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ONE LANE INDUSTRIES.
Giga Bike
Sustainable Bike Sharing Today.
Jonathan Light ([email protected])
Kyle Sarkisian ([email protected])
Jeffrey Edwards ([email protected])
Ashleigh Thompson ([email protected])
12/5/2014
Contents
Executive Summary .................................................................................................................. 2
Introduction ............................................................................................................................... 6
Industry Analysis ...................................................................................................................... 7
Business Description and Vision Statement ............................................................................. 8
Market Analysis ........................................................................................................................ 9
Competitor Analysis ............................................................................................................... 11
Marketing Plan ........................................................................................................................ 13
Operational Plan...................................................................................................................... 16
Financial Plan.......................................................................................................................... 18
Conclusions ............................................................................................................................. 20
References ............................................................................................................................... 21
Appendix ................................................................................................................................. 22
Executive Summary
This document summarizes all of the aspects of our business plan into the main points
by section of the following; industry analysis, our company description and mission
statement, and market and competitive analysis. Included as well are the critical points of our
marketing, operational, and financial plans. Each of these summaries will be presented in
order as they are listed in the prior statements.
Our industry analysis reflects very positive outlooks for our company's entry into the
marketplace. There are currently no bike rental companies in the state of Pennsylvania.
Furthermore, there are only three other bike rental companies in the United States. Thus we
have limited competitors in a large target market consisting of college students looking to get
to their classes on-time, utilize a more efficient mode of transportation while offering our
services for an affordable price when compared to the costs of other methods of
transportation. Our most notable and completely unique feature that Giga Bike offers the
ability to fold in half thereby making it possible to be brought into the classroom thus
avoiding the hassle of having to lock the bike up. We have also conducted in-depth research
into the three previously mentioned bike rental companies further giving us insight into what
does and does not work within the bike rental industry.
Company Description:
The purpose of our company, Giga Bike, is to offer convenient access to rental bikes
and bike services (instructional Fix-it stations) to people looking for a more efficient way to
travel, which is environmentally responsible and offers a unique experience to our clients.
We offer collapsible bikes that serve to enhance their portability to enable them to be brought
indoors without public disturbance. There are currently no other bike rental service in the state
of Pennsylvania and beyond that, only three other companies in three different states exist
separate from GigaBike. Rental stations will also be equipped with a repair service apparatus
that includes how-to instructional videos for repairing your bike whether they are rented from
us or not for free. GigaBike is also partnered with companies including Millersville
University, Dero (repair service station supplier), Cricket (GPS/security alarm system
supplier), and Citizen Bike (Bike supplier).
Our market analysis is testament to the amount of thorough research that has been
conducted. The analysis shows that our main demographics include people ages 18-35 in the
lower-middle to upper-middle class who are looking to get or stay active, those who value
adventures and nature, and those who understand the technology. Behavioral characteristics
of our client base would include those that depict high customer loyalty taking advantage of
special events in the community that, for the most part would only be dwarfed by the
presence of in climate weather. From 2000-09, bike usage has increased 70%. Taking from
the amount of people that attend Millersville and those that would benefit from a bike rental
company, we conclude that the entire student body which consists of 8,500 people would be
potential clients. GigaBike will also target those students' families if they were to spend a
day in the area wanting a pleasant travel experience through Millersville. This number
includes students living on and off campus, full-time and part-time. Our clients will be able
to recognize that we offer affordable, eco-friendly/responsible, and new adventurous
experiences when they choose to give us their business. Our affordable payment options will
cater to nearly every need of our customer base with various payment options for varying
amount of rental times. Negative effects as a result of our presence include Red Rose Transit
which may see a significant decline in use do to more people using our products.
While looking at our competitive analysis one would see that we only have three
other competitors which are not even located in our state. Two of the three companies are
based in Massachusetts and the other is based in New York City. Only the company out of
New York has any kind of significant public recognition whereas the others are not well
known at all. None of these companies offer the comprehensive service and products that
GigaBike has to offer. Our most notable feature is the collapsible bikes that can be almost
effortlessly transported anywhere because of its compact size.
Our marketing plan shows a comprehensive view of how we plan to make profits
while still keeping to our original mission statements. We have advertising one various
platforms including campus radio, Pandora and Spotify internet radio, and YouTube. With
our business being located on college campuses, we have made the process of interacting
with the customers 100% streamlined since the clients would be on location already. Our
GigaBike kiosks will utilize the Coke Freestyle design offering many choices and
availabilities while showing personal nuances such as wearing that particular school's colors.
Our products will be on the upper-middle to high quality. The key factors that will determine
the prices that we set will include how much it costs to produce our bikes, the costs of leasing
the space, and how many kiosks we will have at a designated location or facility.
With regards to our operational plan our current management team consists of Jeffery
Edwards, Business Management, and Concentration in Sports Management. Jon Light, brings
Graphic Communications, along with the degree he brings 10 years of marketing experience.
Kyle Sarkisian offers his education in Philosophy and Entrepreneurship. Ashleigh
Thompson, offers her knowledge in International Business and French as well as having
tremendous entrepreneurial experience working at an entrepreneurial venture capitalist firm.
The company’s overall management style is authoritative, also known as the visionary. The
founding four managers will be considered firm but fair managers, giving employees clear
directions, motivation by persuasion, and feedback on tasks. Everyone brings their own
unique experience and expertise to the table. Giga Bike will have three bike rental locations
throughout Millersville’s Campus. One location will be at the North Side Bistro, on the North
Side of Campus. The second location will be at the SMC, the Central location on campus.
And the third location will be at Pucillo, representing the South Side of Campus. GigaBike
will not need to hire outside employees for at least two years depending on how much the
company grows. In the future, GigaBike would be proud and eager to offer internships and
co-ops. Ideally we would be interested in business administration, communication, public
relations, marketing, and computer science majors. Realistically, we would be more than
willing to accept an intern from any major, depending upon the experience they bring to the
position.
Our last section of our business plan is our financial plan. After analyzing our cost of
supplies we have come to this conclusion regarding our price structure; the pricing plans are
as follows: $3.00 per hour, $10.00 per day, $40.00 per month, and $80.00 for the yearly
rental. The optional insurance plans for the rentals are as follows: $2.00 per hour, $3.00 per
day, $20.00 per month, and $40.00 per year, respectfully. We took into account yearly
revenues using different payment plans and reached the conclusion that our first year we
would yield $95,550 in sales. We then subtracted our cost of business which came to
$175,889 after taxes are incurred and reached a negative value of $84,335. This value
represents how much we will need to make in net profits to break even. Of course, none of
this would be possible without knowing what our startup cost are. Rather than acquiring a
traditional loan from the bank, we have chosen to utilize a convertible loan valued at
$150,000 maturing over 15 years. At the end of the fifteen year time period, the amount of
interest and original lump sum will be transferred to 5% equity for each $10,000 amount
unpaid. More specifically, we will need to acquire $129,425 in startup costs from the bank.
No purchases will be made before May of 2015 and no sales will be conducted until August
of the same year to debut a soft opening in Millersville. The hard opening will be made
when the fall semester school year starts at Millersville University open to all of the public.
Introduction
One Lane Industries is proud to present a revolutionary new service to commuting. It
is affordable, convenient, and environmentally friendly. Its name is Giga Bike. Giga Bike
presents the world with a brand new sharing program geared towards those interested in
staying or getting active, the environment, and is looking to experience the beauty of the
world first hand. Through our service users are able to select a bike of their choosing, rent it
for an allotted amount of time, and return that bike all in the time needed to accomplish their
tasks. Our system is different from others for a number of reasons. Giga bike features state of
the art security and tracking systems, a new way to learn how to mainta in a bike, and a one of
a kind biking experience that consumers will be talking about for years to come. In this
proposal you will find out just how we plan to accomplish our mission of being the premier
bike rental service in the Millersville/Lancaster, Pennsylvania area.
Industry Analysis
We believe that the bike rental industry is a great place to enter a new venture into; it
has a big target market, with limited competitors in it. Which we feel that we can make a real
difference in this space and we can change the way people travel and the way they thing
about bike sharing as a whole new innovated way to get around and a great new experience,
while saving money.
Our belief is that since there’s no other bike rental company in the state of PA that we
would do a better job than the rest of the industry, in that we are providing a new experience
to our customers in the state of Pa and, with our product of the foldable bike which is
something that no one has done before. We also have other bike rentals companies in other
states to look at and she what and how they are running their business and, take their strength
and weakness of those companies any try to fit it into what our demographics prefer where
we put our bikes, how convenient is it for our customers to get these bike, and how this be a
better way of travel compare to drive, catching the bus or even walking.
There is a unique position in this industry that not everybody is in it, we can offer a
new and healthier way to get around, via if you want to get to class and you live across
campus and done have time to wait on the bus or to even walk to class. The most unique
thing is our product, to have the ability to fold you bike up and brings it in class with you.
This is something that hasn’t been done before and it saves you time compare to you having
to lock it up at one of the bike racks, which can be a hassle sometimes when your lock gets
tangle up and you are late for class something everybody wants to avoid. This sets us apart
from every other bike rental company in the country.
Business Description and Vision Statement
The purpose of our company, Giga Bike, is to offer convenient access to rental bikes
and bike services (instructional Fix-it stations) to people looking for a more efficient way to
travel, which is environmentally responsible and offers a unique experience to our clients.
Initially, our clients would consist of college students and those on college campuses. The
key feature that sets Giga Bike apart from any competitors in its industry is the bike’s ability
to fold for easier portability than conventional methods. Furthermore, there are currently no
other bike rental service in the state of Pennsylvania and beyond that, only three other
companies in three different states exist separate from Giga Bike. Our rental stations will
also be equipped with a repair service apparatus that includes how-to instructional videos for
repairing your bike whether they are rented from us or not for free. There will also be live
service technicians available to assist you if a client gets stuck. Giga Bike utilizes a range of
partnerships that have allowed us to offer such innovations, these include; Millersville
University, Dero (repair service station supplier), Cricket (GPS/security alarm system
supplier), and Citizen Bike (Bike supplier). We are also working with program developers to
further the efficiency of our service. A differentiation strategy will be utilized to further set
ourselves apart. The legal form our company will represent is a partnership.
Mission Statement:
“Our Mission is to provide top quality bicycles and bicycle services to the campus of
Millersville University. Through a convenient method of acquisition that is not only
economical to the public, but also to provide environmentally responsible alternative forms
of transportation.”
Vision Statement:
“Giga bike will be the leading means of transportation at Millersville University for non-
commuting students. Our company will lead the way in bike sharing through innovation,
efficiency, and environmental factors”
Market Analysis
The target demographic that Giga Bike plans to reach out to would be male and
female college students and faculty at Millersville University. The target age group for our
service would be 18-35. The income range our service will target will be lower-middle to
upper-middle class. The psychographic characteristic of our target market is those who are
looking to get or stay active, those who value adventures and nature, and those who
understand the technology. The behavioral characteristics of our target market would be that
of a very loyal customer base with the only occasion that could potentially drive sales down
is severe inclement weather.
The size of our market will slightly change on a yearly basis, however, according to
Millersville University’s fast facts page, from 2013-2014 Millersville University had 8,500
students. Of the 8,500 students, 7,500 were either full time or part time undergraduate
students and the other 1,000 students were graduate students. Of the 8,500 students that
attended Millersville University 2,216 live in one of the many residence halls on-campus and
1,128 students lived in local off-campus housing. This resulted in almost 3,300 of the 8,500
total students remaining in the immediate surrounding area of the university and that
approximately 5,365 students must have either rode public transportation or drove
themselves to campus. Millersville University also employs approximately 900 full time
employees. 300 of these employees are faculty and 600 of these employees are staff and/or
administration.
There are various trends that will impact the success of Giga Bike in both the long
and short term. A social trend that will impact our service is the fact that bikes are becoming
increasingly more utilized in campus and city life. According to an article on the website
citylab.com, a survey conducted across 45 states showed that commuting via bicycle had
increased nearly 70% from 2000 to 2009. The survey takers grouped the states into five
regions (Northeast, Southeast, Midwest, Northwest, and Southwest) and found that the
Northeast region saw the highest increase (127%) in commuting ridership in that time frame.
In terms of short term social trends, on October 22nd 2014, Millersville University received an
honorable mention from the League of American Bicyclis ts for its bicycle friendliness
following the campus’ first ever sustainability day. Trends in economic factors will also
affect our service. A need for a cleaner and cheaper means of transportation is being
requested by a large sum of the population. Gas prices continue to fluctuate and good
manufacturing jobs, that our service would provide, are often hard to come by. Cultural
trends can be seen through the growing green and organic movement that is affecting many
young adults. Our service would help drastically reduce the campus’ carbon footprint.
The economic environment in the surrounding area of Millersville University looks
optimistic. The Bureau of Labor Statistics states that Lancaster, PA has an unemployment
rate of 3.9%y. By the time operation is set up inflation across the country will be
approximately 1.7%. The country also offers many different business funding programs such
as a Small Business First loan. The social environment will continue to be mainly unchanged
as every year a new body of students will come in and leave the university. 18-35 years old
will always remain to be the target demographic.
Giga Bike will utilize a number of positive external options in the pursuit of its
mission. The company would like to increase the supply of bikes to obtain them at a lower
cost. Another positive external option that Giga Bike will utilize is the idea of positive
production. Giga Bike is a provider of multiple services to the campus and we want those
partnered with us to achieve the same success we do. The same way that HTML was
developed alongside the internet the use of innovations from companies like Citizen Bikes
and Dero will allow our company and their company to remain prosperous as we venture into
new way to utilize their inventions.
Negative externalities are small and would be rare. Our service is clean, efficient, and
in no way would cost more to society than the consumer. A few small examples that would
be looked at as negative externalities would be the potential that a decrease in parking pass
sales may bring less money to MUPD. Another example of a negative externalities that could
be affected by our service is that Red Rose Transit (Shuttle Service) would no longer need to
follow the same time frame as they once did. Giga Bike produces next to no environmental
concerns in production or installation.
Competitor Analysis
Our Three main competitors are
(1. Citi bike- is a bike rental system, which is based in New York; it’s intended to
provide New Yorkers and also visitors with an additional transportation option for getting
around the city in a fun and efficient and convenient way).
(2. Zagster- which is a bike sharing out of Cambridge, MA. Which has bike deployed
all around the United States, it relies on a nationwide network of bicycle mechanics to keep
their company moving smoothly. Their experienced mechanics provide regular tune-ups and
repairs to bike fleets in their area, which help install new deployments as their bike sharing
programs continues to expand across the country).
(3. Hubway- is your bike sharing system which provides more than 1,300 bikes at 140
stations throughout Boston, Brookline, Cambridge, and Somerville).
The strengths of Citi bike are that they are a well know company with an already
establish brand and products that customers already know about, they also have a establish
relationships with a variety of other brands like master card, and Alta a bike sharing service
provider. Citi bike weaknesses are that they don’t have any bike operations in the state of PA,
and they are not offered on the campus of the schools in New York just in the city for
business use for a cheaper way to get to your job then driving or take a cab.
The strengths for Zagster are that have bike across the country and also have people
set to run the bike sharing business in that city, if they want to you can sign up thru and app.
Their weaknesses are that they’re not as well-known thru out the United States as Citi bikes
are because they are such a small company and don’t offer other products or services as Citi
bike does. Also like Citi bike they don’t have a base in PA. Last Hubway bike sharing
strengths are that they are a small based company who basically serve the area of MA. They
do have a couple of sponsors like Adidas but they don’t have a big brand name like the
others, and like the others they are not establish in PA which are company is based in this
area especially.
The way we differentiate ourselves from the other bike sharing services are that we
are based in the PA area, which is a big plus since there is no current bike sharing companies
based here. We offer our customers the option to choose from different type of bikes and the
color of the bike. Our bikes are affordable and reliable, especially since we are putting this on
a college campus where money is a big concern for college kids. Are bikes are foldable with
will come in real handy, when you are ride your bike to class and don’t have any place to put
it or you don’t have a chain to lock it up, you can just fold it up and bring it in class.
We want to give students the option to use an affordable and eco-friendly and also
healthier way of transportation, which will save them money in the long run on gas and other
expensive dealing with driving or catching a bus to class.
Marketing Plan
Giga Bike will utilize the 4 P’s of marketing when evaluating how to reach out to new
customers. Giga Bike provides an environmental, convenient, and creative bike sharing
service to solve transportation needs at a state university. In total our service will provide an
initial 90 collapsible bikes to the campus. The price Giga Bike is reasonable at $80.00 Per
Year, $40.00 Per Month, $10.00 Per Day, or $3.00 Per Hour. This does not include insurance
which covers any damage to the bike on the users end and varies in price depending on the
rental time. Compared to competitors prices, which can be seen in [Figure 1] our prices are
more than reasonable and can be adjusted on a yearly basis as needed to account for more
riders and or bicycle/kiosk maintenance. Giga Bike will utilize various different forms of
promotion to spread information about our service. Advertising will be heavily utilized
through radio websites (8tracks, Spotify, and Pandora), video websites (YouTube and
Vimeo), and google AdSense. Additional advertising will take place at campus bus stops and
through campus media (Local paper, radio, TV channel). Giga Bike will also be a main
contributor and sponsor to the campus’ sustainability conference where it will host a seminar
to discuss how Giga Bike has impacted the university thus far and in the future. Distribution
is one of the most important factors when providing a service like our company does. A
figure of the campus map is provided in [Figure 2]; Giga Bike has elected to place the rental
kiosks in 3 locations on campus. 1 location will be at the Student Memorial Center, 1
location will be at the North Side Bistro, and the final location will be a Pucillo Gymnasium.
At every academic building on campus docking stations will be placed to allow riders to
dock their bikes until their class lets out. This provides the rider with more time before
receiving a late fee and allows for a more convenient and safe way to store the bikes on
campus.
Giga Bike plans to use social media promotions to communicate with its customer.
The utilization of Groupon, Facebook, Twitter, and YouTube will be crucial to our success in
reaching a younger demographic. The proposed location for our service is Millersville
University. It is an appropriate location because the campus is and has been recognized as a
leader in environmental progress. The campus is expanding in size every year and currently
the only options students and faculty have for transportation around campus is as follows:
Drive (Must Buy Parking Permit), Red Rose Transit Shuttle, Walk. Our company feels that
there is room for a more convenient and affordable way to transit around the Millersville
University campus.
Our store design will be that of a kiosk. The colors of our company and kiosk are
Black and Gold in honor of the school that gave our service its first chance at success. The
kiosk will be a large rectangle with a Dero Fixit station located on the back and a Dero bike
rack coming off the side. The main rectangle shape of the machine will feature a screen that
will allow users to purchase passes to use the bikes and pick which bike they would like to
use that day.
To assure the utmost of customer satisfaction the product quality level Giga Bike will
be middle-top of the line. The bikes will be provided by a company called Citizen Bike.
Citizen Bike makes bikes that are foldable and range in price from $200-$500 dollars per
bike and have achieved high reviews from multiple sites. The only branded or private
merchandise that will be offered is Citizen Bike bicycles and a do it yourself bike repair
service from Dero.
The key factors that will determine the price our company charges will initially be
how much the bike costs to produce at 90 bikes, how much the space will cost to lease from
the university, how much the (3) kiosk(s) will cost to manufacture with the Dero bike rack
and fix it station. After 3 years the price our company charges will be based on all of the
above factors with the addition of how many annual users we have, what times are the
heaviest used, and what kind of maintenance has had to happen to our inventory over that
time.
Giga Bike will utilize a few strategies when unveiling its service to the market. The
most important thing and the first thing we will do is study our competition. Giga Bike is not
the first to provide a bike ride sharing service, but it will be the most affordable and reliable
on the market. By studying our competition we will have a full understanding of how prices
and quality correlate to the perception of these companies. Another strategy we plan to utilize
is Timing. We would like to introduce this product at the beginning of the summer while
many students are away. This 3 month time will allow us to take in some key feedback
during the heavier months of riding prior to majority of the students returning for the fall
school year. Finally, Promotion will be key in spreading the word about our service and how
much good it can do for the campus. Consumers may be confused if they are not familiar
with the service prior to seeing it firsthand. Giga Bike will offer credit to those who
experience any difficulties or issues while actively renting bikes from our service.
Operational Plan
The key managers in Giga Bike are the founding four managers: Jeffery Edwards, Jon
Light, Kyle Sarkisian, and Ashleigh Thompson. Each business manager does have their own
unique experience to bring to the table. Jeffery Edwards will be graduating from Millersville
University in December of 2015 with a Bachelor’s in Business Management, Concentration
in Sports Management. Jon Light will be graduating from Millersville in December of 2014
with a Bachelor’s in Graphic Communications, along with the degree he brings 10 years of
marketing experience. Kyle Sarkisian graduates in December of 2015 with a Bachelor’s in
Philosophy and a minor in Entrepreneurship. Ashleigh Thompson will graduate in May of
2015 with a Bachelor’s in International Business and French. She also has intern experience
at Lee-Chandler Enterprises, an entrepreneurial venture capitalist firm.
The company’s overall management style is authoritative, also known as the
visionary. The primary objective is to provide long-term direction and vision for the
employees. The founding four managers will be considered firm but fair managers, giving
employees clear directions, motivation by persuasion, and feedback on tasks.
Not at least for the first two years will Giga Bike need to hire any additional
employees. The founding four managers will be able to control the business and the growth
expected to happen from the first to the second year. Should growth increase more than
expected, Giga Bike would be more than willing to have an internship or a co-op through
Millersville University. Ideally we would be interested in business administration,
communication, public relations, marketing, and computer science majors. Realistically, we
would be more than willing to accept an intern from any major, depending upon the
experience they bring to the position.
Giga Bike will consist of a partnership among the four founding managers: Edwards,
Light, Sarkisian, and Thompson. The business begins as soon as the business is started. The
managers understand that they are responsible for paying taxes on their own personal shares
and each manager is liable for the entire amount of business debt, divided equally four ways.
In terms of the organizational chart, each founding manager will have a delegated
area of responsibility. Edwards is the VP of Sales. Light is the VP of Marketing. Sarkisian is
the VP of IT & Product Development. Thompson is the CFO. [Figure 3] depicts the
organizational chart for the company.
Managerial decisions will be presented to the founding managers and voted upon
democratically. Giga Bike truly supports the free-thinking flow environment where all ideas
are accepted and voted upon appropriately. The managers also realize that forgoing an
income for the first few years in a start-up is almost expected in a new business. The
founding managers have decided to accept deferred compensation for the first two years, and
will re-evaluate depending upon profits for the 2015-2016 school year.
Giga Bike will have three bike rental locations throughout Millersville’s Campus.
One location will be at the North Side Bistro, on the North Side of Campus. The second
location will be at the SMC, the Central location on campus. And the third location will be at
Pucillo, representing the South Side of Campus.
Financial Plan
[Figure 4] is the projected income statement for the 2015-2016 school year,
finalized December 31, 2015. Our bike rental business operates on the customers
having multiple choices for their rental decisions. They can choose from an hourly
rental, daily rental, monthly rental, and a yearly rental plan. The pricing plans are as
follows: $3.00 per hour, $10.00 per day, $40.00 per month, and $80.00 for the yearly
rental. The optional insurance plans for the rentals are as follows: $2.00 per hour,
$3.00 per day, $20.00 per month, and $40.00 per year.
The revenue consists of an estimation of rental plans and an estimation of the
insurance plans as well. I estimated that we would have 1,000 hourly rentals for the
2015-2016 school year. At $3.00 day, this would calculate a total of $3,000. If 700
people take advantage of the $2 optional insurance plan, that would bring in a
revenue of $1,400. This means that hourly rentals would bring in a total revenue of
$4,400.
For the daily calculations, we estimated that there would be 1,500 daily rentals
at $10.00 a day. This would bring the total to $15,000. I estimated that out of those
1,500 daily rentals, there would be approximately 700 people who take advantage of
the optional $3.00 insurance plan. This would bring the insurance revenue from daily
rentals to $2,100. This brings the total revenue derived from daily rentals to $17,100.
For the monthly calculations, we are estimating that approximately 1,500
people utilizing the plan at $40.00 per month. This will bring the revenue to $60,000.
If 700 people take advantage of the optional insurance plan at $20.00 a month, this
will bring the total insurance revenue to $14,000. This brings the total revenue
derived from monthly calculations to $74,000.
The total revenue accumulated through all plans explained and insurance
option estimations, this will bring the total expected revenue to $95,550 for our first
year of business.
The operating expenses include the costs of purchasing the equipment and the
Coke Freestyle Machine costs associated with usage. The income statement details
how the numbers were calculated. We included insurance for the company at
$50,000. We depreciated the total amount of equipment needed to start the business,
which came to a total of $31,400 and depreciated it over four years. This came to an
annual depreciated value of $7,850 which is reflected on the income statement. The
employees of Giga Bike have accepted deferred compensation for a minimum of two
years; this also is reflected on the income statement.
We estimated that 30% of the net sales would be taken out for taxes. After
subtracting the taxable income from the total expenses, we came to an after tax
income value of $179,885. We then subtracted this value from the net sales value of
$95,550. This gave us a negative value of $84,335, meaning that we had to earn
$84,335 in profits before we break even.
[Figure 5] explains the projected startup costs for 2015. The inventory
includes the equipment that we have purchased to start the business. The cash is what
the four founding members can bring to the business from our own personal savings.
The leasehold includes the yearly amount paid to Coke for rental of the Coke
Freestyle machines. Permits and Licenses are paid to Lancaster County every year to
operate our business. The legal and counseling and miscellaneous values are
estimates that we have in case we need to fall back on either of those options. The
owner investments are the cash values that the founding members are contributing
from their own personal wealth. The external investments are monies that the
founding members have collected from friends and family. Instead of having a
traditional loan from the bank we will be taking out a convertible loan. This means
that we will be loaned a lump sum of $150,000 over the course of 15 years. At the
end of the 15 years, the interest and original lump sum that have not been repaid, will
then be turned into equity in the Giga Bike. For every $10,000 not returned, there will
be an exchange of 5% equity to the investor.
[Figure 6] is the 3-month cash flow statement. We will start the 2015 year with
$20,000 in cash. Each year we will spend approximately $5,000 in cash flows until
the summer of 2015 when the Giga Bike business makes its debut. There will be no
purchases until the month of May. The overhead is the cost of depreciation on the
machines. There also will be no sales until school starts in August of 2015.
Conclusions
In conclusion, we, at Giga Bike, feel that not only is this business viable but a true
necessity on campus that could easily cater to the community. Our service would lower the
environmental footprint that we leave behind and build a path to a better future for
generations to come. Furthermore, we feel that our partnerships are strategic and well
thought out so that we will remain viable for years to come and set a precedent in this field
that no other has yet to set. Giga Bike can truly become a stand out in the field with your
support and passion. With support and passion comes innovation and we stand to be as
innovative as they come when it comes to ride sharing in this area.
While this business may provide ups and downs in the coming years we feel that with
technology advancement and proper marketing our company and service could be looked at
as a stepping stone to further develop ride sharing programs across the nation. Giga Bike’s
affordability and adaptability are above any competitor in the market and can truly do great
things for many students both now and in the future.
References
<(n.d.). Retrieved November 18, 2014, from http://bikeshare.com/wp-
content/uploads/2013/03/ComparetheFareTable12-01.jpg>
<Lancaster, PA Economy at a Glance. (n.d.). Retrieved November 18, 2014, from
http://www.bls.gov/eag/eag.pa_lancaster_msa.htm>
<Fast Facts. (n.d.). Retrieved November 18, 2014, from
http://www.millersville.edu/about/fastfacts.php>
<Is Bicycle Commuting Really Catching On? And if So, Where? (n.d.). Retrieved November 18, 2014,
from http://www.citylab.com/commute/2011/09/substantial-increases-bike-ridership-across-
nation/161/>
<Millersville U. gets honorable mention for bicycle friendliness. (n.d.). Retrieved November 18, 2014,
from http://lancasteronline.com/news/local/millersville-u-gets-honorable-mention-for-bicycle-
friendliness/article_b89323a4-5966-11e4-894a-001a4bcf6878.html>
<Historical Inflation Rates: 1914-2014. (n.d.). Retrieved November 18, 2014, from
http://www.usinflationcalculator.com/inflation/historical -inflation-rates/>
Appendix
Figure 1- Comparison of Top Bike Sharing Companies in the USA.
Figure 2- Map of Millersville University (Proposed Locations in Blue)
Figure 3- Organizational Chart for True Lane Industries
Millersville
University Liaison Product Internet Services Human Resources
Product Engineer Creative & Art Systems Software Direct Purchasing
VP Sales VP MarketingVP Product
Development & ITCFO
DistributionInternet & Social
MediaNetwork Services Financial Advisory
GIGA BIKE
J. Edwards J. Light K. Sarkisian A. Thompson
Figure 4- Income Statement First Year of Operation
Net Sales See Calculations 95,550$
Operating Expenses Bikes 90 bikes @ $200 18,000$
CFM Rental 3 @ $3500/month 126,000$
CFM Installation 3 @ $3000 9,000$
Cricket Securities 90 @ $50 4,500$
Dero Fix-It Station 3 @ 800 2,400$
Securities Software Linked With Cricket 5,000$
Bike Racks 3 @ $500 1,500$
Insurance 50,000$
Depreciation 7,850$
Employee Salaries Deferred -$
Total Expenses 208,550$
Taxes (30%) From Net Sales 28,665$
After Tax Income 179,885$
Net Profit (84,335)$
Income Statement
Figure 5- Start up Costs 2015
Assets Inventory 31,400$
Cash 20,000$
Leasehold 126,000$
Insurance 50,000$
Subtotal 227,400$
Expenses Permits & Licenses 25$
Legal & Consulting 1,000$
Miscellaneous 1,000$
Subtotal 2,025$
Total Start Up Costs 229,425$
Financing Owner Investments 20,000$
External Investments 60,000$
Total Equity Financing 80,000$
Bank Loan 79,425$
Line of Credit 50,000$
Total Debt Financing 129,425$
Total Financing 209,425$
Projected Start Up Costs
2015
Figure 6- Projected First 3 Month of Operation
JanuaryFebruary March April
Starting Cash 20,000 15,000 10,000 5,000IN
SALES 0 0 0 0
0 0 0 0
OUT
0 0 0 0
0 0 0 0
655 655 655 655
5,000 5,000 5,000 5,000
5,655 5,655 5,655 5,655
14,345 9,345 4,345 (655)
Total In
Total Out
CASH BALANCE
OVERHEAD
CAPITAL EXPENSE
PAYROLL
PURCHASES
