How to Write Ride-Hailing Business PlanSadaf Abbas
How to Write Ride-Hailing Business Plan
Our Ride-Hailing Business Plan is based on an UBER-like business plan, Ride-hailing or taxi collection business is a smart way to generate money for start-ups and business people alike. UBER, despite being the biggest industry in the taxi business, is not holding a single car. Such great is the business idea wherein the business is run relying on a powerful online app platform. So, just by owning the software, one can effectively generate money through commissions without investing a bit in buying and maintaining cars.
UBER has penetrated all parts of the world, with over 2 million drivers and counting. Instead of owning a car and driving for UBER, one can easily buy an app package, start and run their own taxi business and be an entrepreneur. This may sound daunting, but there are lots of UBER-like clone mobile software and scripts available, some being ready-made and some tailor-made to the customer’s precise needs.
Making a Software for Ride-Hailing Business Plan
An UBER-like Business Plan to run will need Software as reliable as UBER itself. The market is full of Software claiming to be UBER clones. An online Taxi Business is almost entirely dependent on the Software to function more efficiently. So investing in the best Software itself will alleviate most of the problem. A ride-hailing software should manage payments, have proper GPS navigation, handle incoming requests, user rating, management and record commissions, record transactions, and driver details. Some UBER clone scripts promise even more features like airport ride management and support for future driverless cars.
Before getting a Uber-like ride-hailing business up and running, you will need to structure a financial plan that would work out profitable for your business and the car owners. First of all, you’ll have to decide on a device, the budgetary plan, and the monthly revenue target and work accordingly to achieve it.
With a good user base at hand, you can up-sell and cross-sell numerous products from partner service providers right through the ride-hailing app. You can promote the ride-hailing business by partnering with service providers like movie food delivery, coffee shops, booking, groceries, shopping sites, etc., who can promote your business through ads on their platforms. Email marketing and Mobile SMS is a cheaper way to reach hundreds of potential customers. Sponsoring important local events can go a long way in increasing the reach. You can even try innovative, creative, or even hilarious PR stunts that could attract the media’s attention.
Executive Summary for Ride-Hailing Business Plan
The executive summary of your Ride-Hailing business plan will introduce your business, describes what you do, and lays out what you’re expecting from your readers. Structurally, it is an important chapter of your business plan. And while it’s the first thing that reader will read, we generally advise that you write it last.
Why? Because once you know your business’s details inside and out, you will be fully prepared to address your executive summary. After all, this content of a business plan is a summary of everything else you’re going to write about.
Ideally, the executive summary can stand out as a document which includes all business milestone and opportunities available for the investors. You can also include brief financial highlights of your business.
Because your executive summary is such a crucial component of your business plan. You’ll want to make sure that it’s as clear and concise as possible. Cover the key business highlights and milestones of your business, but don’t into too much detail. Ideally, your executive summary will be two to three pages at most, designed to be a quick read that sparks interest and makes your investors feel eager to hear more.
The problem and solution for Ride-Hailing Business Plan
Start the opportunity section by describing the problem that you are solving for your target customers. What is the absolute pain point for them? How are they solving their problems? Maybe the existing solutions to your targeted customer’s problem are not affordable. For a startup business with a physical office location, maybe there aren’t any existing solutions within reasonable driving distance. Explaining the problem, as a business owner you are solving for your target customers is far, the most important element of your ride-hailing business plan and crucial for your business success in the future. If you are not able to pinpoint a problem that your potential customers have. Then you might not have a viable business concept.
Who is your Target Market for Ride-Hailing Business Plan
Who is your ideal target market or customer? What is their number? It’s critical here to be specific. If you’re a ride-hailing company, you aren’t targeting “everyone” just because many have owned a car. You’re possibly targeting a specific market segment such as “Students or individuals not owning a car” or “Tourists.” This technique will become much easier for you to target your sales and marketing efforts and bring new customers that are most likely to buy your service.
The individuals using or not using ride-hailing applications, private car transport with a driver, are classified according to different criteria, such as their level of education, age, annual income, and area, i.e., whether their place of residence is in an urban or rural area. These different poles make it possible to categorize and classify users and see the evolution of the last four years.
For example, in 2018 Less than a quarter of North American high school graduates used Lyft or Uber while more than a third of graduates and more than half of post-graduates used these applications. Educated students or people tend to use these Ride-Hailing applications more often. One of the reasons is that many of them live in city areas where access to this type of online service is straightforward and fast, unlike in rural areas with very few Lyft or Uber drivers.
Market analysis and Market Research
If you want to include a market analysis section in your business plan, start with some basic research. First, identify your market segments in the target location and determine how big each segment is. A market segment is a group or combination of individuals or businesses you could potentially sell.
Don’t fall into the trap by defining the market as everything. The classic example is an ice cream parlor; if everything in the target location eats ice cream, it doesn’t mean the whole population is your target market.
Marketing and Sales plan
The sales and marketing plan section of the Ride-Hailing Business Plan will include how you plan to reach your market segments, your pricing plan, how you plan on trading to those target markets, and what types of partnership and activities you need to make your business a success.
Before you decide about writing your marketing plan, you must have your target market properly defined and have your buyer persona comes out. Without actually understanding who you are marketing to, a marketing plan will have little value.
Last but surely not least is your financial plan section. This is often what Business Startups find most difficult, but it doesn’t have to be as intimidating as it appears. Business financial plans for most startups are less complex than you think, and a business finance degree is absolutely not required to build a solid financial model. That said, if you need further help, there are lots of financial templates and resources out there to help you build a perfect financial plan. You can also hire financial consultants who could carry such tasks.
A typical financial plan will have Income Statement, Cashflow, and Balance Sheet for five years and then annual sales projections for the remaining three to five years. Five-year projections are typically sufficient, but some investors will request a seven-year statement.
Following are details of the three financial statements that you should include in your business plan and a brief overview of what should be in each section.
The sales forecast is just that your projections of how much you will sell over the next 5 years. An ideal sales forecast is usually broken down into several excel rows, with a row for each center product or service you offer. Don’t make the error of breaking down your sales forecast into painful detail. Just focus on the high-level at this point.
Your sales forecast will also include an identical row for each sales row to cover the COGS(Cost of Goods Sold),. These rows show the expenses related to getting your product or delivering your service. Cost of Goods Sold should only include those costs directly related to producing your products. Regular business operating expenses such as insurance, salaries, rent, etc. are not a part of COGS.
Your business personnel plan details how much you plan on hiring or paying your employees. For a small or medium-sized company, you might list every position on the personnel plan. And how much money will be paid each month for each job post? For larger enterprises, the personnel plan is usually broken down into functional groups such as “Sales” and “Marketing.”
The personnel plan will also include cost analysis like “employee burden,” which is the employee’s cost beyond salary. This includes payroll benefits, payroll taxes, medical, insurance, and other related costs that you will incur every month for obtaining an employee on your payroll.
Income statement or profit and loss statement
The profit and loss are also known as PnL. This is where your Financial numbers all merge. It shows if you’re generating a profit or bearing a loss. The PnL pulls data from your sales forecast and your admin expenses and includes a list of all your other ongoing expenses connected with running your Ride-Hailing business.
The P&L also includes the all-vital “bottom line,” where your admin expenses are deducted from your sales to show if your business is making a net profit each month or potentially incurring some losses while you grow.
Cash flow statement
The cash flow statement mostly gets confused with the income statement, but they are very different and have different purposes. While the PnL calculates your profits and losses. The cash flow statement contains how much cash (money in the hand) that you have at any given point.
The key to understanding the distinction between the two statements is understanding the difference between profits and cash. The easiest way to imagine it is when you make a revenue. If you need to send an invoice to your customer. And then your customer takes 10 or 30 days to pay the dues. Then you don’t have the cash from the sale straight away. But, you will have recorded the sale in your PnL. And shown a profit from that sale on the day you made the sale.
The last financial statement that most ride-hailing businesses will need. To create as part of their business plan is the statement of financial position or balance sheet. The balance sheet gives an overview of the financial stability of your business. It lists the Fixed and Non-fixed assets in your company, the short and long-term liabilities, and the owner’s equity. If you deduct the company’s assets from liabilities, you can determine the net worth.
For ride-hailing businesses, we also offer customer financial models with guidelines. Do check it out below: