Accounting assignment on: Banks & Grants from Government of Australia

I. INTRODUCTION

a) Name of the Business: Cycle-a-Taxi

b) Address: Brisbane & Perth, Australia

c) Nature of Business: Environment friendly mode of transportation

d) Statement of Finance: Taking loans from Banks & Grants from Government of Australia to purchase the cycle taxi.II. EXECUTIVE SUMMARY:

Ranked thirteenth among the world’s largest economies, Australia is rated amongst the highest in many international comparisons of national performance such as public education, human development, health care, life expectancy, quality of life, protection of civil liberties, economic freedom and the and political rights. (Cubby, 2009)

Nearly 75% of Australian population lives in metro cities and near the coast line; therefore, beaches are an essential element in the life of every Australian. The Australian Beach Culture is akin to other cities in the US. The major chunk of Australian population lives in coastal areas as the interior part of the country is called “the Outback” because it can be a very dry area with deserts and shortage of water. (Tulloch & Threadgold, 1978)Brisbane  is the capital and most populous city in the Australian state of Queensland and the third most populous city in Australia. Brisbane’s metropolitan area has an approximate population of 2 million. A resident of Brisbane is commonly known as a “Brisbanite”.

Perth  is the capital and largest city of the Australian state of Western Australia and the fourth most populous city in Australia. The Perth metropolitan area has an estimated population of 1,659,000. (Pamela, 1990)

There has been a growing concern regarding the change in climate in Australia in the past decade. One of the major issues for Australian nationals today is the protection of the environment. However, carbon dioxide emissions in Australia are ranked highly among the top developing countries in the world. (Goodall, 1995)

Another major issue which is of accelerating concern, has been cited in the data from recent regional and state surveys of school students by the AIHW’s (2000) which states that the rate of overweight and obese among young Australian population are increasing at an alarming rate. (Klugman, 2010)

To overcome the problems discussed above ‘Cycle-a-Taxi’ will be launching cycle taxi services in two cities of Australia, namely Brisbane & Perth.Cycle Taxi would be a vehicle which will be used for transporting one or two people within a distance of 8-10 miles. This cycle taxi will be driven by a cycle puller who could be a full time or a part time employee of the company. The part time employees could be students & unemployed.

This cycle taxi would be having paddling options with the person sitting behind (passenger) as well. This one of a kind taxi, currently popular in emerging countries like South Asian Countries & Africa, would serve a dual benefit of saving on carbon emissions as it would be driven without fuel & would also help the passengers & the part time drivers to improve on their health, fight obesity & even earn an extra buck.

III. INDUSTRY ANALYSIS:

a) Future outlook & trends:

Brisbane & Perth are the major metros in Australia with a population 2,004,262 & 1,658,992 respectively (Australian Bureau of Statistics, June 2009). And with an augmenting rate of population the car ownership is also increasing thereby leading to problems like traffic jams & congestions, which further creates problems like loss of man hours, thinning of the ozone layer, etc.

The future of cycle taxis in the developed & OCED countries is attributed to all these never ending problems.b) Analysis of competitor:

The competition faced by ‘cycle-a-taxi’ is majorly from other public modes of transport which includes Rail & Buses, which have their own share of advantages & disadvantages.

But, when we consider travelling within the city, rail & buses operates as per their stipulated time schedule and not as per each individual’s convenience. This is where cycle taxi has an edge over its competitor.

c) Market Segmentation:

The target market for cycle taxi has been segmented on the following grounds:

• People suffering from obesity, overweight & other health related issues.
• People frequently visiting the beaches.
• Retired population (visiting nearby shopping malls & other leisurely places).
• People willing to work part-time.

d) Industry & Market Forecast:

Brisbane, Adelaide & Perth are one of the cities relying on car for transportation. Moreover, the distance travelled by car in Australia exceeds USA and Canada. Issues like increasing traffic congestion & rising petrol prices are the main factors contributing to increasing use of public transport.

But, the other available modes of transportation lack the flexibility of timings & convenience which make them unsuitable for the common public. Cycle Taxi as a mode of transport would overcome the shortcomings of the current transportation available, making its future bright & prosperous.

IV. DESCRIPTION OF THE VENTURE:

a) Product:

The cycle taxi would resemble a tricycle with a seating capacity of two people except the driver. Along with the driver the passenger’s seats would also have an option to paddle & ride along the taxi, as per their convenience.

The cycle taxi would come with a distance & calorie meter attached, so as to make the riders aware of the distance travelled and the calories burnt by them. Also the cycle taxi would be covered from the sides & the top to display advertisements, which would be one of the sources of funds.

Of the 50 cycle taxis in each city, 30 would be allotted to full time employees & 20 cycle taxis would be spared for the part-time drivers.

b) Service:

The services of the cycle taxi would be available from 0600 hrs in the morning till 2300hrs.  This service provided by the riders would be charged 75 cents per mile. The full time drivers would operate in two shifts, one from 0600 hrs-1400 hrs & second from 1500 hrs-2300 hrs. The part time drivers can provide cycle taxi services for maximum 6 hrs at a stretch. All cycle taxis will be accessible to public at their door steps as they can make a call to a toll free number to order a cycle taxi.c) Size of business:

At the outset the number of cycle taxis running in each city would be 50, which can be increased as per the demand. The success ratio of the cycle taxi in Kenya has been very high ranging to almost 5000 cycle taxis in a city, Each of the taxis generated (Ksh 250 per day) US $ 3  in a country with an income per capita of US $ 300. Each of the 5000 taxis transported about 10 people per day. And now it has become part of the mass transit system in Kisumu town, which indicates that the success rate of cycle taxis in Australia could be high.

d) Office equipment & personnel:

Cycle taxis not in use will be parked at the nearest shopping mall parking lots during the day as well as in the night. These tricycle taxis would require servicing & maintenance once in every three months which would be catered by the manufacturer of the tricycle at his local servicing centres in the respective city.

 Each rider will be provided with a helmet & first aid kit with the cycle taxi. With every 100 miles ridership, the riders will be credited with 100 points in their Benefit Card which would help them to make discounted purchases at the local stores. The Benefit Card scheme would be applicable to both the full time employees & part time riders & passengers.

All full time drivers will be provided one week training on traffic rules & regulations, whereas part time drivers will be provided two weeks training.

V. PRODUCTION PLAN

Production of the cycle taxi would not be under taken by Cycle-a-Taxi, which will order the taxis to a local bicycle manufacturer. But, Cycle-a-Taxi would provide specifications to build the tricycle.Some of the specifications would include:

• Use of light weight material to build the frame work of the tricycle.
• Certified spare parts.
• Sufficient space for passengers to sit & extra space for luggage.
• Design as per the safety standards laid down by the Australian government.

The design of the cycle taxi would be laid out by the bicycle manufacturing company, Avanti situated in Queensland. Once the design would be cleared by Cycle-a-Taxi, the cycle taxi would be delivered in Brisbane & Perth by Avanti.

VI. OPERATIONAL PLAN

The day to day functioning of the business would include pick up of the cycle taxi by the drivers from the parking lots. The parking place of cycle taxis would be equipped with computer systems to generate an automated driver’s identity card along with the number of the cycle taxi allotted to him & two full time staff to supervise the entry & exits of the taxis from the parking lot.

At the end of the day when the driver leaves the taxi in the parking lot the distance and the calorie meter attached would notify the supervisors about the distance travelled by each taxi & he would be paid the remuneration accordingly.

The part time employees will be paid on hourly basis depending on the distance they cover.

VII. MARKETING PLAN

a) Pricing:

There are two ways of getting into the industry, first is to be a tricycle owner and second is to lease it to a cyclist. Tricycle owners will lease the riders at AUD 10. One can also be a cyclist who hires a bicycle and gets an income of AUD 100 per day. There are also owner-cyclists.

Each cycle taxi would cost AUD 500 (app.) to cycle-a-taxi. So, procuring 100 cycle taxis from the manufacturer would cost AUD 50,000. Each cycle taxi would earn 75 cents per mile for the company.b) Promotion:

• Cycle taxi as a mode of transport would be promoted as an ‘Environmental friendly transport’ through regular announcements on the radio & frequent fliers in newspapers. Moreover, positive word of mouth publicity would provide a boost to the usage of cycle taxis in other cities as well.
• The Calorie & Distance Meter, installed in the cycle taxi which would motivate people to become aware & conscious towards the importance of regular exercise and a healthy lifestyle.
• Activists from other social causes would be indulged at regular intervals to promote the use of cycle taxis.
• The cycle taxi riders will carry mobile phones, so that people can call them whenever needed.

VIII. FINANCIAL PLAN

a) Sources & Application of funds:

• Cycle-a-taxi would take loan from the Commonwealth Bank of Australia & grant from the Australian Government Agencies supporting SME’s to procure the cycle taxis & for the operational expenses of the company.
• The revenue generated from advertisements on the cycle taxis would be used to pay the part time & full time employees.

IX. ASSESSMENT OF RISK: SWOT Analysis

a) Strength:

• Cycle taxi is the only Environment Friendly mode of transport, besides walking.
• It is a cheap mode of transportation for short distance journey.
• Cycle Taxi is most convenient in traffic jams.
• It is the only mode of transport which can help in controlling health related problems.
• Easily accessible and available at door steps at one call.
• It is the only indivualised mode of transport.

b) Weakness:

• Cycle taxi could be used only for short distance travel, as it would be pulled manually & not by any fuel.
• Since it is not run by any fuel, it lacks speed.

c) Opportunities:

•  Cycle Taxi can be free of its weakness by attaching an electric motor run on battery in future, which would turn out to be an excellent opportunity to make it a commercial success.
• Increasing environmental issues like changing climate, thinning of the ozone layer, etc as a result of pollution caused by vehicles on road always bring new opportunities for alternative mode of transportation.

d) Threats:

• Other available motorised public modes of transport are well established which could hamper the entrance of cycle taxis.
• Involvement of physical effort and less financial incentives can affect the availability of part time drivers.X. CONCLUSION

In a developed country like Australia, where infrastructure is not a hindrance to growth, small & micro enterprises can flourish without any setbacks. For a micro business like Cycle-a-Taxi which requires low investments and can give high returns the government is always there to support them.

Besides a mode of transportation there are numerous ways how this business can be a success:

• Small traders can use the cycle taxis on credit and pay back after  their trading day;
• The cycle taxis would not have any fixed route and can go to any place that the client wants;
• Unlike other public transport services, there is no waiting period
• Traders can use the cycle taxi and so that like a “courier service”;

Therefore this young mode of transportation system needs government assistance & support that is not much seen for a small and micro enterprise service sector.

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