Well-Thought on a Car Hire - Business Plan Example

A Business Plan on a Car Hire A Business Plan on a Car Hire INTRODUCTION There is a need for everyone intending to go down the business road to have a well-thought of plan, in today’s world. One is required to have the right mind-set and skills in order to make a name for the business. In doing so, one must ensure the venture has the ability to pick up, and bring in profits. To ensure this is possible, there is a need to have a well-cut out business plan for any start-up business. This lays out the perfect strategy that is capable of realising the targets and goals intended. A business plan may have the ability to predict the future of a business in terms of revenue. At the same time, it must come up with feasible and reasonable strategies that ensure all challenges and hurdles that come with the business are handled (McDonald 2010). This paper will examine such a plan, and how it may assist the growth of a business, in the long run. Business plans laid out must address the details that are involved in making the business a successful venture. A car hire service requires products with appeal. In this case, the market needs to be researched to acquire the right information about the products offered (Markides 2013). In the start of a car hire service, five cars are adequate to attract a number of high-end customers. The amount of capital required is £ 150 000 for the acquisition and maintenance of the vehicles. This can work toward creating the working environment that a starting business requires. Two Mercedes model vehicles may be appropriate for high-end clients. Toyota vehicles may be the cars that are accorded for everyday use around the town or area of operation. The price of a second-hand Mercedes car is around £ 750. The price of a new Toyota car is £ 1000. Two Mercedes total to £ 1 500, while the Toyotas total to £ 3 000. These cars can work for the new business while giving it time to grow. THE BUSINESS PLAN The rental types A car hire agency needs to attract a wide range of clients. This puts the management of the car hire agency at a predicament if they choose not to cater to the needs of all of their clients (Lomax & Raman 2007). In an environment that is focused on globalisation, it is vital to have cars that are reliable, fast, and effective. This means that the agency should have a variety of personal cars that run for many miles, and can accommodate a fairly large amount of individuals. Carpooling has become fairly common among many adults and this is also a factor to consider when setting up shop in an area. Car services that may enable customers have fun while using their cars is indicative of a service that may retain customers, in the long run. The sort of cars There needs to be a diverse car collection for the number of diverse customers that exist. High-end clients may require a much classier type of vehicle for some of their luxurious occasions around the city that one occupies, or may be interested in larger vehicles that may travel a much longer distance. Such specifications must be considered, and as management of a car service, it would be crucial to learn about the environment that one has set up shop. In major cities, it would be a likely investment if vehicles from well-known industries were used to get the job done (Kurtz & Boone 2008). This may make the prices of the cars range in the agency depending on the model and make of the car being hired. The availability of these vehicles may make the business a top choice for many clients. In this day and age, individuals want to be associated with stylish lifestyles. Their cars of choice, even for a day or two, may prove their superiority and may change the direction of the business’s finances. The creation of cars that are cheap but look lavish may assist in this quest as well. This may help in creating regulars among customers who live around the area where the business is situated. It may promote a culture of trust and understanding, which is vital in any business enterprise (Griffin 2008). The rates to be charged In determining the rates to be charged by the agency, the type of cars being hired might determine most of the going rates. The distance and days that the car will be in use might affect the rate of most of the cars in the agency. A case in point is the going rate of a Toyota and a Mercedes; the two rates cannot be the same because of the make and model of the two cars. The Mercedes could go for £ 200 while the Toyota £ 100. This ensures consumer loyalty. The presence of the two types of vehicles may present clients with alternatives to choose from when the need arises (Cziczo 2004). Ensuring the price is pocket friendly might ensure customers keep coming back for the same service, which ensures the business grows and develops. The location might also affect the rates at which most of the vehicles get hired. For agencies that are not close to towns, it would be advisable to have lower hiring rates. This is for the purpose of retaining the small amount of customers that are present. The level of loyalty in a customer may determine if the rates are more pocket-friendly than for one who is a one-time user of the service. They often determine the growth of the business as loyalty is a key investment to develop in such a case. Management should focus on this to ensure they are placed above any other in the same line of work (Barringer 2009). Marketing strategies to use There will be the allocation of 3% of sales to marketing strategies in the business. Advertising is a crucial tool that may lead to the decline or growth of the business. Print and electronic media used to advertise about the services and products that the agency offers is fundamental in its growth. A large number of clients rely heavily on newspapers and television to gather information about a number of things, especially in the rural areas. If one was to take the time to invest in advertising, the returns may be worthwhile as the news may reach a wider variety of individuals. Relationships and partnerships that are created may be fundamental in the growth of the business (Barringer 2008). These partnerships may come in the form of banks and other institutions trying to look for services through the agency to transport their clients from one area to another. The combination of these powers may lead to a stronger foundation for the agency and ultimately, its growth. Furthermore, checking out the competition and what they offer may be a vital strategy for the business. It is only fair to have more than what competition offers its clients, otherwise; the term “friendly competition” may lose its meaning. Underestimating the opposition may be detrimental to the creation of a solid foundation for the agency’s growth. Being a cut above the competition through services and products offered may seem simple, but is particularly vital. Customers can be highly picky, especially if there seems to be alternatives in the same area that offer the same services or products (Botha et al. 2006). Rentals can be maximised through such methods as folks may be interested in getting more services and products, other than the usual hire of vehicles. Market for the rental agency The market in this globalising environment is diverse. It is getting to a point where many individuals opt to hire vehicles rather than buy vehicles. They are finding it easier to find agencies that cater to their needs because of their diverse nature, which they would not have if they stood on their own. Individuals from different areas that may have difficulty in driving their cars in the states they visit can find good use for a rental agency in the state. This should be the target market for any agency that may opt to cater to a wider variety of customers. The different purposes that make people want to hire cars may make them choose the best options for them, and at the time they choose (Finch 2006). The older much experienced generation may be a client base that is of worth to the business. This client base may require cars that are much more secure and more comfortable. To cater to their needs, large vehicles may be a wise investment. They should also not require much maintenance as the high-end vehicles. People on business trips may require such services, and it is also important to have cars for their needs. The much younger generation needs cars that are fast due to their lifestyle. When a group of friends decide to hire a car, they may need something that is fast. However, in this case, the rate may change due to the risk that is associated with such a group (Kuratko 2008). Amount of funding To start and raise such a business, one requires a significantly large amount of money. £ 250 000 might be the appropriate capital that needs to be invested in the new business. This is to facilitate the growth of some of the fundamental operations of the agency. If and when the business picks up, the amount required may be lower. One aspect that needs to be addressed at the start of such a business is the setting up of the agency, and the requirements needed to do so without glitches. These include the legal requirements that surround such a business, and the connection that one needs to have in order to create a firm foundation. Employees and staff members are another issue that needs to be addressed. This is because they need the assurance that at the end of a period they get their pay, as per the management’s agreement (Lane 2002). To ensure the consistency of the services and products, all these issues must be addressed before-hand. Business plans are not just for businesses that are starting up, rather; should be drawn every fiscal year. This is to find out if the business is where it was projected to be at the start of the financial year. It is only through evaluating the goals and objectives of the previous year that one might find out if the targets were met, and the amount of capital that was used in the business operations. The realization that the agency did not attain previous targets may be an indicator that management needs to come up with new strategies. This is to satisfy the needs of the agency, plus the needs of the customers (Madura 2007). One needs adequate capital to create relations with other agencies because; through partnerships the business may achieve success. Effective asset management may provide management with the adequate knowledge about the goods and services the agency is offering. Allocation of capital and amount to be reinvested in the business The management of funds needs to be done appropriately and effectively. This is to allow everyone the opportunity to have an equal proportion of the funds. This is as stakeholders, managers, and staff members. Financial strategists may come in handy during times like this. They can assess the use of capital in the business, analyse its use, and allocate the funds effectively and appropriately. Employees and staff members have a fixed salary at the end of the month. However, management may allow them to have commission depending on the number of clients they bring into the agency (Martin & Jackson 2002). This may increase the competitive nature in the business, whilst improving the services. This ultimately leads to the growth of the business. Below is a table showing capital allocation in the agency. Capital Allocation Period (years) Pricing Amount Servicing -car balancing -engine checks -tyre checks Annually semi-annually annually £ 1 000 £ 500 £ 650 £ 1000 £ 1 000 £ 650 Salaries -finance strategist -staff Semi-annually annually £ 20 000 £ 50 000 £ 40 000 £ 50 000 Table showing capital allocations in the car hire service Some of the additional services offered may attract more customers. They do not necessarily have to come for the hiring service, but they could have their cars receive some attention for some of the extra services. This increases the profit the agency may make after the close of business. An increase in profits may force the agency to hire more employees and increase the services depending on what they can offer. This popularity leads to the growth of interest from different parties, for example; hotels and airport agencies that may require the services of a car agency. The agency’s operations will no longer be rooted in one place as there will be an avenue to grow and expand (McKeever 2010). Personal plan Investing in insurance policies for the business is instrumental in ensuring the business has a back-up plan. This is if anything was to go wrong in terms of perils and hazards. If some of the hazards in the business can be avoided, a smaller insurance policy may be in order. This depends on a number of factors that are in the external environment. To prevent the collapse of the business in case of a peril, insurance policies with well-known insurance companies may be appropriate (McDonald 2011). This ensures employees, management, and the customers’ protection in case of any problems that may arise. Any damage that is caused may be addressed by the insurance companies that are involved. Furthermore, all the agreements that are agreed upon must be signed to ensure that misunderstandings are reduced. There should be a reduction in the operations that the agency conducts. This is to prevent the loss of unused inventory on operations that could be handed over to other agencies. The percentage to which these profits will be shared must be addressed, and the future of the business might be guaranteed (Markides 2013). In operations that the agency is not fully engaged in, this strategy is vital in ensuring the agency saves capital and labour. This means that the saved capital can be used in other operations. Below is a table showing the personal plan on capital use. Capital Allocation Period Pricing Amount Personal Plan -insurance -permits -company contract -taxes Annually Annually Annually Annually £ 500 £ 3 000 £ 10 000 £ 600 £ 500 £ 3 000 £ 10 000 £ 600 Table showing personal plan on capital use Cash flow Through proper monitoring channels, management may have clear insight into what the agency is doing. Office supplies and expenses may be checked and counterchecked to ensure there is no surplus or extra expenses incurred. Poor cash flow management may be indicative of a poor marketing and business plan. Management needs to monitor the receivables in the agency. This works to reduce the chances of theft and loss that may be associated with supplies in the agency. Moreover, the overreliance of one product may cease as management may find alternatives they can choose from in the vast market Lomax & Raman 2007). The possibility of a variety in the business may be the difference between the growth and the collapse of the business. By checking to ensure there are appropriate valuation methods in the agency, management may increase the effectiveness of cash flow. To make this possible, there is an urgent need to raise the productivity of most of the services provided, and the nature of its products. Through the creation of an applicable business structure, there is the possibility of creating an agency which utilises all its resources. Most cash flows in the business enterprises present are addresses at the end of the month (Lane 2002). In order to maintain the longevity of the agency, all the capital retained should be used for paying and maintaining motor vehicles in the agency. APPENDIX A– CAR HIRE FINANCIAL EXPENSES Notes for start-up assets & investments Price Total Equipment and Furniture -Office furniture £ 3 400 -Spare parts for vehicles £ 2 500 £ 5 900 Other services -restaurant £ 25 000 -car wash £ 15 000 £ 40 000 Building improvements -labour £ 1 500 -material £ 1 000 -miscellaneous expenses £ 1 500 £ 4 000 £ 49 900 Since there will be little need for many offices, there will be little need for a huge number of office furniture in the car hire agency. The restaurant, on the other hand, will be catering to a fairly large number of clients; therefore, the amount allocated for the restaurant will be much higher. The amount needed will be approximately £ 50 000. Strategy implementation plan Individuals, especially in the agency, need to understand why it exists. Once this is clear to everyone, there will be a sense of purpose towards achieving the goals and objectives of the agency. Its strategies need to indicate and outline their goals in a manner to suggest that success, while providing for the customer’s every need, is the most crucial thing (Griffin 2008). By allowing for avenues to voice the concerns of the employees, management can find out what the agency lacks in terms of employee satisfaction. This works in ensuring customer satisfaction, in the long run. Putting all the concerns of the employees into practice may guarantee the proper and effective functioning of the labour force. This encourages exceptional working relations among all the people in the agency. Introduction of other services, as indicated, may place the agency in a position of power over their competition. Other operations such as a high-end car centre services may increase the chances of creating employment for people around the car-wash. The introduction of a rest-stop may be an exceptional idea for the expansion of the agency. It could incorporate other business operations and promote the culture of togetherness. This may make it an appealing venture for the people in that area (Madura 2007). Investors may also find it easy to invest in the area’s agency, making the area expand and develop. Market analysis Conducting surveys may be the perfect way in which the agency may find out if the agency is attaining its targets. This analysis may work toward giving the agency a look into what needs to be done to achieve their primary targets and objectives. Individuals in society always want to know if the business agencies around them are out to benefit them, or if they are in it for themselves. Through the administration of questionnaires, the agency may find an appropriate avenue in which the concerns of the people are displayed. The questionnaires are fast, easy to use, and reliable. This means that trust and loyalty is created among the people and the agency. This becomes a profitable venture for all those involved (Kuratko 2008). The agency can therefore, build its operations based on what its customers say. Conclusion Effective, well-written and thought-of business plans increase the advantages of the prospective businesses. The business plan works to cover all avenues of the agency by providing the basis for all managerial decisions. Everyone needs to be hands-on when it comes to the growth and development of the car hire service. Any failure by management or employees to fully comprehend the situation may be detrimental in the growth of the business. A business that is lucrative is likely to attract investors. Investors bring in more capital and revenue, and the business plan may help the agency achieve this dream. There is competition in even the smallest agencies and firms (Barringer 2008). It is only fair that the car hire service finds the energy to engage in these activities with the hope of being a global phenomenon. Checklist [ ] Choose the business’s name. [ ] Check the business plan with specialists. [ ] Choose a location for the business. [ ] Choose to file for partnership. [ ] Register the business’s name. [ ] Get the permits and licences for the business’s daily operations. [ ] Order required notices, for example, advertisements. [ ] Check the business’s insurance policies. [ ] Get the tax information depending on the location. [ ] Open the business bank accounts. [ ] Print out business cards. [ ] Purchase equipment, supplies, and order inventory. [ ] Send out releases to the public. References Barringer, BR 2008, The truth about starting a business, PULP, New York. Barringer, BR 2009, Preparing effective business plans: an entrepreneurial approach, Sage Publishers, London. Botha, M, Wessels, FF & Lubbe, B 2006, Tourism entrepreneurs, Free Press, New York. Cziczo, R 2004, Detailing for fun and profit, Macmillan Publishers, London. Finch, B 2006, How to write a business plan, Macmillan Publishers, London. Griffin, RW 2008, Management, Butterworth Publishers, New Zealand. Kuratko, DF 2008, Entrepreneurship: Theory, process, practice, Free Press, New York. Kurtz, DL & Boone, LE 2008, Contemporary business 2009 update, Free Press, New York. Lane, M 2002, A guide to the effective business plan, Oxford University Press, New York. Lomax, W & Raman, A 2007, Analysis and evaluation 2007-2008, Bantam Books, New York. Madura, J 2007, Introduction to business, Hart Publishing, New York. Markides, CC, 2013, Game-changing strategies: how to create new market space in established industries by breaking the rules, Hart Publishing, New York. Martin, M & Jackson, T 2002, Personnel practice, Oxford University Press, Oxford. McDonald, M, Payne, A & Frow, P 2011, Marketing plans for services: a complete guide, Wiley & Sons Co., New York. McKeever, M 2010, How to write a business plan, PULP, New York. Read More