Business Plan

The Driver

Business Overview
Our chauffeur service shall be available to anyone who requires to be taken from point A to
point B within a twenty-mile radius of downtown Nashville. Our service especially targets
college-aged men and women and young professionals who prefer to consume alcohol with the
promise of a safe ride home. The Driver operates as a membership-based company, as clients
pay a monthly fee for six ($45), 12 ($80), or 20 ($110) rides a month. Reservations are made by
clients themselves through our online reservation site, or through our App on customers smart
phones. We aim to offer a convenient, safe, and affordable alternative to drunk driving at a
competitive price. At The Driver, we hope to make a difference in peoples lives by saving loved
ones from drinking and driving themselves, or being the victim of this catastrophic decision.

Mission
The Driver aims to prevent drunk driving by providing a convenient, safe, and affordable
chauffeur service during evening and night hours.
Vision
Our goal is to see the number of drunk driving arrests, accidents, and fatalities be reduced in
Nashville.
Need: Rationale for product/service - and how to fill
The Tennessee Highway Patrol arrested 3,365 people in 2008 for driving under the influence of
alcohol (www.MADD.org). These arrests from the irresponsible decision to drink and drive cost
each one of those people an average of $5,000. This same year, 327 individuals were killed in
drunk driving crashes in the state of Tennessee. Additionally, in all fatal crashes occurring from
midnight to 3 a.m., 66 percent involved alcohol-impaired driving
(http://www.edgarsnyder.com/drunk-driving/statistics.html).
The state of Tennessee, and specifically the Nashville area with four universities full of students
who take advantage of the nightlife scene, needs a service thats easy, more affordable than a
regular cab service, and dependable to help these young adults get from place to place safely.
Every 50 minutes in the U.S. a person dies because of accidents involving alcohol
(www.MADD.org), and through scheduling our service to run during the peak party times,
offering a low monthly fee, making the reservation process easy, and targeting this nightlife
crowd, The Driver aims to reduce this horrifying statistic starting with the Nashville area.

Business Model:

Key Partners: Local universities (Lipscomb, Vanderbilt, Belmont, TSU), MADD,

Sororities/Fraternities and other student organizations at these universities
Key Activities: Offer driving services during peak party hours within 20 miles of
downtown (includes Brentwood, Bellevue, Green Hills, Hendersonville)
Key Resources: Safe and pre-certified drivers and their cars, a very social population
of students and young adults, the internet/App software were developing, the 501(c)(3)
status
Value Proposition: Convenience- no cash needed, no tipping, reliable. Competitive
advantage (more cost-efficient than a regular cab), safe, works to prevent drunk driving
Customer Relationships: Close and service oriented: e.g. customers can request a
certain driver, easy to use in both registration and in our car reservation service or App,
driver will be on time, cars will be available to all members during peak times
Channels: Marketing (Graffiti advertisements, word of mouth from satisfied customers,
social networks), pairing with student organizations to gain access to more students
Customer Segments: College students at the four local universities, young professionals
in the area
Revenue Streams: Monthly fee for 6, 12, or 20 rides, additional revenue brought in by
trial fee and purchasing extra rides once the 6, 12 or 20 monthly rides run out,
fundraising
Cost Structure: See pricing model and attached Income Statement and Cash Flow

Marketplace Analysis
The Driver will be targeting students from local Nashville colleges including Vanderbilt,
Tennessee State University, Lipscomb, and Belmont. In addition to college students, we will
also target young professionals in the Nashville area. We will try to partner with organizations
such as the Nashville Junior Chamber of Commerce, and YP Nashville (Young Professionals of
Nashville Organization) to gain membership and awareness. According to the 2010 US Census
(www.factfinder2.census.gov), the population in Nashville between the ages of 20-29 is
115,876.

Fundraising
We are counting on making $40,000 annually through fundraising efforts. We plan to have two
semi-annual fundraisers and have designated a separate fundraising budget of $3,000 annually.
We have budgeted $1,500 to throw each event and hope to bring in $20,000 at each of these
fundraisers. We plan to ask for catering and location donations to host such events. Some
fundraising options we have considered are:
Gala/ ball
Auction
Golf scramble
A-thons (dance, walk, run, sport, swim, bike, etc.)
Sports tournaments
Carnival

Both within and outside of these events, we plan to incorporate smaller events to aide in
reaching our goal. These include:
Raffles
Auctions
Bake sales
Contests
Donations
Change drives
Bingo
Car wash
With so many of these smaller fundraising ideas being much cheaper or even free, we have
some backup options to make up for any fundraising shortfalls. We considered both semiannual and quarterly efforts, and will be able to make changes regarding the frequency of our
events based on what we encounter at our first few events.
Money Making Strategy
Pricing model:
The Driver will offer bundle pricing for members only. The bundles will be as follows:
$110 for 20 rides*
$80 for 12 rides*
$45 for 6 rides*
Members will have to pay the bundle fee in a monthly bill, however they will not provide any tips.
The intention is to make The Driver as convenient and easy as possible. The only additional
fees in the contract include a one-time $10 processing fee per member, and a passenger will be
charged if he/her gets sick in the vehicle (a $100 fee charged to the members monthly bill).
If a member wants to take additional, non-member passengers, the member will be billed $2 for
each individual non-member per ride. For any of the additional passengers whom are
members, the ride is free and is intended to incentivize groups of friends, family, and
businesses to buy memberships together.
The service will also be reservation-based. We would like to create an online platform where
members can quickly and easily go online, or use a mobile app to reserve a specific time slot,
which will be offered in 15-minute increments. Although most of the reservation slots will be
held for members-only, we want to have availability for non-members who hear about the
service and want to give the service a try. For those individuals who would like to try out The
Driver for the first time, we will offer one roundtrip for $15. We wanted to ensure the
introductory price was more reasonable than an average roundtrip cab ride, but also below the
value saved by becoming a member. The $15 roundtrip can only occur one time and we will
keep track by taking name, email, and phone number for our records.
Finally, there may be times when members use up their bundle before the month is up. If they
need to add additional rides, they will have to pay $15 for one roundtrip. Again, we wanted to
ensure the needs of members are met, but incentivize them to pay for the larger packages by
pricing the additional roundtrip higher than the value of the bundles.

*One ride is defined as one-way trip, not roundtrip.

Competitive Analysis
The Driver pricing model offers a much better value than a regular cab service. The average
cab service charges $3 for passenger pick up, $2 to each additional mile and $1 for each
additional passenger. In addition, passengers must tip when using a cab service, which typically
adds another 10%-15% to the final charge. As demonstrated in the pricing chart below, the
larger packages offered by The Driver create the most value for the customer. Finally, the value
of The Driver services increases as the miles traveled increase.

Marketing
Our targeted customers are Nashville-based college students and young professionals. With a
$9,600 annual budget ($800 monthly), we plan to save major marketing efforts and
expenditures until we get closer to the opening date. We will begin with cheaper marketing
strategies, including but not limited to:

Booths/ Flyers (MADD events, Vanderbilt/ Belmont/ Lipscomb/TSU orientation or

recruitment student events, Young Professionals Nashville/ Young Professionals Council
Brentwood meetings, etc.)

Flyers posted throughout Nashville, handed out at chapter meetings, and e-mailed out
Social Networking (Facebook, Twitter, Linkedin)
Create website, market through e-mails
Speaker
Joint marketing/ fundraising efforts ($5 raffle for a 12-ride monthly package)

Our more expensive marketing efforts will occur just before and consistently after our official
opening date. These efforts include but are not limited to:

Graffiti advertisements ($40.80 for each ad monthly, minimum of 10 monthly)

Billboard (approximately $9,000 annually)
Radio (60 sec- $101.67, 30 sec- $50.84, 15 sec- $25.42)

Our customer incentives will be pushed strongly through our marketing efforts. The following
incentives will be strongly advertised to those in our target customer base:
The cause (so many people affected/ can relate to the need)
Rate comparison to competitors
Convenience (paid in advance- no need for cash, all electronic- can book from phone,
can sign up for specific time slot)
Very low fee for friends to join the ride
Package options
Marketing Budget:
Booths/ Flyers
Website
Social Media
Graffiti Advertising
Billboard
Radio
Total
Remaining

Year 1
$100
$200
$0
$0
$4,000
$5,287.36 (208, 15- second
commercials)
$9,587.36
$12.64

Year 2 and On
$100
$50
$0
$4,896 (10 flyers out at all
times annually)
$0
$4550.18 (179, 15 second
commercials)
$9596.18
$3.82

Financials
Sensitivity Analysis:
In our best-case scenario we will be able to raise $40,000 before the launch of our company
and will continue to raise $20,000 every 6 months. If we can realize this, we can pay back the
loan of $80,000 in the middle of the third year.

The following scenario shows, that we are, in fact, heavily dependent on fundraising coming in
every six months. It works like a cushion, preventing us from falling into the negative numbers.
The scenario below shows the minimum amount we will have to raise in the beginning ($15,200
in month six additional to the $40,000 start-up funds from fundraising) to stay in the positive and
to achieve a slow but steady growth. However, with this slow growth we would only be able to
pay back the loan of $80,000 after 15 years or in very small rates.

For more information on financials, see Appendix A for Cash Flow Statement and Appendix B
for Income Statement.

Assumptions
All financial calculations are based on the assumptions made concerning the following pattern
for member increase.
As we will have done intensive marketing by the time our business launches (Fall semester of
2012), we assumed wed begin our service with:

20 members for contract 1 (6 rides for $45)

15 members for contract 2 (12 rides for $80)
10 members for contract 3 (20 rides for $110)

We will continue marketing and are counting on some growth due to word of mouth of members.
Therefore we assume a growth rate of:

110% for contract 1

115% for contract 2
125% for contract 3

These numbers will remain as listed above for the first three months. Then, the growth rate of
the three contracts will slow to 110% for another three months. Finally, in the last three months,
contract ones member growth will have ceased, contract two will stay at 110% until we reach
our cap of 1500 members (in the ninth months), and contract three will have slowed down to
105% growth. As our business launches, we want to stay small and manageable, therefore we
have placed a cap on membership. However, once business has become stable and revenue is
high enough, we are planning to expand to allow a greater membership base.
From the weekly calculations of member growth, it was possible to calculate both the rides we
would have to provide and also the drivers needed.
Our hours of service are:
Sunday through Wednesday: 6pm to 2am
Thursday: 6pm to 5am
Friday and Saturday: 3pm to 5am
These hours add up to 71 hours of service in 3 shifts each week.

To make a reservation on our website, people will have to insert the time they would like to get
picked up, and the pickup location and end destination. The software will handle the logistical
aspects of booking either one or two 15-minute slots. However, we have assumed that the
driver can cover a distance of 10 miles in each 15-minute slot. Therefore, one driver can
provide:

56 rides on Fridays and Saturdays

44 rides on Thursdays and
32 rides on the rest of the days.

In connection to the growth of our member numbers, we calculated that we would need:

2 drivers for each shift for month one and two (month one could suffice with one driver,
but we want to be prepared for unforeseen rushes)
3 drivers for each shift for month three
5 drivers for each shift for month four
7 drivers for each shift for month five
9 drivers for each shift for month six
12 drivers for each shift for month seven
15 drivers for each shift for month eight
20 drivers for each shift for month nine.

After the ninth month, the number of members remains 1500 (the cap) which can be covered
from then on with 20 drivers a shift.
Expenses:
For each mile a driver covers while on the clock (and in his/her own car), he/she will be
reimbursed 55 cents to cover gas, maintenance etc (www.money-zine.com/financialplanning/tax-shelter/mileage/reimbursement-rate). With that, we calculated the monthly amount
of reimbursement to individual drivers that we would have to pay. When taking into
consideration the above numbers of rides and mileage, the average hourly rate of
reimbursement is $7.33 (except for the first month of business, where total miles covered per
driver is expected to be less than their maximum mileage abilities).
Salaries:
The hourly salary for our drivers will be $13.01, which is the average for taxi and limousine
services according to the Bureau of Labor Statistics:
http://www.bls.gov/oes/current/oes533041.htm.
With the four of us serving as administrators to The Driver (at lease in the start-up phase), we
decided we would separate the 71 hours per week and work 18 hours each as
administrators for a salary of $17/hour.
Marketing/ Technology/ Fundraising
We researched marketing options and decided on a $9,600 annual budget.

We contacted a programmer who made us an offer to install a database, design a website and
create an App for $3,000. He added that we would need about $500 annual for maintenance.
We have budgeted $3,000 annually for fundraising events.
Other Expenses:
We found this website that showed getting the 501(c)(3) status is a one-time payment of $700.
http://www.charitynetusa.com/price_comparison/501c3_price_comparison.php. We also
assumed that this status would be granted to The Driver.
The loan we took from our own funds (and families and friends) has an annual interest rate of
1%. The $800 is paid at the end of the year; in the best case we will pay back the loans
between the second and the third year.
We called Geny Insurance, and after giving an overview of our company, discovered that
insurance will cost $280/month per car.
Revenue:
We assume our own funds and friends and families support will accumulate to $80,000.
We are hoping for public support of $40,000 through fundraisers in cooperation with
organizations like MADD. Furthermore, we will continue our effort to raise money by holding
fundraising events every six months, hoping for $20,000 each time.
In addition to the monthly membership fees calculated through the membership sign-up pattern,
we will charge a one-time processing fee of $10 per member which will be due at the end of the
first month.
There are four other fees through which we bring in additional revenue:
1. A $2 fee for each additional passenger who is not a member (which will be charged to the
members monthly bill). In the beginning when we dont have many members, we assume
members will bring an average of two non-members on 80% of the rides. This percentage
decreases with growing membership by 10 percent each month.
2. A one-time $15 trial fee for a roundtrip (two rides) service. Here, we estimated that 10% of all
our members have done this trial before signing up. Also we have to assume that 10% of people
who tried the company wont sign up for the membership (so we could have 10% more
members right now if all those who did the trial went on to become members). Through this
option, well bring in on average $492.16 every month for the first nine months.
3. To buy an additional roundtrip for $15 if a member has used all of their rides for their monthly
membership. We assume that 3% of our contract one, 1% of contract two and 0.5% of our
contract three customers will make use of the option once a month.
4. A $100 charge in case a customer gets sick in the car. Here we estimated that every
700th ride, this case occurs

SWOT Analysis

-Convenient: no cash needed, no tipping,

once a month CC payment
-All electronic: online registration, online
payment, app/ website for ride reservation
-Offers an alternative to drinking and
driving while promoting a message
-Prices beat competitors
-Large incentive for new-comers to try
service ($15 flat rate for 2 separate rides),
easy for guests
-Software, social media allows for cheap
costs
-High need: Nashville has a large party
scene, especially with multiple colleges

-More of a hassle than simply hailing a cab

-Summers or holiday months could be very slow
because of student customer base
-Time slots dont allow tardiness, could be
problematic during busy times
-1,500 customer cap
-Highly dependent on fundraising efforts

-Partnerships (i.e. MADD, VanderbiltCommodore Card Payment )

-Harsher DUI punishment from
Tennessee Law Enforcement (more DUI
checkpoints, fewer people will be inclined
to drink and drive)
-Improved economic conditions (people
will go out more)

-Unsuccessful fundraising efforts (lack of

sponsorships, not meeting monetary goals)
-Vandy Vans offering shuttle services downtown
-Cab companies that accept payment through
Vanderbilt cards
-Incoming market competitors (Ex. Dial A
Designated Driver)
-Dry campuses not assisting with our company
promotion

Internal OutlookPotential opportunities for growth:

Should our company make enough money for growth or should we deem a need to change the
business model completely, we have considered several options which would depend on the
success of The Driver. These include but are not limited to:
Expansion outside of 20 mile radius
Extend our cap
Allow for public-hire rides (drives could be hailed)
Shuttle service (airport, senior citizen)
Change in service hours

Appendix A: Cash Flow Statement

Appendix B: Statement of Activities

Appendix C: Example of Marketing Materi

References:
Drunk driving statistics:
http://www.edgarsnyder.com/drunk-driving/statistics.html
www.MADD.org
Costs for insuring a private hire cab:
Phone interview with Nathan Spears of Geny Insurance on November 29, 2011.
Competitors price model:
yellowcab.com
Nashville population statistics:
www.factfinder2.census.gov
Costs to get the 501c3 status:
http://www.charitynetusa.com/price_comparison/501c3_price_comparison.php
Reimbursement rate for chauffeurs:
www.money-zine.com/financial-planning/tax-shelter/mileage/reimbursement-rate
Average hourly wage for chauffeurs:
http://www.bls.gov/oes/current/oes533041.htm.
Graffiti Advertising rates:
E-mail interaction with Lars Frederiksen, Graffiti Director of Sales, on November 16, 2011.
Billboard Rates:
http://carboncopyconsulting.com
Radio Rates:
http://www.radioloungeusa.com/