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Business Proposal ppt on a Motor Cycle based Adventure Company

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Business Proposal ppt on a Motor Cycle based Adventure Company by students of Era Business School, New Delhi (PGDM 12-14 batch)

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Business Proposal ppt on a Motor Cycle based Adventure Company

  1. 1. Era Business School, New Delhi AJ; Ajay K Raina1
  2. 2. McG McG Part 1 - Executive Summary
  3. 3. Executive Summary…. • McGypsies India Pvt Ltd (McG) offers off beat motorcycle based travel services. • Our clients are those who dare to be different. • Motorcycle (MC) based travel is fast catching up in India even though we are way behind the West. • Many companies have started offering MC rides but no one has yet ventured into hard-core off-roading.
  4. 4. ….Executive Summary…. • Our strategy revolves around exploring uncharted areas and offer unusual experience to our clients. • Company owned MCs and a unique ‘Participative Concept’. • The management made up of three MC enthusiasts with a plethora of experience in the field. • The capital requirement to the tune of 01.10 Crore.
  5. 5. …..Executive Summary • Qualitative method used for forecasting: lack of figures as well as accurate precedence. • Conservative estimates used for calculations. • Scope for expansion after two or three years. • Break Even expected by 6th or 10th year depending on the expansion plans and model.
  6. 6. Part 2 – Business Plan Sub Part - Industry
  7. 7. The Industry : An Overview… • Size of Indian travel industry - $ US 20 Billion. • Likely to grow @ 2.0% to 2.5% of GDP (1900=47) by 2018. • Size of Indian MC travel industry – approx 0.7%. • Major players – Aboriginal (Ind MC Tours), Ind Backpack MC, 60 KPH, Royal Bike Riders, Blazing Trails, Extreme Bike Tours, Vintage Rides and so on.
  8. 8. …The Industry : An Overview… • Sectorial Focus : Ladakh, Goa, Rajasthan. • Packaging : Pure rentals to variety of package(s) (MC+ Accommodation+ Guidance + Backup cover). • Issues:– Great Indian Jugaad : Rented bikes. – No niche-specific outlook. – Unscientific conduct. – Lack of personal touch.
  9. 9. …The Industry : An Overview… • Trends :– International Footfall in India • Improved infrastructure is a magnet; • Now at less than 0.6%, aspiring to hit 1.0% soon. – National : Changing Trends • • • • Youngest country; Higher disposable income; Gen## looking to be different; Quest for unseen beyond media.
  10. 10. ….The Industry : An Overview • Growth Curve:– No confirmed data; street operators; lack of regulations. – Indians tend to mix n match. – @ 0.7% = $ US 14 Million. – On ground data, eg 30,000 (2013) v/s 1000 (2008) = @ 100%. – Even@ 20% = healthy LT growth prospect.
  11. 11. Position in Industry… • Our Services:– MC + Backup. – Participative Accommodation & Food. – Guidance. – Permit handling. – Thematic travel – photo-tours/ Lakes of Ladakh/ Camel Fair/ Rural Olympics/ Elephants of India/ Majestic Tigers/ Holi Chaos/ Sacred Rivers/ Hornbill Kick/Haunted Spaces/ Kite Fiesta/ Dandiya Special……..!
  12. 12. …..Position in Industry… • Our USP:– Company owned fleet. – Participative – big family feel. – High degree of customisation on demand. – Knowledge bank – terrain/customs/relationships.
  13. 13. …..Position in Industry… • Barriers to Entry – very low. • Competitors – As mentioned; however, nil as per niche. • Expected Market Share - @ 10% of overall MC travel market (T/O = $ 0.7 Million = ₹45 Lac); First Movers! • Niche market of enthusiasts : Foreigners, HNI, NRIs. • Relationship based reach into hinterland; need to preserve relationships with locals – difficult to replicate.
  14. 14. Part 2 – Business Plan (contd) Sub Part – Market & Competitive Analysis
  15. 15. Market Analysis…. • Target Segments:– Upper middle class and HNI. – Foreigners and domestic. – Age & Gender no bar; physical fitness would be the key. – Adventure seeking/ bored with rut/ very busy jobs/ urban centric/ informed class/ self-challengers.
  16. 16. ….Market Analysis…. • Market Size:– World travellers – Approx 01 Billion. – India’s share – 0.5 % = 05 Million (M:F = 66:34). – Percentage of young arrivals in India = 30% = 15 Lac. (UK, USA, Canada, France, Japan, Australia, Singapore, SL) – Size @ 0.5% = 7500 + domestic (follows). – 66% of Indians below 35 = 925 Million. – Total travellers =700 million.
  17. 17. ….Market Analysis…. – Youth component = 425 Million approx. – Conservative 0.5% = 2.1 million. – Mix n Match = 99.5% = 2.09 million. – Balance = 10,000. • Looking at = 7.5K+10K=17.5K or 17,000 Approx. • @10% = 1700 or 1500/year – Group size of 20 (average). – No of groups = 75 (details later).
  18. 18. Competitive Analysis…. • A mixed bag in the real sense:– Many in the field. – Commonality of services and reputation. – General market coverage. – No niche specialist except 60kph but area of operations narrow. • Possible to carve out a niche market. • Human relationship based local contacts- forte!
  19. 19. ….Competitive Analysis • Our niche:– HNI and foreigners looking for out of the rut experience. – Participative model that is unique. – Areas that have remained out of bounds to outsiders for decades. – Goodwill among locals; self contained and ecologically savvy.
  20. 20. Part 3 – Business Plan (contd) Sub Part – Marketing Plan/Strategy
  21. 21. Marketing Plan • USP – as mentioned. • Pricing Strategy. – The general trend - ₹ 4000-5000 per head per day. – The rough actual breakup:• Driving approx 100 Kms/day @ 25kmpl=4 litres@75=300. • Maintenance and depreciation costs (2000/month)= 100. • Food n accommodation (participative)= 500; Organised= 1000; average= 750. • Services including 12.5% tax = 700. (Total Say 1800) – Our Offer = 3500 per person per day.
  22. 22. Communications • Foundation exists:– IronButtsItchySoles. – Membership of BCMT; bhp; 60 Kph. – Word of mouth reputation in the environment. • Tie ups with Banjara Campers India on mutual benefit basis. • Own site, Page 3, Social sites, channel partners sites. • BBC Magazine, Discovery and TLC. • Travel fairs
  23. 23. Sales and Distribution • A combination of:– Direct; online. – Offshore contacts on commission basis. – Yatra, Travelmart, makemytrip, Govt Tourism Departments of concerned states, Airlines and so on as channel partners. – Competitive rates to suppliers; discounts to sponsors. – Corporate selling.
  24. 24. Services Offered • Travel experience based on motorcycles. • Guidance, consultations, handling of travel formalities. • Travel Café – place to meet and plan travel. • Camping, community living and participative trip. • Special thematic trips. • Customisation. • All inclusive canvas excluding only drinks and calls.
  25. 25. Part 4 – Business Plan (contd) Sub Part – Management Plan
  26. 26. Ownership • • • • Partnership – 3*33.33%. Debt model through bank/ pvt funding. Debt not to exceed 40% of capital outlay. Plans afoot to generate ST funding through attractive business proposal like pay today and earn vouchers for two or three years at half of the commercial costs.
  27. 27. Internal Management Structure • Broad Supervisory Roles:– Manoj – Sales, Marketing and communications. – AJ– Administration , HR & Finance. – Navdeep – Field operations, ground liaison, fleet management. • Initially, the management will follow ‘Lean & Thin’ profile with multi-tasking being the model. • Each department will have one/two assistants.
  28. 28. External Management Services • Professional Services to be hired:– CA, IT, Sales & Service Tax consultants. – Medical and Mechanical backup (on need basis). – Camp site / accommodation liaison personnel. • Advisory Services:– Retired professional(s). – Travel reporter(s).
  29. 29. HR Needs • Lean & Thin Mantra; on payroll:– Three partners. – Three Assistants. – Ministerial staff and helpers – 03. – Web Administrator. – Mutli-vehicle driver – 01. • All other needs would be met through outsourcing.
  30. 30. HRM • Initial model bound to expand as business grows. • At the trigger, a monthly outgo of ₹1.50 Lac on staff expected. • Partners @40K =120 (Total outgo of ₹ 2.70 Lac). • No training expenses visualised initially. • PF and Insurance costs + outsourcing= 30K. • Cost of HR to company = 3.0 Lac PM.
  31. 31. Part 5 – Operations Plan Sub Part - General
  32. 32. Location • NCR; Vasant Kunj (convenience and reputation). • Travel Café Mode:– – – – – – Self-service coffee machine. Free wi-fi. Travel library. Brochures and leaflets. Travel memorabilia. Lazy day attitude. • Informal office set up based on internet, few machines.
  33. 33. Inventory & Stocking • No major recurring expenses on inventory beyond maintenance. • One time Investments:– 20 MCs along with complete riding gear. – One Truck – hired v/s need to modify. – One SUV. – Camping equipment. – Climbing ropes, carabineers and safety equipment.
  34. 34. Capital & Expense • The Initial K, 01.10 Crore:– – – – – – – – – Office set up (including IT ware) – 05 Lacs. MCs and equipment – 25 Lacs. Vehicles – 25 Lacs. Camping equipment and misc – 05 Lacs. Leasing costs – 15 Lacs. Communications – 05 Lacs. Website – 10 Lacs. Misc (licenses, clearances etc) – 10 Lacs. Working Capital – 10 Lacs.
  35. 35. Running Monthly Expenses • • • • • • HR costs (first 24 months) – 3.0 Lacs. Maintenance of inventory – 10K. Café – 20K. Web and communications – 10K. Loan Service–50K (Initially, only Interest component) Misc – 10K • Total Per Month (approximately) – 4.0 Lacs.
  36. 36. As on Date • • • • • License and permits applied for. Member of IATA, ITTA, IBF, 60kph, BCMT. Loans applied for; detailed Business Plan submitted. Have been participating in seminars and meetings. A thorough networking with local populace as also the local administration in place through personal interactions and rapport built over years.
  37. 37. Risk-Identification • • • • • • • Natural calamities and weather. Terrorist activities and strikes. Reliance on foreigners; travel advisories. China factor. MoD issues. ‘Down Wala’ syndrome. Road accidents, health hazards and mishaps.
  38. 38. Risk Management • • • • • • • Indemnity bonds. Life and medical insurance. Weather and disaster mapping. Close liaison with MoD and troops. Respect for local traditions and sentiments. Employment to natives and meaningful CSR. Detailed briefings prior to and during the conduct.
  39. 39. Part 6 – Operations Plan (Contd) Sub Part – The Process of Delivery
  40. 40. General • A seasonal business, hedged through geographical expansion/coverage. • Season specific focus regions. • Day-to-day office : 08 hours. • Time zone free net based business interactions. • Six days a week; 24x7 otherwise. • Project approach towards geographical segments.
  41. 41. The Café: Layout 40 Ft Seating ENTRY Locker Room Loo Wall adorned with Travel Memorabilia and Collectibles Coffee & Cookies B o o k s Work Station & Records 20 Ft Wall adorned with Travel Memorabilia and Collectibles
  42. 42. Equipment
  43. 43. A Typical Calendar Year • • • • • • • April- May : Garhwal/Kumaon Region. June-August : Ladakh, Lahaul-Spiti. September: Himachal. October: Gujarat. Nov-Dec : Deserts, Northeast. Jan- Feb : Goa, Kerala. March : Break.
  44. 44. A Typical Month in Operations • • • • • Pre-trip Period (Reception, RV, Briefings) – 02 Days. Trip No 1 – 10 days on average. Post trip and pre-next trip – 05 Days. Trip No 2 – 10 Days. Reserve – 03 Days.
  45. 45. Revenue Generation • Eleven months operations (minimum); 22 trips (capacity utilisation = 22/75= 30% (realistic). • Each trip = 15-25 (average 20 persons). • Per trip expense (for 20 pax)=20x1800x10= 3,60,000. • Per trip(projected)revenue = 20x3500x10=7,00,000. • Total estimated profit (yr)= 3,40,000x22 = 75,00,000 approx.
  46. 46. Making Two Ends Meet • First Two Years:– Projected outflows @4.0Lac/month= 48 Lacs. – Projected Inflows = 75 Lacs. – Projected Savings = ₹ 27 Lacs/year. • Third Year Onwards, additional burden:– Expansion – coverage & services. – Principal component of loan. – Ageing fleet. • Break-Even expected – 06 years/ 10 years.
  47. 47. Some Loud Thinking • All estimation based on present pricing model. • 27 Lac annual return on 60 Lacs , esp on conservative estimates - not bad for beginners. • Debt service can be broadened from 2nd year. • Overseas expansion. • Going public at some point in future.
  48. 48. Our Dream…..How Realistic? Question Time!!
  49. 49. Thank You!

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