taxi at least 1-2 times a week

85% would order a taxi by app if a suitable one was available

90% suggested waiting times and price as their main concerns

58% prefer to pay for their journey by card

The research findings alongside the personal experiences of the business founders enabled

identification of the following needs/concerns that are to be considered by MyTaxiBooker in

order to generate high demand for our product.

The table below illustrates the potential demands, both from a consumer a supplier

perspective and how those demands may be satisfied by MyTaxiBooker.

Individuals booking through the app Taxi firms listing/advertising with the app

Need/concern Satisfying the need Need/concern Satisfying the need

Long waiting times

High cost

Safety

Late taxi arrival

Loss of possessions

Waiting times may be tracked and

compared

Discounts and taxi miles are available

ID may be verified on the app to

determine whether the driver is licensed

to drive the vehicle

Taxis may be monitored through GPS

and this in turn should encourage taxi

efficiency. It also reduces the need to

repeatedly call taxi firms to enquire

waiting times

Proof of purchase so the taxi may be

traced

Market visibility of

small taxi firms

Lack of competition

No proof of purchase

Competition from

other forms of

transport

Reputation

Maintenance

Provides a platform where small companies are

able to promote themselves against the larger

firms without financial constraints

Currently larger firms dominate the market due

to customer familiarity. The app will enable

smaller firms to offer discounts hence raise

market competition

Firms can identify the name of the individual

who booked the app through a customer receipt.

This avoids complications especially after clubs

nights where people may claim a taxi they have

not booked.

Ease of booking, lower costs, and timing

availability for consumers should promote

increased taxi usage.

Firms are encouraged to act efficiently since

consumers are able to observe company reviews

and monitor waiting times. The liquidity of

customer loyalty is such that they are easily

prone to swapping to regular usage of taxi firms

that appear to possess a superior reputation on

the app. Increased efficiency will therefore

enable ease of reputation maintenance.

Option to pay by card Less need for cash Option to pay by card No cash at hand

1.3 Mission

“To provide economy and efficient minded taxi users with a free, user friendly and

innovative platform for booking and monitoring the travel process with consistency of

service, heightened opportunities for taxi affordability and safety advancement

features. Our mission extends to building strong advertising links with the University

of York, York St John, York College, Leeds University and Leeds Metropolitan

University in order to instigate and strengthen brand awareness. Further, we seek to

introduce ease into the user booking experience and develop overall user satisfaction

by addressing current concerns and discontents.”

1.4 Vision

“MyTaxiBooker aims to develop and maintain its position as the leading provider of a

taxi booking service providing discounts and savings specifically targeted at the UK’s

student populations. The launch in York and Leeds will be the first of its kind in the

UK and distinctive as the only region-specific UK taxi app outside London. Although

the ‘free-rider effect’ (Lieberman & Montgomery, 1988) may be possible, whereby

companies mimic an idea without the extensive costs of research and development,

MyTaxiBooker intends to establish a strong reputation in its primary regions prior to

extending services to other large cities with large student populations. We envisage

the prospect of widespread customer loyalty through the advantage of being the ‘first

mover’ in the market.”

1.5 Values

Our Values

Ensuring equitable

market exposure for

larger and smaller taxi

firms

Enhancement of

student safety

Fair treatment of all

stakeholders

Efficient and reliable

service for users

Rapid growth so as to

maximise company

shareholder returns

whilst maintaining

stakeholder

satisfaction

Competitive

Remuneration

Packages (discussed

with employees

regularly)

1.6 Business Objectives

MyTaxiBooker functions in line with the management by objectives concept (Drucker, 1954).

All objectives should be Specific, Measurable, Attainable, Realistic and Time-bound

(SMART) (Doran, 1981).

To break even within the first three years

To increase app usage by 3% (comparing

usage to the respective month in the

previous year)

To begin expansion of services to

Newcastle and Manchester in the fourth

year of operations.

Key Business

Objectives

1.7 Strategic Capabilities

Makadok (2001) emphasises the importance of capabilities which determine the firm’s

capacity to efficiently deploy resources. In the first three years of operations, the firm will

follow the dynamic capabilities view which focuses on competitive survival and adaptation

during times of rapid external change in the macro environment. However often, adaptation is

not possible due to practical feasibility constraints that apply to technological industries.

Operation in a low competition market

The app is introduced at a time where there is a strong need which has

been identified through market research, ‘right place at the right time’

Flexible to changes in the market environment since all operations

are maintained electronically

A financial advantage since low start-up and running costs result in a requirement for

low capital investment and a net profit margin

First mover advantage through technological leadership which is often considered the most

strategic advantage if capitalised upon, ensuing long lasting profits (Reinganum, 1983)

University support for advertising and promotion

CAPABILTIES

However the firm recognises the following resources as possible long-term contributors to

sustained competitive advantage:

Tangible Resources Intangible Resources

external expertise from a panel, managerial

skills, practices and procedures

Innovation and creativity – technical skills

and capacity for innovation

Reputation – Evaluation and control systems,

company culture

Financial resources such as cash accounts

and the ability to raise equity

Human – experience and capabilities of

Physical Resources such as the office,

favourable promotion locations

Technological resources – intellectual

property

distributors and the managing director,

Applying Barney's (1991) VRIN (Valuable, rare, inimitable, and non-substitutable)

framework assists determination of whether a resource is a source of sustainable competitive

advantage. Priem and Butler (2001) state that this framework has little prescriptive value; and

it is difficult to decide resources that meet all the VRIN criteria however, reflection does

position managers to consider unique profit-creating resources that collectively construct the

businesses resource base.

1.8 USP and Competitive Advantage

The uniqueness of MyTaxiBooker and lack of competition in its target regions warrants the

company an ability to distinguish itself as unique, offering a multi-functional free service

with numerous user benefit-creating features (see appendix 4.0). The opportunity for strong

brand presence and customer loyalty may ultimately instigate a brand image that is

synonymous with booking a taxi in York and Leeds. According to primary research, 85 of

100 student respondents and all four taxi respondents (ten were contacted) would utilise the

app with the purpose of addressing journey apprehensions and ensuring an ordered and

unproblematic booking process on behalf of both parties.

2.0 Market Analysis

2.1 Macro Environment Audit

2.1.1 PESTLE Analysis

(Please see appendix for 6.0 for PESTLE analysis)

PESTLE (Political, Economic, Socio-cultural, Technological, Legal, and Environmental)

analysis is an effective method of assessing the inevitable macro environmental factors that

may impact on the success of MyTaxiBooker (Lynch, 2009).

Model Weaknesses

PESTLE can readily

become obsolete

Analysis provides

purely a list of

factors

Our Approach

The company will regularly update the analysis in order to ensure

anticipation, avoidance and minimisation of any threats that may

limit, or take advantage of factors that may contribute to the

company’s future success (Blythe, 2009). Analysis will be updated

using contribution from all people involved in the business

(employees and members of the board) in order to capture different

business perspectives; in turn aiding the development of strategic

thinking and the decision making process of MyTaxiBooker. Rapid

market change renders it increasingly difficult to anticipate trends that

may affect an organisation in the future. However, the simple

framework will enable the firm to rapidly position itself with regards

to current market trends.

It must be used in conjunction with other frameworks in order to

ensure a holistic view of the company’s marketing environment

(Cheverton, 2005). PESTLE highlights the opportunities and threats

likely to affect the company and these will inspire the external inputs

into the SWOT analysis. The factors under each heading have been

listed in order of present and future significance, enabling the

company to prioritise in order to counteract any risk that these factors

may cause.

The company will use frameworks as a supporting tool for analysis and evade over-reliance

since this can often lead to the oversimplification of data in the decision making process.

2.1.2 Porters Five Forces Analysis

Michael Porter (1979) argued that the state of competition relies on five basic forces that

affect the organisation. He developed the model to the then popular SWOT analysis which he

believed to be without rigour. MyTaxiBooker will function in an industry, composed of a

group of firms offering similar services.

The following provides a useful tool for analysing the relationship between competitors,

suppliers and the market.

Intensity of rivalry

within the industry

Threat of substitute products

Bargaining power

of buyers

Bargaining power of suppliers

Threat of new entrants

(Lynch, 2009)

The five forces model will be utilised in order to create a qualitative evaluation of

MyTaxiBooker’s strategic market position and respond to apparent opportunities/deal with

potential threats (Grundy, 2006). However, it must only be used at the business industry level

as opposed to the industry group level. The analysis has been criticised by Coyne and

Subramanium (1996), stating that unrealistic assumptions underlie the five forces such as that

buyers, competitors and suppliers do not interact, that barriers to entry create value and that

participants in the market can plan for and respond to competitive. However, the framework

provides the business with a tool for raising awareness as to the potential forces impeding on

its operations and an understanding of the relationship between competitors, suppliers, and

the market.

Werner (1984) argues that Porter’s five forces fail to consider the unique resources and

capabilities that enable a firm to be successful in an industry. Therefore, when MyTaxiBooker

transfers focus towards competitive advantage, it will combine the analysis with a RBV

analysis in order for the firm to understand the competitive strengths that may enable it to

overcome the forces,

(Please see appendix 7.0 for five forces analysis)

2.1.3 Ansoff Matrix

The app will undertake a product development strategy approach since it will utilise an

existing industry and develop a differentiated product therefore improving the performance of

the industry (Ansoff, 1957). The app provides an alternative taxi ordering method in York

and Leeds. Please see section 9.2 (Further Development) for a fuller understanding of the

matrix application to the business.

2.2 Micro Environment Audit

2.2.1 The Market

The business market is the York and Leeds taxi industry (719 taxis) which is primarily dominated by

large taxi companies. In York, Streamline and 669 taxis dominate the market; Leeds is dominated by

Amber taxis. These companies have agreed to the use of our service (please see appendix 2.0) which

in turn should encourage smaller taxi companies to participate. The York and Leeds markets do not

currently possess an alternative booking system to the traditional phone call system.

2.2.2 Target Market Size

The market size is large with a number of educational institutions possessing large student

populations; the University of York with 15,253 students, York St. John University (5,824 students)

and the surrounding colleges such as York College (7,492) students. There is an ever larger student

presence in Leeds with Leeds University (33,600 students), and Leeds Metropolitan University

(18,994 students).

2.2.3 Customer Segmentation

MyTaxiBooker will provide a solution to meet the needs of individuals and taxi firms identified in

section 1.2 (Nature of Demand). A combination of desk and field market research has confirmed the

need and the desire of our product amongst university students, locals and taxi firms.

Heterogeneity in demand from our customer base is such that it can be segmented into diverse

demand functions (Dickson & Ginter, 1987). This will enable the company to focus marketing on

those more likely to use the product and identify the relevant resources to undertake this process.

1. Segment geographically – York and Leeds

2. Segment by markets (Business-to-Consumer and Business-to-Business), as follows:

Type of factor Business-to-Consumer Business-to-Business

Characteristics

of people/

organisations

Purchase/use

Users’ needs and preferences

for product

Smartphone users:

university/college students and

locals, both male and female

that use taxis as a means of

transportation

Size of purchase

Size of their purchase is

assumed to be 5% commission

of an average £9.50 journey

Brand Loyalty

Provided that the app increases

customer utility, brand loyalty

will be high amongst this

segment since no competition

exists

Purpose of Use

To facilitate the consumer in

booking a taxi

Purchasing Behaviour

Frequency of use will be varied

but market research suggests a

minimum of 1 to 2 times per

week. Seasonal variations will

alter frequency (holiday

periods)

Importance of Purchase

Enables a more convenient

booking process as opposed to

calling multiple taxi firms

Product Similarity

Not applicable since no direct

competition exists

Price Preference

The app is free so there are no

financial costs to the consumer

Brand Preferences

Not applicable since no direct

competition exists

Desired Features

These have been confirmed

through market research, the

extensive list can be found

under appendix 4.0

Quality

Ease of use and intuitive

Small and large taxi

companies, diverse in terms of

levels of profitability

Application

To advertise their services and

journey offers

Importance of Purchase

To advertise their brand

against competitors, improve

efficiency with the time

monitored aspect of the app

(GPS) and increase market

Volume

13 taxi firms between York

and Leeds

Frequency of Purchase

on the app every six months

Purchasing procedure

Block fees and commission of

5% are payable

Performance Requirements

Effective functionality (no

operational errors or GPS

delays). This will be monitored

by the managing director

Brand Preferences

Not applicable since no direct

competition exists

Desired Features

These have been confirmed

through market research, the

extensive list can be found

under appendix 4.0

Quality

Ease of use and intuitive

2.2.4 Competitors

The company will employ a blue ocean strategy (Chan & Mauborgne, 2005) since the

existing market is reasonably sparse and most apps contain basic features that allow a

customer to simply book a taxi; the marginally more advanced apps are London specific.

Currently, no app exists to meet the multiple needs of taxi users specifically whereby a team

liaise directly with taxi companies in specific cities to offer efficient journeys in terms of

overall experience and price. Current available apps lack a personable characteristic and can

be considered a platform to simply source all available taxi companies in the area without

monitoring of quality. 90% of those questioned for market research were unaware of an

existing taxi booking app to suit their needs. The team therefore trust that the barriers to entry

are low and preliminary market research indicates that in highly populated student cities there

is a desire for a method to solve student journey concerns; this implies a gap in the market.

(Please see appendix 8.0 for a summary of rivals’ service offerings and the unique features of

the app that will enable it to surpass this competition)

2.2.5 Perceptual Mapping

Perceptual mapping is used to identify opportunities, enhance creativity and tailor the

marketing strategy so as to determine the most appealing solution for its consumers (Johnson

et al, 1979). Furthermore, a perceptual map enables the company to determine how it intends

to be perceived by society with respect to competitors. The company board and external

contacts have concluded that the pivotal considerations for the app in comparison to

competitors are; the app target market size (number of taxi firms/cities listed on the app),

features of the app, and convenience of app use.

MyTaxiBooker

Hailo

Click A

Taxi

GetTaxi

Uber

Unibus/ Clubbers

bus

Kabbee

features/specifications

Limited features

Extensive

Widespread Niche Market

target market

MyTaxiBooker contains the most features/specifications amongst all competitors and focuses on a

niche market (York and Leeds). The company focuses on efficiency; customer reviews on app

websites indicate that the more widespread the target market, the less efficient the app.

MyTaxiBooker Hailo

Click A

Taxi

GetTaxi Uber

Unibus/ Clubbers

bus

Kabbee

User Convenience

Inconvenient for user

Niche Market Widespread

target market

(Adapted from Loudon et al., 2005)

This second perceptual map, maps the convenience against the target market, MyTaxiBooker

appears to be moderately convenient against competitors, with Unibus, Hailo, and Click A Taxi

providing a quicker booking process (one or two clicks faster). However, MyTaxiBooker believe

that this is a reasonable sacrifice for the presence of a much greater list of features/specifications

in comparison to other competitors.

2.2.6 Suppliers

MyTaxiBooker’s suppliers are limited since operations do not involve an outflow of material

goods. However, the app and website developer, lawyers, accountants, office providers and

those that assist the business operations may be considered suppliers.

2.2.7 SWOT Analysis

SWOT will enable the analysis of the company’s internal strengths and weaknesses and the

external opportunities and threats that may affect the organisation. It enables an

understanding of factors that are favourable and unfavourable in the pursuit of business

objectives in order that business strategy can be formulated accordingly (Hill & Westbrook,

1997). To ensure consistent effectiveness, it will be reviewed twice a year through

collaboration of business stakeholders.

Model Weaknesses

SWOT analysis has

been criticised by

Menon et al. (1999)

for listing factors

uncritically without

prioritisation.

It has been further

suggested that rarely

companies use the

framework

effectively to

generate strategies

(Hill & Westbrook,

1997).

Our Approach

MyTaxiBooker has overcome this criticism through analysis of the

significance of each factor which has in turn been listed by

importance.

The company will utilise SWOT to generate strategies through

matching and converting. Matching is used to determine competitive

abilities through pairing strengths with opportunities. Conversion will

allow the company to convert threats or opportunities into strengths or

weaknesses. An example of a conversion may be to avoid the threat of

a new entrant by entering a new market. The threats or weaknesses

that cannot be converted will be minimised (Mehta, 2000). Plans will

be created to address the SWOT results and compared to later SWOT

analyses. If improvements have not been addressed as a result of

plans, this is an indicator to the business that strategy must be revised.

The process will be undertaken alongside other frameworks analysed for a cohesive view of

business/environmental factors.

Strengths Weaknesses

Characteristics that provide an advantage over other businesses Characteristics placing MyTaxiBooker at a disadvantage relative to

 Strong demand for the service determined through market research

 People use a taxi throughout the year which provides an annual income

 Low start-up capital required and low running costs

 Market dominance. This is the first app to exist of its kind

 Sufficient financial resources (£70,000 start-up capital)

 Product quality is guaranteed through outsourcing app and website

development to favourably rated developers. The application is easy to

access and feedback may be submitted.

 The employment of motivated/professional members of staff, this will

be maintained (see section 6.4 Strategies to Maintain Staff Morale).

 Easy to download and simple to access app with a combination of

features that are not currently offered in the market. This has been

verified as the optimum range of features through market research

 Provides an incentive for usage by offering a cheap service to

consumers (taxi miles)

 GPS tracking enabled, consequently lowering waiting times

 The service is safe and reliable, if a customer has forgotten their bag,

phone, wallet they can contact the driver and retrieve their possessions

 Staff can be easily situated in appropriate regions

 Easy to exit the industry

other businesses

 No brand equity exists as the business is a new start-up

 A lack of reputation which will require costly advertising in

order to raise the company profile

 It may be difficult to determine who is best for the job; this is

vital as the initial success of the business may be dependent on

the quality of the managing director employed

 It may initially be difficult to manage a fall in sales due to

seasonality; this will depend on the popularity of the app

amongst locals

 It is dependent on internet or smartphone availability

 It is dependent on taxi companies efficiently providing relevant

information (such as taxi discounts) which will contribute to

the functionality of the app

 Consumer preferences change frequently and the app may

become ‘out-fashioned’. It is therefore important that the

company managing director monitors trends in order that the

business can adapt to the market

Opportunities Threats

Elements that could be exploited to provide an advantage Environmental elements that could negatively impact

 Participation in a high demand industry that enables expansion into

other regions, enabling the gain of a greater customer base and the

ability to gain operating efficiencies, ultimately leading to greater

profits

 Weaknesses in competitor business models. MyTaxiBooker improves of

the features that customers claim to be missing from current London

offerings

 Market growth - A high standard customer service may result in

customers raising awareness of the app amongst peers. Word of mouth

may improve the company reputation

 Growth in the number of taxi firms in York and Leeds (second largest

student city)

 Once the company board believes profits to be significant enough, the

company could sponsor university events such as sporting events, to

further raise awareness amongst the target market

 A freemium business model

 Extension of features e.g. allowing the customer to view places to eat in

the region of their destination

MyTaxiBooker

 Technological system failure since all operations rely on an

online database

 Since the app market is growing, especially for transportation

and utility apps, the company may face increasing competition;

this could reduce profits, the company’s market share and

differentiation strategies that originally were a source of

market success (Threats of such nature will be determined

quickly due to increased market knowledge that will develop

overtime due to industry familiarity)

 Increased taxi prices due to petrol price rises may encourage

people to use alternative forms of transport. Decreased

revenues may result in taxi firms reviewing the percentage of

their revenues that they allow MyTaxiBooker to consume

 Development of a national transportation application system

may inhibit customers from using our application

 Adverse economic conditions may affect the ability of the

public to frequently utilise such premium methods of transport

2.2.8 Product Properties

Digital resources are becoming increasingly common as replacements for traditional face-to-face

marketing. In 2013, 73% of adults regularly used the internet and 72% regularly made online

purchases (ONS, 2013). As a result, app and website based businesses often evaluate the likelihood

of successful market penetration based on the unique set of product properties which determine the

usage and enhance the customer experience. Profit and growth are stimulated by customer loyalty

which is a direct result of customer satisfaction (Heskett et al, 1994).

Properties Definition Application Marketing

Implications

The visual experience Bright colours that Determines the

suit the purpose of the effectiveness of Vividness

product information

processing

Interaction/ Responsiveness

Intuitive

Information

Transfer

The speed and

efficiency of

information exchange

between user parties

Ease of use for those

the app is targeted at

The process by which

information travels

from one user to

another

The app involves

interaction between

taxi firms/drivers and

taxi users. The speed

of engagement will be

managed through

internal and external

controls

The app allows users

to follow the built in

booking process

buttons

GPS and a shared

information platform

Positive interaction

speed levels effect the

likelihood of

continued app usage

Ease of use

encourages returning

customers and

continued long-term

usage

The user becomes an

active participant in

the process with the

ability to self- control

the booking process at

their fingertips

3.0 Marketing Plan

3.1 Target Market

Our initial target market will be students in York and Leeds, the majority of which will be aged

16-24 and who use a taxi at least once a week. Students are generally concentrated around a

small geographical radius surrounding university or college campuses which eases the targeting

process. The app is not student exclusive, and it will be the responsibility of the distributors to

circulate flyers to local residents in the city centres. The social media aspect of the business will

also be pivotal to the company’s marketing strategy in spreading awareness. Travel apps are

used on average 2.6 times per week (Khalaf, 2014), emphasising the demand for such a product.

3.2 Brand Elements

Brand awareness is of critical importance since customers will not consider a brand unless they

are aware of it (Tan, 2010). The nature of the company is such that it will focus on developing

Aided Awareness (Laurent et al., 1995) as the most appropriate form of brand awareness which

occurs when a consumer can express familiarity with the brand when they see it or hear it. One

of the key benefits of the app is reliability, in contrast to the long waiting times and no-show

taxis that are currently frequent. Features that enable tracking and checking driver details

emphasise the safety element of the app. The branding will be presented on all marketing

material to develop and sustain brand awareness.

Taxi drivers will further the spreading of brand awareness through verbal advertisement of the

app with customers. It is expected that growth of the customer base will in turn develop a strong

business reputation.

Name

Logo and colours

The company name, MyTaxiBooker, was chosen on the premise that it is

simple, and explains exactly what the product does. The ‘my’ introduces a

personal aspect to the app with connotations of an app designed to serve

and meet the needs of each user.

The logo is simple which emphasises the simplicity of the apps

functionality. The branding of the App was designed to be clean, bright

and as user-friendly as possible. The following branding colours were used

since they best convey the emotions and characteristics we hope customers

to associate the business with:

Yellow – happiness and optimism

Orange - physical comfort and social interaction

3.3 Product Strategy

The company’s main aim is to offer taxi users an easily accessible and convenient system to

access local taxi information whilst providing a platform for taxi companies to compete through

offering journey deals and ensuring heightened efficiency. The product strategy involves

providing a common ground between taxi drivers and taxi users through a single platform. The

strategy involves offering the app for free in order to attract maximum downloads. The ability to

book using the app via credit card is also a distinct product feature. Unknown waiting times and

taxi destination are dealt with.

3.4 Advertising Strategy

Distributors will be employed at specific times throughout each year (please see the financial

plan for more details) to distribute flyers and posters within York and Leeds educational

campuses and the city centres. Their employment will match the seasonal nature of university

and college timings. The managing director will be responsible for seeking promotional

opportunities within the universities that the company can take advantage of. As well as taking

advantage of the university student union support during fresher’s week, posters and t-shirts with

the company logo/information on have been budgeted for. The main strategy is to ensure

maximum downloads of the app in order to encourage it as their primary means for booking a

taxi. Word of mouth and assistance from sports societies will also assist this as well as the aid of

social networking sites Twitter and Facebook which have already developed a following.

3.5 Marketing Strategy/Marketing Mix

The marketing mix is a form of analysis utilised by marketing managers in order to determine

the elements required to implement the marketing plan and satisfy the target market (Rafiq and

Ahmed, 1995). Traditionally, tangible products used a 4P’s model suggested by McCarthy in

1960 (Needham, 1996) which were product, place, price and promotion, nowadays, the 7P’s is

used more often by service sectors adding people, process and physical evidence to the original

model (Ivy, 2008). It enables a more detailed and broader perspective of MyTaxiBooker’s

operations within its service based market. The 7P’s model has developed over time to include

more variables, it is therefore likely that the model is potentially incomplete and that further

variables will be introduced into theory. The business will ensure these are considered in

practice. This marketing mix is relevant to the company’s start up marketing plan and will

therefore need to be revised at least once a year in order that it meets changes in marketing

strategy.

The company will adopt a differentiated strategy to targeting (Jobber, 2013); targeting

individuals and taxi firms with dissimilar promotional messages that convey benefits that suit

their distinct needs (refer to section 1.2 Nature of Demand). The targeting approaches can be

understood in greater detail through analysis of the marketing mix. A long term differentiated

advantage will constitute the firms competitive advantage.

PRODUCT

A successful business will provide product/services that carry sufficient demand from

customers (CIM, 2009).

- An app, MyTaxiBooker

- A website – Customers can view the latest offers from different companies on this website, as well as MyTaxiBookers’s company details and privacy policy.

- The app image is a yellow taxi with the name MyTaxiBooker superimposed on the

image which simply elucidates the apps function and is in line with the simplicity of

the business concept; it also permits an easily distinguishable app.

- The quality of the product is guaranteed by both internal and external control.

Internal control is managed by the managing director who will review customer

feedback on a weekly basis. The external control is supported by Awesum, the

company designing and updating our product.

According to our market research, a taxi booking app is demanded by 85% of students.

PLACE

‘Place’ defines the regions and methods by which the business operates in and by (CIM, 2009).

- MyTaxiBooker utilises the internet, also understood as a direct distribution channel.

- Customers download the app in the relevant app store and can check the latest information regarding service updates on the website.

- Another consideration is the location to which the services will relate. The business initially intends to focus on York and Leeds for the first three years.

These cities were chosen for two reasons; they are in close proximity to the

business founders which enables the high levels of involvement regarding

operations and strategy that are often required during start-up. Secondly,

familiarity with these regions and the availability of personal connections

amongst the directors will result in an easier start-up process (greater likelihood

of effective advertising and word of mouth success, directors know what works

and what does not in these regions).

- These regions are also experiencing an increase in student populations, resulting in an increased consumer base.

- The only potential competitors are located in London, however the consumer base in York and provides a large enough base to break even in three years.

- Future expansion to other cities is a longer term strategy, imposing the need for an increase in managing directors that will manage operations from premises in

different regions.

PRICE

Price setting is an essential step that needs to be considered carefully; it does not only

affect the revenue gained, but also the competitiveness of our product (Ivy, 2008).

- Price setting in the conventional sense does not apply to MyTaxiBooker since the direct revenue does not stream from the customers who book taxis but taxi

companies through block fees and commission from each journey

- The app is free to purchase which can intensify product attractiveness. - We provide two scenarios which are 3%, and 5% commission from taxi companies;

3% being the worst case scenario and 5% the most realistic scenario and both

enable the company to break even in the first three years of operations. According

to the responses from questionnaires, 5% is the average percentage taxi firms are

willing to pay.

- Block fees form another revenue stream, since £50 per month for each firm is a small proportion of their overall profits; all respondents have agreed to pay this

sum. Block fees provide cash flow to ensure cost coverage during university

holidays when revenue from commission is low due to low app usage.

PROMOTION

Promotion encompasses all tools that a business can use to enhance its recognition by

customers; it includes advertising, sales management, special offers and exhibitions

(Ivy, 2008).

- The company’s main promotion strategies are self-advertising, an app trial period, meetings with local taxi firms to gain support, university and society support,

attendance at freshers events, an article in student newspapers, promotion through

word of mouth and weekly updates of taxi offers on the website and social

networking sites which are effective and free to use to the company’s advantage. - Posters are to be displayed on halls of residence notice boards and the distributors

will be responsible for this. A large scale advertising campaign will be held in

October every year to target the fresher population.

- The trial of the app in order to test quality and functionality will last two months in the summer of 2014. International, postgraduate, and local students will be

individually targeted to test the app. The trial will also produce a small return on

customers through word of mouth recommendations.

- Current YUSU president Kallum Taylor has also given his support, alongside various society social secretaries who would be willing to publicise the app and

encourage usage on social events (see appendix 3.0).

PEOPLE

The services provided by employees can directly influence the customers’ impression

of a business (CIM, 2009).

- The three main business connections that will contact consumers directly are the director, distributors and taxi drivers. However, the staffing structure hierarchy

outlines other business stakeholders (see section 6.1 Board of Directors). A good

staffing structure will warrant unobstructed expansion to other regions.

- The director and distributors are employed by the business directly. Part of the director’s responsibility is to review customer feedback and implement app revisions if necessary.

- Distributors will hand out company leaflets to potential consumers in the city centre and on campuses. Training will be provided (see section 6.3 Training) regarding

appropriate behaviour and dealing with customer FAQs. A friendly service attitude

is necessary for an enhanced business image. However, the behaviour of

distributors is difficult to monitor.

- Company and taxi firm relationship management will be a key long term focus.

PROCESS

‘Process’ comprises conditions necessary to optimise customer satisfaction; service waiting times, availability of information to customers and the helpfulness of staff (Ivy,

2008).

- For MyTaxiBooker, the waiting time of ordering a taxi is provided by each company and customers can track the precise location of the taxi whilst they are waiting, this

avoids uncertainty surrounding times.

- Customer satisfaction will be maximised through implementation of customer suggestions.

PHYSICAL EVIDENCE

A service cannot be experienced before it delivers therefore purchase may be carry risk of

dissatisfaction (CIM, 2009).

- The nature of the app is such that the company must aim to persuade customers through an app notification to submit positive feedback and certify whether the app is

convenient and useful which will promote further downloads.

- Word of mouth recommendations citing a beneficial experience from the app are a convincing way to persuade further downloads rather than simply business self-

promotion.

’

3.6 Market Growth

The estimated growth rates for the app during the first three years will result in a 3% increase in

number of taxi journeys booked relative to the respective month in the prior year, equating to an

increase of almost 50,000 journeys per year. By 2018, 54% of mobile devices will be “smart”, an

expected increase of 21% from 2013 (Cisco, 2014). Specifically, demand for the travel apps

market is expected to continue to rise following the increase by 149% in 2013 (Khalaf, 2014).

Consequently, there is scope for significant growth in the app market which MyTaxiBooker will

aim to take advantage of by expansion into Newcastle and Manchester as the secondary target.

The focus will be cities with a high student population. When region targets are satisfied and the

company can see established demand and brand awareness, further cities will be targeted in

order to increase advertising revenues. A gradual process is necessary and regular feedback

implementation should improve overall customer satisfaction and encourage user growth.

To maintain market share in the first two

years (Currently this is 100%, therefore

the aim is to deter new entrants whilst

brand awareness is heightened).

Become the UK s largest student taxi app within the next 5 years.

To be present in 7 UK cities by 2020

Specific

Marketing

Objectives

4.0 Operations Strategy

4.1 Information Systems and Information Technology

The app and the website rely on the use of information technology. Both will be designed,

created and maintained (updates or changes to the app and/or the website, as a result of customer

feedback or fault) by a specialist, Awesum Company. Basic Microsoft Office tools will be

required to produce general company daily/weekly reports Outlook will also be essential for

communicating with the App/Web creator, customers and other arising parties.

The system is guaranteed reliable due to internal and external control measures. Internal control

is managed by the managing director through feedback review/fault submissions. Technology

support from the designer provides the external control. The system will be the primary means

for recording sales figures and GPS may be used to track the parameters of each journey. This

enables determination of commission owed to the company through distance tracking should a

customer choose to pay by cash.

Due to heavy reliance upon IT, the business has ensured cyber security measures with Awesum

to ensure all data is backed up and no risk is presented to other businesses that choose to trade

with us. In the event of proposed expansion, the system may need to be reviewed to account for

this.

4.2 External Accountancy

The director will work alongside an external accountant from The Accountancy Partnership.

Since revenue can be automatically calculated through the IT system, a book keeping service is

not required. Furthermore, due to the simplicity of the business finances, external accountants

have suggested they be hired and paid based per hour. Accountant duties include payroll through

the BACS transfer method and the completion of an annual p35 tax return. Please see appendix

15.8 for a full list of duties. To avoid confusion and inconsistency with accounts over the long-

term, the accountants will remain unchanged for the foreseeable future. However, external

accountants may take significant time to understand the company resulting in longer hours

required at start-up.

4.3 Quality Assurance and Control

In order to ensure service quality, quality awareness is built into app production systems.

The app will undergo a beta testing period

The company understand that first impressions matter and negative impressions have the

potential to damage the brand. Therefore, a two month trial for customers in July and August

2014 will take place and their feedback will enable adjustment of the product in September

before it enters the market in October. The app will be provided to students who remain at

university during the summer period, notably postgraduate and PhD students, York-based

placement students and students visiting for summer foundation courses. Subsequently,

customers can feedback every time after they book a taxi through our app.

Problem

Taxi company

service

App

functionality

This beyond the control of

MyTaxiBooker, however, the

company may negotiate with firms

to improve the service quality and

heighten their awareness of

customer perceptions

Awesum will be contacted for

updates and existing app users will

be notified on the app when a

newer version is available for

download.

4.4 Premises

Our business is located within close proximity to York railway station and the local bus station.

The premises will be rented for three years (although there are no long term contractual

obligations present), after which company expansion may suggest relocation.

The rent includes all necessary facilities including a telephone system and -Fi broadband. A

limitation of the location may be that business operations exist in York and Leeds yet the office

is in one location, however, the travel time between two cities is such that the manager may

easily travel via the closely situated transport links.

4.5 Advertising Locations

Who? Rationale

Term Time -

Students and locals will be targeted within York and Leeds

(students being the main target

market). Advertising campaigns

will take place during term time

Local targeted advertising after the initial three year set up

period.

Key selling points are in the York and Leeds city centres and

distribution of leaflets within the

University of York, York St

John, York College, Leeds

University and Leeds

Metropolitan University.

These locations have been chosen

based on popular demand from market

research. The geographical closeness to

the business investors ensures that they

can maintain input and easy access

where necessary during early years.

Further, Leeds possesses one of the

largest UK student populations whilst

York holds a rapidly growing student

population. Positioning will be chosen

strategically in city areas with a large

number of by passers. Distributors will

be required to use their initiative and

develop advertising skills. The

business is easy to relocate and can

therefore meet demand. Low season -

When the majority of students return home, it is expected that

there will be a significant

decrease in app usage.

Loss will be partially compensated for the remaining

PhD, masters and international

students.

Any locals using the app will continue to provide revenue.

Concentration on low season revenues will occur after the

three year start-up period.

For a breakdown of distributor

numbers, please see the

financials.

4.6 Clients

The potential is high for taxi companies besides those already in agreement with the initiative to

become involved. This is because those that refuse involvement are posed the threat of losing

potential customers to their competitors who have contract with our company.

4.7 Equipment

Electrical

Distributor

Clothing

Tangible assets include the laptop and mobile phone used by the managing

director which will be necessary for stakeholder communication and daily

business management. The laptop depreciates each year however, for the first

three years the likelihood of needing to purchase new equipment is minimal.

Distributors must wear the following when undertaking business duties on

campuses or in the city centres. Wearing a T-shirt with the business logo can

enhance recognition to customers. The design appears professional whilst

maintaining the convenience spirit of the business.

4.8 Insurance

Our business employs one full-time managing director and several part-time distributors. Every

business that employs one or more employees must purchase employers’ liability insurance; this

protects the business in the event of injured or ill workers. The company will also purchase

business equipment insurance to protect our assets such as laptop.

5.0 Legal and Industry Requirements

Although legal considerations are limited due to the nature of the business, it is vital that these

are deliberated.

5.1 App considerations

Data

Encryption

To ensure data protection, the app code will be encrypted by the app creator since

the hardware for most smartphones is not already encrypted.

Disclosure The app will disclose all potential monetary charges from in-app options.

End User

Privacy

1. The app will disclose to the user any information that will be collected from

the app, both intentionally and unintentionally.

2. No personal data including name, contact details or other personally

identifiable information will be shared with any parties including taxi firms

apart from the taxi driver involved in collection. There will be a necessary

business purpose for any data collected and the data will be used only for the

purposes for which the information was provided (in order to book a taxi).

Intellectual

Property

1. On the development and distribution of the app, it is important to address the

protection of the company’s own rights and minimise the risk of infringing

upon the rights of other companies.

2. The app and its code will qualify for copyright protection and authorship

rights. Copyright will come into existence when the work is created and

stable in tangible form. This copyright will be registered. The company will

enter into work-made-for-hire and IP rights assignment agreements with

third-party app developers to ensure that rights are held with MyTaxiBooker

Ltd. To minimise the risk of infringing or misappropriating third-party

copyrights, the app will be created using an original developer code.

3. The apps name and logos/design elements will be trademarked. To reduce

risk of trademark infringement, a trademark search will be undertaken

through the intellectual property office.

4. At the beginning of and throughout app creation, MyTaxiBooker Ltd will

ensure that it clearly defines and protects IP rights on any services provided

to the public.

5. The developers will also ensure and offer advice regarding compliance with

app advertising laws.

1. The app stores that the company will list with will contain various non-Distribution

negotiable agreements that vary in complexity. These will be reviewed before

acceptance to ensure no unpremeditated consequences.

Agreement

2. Any agreements between the third-party developer and the stores will also be

reviewed for compliance purposes.

Failure to address the issues above may cause inquiry by customers and potential competitors;

therefore it is vital to understand potential legal concerns and actions that must be taken before

operations. Best practice is advisable for this form of business since the legal boundaries

regarding technology and apps are still to be solidified (Radley, 2012).

5.2 Employment Considerations

In order to ensure that the company remains within its legal boundaries and to mitigate risk of

legal complications regarding employment, the company will consider the following;

 Public liability insurance,

 Employer’s liability,

 Business equipment,

 Personal accident insurance.

More specific employment considerations include the following:

1. Advertising Stage

The company must take caution to avoid discrimination on the grounds of age, sex or

race and ensure that its keeps in mind the workers’ rights (Government, 2013.)

2. Interview Stage

The company must avoid personal biases, ensure provision of realistic information to

the best of the interviewer’s knowledge and not to create any verbal

agreements/promises that have potential to be unfulfilled and constitute legally binding.

3. Right to employment

The company must request the relevant documents to ensure that the individual has the

legal right to work in the UK. The appropriate criminal records checks should be

performed to ensure that individuals are suitable to undertake and represent the

company’s activities.

4. Statement of employment

Written statements of employment will be produced within 2 months of employment

for all employees and detail; salary, hours of work, holiday entitlement, sick policies

and disciplinary and grievance procedures. This is to ensure no issues arise with

employment tribunals for misconduct.

5. Tax Responsibilities

The company will adhere to all taxation requirements including; ensuring due PAYE

and National Insurance contributions are made by employees and that any student loan

repayments are made if required by the managing director.

6.0 Human Resource Strategy

6.1 Board of Directors and Workforce

The board of directors will constitute the six primary investors/founders of the company. Total

initial investment will sum £70,000, one investor contributing £20,000 and the other five,

£10,000. The investors will not be involved in such activities due to other full time

commitments. The board will hire a managing director in order to manage daily business

activities in return for a remuneration package.

The business workforce is limited due to the predominantly self-regulating nature of an app.

After year three, when expansion into Newcastle and Manchester is considered, it will be the

responsibility of the director to hire further marketing material distributors and a further

managing director for the two cities.

Company structure and roles will be established as follows:

The Managing

Director

The Distributors

1. The day-to-day operations of the business within York and Leeds

2. Maintaining contact with potential customers (taxi firms)

3. Identifying and solving problems within the company and monitoring the

app/website system

4. Monitoring the overall performance of the company

Some of these tasks may require him/her to travel within these two cities

which we have considered by allowing a travelling expense budget. The

director is also responsible for maintaining healthy stakeholder relationships.

1. Distributing flyers and posters in university campuses, bus stops and town

centres. Potential distributors are mainly university students who want

some part-time jobs.

2. In October in each of the three years, 20 distributors will be employed (10

York, 10 Leeds) and will each work 10 hours per week. This is due to the

fresher’s week which provides heightened opportunity to gain customers,

thus, a high level of advertising is required.

3. In November until February and the month of May, 6 distributors will be

employed (3 York, 3 Leeds) and each will work 15 hours a month. High

employment is necessary in October when the academic year starts in

order to advertise to freshers. Lower employment is required in the

following months in order to simply ensure maintenance of marketing

material presence in our target regions. Distributors have not been

employed during holiday months in order to reflect the seasonality of

student presence. Using simple cost-benefit analysis, arguably the most

comprehensive form of economic evaluation, suggests that maintaining

advertising during these months is likely to result in a cost that outweighs

the potential benefits due an accepted and financially sustainable lower

level of app usage during holiday periods and the company therefore

considers this to be unnecessary (Robinson, 1993).

6.2 Recruitment

Distributors - Recruitment will occur through academic institutions in York and

Leeds.

- Advertisements will be positioned on campuses in areas with

regular student transitions and details of the recruitment process

will be included on the website on which applicants will be

prompted to submit their applications.

- Interviews conducted by the board of directors will follow, taking

place at the rented office premises.

Managing Director - The managing director position will be advertised on employment

websites and at university leavers in York and Leeds through the

careers service.

- The managing director will face a first stage interview from two

members of the board, and if successful, a final stage interview

will follow conducted by all board members to ensure agreement

with the individual to be chosen for company representation.

6.3 Training

Training will be required in order to ensure that employees hold brand awareness and an

understanding of the company’s intended image and logistics of their role. Training will take

place over one working day involving relevant themes including ‘how to maintain suitable

advertising conduct’. The managing director will require separate training, lasting 3 days in

order to ensure all company objectives, processes and activities are instilled, understood and

undertaken in a manner considered appropriate by the board. All training will be undertaken by

the board members (the company owners); the only individuals to understand the nature of the

company in its complexity and entirety.

6.4 Strategies to Maintain Staff Morale

According to Heskett et al (1994), ‘the Service Profit Chain’ suggests that company value is

created by satisfied, loyal and product employees.

Distributors - Regarding distributors, due to the simplicity and non-time-

consuming nature of their role, and the seasonal aspect, the

company will not be conducting appraisals.

Managing Director - In order to motivate the managing director, a 3% pay rise will be

awarded given that certain minimum standards are met that the

board deems appropriate. This will be assessed through an annual

appraisal by confirmed members of the board. After three years

when the company has established itself, the managing director

will undergo an appraisal after which there is the potential for a

substantial pay rise at the board’s discretion. The aim is to drive

performance.

Personnel Credentials

Due to the innovative nature of the business, strong prior experience is not required amongst

personnel and relevant skills are to be gained progressively and on training. However, advisors

such as lawyers and accountants will have the specific expertise necessary to assist the business.

Prior sales and marketing skills are beneficial for the managing director, though these are not

vital. All employees will be required to possess strong communication and commitment skills.

7.0 Financial Proposal

Below is a summary of key financial projections. For revenue stream information, detailed

assumptions and statements please see appendix 14.0 and 16.0 respectively.

7.1 Projected Profit/Loss Summary

In summary, MyTaxiBooker predict the following profits:

5% Commission (actual)

2014 2015 2016

3% Commission (worst

case)

2014 2015 2016

£56,421 £88,797 £106,039 £6,320 £32,825 £42,881

7.2 Projected Cash Flow Summary

The company is able to maintain a healthy positive cash flow during the three years.

5% Commission (actual)

2014 2015 2016

3% Commission (worst case)

2014 2015 2016

£126,503 £215,382 £321,502 £76,402 £109,309 £152,272

7.3 Balance Sheet Summary

In the first year, a laptop is to be purchased for the managing director’s use. The net book value

of the asset is visible on the statement of financial positions. No long term liabilities exist since

the company does not borrow funds. The liabilities present are creditors payable within a year:

5% Commission (actual)

2014 2015 2016

3% Commission (worst case)

2014 2015 2016

Net Assets= Share

Capital +Reserves £126,421 £215,218 £321,256 £76,320 £109,145 £152,026

7.4 Break-even Analysis

The Table below indicates the predicted months in which MyTaxiBooker will breakeven along

with the margin of safety percentage for both the 5% actual scenario and the 3% worst case

scenario.

5% Commission (actual)

3% Commission (worst

case)

Break Even

Between October and

November 2014

Between December 2013

January 2014

Predicted Journeys 81,000 148,500

Break Even Journeys 68,611 145,777

Margin of Safety 12,389 (15.29%) 2,723 (1.83%)

7.5 Key Performance Indicators

The following table summarises key financial ratios that enable a summary assessment of the

company’s forecasted performance for the first three years of operations. There is no gearing

since the company does not finance operations through debt. The current ratio is consistently 1

as the company’s total assets equate to its total liabilities.

Key Performance Indicators 5% Commission (actual)

2014 2015 2016

3% Commission (worst

case)

2014 2015 2016

Gross Profit Margin

Net Profit Margin

Return on Capital Employed

(ARR)

Current Ratio

Gearing Ratio

Payback Period

95% 97% 98%

17% 45% 55%

59% 52% 41%

1 1 1

0 0 0

November 2015 (1 year

and 2 months)

92% 96% 96%

-28% 14% 28%

20% 39% 36%

1 1 1

0 0 0

April 2017 (2 years and 7

months)

The payback period suggests that the initial cash flow of investment is expected to be recovered

within the required three year period in both scenarios from the venture cash inflows. Investment

risk as expected is relatively lower with 5% commission, however, in both circumstances it can

be considered low since investment can be recuperated in less than three years. Although the

payback period does not take into account the time value of money, it is a useful indicator. It is

also unlikely than the value of money will change substantially in 3 years such that the

investment risk increases significantly from predictions.

8.0 Risk Analysis

The 2008 Financial Crisis’ evidence has shown that poor management of risks can have a

devastating impact on industry sectors, the whole nation, and more severely, the global

economy. As a consequence, there is a significant pressure to meet these risks in a timely

manner. Thus, risk assessment plays an important part of leading business into longevity (PWC,

2008). Risk assessment involves identifying and controlling possible risks that could influence

the businesses’ performance capabilities. This includes both risks in the external environment

and within an organization’s internal environment. In general, there are four ways in which

businesses can respond to risks; tolerate, treat, transfer and terminate (Imperial College London,

2008).

There are various approaches that MyTaxiBooker will use to assess risks.

8.1 Risk assessment through PESTLE Environment

The diagram below illustrates company responses to the most threatening PESTLE factors that may be targeted.

PESTLE Risks Potential Risks and Effects (Positive or Negative) Possible Risks Responses

Political Potential protests which can have an impact on taxi

usage-reducing our potential commission revenue.

Tolerate - The company can only tolerate these

problems.

Economic The economic cycle may have an effect on our

business as taxis may be considered luxury means of

transportation as opposed to walking or buses.

Therefore, a recession may slightly reduce taxi usage

which can result in a decrease in commission (vice

versa for a boom period).

Sociocultural Students from different cultures and backgrounds -

Some students may not habitually use taxis as a

personal preference to walking, buses or bicycle and

only when going out with several friends. This may

slightly impact the commission figures.

Tolerate - The cannot significantly impact the

consumers’ demand in the market.

Treat - Undertake prior research regarding statistics of

consumer spending and potential demand for our

products to identify the current economic cycle. This

enables the company to determine when to enter the

market.

Tolerate - The company cannot significantly alter

consumer habits apart from those consumers

concerned about taxi booking convenience.

Treat – The convenience aspect of the app may alter consumer habits.

PESTLE Risks Potential Risks and Effects (Positive or Negative) Possible Risks Responses

Technological Treat – Limit our exposure to those risks through purchase of anti-virus software. The company will

property.

Transfer – Transferring the risks to an external party through purchase of insurance for software failure

losses. By having an external service provider, in this

case, Awesome company who will look after the

maintenance and the overall system and performance

of the company’s software.

Viruses on our app or website which may interfere

with our operations.

Potential competitors may replicate the idea.

Legal A change in the taxation rate or limitation on the

commission revenue that can be charged to taxi firms.

This will have a moderate impact to high impact

depending on the type of legal risks – however, the company does not deal with many legal factors. The

potential damage is loss of revenue or fines.

Tolerate - The company must tolerate the risks as the

company cannot illuminate legal risks.

Treat - Reducing the risk exposure by consulting with

a specialised law firm to avoid any incompliance with

the legal aspects.

Environmental

PESTLE Risks Potential Risks and Effects (Positive or Negative) Possible Risks Responses

Natural disasters such as flooding or storms. These

have a great impact on the usage of taxis. This can

reduce our potential commission considerably. Our

employees may experience travel difficulties.. In the

worst case, it could possibly terminate the operation of

the business temporarily.

Positive risks – Heavy rain and flooding may increase use of more convenient methods of transport such as

taxis which may in turn increase our commission

revenue.

Tolerate - We cannot control the occurrence of natural

disasters.

Transfer – Entering into an insurance contract to cover our potential damages.

Risk measurement: The risks assessed in the PESTLE environment can be measured by

likelihood of occurrence and their possible impact level.

PESTLE Risks Likelihood (0=very low;

5=very high)

Impact (0=very low; 5=very

high)

Political 2 2

Economic 2 4

Sociocultural 2 1

Technological 3 4

Legal 2 3

Environmental 1 4

The Risk Assessment Matrix (RAM) below enhances understanding of the risk measurement

(Martinez, 2013).

Likelihood

Technological

Sociocultural Political Legal Economic

Environmental

Major

3 Moderate

1 Minor

1 2 3 4 5

Impact

It can be seen that technological risk is the company’s highest priority as it has the highest

likelihood and the highest impact level. This makes practical sense since the company’s

operations are based on IT systems. On the other hand, sociocultural risk is the lowest concern

for our business as it has very low impact and likelihood, if at all, to the company.

8.2 Risk Mapping

The risk mapping technique helps to visualise these threats more clearly.

High Probability

Protests in York and Leeds

Financial Crisis/Economy Meltdown

IT Viruses/Website or App Malfunction

Low Probability

High Impact

Low Impact

Fines from lack of legal considerations

Entry of new competitors

Invention or entry of substitutes

Supplier (App/Website

manufacturer) goes bankrupt

Flooding in York

Furthermore, risks can be more commonly classified as follows.

8.3 Strategic Risk, Operational Risk, Financial Risk and Commercial Risk

Strategic Risk

From our strategic analysis, Porter’s Five Forces ‘Threat of new entrants’

is our main concern. Thus, this risk has been considered thoroughly. We

will register copyright for our intellectual property; contractually agree

with the app/website provider ownership of codes, data encryption and

other essential programme data. Moreover, we will trademark the logo and

brand name. This can reduce the risk from potential competitors

significantly. Furthermore, once the brand has been popularised, there will

exist greater barriers for potential competitors to enter the market and the

company will be more likely to hold the dominant position in the market

in York and Leeds regions.

Operational

Risk

Operational Risk is defined as risk which arises from day-to-day

operations of the business. Potential operational risk of our business can

arise due to managing director and/or distributors unavailability due to

sicknesses/accidents or malfunction in our app/website to operate

normally.

The former case can be limited by transferring the risk to an external party

by purchasing insurance from AXA which covers public liability

insurance, employer’s liability, business equipment and personal

insurance. The latter case may be treated and transferred by outsourcing

our risk to a website/app provider, Awesome Company who will take

responsibility for errors in the app/website which will be agreed in the

signed contract.

Financial Risk

Commercial

Risk

Since the capital structure of our company does not include debt, there is

therefore no interest commitment risk. This also results in a more

favourable financial position that would better sustain debt and interest

payments if needed in future. Moreover, contingency reserves have been

included in the financials to compensate any underestimated financial

assumptions.

One aspect of commercial Risk deals with the accuracy of the income

projections. This risk can be minimised as the financial proposal has also

considered a worst case scenario with a 3% commission rate (as supposed

to 5%). With the 3% commission rate, the forecasted financial statements

show that the company will still break even within the first year. In

addition, all costs are covered during the low season period demonstrated

by the company’s ability to produce healthy and adequate levels of

liquidity. Another commercial risk may be a small customer return on

advertising such as posters and flyers. This has been mitigated through

minimalistic assumptions regarding number of ‘journeys booked through

the app’ in the first few months of operations. The use of other advertising

methods including university links and social media will ensure that low

returns on distribution material are not detrimental to company success.

9.0 Beyond Start-up (Exiting or Growing the business)

9.1 Exit Strategy

Stutely (2012) suggests that an exit strategy is one of the most crucial factors to be considered

during business start-up. It indicates potential business reactions during times of business

distress where even liquidation may be vital.

First, we have planned a trial period (demo version of the product) for the first few months

before launching into the market. If we have to exit in this period, there is a very minor impact to

the company since most of expenses would not yet be incurred.

Secondly, if the operation does not run well during the first three years, there will still be a small

impact to the company. Since the company does not use debt as a source of finance and expenses

are cash based, there will be no risk obligation; neither would the company be bound to any

supplier contracts. The company also possesses a laptop and mobile as its only tangible assets

which may be disposed of at no significant loss to the business.

After three years, the company would have reached its breakeven point and payback period plus

interest; therefore investors will not be affected. The company can be sold to the current

manager (management buy-out) or other interested investors. The company may also exit by

closing down operations, removing the website domain and cancelling the subscriptions for the

app and website.

The main concerns are managing director dismissal; it will be agreed in the contract for a one-off

payment of compensation to their damages. This will depend on the past performance of the

business, the operating period that the company has to exit and whether it has surpassed its break

even period and payback period.

No contractual agreement would exist with app users and taxi companies or any other

stakeholders such as the accountants, lawyers and app creators, however all parties will be

notified in the event of market exit.

9.2 Future Development

Stutely (2012) recommends that it is also vital to consider future operations in the business plan.

We have considered four main goals after the three years of success. The four main goals are

developed from Ansoff’s Growth matrix of four marketing strategies; market penetration, market

development, product development and diversification (Riley, J., 2012).We are also aware of the

level of risk associated to each growth strategy compared to one another (Please see Fig. 1).

In cr

e a

si n

g ly

n e

w m

a rk

e ts

Increasingly new products

Fig.1. Ansoff Growth Matrix (Riley, J. 2012)

https://2012).We

Market Penetration

1. The business aims to further penetrate the

existing market in York and Leeds. An aim

of successfully targeting 80% of taxi firms

in both York and Leeds has been set.

2. We also aim to boost popularity amongst

local residents and tourists for new demand

pool. This may be achieved through the

development of a new marketing mix.

Product Development

1. Introduction of a Freemium business model

which has proved increasingly popular in

recent decades (Niculescu & Wu, 2011). It

offers extra upgraded app versions

containing special features and functions at

a small extra cost alongside the original

free app; extra income may further assist

funding of the future expansions.

2. The business may also consider an increase

in the commission rate by 1% or 2% if the

company performance appears to surpass

taxi company expectations

Market Development

1. There are strong opportunities. The

business will aim to seize opportunities in

untouched markets in other student regions

using the first mover advantage. Expansion

to Newcastle and Manchester is the aim

and one/ two managing directors may need

to be employed as well as an increase in the

asset base to accommodate this increase.

2. At the beginning of operations, the business

will pitch to a panel of investors for

expertise and funding will be provided by

founding investors. Therefore, if the

business does not have the means for

funding expansion, expertise investors may

be approached since they will have three

years of business knowledge to determine

whether the investment would suit their

portfolio. Banks loans would be considered

if essential.

Diversification

1. The company may also consider

franchising its idea to other companies

wishing to utilise it.

2. In the long term, the company may

consider selling personal data information

within legal limits to third parties. Users

will however be notified of this change and

the company will seek legal advice to

ensure activities remain within the UK

legal framework.

Conclusion

The sections within this plan demonstrate MyTaxiBooker as a viable business idea with a

mission to provide economy and efficient minded taxi users with a free, user friendly and

innovative platform for booking and monitoring the travel process. The plan also highlights the

close interlinked nature of the main business functional areas. Market research suggests the

existence of a unique need for our service amongst both taxi users (specifically students) and

taxi firms. Through assessment of the external and internal environment, it is apparent that

MyTaxiBooker will possess the branding and service usability leads necessary to take advantage

of an unoccupied market opportunity. The financial plan illustrates a strong profit making

company and the ability to break even within the first year under both the average and worst

case scenarios. Market research aided the revenue and costs assumptions process to ensure

realistic forecasts and the marketing plan validates the company’s ability to achieve these figures

in practice. Company default and risk levels will remain low since the company does not intend

to finance with debt in the first three years of operations; seizure of the company’s operations

would also result in minimal financial loss.

MyTaxiBooker is established to take advantage of being the ‘first mover’ in its market. Being the

first app/website arrangement places the company in good stead to benefit from the highly in-

demand and lucrative nature of the app industry

The MyTaxiBooker team

References

AlterNet. (2009). How our Fast Paced World is Making us Sick. AlterNet Online. [Online].

Available at: <http://www.alternet.org/story/140994/slow_down%3A_how_our_fast-

paced_world_is_making_us_sick> [Accessed 20 January 2014].

Ansoff, H. I. (1957). Strategies for Diversification. Harvard Business Review, 35 (5), 113-124.

Barney, J. B. (2001). Resource-Based Theories of Competitive Advantage: A Ten-Year

Retrospective on the Resource-Based View. Journal of Management, 27 (6), 643-650.

Blythe, J. (2009). Key Concepts in Marketing. Los Angeles: SAGE.

Chan, K. W. & Mauborgne, R. (2005). Blue Ocean Strategy: How to Create Uncontested Market

Space and Make Competition Irrelevant. Boston: Harvard Business Press.

Chartered Institute of Marketing (2009). Marketing and the 7Ps: a Brief Summary of Marketing

and How it Works. [Online]. The Chartered Institute of Marketing, UK. Available at:

<http://www.cim.co.uk/Resources/ResourcesHome.aspx> [Accessed 26 February 2014].

Cheverton, P. (2005). Key Marketing Skills: Strategies, Tools and Techniques for Marketing

Success. London: Kogan Page.

Chron. (2013). How Much of Fare Do Taxi Drivers Keep? [Online]. Houston Chronicle.

Available at: <http://work.chron.com/much-fare-taxi-drivers-keep-22871.html> [Accessed 22

January 2014].

Cisco. (2014). Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update,

2013–2018. Cisco Online. [Online]. Available at:

<http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-

vni/white_paper_c11-520862.html> [Accessed 20 January 2014].

http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index

http://work.chron.com/much-fare-taxi-drivers-keep-22871.html

http://www.cim.co.uk/Resources/ResourcesHome.aspx

http://www.alternet.org/story/140994/slow_down%3A_how_our_fast

CMSinfo. (2011). European Mobile Market. [Online]. Telecoms Market Research. Available at:

< http://www.telecomsmarketresearch.com/resources/Mobile_Market_Europe.shtml> [Accessed

27 February 2014].

Complete University Guide. (2013). Percentage of International Students by University.

Complete University Guide Online. [Online]. Available at:

<http://www.thecompleteuniversityguide.co.uk/international/international-students-the-facts/by-

university/> [Accessed 20 January 2014].

Coyne, K, P. & Subramaniam, S. (1996). Bringing Discipline to Strategy. The McKinsey

Quarterly, 4 (1), 14-25.

Dickson, P. R. & Ginter, J. L. (1987). Market Segmentation, Product Differentiation, and

Marketing Strategy. Journal of Marketing, 51 (2), 1-10.

Doran, G. T. (1981). There's a S.M.A.R.T. Way to Write Management's Goals and Objectives.

Management Review, 70 (11), 35–36.

Drucker, P. F. (1954). The Practice of Management. New York: Routledge.

Eca-international. (2013). Companies in the UK are Forecasting 3% Pay Rises Again in 2014.

[Online]. Employment Conditions Abroad. Available at: <http://www.eca-

international.com/news/press_releases/7915/Companies_in_the_UK_are_forecasting_3__pay_ri

ses_again_in_2014> [Accessed 22 January 2014].

Government . (2013). Statistical Data Set. Taxis, Private Hire Vehicles and their Drivers.

[Online]. Available at: <https://www.gov.uk/government/statistical-data-sets/taxi01-taxis-

private-hire-vehilces-and-their-drivers> [Accessed 23 January 2014].

Grundy, T. (2006). Rethinking and Reinventing Michael Porter's Five Forces Model. Strategic

Change, 15 (5), 213-229.

Han, S. L., Wilson, D. T. & Dant, S. P.. (1993). Buyer-supplier Relationships Today. Industrial

Marketing Management, 22 (4), 331-338.

https://www.gov.uk/government/statistical-data-sets/taxi01-taxis

https://international.com/news/press_releases/7915/Companies_in_the_UK_are_forecasting_3__pay_ri

http://www.eca

http://www.thecompleteuniversityguide.co.uk/international/international-students-the-facts/by

http://www.telecomsmarketresearch.com/resources/Mobile_Market_Europe.shtml

Heskett, J. L., Jones, T. O., Loveman, G.W., Sasser, E. W., & Schlesinger, L. A. (1994). Putting

the Service-Profit Chain to Work. Harvard Business Review, 72 (2), 164-174.

Hill, T. & Westbrook, R. (1997). SWOT Analysis: it's Time For a Product Recall. Long Range

Planning, 30 (1), 46-52.

HMRC VAT. (2014). Exempt and Partially-Exempt Businesses for VAT Purposes. [Online].

HMRC (Government). Available at: <http://www.hmrc.gov.uk/vat/managing/reclaiming/partial-

exemption.htm> [Accessed 13 February 2014].

Hogan, T. (2013). Free App Allows Public Run Check on Taxi Drivers. Independent Online.

[Online]. Available at: <http://www.independent.ie/irish-news/free-app-allows-public-run-

check-on-taxi-drivers-29102203.html> [Accessed 21 January 2014].

Imperial College London (2008). Risk Management Procedure. [Online]. Available at:

<http://www3.imperial.ac.uk/riskanddisasterrecovery/riskmanagement/riskproceduredecember2

008> [Accessed 02 March 2014].

Ivy, J. (2008). A New Higher Education Marketing Mix: the 7Ps for MBE Marketing.

International Journal of Educational Management, 22(4), 288-299.

Jacoby, J. & Kyner, D. B. (1973). Brand Loyalty vs. Repeat Purchasing Behaviour. Journal of

Marketing Research, 1 (4), 1-9.

Jobber, D. (2013). Principles and Practice of Marketing. Maidenhead: McGraw-Hill.

Johnson, R., Gensch, D., Moore, W., Pessemier, E., Urban, G., Shocker, P. G. A. & Lerman, S.

(1979). Alternative Perceptual Mapping Techniques: Relative Accuracy and Usefulness. Journal

of Marketing Research, 16 (4), 495-506.

Khalaf, S. (2014). Mobile Use Grows 115% in 2013, Propelled by Messaging Apps. Flurry Blog.

[Online]. Available at: <http://blog.flurry.com/?Tag=Usage%20Statistics> [Accessed 21 January

2014].

http://blog.flurry.com/?Tag=Usage%20Statistics

http://www3.imperial.ac.uk/riskanddisasterrecovery/riskmanagement/riskproceduredecember2

http://www.independent.ie/irish-news/free-app-allows-public-run

http://www.hmrc.gov.uk/vat/managing/reclaiming/partial

Laurent, G., Kapferer, J. N., & Roussel, F. (1995). The Underlying Structure of Brand

Awareness Scores. Marketing Science, 14 (3), 170-179.

Lieberman, M. B. & Montgomery, D. B. (1988). First‐Mover Advantages. Strategic

Management Journal, 9 (1), 1-58.

Loudon, D. L., Stevens, R. E. & Wrenn, B. (2005). Marketing Management: Text and Cases.

London: Routledge.

Lynch, R. (2009). Strategic Management. 5th edition. Essex: Pearson Education Limited.

Mahmood, W. & Sallehah, W. (2007). Americans Lead the World in Car Ownership, China and

India Fast Catching up in Absolute Number of Cars Owned. Nielsen. [Online]. Available at: <

http://www.nielsen.com/my/en.html> [Accessed 05 March 2014].

Makadok, R. (2001). Toward a Synthesis of the Resource‐Based and Dynamic‐Capability Views

of Rent Creation. Strategic Management Journal, 22 (5), 387-401.

Martinez, M. (2013). Qualitative Risk Analysis and Assessment. [Online]. Available at:

<http://www.project-management-skills.com/qualitative-risk-analysis.html> [Accessed 02

March 2014].

Mehta, S. (2000). Marketing Strategy. Sam Houston State University. [Online]. Available at: <

http://www.shsu.edu/> [Accessed 01 March 2014].

Menon, A., Bharadwaj, S G., Adidam, P. T. & Edison, S. W. (1999). Antecedents and

Consequences of Marketing Strategy Making. Journal of Marketing, 63 (2), 18-40

McKinsey. (2011). To Centralise or not to Centralise. McKinsey Online. [Online]. Available at:

<http://www.mckinsey.com/insights/organization/to_centralize_or_not_to_centralize>

[Accessed 05 March 2014].

Needham, D. (1996). Business for Higher Awards. Oxford: Heinemann.

http://www.mckinsey.com/insights/organization/to_centralize_or_not_to_centralize

http://www.shsu.edu

http://www.project-management-skills.com/qualitative-risk-analysis.html

http://www.nielsen.com/my/en.html

Niculescu, M .F. & Wu, D. J. (2011). When Should Software Firms Commercialize New

Products via Freemium Business Models? [PDF]. Georgia Institute of Technology. Available

at:<http://citeseerx.ist.psu.edu/viewdoc/download?rep=rep1&type=pdf&doi=10.1.1.220.9580>

[Accessed 02 March 2014].

ONS. (2011). Neighbourhood Statistics. [Online]. Office for National Statistics. Available at:

<http://neighbourhood.statistics.gov.uk/dissemination/LeadTableView.do?a=7&b=6275150&c=

LS1+4HR&d=13&e=13&g=6482321&i=1x1003x1004&o=362&m=0&r=0&s=1391879109711

&enc=1&dsFamilyId=2545> [Accessed 08 February 2014].

ONS. (2013). Internet Access - Households and Individuals, 2013. Office for National Statistics.

[Online]. Available at: < http://www.ons.gov.uk/ons/rel/rdit2/internet-access---households-and-

individuals/2013/stb-ia-2013.html> [Accessed 21 January 2014].

Porter, M. E. (1979). How Competitive Forces Shape Strategy. Harvard Business Review, 57

(2), 137-145.

Porter, M.E. (1980). Competitive Strategy. New York: Free Press.

Priem, R. L. & Butler, J. E. (2001). Is the Resource-Based “View” a Useful Perspective for

Strategic Management Research? Academy of Management Review, 21 (1), 22-40.

PWC (2008). A practical guide to risk assessment. [online] Available at:

<http://www.pwc.com/en_us/us/issues/enterprise-risk-

management/assets/risk_assessment_guide.pdf> [Accessed 02 March 2014].

Radley, W. (2012). Mobile App Pushes Legal Boundaries: Houston Start-up Revolutionizes that

Bulky Law Library. Culture Map Houston. [Online]. Available at:

<http://houston.culturemap.com/news/innovation/08-11-12-mobile-app-pushes-legal-

boundaries-houston-startup-revolutionizes-the-old-bulky-law-library/> [Accessed 17 February

2014].

http://houston.culturemap.com/news/innovation/08-11-12-mobile-app-pushes-legal

http://www.pwc.com/en_us/us/issues/enterprise-risk

http://www.ons.gov.uk/ons/rel/rdit2/internet-access---households-and

http://neighbourhood.statistics.gov.uk/dissemination/LeadTableView.do?a=7&b=6275150&c

Rafiq, M & Ahmed, P. K. (1995). Using the 7Ps as a Generic Marketing Mix: an Exploratory

Survey of UK and European Marketing Academics. Marketing Intelligence & Planning, 13 (9),

4-15.

Reinganum, J. F. (1983). Uncertain Innovation and the Persistence of Monopoly. American

Economic Review, 73 (4), 741-748.

Riley, J. (2012). Ansoff Growth Matrix. Tutor2u. [Online]. Available at:

<http://www.tutor2u.net/business/strategy/ansoff_matrix.htm> [Accessed 02 March 2014].

Robinson, D. (1990). Meeting Customer Needs. Logistics Information Management, 3 (2) 93-95.

Robinson, R. (1993). Cost-Benefit Analysis. BMJ: British Medical Journal, 307 (6909), 924.

Sarkis, J. (2001). Manufacturing’s Role in Corporate Environmental Sustainability-Concerns for

the New Millennium. International Journal of Operations & Production Management, 21 (5),

666-686.

Stutely, R. (2012). The Definitive Business Plan: the Fast-track to Intelligent Business Planning

for Executives and Entrepreneurs. Harlow: Prentice Hall/Financial Times.

Tan, D. (2010). Success Factors In Establishing Your Brand. Franchising and Licensing

Association. [Online]. Available at: < http://www.flasingapore.org/info_branding.php>

[Accessed 23February 2014].

Timeout. (2010). A Shift in the Life of a Cab Driver. [Online]. Timeout Online. Available at:

<http://www.timeout.com/newyork/things-to-do/a-shift-in-the-life-of-a-cab-driver> [Accessed

22 January 2014].

Unistats. (2014). University Statistics. [Online]. Unistats Online. Available at:

<http://unistats.direct.gov.uk/> [Accessed 08 February 2014].

http://unistats.direct.gov.uk

http://www.timeout.com/newyork/things-to-do/a-shift-in-the-life-of-a-cab-driver

http://www.flasingapore.org/info_branding.php

http://www.tutor2u.net/business/strategy/ansoff_matrix.htm

Walker, A., Huddlestone, B. & Pullen, D.L. (2010). An Overview of Technology in Society.

[PDF]. Ima International Website. Available at: <http://www.irma-

international.org/viewtitle/41451/> [Accessed 21 January 2014].

Werner, F. B. (1984), A Resource-Based View of the Firm. Strategic Management Journal, 5

(1), 171-180.

Zdnet. (2014). Messaging, social apps drive 115 percent surge in mobile app usage. CBS

Interactive. [Online]. Available at: < http://www.zdnet.com/messaging-social-apps-drive-115-

percent-surge-in-mobile-app-usage-7000025108/> [Accessed 20 January 2014].

http://www.zdnet.com/messaging-social-apps-drive-115

https://international.org/viewtitle/41451

http://www.irma

Appendices

1.0 User Questionnaire

2.0 Agreement from Taxi Companies and revenue assumptions support

3.0 Support from the University of York

4.0 The product(s)/service(s)

5.0 Process Map

6.0 PESTLE Analysis

7.0 Porter’s Five Forces 8.0 Competitor Research

9.0 Product Response to Competitor Research

10.0 App designs

11.0 Website Design

12.0 Social Media Pages

13.0 Poster/Flyer Design

14.0 Financial Assumptions

15.0 Cost Evidence

16.0 Financials

16.1 5% Commission

16.1.1 Break Even Analysis

16.1.2 Year 1 Sales Forecast

16.1.3 Year 1 Profit and Loss Forecast

16.1.4 Year 1 Cash Flow Forecast

16.1.5 Year 2 Sales Forecast

16.1.6 Year 2 Profit and Loss Forecast

16.1.7 Year 2 Cash Flow Forecast

16.1.8 Year 3 Sales Forecast

16.1.9 Year 3 Profit and Loss Forecast

16.1.10 Year 3 Cash Flow Forecast

16.1.11 Balance Sheet

16.2 3% Commission

16.2.1 Break Even Analysis

16.2.2 Year 1 Sales Forecast

16.2.3 Year 1 Profit and Loss Forecast

16.2.4 Year 1 Cash Flow Forecast

16.2.5 Year 2 Sales Forecast

16.2.6 Year 2 Profit and Loss Forecast

16.2.7 Year 2 Cash Flow Forecast

16.2.8 Year 3 Sales Forecast

16.2.9 Year 3 Profit and Loss Forecast

16.2.10 Year 3 Cash Flow Forecast

16.2.11 Balance Sheet

17.0 Performance Graphs

1.0 User Questionnaire

How many times a week on average do you use a taxi to get around?

P e

rc e

n ta

g e

6 + Never 1 - 2 3 - 5

What is the main feature looked for when ordering a taxi?

P e

rc e

n ta

g e

Price Waiting Time Quality of Service Company

Opposed to a Taxi what would be your preferred method of transport?

P e

rc e

n a

te g

Bus Walking None Other

Cash Card

P e

rc e

n ta

g e

How would you prefer to pay for your taxi?

On average how many purchases do you complete through an app in a week?

P e

rc n

e ta

g e

Never 1 - 2 3 - 5 6 +

Would you be likely to order a taxi through an app if a suitable app was available?

100

P e

rc e

n ta

g e

Yes No

Have you suffered a bad experience ordering a taxi?

 Long Waiting times (15)  Late (9)  Taxi not arriving (5)  Taxi taking longer route intentionally to raise price (3)  Driver has bad attitude (2)  Wrong number of seats or taxis arrive (3)  Expensive Price which was not aware off before booking  Taxi taking wrong customer  Not licensed taxi driver  Called after booking to check on taxi but was told there was no record of booking

available

On average often do you go out and not use a taxi a week?

P e

rc e

n a

tg e

Never 1 - 2 3 - 5 6 +

On average how often do you go out and use a taxi on average a week?

P e

rc e

n a

tg e

Never 1 - 2 3 - 5 6 +

What may deter you from ordering a taxi?

 Waiting Time (13)  Price (12)  Cheaper alternative e.g. Bus  Faster alternative due to waiting time  Safety (6)  Being alone (2)  Bad reputation (3)

Are you aware of any apps that allow you to book a taxi?

100

P e

rc e

n a

tg e

Yes No

If you are aware of an app that allows you to book a taxi what features does it provide?

 GPS Tracking  Waiting time and Driver name  Waiting times, price and reliability of taxi  Waiting times and pay by card  Waiting Time of specific company

2.0 Agreement from Taxi Companies and revenue assumptions support

Correspondence 1 - York

Correspondence 2 - York

Correspondence 3 - Leeds

The third conversation occurred via telephone with a Leeds based firm who again wished to

remain anonymous. The individual disclosed interest in the app but could not make any firm

commitment. He suggested a percentage figure of around 5%.

Correspondence 4 - Leeds

3.0 Support from the University of York

Union President

History Social Secretary

Boxing Social Secretary

4.0 The product(s)/service(s)

During the initial three years of operations the business will produce the following:

 An app booking system

 An accompanying website with details regarding how the app operates, and contact

information.

The intended benefits and features/specifications listed below explain how the app will

overcome the current identified problems for taxi companies and their customers and why the

app will be desirable amongst the intended market:

Intended benefits for taxi firms:

 Proof of purchase – this avoids complications regarding purchase claims and fare evasion

 Advertising cost cuts - the app will be advertised as the main port of call for customer deals,

reducing taxi firms’ requirement to self-advertise

 Exposure - smaller firms receive equal publicity against the more established firms

 Customer loyalty - a rewards system will encourage customers to collect points to receive

discounts from future taxi journeys

 Reduces calls to company staff regarding book taxis and waiting times since the app

centrally monitors this process and reports to customers

 Efficiency –customers can actively track waiting times from their mobiles which will

encourage driver efficiency to ensure that their company name receives a good reputation for

availability and promptness

 Track company usage

Intended benefits for users of the app (students and locals):

 Payment by credit/debit card, reducing the need to find a cash point

 Taxis may be booked instantly

 Taxis can be pre-ordered a week in advance and cancelled up until the driver makes his/her

way to the customer’s destination without the need to call an operator

 Waiting times for booking various companies can be viewed without the need to inquire

through contacting numerous companies; resulting in less time wasted especially when taxis

are required promptly and no need to remember or search for company telephone numbers

 The need to call companies to find out the current arrival time for a booked taxi is reduced

through GPS tracking. The location of a customer’s taxi can be viewed as it makes its way to

pick up the customer

 Students can receive cheaper journeys through advertised deals such as fixed cost journeys

and the rewards system (taxi miles)

 Customers that suspect they may have lost possessions on a journey (especially students after

a night out) can easily trace the taxi driver name and vehicle

 For the safety conscious, ID may be checked on the app to determine whether the driver is

licensed to drive the vehicle (Hogan, 2013).

The demand for the features/specifications of MyTaxiBooker is confirmed by the success of

other apps. The features exclusive to MyTaxiBooker are based on student suggestions as to what

the market currently lacks. It is therefore fitting to propose that the demand for these features

will instigate high demand for the app.

Features/specifications:

 Book within a few clicks

 Two logins; one for consumer and one for the taxi driver

 Select the number of passengers

 Map nearby available taxis

 Pre-order, cancel

 Real time GPS tracking

 Notification for driver arrival

 Credit/debit card payment or cash if preferred

 Encryption to protect data

 Contact driver, view driver name, check ID for safety, view taxi registration

 Offers/deals and rewards

 Receipt generator

 View previous journeys

 Search and select previous addresses

 Switch between cities

5.0 Process Map

GPS Tracks

Select Number of

Passengers and Pick Up time

Receive Taxi Availability

Select Taxi

Provide Information on

Requested Taxi Service

Send Taxi Selected by Customer

View Driver Details

Yes No

Taxi Journey

Customer

Download and Open Application

Journey completion and Payment

Acknowledge Journey Completion

Taxi Companies

Receive Taxi Request Select City

Choose Payment Option Check Driver Send Push Notification When Taxi Dispatched

Details

6.0 PESTLE Analysis

Political Factors

Economic Factors

Labour laws regarding employment

Legislation on immigration, VISAs and work permits which

will need to be considered if employing non UK citizens

If positive relations are maintained with the government, this

could influence ability to access future funding or grants.

State regulation of the public transport sector. With

centralisation of operations becoming a progressive theme in

the economy (McKinsey, 2011), this may present operational

limitations such as the ability of taxi firms to utilise third party

apps as promotional methods

Sales need to be maintained through effective marketing

activities and customer and employee satisfaction in order to

ensure sustained and increasing revenues streams.

Disposable income – Commitment to using a taxi service is susceptible to fluctuations in disposable income especially due

to the primary nature of the customer base (students). Student

disposable income can often be unstable.

The key to economic growth is to continually ensure that the

company listens and analyses customer needs (Robinson, 1990).

The start-up of the business fulfilled this requirement by

identifying a gap in the market through primary research.

Customer needs will be identified through regular customer

surveys, the responses of which will be discussed at board

meetings for decision regarding implementation.

The app relies on levels of taxi usage and this could be affected

by the following:

International students make up a significant proportion of

students populations; York (14.7%), York St. John (3.9%),

Leeds (9.4%), Leeds Metropolitan (4.9%), Leeds Trinity (2.0%)

(Complete University Guide, 2013). Therefore, for international

students that receive money from home, adverse changes in the

exchange rate could affect level of monetary support from home

and hence cause them to use cheaper public transport

alternatives.

Rises in petrol prices could cause increase in taxi prices in order

for them to maintain profit margins, this may cause a decrease

in taxi usage.

Consumer confidence has decreased due to the economic

downturn, causing more to take more stringent lifestyle choices.

More people can afford to buy and use a private car (Mahmood

& Sallehah, 2007).

Corporation taxes which would affect the company’s level of profit after tax

Inflation rate – Capital costs such as labour will be responsive to changes in the rate of inflation to ensure that the real rate of

pay does not decrease as this would consequently lead to a

reduction in employee welfare. Increase in inflation could also

increase overall business costs, leading to reduction in profits.

Mobile app usage is likely to increase with usage of utility apps

likely to increase by 150% (zdnet, 2014). These trends will need

to be monitored to determine if changes to the business model

are necessary.

The company’s reliance on smart phones is stable since smart phone usage is increasing amongst the population (CMSinfo,

2011).

Social Factors Shift in social attitudes (increase in choice of taxi apps), the

company would hope that the first mover advantage and

establishment of customer loyalty will overcome this issue

should it arise. Consumer buying patterns will be monitored in

order to make effective changes to business strategy

Consumer opinions and attitudes often change therefore it is

important that expectations are managed through regular

customer satisfaction feedback and student questionnaires

regarding improvements to the service

Respond to the selective nature of customers with regards to

digital services. There has been an increase in expectations due

to increasing standards. The trial period will ensure that it meets

customer wants and is deemed to suit customer expectations.

Advertising will be kept in line with changes in social media

trends

Accommodate to shifts in the university population through

increasing in advertising

Staff morale will be managed through the creation of an open,

inclusive and nurturing company work ethic

Training to ensure employees maintain a high standard of

promotion and that the company brand and image is

Technological Factors

Legal Factors

Environmental Factors

maintained/developed.

Change in consumer lifestyle preferences. The increasing fast

paced nature of lifestyles (alterNet, 2009) means that people

seek more efficient ways of transport especially in cities where

public transport would be slower and less flexible than taxis in

terms of routes. Furthermore, students and residents

increasingly seem the convenience, personal comfort and social

status of a taxi in comparison to public methods of transport.

The app contains many features yet maintains a simple to use

advantage over other similar apps.

Reviews will enable the future technological development of

the app

To ensure that the website and app are easily ‘findable’ in search databases, search databases will be monitored by the

managing director to ensure visibility.

Respond to the increase in wearable technology if necessary and

deemed to be a success

Legal factors are all equally as important since they may carry

legal or prosecution consequences, therefore the following are

not in order of importance.

Employment law – Minimum Wage changes

App and website must adhere to the app standards – restrictions may be introduced. The company will be informed of changes

by the app and website developer.

Legal contracts will be entered into regarding all employees and

advertising will be protected by copyrights.

Intellectual property and its laws will be monitored to ensure

that the company brand is protected

Consumer protection regarding privacy laws

Please see section 5.0 (Legal and Industry Requirements) for

further legal considerations.

Increasing awareness exists concerning environmental issues in

England (Sarkis, 2001. However, MyTaxiBooker’s environmental concerns are limited in nature.

Reduced petrol usage since closer taxis will be ordered rather

than taxis that have to travel a large distance simply due to a

customer’s familiarity with the firm.

The app reduces safety concerns for students as they can easily

order a taxi after a night out and be certain of the driver’s

credentials.

There are minimal printing costs due to the online nature of

operations. The printing of advertising material is the only

environmental disposal concern; however, York and Leeds

councils ensure an efficient paper recycling process.

The app appeals to people facing bad weather conditions by

enabling a fast transport process.

Energy consumption will be high due to the running of the app

however more energy efficient modes of operations may be

introduced. Further, energy would be utilised by smartphones

regardless of the presence of our app.

7.0 Porter’s Five Forces

Below are the effects of the 5 forces on the business venture and the extent to which they

have a high or low impact on the firm.

Bargaining power of suppliers (Low):

 It is possible to change suppliers; the main suppliers are the app developers, office space providers, lawyers and accountants. There is a large market for online business

providers.

 Competitor firms would be an alternative if prices begin to rise too high or the business encounters relational issues with these suppliers. Further, the suppliers are

not large enough to exert significant power over the company.

 The only issue would be the need to build a new relationship with the supplier, often long-term relationships with suppliers are a key indicator of business success (Han et

al., 1993).

Bargaining power of buyers (Medium):

Taxi firms

 There is initially a high bargaining power of buyers as they may be reluctant to use the app to offer their service if they believe the fees involved are too high. As service

increases and more taxi companies utilise MyTaxiBooker, buyer bargaining power

decreases as non-compliance may result in a loss of advertising ability against

competitors. Therefore, initial compliance and commitment from a few taxi firms is

necessary in order to instigate the trend.

 Market research indicates that the fees are acceptable. Most taxi firms gave a positive response to the suggested fees.

Students/ locals

 There is little or no bargaining power of these buyers since no cost exists to the customer for app usage.

 Market research and financial plans indicate that customer concentration and sales will be high.

 Since the product is highly differentiated from current market offerings and no current alternative exists, customers are likely to remain committed customers, provided that

the app meets their needs, this will be ensured through attention to customer feedback.

Threat of potential new entrants (High):

 There are low initial outlay costs and attractive profit margins connected with the business model.

 There is also a threat from a large taxi company developing their own application with similar features and this may be deemed popular and more trustworthy as transactions

will be completed directly with the taxi company. However, MyTaxiBooker has the

advantage of comparison between taxi firms regarding waiting times; a single taxi

company is unlikely to be able to fulfil this condition.

 Since barriers to entry are low, the business will implement measures to provide a deterrent for entry and reduce the possibility of entrant success.

 The development of good relationships with taxi firms which will be the responsibility of the managing director may enable future economies of scale which

an entrant would not be able to achieve immediately and could result in unsustainable

losses.

 A first mover advantage will provide the company with time to develop strong brand awareness such that customer familiarity with the brand would force new entrants to

employ high amounts of capital on establishing market presence. Consequently, this

introduces a high risk of loss to the entrant since the likelihood of achieving a

sufficient return on large investment is small. Further, MyTaxiBooker will possess the

infrastructure to quickly adapt to new entrant offerings at limited cost.

 Intellectual property will be in place to avoid design, name or app functionality theft.

Threat of substitutes (Low):

 There is little threat from substitution without future technologic advancements as the app provides an alternative to the traditional service used for ordering a taxi and

addresses a variety of concerns that customers have with the current options available

to them.

 The internet is often deemed the most efficient and accessible way to buy.  Individually contacting taxi firms is the only possible substitute, which gives rise to

the advantage of MyTaxiBooker which is to provide a platform which simultaneously

advertises the availability of multiple taxi firms.

The extent of a competitive rivalry (High):

 There is a high level of competition within the markets; a large number of taxi firms exist within both York and Leeds, varying in size from several taxis in their fleet to

the large companies with over 100 taxis in their fleet.

 Market research, both primary (questionnaires), and secondary (app research) indicates that no other similar service is currently offered.

 MyTaxiBooker aims to introduce additional custom to the market by providing a more efficient service to order a taxi whilst hopefully contributing to a safer community.

The app combines a fast service with cheap prices which appeals to both students and

locals. Since it is easy to differentiate the product and it is not purely price based, this

enables the development of customer loyalty.

8.0 Competitor Research

App name Features/

Specifications

Strengths Weaknesses

GetTaxi  Order a taxi with cashless payment  GPS tracking  Earn Taxi miles  Receipt to email  Cancellation option

 Large client base including the Marriott and the Hilton

 Customer care 24/7 365 days a year

 Only available in London in the UK  No option to specify how many

passengers

Unibus/clubbers

bus  Map buses  View schedule times  Nearest/alternative stops  Earlier/later times  Switch direction

 Brand awareness amongst students  Only for buses which serve a standard route

 Specific to York only

Hailo  Order a taxi with card  View waiting times  Track the taxi using GPS  Specify number of passengers

 Economies of scale  Large budgets  Well established brand (London and

Dubai’s biggest taxi app)  Large advertising and marketing

budgets

 London specific in the UK

Uber  Pay by card  View waiting times  Notification for arrival of driver  Fare quotes

 Presence in 26 cities around the world so has a strong brand

presence enabling penetration into

other cities

 Only available in London for the UK  Drivers employed by Uber so a high cost

to customers is frequent

Kabbee  Option to book a taxi by card  Prices up to 70% cheaper than

going direct

 Select quotes from 65 minicab companies based on cheapest,

closest, user rating or reliability

 Customer care available 24/7  London specific

Click A Taxi  Order a taxi with card  Global reach  London specific  GPS tracking  Works directly with taxi companies  Earn Taxi miles  Receipt to email  Only top rated licenses taxis listed

rather than making arrangements

with drivers which has proved

ineffective with other apps.

for safety purposes

 Cancellation option  Advanced booking

9.0 Product Response to Competitor Research

Many of the analysed apps are not direct competitors since they are located in London only in

the UK. However, they allow for effective analysis of the current market service offering in

order that MyTaxiBooker may expand on this offering. The Unibus app has been considered

as a competitor since it is the other most commonly used form of transport at the University

of York.

Reviews of the above apps on the Apple and Android app stores and informal dialogue with

students has suggested that MyTaxiBooker should develop the basic nature of the current taxi

app offering by introducing the following additional features:

 Call driver, see name, registration, check ID for safety  Offers/deals and rewards specific to the respective cities taxi companies  Receipt generator without email  View previous journeys  Switch between UK cities  Give/view feedback

Once brand equity has been established in York and Leeds, it will provide the opportunity to

target students and locals in other large cities. MyTaxiBooker will stand in good stead to

reach these cities before they are penetrated by the likes of Hailo and Click A Taxi since it

will already have a strong student following in York and Leeds. Social networking sites will

be a suitable tool to gain a strong student following. Further, it is likely that if students have

used MyTaxiBooker whilst at university, familiarity with the app is likely to ensure their

continued usage following university. Therefore a key strategy is to target the younger

generation in the hope of future brand loyalty (Jacoby and Kyner, 1973).

10.0 App designs

Android interface iPhone Interface

Using the App

11.0 Website Design

12.0 Social Media Pages

Facebook

Twitter

13.0 Poster/Flyer Design

14.0 Financial Assumptions

14.1 Revenue Assumptions

1. Journey Commission

Our primary revenue will be sourced from commission from each taxi journey booked

through the app. The appropriate commission percentage has been determined through

market research with taxi companies. The average figure from market research suggests that

5% would be a reasonable percentage. Some firms were willing to pay a higher figure,

however to ensure estimates are reasonable we have utilised the average (5%) as the actual

value. To further mitigate unrealistic assumptions, a 3% scenario (worst case scenario) has

been included in the forecasts. Both 5% and 3% break even within the first three years of

operations. A best case scenario (not here considered) would be with 7% commission.

Journeys booked through the app and paid with card will automatically retrieve the 5%

commission on completion of the journey. For journeys booked with cash, the app has the

ability to track the journey price and the taxi company will settle its payments with the

MyTaxiBooker on the last day of every month.

We have assumed

- That the number of taxis using our app is 360 (50% of the total number of taxis in

York and Leeds). Market research indicated that all of the taxi firms that responded

would be interested in using our app. However, to remain realistic and to account for

the uncertainty of commitment that market research is unable to confirm, we have

assumed 50% of firms. Furthermore, Streamline taxis who have agreed to list with

MyTaxiBooker has over 120 cars alone. The remainder will derive from other

companies in York and Leeds. This number has been confirmed realistic through

market research.

- For each month we have assumed that out of these 360 taxis, a proportion will be

booked through the app (second column). These have been suggested on the basis of

interest from the student questionnaire. Seasonality for holidays has been considered.

- We have assumed that a taxi driver works on average 10 hours (Chron, 2013) 5 days a

week and can undertake 2 journeys an hour (Timeout, 2010). Public Holidays and

allowance of 28 days holiday have been considered for the average working days per

month.

- To calculate app usage, we calculated (3*2)*(4*1) - see the subscript numbers in the

table above.

- We then calculated the number of journeys per month for all taxi firms in York and

Leeds (719) (Government, 2013) and calculated this as a proportion of our app usage

to calculate the percentage of journeys booked through the app as a proportion of total

taxi journeys in York and Leeds.

- To calculate our sales revenue we multiplied the app usage by the 5% commission

- 5% commission was calculated to be an average of £0.475p per journey (5% of an

average of £9.50 journey fare).

- For 3%, commission is £0.285p per journey (3% of an average of £9.50 journey fare).

- The first month of operations (October 2014) it has been assumed that only 20% of

journeys undertaken by taxi companies listed with the app will be booked through the

app system. This is due to the apps recent introduction to the market. The holidays

and exam months will have only 10% usage and maximum usage during term times

will be 40%. This maximum is assumed appropriate from the market research

undertaken.

- During the 3 years, usage is expected to rise 3% from the corresponding month in the

previous year.

2. Block Fees

- The block fees section of revenue is based on a £50 block fee that each taxi company

will pay for inclusion and advertising on the app. We have assumed 5 taxi companies

in York and 8 in Leeds. (5*50)+(8*50)= £650

- We have assumed this number will remain consistent over the three years as the

company initially focuses on maintaining customer loyalty from a select few

customers. The company will focus on increasing its customer base after its initial

three start-up years.

- This has been confirmed through the willingness of companies through market

research. All taxi companies surveyed agreed to paying the £50 fee a month.

- The expenses/overheads have been determined through research. Please see the ‘cost

evidence’ (appendix 15.0) for sources of costs.

14.2 Website and App

The creation and design of our website and app is £10,000 and will be settled in the first

month of operations (October 2014). This fee is all inclusive for three years and covers all

website and app considerations including; design the website and app, maintenance, data

encryption and website domain name.

App subscription charges will be incurred in order to list the app with three platforms

(Google Play, Apple App Store, Windows Store). Google Play charges a one-time fee of $25,

Apple App Store charges $99 per annum and Windows Store charges a one-time fee of $99.

Please see statements for $ to £ conversion rates. We have assumed the annual cost for Apple

App Store remains constant for three years.

14.3 Advertising

1. A5 Flyers and A3 Posters

In the first year, 8,000 A5 flyers and 1,500 A3 posters will be printed in October for

distribution throughout the year in York and Leeds. In following two years, 8,000 A5 flyers

will be produced and 750 A3 posters will be produced. The number of A3 posters in the first

year is double subsequent years due to a need to for extensive advertising in order to gain

brand awareness at the commencement of operations. We have assumed a compounded 2.5%

rise in costs each year.

The printing company has agreed to design the material for a one-off fee of £60 which will be

paid in October 2014.

14.4 Premises

An office space will be rented for the managing director for £165 per month in a convenient

location in the centre of York. The office features include broadband and telephone systems.

It has been assumed that costs rise by 2.5% each year due to inflation.

14.5 Insurance

AXA Insurance has quoted the following costs; public liability insurance at £36.03 per

month, employers’ liability insurance at £26.03 per month, business equipment cover at £3.38

per month, and personal accident cover at £1.04 per month. The total monthly insurance

therefore equates to £66. It has been assumed that costs will increase by 2.5% each year.

14.6 Distributors

1. Wages

All distributors will be paid the minimum wages for their respective age group. This was

deemed appropriate since distributor’s roles are simply to distribute flyers and posters around

academic institutions. These roles are basic in nature, not time consuming or strenuous but is

an opportunity to provide students with a small fee earning job.

Costs are calculated as follows:

- In the first month of operations, for both York and Leeds, 20 workers (10 under 21s

and 10 over 21s) will be employed to work 10 hours a week. The under 21s will be

paid £5.03 per hour and over 21s £6.31 per hour. This cost will total £4,536.

- For November to February and the month of May, 6 workers (4 under 21s and 2 over

21s) will be employed to work 15 hours a month. The rationale is based on a need to

simply maintain presence of advertising material around our target regions.

Distributors have need been employed in months where demand is unavoidably low

due to seasonality.

2. Clothing

Twenty T-shirts will be purchased every October during the three years as uniform for the

distributors. The total costs will be £165 in the first year and will be assumed to rise by 2.5%

in the following two years.

14.7 Managing Director and Allowances

1. Salary

The managing director will be awarded £24,000 per annum (£2,000 per month) for his/her

company’s responsibilities. A 3% rise has been forecasted for each year and this has been

determined by average pay rise rates in the UK (eca-international, 2013). Pension provision

will be considered after the start-up period, if any when the company investors can ascertain

that the business will continue to maintain a solid growth pattern.

2. Mobile Phone

The managing director will be provided with mobile phone to carry out work related

communications outside the office. The cost is contracted at £27 per month for three years.

3. Travel Expenses

An allowance will be provided of 1,500 miles a year in order for the managing director to

deliver adverts to distributors and meet taxi firms in York and Leeds. Mileage is 40p/mile

that calculates to £600/annum in year one. This cost has been predicted to rise by 2.5% per

annum.

14.8 Investor Wages (Share capital)

The six members of the board will be repaid during the three years for their capital

investment totalling £70,000. At the end of the three years, each investor will have recovered

their investment plus a financial gain of 15% of their original investment. This 15% interest is

split throughout the three years and paid in monthly instalments.

The gain will be as follows:

Investor Original Investment 15% Gain Total financial reward

over the three years

(original investment plus

15% interest).

1 £20,000 £3,000 £23,000

2 £10,000 £1,500 £11,500

3 £10,000 £1,500 £11,500

4 £10,000 £1,500 £11,500

5 £10,000 £1,500 £11,500

6 £10,000 £1,500 £11,500

Total £70,000 £10,500 £80,500

The total financial reward will be split between 36 months (chosen payment frequency has

been agreed at the discretion of the capital providers). Therefore, MyTaxiBooker has a cost of

capital of 15% (£10,500) over the three years and a payment to investors of £2,236 per

month.

14.9 Expertise

The plan will be submitted to a panel of investors. It will be requested that they provide their

marketing expertise for an annual return of 5% of total profits to be received at the company

year end. Biannual meetings with the managing director will take place in order to ensure that

marketing and advertising strategies are efficient and effective and to provide expertise

regarding suggestions for improvement.

Projected returns for these expertise advisors are as follows:

5% Commission (actual)

2014 2015 2016

3% Commission (worst

case)

2014 2015 2016

£2,821 £4,440 £5,302 £316 £1,641 £2,144

The returns have not been included in the financial statements since they are subject to

change when pitched. Further, they do not have a large effect on projected profits, break even

analysis or ratios.

14.10 Accountancy Fees

All accountancy services will be provided by the Accountancy Partnership.

1. Incorporation Fee

At the start of operations, the company will be required to register with Companies House as

a limited liability company. This will be a one-off fee of £120.

2. Accountancy Fees and Payroll

A monthly cost of £72 including VAT will be incurred in the first year for:

- Completion of a full set of accounts

- Completion of abbreviated accounts for Companies House

- Submission of Corporation tax return

- Submission of annual return to Companies House

- Up to 2 director’s personal tax returns

- Up to 2 director’s annual payroll

- Representation in the event of a HMRC enquiry

- Any help and advice needed throughout the year including ensuring the correct employee

PAYE and NIC deductions.

A cost of £14 per month including VAT will cover the cost of payroll and BACS transfer for

employees including weekly/monthly pay slips, the end of year returns and the processing of

all P60/P45’s to ensure the correct deduction of taxation and national insurance.

Book-keeping fees have been omitted due to the IT systems ability to trace and record

transactions which can be complied as a set of electronic accounts.

The total monthly will therefore be £86 in the first year and has been forecasted to increase

by 2.5% each year.

14.11 Legal and Intellectual Property Fees

The purpose of this cost is to seek legal advice as to any future legal considerations or claims

that may affect company operations. A group contact, founding partner of a law firm, has

offered to provide this service at a flat rate of £100 for the three years. If the company was to

incur any court fees as a result of a legal case, this would result in legal advice at a further

cost. The £100 has thus far included advice regarding the trademark of the brand. The lawyer

advised MyTaxiBooker would not infringe upon any existing trademarks.

The company will incur an intellectual property cost of £220 pounds (includes a £30

discount). This will enable the company to trademark the MyTaxiBooker brand; this includes

the logo, wording and designs related to the brand (the defining aspects). £200 of the cost

relates to registration for services class 35 (Advertising). The remaining £20 (includes a £30

discount) relates to trademark coverage for class 39 services (transport and travel

information). The trademarks will require renewal after 10 years since the filed date and

covers all UK geographical regions.

The website and app designers hold copyright ownership by law for the inbuilt code and

security, however it has been agreed that MyTaxiBooker is able to acquire ownership through

contractual agreement.

14.12 Fixed Assets

The firm’s laptop for the managing director will be its only form of fixed assets. This will

cost £330 in October 2014 and straight line depreciation will be incurred each month. It will

be assumed that by the end of the three years, the laptop will have accumulated depreciation

of 75% or its original value. This equates to 25% each of the three years and a decrease in

value of £7 a month. The laptop will have a resale value of £84 at the end of the three years.

14.13 Tax

Corporation tax will be paid monthly and relate to the respective profits for the month. The

tax rate is 20% of net profits. Tax of £4,234 is first paid in November 2014 in the first profit

making month. The business is registered for VAT since the service is provided is exempt

from VAT (HMRC VAT, 2014)

14.14 Reserves

The statement of Financial Position displays a contingency reserve. 15% of profits incurred at

the end of each financial year will be transferred into this reserve account to ensure that any

shortfalls in projected costs or the arising of any unexpected costs may be met adequately.

14.15 Debtors & Creditors

1. Creditors

Wages and salaries will be paid at the end of each month worked by an employee.

2. Debtors

Sale commission and revenue will be received at the end of each corresponding month. The

only immediate form of revenue will be journeys booked on the app that are paid by card.

This will result in an immediate deduction of commission at completion of the journey which

will transfer to the company account.

15.0 Cost Evidence

15.1 Website and app development fees

Available at: http://www.awesum.co.uk/what-we-do/website-design/

[Accessed 24 January 2014]

100

http://www.awesum.co.uk/what-we-do/website-design

15.2 Advertisement (Flyers, posters and graphic design)

Available at:

http://online.yorkprintcompany.co.uk/Leaflets-and-Flyers-d66/A5-Leaflet-Flyer-Printing-

p322/

http://www.yorkprintcompany.co.uk/sameday_print/single_sided_flyers.html

http://www.yorkprintcompany.co.uk/sameday_print/poster_large_format_printing.html

[Accessed 27 January 2014].

101

http://online.yorkprintcompany.co.uk/Leaflets-and-Flyers-d66/A5-Leaflet-Flyer-Printing-p322/

http://www.yorkprintcompany.co.uk/sameday_print/single_sided_flyers.html

http://www.yorkprintcompany.co.uk/sameday_print/poster_large_format_printing.html

15.3 Laptop

Available at:

http://www.pcworld.co.uk/gbuk/laptops/netbooks/laptops/laptops/703_7006_70006_xx_xx/1

_20/price-asc/xx-criteria.html

[Accessed 24 January 2014]

15.4 Distributor Wages

Available at: https://www.gov.uk/national-minimum-wage-rates

[Accessed 24 January 2014]

102

https://www.gov.uk/national-minimum-wage-rates

http://www.pcworld.co.uk/gbuk/laptops/netbooks/laptops/laptops/703_7006_70006_xx_xx/1

15.5 Tax

Available at: https://www.gov.uk/corporation-tax-rates

[Accessed 24 January 2014]

15.6 Premises Rental

Available at: http://www.flexioffices.co.uk/york/blake-street_yo1_id7429

[Accessed 27 January 2014].

103

http://www.flexioffices.co.uk/york/blake-street_yo1_id7429

https://www.gov.uk/corporation-tax-rates

15.7 Company Incorporation Fee

Available at: http://www.theaccountancy.co.uk/who-we-help/limited-company-

accountants?gclid=CLf6iP70nrwCFZHJtAod0hEAaA

[Accessed 27 January 2014]

15.8 Accountancy Fees

Evidence from email communication with Emily Boardman from The Accountancy

Partnership

104

http://www.theaccountancy.co.uk/who-we-help/limited-company-accountants?gclid=CLf6iP70nrwCFZHJtAod0hEAaA

105

15.9 Mobile Phone

Available at:

http://www.carphonewarehouse.com/mobiles/choosetariff/APPLE_IPHONE_4S_8GB/MON

THLY?viewDealForAll=false&colourCode=WHITE&modelName=Apple iPhone 4s 8GB

[Accessed 27 January 2014]

15.10 App subscriptions (iTunes, Google Play and Windows)

Available at: http://www.computerweekly.com/news/1280097329/What-is-the-cost-of-

developing-apps-for-mobile-marketplaces

And

http://blogs.windows.com/windows_phone/b/wpdev/archive/2013/11/06/unifying-developer-

registration-windows-and-windows-phone.aspx

[Accessed 27 January 2014]

106

http://www.computerweekly.com/news/1280097329/What-is-the-cost-of-developing-apps-for-mobile-marketplaces

http://blogs.windows.com/windows_phone/b/wpdev/archive/2013/11/06/unifying-developer

http://www.carphonewarehouse.com/mobiles/choosetariff/APPLE_IPHONE_4S_8GB/MON

Apple App store fee $99 per annum=60.0269*

Google Play fee $25 one-time fee=15.1583*

Windows fee $99 one-time fee=60.0269*

*Current rate at 27/01/2014 $1:£0.60633

15.11 Insurance

Available at:

https://secure.axainsurance.com/eSales/products/eSalesLoop.aspx?Action=nav&Page=5505

[Accessed 27 January 2014]

107

https://secure.axainsurance.com/eSales/products/eSalesLoop.aspx?Action=nav&Page=5505

15.12 Clothing

Available at: http://www.vistaprint.co.uk/select-options.aspx?item_id=3377802196&origin

=1&rd=1

[Accessed 27 January 2014].

15.13 Intellectual Property Fees

Available at:

http://www.ipo.gov.uk/types/tm/t-os/t-os-forms/tm3-introduction/tm3-servicesfees.htm

[Accessed 20 March 2014]

108

http://www.ipo.gov.uk/types/tm/t-os/t-os-forms/tm3-introduction/tm3-servicesfees.htm

http://www.vistaprint.co.uk/select-options.aspx?item_id=3377802196&origin

16.0 Financials

16.1 5% Commission

16.1.1 Break Even Analysis

Oct '14 Nov '14 Total

Sales (5% Commission) incl. block fees £13,475 £26,300 £39,775

Less Variable Costs

- £0 £0 £0

Contribution Margin £13,475 £26,300 £39,775

Contribution Margin % 100.00% 100.00% 100.00%

Fixed Expenses

A5 Flyers (8,000) £960 - £960

A3 Posters (1,500) £7,500 - £7,500

Insurance £66 £66 £132

Premises Rental £165 £165 £330

Distributor Clothing £165 - £165

Laptop £330 - £330

Managing Director Salary £2,000 £2,000 £4,000

Distributor Wages £4,536 £491 £5,027

Investor Wages £2,236 £2,236 £4,472

Travel Expenses £50 £50 £100

Website and app (inc. design, maintenance, domain,

data encryption) £10,000 £0 £10,000

Mobile Phone £27 £27 £54

App Subscriptions(itunes, Google Play, Windows) £135 £0 £135

Graphic design (flyers and posters) £60 £0 £60

Incorporation Fee £120 £0 £120

Accountancy Fees and Payroll £86 £86 £172

Legal Fees £100 £0 £100

Intellectual Property £220 £0 £220

Depreciation £7 £7 £14

Total Fixed Costs £28,763 £5,128 £33,890

Total Fixed Costs % 213.45% 19.50% 85.21%

Break-Even (Units) [(Fixed Costs-Block fees)/(£0.475)] - - 68,611

Predicted Sales (Units) 27,000 54,000 81,000

Margin of Safety (Units) - - 12389

Margin of Safety (%) - - 15.29%

5% Commission – A profit is made within the second month therefore MyTaxiBooker breaks

even between the first and second month of operations; this is due to the low running cost

required. Predictions indicate that 68,611 journeys in York and Leeds must be made in order

to meet this target. Predictions indicate that over these two months, 81,000 journeys will be

booked through the app. The margin of safety is therefore 12,389 units (sales can short fall

by 15.29% from predicated sales without affecting the ability to break even).

109

16.1.2 Year 1 Sales Forecast

Date

Number of

hours

worked per

day

Number of

journeys

per hour

Average number

of journeys/day (2)

Number of

working days

a year (minus

public

holidays and

28 days

holiday

allowance)

Average number

of working days

per month (3)

Number of taxis

in York and

Leeds

Number of

taxis using

the app (4)

Percentage of

journeys booked

through the app

(per 360 taxis

using the app) (1)

App usage (number

of journeys utilising

the app)

5% Commission on

£9.50 journey

Average number of

journeys each month

for all taxis in York

and Leeds Market Share

Sales revenue (5%

commission)

31 October 2014 10 2 20 225 18.75 719 360 20% 27,000 0.475 269,625 10.01% £12,825

30 November 2014 10 2 20 225 18.75 719 360 40% 54,000 0.475 269,625 20.03% £25,650

31 December 2014 10 2 20 225 18.75 719 360 10% 13,500 0.475 269,625 5.01% £6,413

31 January 2015 10 2 20 225 18.75 719 360 40% 54,000 0.475 269,625 20.03% £25,650

28 February 2015 10 2 20 225 18.75 719 360 40% 54,000 0.475 269,625 20.03% £25,650

31 March 2015 10 2 20 225 18.75 719 360 10% 13,500 0.475 269,625 5.01% £6,413

30 April 2015 10 2 20 225 18.75 719 360 10% 13,500 0.475 269,625 5.01% £6,413

31 May 2015 10 2 20 225 18.75 719 360 40% 54,000 0.475 269,625 20.03% £25,650

30 June 2015 10 2 20 225 18.75 719 360 10% 13,500 0.475 269,625 5.01% £6,413

31 July 2015 10 2 20 225 18.75 719 360 4% 5,400 0.475 269,625 2.00% £2,565

31 August 2015 10 2 20 225 18.75 719 360 4% 5,400 0.475 269,625 2.00% £2,565

30 September 2015 10 2 20 225 18.75 719 360 4% 5,400 0.475 269,625 2.00% £2,565

Total 313,200 3,235,500 £148,770

* Market share in this instance represents the number of journeys booked through the app as a percentage of all taxi journeys i n York and Leeds

110

16.1.3 Year 1 Profit and Loss Forecast

Oct '14 Nov '14 Dec '14 Jan '15 Feb '15 Mar '15 Apr '15 May '15 Jun '15 Jul '15 Aug '15 Sep '15 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Turnover

Journey Commission (5%) 12,825 25,650 6,413 25,650 25,650 6,413 6,413 25,650 6,413 2,565 2,565 2,565 148,770

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Turnover 13,475 26,300 7,063 26,300 26,300 7,063 7,063 26,300 7,063 3,215 3,215 3,215 156,570

Direct Costs

A5 Flyers (8,000) 960 - - - - - - - - - - - 960

A3 Posters (1,500) 7,500 - - - - - - - - - - - 7,500

Gross Profit 5,015 26,300 7,063 26,300 26,300 7,063 7,063 26,300 7,063 3,215 3,215 3,215 148,110

Gross Profit Margin 0 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 95%

Expenses/Overheads

Insurance 66 66 66 66 66 66 66 66 66 66 66 66 792

Premises Rental 165 165 165 165 165 165 165 165 165 165 165 165 1,980

Distributor Clothing 165 - - - - - - - - - - - 165

Laptop 330 - - - - - - - - - - - 330

Managing Director Salary 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000

Distributor Wages 4,536 491 491 491 491 - - 491 - - - - 6,992

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 50 50 50 50 50 50 50 50 50 50 50 50 600

Website and app (inc. design, maintenance,

domain, data encryption) 10,000 - - - - - - - - - - - 10,000

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes, Google Play,

Windows) 135 - - - - - - - - - - - 135

Graphic design (flyers and posters) 60 - - - - - - - - - - - 60

Incorporation Fee 120 - - - - - - - - - - - 120

Accountancy Fees and Payroll 86 86 86 86 86 86 86 86 86 86 86 86 1,030

Legal Fees 100 - - - - - - - - - - - 100

Intellectual Property 220 - - - - - - - - - - - 220

20,296 5,121 5,121 5,121 5,121 4,630 4,630 5,121 4,630 4,630 4,630 4,630 73,680

Other Costs

Depreciation 7 7 7 7 7 7 7 7 7 7 7 7 82

Total Overheads 20,303 5,128 5,128 5,128 5,128 4,637 4,637 5,128 4,637 4,637 4,637 4,637 73,762

Net Profit -15,288 21,172 1,935 21,172 21,172 2,426 2,426 21,172 2,426 -1,422 -1,422 -1,422 74,348

Net Profit Margin -113% 81% 27% 81% 81% 34% 34% 81% 34% -44% -44% -44% 17%

Corporation Tax 0 4,234 387 4,234 4,234 485 485 4,234 485 -284 -284 -284 17,927

Profit after tax -15,288 16,938 1,548 16,938 16,938 1,941 1,941 16,938 1,941 -1,137 -1,137 -1,137 56,421

Cumulative Profit -15,288 1,650 3,198 20,136 37,073 39,014 40,955 57,892 59,833 58,695 57,558 56,421 56,421

Month

111

16.1.4 Year 1 Cash Flow Forecast

Oct '14 Nov '14 Dec '14 Jan '15 Feb '15 Mar '15 Apr '15 May '15 Jun '15 Jul '15 Aug '15 Sep '15 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Cash Receipts

Journey Commission (5%) 12,825 25,650 6,413 25,650 25,650 6,413 6,413 25,650 6,413 2,565 2,565 2,565 148,770

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Cash Receipts 13,475 26,300 7,063 26,300 26,300 7,063 7,063 26,300 7,063 3,215 3,215 3,215 156,570

Cash Payments

A5 Flyers (8,000) 960 - - - - - - - - - - - 960

A3 Posters (1,500) 7,500 - - - - - - - - - - - 7,500

Insurance 66 66 66 66 66 66 66 66 66 66 66 66 792

Premises Rental 165 165 165 165 165 165 165 165 165 165 165 165 1,980

Distributor Clothing 165 - - - - - - - - - - - 165

Laptop 330 - - - - - - - - - - - 330

Managing Director Salary 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000

Distributor Wages 4,536 491 491 491 491 - - 491 - - - - 6,992

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 50 50 50 50 50 50 50 50 50 50 50 50 600

Website and app (inc. design, maintenance,

domain, data encryption) 10,000 - - - - - - - - - - - 10,000

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes, Google Play,

Windows) 135 - - - - - - - - - - - 135

Graphic design (flyers and posters) 60 - - - - - - - - - - - 60

Incorporation Fee 120 - - - - - - - - - - - 120

Accountancy Fees and Payroll 86 86 86 86 86 86 86 86 86 86 86 86 1,030

Legal Fees 100 - - - - - - - - - - - 100

Intellectual Property 220 - - - - - - - - - - - 220

Tax Paid 0 4,234 387 4,234 4,234 485 485 4,234 485 -284 -284 -284 17,927

Total Cash Payments 28,756 9,355 5,508 9,355 9,355 5,115 5,115 9,355 5,115 4,346 4,346 4,346 100,067

Net Cash Flow -15,281 16,945 1,555 16,945 16,945 1,947 1,947 16,945 1,947 -1,131 -1,131 -1,131 56,503

Opening Bank 70,000 54,719 71,664 73,218 90,163 107,107 109,055 111,002 127,947 129,894 128,764 127,633 1,201,167

Closing Bank 54,719 71,664 73,218 90,163 107,107 109,055 111,002 127,947 129,894 128,764 127,633 126,503 1,257,670

Month

112

16.1.5 Year 2 Sales Forecast

Date

Number of

hours

worked per

day

Number of

journeys

per hour

Average number

of journeys/day (2)

Number of

working days

a year (minus

public

holidays and

28 days

holiday

allowance)

Average number

of working days

per month (3)

Number of taxis

in York and

Leeds

Number of

taxis using

the app (4)

Percentage of

journeys booked

through the app

(per 360 taxis

using the app) (1)

App usage (number

of journeys utilising

the app)

5% Commission on

£9.50 journey

Average number of

journeys each month

for all taxis in York

and Leeds Market Share

Sales revenue (5%

commission)

31 October 2015 10 2 20 226 18.75 719 360 23% 31,050 0.475 269,625 11.52% £14,749

30 November 2015 10 2 20 226 18.75 719 360 43% 58,050 0.475 269,625 21.53% £27,574

31 December 2015 10 2 20 226 18.75 719 360 13% 17,550 0.475 269,625 6.51% £8,336

31 January 2016 10 2 20 226 18.75 719 360 43% 58,050 0.475 269,625 21.53% £27,574

28 February 2016 10 2 20 226 18.75 719 360 43% 58,050 0.475 269,625 21.53% £27,574

31 March 2016 10 2 20 226 18.75 719 360 13% 17,550 0.475 269,625 6.51% £8,336

30 April 2016 10 2 20 226 18.75 719 360 13% 17,550 0.475 269,625 6.51% £8,336

31 May 2016 10 2 20 226 18.75 719 360 43% 58,050 0.475 269,625 21.53% £27,574

30 June 2016 10 2 20 226 18.75 719 360 13% 17,550 0.475 269,625 6.51% £8,336

31 July 2016 10 2 20 226 18.75 719 360 7% 9,450 0.475 269,625 3.50% £4,489

31 August 2016 10 2 20 226 18.75 719 360 7% 9,450 0.475 269,625 3.50% £4,489

30 September 2016 10 2 20 226 18.75 719 360 7% 9,450 0.475 269,625 3.50% £4,489

Total 361,800 3,235,500 £171,855

* Market share in this instance represents the number of journeys booked through the app as a percentage of all taxi journeys i n York and Leeds

113

16.1.6 Year 2 Profit and Loss Forecast

Oct '15 Nov '15 Dec '15 Jan '16 Feb '16 Mar '16 Apr '16 May '16 Jun '16 Jul '16 Aug '16 Sep '16 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Turnover

Journey Commission (5%) 14,749 27,574 8,336 27,574 27,574 8,336 8,336 27,574 8,336 4,489 4,489 4,489 171,855

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Turnover 15,399 28,224 8,986 28,224 28,224 8,986 8,986 28,224 8,986 5,139 5,139 5,139 179,655

Direct Costs

A5 Flyers (8,000) 984 - - - - - - - - - - - 984

A3 Posters (750) 3,844 - - - - - - - - - - - 3,844

Gross Profit 10,571 28,224 8,986 28,224 28,224 8,986 8,986 28,224 8,986 5,139 5,139 5,139 174,827

Gross Profit Margin 69% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 97%

Expenses/Overheads

Insurance 68 68 68 68 68 68 68 68 68 68 68 68 812

Premises Rental 169 169 169 169 169 169 169 169 169 169 169 169 2,030

Distributor Clothing 169 - - - - - - - - - - - 169

Managing Director Salary 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 24,720

Distributor Wages 4,627 501 501 501 501 - - 501 - - - - 7,131

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 51 51 51 51 51 51 51 51 51 51 51 51 615

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes, Google

Play, Windows) 60 - - - - - - - - - - - 60

Accountancy Fees and Payroll 88 88 88 88 88 88 88 88 88 88 88 88 1,055

9,555 5,200 5,200 5,200 5,200 4,699 4,699 5,200 4,699 4,699 4,699 4,699 63,749

Other Costs

Depreciation 7 7 7 7 7 7 7 7 7 7 7 7 82

Total Overheads 9,561 5,207 5,207 5,207 5,207 4,706 4,706 5,207 4,706 4,706 4,706 4,706 63,831

Net Profit 1,010 23,017 3,779 23,017 23,017 4,280 4,280 23,017 4,280 433 433 433 110,996

Net Profit Margin 7% 82% 42% 82% 82% 48% 48% 82% 48% 8% 8% 8% 45%

Corporation Tax 202 4,603 756 4,603 4,603 856 856 4,603 856 87 87 87 22,199

Profit after tax 808 18,414 3,024 18,414 18,414 3,424 3,424 18,414 3,424 346 346 346 88,797

Cumulative Profit 808 19,221 22,245 40,658 59,072 62,496 65,920 84,334 87,758 88,104 88,451 88,797 88,797

Month

114

16.1.7 Year 2 Cash Flow Forecast

Oct '15 Nov '15 Dec '15 Jan '16 Feb '16 Mar '16 Apr '16 May '16 Jun '16 Jul '16 Aug '16 Sep '16 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Cash Receipts

Journey Commission (5%) 14,749 27,574 8,336 27,574 27,574 8,336 8,336 27,574 8,336 4,489 4,489 4,489 171,855

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Cash Receipts 15,399 28,224 8,986 28,224 28,224 8,986 8,986 28,224 8,986 5,139 5,139 5,139 179,655

Cash Payments

A5 Flyers (8,000) 984 - - - - - - - - - - - 984

A3 Posters (1,500) 3,844 - - - - - - - - - - - 3,844

Insurance 68 68 68 68 68 68 68 68 68 68 68 68 812

Premises Rental 169 169 169 169 169 169 169 169 169 169 169 169 2,030

Distributor Clothing 169 - - - - - - - - - - - 169

Managing Director Salary 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 24,720

Distributor Wages 4,627 501 501 501 501 - - 501 - - - - 7,131

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 51 51 51 51 51 51 51 51 51 51 51 51 615

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes, Google

Play, Windows) 60 - - - - - - - - - - - 60

Accountancy Fees and Payroll 88 88 88 88 88 88 88 88 88 88 88 88 1,055

Tax Paid 202 4,603 756 4,603 4,603 856 856 4,603 856 87 87 87 22,199

Total Cash Payments 14,584 9,803 5,956 9,803 9,803 5,555 5,555 9,803 5,555 4,786 4,786 4,786 90,776

Net Cash Flow 814 18,420 3,030 18,420 18,420 3,431 3,431 18,420 3,431 353 353 353 88,879

Opening Bank 126,503 127,317 145,738 148,768 167,188 185,609 189,040 192,471 210,891 214,322 214,675 215,028 2,137,550

Closing Bank 127,317 145,738 148,768 167,188 185,609 189,040 192,471 210,891 214,322 214,675 215,028 215,382 2,226,429

Month

115

16.1.8 Year 3 Sales Forecast

Date

Number of

hours

worked per

day

Number of

journeys

per hour

Average

number of

journeys/day (2)

Number of

working days

a year (minus

public

holidays and

28 days

holiday

allowance)

Average number

of working days

per month (3)

Number of taxis

in York and

Leeds

Number of

taxis using

the app (4)

Percentage of

journeys booked

through the app

(per 360 taxis

using the app) (1)

App usage (number

of journeys utilising

the app)

5% Commission on

£9.50 journey

Average number of

journeys each month

for all taxis in York

and Leeds Market Share

Sales revenue (5%

commission)

31 October 2016 10 2 20 224 18.75 719 360 26% 35,100 0.475 269,625 13.02% £16,673

30 November 2016 10 2 20 224 18.75 719 360 46% 62,100 0.475 269,625 23.03% £29,498

31 December 2016 10 2 20 224 18.75 719 360 16% 21,600 0.475 269,625 8.01% £10,260

31 January 2017 10 2 20 224 18.75 719 360 46% 62,100 0.475 269,625 23.03% £29,498

28 February 2017 10 2 20 224 18.75 719 360 46% 62,100 0.475 269,625 23.03% £29,498

31 March 2017 10 2 20 224 18.75 719 360 16% 21,600 0.475 269,625 8.01% £10,260

30 April 2017 10 2 20 224 18.75 719 360 16% 21,600 0.475 269,625 8.01% £10,260

31 May 2017 10 2 20 224 18.75 719 360 46% 62,100 0.475 269,625 23.03% £29,498

30 June 2017 10 2 20 224 18.75 719 360 16% 21,600 0.475 269,625 8.01% £10,260

31 July 2017 10 2 20 224 18.75 719 360 10% 13,500 0.475 269,625 5.01% £6,413

31 August 2017 10 2 20 224 18.75 719 360 10% 13,500 0.475 269,625 5.01% £6,413

30 September 2017 10 2 20 224 18.75 719 360 10% 13,500 0.475 269,625 5.01% £6,413

Total 410,400 3,235,500 £194,940

* Market share in this instance represents the number of journeys booked through the app as a percentage of all taxi journeys i n York and Leeds

116

16.1.9 Year 3 Profit and Loss Forecast

Oct '16 Nov '16 Dec '16 Jan '17 Feb '17 Mar '17 Apr '17 May '17 Jun '17 Jul '17 Aug '17 Sep '17 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Turnover

Journey Commission (5%) 16,673 29,498 10,260 29,498 29,498 10,260 10,260 29,498 10,260 6,413 6,413 6,413 194,940

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Turnover 17,323 30,148 10,910 30,148 30,148 10,910 10,910 30,148 10,910 7,063 7,063 7,063 202,740

Direct Costs

A5 Flyers (8,000) 1,009 - - - - - - - - - - - 1,009

A3 Posters (750) 3,844 - - - - - - - - - - - 3,844

Gross Profit 12,470 30,148 10,910 30,148 30,148 10,910 10,910 30,148 10,910 7,063 7,063 7,063 197,888

Gross Profit Margin 72% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 98%

Expenses/Overheads

Insurance 69 69 69 69 69 69 69 69 69 69 69 69 832

Premises Rental 173 173 173 173 173 173 173 173 173 173 173 173 2,080

Distributor Clothing 173 - - - - - - - - - - - 173

Managing Director Salary 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 25,462

Distributor Wages 4,627 511 511 511 511 - - 511 - - - - 7,181

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 103 103 103 103 103 103 103 103 103 103 103 103 1,230

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes, Google

Play, Windows) 60 - - - - - - - - - - - 60

Accountancy Fees and Payroll 90 90 90 90 90 90 90 90 90 90 90 90 1,082

9,680 5,331 5,331 5,331 5,331 4,820 4,820 5,331 4,820 4,820 4,820 4,820 65,257

Other Costs

Depreciation 7 7 7 7 7 7 7 7 7 7 7 7 82

Total Overheads 9,687 5,338 5,338 5,338 5,338 4,827 4,827 5,338 4,827 4,827 4,827 4,827 65,339

Net Profit 2,783 24,809 5,572 24,809 24,809 6,083 6,083 24,809 6,083 2,235 2,235 2,235 132,548

Net Profit Margin 16% 82% 51% 82% 82% 56% 56% 82% 56% 32% 32% 32% 55%

Corporation Tax 557 4,962 1,114 4,962 4,962 1,217 1,217 4,962 1,217 447 447 447 26,510

Profit after tax 2,227 19,848 4,458 19,848 19,848 4,866 4,866 19,848 4,866 1,788 1,788 1,788 106,039

Cumulative Profit 2,227 22,074 26,532 46,379 66,227 71,093 75,960 95,807 100,674 102,462 104,250 106,039 106,039

Month

117

16.1.10 Year 3 Cash Flow Forecast

Oct '16 Nov '16 Dec '16 Jan '17 Feb '17 Mar '17 Apr '17 May '17 Jun '17 Jul '17 Aug '17 Sep '17 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Cash Receipts

Journey Commission (5%) 16,673 29,498 10,260 29,498 29,498 10,260 10,260 29,498 10,260 6,413 6,413 6,413 194,940

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Cash Receipts 17,323 30,148 10,910 30,148 30,148 10,910 10,910 30,148 10,910 7,063 7,063 7,063 202,740

Cash Payments

A5 Flyers (8,000) 1,009 - - - - - - - - - - - 1,009

A3 Posters (1,500) 3,844 - - - - - - - - - - - 3,844

Insurance 69 69 69 69 69 69 69 69 69 69 69 69 832

Premises Rental 173 173 173 173 173 173 173 173 173 173 173 173 2,080

Distributor Clothing 173 - - - - - - - - - - - 173

Managing Director Salary 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 25,462

Distributor Wages 4,627 511 511 511 511 - - 511 - - - - 7,181

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 103 103 103 103 103 103 103 103 103 103 103 103 1,230

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes,

Google Play, Windows) 60 - - - - - - - - - - - 60

Accountancy Fees and Payroll 90 90 90 90 90 90 90 90 90 90 90 90 1,082

Tax Paid 557 4,962 1,114 4,962 4,962 1,217 1,217 4,962 1,217 447 447 447 26,510

Total Cash Payments 15,089 10,293 6,446 10,293 10,293 6,037 6,037 10,293 6,037 5,267 5,267 5,267 96,619

Net Cash Flow 2,234 19,854 4,464 19,854 19,854 4,873 4,873 19,854 4,873 1,795 1,795 1,795 106,121

Opening Bank 215,382 217,615 237,470 241,934 261,788 281,643 286,516 291,389 311,244 316,117 317,912 319,707 3,298,715

Closing Bank 217,615 237,470 241,934 261,788 281,643 286,516 291,389 311,244 316,117 317,912 319,707 321,502 3,404,836

Month

118

16.1.11 Balance Sheet

Year 1 Year 2 Year 3

£ £ £

FIXED ASSETS

Laptop 330 330 330

Accumulated Depreciation 82 164 246

248 166 84

CURRENT ASSETS

Bank 126,503 215,382 321,502

126,503 215,382 321,502

CREDITORS DUE WITHIN ONE YEAR

Laptop 330 330 330

330 330 330

TOTAL NET ASSETS 126,421 215,218 321,256

CAPITAL & RESERVES

Share Capital 70,000 70,000 70,000

Retained Earnings 47,958 123,435 213,567

Contingency Reserve 8,463 21,783 37,689

126,421 215,218 321,256

119

16.2 3% Commission

16.2.1 Break Even Analysis

Oct '14 Nov '14 Dec '14 Jan '15 Total

Sales (3% Commission) incl. block fees £8,345 £16,040 £4,498 £16,040 £44,923

Less Variable Costs

- £0 £0 £0 £0 £0

Contribution Margin £8,345 £16,040 £4,498 £16,040 £44,923

Contribution Margin % 100.00% 100.00% 100.00% 100.00% 100.00%

Fixed Expenses

A5 Flyers (8,000) £960 - - - £960

A3 Posters (1,500) £7,500 - - - £7,500

Insurance £66 £66 £66 £66 £264

Premises Rental £165 £165 £165 £165 £660

Distributor Clothing £165 - - - £165

Laptop £330 - - - £330

Managing Director Salary £2,000 £2,000 £2,000 £2,000 £8,000

Distributor Wages £4,536 £491 £491 £491 £6,009

Investor Wages £2,236 £2,236 £2,236 £2,236 £8,944

Travel Expenses £50 £50 £50 £50 £200

Website and app (inc. design, maintenance, domain, data

encryption) £10,000 - - - £10,000

Mobile Phone £27 £27 £27 £27 £108

App Subscriptions(itunes, Google Play, Windows) £135 - - - £135

Graphic design (flyers and posters) £60 - - - £60

Incorporation Fee £120 - - - £120

Accountancy Fees and Payroll £86 £86 £86 £86 £343

Legal Fees £100 £0 £0 £0 £100

Intellectual Property £220 £0 £0 £0 £220

Depreciation £7 £7 £7 £7 £28

Total Fixed Costs £28,763 £5,128 £5,128 £5,128 £44,146

Total Fixed Costs % 344.67% 31.97% 114.02% 31.97% 98.27%

Break-Even (Units) [(Fixed Costs-Block fees)/(£0.285)] - - - - 145,777

Predicted Sales (Units) 27,000 54,000 13,500 54,000 148,500

Margin of Safety (Units) - - - - 2,723

Margin of Safety (%) - - - - 1.83%

3% Commission – Given the worst case scenario, MyTaxiBooker breaks even between

the third and fourth month of operations. Predictions indicate that 145,777 journeys in

York and Leeds must be made in order to meet this target. Predictions indicate that over

these two months, 148,500 journeys will be booked through the app. The margin of

safety is therefore 2,723 units (sales can short fall by 1.83% from predicated sales

without affecting the ability to break even).

120

16.2.2 Year 1 Sales Forecast

Date

Number of

hours

worked per

day

Number of

journeys

per hour

Average

number of

journeys/day (2)

Number of

working days

a year (minus

public

holidays and

28 days

holiday

allowance)

Average number

of working days

per month (3)

Number of taxis

in York and

Leeds

Number of

taxis using

the app (4)

Percentage of

journeys booked

through the app

(per 360 taxis

using the app) (1)

App usage (number

of journeys utilising

the app)

3% Commission on

£9.50 journey

Average number of

journeys each month

for all taxis in York

and Leeds Market Share

Sales revenue (3%

commission)

31 October 2014 10 2 20 225 18.75 719 360 20% 27,000 0.285 269,625 10.01% £7,695

30 November 2014 10 2 20 225 18.75 719 360 40% 54,000 0.285 269,625 20.03% £15,390

31 December 2014 10 2 20 225 18.75 719 360 10% 13,500 0.285 269,625 5.01% £3,848

31 January 2015 10 2 20 225 18.75 719 360 40% 54,000 0.285 269,625 20.03% £15,390

28 February 2015 10 2 20 225 18.75 719 360 40% 54,000 0.285 269,625 20.03% £15,390

31 March 2015 10 2 20 225 18.75 719 360 10% 13,500 0.285 269,625 5.01% £3,848

30 April 2015 10 2 20 225 18.75 719 360 10% 13,500 0.285 269,625 5.01% £3,848

31 May 2015 10 2 20 225 18.75 719 360 40% 54,000 0.285 269,625 20.03% £15,390

30 June 2015 10 2 20 225 18.75 719 360 10% 13,500 0.285 269,625 5.01% £3,848

31 July 2015 10 2 20 225 18.75 719 360 4% 5,400 0.285 269,625 2.00% £1,539

31 August 2015 10 2 20 225 18.75 719 360 4% 5,400 0.285 269,625 2.00% £1,539

30 September 2015 10 2 20 225 18.75 719 360 4% 5,400 0.285 269,625 2.00% £1,539

Total 313,200 3,235,500 £89,262

* Market share in this instance represents the number of journeys booked through the app as a percentage of all taxi journeys in York and Leeds

121

16.2.3 Year 1 Profit and Loss Forecast

Oct '14 Nov '14 Dec '14 Jan '15 Feb '15 Mar '15 Apr '15 May '15 Jun '15 Jul '15 Aug '15 Sep '15 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Turnover

Journey Commission (3%) 7,695 15,390 3,848 15,390 15,390 3,848 3,848 15,390 3,848 1,539 1,539 1,539 89,262

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Turnover 8,345 16,040 4,498 16,040 16,040 4,498 4,498 16,040 4,498 2,189 2,189 2,189 97,062

Direct Costs

A5 Flyers (8,000) 960 - - - - - - - - - - - 960

A3 Posters (1,500) 7,500 - - - - - - - - - - - 7,500

Gross Profit -115 16,040 4,498 16,040 16,040 4,498 4,498 16,040 4,498 2,189 2,189 2,189 88,602

Gross Profit Margin -1% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 92%

Expenses/Overheads

Insurance 66 66 66 66 66 66 66 66 66 66 66 66 792

Premises Rental 165 165 165 165 165 165 165 165 165 165 165 165 1,980

Distributor Clothing 165 - - - - - - - - - - - 165

Laptop 330 - - - - - - - - - - - 330

Managing Director Salary 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000

Distributor Wages 4,536 491 491 491 491 - - 491 - - - - 6,992

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 50 50 50 50 50 50 50 50 50 50 50 50 600

Website and app (inc. design, maintenance, domain, data encryption)10,000 - - - - - - - - - - - 10,000

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes, Google Play, Windows)135 - - - - - - - - - - - 135

Graphic design (flyers and posters) 60 - - - - - - - - - - - 60

Incorporation Fee 120 - - - - - - - - - - - 120

Accountancy Fees and Payroll 86 86 86 86 86 86 86 86 86 86 86 86 1,030

Legal Fees 100 - - - - - - - - - - - 100

Intellectual Property 220 - - - - - - - - - - - 220

20,296 5,121 5,121 5,121 5,121 4,630 4,630 5,121 4,630 4,630 4,630 4,630 73,680

Other Costs

Depreciation 7 7 7 7 7 7 7 7 7 7 7 7 82

Total Overheads 20,303 5,128 5,128 5,128 5,128 4,637 4,637 5,128 4,637 4,637 4,637 4,637 73,762

Net Profit -20,418 10,912 -630 10,912 10,912 -139 -139 10,912 -139 -2,448 -2,448 -2,448 14,840

Net Profit Margin -245% 68% -14% 68% 68% -3% -3% 68% -3% -112% -112% -112% -28%

Corporation Tax 0 2,182 -126 2,182 2,182 -28 -28 2,182 -28 0 0 0 8,520

Profit after tax -20,418 8,730 -504 8,730 8,730 -111 -111 8,730 -111 -2,448 -2,448 -2,448 6,320

Cumulative Profit -20,418 -11,688 -12,192 -3,462 5,267 5,156 5,045 13,774 13,663 11,215 8,767 6,320 6,320

Month

122

16.2.4 Year 1 Cash Flow Forecast

Oct '14 Nov '14 Dec '14 Jan '15 Feb '15 Mar '15 Apr '15 May '15 Jun '15 Jul '15 Aug '15 Sep '15 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Cash Receipts

Journey Commission (3%) 7,695 15,390 3,848 15,390 15,390 3,848 3,848 15,390 3,848 1,539 1,539 1,539 89,262

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Cash Receipts 8,345 16,040 4,498 16,040 16,040 4,498 4,498 16,040 4,498 2,189 2,189 2,189 97,062

Cash Payments

A5 Flyers (8,000) 960 - - - - - - - - - - - 960

A3 Posters (1,500) 7,500 - - - - - - - - - - - 7,500

Insurance 66 66 66 66 66 66 66 66 66 66 66 66 792

Premises Rental 165 165 165 165 165 165 165 165 165 165 165 165 1,980

Distributor Clothing 165 - - - - - - - - - - - 165

Laptop 330 - - - - - - - - - - - 330

Managing Director Salary 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000

Distributor Wages 4,536 491 491 491 491 - - 491 - - - - 6,992

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 50 50 50 50 50 50 50 50 50 50 50 50 600

Website and app (inc. design,

maintenance, domain, data encryption) 10,000 - - - - - - - - - - - 10,000

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes, Google Play,

Windows) 135 - - - - - - - - - - - 135

Graphic design (flyers and posters) 60 - - - - - - - - - - - 60

Incorporation Fee 120 - - - - - - - - - - - 120

Accountancy Fees and Payroll 86 86 86 86 86 86 86 86 86 86 86 86 1,030

Legal Fees 100 - - - - - - - - - - - 100

Intellectual Property 220 - - - - - - - - - - - 220

Tax Paid 0 2,182 -126 2,182 2,182 -28 -28 2,182 -28 0 0 0 8,520

Total Cash Payments 28,756 7,303 4,995 7,303 7,303 4,602 4,602 7,303 4,602 4,630 4,630 4,630 90,660

Net Cash Flow -20,411 8,737 -497 8,737 8,737 -105 -105 8,737 -105 -2,441 -2,441 -2,441 6,402

Opening Bank 70,000 49,589 58,326 57,828 66,565 75,301 75,197 75,092 83,829 83,724 81,283 78,843 855,578

Closing Bank 49,589 58,326 57,828 66,565 75,301 75,197 75,092 83,829 83,724 81,283 78,843 76,402 861,980

Month

123

16.2.5 Year 2 Sales Forecast

Date

Number of

hours

worked per

day

Number of

journeys

per hour

Average

number of

journeys/day (2)

Number of

working days

a year (minus

public

holidays and

28 days

holiday

allowance)

Average number

of working days

per month (3)

Number of taxis

in York and

Leeds

Number of

taxis using

the app (4)

Percentage of

journeys booked

through the app

(per 360 taxis

using the app) (1)

App usage (number

of journeys utilising

the app)

3% Commission on

£9.50 journey

Average number of

journeys each month

for all taxis in York

and Leeds Market Share

Sales revenue (3%

commission)

31 October 2015 10 2 20 226 18.75 719 360 23% 31,050 0.285 269,625 11.52% £8,849

30 November 2015 10 2 20 226 18.75 719 360 43% 58,050 0.285 269,625 21.53% £16,544

31 December 2015 10 2 20 226 18.75 719 360 13% 17,550 0.285 269,625 6.51% £5,002

31 January 2016 10 2 20 226 18.75 719 360 43% 58,050 0.285 269,625 21.53% £16,544

28 February 2016 10 2 20 226 18.75 719 360 43% 58,050 0.285 269,625 21.53% £16,544

31 March 2016 10 2 20 226 18.75 719 360 13% 17,550 0.285 269,625 6.51% £5,002

30 April 2016 10 2 20 226 18.75 719 360 13% 17,550 0.285 269,625 6.51% £5,002

31 May 2016 10 2 20 226 18.75 719 360 43% 58,050 0.285 269,625 21.53% £16,544

30 June 2016 10 2 20 226 18.75 719 360 13% 17,550 0.285 269,625 6.51% £5,002

31 July 2016 10 2 20 226 18.75 719 360 7% 9,450 0.285 269,625 3.50% £2,693

31 August 2016 10 2 20 226 18.75 719 360 7% 9,450 0.285 269,625 3.50% £2,693

30 September 2016 10 2 20 226 18.75 719 360 7% 9,450 0.285 269,625 3.50% £2,693

Total 361,800 3,235,500 £103,113

* Market share in this instance represents the number of journeys booked through the app as a percentage of all taxi journeys in York and Leeds

124

16.2.6 Year 2 Profit and Loss Forecast

Oct '15 Nov '15 Dec '15 Jan '16 Feb '16 Mar '16 Apr '16 May '16 Jun '16 Jul '16 Aug '16 Sep '16 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Turnover

Journey Commission (3%) 8,849 16,544 5,002 16,544 16,544 5,002 5,002 16,544 5,002 2,693 2,693 2,693 103,113

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Turnover 9,499 17,194 5,652 17,194 17,194 5,652 5,652 17,194 5,652 3,343 3,343 3,343 110,913

Direct Costs

A5 Flyers (8,000) 984 - - - - - - - - - - - 984

A3 Posters (750) 3,844 - - - - - - - - - - - 3,844

Gross Profit 4,672 17,194 5,652 17,194 17,194 5,652 5,652 17,194 5,652 3,343 3,343 3,343 106,085

Gross Profit Margin 49% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 96%

Expenses/Overheads

Insurance 68 68 68 68 68 68 68 68 68 68 68 68 812

Premises Rental 169 169 169 169 169 169 169 169 169 169 169 169 2,030

Distributor Clothing 169 - - - - - - - - - - - 169

Managing Director Salary 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 24,720

Distributor Wages 4,627 501 501 501 501 - - 501 - - - - 7,131

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 51 51 51 51 51 51 51 51 51 51 51 51 615

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes, Google Play, Windows)60 - - - - - - - - - - - 60

Accountancy Fees and Payroll 88 88 88 88 88 88 88 88 88 88 88 88 1,055

9,555 5,200 5,200 5,200 5,200 4,699 4,699 5,200 4,699 4,699 4,699 4,699 63,749

Other Costs

Depreciation 7 7 7 7 7 7 7 7 7 7 7 7 82

Total Overheads 9,561 5,207 5,207 5,207 5,207 4,706 4,706 5,207 4,706 4,706 4,706 4,706 63,831

Net Profit -4,890 11,987 445 11,987 11,987 946 946 11,987 946 -1,363 -1,363 -1,363 42,254

Net Profit Margin -51% 70% 8% 70% 70% 17% 17% 70% 17% -41% -41% -41% 14%

Corporation Tax 0 2,397 89 2,397 2,397 189 189 2,397 189 -273 -273 -273 9,429

Profit after tax -4,890 9,590 356 9,590 9,590 757 757 9,590 757 -1,090 -1,090 -1,090 32,825

Cumulative Profit -4,890 4,700 5,056 14,646 24,236 24,992 25,749 35,339 36,096 35,006 33,915 32,825 32,825

Month

125

16.2.7 Year 2 Cash Flow Forecast

Oct '15 Nov '15 Dec '15 Jan '16 Feb '16 Mar '16 Apr '16 May '16 Jun '16 Jul '16 Aug '16 Sep '16 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Cash Receipts

Journey Commission (3%) 8,849 16,544 5,002 16,544 16,544 5,002 5,002 16,544 5,002 2,693 2,693 2,693 103,113

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Cash Receipts 9,499 17,194 5,652 17,194 17,194 5,652 5,652 17,194 5,652 3,343 3,343 3,343 110,913

Cash Payments

A5 Flyers (8,000) 984 - - - - - - - - - - - 984

A3 Posters (1,500) 3,844 - - - - - - - - - - - 3,844

Insurance 68 68 68 68 68 68 68 68 68 68 68 68 812

Premises Rental 169 169 169 169 169 169 169 169 169 169 169 169 2,030

Distributor Clothing 169 - - - - - - - - - - - 169

Managing Director Salary 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 2,060 24,720

Distributor Wages 4,627 501 501 501 501 - - 501 - - - - 7,131

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 51 51 51 51 51 51 51 51 51 51 51 51 615

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes, Google

Play, Windows) 60 - - - - - - - - - - - 60

Accountancy Fees and Payroll 88 88 88 88 88 88 88 88 88 88 88 88 1,055

Tax Paid 0 2,397 89 2,397 2,397 189 189 2,397 189 -273 -273 -273 9,429

Total Cash Payments 14,382 7,597 5,289 7,597 7,597 4,888 4,888 7,597 4,888 4,427 4,427 4,427 78,006

Net Cash Flow -4,883 9,597 363 9,597 9,597 764 764 9,597 764 -1,083 -1,083 -1,083 32,907

Opening Bank 76,402 71,519 81,115 81,478 91,075 100,672 101,435 102,199 111,795 112,559 111,476 110,392 1,152,116

Closing Bank 71,519 81,115 81,478 91,075 100,672 101,435 102,199 111,795 112,559 111,476 110,392 109,309 1,185,023

Month

126

16.2.8 Year 3 Sales Forecast

Date

Number of

hours

worked per

day

Number of

journeys

per hour

Average

number of

journeys/day (2)

Number of

working days

a year (minus

public

holidays and

28 days

holiday

allowance)

Average number

of working days

per month (3)

Number of taxis

in York and

Leeds

Number of

taxis using

the app (4)

Percentage of

journeys booked

through the app

(per 360 taxis

using the app) (1)

App usage (number

of journeys utilising

the app)

3% Commission on

£9.50 journey

Average number of

journeys each month

for all taxis in York

and Leeds Market Share

Sales revenue (3%

commission)

31 October 2016 10 2 20 224 18.75 719 360 26% 35,100 0.285 269,625 13.02% £10,004

30 November 2016 10 2 20 224 18.75 719 360 46% 62,100 0.285 269,625 23.03% £17,699

31 December 2016 10 2 20 224 18.75 719 360 16% 21,600 0.285 269,625 8.01% £6,156

31 January 2017 10 2 20 224 18.75 719 360 46% 62,100 0.285 269,625 23.03% £17,699

28 February 2017 10 2 20 224 18.75 719 360 46% 62,100 0.285 269,625 23.03% £17,699

31 March 2017 10 2 20 224 18.75 719 360 16% 21,600 0.285 269,625 8.01% £6,156

30 April 2017 10 2 20 224 18.75 719 360 16% 21,600 0.285 269,625 8.01% £6,156

31 May 2017 10 2 20 224 18.75 719 360 46% 62,100 0.285 269,625 23.03% £17,699

30 June 2017 10 2 20 224 18.75 719 360 16% 21,600 0.285 269,625 8.01% £6,156

31 July 2017 10 2 20 224 18.75 719 360 10% 13,500 0.285 269,625 5.01% £3,848

31 August 2017 10 2 20 224 18.75 719 360 10% 13,500 0.285 269,625 5.01% £3,848

30 September 2017 10 2 20 224 18.75 719 360 10% 13,500 0.285 269,625 5.01% £3,848

Total 410,400 3,235,500 £116,964

* Market share in this instance represents the number of journeys booked through the app as a percentage of all taxi journeys in York and Leeds

127

16.2.9 Year 3 Profit and Loss Forecast

Oct '16 Nov '16 Dec '16 Jan '17 Feb '17 Mar '17 Apr '17 May '17 Jun '17 Jul '17 Aug '17 Sep '17 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Turnover

Journey Commission (3%) 10,004 17,699 6,156 17,699 17,699 6,156 6,156 17,699 6,156 3,848 3,848 3,848 116,964

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Turnover 10,654 18,349 6,806 18,349 18,349 6,806 6,806 18,349 6,806 4,498 4,498 4,498 124,764

Direct Costs

A5 Flyers (8,000) 1,009 - - - - - - - - - - - 1,009

A3 Posters (750) 3,844 - - - - - - - - - - - 3,844

Gross Profit 5,801 18,349 6,806 18,349 18,349 6,806 6,806 18,349 6,806 4,498 4,498 4,498 119,912

Gross Profit Margin 54% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 96%

Expenses/Overheads

Insurance 69 69 69 69 69 69 69 69 69 69 69 69 832

Premises Rental 173 173 173 173 173 173 173 173 173 173 173 173 2,080

Distributor Clothing 173 - - - - - - - - - - - 173

Managing Director Salary 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 25,462

Distributor Wages 4,627 511 511 511 511 - - 511 - - - - 7,181

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 103 103 103 103 103 103 103 103 103 103 103 103 1,230

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes, Google Play, Windows)60 - - - - - - - - - - - 60

Accountancy Fees and Payroll 90 90 90 90 90 90 90 90 90 90 90 90 1,082

9,680 5,331 5,331 5,331 5,331 4,820 4,820 5,331 4,820 4,820 4,820 4,820 65,257

Other Costs

Depreciation 7 7 7 7 7 7 7 7 7 7 7 7 82

Total Overheads 9,687 5,338 5,338 5,338 5,338 4,827 4,827 5,338 4,827 4,827 4,827 4,827 65,339

Net Profit -3,886 13,010 1,468 13,010 13,010 1,979 1,979 13,010 1,979 -330 -330 -330 54,572

Net Profit Margin -36% 71% 22% 71% 71% 29% 29% 71% 29% -7% -7% -7% 28%

Corporation Tax 0 2,602 294 2,602 2,602 396 396 2,602 396 -66 -66 -66 11,692

Profit after tax -3,886 10,408 1,174 10,408 10,408 1,583 1,583 10,408 1,583 -264 -264 -264 42,881

Cumulative Profit -3,886 6,523 7,697 18,105 28,514 30,097 31,680 42,089 43,672 43,408 43,144 42,881 42,881

Month

128

16.2.10 Year 3 Cash Flow Forecast

Oct '16 Nov '16 Dec '16 Jan '17 Feb '17 Mar '17 Apr '17 May '17 Jun '17 Jul '17 Aug '17 Sep '17 Total

£ £ £ £ £ £ £ £ £ £ £ £ £

Cash Receipts

Journey Commission (3%) 10,004 17,699 6,156 17,699 17,699 6,156 6,156 17,699 6,156 3,848 3,848 3,848 116,964

Block Fees (advertising) 650 650 650 650 650 650 650 650 650 650 650 650 7,800

Total Cash Receipts 10,654 18,349 6,806 18,349 18,349 6,806 6,806 18,349 6,806 4,498 4,498 4,498 124,764

Cash Payments

A5 Flyers (8,000) 1,009 - - - - - - - - - - - 1,009

A3 Posters (1,500) 3,844 - - - - - - - - - - - 3,844

Insurance 69 69 69 69 69 69 69 69 69 69 69 69 832

Premises Rental 173 173 173 173 173 173 173 173 173 173 173 173 2,080

Distributor Clothing 173 - - - - - - - - - - - 173

Managing Director Salary 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 2,122 25,462

Distributor Wages 4,627 511 511 511 511 - - 511 - - - - 7,181

Investor Wages 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 2,236 26,833

Travel Expenses 103 103 103 103 103 103 103 103 103 103 103 103 1,230

Mobile Phone 27 27 27 27 27 27 27 27 27 27 27 27 324

App Subscriptions(itunes,

Google Play, Windows) 60 - - - - - - - - - - - 60

Accountancy Fees and

Payroll 90 90 90 90 90 90 90 90 90 90 90 90 1,082

Tax Paid 0 2,602 294 2,602 2,602 396 396 2,602 396 -66 -66 -66 11,692

Total Cash Payments 14,532 7,933 5,625 7,933 7,933 5,216 5,216 7,933 5,216 4,754 4,754 4,754 81,801

Net Cash Flow -3,879 10,415 1,181 10,415 10,415 1,590 1,590 10,415 1,590 -257 -257 -257 42,963

Opening Bank 109,309 105,430 115,845 117,027 127,442 137,857 139,447 141,037 151,452 153,042 152,785 152,528 1,603,202

Closing Bank 105,430 115,845 117,027 127,442 137,857 139,447 141,037 151,452 153,042 152,785 152,528 152,272 1,646,164

Month

129

16.2.11 Balance Sheet

Year 1 Year 2 Year 3

£ £ £

FIXED ASSETS

Laptop 330 330 330

Accumulated Depreciation 82 164 246

248 166 84

CURRENT ASSETS

Bank 76,402 109,309 152,272

76,402 109,309 152,272

CREDITORS DUE WITHIN ONE YEAR

Laptop 330 330 330

330 330 330

TOTAL NET ASSETS 76,320 109,145 152,026

CAPITAL & RESERVES

Share Capital 70,000 70,000 70,000

Retained Earnings 5,372 33,273 69,722

Contingency Reserve 948 5,872 12,304

76,320 109,145 152,026

130

17.0 Performance Graphs

131

132

133