Business Plan On

OnTrac Courier Service

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Executive Summary

1. Introduction

OnTrac is a newly established small business in courier service. OnTrac is an emerging transport operator that was established to fill a niche in the market of road freight industry in Wembly. OnTrac can transport documents and small parcels to clients will provide local courier and delivery services to customers in its targeted market. We can transport documents and parcels to customers within a 40 mile radius of town. Our customers are medical professionals, attorneys and local businesses who need reliable, same-day services not offered by the larger service providers, such as Fedex and UPS.

1.1 Objectives

The objectives for the first three years of operation include:

Our primary goal is to surpass customer's expectations. To enhance the number of clients served by 20% per year through superior service.

To expand a profitable start-up business within the first year of function.

1.2 Mission

Serve clients with an environmentally friendly, expedient delivery service. We subsist to attract and preserve customers. Our services will surpass the expectations of our patrons.

Situation AnalysisOnTrac is entering their first year of operation.  In order to achieve the market penetration that is forecasted, marketing must become a dominant business activity.  We offers the authorized community a reliable, professional, delivery service that can provide service of notice, document and small parcels delivery .The basic market need is a reliable service that can support all needs the particular firm may have.

2.1 Company Ownership

The company will be owned completely by Rose.

2.2 Start-up Summary

OnTrac will acquire the following start-up costs:

Office furniture including: two desks, two chairs, and two file cabinets. Three phone lines and Fax machine. Two computer systems including a printer, CD-RW, and a broadband Internet

connection. Improvement of a website that permits delivery orders to be placed online and received

every ten minutes. Legal fees for the assimilation of the business. Messenger bags printed with company logo.

Services

The primary revenue center for the business will come from the local delivery of documents and packages on behalf of individuals and businesses within the target market. The business will generate substantially high gross margins from these services via its two delivery trucks.

Market Summary

The demand for reliable, cost-effective delivery services has been growing in the area for several years as the town’s population continues to grow. In addition to a growing population, there are more customers who require faster service, ranging from “stat” medical specimen deliveries to time-sensitive legal documents to “just-in-time” parts deliveries to local manufacturers. There is only one other local courier service in the area, and we believe there is ample room, due to our growing local economy, for another reliable courier service.

We possess good information about the market and has excellent information about the common characteristics of the most valued customers. This information will be used to better understand who is served, their specific needs, and the best way to communicate with them.

Marketing Objectives

Establish ongoing relationships with local businesses and corporations within the target market.

Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth advertising.

Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.

Market Needs

We are providing customers with a fast, reliable document delivery service throughout the Wembly downtown area.

Marketing Strategy

The marketing strategy of OnTrac is to provide reliable and outstanding delivery services to businesses and professionals who have a regular need for hoist and delivery services. This will assure that we will have a regular, steady income from repeat customers. The second part of our marketing strategy will be to gain customers who need courier services occasionally, such as last-minute parts and supplies delivered to a contractor’s job site, plans deliveries for architects and engineers and documents and materials for local government agencies.

SWOT Analysis

Strengths

Unparalleled legal industry imminent. Professionalism and efficiency. The use of fast, eco-friendly delivery vehicles.

Weaknesses

The require of brand. The resist to convince different firms to drain their current service provider in favor of

OnTrac.

Opportunities

The repeated need for document delivery by medical firms. The increasingly developed transportation for vehicles.

Threats

High turnover within the messenger industry. Electronic filing.

Competition

Helping the Wembly area, there are about 10 different delivery services, about a quarter of these are taxi services that also make deliveries. The rest are courier or messenger services. Some use cars and a few use bicycles as the means of transportation. In general, the bicycle messengers are less expensive because they have lower overhead. In the heart of downtown, bicycle messengers can be as fast as or faster than the car-based courier services because of automobile traffic.There are five different companies that target law firms by catering to their special needs. All of these are bicycle based services. 

Keys to SuccessThe keys to success are:

Reliability. Convenience. Custom service.

Financial Summary

Sales ForecastYear 1 Year 2 Year 3

SalesLaw firms £152,459 £255,458 £271,554Assorted customers £20,841 £30,254 £35,125Total Sales £173,300 £285,712 £306,679

Direct Cost of Sales Year 1 Year 2 Year 3Law firms £3,049 £5,109 £5,431Assorted customers £417 £605 £703Subtotal Direct Cost of Sales £3,466 £5,714 £6,134

Break-even Analysis

Monthly Revenue Break-even £19,155

Assumptions:Average Percent Variable Cost 2%Estimated Monthly Fixed Cost £18,772

Pro Forma Profit and LossYear 1 Year 2 Year 3

Sales £173,300 £285,712 £306,679Direct Cost of Sales £3,466 £5,714 £6,134Other £0 £0 £0Total Cost of Sales £3,466 £5,714 £6,134

Gross Margin £169,834 £279,998 £300,545Gross Margin % 98.00% 98.00% 98.00%

ExpensesPayroll £177,360 £183,360 £189,360Sales and Marketing and Other Expenses £3,000 £3,000 £3,000Depreciation £1,500 £1,500 £1,500Cellular service £4,200 £4,200 £4,200Utilities £1,200 £1,200 £1,200Insurance £1,800 £1,800 £1,800Rent £9,600 £9,000 £9,000Payroll Taxes £26,604 £27,504 £28,404Other £0 £0 £0

Total Operating Expenses £225,264 £231,564 £238,464

Profit Before Interest and Taxes (£55,430) £48,434 £62,081EBITDA (£53,930) £49,934 £63,581Interest Expense £4,517 £3,596 £2,546Taxes Incurred £0 £11,210 £15,132

Net Profit (£59,947) £33,629 £44,404Net Profit/Sales -34.59% 11.77% 14.48%

Pro Forma Cash FlowYear 1 Year 2 Year 3

Cash Received

Cash from OperationsCash Sales £43,325 £71,428 £76,670Cash from Receivables £96,883 £192,819 £226,006Subtotal Cash from Operations £140,208 £264,247 £302,675

Additional Cash ReceivedSales Tax, VAT, HST/GST Received £0 £0 £0New Current Borrowing £0 £0 £0New Other Liabilities (interest-free) £0 £0 £0New Long-term Liabilities £0 £0 £0Sales of Other Current Assets £0 £0 £0Sales of Long-term Assets £0 £0 £0New Investment Received £0 £0 £0Subtotal Cash Received £140,208 £264,247 £302,675

Expenditures Year 1 Year 2 Year 3

Expenditures from OperationsCash Spending £177,360 £183,360 £189,360Bill Payments £49,882 £66,203 £71,071Subtotal Spent on Operations £227,242 £249,563 £260,431

Additional Cash SpentSales Tax, VAT, HST/GST Paid Out £0 £0 £0Principal Repayment of Current Borrowing £0 £0 £0Other Liabilities Principal Repayment £0 £0 £0Long-term Liabilities Principal Repayment £9,055 £9,976 £11,026Purchase Other Current Assets £0 £0 £0Purchase Long-term Assets £0 £0 £0Dividends £0 £0 £0Subtotal Cash Spent £236,297 £259,539 £271,457

Net Cash Flow (£96,089) £4,707 £31,218Cash Balance £5,111 £9,818 £41,036

Pro Forma Balance Sheet

Year 1 Year 2 Year 3

Assets

Current Assets

Cash £5,111 £9,818 £41,036

Accounts Receivable £33,092 £54,557 £58,561

Other Current Assets £0 £0 £0

Total Current Assets £38,203 £64,375 £99,597

Long-term Assets

Long-term Assets £7,500 £7,500 £7,500

Accumulated Depreciation £1,500 £3,000 £4,500

Total Long-term Assets £6,000 £4,500 £3,000

Total Assets £44,203 £68,875 £102,597

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable £4,505 £5,525 £5,870

Current Borrowing £0 £0 £0

Other Current Liabilities £0 £0 £0

Subtotal Current Liabilities £4,505 £5,525 £5,870

Long-term Liabilities £40,945 £30,969 £19,942

Total Liabilities £45,450 £36,494 £25,812

Paid-in Capital £60,000 £60,000 £60,000

Retained Earnings (£1,300) (£61,247) (£27,618)

Earnings (£59,947) £33,629 £44,404

Total Capital (£1,247) £32,382 £76,785

Total Liabilities and Capital £44,203 £68,875 £102,597

Net Worth (£1,247) £32,382 £76,785

Ratio AnalysisYear 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 64.87% 7.34% 4.50%

Percent of Total AssetsAccounts Receivable 74.86% 79.21% 57.08% 27.40%Other Current Assets 0.00% 0.00% 0.00% 21.80%Total Current Assets 86.43% 93.47% 97.08% 50.30%Long-term Assets 13.57% 6.53% 2.92% 49.70%Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 10.19% 8.02% 5.72% 29.80%Long-term Liabilities 92.63% 44.96% 19.44% 27.90%

Total Liabilities 102.82% 52.99% 25.16% 57.70%Net Worth -2.82% 47.01% 74.84% 42.30%

Percent of SalesSales 100.00% 100.00% 100.00% 100.00%Gross Margin 98.00% 98.00% 98.00% 100.00%Selling, General & Administrative Expenses 132.59% 86.23% 83.44% 79.50%

Advertising Expenses 0.69% 0.42% 0.39% 0.20%Profit Before Interest and Taxes -31.98% 16.95% 20.24% 1.30%

Main RatiosCurrent 8.48 11.65 16.97 1.64Quick 8.48 11.65 16.97 1.43Total Debt to Total Assets 102.82% 52.99% 25.16% 57.70%Pre-tax Return on Net Worth 4807.12% 138.47% 77.54% 2.50%Pre-tax Return on Assets -135.62% 65.10% 58.03% 5.90%

Additional Ratios Year 1 Year 2 Year 3Net Profit Margin -34.59% 11.77% 14.48% n.aReturn on Equity 0.00% 103.85% 57.83% n.a

Activity RatiosAccounts Receivable Turnover 3.93 3.93 3.93 n.aCollection Days 56 75 90 n.aAccounts Payable Turnover 12.07 12.17 12.17 n.aPayment Days 27 27 29 n.aTotal Asset Turnover 3.92 4.15 2.99 n.a

Debt RatiosDebt to Net Worth 0.00 1.13 0.34 n.aCurrent Liab. to Liab. 0.10 0.15 0.23 n.a

Liquidity RatiosNet Working Capital £33,698 £58,850 £93,728 n.aInterest Coverage -12.27 13.47 24.39 n.a

Additional RatiosAssets to Sales 0.26 0.24 0.33 n.aCurrent Debt/Total Assets 10% 8% 6% n.aAcid Test 1.13 1.78 6.99 n.aSales/Net Worth 0.00 8.82 3.99 n.aDividend Payout 0.00 0.00 0.00 n.a

Contingency Planning

Difficulties and Risks Problems unseating current service providers. Unforeseen difficulty attracting quality, reliable employees.

Worst Case Risks May Include

Electronic filing becomes legislatively mandated for 100% of the court filings. Having to liquidate equipment to cover liabilities.