sample business plan - car hire

I-Drive Stoke Ltd.

Business Plan&

Cash Flow Projections

Prepared By Rosetta IT Solutions Ltd. Pagewww.rosetta-it.com

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http://www.rosetta-it.com/

I-Drive Stoke Ltd. – Car & Van Rental

CONTENTS

The Owner

Objectives

Market Research

Staff

Funding

Projections for the three accounting years to October 2006, 2007 and 2008, including:

- Highlights- Survival Ratio- Cash Flow Forecasts- Profit and Loss Forecasts- Balance Sheet Projection- Analyses of Operational Expenditure- Sales Analysis

Conclusion


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THE OWNER

The proposed venture is organised by Mr. Mark Smith who is at present the owner of the successful Property managed business “I-PROPERTIES LTD.”. With a substantial experience in the area of business management and a very well established client base Mr. Smith is ideally positioned to undertake this venture.

OBJECTIVES

Our aim is to provide a local Car and Van Rental Service in Stoke at a completive market rates. In addition to the core business of car rental we are also planning to provide Caravan Storage Facility. We believe that this service will be particular popular as it will provide caravan owners with a very cost effective (£15 pounds per week) and totally secure way of storing their caravans. As well as the above we are also planning to create the facility to store Damaged Vehicles. This facility can be used by individuals as well as other businesses. Finally we also will be offering a Damaged Vehicles Recovery service.

Based on such a diversified structure of the proposed business we believe that it will be a very stable and profitable venture.

MARKET RESEARCH

We envisage that the following points will be our keys to successfully establishing the new business: - Our large client database already includes many addresses of satisfied

customers from the Stoke area and beyond. Many of these customers have asked us when we will open a car rental

business. We have already established a partnership arrangement for the Damaged

Vehicle Storage facility with another local business. At present there are no available Caravan storage facilities available in the

local area. Based on our market research the prices for Car & Van rental are very

completive comparing to the competition.

I-Drive Stoke Ltd. – Car & Van RentalSTAFF

Mr. Smith will be managing this business directly eliminating the need for an additional managerial post. In addition to the manager two support staff will be employed to ensure that the business runs smoothly.

FUNDING


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In the initial setup process it is intended to purchase the following types of vehicles:

The estimated setup costs per the cash flow statement are summarised in the table below.

Item Cost(Incl. VAT)

Cost of Vehicles £65,650Legal fees £500Initial advertising £4,000Refurbishment £3,500Computers & Furniture £2,000CCTV & Security £1,500Car Insurance £2,100Road Tax £2,850Rent & Rate £2,500TOTAL £84,600Capital introducedby directors

£ 35,000

Bank loan £ 50,000


Vehicle Type Quantity Type of Purchase

Initial Cost (Incl. VAT)

Large Van 4 Finance Lease(Capital)

£8,400

Small Van 3 Finance Lease(Capital)

£5,250

Medium Car 4 Cash Purchase £24,000Large Car 4 Cash Purchase £28,000TOTAL £65,650

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I-Drive Stoke Ltd. – Car & Van RentalPROJECTIONS

The attached cash flow, profit and loss and balance sheet projections are based on the following assumptions and estimates: -

The business will have the capacity to rent out:

4 Medium Cars - at the rate of £35 per day

4 Large Cars - at the rate of £50 per day

3 Small Vans - at the rate of £35 per day

4 Large Vans - at the rate of £45 per day

We estimate for the vehicle to be initially occupied 10 days per month with the growth up-to 20 days per month by November.

The business will be able to store up-to 20 caravans at the rate of £15 per week.

The business will store on average 5 damaged vehicles at the rate of £12 per week.

Initial sales in the first month are estimated at £8,300. An estimated £20,000 sales per month is envisaged from December 2006

once the business has reached its full capacity.

Running cash outflow is estimated to be approximately £19,000 per month once the initial setup process is completed.

Depreciation on vehicles over 5 years on a straight line basis Interest on the loan of £50,000 repayable over 15 years has been calculated

at 5.5% p.a.

The business operates on a cash basis; as such there are not debtors or creditors

I-Drive Stoke Ltd. – Car & Van RentalHIGHLIGHTS

PeriodRevenue

sNet

ProfitNet Profit

(%)Operating Profit Closing Bank Balance

2006/07 211,545 79,570 37.61 83,636 101,253

Jul-6 8,300 -13,822 -166.52 -13,594 4,537

Aug-06 12,130 3,012 24.83 3,365 11,974

Sep-06 14,870 6,532 43.93 6,884 18,787


Item CostVehicles – Finance Lease Repayments £1,481Advertising £400Car Insurance £2,100Vehicle Service & Maintenance £750Rent & Rate £2,500Staff Cost £3,000Loan Repayment & Interest £400Capital Lease - Interest £121TOTAL £10,752

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Oct-06 16,600 6,492 39.11 6,843 25,132

Nov-06 19,890 9,762 49.08 10,112 35,171

Dec-06 19,965 9,817 49.17 10,166 44,723

Jan-07 19,965 9,796 49.07 10,145 54,261

Feb-07 19,965 9,776 48.97 10,124 63,800

Mar-07 19,965 9,756 48.87 10,103 73,338

Apr-07 19,965 9,036 45.26 9,382 82,054

May-07 19,965 9,716 48.66 10,061 91,715

Jun-07 19,965 9,696 48.56 10,040 101,253

2007/08 215,622 84,377 39.13 88,444 186,278

2008/09 239,580 105,181 43.90 109,116 295,768

I-Drive Stoke Ltd. – Car & Van RentalSURVIVAL RATIO

Description 2006/0

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2007/08 2008/0

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Operating Profit / Assets (%) 50.80 35.90 31.20Acc. Profit / Assets (%) 48.30 66.60 77.00Equity / Debt (%) 228.90 420.60 673.20Working Capital / Assets (%) 60.10 74.90 84.00Revenues / Assets (%) 128.50 87.60 68.60

Survival Ratio 4.66 4.86 5.74


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0

50,000

100,000

150,000

200,000

250,000

2006/07 2007/08 2008/09

HIGHLIGHTS

Revenue

Profit


0.00

1.00

2.00

3.00

4.00

5.00

6.00

2006/07 2007/08 2008/09

Survival Ratio

2006/07

2007/08

2008/09



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CASH FLOW (PART 1)


CASH FLOW (PART 2)Description Feb-07 Mar-07 Apr-07 May-

07 Jun-07 2006/07

2007/08

2008/09

Cash flow provided/used by operating activities


Description Jul-06 Aug-06 Sep-06 Oct-06 Nov-

06 Dec-06 Jan-07

Cash flow provided/used by operating activities

Net Income -13,822 3,012 6,532 6,492 9,762 9,817 9,796

Depreciation 1,060 1,081 1,102 1,123 1,144 1,165 1,186

Amortization of Goodwill

Change in long term provisions

Cash Earnings -12,761 4,094 7,634 7,615 10,906 10,982 10,983

Change in Accounts Receivable -3,905 3,905

Change in Inventory

Change in Accounts Payable 879 620 172 576 13

Change in Accrued Expenses

Cash flow provided/used by operating activities -16,667 8,878 8,254 7,787 11,482 10,995 10,98

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Cash Flows from Investing Activities

Purchase of property, plant, and equipment -63,617 -1,260 -1,260 -1,260 -1,260 -1,260 -1,260

Disposal of property, plant and equipment

Investments in Goodwill

Cash flow provided/used by investing activities -63,617 -1,260 -1,260 -1,260 -1,260 -1,260 -1,260

Cash Flow from Financing Activities

Owners' Equity 35,000

Change of long term debt 49,821 -180 -181 -182 -183 -184 -184

Change in short term debt

Payment of Dividend

Cash flow provided/used by financing activities 84,821 -180 -181 -182 -183 -184 -184

Change in cash and cash equivalents 4,537 7,437 6,813 6,345 10,039 9,552 9,538

Net Cash in the beginning of the year 4,537 11,974 18,787 25,132 35,171 44,723

Net Cash at the end of the year 4,537 11,974 18,787 25,132 35,171 44,723 54,261

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Net Income 9,776 9,756 9,036 9,716 9,696 79,570 84,377 105,181

Depreciation 1,207 1,228 1,249 1,270 1,291 14,109 18,518 21,541


Change in long term provisions

Cash Earnings 10,984 10,984 10,285 10,986 10,987 93,679 102,895 126,722

Change in Accounts Receivable

Change in Inventory

Change in Accounts Payable -123 123 2,258 -423 346

Change in Accrued Expenses

Cash flow provided/used by operating activities 10,984 10,984 10,163 11,109 10,987 95,938 102,472 127,068

Cash Flows from Investing Activities

Purchase of property, plant, and equipment -1,260 -1,260 -1,260 -1,260 -1,260 -77,477 -15,115 -15,115

Disposal of property, plant and equipment

Investments in Goodwill

Cash flow provided/used by investing activities -1,260 -1,260 -1,260 -1,260 -1,260 -77,477 -15,115 -15,115

Cash Flow from Financing Activities

Owners' Equity 35,000

Change of long term debt -185 -186 -187 -188 -189 47,792 -2,332 -2,464

Change in short term debt

Payment of Dividend

Cash flow provided/used by financing activities -185 -186 -187 -188 -189 82,792 -2,332 -2,464

Change in cash and cash equivalents 9,538 9,538 8,716 9,661 9,538 101,253 85,025 109,489

Net Cash in the beginning of the year 54,261 63,800 73,338 82,054 91,715 101,253 186,278

Net Cash at the end of the year 63,800 73,338 82,054 91,715 101,253 101,253 186,278 295,768

I-Drive Stoke Ltd. – Car & Van RentalPROFIT & LOSS (PART 1)

Description Jul-06 Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

Revenues 8,300 12,130 14,870 16,600 19,890 19,965 19,965

Other Operating Income

Direct Cost

Production Depreciation

Gross Profit 8,300 12,130 14,870 16,600 19,890 19,965 19,965

Main 20,833 7,683 6,883 8,633 8,633 8,633 8,633

Unrecoverable Debts

Depreciation 1,060 1,081 1,102 1,123 1,144 1,165 1,186


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Warranty

Provisions


Total Operation Expenses 21,894 8,765 7,986 9,757 9,778 9,799 9,820

Operating Profit -13,594 3,365 6,884 6,843 10,112 10,166 10,145

Interest Income

Interest Expenses 228 353 352 351 351 350 349

Total Finance -228 -353 -352 -351 -351 -350 -349

Other Income

Other Expenses

Total Others

Income before Tax -13,822 3,012 6,532 6,492 9,762 9,817 9,796

Income Tax

Net Profit -13,822 3,012 6,532 6,492 9,762 9,817 9,796

I-Drive Stoke Ltd. – Car & Van RentalPROFIT & LOSS (PART 2)

Description Feb-07

Mar-07

Apr-07

May-07

Jun-07

2006/07

2007/08

2008/09

Revenues 19,965 19,965 19,965 19,965 19,965 211,545 215,622 239,580

Other Operating Income

Direct Cost

Production Depreciation

Gross Profit 19,965 19,965 19,965 19,965 19,965 211,545 215,622 239,580

Main 8,633 8,633 9,333 8,633 8,633 113,800 108,660 108,922

Unrecoverable Debts

Depreciation 1,207 1,228 1,249 1,270 1,291 14,109 18,518 21,541

Warranty

Provisions


Total Operation Expenses 9,841 9,862 10,583 9,904 9,925 127,909 127,178 130,464

Operating Profit 10,124 10,103 9,382 10,061 10,040 83,636 88,444 109,116

Interest Income


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Interest Expenses 348 347 346 346 345 4,066 4,067 3,935

Total Finance -348 -347 -346 -346 -345 -4,066 -4,067 -3,935

Other Income

Other Expenses

Total Others

Income before Tax 9,776 9,756 9,036 9,716 9,696 79,570 84,377 105,181

Income Tax

Net Profit 9,776 9,756 9,036 9,716 9,696 79,570 84,377 105,181

I-Drive Stoke Ltd. – Car & Van RentalBALANCE SHEET (PART 1)

Description Jul-06 Aug-06 Sep-06

Oct-06

Nov-06 Dec-06 Jan-07

Cash 4,537 11,974 18,787 25,132 35,171 44,723 54,261

Accounts Receivable

Inventory

Other Accounts Receivable 3,905

Total Current Assets 8,442 11,974 18,787 25,132 35,171 44,723 54,261

Fixed Assets 63,617 64,877 66,137 67,397 68,657 69,917 71,177

Acc. Depreciation -1,060 -2,142 -3,244 -4,367 -5,511 -6,677 -7,863

Goodwill

Total Fixed Assets 62,557 62,735 62,893 63,030 63,146 63,240 63,314

Total Assets 70,999 74,710 81,680 88,162 98,317 107,963

117,575

Accounts Payable

Other Payables

Bank and S.T. Liabilities

Tax Due

VAT Payable 879 1,498 1,670 2,245 2,258 2,258

Salary & Benefits Payable

Total Current Liabilities 879 1,498 1,670 2,245 2,258 2,258

L.T. Liabilities 49,821 49,640 49,459 49,278 49,095 48,911 48,727

Other Provisions

Pension Provision

Total L.T. Liabilities 49,821 49,640 49,459 49,278 49,095 48,911 48,727


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Total Liabilities 49,821 50,519 50,957 50,947 51,340 51,170 50,985

Owners Equity 35,000 35,000 35,000 35,000 35,000 35,000 35,000

Profit Provision

Retained Earnings -13,822 -10,809 -4,277 2,215 11,977 21,793 31,590

Total Equity 21,178 24,191 30,723 37,215 46,977 56,793 66,590

Total Equity and Liabilities 70,999 74,710 81,680 88,162 98,317 107,96

3117,57

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BALANCE SHEET (PART 2)Description Feb-07 Mar-07 Apr-07 May-07 Jun-07 2006/0

7 2007/0

8 2008/0

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Cash 63,800 73,338 82,054 91,715 101,253 101,253 186,278 295,768

Accounts Receivable

Inventory

Other Accounts Receivable

Total Current Assets 63,800 73,338 82,054 91,715 101,253 101,253 186,278 295,768

Fixed Assets 72,437 73,697 74,957 76,217 77,477 77,477 92,592 107,707

Acc. Depreciation -9,070 -10,299 -11,548 -12,818 -14,109 -14,109 -32,628 -54,169

Goodwill

Total Fixed Assets 63,367 63,398 63,409 63,399 63,368 63,368 59,964 53,538

Total Assets 127,166 136,736 145,463 155,114 164,621 164,621 246,243 349,305

Accounts Payable

Other Payables

Bank and S.T. Liabilities

Tax Due

VAT Payable 2,258 2,258 2,136 2,258 2,258 2,258 1,835 2,181

Salary & Benefits Payable

Total Current Liabilities 2,258 2,258 2,136 2,258 2,258 2,258 1,835 2,181

L.T. Liabilities 48,542 48,356 48,169 47,981 47,792 47,792 45,460 42,997

Other Provisions

Pension Provision

Total L.T. Liabilities 48,542 48,356 48,169 47,981 47,792 47,792 45,460 42,997

Total Liabilities 50,800 50,614 50,305 50,239 50,051 50,051 47,296 45,177

Owners Equity 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000

Profit Provision

Retained Earnings 41,366 51,122 60,158 69,874 79,570 79,570 163,947 269,128

Total Equity 76,366 86,122 95,158 104,874 114,570 114,570 198,947 304,128

Total Equity and Liabilities 127,166 136,736 145,463 155,114 164,621 164,621 246,243 349,305


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I-Drive Stoke Ltd. – Car & Van RentalANALYSIS OF OPERATIONAL EXPNDITURE (PART 1)

Description Jul-06 Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

Fixed Expenses

Rates 417 417 417 417 417 417 417

Rent 2,083 2,083 2,083 2,083 2,083 2,083 2,083

Building Insurance 50 50 50 50 50 50 50

Advertising 4,000 1,200 400 400 400 400 400

Accountancy Fees

Legal Fees 500

Building Work 3,500

Computers & Furniture 2,000

CCTV & Security 1,500

Car Insurance 2,100 2,100 2,100 2,100 2,100 2,100 2,100

Road Tax (Van & Minibus) 2,850

Service & Maint. (Van & Minibus) 750 750 750 750

Total Fixed Expenses 19,000 5,850 5,050 5,800 5,800 5,800 5,800

Personnel Cost

Managing Director 1,000 1,000 1,000 1,000

Company Secretary 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Car Cleaner 833 833 833 833 833 833 833

Total Personnel Cost 1,833 1,833 1,833 2,833 2,833 2,833 2,833

Total 20,833 7,683 6,883 8,633 8,633 8,633 8,633


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I-Drive Stoke Ltd. – Car & Van RentalANALYSIS OF OPERATIONAL EXPNDITURE (PART 2)

Description Feb-07

Mar-07

Apr-07

May-07

Jun-07

2006/07

2007/08

2008/09

Fixed Expenses

Rates 417 417 417 417 417 5,000 5,250 5,513

Rent 2,083 2,083 2,083 2,083 2,083 25,000 25,000 25,000

Building Insurance 50 50 50 50 50 600 600 600

Advertising 400 400 400 400 400 9,200 4,800 4,800

Accountancy Fees 700 700 1,200 1,200

Legal Fees 500

Building Work 3,500

Computers & Furniture 2,000

CCTV & Security 1,500

Car Insurance 2,100 2,100 2,100 2,100 2,100 25,200 25,200 25,200

Road Tax (Van & Minibus) 2,850 3,610 3,610

Service & Maint. (Van & Minibus) 750 750 750 750 750 6,750 9,000 9,000

Total Fixed Expenses 5,800 5,800 6,500 5,800 5,800 82,800 74,660 74,922

Personnel Cost

Managing Director 1,000 1,000 1,000 1,000 1,000 9,000 12,000 12,000

Company Secretary 1,000 1,000 1,000 1,000 1,000 12,000 12,000 12,000

Car Cleaner 833 833 833 833 833 10,000 10,000 10,000

Total Personnel Cost 2,833 2,833 2,833 2,833 2,833 31,000 34,000 34,000

Total 8,633 8,633 9,333 8,633 8,633 113,800 108,660 108,922



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SALES ANALYSIS

Description Jul-06

Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

Feb-07

Revenues 8,300 12,130 14,870 16,600 19,890 19,965 19,965 19,965

Medium Car Rental 1,400 1,960 2,520 2,800 3,500 3,500 3,500 3,500

Large Car Rental 2,000 2,800 3,600 4,000 5,000 5,000 5,000 5,000

Small Van Rental 1,050 1,470 1,890 2,100 2,625 2,625 2,625 2,625

Large Van Rental 1,800 2,520 3,240 3,600 4,500 4,500 4,500 4,500

Caravan Storage 120 240 480 960 1,125 1,200 1,200 1,200

Damaged Vehicles Storage 1,800 2,880 2,880 2,880 2,880 2,880 2,880 2,880

Damaged Vehicles Recovery 130 260 260 260 260 260 260 260

Description Mar-07 Apr-07 May-

07 Jun-07 2006/07 2007/08 2008/09

Revenues 19,965 19,965 19,965 19,965 211,545 215,622 239,580

Medium Car Rental 3,500 3,500 3,500 3,500 36,680 37,800 42,000

Large Car Rental 5,000 5,000 5,000 5,000 52,400 54,000 60,000

Small Van Rental 2,625 2,625 2,625 2,625 27,510 28,350 31,500

Large Van Rental 4,500 4,500 4,500 4,500 47,160 48,600 54,000

Caravan Storage 1,200 1,200 1,200 1,200 11,325 12,960 14,400

Damaged Vehicles Storage 2,880 2,880 2,880 2,880 33,480 31,104 34,560

Damaged Vehicles Recovery 260 260 260 260 2,990 2,808 3,120

I-Drive Stoke Ltd. – Car & Van RentalCONCLUSION

From a detailed review of the enclosed projections, it is to be concluded that the expected profits are comfortably sufficient to justify the pursuing of the objectives detailed at the beginning of this business plan.


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sample business plan - car hire

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