Entrepreneurship Development

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Table of Contents
Introduction...........................................................................................................................................3

Customer Value Proposition..................................................................................................................4

Lean Business Model Canvas................................................................................................................5

CEO Contribution..................................................................................................................................8

Financial Planning.................................................................................................................................9

Summary.............................................................................................................................................10

Reference.............................................................................................................................................11

Appendix.............................................................................................................................................12

Appendix 1:.....................................................................................................................................12

Appendix 2:.....................................................................................................................................13

Appendix 3:.....................................................................................................................................14

Appendix 4:.....................................................................................................................................15

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Introduction

This present report is about a development plan for a car dealership business. This proposed
car dealership will only deal with Toyota Hydrogen Vehicles. The name of this dealership
business is not yet finalised, and for the time being, it is called West London Hydrogen Car
Dealership (WLH). This report is being prepared by the CEO of this dealership company. In
the following sections of this report will discuss the business model and will use frameworks
such as customer value proposition and lean business model to analyse the financial viability
of this business. Furthermore, financial planning will also be demonstrated in this report as
well as CEO contribution to WLH car dealership, will also be discussed.
This proposed WLH car dealership will only deal with the innovative and environment-
friendly Hydrogen cars of Toyota. With the increasing concern about the environment, these
hydrogen fuel-based vehicles are gaining more popularity. Because of fossil-fuel-based
vehicles impacts the environment drastically with carbon emissions (Das, 2016). Though
electric vehicles or cars such as Toyota is also gaining more popularity, hydrogen-based cars
are more fuel-efficient and can be used for long drives. Because of these efficiency space
agencies such as NASA or ESA relies on hydrogen fuel for the main propulsion and electric
fuel for supportive thrusters (Van Vorst and Woolley, 2018).
The main reason electric vehicles are more highlighted in the market because of their
availability. On the other hand, Toyota hydrogen vehicles do not have any dedicated
dealership chains in the UK to reach customers (Yang et al. 2017). WLH wants to grab this
shortage of dealership as an opportunity for business. This is why this business model or
domain is selected by the company. WLH will generate revenues from three primary sources,
a commission from car sales, income from car maintenance and servicing and car leasing or
rental service. The commission rate is proposed at 20% and manufacturing companies
Toyota, will be approached for a dealership license. While the car rental charges will depend
on the duration, pickup and drop off location, a minimum charge is set at £14.99 per day in
the London city area.
A marketing plan has been prepared by the C level executive members of the company in
order to achieve success in the market. This marketing plan is developed in order to gain a
user-base and achieve a steady revenue stream for the company. Furthermore, this plan will
enhance the revenue for this business over the following years as well. Following are some of

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the objectives to establish WLH car dealership in the market and to enhance the revenue
stream for the business:
● Establish WLH car dealership in the UK market through effective marketing and
customer trust-building activities
● Increase the revenue stream through revenue channels such as sales, servicing and
leasing services
● Creation of environmental awareness among the Londoners to motivate them to
switch to hydrogen cars

Customer Value Proposition

The way a business generates value in their services or products when they are being
marketed to the customers is called Customer Value Proposition. These values differentiate a
business or their products from the other available products or businesses in the market
(McDonald, 2016). This is why the enhancement of customer value proposition is a necessary
step in order to attain a competitive advantage in the market. The following section will
discuss the value proposition of WLH 's business proposal based on the value proposition
canvas.
Identification of product benefits: As already established in this report, WLH will only deal
with Toyota hydrogen-based cars. The reason hydrogen cars are selected is because of their
environment friendliness as there are no carbon emissions. Hydrogen is also the most
abundant element on this planet, and as a result, the price of this fuel is way less than
traditional gasoline fuel which is why these vehicles are also cost-effective or economical for
the customers (Ahmed et al. 2016). Furthermore, the refuelling of hydrogen cars is similar to
traditional gasoline-based vehicles and much faster than electric cars.
Value of these product benefits: As hydrogen cars are more cost-effective, environment-
friendly and can refuel at a much faster speed than competitive electric cars, these features
add value to these vehicles (Ligen et al. 2018). Therefore, as per the market research
customers are aware of these benefits and interested in these cars, but as there are no
dedicated dealerships for these cars, they cannot get their hands on these vehicles. The WLH
car dealership will enable these interested and potential customers to test drive these vehicles.
It is expected these gain creators will enhance more value as they will be able to see the
difference themselves.

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Identification of customer issues: While value proposition canvas portrays the values and
benefits of the service or products, it also illustrates the pain segment as well. Main customer
issues in this business segment are the increasing fuel costs and also the environmental
concern from the aware and educated customers. Furthermore, based on primary research,
customers also faced issues while they serviced their cars. WLH car dealership business
wants to address these pain segments in order to attain customer satisfaction and enhance
customer relationship.
Addressing the customer issues: As WLH has identified the customer issues, these issues
will also serve as opportunities for the company. This is why WLH is promoting the idea of
environment-friendly, cost-effective hydrogen-fuelled vehicles. As hydrogen fuel is cost-
effective, they will address their needs (Edmunds, 2015) while WLH will address their
customer service concern with an effective vehicle servicing facility as well.
Enhanced market identity to achieve competitive advantage: In order to attain
competitive advantage, enhancements of market identity is also important (Payne et al.
2017). Hydrogen cars have high-value propositions, and it is already established in this
section of this report. Furthermore, as the company is motivated to provide enhanced
customer service to improve customer relationship, it will generate a reputation for WLH in
the market. Also, free test drive service and educating customers about hydrogen fuel, its
cost-effectiveness and the environmental necessity of such fuel will also enhance the market
identity of this business.

Lean Business Model Canvas

A lean business model canvas was also developed for this proposed business as well. The
lean business model is widely used in the industry to find problems, solution as well as to
find a competitive advantage through business model (Onken and Campeau, 2016). This
section of this report will demonstrate the evaluation of WLH's business model based on this
framework.
Key Partners: In this lean business model framework, major stakeholders of a business are
the key partners. For the WLH car dealership business, hydrogen car manufacturers Toyota is
the key partners. This is why this manufacturer will be approached for dealership licensing in
order to facilitate direct sales through WLH showrooms. Furthermore, local authorities are
also a key partner as there is a long legal procedure to obtain car dealership business license

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in the UK. In order to provide better customer service, several car servicing businesses will
be partnered with to provide servicing and maintenance service around the UK and London.
Key Activities: These are the activities a business or company engages in order to perform
their organisational operations. As WLH is a car dealership business, the key activities are
logistics operations, marketing, sales and servicing. Through logistics channels, WLH will
bring cars to the showrooms from the car manufacturers. These are the cars that will be then
marketed to the customers. Therefore, sales are another key activity for WLH. While post-
sales activities are related to car servicing at the WLH facility or at other third party partnered
servicing companies.
Key Resources: Key resources are through which a business provides its service to the
customers. These resources are physical resources, human resources and capital resources.
Physical resources for WLH are the showrooms, car parts, servicing equipment, and so on.
While the human resources are the salesmen, managers and the mechanics, who will service
or demonstrate the cars to customers. Capital resources are the financial needs for business;
for WLH, these are associated with showroom leasing, lighting, car purchase cost, marketing
and salaries. The estimated required financial to start this business is £3,00,000.
Value Proposition: The gain creators for the customers are the value proposition for a
business. For WLH, the value proposition is the hydrogen cars itself because they are the
innovative vehicles that reduce the cost of fuel as well as environment-friendly at the same
time (Onken and Campeau, 2016). As these cars do not require any fossil fuel, there is no
carbon emissions from these vehicles and thus sustains the environment as a result.
Furthermore, as hydrogen fuel is more cost-effective and costs only £12 per KG in the UK, it
is expected to create a value proposition to the customers.
Channels: Channel represents the way through which a business reaches its target customers.
WLH will set up a showroom in the West London and customers will be able to test drive,
purchase and rent hydrogen-fuelled cars from this showroom. Going forward, WLH is also
planning for business expansion and will set up more showrooms in the other parts of the city
as well as the UK. In order to reach these customers marketing activities through both offline
and online channels will be used by the company.
Customer Segments: Customer segments are the target customers for a business or their
products and services. The main customer segments for WLH are divided into two segments.
First segments are the people who are looking for cost-effective cars, as hydrogen fuel cost is
lesser than traditional fossil fuels, customers are more interested in these cars. Though they
can choose electric vehicles but hydrogen-fuelled cars are more efficient and easily refuels

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whenever it is needed, which is not available in electric cars. This is why hydrogen-fuelled
cars sales are expected to rise in the coming years with proper awareness (Bockenet al.
2019). The second identified segments are the people who are concerned about
environmental degradation as there is no impact on the environment from these vehicles
because of zero carbon emission.
Customer Relation: In order to start this car dealership business, WLH will collaborate
Toyota. Leading car manufacturers Toyota is the makers of hydrogen-fuelled cars in the UK.
This is why dealership licensing will be undertaken by these manufacturers. Thus, WLH will
be able to provide direct sales to the customers without applying any profit margins, as WLH
will earn commissions from each successful sale. Also, customers will be provided car
servicing service from showrooms as well as other third parties. Furthermore, WLH will also
develop its presence through social media websites such as Facebook, Twitter and Instagram
and will maintain customer relationship. These platforms will be also helpful for the company
to educate Londoners about hydrogen fuel and its features as well.
Cost Structure: A cost structure is developed by the CFO of the company and based on this
structure, an initial £3,00,000 is required to establish this business for operation. The fixed
costs are related to showroom leasing or renting, employee salaries and estimated to be
around £1,80,000. The variable costs are related to legal segments to start this business,
logistics and also related to manufacturer licensing and expected to be at £1,20,000.
Revenue Structure: Revenue stream for WLH is dependent on three business segments.
These are a commission from car sales, servicing fees and lease or rental charges. Revenue of
a business is impacted by the market competition. Even though the hydrogen car dealership
market is a newly open market, there is significant competition from electric car dealerships
in the West London area. There are well known electric car dealerships such as EV Experts
and LEVC West London in this part of this city. This is why educative and awareness-based
marketing needs to be performed in order to create a customer base. With proper marketing
and advertising, WLH will be able to gain a steady revenue stream and become profitable.

CEO Contribution

The term CEO is well known, and there is no doubt about it, it stands for Chief Executive
Officer. The CEO is the person who is responsible for almost every actions and decision an
organisation takes. Also, in a start-up such as WLH, CEO is more responsible for its failure
or success than they are in an established business or company. Therefore, a CEO has to look

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after various aspects of an organisation; these are related to company operations, product
marketing, regulations, sales, business strategy, cash flow management, and so on. As CEO is
an integral part of a business organisation, the contributions are also important as a result
(Picken, 2017). This section of this report will demonstrate the contribution of the CEO in the
WLH car dealership company.
● First and foremost, the responsibility of a CEO is to strategize for the improvement of
the business as the market is always changing because customers' needs and demands
are always changing. This is why in order to stay relevant in the market, a business
always has to come up with products or services their customers' demands. This is
why, based on the market study, business strategies are developed by the CEOs
(Blagburn, 2016). WLH is a car dealership that specialises in hydrogen-fuelled cars.
Selection of this business segment has created a potential for this company. But, in
order to capitalise on this potential CEO of WLH needs to develop effective business
strategies. This is why WLH will market the cost-effectiveness and environment
friendliness of these cars in order to attract customers.
● CEO also defines the product or service visions. These visions are more effective
when they are in accordance with customer needs and marketing strategies. WLH is
marketing the cost-effectiveness, and environment-friendliness of hydrogen cars and
customers are also looking for cost-effective alternatives. This is why the CEO's
vision of this business is in accordance with these aspects.
● CEO is also responsible for brand development and management. In order to develop
a brand, the customer's value proposition needs to be addressed (Blagburn, 2016). As
WLH is approaching the market with eco-friendly and cost-effective hydrogen cars,
this will develop a unique brand identity for this car dealership in the market.
● A CEO also acts as a mentor, and this is why with their mentorship can enhance the
performance of the human resources of the company. This is why it can be said that a
CEO is also responsible for team building as well (Martin Roll, 2019). As WLH is a
start-up and employee base will be much smaller, as a CEO, it will be much easier to
develop and motivate an effective workforce for the company, which in return will
help this business to grow in the market.
● As in order to start this proposed business, outside finance will be taken; these
investors will also become a stakeholder in this business. A CEO is also responsible
for managing these stakeholders. An effective CEO gains respect and enthusiasm
from investors and influences them to manage the financial segment of a company.

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 Though CFO is responsible for this segment of the business; a CFO has to answer to
CEO's ultimate guidance and intervenes financial segment.
● Looking after the social responsibilities is also another duty of a CEO. WLH will sell
the hydrogen-fuelled cars which are environment-friendly because of zero carbon
emissions. This is why, as a CEO of WLH, this environmental and social
responsibility is also being adhered.
CEO's contribution and responsibilities are enormous; this section of this report demonstrated
some of the important contributions of the CEO in order to establish this proposed car
dealership business.

Financial Planning

This section of this report will demonstrate the financials and financial estimations of the
WLH car dealership business. A cost structure for the first year of this business has
developed post the market research [Appendix II]. This cost structure demonstrates the fixed
and variable cost requirements in order to start this business. Furthermore, a revenue
estimation is also developed by the finance team under CFO's guidance as well. Break-Even
analysis for the coming five years also has been developed. Based on this estimated break-
even analysis report, there is a steadily improving trend can be seen. Even though these
numbers are based on the estimation based on market research, the first year's revenue will
establish the correctness of this analysis.
A cash flow analysis also has been prepared by the finance team. This analysis also has been
made on five years of estimated data. This analysis also shows an increasing trend of the
annual revenue as well. According to this analysis, the five-year growth rate of this company
is projected to be at 14.29% as the revenue percentage increase shows this value.

Summary

Based on the above discussion about this proposed car dealership business, it can be said that
this business is financially viable because there is an untapped market opportunity for
hydrogen vehicles in the UK market. Though there are alternative electric vehicles in the
market, with proper educative marketing about the efficiency of these vehicles, this business
can establish itself and succeed. To summarise, it can be said that:

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● Hydrogen fuelled car specialised dealership is a fairly new idea, and there is very less
competition in this market. Therefore, it will be much easier for WLH to establish
itself in this business model.
● Customers are also looking for cost-effective cars, as traditional fossil fuels are more
costly than hydrogen fuel. In the UK hydrogen fuel costs, only £12 per KG and thus
these vehicles will address this concern of the customers.
● Hydrogen fuelled cars are also environment-friendly, thus environmentally aware
customers are also expected to buy these vehicles from WLH showrooms.
● Furthermore, as more people are switching to alternative fuelled cars such as electric
and hydrogen-fuelled vehicles. WLH being among the first dealerships to enter this
market will enable this company to establish itself in the market to gain market
reputation and expand itself around the UK and EU locations.

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Reference

Ahmed, A., Al-Amin, A.Q., Ambrose, A.F. and Saidur, R., 2016. Hydrogen fuel and
transport system: A sustainable and environmental future. International journal of hydrogen
energy, 41(3), pp.1369-1380.
Blagburn, N., 2016. Why startup boards matter. Technovation, 57, pp.45-46.
Bocken, N., Boons, F. and Baldassarre, B., 2019. Sustainable business model
experimentation by understanding the ecologies of business models. Journal of cleaner
production, 208, pp.1498-1512.
Das, L.M., 2016. Hydrogen-fueled internal combustion engines. In Compendium of
Hydrogen Energy (pp. 177-217). Woodhead Publishing.
Edmunds., 2015. Hydrogen fuel cell vehicles. [online] Hydrogen fuel cell vehicles. Available
at: https://www.edmunds.com/fuel-economy/8-things-you-need-to-know-about-hydrogen-
fuel-cell-cars.html [Accessed 29 Nov. 2019].
Ligen, Y., Vrubel, H. and Girault, H., 2018. Mobility from renewable electricity:
infrastructure comparison for battery and hydrogen fuel cell vehicles. World Electric Vehicle
Journal, 9(1), p.3.
Martin Roll., 2019. Leadership and Branding - The Role of the CEO – Martin Roll. [online]
Martin Roll. Available at: https://martinroll.com/resources/articles/leadership/leadership-and-
branding-the-role-of-the-ceo/ [Accessed 29 Nov. 2019].
McDONALD, M.A.L.C.O.L.M., 2016. Strategic marketing planning: theory and practice. In
The marketing book (pp. 108-142). Routledge.
Onken, M. and Campeau, D., 2016. Lean startups: Using the business model canvas. Journal
of Case Studies, 34(1), pp.95-101.
Payne, A., Frow, P. and Eggert, A., 2017. The customer value proposition: evolution,
development, and application in marketing. Journal of the Academy of Marketing Science,
45(4), pp.467-489.
Picken, J.C., 2017. From startup to scalable enterprise: Laying the foundation. Business
Horizons, 60(5), pp.587-595.
Van Vorst, W.D. and Woolley, R.L., 2018. Hydrogen—Fueled Surface Transportation.
Hydrogen: Its Technology and Implication: Utilization of Hydrogen, 4, p.3.
Yang, M., Evans, S., Vladimirova, D. and Rana, P., 2017. Value uncaptured perspective for
sustainable business model innovation. Journal of Cleaner Production, 140, pp.1794-1804.

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Appendix

Appendix 1:

Appendix I - Customer Value Proposition

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Appendix 2:

Variable Costs
Category In GBP
Development costs £ 80,000
New hardware £ 20,000
Quality Assurance Facility £ 10,000
Employee Training £ 10,000
Site preparation £ -
Other £ -
Total Variable Costs £ 1,20,000

Fixed Costs
Category In GBP
Rent £ 25,000
Salaries £ 75,000
Furniture & Machineries £ 50,000
Supplies £ 25,000
Other £ 5,000
Total Fixed Costs £ 1,80,000

Revenue
Category In GBP
Cost reduction or avoidance £ 50,000
Vehicle servicing £ 1,00,000
Increased flexibility £ 40,000
Increased sales £ 1,60,000
Income from lease and rent of
hydrogen cars £ 50,000
Commissions £ 1,50,000
Total Tangible Benefits £ 5,50,000

Appendix II - Cost Structure

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 Appendix 3:

Break Even Analysis (in 000s)

Total benefits Year 1 Year 2 Year 3 Year 4 Year 5
£ £ £ £ £
Increase in sales
1,60,000.00 1,80,000.00 1,90,000.00 2,00,000.00 2,20,000.00
£ £ £ £ £
Increased customer base
60,000.00 80,000.00 80,000.00 70,000.00 80,000.00
£ £ £ £ £
Increased sponsorship
25,000.00 30,000.00 35,000.00 45,000.00 50,000.00
£ £ £ £ £
Enhanced market value
50,000.00 55,000.00 50,000.00 40,000.00 45,000.00
£ £ £ £ £
Total benefits
2,95,000.00 3,45,000.00 3,55,000.00 3,55,000.00 3,95,000.00
Costs of Proposed System Year 1 Year 2 Year 3 Year 4 Year 5
£ £ £ £ £
Development costs
80,000.00 1,20,000.00 1,30,000.00 1,30,000.00 1,30,000.00
£ £ £ £ £
Additional hardware
20,000.00 25,000.00 25,000.00 25,000.00 25,000.00
£ £ £ £ £
Operation costs
20,000.00 40,000.00 45,000.00 40,000.00 50,000.00
£ £ £ £ £
Fixed costs
1,80,000.00 2,00,000.00 2,10,000.00 2,20,000.00 2,50,000.00
£ £ £ £ £
Maintenance costs
2,500.00 2,500.00 2,500.00 3,000.00 3,000.00

Break Even Analysis

3500
3000
2500
Total Cost of Existing System
2000
GBP

Total Cost of Proposed

System
1500
£ £ £ £ £
1000
3,02,500.00 3,87,500.00 4,12,500.00 4,18,000.00 4,58,000.00
500
0
1 2 3 4 5
Year

Total Cost of Proposed System

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 Appendix III - Break Even Analysis

Appendix 4:

Cash flow analysis

  Year 1 Year 2 Year 3 Year 4 Year 5
Cash flow from operating
         
activities
£ £ £ £ £
Profit/loss for the year
5,50,000 5,80,000 6,00,000 6,10,000 6,40,000
£ £ £ £ £
Interest
10,000 10,000 10,500 11,000 11,500
£ £ £ £ £
Taxation
10,000 12,000 12,500 13,000 13,500
Adjustments for non-cash
         
expenses
£ £ £ £ £
Depreciation
15,000 15,000 15,500 17,000 18,000
£ £ £ £ £
Amortization
20,000 10,000 20,000 10,000 10,000
Changes in operating
         
assets & liabilities
-£ -£ -£ -£ -£
Inventory
23,000 23,000 23,000 23,000 23,000
-£ -£ -£ -£ -£
Trade Receivables
38,000 38,000 38,000 38,000 38,000
£ -£ -£ -£ -£
Loans & Advances
- 20,000 20,000 20,000 20,000
£ £ £ £ £
Sales Tax
38,700 38,700 38,700 38,700 38,700
Payroll Accruals £ £ £ £ £

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 1,200 1,200 1,200 1,200 1,200
Cash generated from £ £ £ £ £
operations 1,00,000 1,25,000 1,35,000 1,45,000 1,50,000
£ £ £ £ £
Interest paid
8,000 10,000 12,000 14,000 16,000
£ £ £ £ £
Taxation paid
5,000 6,000 7,000 8,000 9,000
Net cash from operating £ £ £ £ £
activities 1,13,000 1,41,000 1,54,000 1,67,000 1,75,000
Cash flows from investing
         
activities
£ £ £ £ £
Purchases of property
50,000 40,000 45,000 35,000 30,000
Purchases of intangible £ £ £ £ £
assets - - - - -
-£ -£ -£ -£ -£
Purchases of investments
40,000 40,000 40,000 40,000 40,000
Net cash used in investing £ £ £ -£ -£
activities 10,000 - 5,000 5,000 10,000
£ £ £ £ £
Increase in cash equivalents
1,23,000 1,41,000 1,59,000 1,62,000 1,65,000
Cash & cash equivalents at £ £ £ £ £
the beginning of year 1,71,000 1,71,000 1,71,000 1,71,000 1,71,000
Cash & cash equivalents of £ £ £ £ £
the end of the year 2,94,000 3,12,000 3,30,000 3,33,000 3,36,000
£ £ £ £ £
Net Revenue
2,94,000 3,12,000 3,30,000 3,33,000 3,36,000
Percentage increase in
14.29 %      
revenue

Appendix IV - Cash Flow Analysis

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