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Abctaxi - Business Plan PDF
Abctaxi - Business Plan PDF
It is acknowledged by reader that information to be furnished in this business plan is in all respects
confidential in nature, other than information which is in the public domain through other means and
that any disclosure or use of same by reader, may cause serious harm or damage to
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ABC TAXI SERVICE INC.
The market is a large one with over 1.5 million potential customers
ABCTSI recognizes that their key to success will be providing unmatched customer service. ABCTSI
has infused the importance of customer service into the drivers' jobs by offering financial incentives
to the drivers for superior service. This will ensure that the best customer service will be offered
at every level and interaction with the company.
Management Team
ABCTSI was founded and is run by Mohammed Hakim Zadah. Mohammed began his transportation
career as a taxi driver. Mohammed's logistics and customer service experience will be essential to
the success of ABCTSI. The logistics experience will provide ABCTSI with hyper-efficient
operations and the customer service experience will support their competitive edge.
1.1 Mission
The Mission of ABC Taxi Servive Inc (ABCTSI) is to provide the customer the finest transportation
service available. We exist to attract and maintain customers. When we adhere to this maxim,
everything else will fall in to place. Our services will exceed the expectations of our customers.
ABCTSI mission is to establish a universal licensing plan to be held only by owner operators. To
have all or most of the taxi drivers under one main umbrella
whereby they pay an annual membership fee and monthly dispatch fee to one orginazation. The
drivers will by a mutal agreement between the management
of ABCTSI and all the members, share in the profits of the corporation.
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ABC TAXI SERVICE INC.
1.2 Objectives
The objectives for the first three years of operation include:
Mohammed Hakim Zadah will be working full time as the Manager and have four other employees.
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ABC TAXI SERVICE INC.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $0
Stationery etc. $0
Insurance $0
Rent $0
Computer $0
Other $0
Total Start-up Expenses $0
Start-up Assets
Cash Required $0
Other Current Assets $0
Long-term Assets $0
Total Assets $0
Total Requirements $0
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ABC TAXI SERVICE INC.
Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $0
Additional Cash Raised $35,000
Cash Balance on Starting Date $35,000
Total Assets $35,000
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
Planned Investment
Investor 1 $35,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $35,000
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ABC TAXI SERVICE INC.
3.0 Services
ABCTSI provides a general Taxi and Airport transportation solution for the GTA. ABCTSI can
provide airport travel on short notice if cars are available, but they generally work with a
reservation system. A customer would call up in advance and provide ABCTSI with flight
information. ABCTSI would schedule the pick up time and then call and send an email to confirm
the pickup. For pick up at the airport, ABCTSI would meet the customer outside of baggage claim
after the customer has picked up their luggage and would drive them home.
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ABC TAXI SERVICE INC.
The first group is taking a trip for pleasure and will either be an individual or a family. Their choices
are to either drive and park in long term parking, take a taxi, or use a limousine service. This
group does not typically mind paying a bit more for a solution that takes care of their
transportation to and from the airport. Since they are are on vacation, they appreciate having a
service that gets them to the airport in a seamless way so they do not have to worry about
anything. All they have to do is make the reservation and show up at the arranged pickup point.
The second group is the business traveler. In the past a company would typically hire a limousine
service to pick up their worker. The company would always pay for the service. With ABCTSI as
an alternative, there is a transportation service that functions like a limousine (you can
preschedule pickup dates and be taken directly home or to the airport) but without the overly
fancy car and the associated high price. As companies are always looking at ways to cut
costs, ABCTSI offers a very reasonable solution in terms of comfort and cost. The business traveler
will not notice anything different with ABCTSI versus a limo service other than the vehicle they
are traveling won't be a limo, but will still be a sufficiently large and comfortable car.
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ABC TAXI SERVICE INC.
groups are particularly attractive to ABCTSI because they will always need to get to the airport and
they are willing to pay a bit extra for the luxury of having someone take them there instead of
being required to get themselves there. Please note, however, ABCTSI is only slightly more
expensive for trips under four days; over four days it is more cost effective to use ABCTSI.
Compared to driving a personal vehicle and paying for long-term parking.
In regard to the business customers, it is generally accepted practice for the company to provide
the transportation for their employees. For trips over four days, there is no question that ABCTSI is
more cost effective. Under four days ABCTSI service is slightly more expensive than driving oneself
and parking, however, companies are more than willing to pay a bit extra as their employee is
giving up a decent amount of their free time to go on the trip for work and the business recognizes
and appreciates this. Of course for the companies already willing to pay limousine prices, ABCTSI
will appear as a way of reducing travel costs with no appreciable loss in service quality.
1. Public transportation: TTC provides rapid transit service to the airport. While this is an
inexpensive alternative there are several disadvantages. The service does not run all
hours of the night.
2. Taxi service: Taxis do provide service to and from the airport, however, travelers cannot
book the trip in advance, forcing them to call right before they want to travel. The level of
service is inconsistent from taxi service to taxi service as well as from occasion to
occasion. Taxis can also be quite expensive if city dwellers are going out to the suburbs.
3. Airport parking: Airport parking can be cost effective if it is for fewer than four days.
Driving oneself has the advantage of not having to deal with anyone else, the flip side to
this however is they must do everything for themselves. Lastly, there is always the risk of
damage to their car when it is parked and all airport parking facilities have drivers sign a
waiver absolving the lot from responsibility if anything happens to the car.
4. Shuttle service: This option packs a few different people into a van and takes them to
the airport. This is a less expensive option, however, it takes longer to make the
commute due to the other customers that are traveling Additionally, travelers lose out on
the personalized service relative to ABCTSI or a limousine service.
The buying patterns of these services vary based on the length of the trip, who is paying for it, and
if it is a last minute or planned in advance trip. The longer the trip, the more economical a
transportation option is relative to airport parking. A large percentage of business travelers use
an upscale airport transportation solution like ABCTSI or a limousine service for their employees.
People who are just scraping by to go on vacation are likely to choose the least costly option,
public transportation. Lastly, if the trip is planned at the last minute, taxi service might be the
only option however, ABCTSI will offer last minute rides if cars are available.
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ABC TAXI SERVICE INC.
customers. Additionally, since a lot of these groups have close knit among member referrals
will be quite powerful when they are coming from a member who already has established
a trust bond with other organizational members.
2. Business travelers: ABCTSI will be contacting the travel department of many of the
different companies in Toronto that have a lot of employees traveling and informing them
about our service and offering them an introductory discount. This will be an important
segment to win over as companies routinely have employees traveling throughout the year.
Businesses are also valuable because once the initial contact is made, the relationship can
be turned into a steady stream of business.
Our strategy of wooing the business travelers will be a campaign to introduce ABCTSI to the
different travel departments of the larger companies in the area. The initial contact will be a
letter/brochure describing our services along with a pricing guide. ABCTSI will then follow that up
with a phone call to try to receive a commitment from the company. By including the pricing
information within the brochure, ABCTSI believes that this will catch the eyes of the companies'
travel departments as they are acutely aware of the costs that they are paying now and ABCTSI
believes that they can convert the lead into a customer by offering essentially the same service
of a limo company at a reduced rate.
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ABC TAXI SERVICE INC.
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ABC TAXI SERVICE INC.
1. The company receives positive feedback about the driver (a feedback system will be set
up).
2. The customer is turned into a repeat customer.
3. The driver develops new customers.
4. The driver acts in manners that are team based instead of for individual gain.
Through this complicated but purposeful system, ABCTSI is incentivizing behavior that they believe
will help the company succeed, while not rewarding behavior that is destructive to the company.
5.3 Milestones
ABCTSI will have several milestones to aim for:
1. Business plan completion. This will be done as a road map for the organization. While we do
not need a business plan to raise capital, it will be an indispensable tool for the ongoing
performance and improvement of the company.
2. Set up office.
3. Profitability.
4. Bringing on board the fourth driver.
5. Establish the universal license
6. Attract 300 members in the first year and 800 by year three
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ABC TAXI SERVICE INC.
Table: Milestones
Milestones
Table: Personnel
Personnel Plan
FY 2012 FY 2013 FY 2014
Mohammed $36,000 $36,000 $36,000
Part-time employee $8,800 $16,500 $16,500
Driver $20,600 $21,600 $21,600
Total People 6 6 6
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ABC TAXI SERVICE INC.
Assumptions:
Average Percent Variable Cost 19%
Estimated Monthly Fixed Cost $12,967
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ABC TAXI SERVICE INC.
Expenses
Payroll $65,400 $74,100 $74,100
Sales and Marketing and Other Expenses $3,100 $3,600 $3,600
Depreciation $28,500 $51,300 $41,040
Web site maintenance $600 $600 $600
Utilities $1,200 $1,200 $1,200
Insurance $5,400 $5,400 $5,400
Rent $6,000 $6,000 $6,000
Payroll Taxes $5,400 $5,800 $6,000
Members profit allocation $40,000 $100,000 $160,000
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ABC TAXI SERVICE INC.
Current Assets
Cash $143,628 $227,512 $445,715
Other Current Assets $0 $0 $0
Total Current Assets $143,628 $227,512 $445,715
Long-term Assets
Long-term Assets $285,000 $285,000 $285,000
Accumulated Depreciation $28,500 $79,800 $120,840
Total Long-term Assets $256,500 $205,200 $164,160
Total Assets $400,128 $432,712 $609,875
Current Liabilities
Accounts Payable $41,275 $17,610 $24,893
Current Borrowing $263,000 $239,000 $215,000
Other Current Liabilities $40,000 $40,000 $40,000
Subtotal Current Liabilities $344,275 $296,610 $279,893
Long-term Liabilities $0 $0 $0
Total Liabilities $344,275 $296,610 $279,893
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ABC TAXI SERVICE INC.
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ABC TAXI SERVICE INC.
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ABC TAXI SERVICE INC.
Table: Ratios
Ratio Analysis
FY 2012 FY 2013 FY 2014 Industry Profile
Sales Growth n.a. 66.63% 45.72% 3.70%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 80.54% 87.15% 90.30% 66.70%
Selling, General & Administrative Expenses 86.04% 65.37% 60.12% 46.50%
Advertising Expenses 0.36% 0.21% 0.19% 0.50%
Profit Before Interest and Taxes 18.79% 28.09% 41.61% 2.90%
Main Ratios
Current 0.42 0.77 1.59 1.61
Quick 0.42 0.77 1.59 1.17
Total Debt to Total Assets 86.04% 68.55% 45.89% 56.40%
Pre-tax Return on Net Worth 45.53% 71.91% 71.65% 4.60%
Pre-tax Return on Assets 6.36% 22.62% 38.77% 10.50%
Activity Ratios
Accounts Payable Turnover 3.33 12.17 12.17 n.a
Payment Days 27 50 26 n.a
Total Asset Turnover 0.63 0.97 1.00 n.a
Debt Ratios
Debt to Net Worth 6.16 2.18 0.85 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital ($200,647) ($69,098) $165,822 n.a
Interest Coverage 2.16 5.87 14.02 n.a
Additional Ratios
Assets to Sales 1.59 1.03 1.00 n.a
Current Debt/Total Assets 86% 69% 46% n.a
Acid Test 0.42 0.77 1.59 n.a
Sales/Net Worth 4.51 3.09 1.85 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Page 17
Appendix
Table: Sales Forecast
Sales Forecast
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Sales
Individuals/families $4,000 $4,000 $4,000 $5,000 $5,000 $6,000 $6,000 $7,000 $7,000 $8,000 $8,000 $8,000
Business Travellers $4,000 $4,000 $4,000 $4,000 $5,000 $5,000 $5,000 $5,000 $6,000 $6,000 $6,000 $6,000
Memberships $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Dispatch Fees $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Total Sales $18,000 $18,000 $18,000 $19,000 $20,000 $21,000 $21,000 $22,000 $23,000 $24,000 $24,000 $24,000
Direct Cost of Sales Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Individuals/families $1,350 $1,350 $1,350 $1,800 $1,800 $1,800 $1,800 $1,800 $2,250 $2,250 $2,250 $2,250
Business travelers $1,800 $1,800 $1,800 $1,800 $2,250 $2,250 $2,250 $2,250 $2,700 $2,700 $2,700 $2,700
Subtotal Direct Cost of Sales $3,150 $3,150 $3,150 $3,600 $4,050 $4,050 $4,050 $4,050 $4,950 $4,950 $4,950 $4,950
Page 1
Appendix
Table: Personnel
Personnel Plan
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Mohammed 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Part-time employee 0% $0 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Driver 0% $0 $2,200 $2,200 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Total People 1 4 4 4 5 5 5 5 5 5 6 6
Total Payroll $3,000 $6,000 $6,000 $5,600 $5,600 $5,600 $5,600 $5,600 $5,600 $5,600 $5,600 $5,600
Page 2
Appendix
Table: General Assumptions
General Assumptions
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
Long-term Interest Rate 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
Tax Rate 18.00% 18.00% 18.00% 18.00% 18.00% 18.00% 18.00% 18.00% 18.00% 18.00% 18.00% 18.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
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Appendix
Table: Profit and Loss
Gross Margin $14,850 $14,850 $14,850 $15,400 $15,950 $16,950 $16,950 $17,950 $18,050 $19,050 $19,050 $19,050
Gross Margin % 82.50% 82.50% 82.50% 81.05% 79.75% 80.71% 80.71% 81.59% 78.48% 79.38% 79.38% 79.38%
Expenses
Payroll $3,000 $6,000 $6,000 $5,600 $5,600 $5,600 $5,600 $5,600 $5,600 $5,600 $5,600 $5,600
Sales and Marketing and Other $150 $175 $200 $225 $250 $300 $300 $300 $300 $300 $300 $300
Expenses
Depreciation $2,375 $2,375 $2,375 $2,375 $2,375 $2,375 $2,375 $2,375 $2,375 $2,375 $2,375 $2,375
Web site maintenance $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Utilities $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Insurance $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450
Rent $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Payroll Taxes 15% $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450
Members profit allocation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $40,000
Total Operating Expenses $7,075 $10,100 $10,125 $9,750 $9,775 $9,825 $9,825 $9,825 $9,825 $9,825 $9,825 $49,825
Profit Before Interest and Taxes $7,775 $4,750 $4,725 $5,650 $6,175 $7,125 $7,125 $8,125 $8,225 $9,225 $9,225 ($30,775)
EBITDA $10,150 $7,125 $7,100 $8,025 $8,550 $9,500 $9,500 $10,500 $10,600 $11,600 $11,600 ($28,400)
Interest Expense $1,900 $1,887 $1,873 $1,860 $1,847 $1,833 $1,820 $1,807 $1,793 $1,780 $1,767 $1,753
Taxes Incurred $1,058 $515 $513 $682 $779 $953 $955 $1,137 $1,158 $1,340 $1,343 ($5,855)
Net Profit $4,818 $2,348 $2,338 $3,108 $3,549 $4,339 $4,350 $5,181 $5,274 $6,105 $6,116 ($26,673)
Net Profit/Sales 26.76% 13.04% 12.99% 16.36% 17.75% 20.66% 20.71% 23.55% 22.93% 25.44% 25.48% -111.14%
Page 4
Appendix
Table: Cash Flow
Expenditures Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Net Cash Flow $54,740 $2,210 $2,723 $4,092 $4,464 $4,917 $4,715 $5,719 $6,526 $6,643 $6,480 $5,398
Cash Balance $89,740 $91,950 $94,673 $98,765 $103,229 $108,146 $112,861 $118,580 $125,106 $131,749 $138,230 $143,628
Page 5
Appendix
Table: Balance Sheet
Current Assets
Cash $35,000 $89,740 $91,950 $94,673 $98,765 $103,229 $108,146 $112,861 $118,580 $125,106 $131,749 $138,230 $143,628
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $35,000 $89,740 $91,950 $94,673 $98,765 $103,229 $108,146 $112,861 $118,580 $125,106 $131,749 $138,230 $143,628
Long-term Assets
Long-term Assets $0 $285,000 $285,000 $285,000 $285,000 $285,000 $285,000 $285,000 $285,000 $285,000 $285,000 $285,000 $285,000
Accumulated Depreciation $0 $2,375 $4,750 $7,125 $9,500 $11,875 $14,250 $16,625 $19,000 $21,375 $23,750 $26,125 $28,500
Total Long-term Assets $0 $282,625 $280,250 $277,875 $275,500 $273,125 $270,750 $268,375 $266,000 $263,625 $261,250 $258,875 $256,500
Total Assets $35,000 $372,365 $372,200 $372,548 $374,265 $376,354 $378,896 $381,236 $384,580 $388,731 $392,999 $397,105 $400,128
Liabilities and Capital Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Current Liabilities
Accounts Payable $0 $7,547 $7,034 $7,044 $7,653 $8,193 $8,396 $8,386 $8,549 $9,426 $9,589 $9,579 $41,275
Current Borrowing $0 $285,000 $283,000 $281,000 $279,000 $277,000 $275,000 $273,000 $271,000 $269,000 $267,000 $265,000 $263,000
Other Current Liabilities $0 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
Subtotal Current Liabilities $0 $332,547 $330,034 $328,044 $326,653 $325,193 $323,396 $321,386 $319,549 $318,426 $316,589 $314,579 $344,275
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $332,547 $330,034 $328,044 $326,653 $325,193 $323,396 $321,386 $319,549 $318,426 $316,589 $314,579 $344,275
Paid-in Capital $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000
Retained Earnings $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Earnings $0 $4,818 $7,165 $9,504 $12,612 $16,161 $20,500 $24,850 $30,031 $35,305 $41,410 $47,526 $20,853
Total Capital $35,000 $39,818 $42,165 $44,504 $47,612 $51,161 $55,500 $59,850 $65,031 $70,305 $76,410 $82,526 $55,853
Total Liabilities and Capital $35,000 $372,365 $372,200 $372,548 $374,265 $376,354 $378,896 $381,236 $384,580 $388,731 $392,999 $397,105 $400,128
Net Worth $35,000 $39,818 $42,165 $44,504 $47,612 $51,161 $55,500 $59,850 $65,031 $70,305 $76,410 $82,526 $55,853
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