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Table of Contents

Introduction:....................................................................................................................................1
Objective of the business:............................................................................................................1
Product Concept:.........................................................................................................................1
Business Model:...........................................................................................................................2
Analysis of Market:.........................................................................................................................2
Competitor Analysis:...................................................................................................................3
Customer Profile:.........................................................................................................................4
Unique feature of Proposition:.....................................................................................................4
Marketing and Sales Plan:...............................................................................................................4
Marketing Plan:...........................................................................................................................4
Price strategy:..........................................................................................................................5
Distribution strategy:...............................................................................................................5
Sales Plan:....................................................................................................................................5
Marketing promotion:..............................................................................................................5
Marketing Budget:...................................................................................................................5
Break-Even Analysis:..............................................................................................................6
Operational Plan:.............................................................................................................................6
Logistics and Human Resources:.................................................................................................7
Organizational Hierarchy:............................................................................................................8
Financial Plan:.................................................................................................................................8
Venture Capital Requirements:....................................................................................................8
Working Capital & Profit:............................................................................................................9
Projected Financial Statement:....................................................................................................9
Five Years Moving Forward Financial Plan..............................................................................10
SWOT Analysis.............................................................................................................................11
PESTLE Analysis:.........................................................................................................................11
Political Analysis:......................................................................................................................11
Economic Analysis:...................................................................................................................12
Social Analysis:.........................................................................................................................12
Technological Analysis:.............................................................................................................12
Legal Analysis:..........................................................................................................................12

Environmental Analysis:............................................................................................................12
Conclusions & Recommendations:................................................................................................13
Recommendation:......................................................................................................................13
Conclusion:................................................................................................................................13
References......................................................................................................................................14

Introduction:
Developing new business through entrepreneurship innovation is now considered a key stone to
determine future prospective of an economy. In an economy where entrepreneurship us
encouraged, it is assumed that this industry or economy will not lose its pace in the long run.
Besides industrial growth, employment rate also depends on the degree on encouraged
entrepreneurship business. Business Plan is a vital tool for entrepreneurs. It is considered to a
detailed guideline which directs the entrepreneurs on appropriate and effective steps to be taken
at each stage of their business.

Objective of the business:


With the aim of becoming entrepreneur, I have decided to enter into bi-cycle, tri-cycle and cycle
manufacturing industry. My objective is to introduce and develop a more cost effective and user
friendly cycle industry in my city than the existing one. I have selected a totally unique type of
cycle that is made up of card-board and rubber. It is lighter, can be folded, have unique
characteristics like it is waterproof, though it is light in weight it can carry approximately 551.20
lbs of weight.
To make a business successful, a complete and effective business plan is must
(Letsmakeaplan.org, 2016). Therefore I have developed a full and detail business plan including
operation, finance, management and marketing strategy of my business (Finney, 2010). I have
selected young generation consisting students, teen-agers, service holders and kids as my target
customer. Primarily I have decided to launch my business venture only in Birmingham and I will
also consider to expand my business throughout the country in later time.

Product Concept:
I have elected the name of my product is as Green Cycle. Cycles will be produced using
mainly cardboard and rubber. No metal and machine will be used in this product as a result the
product will be ecofriendly and in favor of protecting green. So I have decided to call my product
as Green. Its raw material is mainly card-board, rubber and plastic. It is cost effective, user
friendly (Cardboardtech.com, 2016) and have some attractive features, like
Lighter Weight
Folding Body Frame

Waterproof
User-friendly
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Attractive Looking
Cost Effective

Portable

Business Model:
A business model is a description of method, process through which a business can make money
(Carsrud and Brannback, 2007). A brief business model of my proposed business is presented
here:
Name of my business will be Green Cyclist Industry and it will be established under sole
proprietorship business contract. All the required will be collected from owners capital.
Primarily target area is only Birmingham City. Target customer is the teen-agers, young peoples
and babies. But baby cycle will be added in later time.

Cardboard
Cycle

Sole
Proprietorship
business

35% Profit
Per Unit of
sales

Green
Cyclists
Industry

Young
People, Teenagers and
Children

Sales in
Birmingham

Analysis of Market:
I have decided to establish my new business only in Birmingham City. As it is a new business
and my venture capital is limited, so I have decided not to go mass production from the very
beginning. I will consider business expansion in later time when circumstances demands.

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Recently Bike industry in UK has faced tremendous growth due to increasing demand of bike
riding (Sba.gov, 2016). Consciousness to protect environment has made the peoples to incline
towards bi-cycle (Businessballs.com, 2016).
I have noticed that all the products provided by our bike industry has become monotonous and
identical (Kapila and Mead, 2012). All of the companies provided similar types of products with
a very little customization. Besides they have little concern about environmental protection. For
this reason I have decided to offer such a product through which I can address this gap in the
industry. I am going to offer such a product which will satisfy the core demand of the customer
and will also meet the environmental concern. I have already mentioned some of the unique
characteristics of my product. Cardboard cycle will be lighter than usual bi cycle in the market
and thus it can be carried anywhere easily. On the top of that it can be folded into two parts,
consequently young children can carry this cycle in their backpack. The core difference of this
cycle from a typical one is that it is fire and water proof. These distinctive qualities will make it a
more attractive one. So analyzing all of this opportunities I think my product has greater
possibilities to acquire market demand.
I already had a discussion with cardboard producer or supplier like Jaffabox, Box & Seal,
Cardboard Box Company, Saxon Packaging (Kuratko, 2006) and entered into a contract to
receive supply from them.

Competitor Analysis:
In Birmingham, four companies are competing in bi-cycle industry; these are: Birmingham
Bicycle Company, Bike Link of Hoover, Cahaba Cycles Birmingham, Zyp. Products of these
companies offer almost similar type of products. A brief illustration will help to understand the
circumstances. All these companies categories their product line based on customer age,
variation in customer needs, speed and the nature of its uses (Mourad et al., 2007). For example
they offer 12 inch bikes for children, mountain bike for racing, touring bike for riding, ladies
bike for woman etc. But all have ignored the fact of environmental concern (Practical business
planning, 2008). They are not offering product having a completely new perspective. Producing
cycle using is a new idea in this industry. Their product is subjected to fire and water, and cannot
be carried easily anywhere. But as I have already mentioned my product will offer these two
unique qualities. So having a new product innovation is my strength in this industry. New
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concept will be my competitive advantages among the competitors (Schilit, 2013). Besides price
of my product will be offer much lower than that of my competitor. As a strength of my
competitor their experience, vast product line can be mentioned. I will face difficulties to grab
market where already they four have made a room for several years.

Customer Profile:
I have segmented my target customer from two different perspective, age based segmentation
and income based segmentation. I have offered my product at much lower price than of my
competitor. So peoples who have limited income can easily afford a bike. On the other hand, I
will also offer differentiated bike with customized design. I have kept an option of called as My
Bike My Styles. Under this facilities customer can make their own design for their bike and can
submit in our website. I will produce bi-cycle for them with their own respective design and will
charge a higher price for customization. So through this I will target who love dainty products. In
case of age segmentation I have targeted babies mainly those who are below the age of seven and
also teenagers.

Unique feature of Proposition:


As already reiterated frequently I have planned to grab market by the uniqueness of my product,
now I am mentioning some of unique feature of my product.
Being Water proof and Fire Proof is the main competency of my product. Unique design and
distinct raw materials will make my product lucrative to customer. Besides some lucrative offer
like free offer, lucky draw will also be offered in the initial stage.

Marketing and Sales Plan:


Marketing Plan:
As it is a new business, so I have decided to follow push marketing plan (Stinson, 2008). Pull
marketing strategy will also be used with the combination of push strategy. I believe that this
combination will help to boost the demand up of my products.
Market expansion strategy: At first, I will make production confined in Birmingham City with
one production house. I have planned to establish one production plant after 3 years in different
cities. Three years late, I have planned to introduce baby cycle in the product line to grab
childrens market.
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Price strategy: The most attractive feature of my product is price. I will offer the bi-cycle
at less than half of the lowest market price. It will be very feasible for students of school, college
and university. Consumers can order cycle from website, Facebook page and through e-mail. I
also offer home delivery service for Birmingham city with a reasonable service charge.
Distribution strategy: I have decided to go for intensive distribution of products to
occupy retailer as many as possible. So I thought three types of distribution channel for my
products.
Dealer/agent: I will appoint at least one dealer/agent in Birmingham City. Application
would be offered for dealers. Dealers will be selected according to their show rooms location,
size of show room, financial condition and conditions they offer. In this case dealers will be
allowed to sell products of another companies also.
Direct sell: I will establish show room in Birmingham in order to sell directly to
customers.
Online: Customers can place order online through the company website. Cycle will be
reached to them in exchange of service charge and transportation cost.

Sales Plan:
Marketing promotion: A large portion of promotional plan is online based. For market
promotion I would like to use social networks that include Facebook, Twitter, Google+ etc. I will
also use poster, banner and newspaper for advertisement. Additionally, I would like to convince
health and environment conscious groups for supporting me. One of the famous cyclist group in
UK; The Cyclists Champion and British Diabetic Association has already agreed to
promote my product. To attract customers, I will offer a safety lock free with every cycle sold for
the first two months of production. I will also offer 1 year after sell customer service.
Marketing Budget: I have conducted a strong marketing and financial plan. Financial plan
for managing marketing costs will be discussed in this section.
Cost (Per Cycle)

Expected
GBP

Fixed Cost & Administrative Cost


Rent for production Unit

0.49423

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4.31328
Salary (Administration)
0.790768
Utility Costs
5.598278
Total Fixed Costs
Raw materials and Variable Costs
Production Costs
8.986
Raw Materials
Labor Costs
2.51608
Workers Wage
0.8986
Utility Cost (Production)
12.40068
Total Variable cost
17.998958
Total Cost of Production (Per Unit)
Break-Even Analysis: I have conducted pilot study to predict the market demand. My

study revealed that, I will have demand of almost 1440 unit of bicycle in the first year. I have
low leveraged cost structure which will be helpful to achieve break-even point within quickest
time frame.
Break-Even Point
(unit)

Fixed
Cost

(Selling
price

Variable
cost)

10080

(28

18)
1008 units

So from the table it is obvious that I need to sale almost 1010 unit of my product to achieve
break-even. According my pilot study I would be able to reach in this target within almost end of
the first year.

Operational Plan:
As already mentioned, the business will be established under the framework of sole
proprietorship, so it is not required to be registered with any regulatory authority. I will collect
trade license from Birmingham City Council in this regard only.
Production process includes three stages:
Gathering of raw materials: I will use mainly cardboard sheets, plastic and rubber for our
production. These raw materials are abundant and biodegradable.

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Primary
Gathering of
raw materials

Secondary
Transformatio
n of raw
materials into
goods

Tertiary
Provisions of
goods to the
customers

Transformation of raw materials into goods: By the following process the goods will be
produced:

Cardboards are folded at first with the help of Hydraulic Jack


The cardboards are given shape to form the body of a cycle with the help of paper cutting

knife
In this stages all the components for the bike like body, wheels, handle bars are put

together with glues and being folded.


Solid rubber tires are made from recycled car tires.
Power is transferred from the pedals to rear wheel with a belt, also made from recycled

rubber
Finally a secret mixture of chemical blend has been produced, which will be applied on
the frame of cardboard so that color can be coated later.

I have kept an option for adding motor in the cycle. In this case price will charge higher than
typical cardboard cycle.
Provisions of goods to the customers: Finally cycles will be supplied to the customer through
the distribution channel.

Logistics and Human Resources:


Mainly labor forces for my business will be semi-skilled. Total manpower engaged

One manager.
Two supervisors
Twelve labors.
Two salespersons.

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Organizational Hierarchy:
Entrepreneur
s

Administrati
ve
Department

Sales
Department

Body Making

Production
Department

Wheel
Making

Accessories

Assembly

Financial Plan:
Financial plan includes analyzing venture capital and working capital, preparing financial
statements, growth rate projections for profit and sales, selling price and many more (Wessner,
2009). Some of the main elements will be discussed in this segments.

Venture Capital Requirements:


The total investment does not require huge demand of investment. Total initial investment
will be gathered from entrepreneurs private fund. Three years after the inception of the project, I
might consider for expansion of the business through expanding regional production units. Then
debt financing can be acquired if necessary then. The initial investment required GBP 18,000 and
will be provided from equity fund. Profit will reaped fully by the entrepreneur.
Expected Initial Expenditure
Licensing Fee
Rent for Production Houses (Advance Payment 650 per
monthX3)
Equipment and Machineries

Expected
GBP
494.23
1950
898.6

-Hydraulic Jack
-roller
-Paper Cutting Knife
-Compasses and other tools
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-Hammer
-Miscellaneous cost

Furniture and Fixtures

1347.9

Decoration of Outlets

808.74

Transportation and Vehicle (Three Pick-up vans)

8986

Advertisement Cost

2605.94

Total Initial Costs

17091.41

Working Capital & Profit:


For the first year working capital will be included in venture capital requirements. But for the
respective following years, working capital can be mentioned and calculated separately. Working
capital usually implies as funds need to keep firm mobile. It includes fixed cost and also variable
costs. Capacity of my production department will be 1800 units of cycle. Profit and working
capital calculation based on 1800 units are presented below:
Cost Structure
Fixed Cost
Variable Cost
Profit (approx. 35%)
Selling Price

Cost Per Unit


5.598278
12.40068

10
28

Total Cost
10080
22322
18000
50400

Projected Financial Statement:


Profit and Loss Account
Green Cyclists Industry
For the year ended 31st December, 2016
Particulars

Sales (28X1440)
Less: Cost of Raw materials

Amount in GBP
(Expected)

Amount in GBP
(Expected)

40320
6469.92
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33850.08

Cost of Goods Sold


1617.48

Less: Utility Cost


Wages in Production Unit:

4528.944

Workers

6146.424
27703.656

Gross Profit
Less: Administrative Costs:
Salary of Managers
Salary of Salesmen
Salary of Supervisor
Total Salary

7548.24
1078.32

Utility Cost

808.74

Decoration of outlets

431.328

Rent for Production House


Licensing Fee

494.23
Total Administrative Cost

10360.858

17342.798

Net Profit after Tax

Five Years Moving Forward Financial Plan


It is essential to provide a five years cash flow projections. In this section, five years profit
projections will be presented with proper assumptions. All the assumptions are established after
conducting market analysis and proper marketing research.
Year-1
Sales in
Unit
Selling
Price
Fixed Cost
Variable
Cost

Year-2

1440

1526.4

28

28.84

5.6

5.712

12.4

12.772

Year-3

Year-4

1617.9
84
29.705
2
5.8262
4
13.155
16

1715.0
63
30.596
36
5.9427
65
13.549
81

Year-5

Growt
h Rate
1817.9
6.00%
67
31.514
3.00%
25
6.0616
2.00%
2
13.956
3.00%
31

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Total Sales

40320

Total Cost

25920

Profit

14400

Profit
Growth
Rate

44021.37
6
28213.97
76
15807.39
84
9.77%

48062.
54
30711.
6
17350.
94
9.76%

52474.
68
33431
19043.
68
9.76%

57291.
85
36391.
93
20899.
92
9.75%

SWOT Analysis
Before launching a venture or merely a product, it is necessary to analyze the market. It is also
important to evaluate the possibilities and weakness of the product or the business. SWOT
analysis is a strong tool in this regard. I have analyzed the Strength, Weakness of my venture.
Opportunity and threat which we may face have also the subject of my concentration.

Strength
Sufficient lower cost
Availability of raw material
No direct competitor
Opportunity
Pioneer industry of

Birmingham
Capturing a large market

through cost effectiveness

Acceptance by target market

Opportunity of proper waste

Weakness
Lack of experience
Lack of trained employee
Moderate Speed
Threat
Achieving consumer's
confidence.

Ensuring product durability

Lack of assistance by
stakeholders.

disposal.
Some of the points are need to be discussed here for further clarifications. As it is new business,
as like the product concept. I will face problem of having skilled and experienced employees.
For this reason I may face problem of developing my product. But this difficulties will be
outperformed by the proper arrangement of trainings. It will be discussed in detail in later
sections.
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PESTLE Analysis:
Political Analysis: As we know, we are in a country which enjoys political stability for long
since. So from this perspective my new venture will not face any political instability.

Economic Analysis: Recent statistics in Bi-cycle industry in Birmingham shows that, they all
have upward slopping profit curve. On the other than my new business venture requires very
lower production cost and its selling price is not also very high. So I expect that this venture will
be economically viable. For further analysis, financial plan of this paper can be seen.

Social Analysis: I have started this venture thinking the social need of our economy. Recently
citizens become concerned about environmental protection. I have targeted this motto of the
society. This product will contribute positively in society by reducing pollution.

Technological Analysis: As already discussed that, the production process of this cycle does
not require intensive technology. So it is obvious that it is very unlikely that the product will
become obsolete.

Legal Analysis: This business venture will be established by following all the established state
and federal laws. Besides federal government offers concession for the business working over
environmental protection.

Environmental Analysis: Core raw materials of my product is card board, plastic, rubber
which are not detrimental to environment. So targeting this environmental concern, I wish to get
the concession form the government.

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Conclusions & Recommendations:


Recommendation:
Looking over the SWOT analysis back, I have identified some of the issues need to be addressed.
Besides I have already mentioned that I will present a brief discussion regarding these issues.
I have mentioned that, the labor forces of my business will not be skilled. So to address this
issues I will have arrange a training program; which includes:
Normally I have to train workers with the experienced workers in hand. The training program
will be divided into two steps.
Hand to hand or Apprenticeship Training: To create new efficient workers
apprenticeship training is far more superior to any other training. This training targets to the low
level workers who are only engaged in production level. It is also to create trainers for the future
purposes.
Task Level Training: For those workers who will not be able to perform efficiently, this
training program will help them to reduce their inefficiencies.

Conclusion:
The business plan presented here is to produce a bicycle made of cardboard. It is water proof and
fire proof and can be kept folded which will make it more attractive for users. So this product is
more unique than other typical bicycle. The target market is primarily Birmingham City. This
cycle is more preferable for urban areas. Initially selling program in Birminham City will solely
be controlled by the business itself. There is availability of raw material, sufficient lower cost
opportunity, no direct competitors. I have targeted kids, teenager, and young generation as
potential customers. Through market analysis I expected that the demand for this product will be
upward moving with time. I am also expecting 20% growth rate for next three years. The most
attractive feature of the product is price. I will offering our bi-cycle at less than half of the lowest
market price. So I expected that I can be the lowest cost producer in bicycle in the Birmingham
City. Through SWOT analysis I found more strength and opportunity than weakness and threats
in this prospective business plan. If all the expected circumstances remain constant, I can expect

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that the business plan is to produce cardboard bicycle will be successful and able to meet demand
of the prospective customers of Birmingham City.

References
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