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Once Driven, Forever Moped Cycling
Philip van Zadelhoff- President Mateo Villegas- Vice President (Operations) Henry Hong- Vice President (Marketing)
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1. Executive Summary Moped Cycling will be the first, and initially, the only service in Singapore that offers both bicycles and mopeds as a means of transportation. Singapore is the perfect place for us to start up our business, as it is a small country that has a relatively short traveling distance between locations. Moped Cycling will therefore fit in perfectly in todays busy and fast moving society. Moped Cycling will allow customers to rent mopeds/bikes for any time they want. Once they have gotten their desired vehicle from one of our stations (which are situated all across Singapore) they are free to travel where ever they want. Our target audiences, to whom we will market to through ads in brochures, magazines, and on billboards, are high school/college students, young businessmen, and tourists. Our main theme that we want to bring across to these groups of people is the environmentally friendly message. The biggest benefit of our service is that it runs on solar energy and therefore it doesnâ€™t pollute the environment in any way, shape or form. Our competitors such as the buss and taxi all pollute the environment, while the MRT requires the creation of underground tunnels. In our first year we expect to lose money because of our high startup costs. However as of the first month in the second year we expect to be making quite a bit of money.
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Table of Contents
1. Executive Summary 2. FAQâ€™s 3. The Business a) Description of business b) SWOT Analysis c) Mission Statement d) Marketing 1. Industry Overview 2. Marketing Plan 3. Market Segment e) Competition f) Operating Procedures g) Personnel 4. Financial Data a) Start Up Costs b) Break Even Analysis c) Income statement projections (profit & loss statements) d) Forecast e) Financial Analysis f) Appendix 5. Website/Print ad/ Business
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2. FAQ’S Do I need a driver’s license to use the Mopeds? Individuals wanting to use Mopeds must be minimum 18 years old and will require a Class 2B Motorcycle license. A license Class 2B requires a passing grade in the theory test and the driving test. There are no license or age requirements to use the Bicycles. Do I need to use a helmet to use a Bicycle or Moped? In Singapore, it isn’t mandatory to wear a helmet for a bike, however driving a moped does require a helmet. What happens if the Bicycle or Moped is damaged? If the bicycle or moped is damaged, report this by calling the Contact Center (our number), providing cycle ID and the place it has broken down. A towing vehicle will be sent to come pick you and the moped up and bring you to the closest station. What happens if the Bicycle or Moped is stolen? If a bicycle or moped is lost, the user will be legally responsible to pay a cost of the bike or moped. What happens if the Bicycle or Moped stops working? If something happens to the moped, users will have to call the Contact Center and ask for assistance. The user will then have to give his location and someone will be sent to pick up the moped. Will I get my money back if it rains? We will not be responsible of refunding due to bad weather. It’s a factor we can’t control.
3. The Business A. Description of the business Moped Cycling is an environmentally friendly bicycle and electric moped sharing scheme that allows costumers to travel in an enjoyable and environmentally friendly way. The system will be offered initially to casual users who would use their MC-Card to access the system. A MC-Link can be collected at any of our stations, and does not
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costs any money. You will receive this card that acts as your personal ID (including photo, birthday etc.) and as a payment method. You can top-up your card with cash at any of the Moped Cycling stations. If you want to hire a moped or a bike one swipe of the MC-Card will allow you to be on your way. Future motives: * MC-Card will be the only payment mean accepted. Visa and MasterCard credit and debit Cards, along with Visa Electron may be accepted at a later stage. * Memberships will be offered at a later stage. B. SWOT Analysis Strengths
Efficiency in time, environmentally friendly, freedom of roaming around, profit making (which is a huge plus for investors) Weakness High start-up costs, Potentially dangerous as people may have accidents Opportunities Economic Growth (Travel time, the opportunity cost, will be reduced, thus customers may work economically efficient), Will be a very profitable organization with sufficient investments for fast growths, Can be a new public transportation boom Threats Customers (our targets) may prefer “already existing” public transportations (Taxi, Bus, MRT) or even personal bikes at higher prices, may have to compete with “Greenlots” C. Mission Statement Moped Transit will provide the first free-route public transportation in Singapore, giving our customers quick, stylish, and environmentally-friendly option to travel & tour around The Lion City. D. Marketing 4,740,737 population 0-14 years: 13.8% (male 338,419/female 314,704) 15-64 years: 77% (male 1,774,444/female 1,874,985) 65 years and over: 9.2% (male 196,101/female 242,084) urban population: 100% of total population (2010) total of 3356 km of Roadways Source: https://www.cia.gov/library/publications/the-world-factbook/geos/sn.html
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Industry Overview / Market Analysis Moped Cycling will provide two services: Bikes and Mopeds. Therefore, our target customers are mainly divided into three different segments. Our priority target customers are students (age 14~22 (especially 18~22)). We will target high school students mainly with bikes as they will be attracted by cheap price, A-to-B traveling. On the other hand, we will target the college students both with bikes and Mopeds as some, with licenses, may prefer faster accelerating transportation. Our second target customers are the new, differentseeking younger investors (age 20~35). As the majority of them may be singles with a daily job, they are likely to try out new things. In addition, these young investors, like college students, will be targeted with both bikes and mopeds as they will have high demands for short district-to-district, building-to-building traveling within the city area. Our last priority target market are tourists (age 25~50) who are looking to be in Singapore for short periods of time. We will target them with the bikes as they will not have the Singaporean license.
Marketing Plan (Strategy – The Four P’s) Product i. ii.
Brand Name – Moped Cycling Features/Benefits – Moped Cycling will provide bikes and Mopeds that may be conveniently used by anywhere in Singapore. In addition, numerous Moped Cycling stations will allow quick, short, and more efficient way of traveling. Customers will benefit from Moped Cycling with time-reducing traveling, free-toroam public transportation, and cheap + attractive price. Level of Quality – Moped Cycling will provide both high-quality and environmentally friendly soothing-green colored bikes and Mopeds. Customers without Singaporean license will be able to experience light-weight, fast-speed road bikes with switchable gears. For the customers with license who prefers Mopeds will be able to experience safe, 500 Watts-powered brand new electric Mopeds with pedals. Customers won’t have to worry about Mopeds breaking down as Mope Cycling Mopeds will come with pedals.
Price – the payments will be paid with MC-Card (which you can collect for free) -S$0.50 per hour for Bikes -S$1.00 per hour for Mopeds
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-The minimum amount that customers will need to put in their MC-Cards will be S$10 Place i.
Where will be the stations? We will build the stations where the public transportations are located and where shopping, traveling, education and business take place the most. -MRT Stations -Bus Stations -Taxi Stands -City Hall (Business District) -Shopping & Tourism -Orchard Road, Scotts Road -Marina Bay (Casino, F1, Hotels, SG Flyer, etcâ€Ś) -Sentosa (Universal Studios, Casino, Hotels, Merlion) -Schools (NUS, NTU, SMU, SIM, Nanyang Polytechnic, SAS (woodlands), etc.)
How will Moped Cycling Advertise? We will not only advertise through TV Commercials and local Newspaper, but also through magazines such as Autocar ASEAN, which is a magazine suited for vehicle lovers. We will ensure to deliver the quick, convenient, and green factors throughout our advertisements. -Newspaper -Today -The Straight Times -The Financial Times -Magazines -The Economists -Expat Living SG -Auto car ASEAN -Information Kiosk -Brochures (Tourism Brochures & Public Transportation Brochures) -Print Advertisements / TV Commercials / Moped Cycling Website
Market Segment Segment 1
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i. Description High school and College students from age 14 to 22 who wishes to travel short distance on low-budget Their Wants? Students, high school student in particular, does not have enough personal money to buy their personal vehicles or even a bike. College students may not have enough money to buy a motorcycle or a car; they may not even have official Singaporean license. However, regardless to what they posses, going back and forth from home to school is mandatory for all. Thus, they will be attracted with cheap-price, short distance traveling instead of long line, pricy, and possibly jamming public transportation. How can we satisfy their needs? Moped Cycling can satisfy their needs both to high school and college students as we will provide both bikes and mopeds. At 50 cents and a dollar per hour for bikes and mopeds respectively, their demand for cheap price will also be satisfied. Last but not the least, we will make sure we build stations around some major campuses such as NUS so that students can make quick moves from their dorm or home to their high school or university campus.
Segment 2 i.
Description Young investors from age 20 to 35 who seek for convenient building A to building B shifts in business districts, and who seeks for something new and different Their Wants? Young investors, unlike students, will most likely to have official licenses. However, as they are still very young investors with relatively low income, they may not risk their finance by purchasing their own vehicles. Thus, if there is a cheap way of traveling within the business district freely, without any specific route, they will be tempted. In addition, as most of them will be singles looking at the better future, they may seek for something bizarre and new. How can we satisfy their needs? Moped Cycling will satisfy their needs not only with the low price, but also by advertising and building stations in the City Hall, the busiest business district in Singapore. For example, by building stations next to buildings like Samsung Hub building and NTUC building, young investors in those building may use Moped Cycling to freely roam around the district for a lunch, for a discussion, or even for a meeting.
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Segment 3 (optional) Tourist from age 25-50 is our third marketing segment. We hope to attract tourists to Moped Cycling with an idea of touring and sightseeing with bikes. This may be a viable option to the tourists as bikes (not Mopeds since tourists do not have SG license) can give them more detailed touring at much lower costs.
E. Competition Competitor Analysis Leader Subway MRT Cheaper alternative for taxis several stations around the country but not all of them are easily accessible.
Niche Player No Niche Player
Publuc Bus Service Industry cheaper alternative for taxis. At the same time, there are a lot less subway stations than bus stops making the public bus industry more convenient.
Taxi Faster alternative for bus and subway.
Comfort/Citycab Limo cabs, london cabs, mini coach, mini bus, minivan.
NOTE: None are environmentally friendly
F. Operating Procedures
No Niche Player
Challenger Pricing Strengths / Weakneses Public Bus Depending on the distance, Strengths - Fast Taxi ticket price may vary between (transportation wise), can 2-4 dollars. carry a lot of people, relatively cheap, reliable. Weaknesses - Waiting, stops are not easily accessible in some parts, crowded, underground: more walking involved.
10 cents every 3.3 km
Strengths - Various Stops, cheap, reliable, relatiely confortable. Many people can be carried Weaknesses Waiting, slow, various stops, not all stops are easily accessible from places.
Comfort, premier, prime, yellow top, citycab, transcab, SMRT. Public bus, subway.
2.80-3.00 1st km or less. 0.20$ every 385m thereafter up to 10km. 0.20$ every 330m after 10km. 0.20$ every 45sec of waiting. Peak hour (7-9.30am or 5-8pm) 35% of fare. Booking form 3.50-8$, advanced booking 5.20-16$.
Strengths - Fast, gets you anywhere (convenient), confortable. Weaknesses - Expensive, very reliable,
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4. Financial Data A. Start up costs and expenses Start up costs first month Stations Bicycles Mopeds Maintenance workers Finance/Marketing advisers
Number 10 150 50 10 2
Cost per Unit Total Cost $15,000 $150,000 $100 $15,000 $1,007 $50,337 10% of Rev 15% of Rev
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B. Break-even Analysis Break-even analysis for the 13 month: We choose to do this analysis on the 13th month, as that is month were our business becomes a steady one. In the 13th month the number of stations situated around Singapore stands at 34. In the 13th month our total moped count will be at 170 and bike count will be at 510. On average our variable cost is 45% (20% Marketing, 25% wages) and our average price is .75cents (($1+$.5)/2). Therefore our contribution (or profit we make from one bike for one hour is $.3375 (.75*.45). Since our fixed cost is $18,795 in the 13th month our break even number of hours of usage by both the moped and the bike (each) is 27844. Therefore per day we require our total hours of use of all mopeds and bikes to be at 928 hours. Since we have 170 mopeds and 510 bikes the average number of hours needed to be spent per day on one moped is 5 hours and 30 minutes, while the average for one bike lies at 1 hour and 20 minutes. This then translates to an occupancy rate of 7.5% (of the 16 hours available per day) for bikes and 33.1% for moped (again of the 16 hours the mopeds are available per day). Since we estimated our occupancy rate to be both at 31% we definitely satisfy our bike requirement but just end up short on our mopeds. Another look:
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C. Income Statement
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D. Forecast Currently there are 4.7 million people residing in Singapore. Of these 4.7 million people our target market (aged 15-65) is 77% of the total population. Adding in the tourist that come almost monthly we have quite a big reach. This allows us to make a lot of revenue within the close future. Our first year will obviously generate a loss because our startup expenses are so high and because people need time to discover our service. Therefore we have estimated that at the end of the first year our use of
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mopeds will be about 29%. Since we stated that the maximum amount of time a moped can be used a day is 16 hours we said that in the first month 12% of these 16 hours will be used. This will gradually increase as more people discover our moped service to about 60% at the end of the 20th month. Since we are steadily increasing the amount of mopeds per month from about 50 in the first month to 120 at the end of the year our revenue made off mopeds will increase significantly. At the end of the 3rd year we want to have a maximum amount of 270 mopeds available. As for the bicycles we once again said that of the maximum 16 hours of usage a day 10% will be used. This number will steadily increase to 29% at the end of the 1rst year and to a maximum of 50% at the middle of the second year. The amount of percentage use of bikes will be less than mopeds because of the weather. Eventually people will find it more comfortable to drive around with a moped than to pedal in the heat. Furthermore people tend to purchase their own bike more often than mopeds. As you can see from our income statement we hoped to be making a revenue at the end of the second year of about $123,789.00 (Singapore dollar). This will steadily increase to about $1,992,195.00 (Singapore dollar). Some variables to keep in mind are weather, when it rains (which it does quite often) our service won’t be used at all. This can lead to huge profit opportunity losses, but we aren’t control of the weather so we can’t do much about it.
E. Financial Analysis
Forecast $2,500,000 $2,000,000
$1,500,000 Total Revenue $1,000,000
Total Cost Net Profit
$500,000 $0 1 -$500,000
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$2,000,000 $1,500,000 Total Revenue $1,000,000
Total Variable Cost Total Fixed Cost
$500,000 $0 1
REVENUE Bicycle Moped TOTAL VARIABLE COST Finance/Marketing Advisors Patrol/Maintenance Wages Marketing TOTAL VARIABLE COST FIXED COST Bicycles Mopeds Electricity cost for Moped Cost of Stations TOTAL FIXED COST TOTAL COST NET PROFIT
173,250 115,500 288,750 43,313 14,438 57,750 115,500 36,000 120,809 6,325 360,000 523,134
1,166,400 972,000 2,138,400
261,360 87,120 348,480 696,960 15,000 50,337 13,200 150,000 228,537
950,400 792,000 1,742,400
174,803 58,268 233,070 466,140 15,000 50,337 10,200 150,000 225,537
665,550 499,800 1,165,350
320,760 106,920 427,680 855,360 15,000 50,337 16,200 150,000 231,537
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5. Website/Print ad Home page (mopedcycling.weeble.com)
Print ad page
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