INTERNATIONAL INSTITUTE OF PLANNING & MANAGEMENT

A business plan on carvenience:

Car rental firm
SUBMITTED TO

PROFF. HARSHA

Submitted By
RAHUL GUPTA
VARUN GOTI
TARUN.C

Contents
1.0 Concept testing
2.0
Executive Summary

3.0

2.1
Objectives
2.2
Mission
2.3
Keys to Success
2.4
Vision
2.5
Company Summary
2.5.1
Company Ownership
2.5.2
Start-Up Plan
2.5.3
Company Locations and Facilities

Services

3.1
service Description
3.2
Sales Literature
3.3
Future services
4.0 Market Planning
4.1 Current Market Situation
4.2 SWOT Analysis

4.3
4.4
4.5
4.6

Objectives
Market Trends & Growth
Market Needs
Market Strategy
4.6.1
Target Market
4.6.2
Positioning
4.6.3
Location
4.6.4
Market Communication
4.6.5
Market Research & Development
4.6.6
Sales forecast
4.7 Market Programs
5.0
Management Summary
6.1

Organizational Structure

6.2

7.0

Personnel Plan

Financial Plan
7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8

Important Assumptions
Key Financial Indicators
Projected Profit and Loss
Projected Balance Sheet
Business Ratios
Long-Term PLAN

Questionnaire for Concept Testing

1. Do you hire vehicles for all levels of executives?
2. While hiring cars what would you give priority to cost or
comforts (quality service)?
3. How frequently you rent a car
Occasionally
Frequently
4. How do you decide from whom to rent a car?
5. Which mode of payment you prefer?
Cash
Credit
6. Which class of cars do you prefer to hire?
7. Do you hire cars only for local use or even for long
distance?
8. Are you satisfied by the services provided by your
current hirer? If yes, why? And if not why?
9. Do you prefer to hire Air-conditioned cars or non Airconditioned cars?
10.
For what purpose you rent a car

Test Results
In this survey we visited various corporate houses in Bandra
Kurla Comlex like Workhardt, ICICI Bank, Bank Of Baroda,etc.
In Andheri we visited Proctor & Gamble, Glaxo India an many
companies in Seepz.
The outcome o the survey was positive for us. We found that
there is a demand in corporate circle for hiring cars. They
usually dont prefer to have their own cars for all the
executives. Instead they hire cars as that is more economical
for them.
We even found out the choice of cars, which they prefer to
hire, which gave us an idea of the composition of cars we
should have. The corporate give more importance to quality
service than cost but the cost should be according to the
market rate.
They dont mind trying a new rental agency if the service
offered is better than the current service provider.
Based on the test results we conclude that starting a car
rental agency is a feasible idea and could lead to a
successful business.

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

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

Objective
To provide friendly and reliable customer service in order
to establish a loyal customer base.

To make the customer aware that hiring a

car is the next best option to buy a car.

To effectively promote our service to a

wide range of corporates.

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

Keys to Success

Optimum utilization of resources

Customer satisfaction
Controlling costs

Vision
Our vision is to be a nationwide market share leader in
each of the markets we serve.
We will try to attain this vision by providing our customers
cost effective and quality service. We will add value to these
services by providing legendary customer service through
our uncompromising commitment to customer satisfaction.

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

Start-Up Plan
The following
Carvenience.

are

the

expenses

incurred

by

Expenses

Printing & stationery

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

Air conditioners
Computers
Furniture and fittings
Office premises

Assets

Company Locations and Facilities

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

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

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

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

Market Planning
Current Market Situation
Industry Analysis
The vehicle rental market can be divided in terms
of
Client type
Location
Rental schemes- car hire
Car lease
Self drive

Industry Participants
Multi national companies- hertz international
National companies- autoriders and meeru
Local players- mitra, auto cabs & orange
The car rental companies may wholly be
concentrated into car rental services eg: -ketan
travels pvt ltd or may be car rental + allied
business eg- autoriders and aqsa
Allied business such as hotel reservations, airline
& railway ticketing, tour packages etc

The Carvenience Difference

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

suggestions on how Carvenience can serve your corporate

needs:

Visiting Employees

- No matter where your

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

Potential Clients

- If your business will be

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

Local Traveling

- Don't worry about having to pay

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

Convention Groups

- Your business can benefit by

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

Factors of Competition

The following factors of competition give

carvenience a
competitive edge over the other car rental
companies.

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

Price: Carvenience offers its

customers car rental packages at a
competitive price without
compromising on quality or sacrificing
company profits.

Convenience: All American Express, Visa,

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

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

Main Competitors
Airlines tie up : Hertz has a tie up with jet airways under
which jet airways offers its domestic frequent flyers car
hire facility of Hertz .
All India presence: Companies having all India presence
e.g. autoriders enjoy higher patronage of outstation
contracts as in case of car breakdown, alternate cars can
be arranged quickly.
Allied services providers: Car rental companies providing
car hire and also allied services such as hotel
reservation, airline and railway ticketing and tour
planning.

SWOT Analysis
Strengths
1. Quality service in terms of time, cost and
comfort

2. Proximity of location near to airports, and other

corporate houses.
3. Organized manner of communication with
drivers
4. Niche market, initially only to corporates and
hence less competition

Weaknesses
1.

The prices are fixed according to the

market conditions (that is demand and supply)
2.
Being a new entrant, it is more difficult to
capture the market share

Opportunities
1.
2.

Online registration and booking

Can
cater
to
corporate
in
other
metropolitan cities
3.
Providing new facilities like self drive
4.
Can cater to travel agencies, banks, hotels
etc. apart from corporates.

Threats
1.

The car rental companies may wholly be

concentrated into car rental services e.g.- ketan
travels pvt ltd or may be car rental + allied
business e.g.- autoriders and aqsa
2.
Rise in lease charges in the market due to
inflation

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

Marketing Objectives:
1.
2.
3.
4.

To
To
To
To

create a brand name in the market.

create awareness among corporates.
increase the sales revenue.
clearly define the target market.

Market Trends and Growth

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

Market Needs
In corporate world, need of hiring cars for their
employees rather than buying them is more

convenient. There are different levels of employees

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

Marketing Strategy
Target Market:
Carvenience plans to target corporate world
customers, who expect to travel with good customer
service and convenience.
We are segmenting the market on the basis of
purchasing approaches, benefits sought and usage rate.
Many companies have general purchasing policies that
prefer hiring or leasing the cars for their top-level and
second level employees rather than purchasing a car.
Also they are benefited in many ways in terms of cost
factor and quality service, which includes time factor
and comfort factor.

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

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

Car category
Economy
Intermediate
Full size
Luxury

Tata Indica
Ford Ikon
Lancer
Mercedes Benz

Price grids
Car category
Economy
Intermediate
Full size
Luxury

Carvenience
Rate per km
Rs 15/km
Rs 20/km
Rs 25/km
Rs 75/km

Autoriders
Rate per km
Rs 19/km
Rs 23/km
Rs 35/km
Rs 81/km

Location
We have tied up with garages near petrol pumps
at three different locations
Jublee hills which is close to major corporate
houses like Taj hotels, Hitech City ,etc
Secunderabad near the major crowd travelling
markets.
shamshabad near to the International Airport and
major Hotels.
Our cars will be available with chauffers carrying cell
phones so communication with them is easy as the
demand for service arises.
Our office will be open for 24 hours with two operators
on shifts so that customers can avail anytime of our
services.

Our parking spots will also have an attendant who will

clean the cars
take care.

Market communications:
Initially we are not spending much on
advertising
but we have employed smart sales
executives who will visit the corporate houses
individually and try to convince them to avail of our
services. Our sales executives will help us in creating
awareness among new customers and getting feedback
from the existing customers.
Later on, when profits start rising we can
advertise in business magazines and newspapers etc.
Direct mail-we will be sending pamphlets
through direct mail to our prospective corporate clients.
E-mail- we will be promoting our organization
by sending e-mails to prospective clients.

Market Research & Development

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

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

Organizational Structure

Finance manager

Marketing & sales

manager

Personnel
manager

DSE
Accountant

Accountant

Receptionist

Chauffeurs, attendants

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

Personnel Plan
2003 2004 2005 2006 2007
to
360000 360000 360000 360000
360000

Remuneration
partners
Salaries
to
48000 54000 60000 60000 62400
receptionist
Salaries to peon 30000 33600 36000 36000 37200
Salaries attendant
54000 72000 82800 82800 30000
Salaries
60000 72000 79200 79200 81600
Telephone
operator
Salaries
to
48000 54000 27600 27600 60000
accountant
Salaries
to
420000 960000 1548000
1548000
chauffeurs
Salaries
to
192000 216000 230400 230400 240000
salesmen

Long-Term Plan
Our long-term plans are:

To become market leaders in car rental

business.
To increase our name recognition

To be recognized for our outstanding

service

Income Statement - Summary of Years 1 to 5

Lease rental income

2009-2010

2010-2011

2011-2012

8,410,668

16,996,446

30,575,822

2012-2013

2013-2014

34,698,720

38,278,507

Total

8,410,668

16,996,446

30,575,822

34,698,720

38,278,507

Gross Profit

8,410,668

16,996,446

30,575,822

34,698,720

38,278,507

Operating Expenses
Salaries to chauffeurs

420,000

960,000

1,548,000

1,620,000

1,620,000

fuel

1,591,040

2,268,470

5,261,220

6,275,360

6,817,949

lease charges

7,440,000

12,060,000

17,520,000

14,040,000

14,040,000

39,600

79,200

118,800

143,640

143,640

100,000

150,000

200,000

200,000

225,000

2,500

2,500

7,500

7,500

7,500

permit charges

18,000

17,000

21,000

14,500

12,000

washing

12,000

12,000

20,000

25,000

25,000

Rent

960,000

960,000

960,000

salaries

240,000

315,600

315,600

315,600

electricity

102,000

285600
120,000

132,000

136,000

156,000

10,000

10,000

35000

37,400

mobile charges
parking charges
depreciation on mobile

office and
administration

auditors remuneration
Subscription
Telephone

8,000

8,000

8,000

25,000

25,000

30,000

120,000

144,000

160,000

170,000

180,000

refreshments

15,000

15,000

20,000

25,000

26,200

Office supplies

42,000

60,000

70,000

75,000

81,000

depreciation

46,250

46,250

293,750

2,837,083

2,769,000

360,000

360,000

360,000

360,000

360,000

16,500

40,000

remuneration to partners
Commission to salesman
selling expenses
salaries to salesmen
internet charges

192,000

216,000

230,400

240,000

240,000

12,000

12,000

12,000

12,600

13,000

Advertising

36,000

finance expenses
preliminary expenses

12,000

12,000

12,000

12,000

12,000

bad debts

14,986

14,836

30,283

68,098

77,280

Total Operating Expenses

11,772,376

17,827,856

Operating Income

(3,361,708
)

(831,410)

3,245,269

608063

643,026

Interest income

575,000

27,330,553

Other income
Total Nonoperating Income
Income (Loss) Before Taxes

Income Taxes
Net Income (Loss)
less partners capital
partner 1
partner 2
partner 3
partner 4
partner 5
partner 6
partner 7

575,000
(2,786,708
)
0

608,063
(223,347)

(2,786,708
)

(223,347)

-398102
-398101
-398101
-398101
-398101
-398101
-398101

-31911
-31906
-31906
-31906
-31906
-31906
-31906

26,638,881

27,244,569

8,059,839

11,033,938

330,000

800,000

643,026

330,000

800,000

3,888,295

8,389,839

11,833,938

1,394,926

3,009,855

4,245,425

2,493,369

5,379,984

7,588,513

356199
356195
356195
356195
356195
356195
356195

768570
768569
768569
768569
768569
768569
768569

1690566
1690562
1690562
1690562
1690562
1690562
1690562

Balance Sheet - Summary of Years 1 to 5

Opening

2009-2010

2010-2011

Cash

8,789,468

6,474,062

Debtors

1,483,574

3,028,320

12,000

2011-2012

2012-2013

2013-2014

4,027,230

8,010,486

18,825,789

6,809,760

7,728,000

8,525,280

12,000

12,000

12,000

12,000

10,575,000

11,183,063

1,000,000

1,000,000

21,860,04
2

21,697,44
5

ASSETS
Current Assets, loans, advces

telephone deposits
fixed deposits
office deposits
Total Current Assets

10,848,990

15,750,48
6

27,363,069

Long-Term Assets
Computers
furniture and fittings
air conditioner

51,750

34,500

17,250

180,000

160,000

140,000

120,000

100,000

51,000

42,000

office premises

33,000
14,750,000

Vehicles

Mobiles
Total Long-Term Assets

22,500

20,000

65,000

73,500

256,500

25,854,240

48,000

36,000

24,000

24,000
13,250,000

15,000
11,750,000

3,659,167

2,419,167

57,500

50,000

32,861,15
3

14,334,167

miscellaneous expenses
preliminary expenses

12,000

Other long-term
assets
Total Assets

22,213,29
2

21,989,94
5

25,878,240

32,873,15
3

41,697,236

LIABILITIES AND SHAREHOLDERS'

EQUITY
Current Liabilities
Income taxes payable

1,394,926

3,009,855

4,245,425

1,394,926

3,009,855

4,245,425

partner 1

4,000,000

3,601,898

3,569,987

3,926,186

4,694,756

partner 2

3,500,000

3,101,899

3,069,993

3,426,188

4,194,757

partner 3

3,500,000

3,101,899

3,069,993

3,426,188

4,194,757

partner 4

3,500,000

3,101,899

3,069,993

3,426,188

4,194,757

Total Current Liabilities

capital a/c

partner 5

3,500,000

3,101,899

3,069,993

3,426,188

4,194,757

partner 6

3,500,000

3,101,899

3,069,993

3,426,188

4,194,757

partner 7

3,500,000

3,101,899

3,069,993

3,426,188

4,194,757

add/less net loss/profits

partner 1

(398,102)

(31,911)

partner 2

(398,101)

(31,906)

partner 3

(398,101)

(31,906)

partner 4

(398,101)

(31,906)

partner 5

(398,101)

(31,906)

partner 6

(398,101)

(31,906)

partner 7

(398,101)

(31,906)

22,213,29
2

21,989,94
5

22,213,29
2

21,989,94
5

Total Shareholders' Equity

Total Liabilities and Shareholders'

Equity

356199
356195
356195
356195
356195
356195
356195

768570
768569
768569
768569
768569
768569
768569

1690566
1690562
1690562
1690562
1690562
1690562
1690562

25,878,240

32,873,15
3

41,697,236

27,273,166

35,883,00
8

45,942,661