Final Business Plan


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Final Business Plan

  1. 1. Page 1 of 31 Business Plan Owners: Sardar Wali, Nafees Zafar, Zohaib khan, Faisal Saeed, Adil Khan and Wasid Iqbal Business Name: “Stallion” Stallion Public Transport Company G.T. road near Daewoo bus terminal Peshawar N.W.F.P, Pakistan. City: Peshawar ZIP Code: 25000 UAN: 143-143-143 Telephone: 091-226……. Fax: 091-226……. E-Mail:
  2. 2. Page 2 of 31 I. Table of Contents I.Table of Contents............................................................................................................2 II.Executive Summary......................................................................................................3 III.General Description of Stallion..................................................................................5 IV.Services of Stallion.......................................................................................................8 V.Marketing Plan............................................................................................................10 VI.Operational Plan........................................................................................................22 VII.Management and Organization.............................................................................26 VIII.Financial Plan..........................................................................................................28
  3. 3. Page 3 of 31 II. Executive Summary Our transport company’s Brand name will be “Stallion”. Our industry is public transport industry of Peshawar. Purpose of Entrance into this market is based on following factors 1. Passengers needs transition 2. Problems faced by them from traditional transportation. 3. Effective Entrance strategies based on proper research and planning. Our Legal form of ownership is based on limited partnership which will be registered with Security and Exchange Commission of Pakistan, and Provincial Transportation Authority. There are total 7 partners in this limited partnership and profit and loss sharing will be Investment based. The Silent partner will be SMEDA. The Industry of Public transport in Peshawar has 5 major types of vehicles’ in which middle and lowered income class population used to travel who will be competitors of Stallion as well: 1. Buses 2. Wagons 3. Mercedes Benz 4. Taxis’ 5. Suzuki Total number of wagons in Peshawar is 205, and total number of buses and Benz in Peshawar are 700 (source: Traffic Police Dept Peshawar) which are expected to grow in the near future. History of Public Transport Industry: 1. Has never seen recession even in an inflation days, infact its demand is growing day by day. 2. Very minor investment is made by Govt and private investors 3. Sole proprietors are the only investors 4. Sole proprietors just only purchase vehicles, takes permission certificate and use them for passengers’ movement services. Problems in Public transport faced by Peshawar population are discussed as follows: 1. Old vehicles 2. Over Loading 3. No care for passengers’ times 4. High fares 5. Woman’s Problems 6. Students Problems 7. Uneducated conductors and staff 8. Drivers and conductors use abusive language in front of females and other passenger 9. No knowledge of Traffic rules and regulations except few basic rules. 10. Drug addicted drivers and conductors 11. dangerous driving sometimes 12. No proper seating for senior citizen and disabled people of Peshawar. 13. Dirty environment 14. Security problems
  4. 4. Page 4 of 31 Target market of Stallion is middle and middle lower income class population of Peshawar, who in large number utilizes local transport vehicles. The survey which we conducted through cross questioning and questionnaires shows that this segment of Peshawar’s is indeed in search of good alternative for their transportation in Peshawar. Marketing Mix for Stallion includes Product, Placement, Price and Promotion. Product/Services (8 Hiace) of Stallion is to provide Public Transportation through Toyota Hiace only inside Peshawar currently from GT road to Hayatabad Phase-7. Price of Stallion will be Rs.8/stop. Placement of Stallion will be based on terminals and bus stops. Promotional mix for Stallion will be consists of advertising, sales promotion, Public Relation, and collateral materials. Our marketing strategy will be based on differentiation principal. Operational Plan will discuss the operational activities of Stallion. Our services will initially start from Peshawar. As number of seat’s in modern vans are more in comparison to traditional transport vehicles, so Stallions will have more passengers to earn more revenues. We will have special team for quality control which will work controlling the quality of our services. Business hours will start from 7:00 till 9:00 pm. At the start Stallion will have 25 employees which will include Drivers, conductors, sweepers, and care takers of vans, Van mechanics, ticket counter organizers at bus terminals, security guards. Stallion’s main Suppliers will include Total Oil marketing Company Pvt. Ltd Peshawar and Toyota Frontier. A contract will be made with total petroleum Peshawar and they will provide our vans cng and other oils. The amount will be paid to them at the end of each month. As the vans will also be on lease so monthly based installments will be given to the supplier of the vans which will depend upon the contract made with them. The structure of Stallion will be flat. Drivers, Conductors and Transport consultant will be the full time employees of the Stallion and personnel may be hired on contract basis or permanently if need arises. Stallion Management team will be run by its founders, and who bring a wealth of skills and experience in the public transport market and will help organization to run business smoothly. We will be availing expertise in 2 fields, generally HR and Finance In each of the department Stallion which will be having 2 experts one will be designated as manager and other as associate managers. In financial plan we calculated the forecasted sales of services for the 1st year and as well we made forecasted financial statements for the 1st year. In breakeven calculation we found that Stallion will equalize its revenues and initial cost in one and half period of time.
  5. 5. Page 5 of 31 III. General Description of Stallion We are entering into the public transport industry of Peshawar, with the brand name “Stallion” which will be the first ever and completely new concept in Pakistani public transport market which inside its major metropolitan cities. The main purpose of entering into this market is based on passengers needs inside Peshawar city which are very high. Traditional transportation vehicles are just unable to meet these needs because their services are not of their needs caliber. So we as professionals’ will enter into this market with effective strategies which will be based on proper research and planning techniques and will work at our level best that we can full fill the growing traveling needs of the people of Peshawar through such services which can directly cater their satisfaction. Mission Statement: Stallion’s mission statement is: “To increase the use of public transport, through partnership, to improve the economic, environmental and social well-being of Peshawar, to provide safe, courteous services to meet the needs of the people of Peshawar. We shall accomplish these high standard goals through the active participation of the organization's most important resource, our employee team members and partner-suppliers”. Stallion’s Goals and Objectives: Goals Have a healthy, successful company that is a leader in passenger’s service inside Peshawar and that have a loyal and satisfied customer following. Objectives: a. Improve- the performance of newly born business. b. Grow- our core business activities into new geographies to various metropolitan cities of Pakistan with the passage of time. c. Expand - into complementary services based on innovation and needs of the market. d. Passengers - to provide professional service of the highest standard, and one that meets all the passenger requirements with regard to costs, duration and security. e. Community- to meet the needs and aspirations of the people of Peshawar and to provide employment opportunities, which contribute towards the overall benefit of Peshawar and Pakistan. f. Environment - to design and manage Stallion in such a manner as to minimize any pollution, harm to the environment, or ecological disturbance; furthermore, to strictly follow to the regulations of relevant authorities. g. Staff- To maintain a well qualified and efficient staff complement through the provision of good attractive salary packages, pleasant working conditions, recognition, excellent resources, efficient leadership. Business Philosophy:
  6. 6. Page 6 of 31 Our philosophy is to provide a framework for our employees, striving to create value for all our:  Passengers  Suppliers  Employees  The communities and environment in which we operate.  We want to enter into this market just to benefit the middle and lower middle class of Peshawar. Public Transport industry description: District Peshawar is the provincial capital of the North West Frontier Province (NWFP) and is also the largest city in the Province. . The current population is 2.242 million, excluding Afghan population, which is approximately 0.4 million. The city is spread over an area of 1.257 Sq kilo meters. The main population demographics of Peshawar are following:  Male: 1,061,000  Female: 958,000  Male/Female: 1.1:1  Urban Population: 48.68 %  Rural Population: 51.32%  Annual growth rate: 3.56 All these demographics given above are higher than the average of many other Pakistani cities, which shows that Peshawar is high potential market to invest in. With higher population growth the public transport utility is getting higher day by day, which shows that public transport sector needs to be manipulated by investors. In the city, there are all sorts of methods to travel around the city, from coaches, buses, rickshaws (Auto rickshaws), yellow and black taxis as well as traditional methods such as horse and carts. As the public transport consumption is growing day by day, many potential entrants have an eye on the market like Daewoo, CNG bus services, Transit system etc. So highly technological and big investment changes are expected in the nearest future but still biggest threat for them to invest here is unstable law and order situation. People are not comfortable with the services of various transport vehicles circulating inside Peshawar due to which people are expecting any efficient alternative which can give them value for their money, so this expectation of them is a biggest opportunity to cater. Core Competencies of Stallion: Stallion as a professional company will provide effective services through proper research and planning. Our management, employees will make such strategies which will directly satisfy our customer needs and wants through proper fare packages, clean environment, educated staff etc. Our competitors are not consumer conscious, they only give importance to money not their customers, so as professional company, our strength and core competency will be just to look our self in the eyes of passenger’s needs and their satisfaction criteria’s.
  7. 7. Page 7 of 31 Our this major core competency will give us a bang if the people of Peshawar got satisfied from our services in comparison to other traditional transport methodologies inside Peshawar. Legal form of ownership: Our legal form of ownership will be limited Partnership. We are almost 7 partners and our profit will be shared according to the investment made by each partner. Partners’ names and investment percentage are given below:  SMEDA (60%)  Wasid (6.6%)  Sardar (6.6%)  Fiasal (6.6%)  Zohaib (6.6%)  Adil (6.6%)  Nafees (6.6%)
  8. 8. Page 8 of 31 IV. Services of Stallion The important factor in Stallion’s services will include 1. Bus Showcase Schemes: Bus Showcase Schemes will aim to improve reliability, journey times and passenger experience. These initiatives include own clean (Tier One Bus Stop Concept, Tier Two Bus Stop Concept, Tier Three Bus Stop Concept) bus stops and information along a bus route together with traffic priority measures provided by the traffic police department of Peshawar. Much of the support infrastructure for bus services will be owned, operated and maintained by Stallion. This includes bus stop, bus stations and passenger information (fare brochures, bus arrival and bus departure information, feedback cards etc). 2. Bus Staff: Stallion will provide newer, accessible vehicles and customer-care trained drivers. Transporter will work hard to bring easy to use public transport system with up to date information. It will clearly identify the complete network of bus, and van services that are easily accessible to most people inside Peshawar. 4. Bus/Vans Stops: Stallion’s logo and signs will be designed on all bus stops, bus stations. Wherever bus stops and stations exist, there will be far better information to make use of Stallion’s buses and vans easily. The aim of Stallion is to work towards creating a smoother, safer, more efficient and user- friendly public transport system inside Peshawar. 3. Real Time Information Stallion’s brand will also include Real Time Information on bus, van showing exactly when the next services will arrive. This includes displays at stops and stations. We also have a program to provide up to date bus times being available on mobile phones via text message and WAP after Transporter gets its operations established inside Peshawar. Types of Fares: 1. Subsidized Fares Stallion will provide people over the age of 60 and eligible blind and disabled people a concessionary travel prices inside Peshawar. 2. Subsidized two days fares package for students: Stallion will give half fares for all young people under 16, and those aged 16-24 in full time education for just two days in a week (Friday and Saturday). 3. Integrated ticketing
  9. 9. Page 9 of 31 Stallion have this plan after its success in the market and launch of bus service along with van is to provide such tickets (e.g. Sbus, Svan) to passengers in future which will allow them to easily travel in both the modes of Stallion’s vehicles i.e. van and bus. So it will save the time of passengers not to purchase tickets separately for van and bus. 4. Traffic police rules and regulation: Our venture will work according to the rules and regulation given by traffic police department of Peshawar and local city government. Our bus stops will be established according to the given criteria by both of these departments. So that we can be seen as a role model for other traditional transport vehicles in Peshawar and we can fulfill our corporate social responsibility by following the law. Stallion’s terminals, passenger stops:  We will operate two bus terminals in Peshawar which are G.T. road and phase 7 terminals.  passenger stops will be following:  Gulbahar, Neshtar abad, Hashthnagri, Firdus, station, sadar, Arbab road, Abdara Road,Peshawar Uni, Board, Hayatabad-3,2,1,5,6, Stallion’s competitive advantage and disadvantage:  Own bus stops which are legally accepted.  Proper timings  Clean environment  No overloading  Educated staff  Professional management  Ladies seats  Security system  Own mechanics for vehicles repairing Disadvantage:  high fares  Less educated passenger.  No pick or drop without Stallion’s own stops
  10. 10. Page 10 of 31 V. Marketing Plan Marketing plan is “written statement of marketing objectives, strategies, and activities to be followed in business plan.” Normally the duration of the marketing plan after its implementation is 1 to 5 years but still marketing plan changes with passage of time. This marketing plan is about Public Transport Company’s opening in Peshawar. Our public transport company will be the first ever and completely new concept in Pakistan, so to give it a bang we need proper marketing research and implementation system. The aim of this plan is to elaborate our information about the potential market of public transport company and then adopt such an effective strategies through the help of which we can gain major market and exploit our target market through strong approach. To exploit the opportunities we have different promotional tools in marketing through the help of which we can inform our target market and gain their attention towards us. These marketing tools include both ways of Above the Line (ATL), Below the Line (BTL) advertising techniques. A. The Industry: 1. Definition of industry: People who want to move from one place to other place domestically inside Peshawar use many types of movement vehicles like some of them have their own personal cars and some moves in public transport vehicles, but our major industry is not to deal with personal cars of people, we want to provide quality services inside to those people who are not satisfied from public transport in Peshawar. So our industry is public transportation industry of Peshawar. There are 5 major types of vehicles’ in which middle and lowered income class population used to travel, and they are named as following: 1. Buses 2. Wagons 3. Mercedes Benz 4. Taxis’ 5. Suzuki 2. History of Public Transport Industry: Public Transport industry is the only industry in Peshawar since its startup concept which has never seen recession, infact its demand is growing day by day. Since 1999 Peshawar has placed people from different areas of N.W.F.P in itself because it is the only metropolitan city of N.W.F.P. Every facility of life for people is present in Peshawar, so to get advantage of them many people have migrated towards Peshawar and with the passage of time Peshawar’s population has moved very drastically to 2.242 million, in which almost 80% of people belongs to middle and lower income class. So most of them when go for offices,
  11. 11. Page 11 of 31 shopping, and other activities of daily during the day and night times use public transport due to which the demand for public transport is getting more day by day. Still with greater demand transport vehicle’s numbers is also inclining day by day, but still there are very less relax and comfortable services for people. Very minor investment from govt and other major privately own companies have been made in this sector and the only type of investment is made by sole proprietors. Sole proprietors just only purchase vehicles and than bring it to the market, gets permission certificate from the traffic police dept and than brings their vehicle to Ada for passengers’ movement services. Buses Growth Numbers Buses Growth numbers Years Number of Buses 2004 440 2005 520 2006 590 2007-08 665 Problems in the Traditional Transport Service in Peshawar: Local transport in Peshawar has many prior problems which people of Peshawar want to be solved by government. These problems are discussed as follows: 1. Old vehicles The vehicles which are used by local transporters are very old. Their internal environment, seating and physical look are very much out dated. Even still these transporters are using buses; wagons and Benz of 1980’s models which are both dangerous for environment and people of Peshawar as well. 2. Over Loading: All the transport methodologies inside Peshawar do overloading with out any fear. If the capacity of vehicle is to accommodate only 15 people, and they get 15 people in it even still they will try to get passengers as much as they can accommodate in the vehicle. They get these passengers at the cost of other passengers psychological and time factors. But people don’t have any other proper alternative due to which they are only limited to travel in these vehicles.
  12. 12. Page 12 of 31 3. High fares: Local transporters’ charges high fares in comparison to the problems local people are facing from them. Recently with rise in prices of petroleum products, the Sarhad Transport Owners Association announced to increase 11 per cent of public transport fares. So the fares got increased from Rs.6 per passenger per stop to Rs.8. But still in the month of December Federal Government Ministry of petroleum and energy had again revised the oil prices and almost the oil prices were declined almost 5 to 7 rupees but still the local transporters’ are not going to change the fare rates. People due to which are showing concern about the government ignorant behavior. These high prices have mostly affected the students’ community of Peshawar. 4. Students Problems: Large numbers of government school students are facing the problem of non-availability of proper transport service in Peshawar. Not only is the problem aggravating with time but is also causing disturbance in the peace and safety of the city’s environment. Thousands of students, mostly from the suburbs of Peshawar, lack educational facilities in their localities and hence they have to travel to Peshawar for schooling. Most of these students travel by public transport, especially buses and wagons. Due to limited space in buses and wagons, many students have to mount the roof of the vehicle which carries them, risking their safety to accidents. A number of cases have been reported in which students fell off the vehicles, getting injuries and, some of them, even losing their lives. In a recent incident, a 9th class
  13. 13. Page 13 of 31 student named Kamran was killed by being run over by a bus. Many school students, traveling in buses, also frequently engage in scuffles with the conductors of the vehicle, usually in a dispute over the issue of paying half fare than that collected from other passengers. Many a time, students flare up on being asked for paying the fare and they damage the vehicle, breaking its windscreen and window panes. Traffic police usually does not take any effective measures to resolve these issues. There is a great need for government transportation for school students who have to travel to Peshawar for education. Formerly, the government maintained the GTS service for carrying school students to and from their schools. Now that service has been discontinued by the government and no alternative provided. Due to poverty, these students cannot afford to travel in taxis or rikshaws. Traveling by public transport is a compulsion and it remains a major daily-life problem for students as well as drivers and conductors of vehicles. 5. Woman’s suffers a great deal in the local transport. Although the N.W.F.P government have finalized arrangements for a bus service to be run exclusively for women in Peshawar last month. According to Peshawar District Nazim, Haji Ghulam Ali, women and female students will benefit from the service. These buses will be exempted from all kinds of taxes and separate bus stands will also be built for women. Additionally, the transporters will be provided special packages and services. As per reports published in the local media the arrangements including purchase of new buses have been finalized. It is a common observation that these working women and female students suffer a great deal while commuting. Under the given circumstances, introduction of women-only buses can provide them relief. But still as citizen of Peshawar we didn’t watched any separate buses for females. 6. Few other basic problems are following: a. Uneducated conductors and staff b. Use of abusive language in front of females and other passenger by the drivers and conductors c. No knowledge of Traffic rules and regulations except few basic rules. d. Drug addicted drivers and conductors e. Some time very dangerous driving while playing with the people’s life and own life as well f. No proper seating for senior citizen and disabled people of Peshawar. g. Dirty environment h. Security problems B. Competitors: Competitors’ analysis gives the firm opportunity to identify its major competitors in the market in which they are entering and see their strengths and weaknesses, so that it can find ways which can help the firm to get benefit of its competitors and gain large number of customers from the potential market. Competitors can be effectively studied through proper research methodologies.
  14. 14. Page 14 of 31 Stallion as a new entrant into the public transportation market, so it will face severe competition from different competitors which are already operating in this market. There are two types of competitors that Stallion will compete in the market. a) Indirect competitors: 1. Taxi 2. Rickshaws b) Direct competitors: 1. Buses 2. Wagons 3. Mercedes Benz Every morning, whole day and till late night (11:30 pm) people travels in them. At Morning time thousands of people comes to Peshawar from different neighboring areas for work as well as Peshawar’s own population also goes for offices, schools, colleges, universities and work places and some of them goes to Afghanistan and other cities of Pakistan, so every one to reach their destiny on time utilize all of the above sources of transportation. Total number of wagons in Peshawar is 205, while total number of buses and wagons in Peshawar are 665 (source: Traffic Police Dept Peshawar) which are expected to grow in the near future. Profits for all of them are very good because of large demand rate but their major threats are traffic police rules violations penalties which ranges from Rs.250 to Rs.600/violation. Every day according to them they gets charged by traffic police due to wrong stop for pick or drop of passengers and it is happening with them because of their own ignorance from traffic rules and regulations. Profits: Profits in public transport industry are very good due to high demand. But local transporters due to their unawareness about proper planning and traffic rules regulations are not able to get benefit out of this demand. Most of the time they gets charged by overloading, illegal pick or drop of passengers, which distributes their profits and they than abuse traffic police while not aware of what was the actual reason of charging. To overcome such loss then they use illegitimate ways and take extra charges from a passenger which is totally unfair with passenger rights. Profits on average of competitors’ are shown in the following table: Average Profits Years Number of Buses 2004 Rs.3000/ day 2005 Rs.3400/day 2006 Rs.4200/day
  15. 15. Page 15 of 31 2007-08 Rs.4800/day Routs Details: Routs details includes the traveling roads information of different transportation services inside Peshawar. Routs Of Competitors Buses Wagons Benzes G.T. road to Karkhano G.T. road to GT road To Karkhano Market(4) Mkt Phase-7 GT road To Hayatabad Phase-6(A-1) Ring Road, Charsada road To Hayatabad Ph-6(6- B) Kohat road To Karkhano Market (3) GT road to phase 7(2) Market Share: Market share of the competitors was not present in any report or secondary data source but we decided the weight age of different transport vehicles from the survey which we conducted from local transporters about per day profit, # of trips and, and # of passengers traveling per day in their vehicles. Vehicles # of trips per day Average # of passengers travels per day Buses 4 (both sides) 800 Benz 6(both sides) 700 Wagons 5-7(both sides) 500
  16. 16. Page 16 of 31 Vehicles %age share Buses 38% Benz 27% Wagons 25% Taxi 10% Market share Buses Benz Wagons Taxi 10% 38% 25% 27% As the above statistical data shows that buses are the market leaders and wagons and Benz are the followers, so we from the initial of our business will be trying to catch the market share of wagons and buses by providing effective passenger services and using different marketing strategies to beat them. Our scratch market share goal will be to at least to gain 5% to 7% share in the first 5 months of our operations startup. Current demand in target market: Target market is one of the most important factors to be considered by any business while going to launch any new product or service. Stallion’s target market is mostly the middle and middle lower income class population of Peshawar, who in large number utilizes local transport vehicles. The survey which we conducted through cross questioning and questionnaires shows that this segment of Peshawar’s is indeed in search of good alternative for their transportation in Peshawar. Trends in target market: With the passage of time the many people from different areas of N.W.F.P wants to get good education and develop their own businesses, so to do all these activities they migrates towards Peshawar because it is the only metropolitan city of N.W.F.P. When
  17. 17. Page 17 of 31 ever Peshawar adjusts new family on its land, its population gets higher, which eventually gives birth to utilize the different facilities of Peshawar city and transport is one of them. So with the growth of population usage of public transport is growing day by day. People of Peshawar are also getting educated and they now as knowledgeable citizen want some transportation facilities which are of international standards, due to which educational background is also playing major role in their need creation. In 21st century every citizen of Peshawar wants self respect, value for money, modern transportation and security with good behavior and environment, so obviously all of these trends in the target market counts while developing any strategy for a business. But unfortunately due to illiterate transporters all these trends were not unfolded by them which is a greater opportunity for Stallion to cater. Barriers for Stallion in the entrance of public Transport Market: Some typical barriers are: o High capital costs required to invest in public transport o High Service costs due to inflation in the economy o High marketing costs o Less Secondary Data Availability o Consumer acceptance and brand recognition is difficult to create because of less educated people in the society of Peshawar. o Trained and skilled labor for public transport is very less in Peshawar. o New Technology’s in transportation sector are just zero in Peshawar. o Slow governmental processes for registration of company and also getting patent rights from SEC. Marketing Mix Product/Services of Stallion: Product is a set of tangible and attributes, which may include packaging, color, price, quality and brand, plus the seller services and reputation. (Stanton, 2001, P-215). Stallion is public transport company will provide Van services to the people of Peshawar at the start from the start. These services will be the same services which are provided by the already existed local transporters’ in Peshawar but the major and unique selling proposition for stallion will be that it will have new and quite comfortable vans. We will start our business from 4 Hiace of Toyota Frontier and with the passage of time as we feel that our vans demand is getting higher, we will than expand our hiace numbers and as well as within 1 and half year we will work to introduce
  18. 18. Page 18 of 31 bus service as well. Our vans will leave for trips according to the given time table decided by management based on the passenger needs and demand. Features and Benefits Services Features: • Two Stallion Vans/bus Terminal’s • Electronic Ticket system at the terminals • Own Bus stops (Tier One Bus Stop Concept, Tier Two Bus Stop Concept, Tier Three Bus Stop Concept) • Tickets Availability inside the van with conductor for the people who gets in to the bus from own bus stops • Audio Real Time Information by the vans conductors to the passengers inside vans through mice. • Complaint and suggestion boxes both inside the van and also on bus terminals Benefits of these services: • Comfort • Clean environment • Self respect • Good alternative for them to travel in • Value for their money • 1st International standard for them in Pakistan • Feel proud to travel in such standard transport service. • Security of respect, and assets Customers Stallion’s target market is those people of Peshawar which do not have their own personal vehicle and utilizes public transport to move for their works inside Peshawar. Peshawar’s almost 70% of population from city area travels in local transport for their offices, schools, universities, colleges and other works. So over major target will be this portion of Peshawar’s population. The availability of local transport for them is only on G.T. Road, so Stallion is public transport company will plan to cater those big stops of G.T. Road where they can find our Vans easily and can get in or get off confidently. There are different types of people who travel in public transport mostly due to which identification of specific target market is difficult. But Stallion as professional transport company will bring its services for the educated and middle income level and middle lower income people of Peshawar. It includes both genders (male, female). Demographic profile of Customers: • Age (16-60 years) • Gender(Male and Female) • Location(Peshawar) • Income level(Rs.7,000/month and more) • Social class and occupation(Students, Professionals etc)
  19. 19. Page 19 of 31 • Education(10th onward) • Self-respect, Status and comfort Conscious • Aware of International standards of transportation • Can pay high fares but wants value for their money which they pay Price and Placement: As there are large number competitors, so we cannot compete with them on fare rates. To do better Stallion will charge average prices and will compete on quality and services. Rs.6/stop is the fare rate which competitors are following but we will charge.8/stop to recover our extra services expenses. Stallion terminals (G.T road and HayatAbad). Initially 3 bus stops will be made (Hashtnagri, Warsak Road and Board) Promotion Promotion means informing, persuading and reminding current and potential customers. (Stanton, 2001, p-487). Promotional mix mostly consists advertising, sales promotion, Public Relation, and collateral materials. a. Advertising: Advertising is a paid non personal communication and mostly done on above the line and below the line medias. We will mostly utilize local news papers such as Ajj and express news page in ATL because they are more reachable to our target market. We will run over ad on daily basis till 1 and half week of the 1st month of our operations, so that we can create awareness about our brand and services. In BTL we will utilize billboard and collateral materials such as broachers and banners. Only 1 to 2 bill boards will be hired for just for the 1 month after the operations launch at the basic interchanges of Peshawar, so that we can reach maximum number of people of Peshawar if they miss news papers ads. b. Sales Promotion: It is a communication technique to offer special incentives motivate people to act right way. (Contemporary Advertising, William Arrens, P-24). In sales promotion technique we will offer half fare services for first 3 days since launch, so that we can study the people’s post purchase behavior and as well as to see that whether they will go for Word of Mouth (W-O- M) advertisement or not. c. Public Relations: Creating direct relationship with passengers or consumers through launching environmental pollution related campaigns etc. PR can be done any time after launch. As it
  20. 20. Page 20 of 31 is an expensive technique so we will utilize it when we reach to such point where we starts generating revenues. d. Collateral materials Broachers, posters, and van services information sheet all of them will be made and will be made available at the launching press conference at Peshawar press club. Promotional Budget Promotional Budget gives the way to allocate financial resources to all of the above Medias that we have selected for running the ad for Stallion. News Papers: Rs. 50,000/- Billboards: Rs.25, 000/- Collaterals: Rs. 25,000/- Market Niche: Stallion is a new entrant into the potential public transport market will have many factors to create a niche and beat its competitors. Those factors are described in the competitors’ analysis. Biggest niche which Stallion will easily create in Peshawar’s public transport market is that of bringing completely new concept of international standard in Pakistan for the 1st time. Own bus Terminals’, new vehicles, educated and trained staff, clean environment, Experienced public transport services consultant and own bus stops are major factors which are almost absent in all the competitors of Stallion. Marketing Strategy: We will market our services as solutions to that portion of population of Peshawar which wants modern public transportation facilities in Peshawar with fair price rates. Our marketing strategy will be based on differentiation principal. The overall marketing plan for services will be based on the following fundamentals:
  21. 21. Page 21 of 31 a. Overall - Stallion will provide transportation services to the local population of Peshawar in an attractive and clean local traveling atmosphere inside the vans, bus stops and terminals. The floors of terminals and bus stops will be red and blue colored to make it identified and differentiated. The sign boards on terminals and bus stops will be large enough to be read from the street, opposite side of the road and will be designed to promote the Stallion’s image. Comment cards will be available at terminals and vans. Suggestions for new or improved services will be appreciated and studied carefully by the quality control team, as well as feedback on drivers’, conductors, and vans maintenance will also be considered as an important variable to bring changes in Stallion services. Red and Blue uniform will also be given to driver and conductors as well. b. Tourists – Details information broachers will be distributed to the local restaurants in Peshawar to encourage their guests to travel in Stallion’s Vans or Buses. Advertisements will be placed on the menu cards of these restaurants, so that their guests can get information if they want to travel inside Peshawar. Broachers will also be placed at information booths. c. Other - Pricing will be a bit high in comparison to other competitors but the services provided by Stallion will be excellent. The Stallion will stand behind its customers, and if anyone is not satisfied of the transportation services, his problems will be discussed at the board of directors meeting and than necessary changes in services will be made if major portion of passengers are facing the same problem.
  22. 22. Page 22 of 31 VI. Operational Plan Operational Plan will explain the daily operation of Transporter’s, its location, vehicles, labor, and surrounding environment. Production of services: Our services are initially starting from Peshawar. Our basic services will be to provide traveling services to the people of Peshawar. Costs controlling techniques: We will control costs through fallowing ways: As number of seating’s in modern vans are more in comparison to traditional transport vehicles, so Stallions will have more passengers to earn more revenues. Quality control: We will have special team for quality control which will work under following criteria’s: • They will check the educational background of drivers and conductors • Their awareness about traffic rules and regulations • Driving methodologies to save the time of company as well as passengers (real time save) • They will see the customer feedback through feedback cards after traveling in Stallions. Customer service: • Comfortable seating • Toilets facilities on each bus terminal • Clean and friendly environment • Security • Real time displays • Concessionary fares • Time management(fixed timing b/w arrival and departures of vans/buses) • Help line and complaint lines • Bus stop and Traffic rules information broachers Product development • We will have 4 vans from the initial but with the passage of time and demand increase we will bring more vans • Arranging TV system • We will bring buses if we feel the demand is growing in the nearest future. • Electronic displays • Separate vans for female Location We will choose such locations for our terminals and bus stops which following qualities:
  23. 23. Page 23 of 31 • Easily accessible • Large parking space for vans and buses. • All basic facilities Our bus terminals will be on those two basic places: 1. G.T. Road Stallions terminal 2. HayatAbad phase-7 Stallions Terminal Physical requirements: • 40x 272 square feet • 10 x 272 square feet (2 story building) • Terminal’s Buildings and parking area will be hired on rent. • Electricity, phone etc. Cost: This shows the total initial investment or cost required to start a business. Following table shows the total investment in the start up business of Stallion. Total Investment Table Types of Investment Cost Total Investment Rs.9.68 million Van Investment(8 Vans) Rs. 8.8 Million (a) Down Payment(20%) Rs. 1.76 Million (b) Installment/month(Rs. 30,000) Rs.2,40000/- Mobile Van Investment Rs. 40,0000 Permit Charges/Van Rs. 4,80000/- Building Hiring Rs.4,80000/- (a) G.T. road terminal Rs.3,90000/- (b) Hayatabad Terminal Rs. 90,000/- Initial Investment Rs. 31,20000/- Business hours: Business hours will start from 7:00 to 9:00 pm Legal Environment Licensing is issued under following authorities: • Rule 134 and 164 of traffic police department of Peshawar • Partnership is legally done under Security Exchange Commission of Pakistan • Peshawar Chamber of commerce • Affiliated with Chartered Institute of Logistics & Transport, Peshawar Section.
  24. 24. Page 24 of 31 Personnel • 25 employees • Drivers, conductors, sweepers, and care takers of vans, Van mechanics, ticket counter organizers at bus terminals, security guards • Through ads • Contractual employees at the start but with passage of time and based on performance we will give them promotion. • Wages will be given weekly based and also on number of trips per week • Training about speed, and traffic rules regulations will be given for one month through the help of traffic police authorities and local driving schools. • Schedules of duty and trips time table will be given to the drivers and conductors at the start of every week. Suppliers Oil and CNG suppliers: • Total filling stations in Peshawar • Petrol and CNG for Stallions Vans and buses • Credit and delivery policies Weekly based payment will be given to Total Peshawar. Maintenance and Car washing: • Own workshop and mechanics at both the terminals • Mobile workshop for vans • Mechanic will be hired on contract • Own car washing places at both the terminals Vans and Buses Suppliers: • Toyota Frontier Management of Stallion’s Accounts Payable: A contract will be made with Total Oil Marketing Company Peshawar Pakistan and they will provide our vans cng and other oils. The amount will be paid to them at 15th of the month and also at the end of the month. As the vans will also be on lease so monthly based installments will be given to the supplier of the vans which will depend upon the contract made with them. A payables aging for Stallion are shown in the following table:
  25. 25. Page 25 of 31 Accounts Total Current 15 Days 30 Days Payable Aging Total Petroleum 100% 50% 25% 25^% Toyota 100% 10% 15% 15% Installments
  26. 26. Page 26 of 31 VII. Management and Organization Organization Structure The structure of Stallion will be flat. Drivers, Conductors and Transport consultant will be the full time employees of the Stallion and personnel may be hired on contract basis or permanently if need arises. These steps will help the partnership management team to plan effectively initially and reduces the administrative expenses of Stallions. Management Summary Stallion Management team will be run by its founders, and who bring a wealth of skills and experience in the public transport market and will help organization to run business smoothly. The educational background of management team will be preferred at the time of management selection. We will be availing expertise in 2 fields, generally HR and Finance. In each of the department Stallion which will be having 2 experts one will be designated as manager and other as associate managers. Human Resource/Management Department The key job of the HR department will be; • Manage employee friendly relation. • To employ the best people available for the designated jobs. • To plot the sufficient numbe5r of employees for every specific job. • To use human resource more efficiently by forming different check and balance system. • Managing and arranging the best available suppliers. • Keeping a quality check Finance Department: Key responsibilities of this department will be; • Identifying financial resources. • Raising financial resources. • Managing day to day transactions of the company. • To increase efficiency of finance. • Attracting potential investors. • Keeping check and balance on profits and expenses of organization. The key job of finance department will be allocating funds fro different projects according to their feasibility after holding meetings among the managers of the 3 departments and other discussion sessions. Organization structure
  27. 27. Page 27 of 31 General Manager Financial Department Sardar Wali Zohaib Khan HR-Department Adil Khan Wasid Operating Personnel 1. Ticket Cashier 2 2. Conductor 8 3. Driver 8 4. Guard 2 Attorney: • Barrister Faisal Khan Mentor: • Mr. Zafar Ullah (father of Nafees Zafar)
  28. 28. Page 28 of 31 VIII. Financial Plan 12-Month Profit and Loss Projection Forecasted Sales figure: The forecasted sale is based on the industry profits trends in Peshawar. The basic figure of competitors per day for each of the vehicle on average is almost Rs.2, 500/day. So we from the initials set the goal to earn Rs.1, 200/day by each van. The table given below shows forecasted sales figure per day, month and annual. Forecasted Sales figure 3,456,000 Vehicles per day sale Monthly Sales(30 days) 2009 Van1 1200 36,000 432000 Van2 1200 36,000 432000 Van3 1200 36,000 432000 Van4 1200 36,000 432000 Van5 1200 36,000 432000 Van6 1200 36,000 432000 Van7 1200 36,000 432000 Van8 1200 36,000 432000 345600 Total 9600 288,000 0 Profit and Loss
  29. 29. Page 29 of 31 Sales Rs .921,6000 Less: Cost of Sales Rs.115,200 Total Cost of Sales Rs.25100 Gross profit Rs.907,5700 Expenses: Sales and Marketing and Other Rs.11,8000 Expenses Depreciation Rs.146,6666 Rs.6283008 Fuel & Maintenance Other Rs. 540000 Rent Rs.120000 Utilities -- Total Operating Expenses Rs.8527674 Profit Before Interest and Taxes Rs.548026 Projected Cash Flow Pro Forma Cash Flow 2008 Cash from Operational Activities: Account Payable RS.17,60000 Net cash from Operating Rs.17, 60000. Activities: Financial Activities Bought Vans Rs.88,00000 Long Term Liabilities Rs.70,40000 Net cash from Financial Rs.15876000 Activities Investment Activities Rs.0 Total cash Balance (Rs.1411600)
  30. 30. Page 30 of 31 Opening Day Balance Sheet Assets Current Assets 2008 Cash Rs.400,000 Equipment Purchased Rs.5000 Total Current Assets Rs.405,000 Long-term Assets Long-term Assets Rs.88,00000 Accumulated Depreciation Rs.146,6666 Total Long-term Assets Rs.7333334 Total Assets Rs.15,071,668 Liabilities and Capital 2008 Current Liabilities Accounts Payable Rs. 831,668 Long-term Liabilities Rs. 70,40000 Notes payable Rs 3,600,000 Total Liabilities Rs. 88,00000 Owner Equity: Rs. 3,600,000 Total Rs.15,071,668 Break-Even Analysis A break-even analysis predicts the sales volume, at a given price, required to recover total costs. In other words, it’s the sales level that is the dividing line between operating at a loss and operating at a profit. Expressed as a formula, break-even is:
  31. 31. Page 31 of 31 Break-Even Sales = Fixed Costs 1- Variable Costs The break-even chart and table below indicate that 12 runs per month are necessary for the company to make enough to cover monthly expenses. Break-even Analysis Break-even Analysis: Fixed Cost: Rs. 540000 Rent Rs.1362000 Salaries Rs.2880,000 Installments Rs.4782000 Total Fixed Cost: Variable Cost: Utilities: Rs.120000 Fuel Expenses: Rs.115200 Maintenance Expense: Rs.25100 Office Expenses Rs.18000 Advertising Rs.100000 Rs.378300 Total Variable Cost: Break-Even Sales Rs.12.64