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Executive Summary
1. Introduction
OnTrac is a newly established small business in courier service. OnTrac is an emerging transport
operator that was established to fill a niche in the market of road freight industry in Wembly.
OnTrac can transport documents and small parcels to clients will provide local courier and
delivery services to customers in its targeted market. We can transport documents and parcels to
customers within a 40 mile radius of town. Our customers are medical professionals, attorneys
and local businesses who need reliable, same-day services not offered by the larger service
providers, such as Fedex and UPS.
1.1 Objectives
The objectives for the first three years of operation include:
To enhance the number of clients served by 20% per year through superior service.
1.2 Mission
Serve clients with an environmentally friendly, expedient delivery service. We subsist to attract
and preserve customers. Our services will surpass the expectations of our patrons.
Situation Analysis
OnTrac is entering their first year of operation. In order to achieve the market penetration that is
forecasted, marketing must become a dominant business activity. We offers the authorized
community a reliable, professional, delivery service that can provide service of notice, document
and small parcels delivery .The basic market need is a reliable service that can support all needs
the particular firm may have.
Office furniture including: two desks, two chairs, and two file cabinets.
Two computer systems including a printer, CD-RW, and a broadband Internet connection.
Improvement of a website that permits delivery orders to be placed online and received
Services
The primary revenue center for the business will come from the local delivery of documents and
packages on behalf of individuals and businesses within the target market. The business will
generate substantially high gross margins from these services via its two delivery trucks.
Market Summary
The demand for reliable, cost-effective delivery services has been growing in the area for
several years as the towns population continues to grow. In addition to a growing
population, there are more customers who require faster service, ranging from stat
medical specimen deliveries to time-sensitive legal documents to just-in-time parts
deliveries to local manufacturers. There is only one other local courier service in the area,
and we believe there is ample room, due to our growing local economy, for another
reliable courier service.
We possess good information about the market and has excellent information about the
common characteristics of the most valued customers. This information will be used to
better understand who is served, their specific needs, and the best way to communicate
with them.
Marketing Objectives
Establish ongoing relationships with local businesses and corporations within the target
market.
Implement a local campaign with the Companys targeted market via the use of flyers,
local newspaper advertisements, and word of mouth advertising.
Develop an online presence by developing a website and placing the Companys name
and contact information with online directories.
Market Needs
We are providing customers with a fast, reliable document delivery service throughout the
Wembly downtown area.
Marketing Strategy
The marketing strategy of OnTrac is to provide reliable and outstanding delivery services to
businesses and professionals who have a regular need for hoist and delivery services. This will
assure that we will have a regular, steady income from repeat customers. The second part of our
marketing strategy will be to gain customers who need courier services occasionally, such as
last-minute parts and supplies delivered to a contractors job site, plans deliveries for architects
and engineers and documents and materials for local government agencies.
SWOT Analysis
Strengths
Weaknesses
The resist to convince different firms to drain their current service provider in favor of
OnTrac.
Opportunities
Threats
Electronic filing.
Competition
Helping the Wembly area, there are about 10 different delivery services, about a quarter of these
are taxi services that also make deliveries. The rest are courier or messenger services. Some use
cars and a few use bicycles as the means of transportation. In general, the bicycle messengers
are less expensive because they have lower overhead. In the heart of downtown, bicycle
messengers can be as fast as or faster than the car-based courier services because of automobile
traffic.
There are five different companies that target law firms by catering to their special needs. All of
these are bicycle based services.
Keys to Success
The keys to success are:
Reliability.
Convenience.
Custom service.
Financial Summary
Sales Forecast
Year 1
Year 2
Year 3
152,459
255,458
271,554
20,841
30,254
35,125
173,300
285,712
306,679
Year 1
Year 2
Year 3
Law firms
3,049
5,109
5,431
417
605
703
3,466
5,714
6,134
Sales
Law firms
Assorted customers
Total Sales
Assorted customers
Subtotal Direct Cost of Sales
Break-even Analysis
19,155
Assumptions:
Average Percent Variable Cost
2%
18,772
Year 2
Year 3
173,300
285,712
306,679
3,466
5,714
6,134
3,466
5,714
6,134
169,834
279,998
300,545
98.00%
98.00%
98.00%
177,360
183,360
189,360
3,000
3,000
3,000
Depreciation
1,500
1,500
1,500
Cellular service
4,200
4,200
4,200
Utilities
1,200
1,200
1,200
Insurance
1,800
1,800
1,800
Rent
9,600
9,000
9,000
26,604
27,504
28,404
225,264
231,564
238,464
Sales
Direct Cost of Sales
Other
Total Cost of Sales
Gross Margin
Gross Margin %
Expenses
Payroll
Payroll Taxes
Other
(55,430)
48,434
62,081
EBITDA
(53,930)
49,934
63,581
4,517
3,596
2,546
11,210
15,132
(59,947)
33,629
44,404
-34.59%
11.77%
14.48%
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales
Year 2
Year 3
Cash Sales
43,325
71,428
76,670
96,883
192,819
226,006
140,208
264,247
302,675
Cash Received
140,208
264,247
302,675
Year 1
Year 2
Year 3
Cash Spending
177,360
183,360
189,360
Bill Payments
49,882
66,203
71,071
227,242
249,563
260,431
9,055
9,976
11,026
Dividends
236,297
259,539
271,457
(96,089)
4,707
31,218
5,111
9,818
41,036
Expenditures
Cash Balance
Year 2
Year 3
5,111
9,818
41,036
Accounts Receivable
33,092
54,557
58,561
38,203
64,375
99,597
7,500
7,500
7,500
Assets
Current Assets
Cash
Long-term Assets
Long-term Assets
Accumulated Depreciation
1,500
3,000
4,500
6,000
4,500
3,000
44,203
68,875
102,597
Year 1
Year 2
Year 3
4,505
5,525
5,870
Current Borrowing
4,505
5,525
5,870
Long-term Liabilities
40,945
30,969
19,942
Total Liabilities
45,450
36,494
25,812
Paid-in Capital
60,000
60,000
60,000
Retained Earnings
(1,300) (61,247)
(27,618)
Total Assets
Current Liabilities
Accounts Payable
Earnings
(59,947)
33,629
44,404
Total Capital
(1,247)
32,382
76,785
44,203
68,875
102,597
Net Worth
(1,247)
32,382
76,785
Ratio Analysis
Year 1
Year 2
0.00%
64.87%
7.34%
4.50%
Accounts Receivable
74.86%
79.21%
57.08%
27.40%
0.00%
0.00%
0.00%
21.80%
86.43%
93.47%
97.08%
50.30%
Long-term Assets
13.57%
6.53%
2.92%
49.70%
100.00%
100.00%
100.00%
100.00%
Current Liabilities
10.19%
8.02%
5.72%
29.80%
Long-term Liabilities
92.63%
44.96%
19.44%
27.90%
102.82%
52.99%
25.16%
57.70%
-2.82%
47.01%
74.84%
42.30%
100.00%
100.00%
100.00%
100.00%
98.00%
98.00%
98.00%
100.00%
132.59%
86.23%
83.44%
79.50%
0.69%
0.42%
0.39%
0.20%
-31.98%
16.95%
20.24%
1.30%
Current
8.48
11.65
16.97
1.64
Quick
8.48
11.65
16.97
1.43
102.82%
52.99%
25.16%
57.70%
4807.12%
138.47%
77.54%
2.50%
Sales Growth
Total Assets
Total Liabilities
Net Worth
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative
Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
-135.62%
65.10%
58.03%
5.90%
Additional Ratios
Year 1
Year 2
Year 3
-34.59%
11.77%
14.48%
n.a
Return on Equity
0.00%
103.85%
57.83%
n.a
3.93
3.93
3.93
n.a
56
75
90
n.a
12.07
12.17
12.17
n.a
27
27
29
n.a
3.92
4.15
2.99
n.a
0.00
1.13
0.34
n.a
0.10
0.15
0.23
n.a
33,698
58,850
93,728
n.a
-12.27
13.47
24.39
n.a
Assets to Sales
0.26
0.24
0.33
n.a
10%
8%
6%
n.a
Acid Test
1.13
1.78
6.99
n.a
Sales/Net Worth
0.00
8.82
3.99
n.a
Dividend Payout
0.00
0.00
0.00
n.a
Activity Ratios
Accounts Receivable Turnover
Collection Days
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Contingency Planning
Difficulties and Risks
Problems unseating current service providers.
Unforeseen difficulty attracting quality, reliable employees.
Electronic filing becomes legislatively mandated for 100% of the court filings.
Having to liquidate equipment to cover liabilities.