BUSI 435 Week 6 Business Plan Example

Business Plan: Wrench on Wheels Mobile Bicycle Repair, LLC

Executive Summary

Wrench on Wheels Mobile Bicycle Repair, LLC will provide on-site bicycle and electric bicycle repair to riders in a college town of about 60,000 people, coming to customers' homes, dormitories and workplaces by appointment. Our feasibility analysis showed that riders frequently delay repairs because taking a bike to a shop is inconvenient, that the town's only full-service shop has waits of seven to ten days in spring, and that no competitor offers mobile or specialized e-bike service. A three-weekend pilot completed 38 jobs at an average ticket of $92 and left 20 requests unfilled.

The company requests a $30,000 microloan, repayable over five years, which together with $15,000 from the founders will fund a fitted cargo van, tools, parts inventory, insurance, launch marketing and working capital. We project 1,100 jobs and $104,500 in revenue in the first year, rising to $260,000 in the third year as a second mechanic joins. The business reaches break-even at about 869 jobs a year, and projected cash flow covers loan payments with a margin in every year. The founders combine four years of professional bike repair experience with business training, and the plan's milestones allow the lender to track progress quarterly.

Company Description

Wrench on Wheels will be organized as a limited liability company owned equally by its two founders. Its mission: bicycle care as easy as booking a ride, done honestly and on schedule, so more people keep cycling. Its values are reliability, transparent pricing and care for the community's riders. The company will operate from the home of one founder, with the van serving as the workshop, which keeps overhead low.

The service addresses a specific problem. Riders whose bikes need repair must transport them to a shop, wait days for the work and return to collect them, which is difficult for students without cars and for busy commuters. By bringing the shop to the rider, Wrench on Wheels removes that barrier.

Industry and Market

More North Americans now ride for commuting and fun than a decade ago, supported by investment in infrastructure and interest in health and sustainability (Pucher & Buehler, 2017). Electric bicycles, which extend the distances riders can comfortably travel, are a growing part of that market and could replace a meaningful share of car trips (McQueen et al., 2020). E-bikes require specialized service for motors, batteries and electronics, and general shops are often slow to provide it.

Research on bicycle commuting shows that convenience strongly affects whether people ride (Heinen et al., 2010), which suggests that easier maintenance can keep more people riding. Our survey of 162 local students, staff and residents, presented as illustrative figures, found that 58 percent own a bike, 64 percent of owners needed a repair in the past year, 41 percent delayed a repair because getting the bike to a shop was inconvenient and 47 percent were likely to use a mobile service at our planned tune-up price.

We will serve three target segments: university faculty and staff who commute by bike and value workplace service; students in dormitories and apartments who lack cars to transport bikes; and owners of electric bikes, fewer in number but worth more per visit because their machines need specialist care. Each segment reaches us through a different door, workplaces, apartment complexes and online search respectively, which shapes the marketing plan below.

Market Size and Share

The town and university together include roughly 30,000 bicycle owners by our estimate, and the survey suggests that about two-thirds of them need service in a given year, or about 19,000 service needs. Our first-year projection of 1,100 jobs represents only about 6 percent of that demand, and the third-year projection of 2,600 jobs about 14 percent. Because the downtown shop already handles a large share of the market and the cooperative serves do-it-yourself riders, we do not need to take customers from either; much of our demand comes from riders who now delay or skip repairs because no convenient option exists.

Customer Profile

Our ideal first customer is a university employee who commutes by bike three to five days a week, rides a mid-priced commuter or e-bike and has little time to take it to a shop. That customer values reliability, wants the bike serviced during the workday and will return each spring and fall. Our second priority is the e-bike owner, who spends more per visit and has few alternatives. Students are a large segment whose bookings cluster at the start of each semester, which fits our plan to run service days at apartment complexes during move-in weeks.

Competition and Strategy

The town's two competitors are a downtown shop that sells bikes and offers repairs with long spring waits, and a student cooperative that provides tools for do-it-yourself repair. Neither offers mobile service or e-bike specialization.

Our strategy is focused differentiation: we will compete on convenience, speed and e-bike expertise rather than price. We will build relationships with the university's facilities and sustainability offices and with apartment managers, offering scheduled on-site service days that bring many customers to one location and make our routes efficient. If the downtown shop adds pickup and delivery, our e-bike skills, workplace service days and reputation for appointments kept on time will continue to distinguish us.

Services and Pricing

We will charge $85 for a standard tune-up and $180 for a complete overhaul; a flat costs $30 plus the tube or tire, brake and drivetrain jobs are quoted individually, and e-bike work begins at $120 for diagnosis. We will also offer a winter storage-and-service package at $140, in which we collect a bike in November, store and service it, and return it ready to ride in March.

Prices are set according to the value customers receive, the convenience of on-site service and saved time, and checked against our costs. Value-informed pricing has been tied to new product success (Ingenbleek et al., 2003), even though many firms shy away from it because value is harder to pin down than cost (Hinterhuber, 2008). Our survey and pilot give us that measure: customers accepted prices slightly above the downtown shop's because the service saved them a trip. Every price exceeds the cost of parts and the mechanic's time by a margin that supports the break-even analysis below.

Customer Experience

Every job follows the same process so customers know what to expect. Customers book online, choose a time window and describe the problem. The mechanic arrives within the window, inspects the bike and explains any additional work and its price before starting, so there are no surprises. After the repair, the mechanic test-rides the bike, reviews what was done with the customer if present, and sends a digital receipt with notes on any upcoming maintenance. Customers who are not present receive a photo of the finished bike. A reminder six months later invites them to book the next tune-up, which builds repeat business without additional marketing cost.

Payment Terms and Guarantees

All individual customers will pay by card or mobile wallet at the time of service, so the business carries no accounts receivable from consumers. University departments and apartment managers that book service days will be invoiced with thirty-day terms under a simple written agreement, and the first invoice to each will be reviewed for prompt payment before further credit is extended. Every repair carries a thirty-day workmanship guarantee: if an adjustment slips or a repaired part fails because of our work, we return and fix it at no charge. Parts carry the manufacturers' warranties, which we will handle on the customer's behalf. Clear terms protect cash flow and build the trust on which a service business depends.

Marketing Plan

Our marketing will focus on the places our customers already gather. Before each semester, we will run workplace service days at university departments and apartment complexes, promoted through department newsletters and building managers. A simple website will let customers book appointments, see prices and pay online. We will claim and maintain local map listings, since many riders search for bike repair on their phones, and post short videos on social media showing quick repairs and e-bike tips.

Word of mouth will be our main growth engine. We will follow every job with a text asking for a review and offer a $10 credit to customers who refer a friend. A partnership with the student cooperative, which teaches riders to fix their own bikes, will send us the jobs that require tools or skills the cooperative lacks. Launch marketing of $2,500 will cover the website, printed door hangers for apartment complexes and introductory offers during the first spring.

Marketing Budget and Measurement

In the first year, the marketing budget of $4,000 will be divided among online listings and the website, about $1,200; printed materials for apartment complexes and workplaces, about $800; introductory offers and referral credits, about $1,500; and a small budget for social media promotion during the spring launch, about $500. Each booking will record how the customer heard about us, so we can see which channels bring customers and shift money toward them. Our target is that at least half of second-year bookings come from repeat customers and referrals, which would sharply lower the cost of acquiring each customer.

Operations Plan

Repairs will be done by the certified founder working out of the outfitted van, which carries a stand, hand tools, common parts and a small compressor. Appointments will be booked through scheduling software that groups jobs by neighborhood to reduce driving time. A typical day will include seven jobs, with workplace service days handling more. The van will stock what tune-ups, brake jobs and flats use most, and anything else comes overnight from our suppliers.

To manage the spring peak, we will open bookings for spring tune-ups in February, offer a discount for March appointments and add Saturday hours from April through June. Quality will be assured through a checklist for every service and a thirty-day guarantee on workmanship. A typical spring weekday illustrates the routine: the mechanic loads parts at 7:30, completes three tune-ups at the engineering building's bike room before noon, handles a brake repair and an e-bike diagnosis at two apartment complexes in the afternoon, and finishes with a flat repair near downtown, logging each job on a tablet as it is completed. The business partner confirms the next day's appointments, answers booking questions and orders any special parts by 4:00 so they arrive the next morning. Grouping jobs by location this way keeps driving to well under an hour a day and lets one mechanic complete seven or eight jobs in a normal day. We will maintain general liability and commercial auto insurance, a city business license and the university's vendor registration.

Technology and Records

Scheduling, invoicing and customer records will run on a single cloud-based service-business application that handles online booking, route planning, card payments at the time of service and automated reminders. Every job will be logged with the bike's make, the work done and the parts used, which lets us track average tickets, parts margins and repeat visits. Financial records will be kept in standard small business accounting software reconciled monthly, and the business partner will prepare a monthly report comparing actual results with this plan.

Inventory and Suppliers

The van will carry a standard inventory of the parts used most often, including tubes, tires in common sizes, brake pads, cables, chains and lubricants, worth about $4,000 at cost. Every Friday after the last job, the stock is counted and anything below its set minimum is reordered for Monday delivery. Two regional distributors supply most parts, so a shortage at one can be covered by the other. Less common parts will be ordered per job, with the customer's approval and a deposit for expensive items such as e-bike batteries. Keeping inventory lean conserves cash, one of the bootstrapping practices small firms use most, while the standard stock ensures most jobs can be finished on the first visit.

Management and Organization

The two founders will manage the company. The mechanic, who holds a professional repair certification and has four years of shop experience, will lead service and quality. The business partner, who studied accounting and marketing, will manage scheduling, customer relations, marketing and finances, and will learn basic repairs to assist on busy days. An advisory relationship with a retired shop owner and with the university's small business development center will provide guidance. In the second year, the company plans to hire a second mechanic for the spring through fall seasons.

Staffing Plan

In the first year, the two founders will do all the work, with the mechanic performing repairs and the business partner handling everything else and assisting on busy days. In the second year, the company will hire a second mechanic from March through October, recruiting from the cooperative's most skilled volunteers and from graduating students with shop experience. The new mechanic will be paid an hourly wage plus a small bonus tied to customer reviews, and will be trained on the company's service checklist and e-bike procedures during the slow weeks before spring. If demand grows faster than projected, a part-time scheduler could free the business partner to focus on partnerships and marketing.

Ownership and Governance

The founders will sign an operating agreement that sets out their equal ownership, their roles, how decisions are made, how each will be paid, and what happens if one wishes to leave or becomes unable to work, including a buy-sell provision funded by a modest life and disability insurance policy. The agreement also requires both founders to approve any borrowing beyond the microloan and any new partner. A lender benefits from this clarity, because disputes between founders are a common reason small businesses fail to repay.

Community Commitment

Wrench on Wheels will volunteer two service days each year at the campus cooperative's free repair clinic and will donate refurbished bikes, assembled from parts left by customers who chose not to keep them, to a local organization that helps people without cars get to work. These commitments reflect the founders' values and build goodwill with the riders and organizations that make up the company's market.

Financial Plan

Startup Costs and Sources of Funds

The founders' contribution, a third of the total, shows commitment and reduces the lender's risk. Research on new firms finds that they rely heavily on external debt such as bank loans alongside owners' own funds (Robb & Robinson, 2014), and that startups with tangible assets like vehicles and equipment are better able to obtain debt (Cassar, 2004). The van and equipment would serve as collateral for the loan.

Three-Year Projection

Year one assumes 1,100 jobs, which works out to just under two dozen weekly across a 48-week season and fits what the pilot and survey showed. In the second year, a second mechanic and a leased second van raise capacity, which explains the jump in wages and vehicle costs and the narrower margin that year. By the third year, both vans operate near capacity and the margin recovers.

Break-Even and Cash Management

Each job contributes about $71 after parts in the first year. With roughly $21,900 a year in fixed costs and $40,000 for the founders, about 869 jobs, around 18 each working week, cover every cost. The first-year projection exceeds that level by about 27 percent.

Cash flow is seasonal, strong in spring and summer and weak in winter. To manage it, we will keep the $7,000 working capital reserve, sell winter storage packages that bring cash in November, and use bootstrapping practices that research finds common among small firms, such as minimizing inventory and collecting payment at the time of service (Ebben & Johnson, 2006). The loan will be repaid in equal monthly installments, and the projection shows enough cash after payments to cover a slow winter.

Sensitivity of the Projection

We tested the first-year projection against weaker outcomes. If jobs fell 18 percent short of plan, to 900, the business would still cover all costs, including the founders' pay and loan payments, though with little left over. A ten-dollar drop in the average ticket would push break-even up by roughly a hundred jobs, which the first-year volume would still cover. A combination of both shortfalls would leave the business slightly below break-even in its first year, which the working capital reserve could absorb while the founders adjusted prices or marketing. The loan payment of about $7,300 a year is small relative to projected operating profit in every year, which gives the lender a reasonable margin of safety.

Growth Path and Exit

If the first two years meet plan, the company could add a third van in a neighboring town or offer contract maintenance for bike-share fleets and university-owned bicycles. The founders intend to operate the business for the long term, but its customer list, recurring service contracts and equipment would also make it saleable to a regional shop or another operator, providing an exit option if circumstances change.

Risks and Responses

The main risks are seasonal demand, limited capacity, competition from the downtown shop and the physical risks of outdoor work. Our responses are winter packages and e-bike service to smooth demand, a second mechanic once bookings exceed one person's capacity, workplace partnerships and e-bike expertise to differentiate us, and insurance with safe work practices. Planning research suggests that ventures that plan before acting are more likely to survive and develop (Delmar & Shane, 2003), and a meta-analysis found that planning is positively associated with small firm performance, though its value depends on context (Brinckmann et al., 2010). We will therefore treat this plan as a working document, reviewing actual results against it each quarter and adjusting assumptions as we learn.

Use of Funds Timeline

The loan and the founders' contribution will be spent in a planned sequence. In the first month, the company will buy and fit out the van, purchase tools and inventory and pay first-year insurance and licenses, about $35,500 in total. Launch marketing of $2,500 will be spent in the six weeks before the spring opening. The $7,000 working capital reserve will remain in a separate account to cover slow weeks and will be drawn on only if monthly cash falls below one month of fixed costs. The business partner will report monthly on spending against this plan.

Milestones

Conclusion

Wrench on Wheels addresses a clear problem with a tested solution. The market evidence, pilot results and financial projections show a business that can repay its loan, pay its founders and grow. With a $30,000 microloan, the founders can launch in time for the spring season, when demand is strongest, and build the reputation that will carry the company through its first years.

References

Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning-performance relationship in small firms. Journal of Business Venturing, 25(1), 24-40. https://doi.org/10.1016/j.jbusvent.2008.10.007

Cassar, G. (2004). The financing of business start-ups. Journal of Business Venturing, 19(2), 261-283. https://doi.org/10.1016/S0883-9026(03)00029-6

Delmar, F., & Shane, S. (2003). Does business planning facilitate the development of new ventures? Strategic Management Journal, 24(12), 1165-1185. https://doi.org/10.1002/smj.349

Ebben, J., & Johnson, A. (2006). Bootstrapping in small firms: An empirical analysis of change over time. Journal of Business Venturing, 21(6), 851-865. https://doi.org/10.1016/j.jbusvent.2005.06.007

Heinen, E., van Wee, B., & Maat, K. (2010). Commuting by bicycle: An overview of the literature. Transport Reviews, 30(1), 59-96. https://doi.org/10.1080/01441640903187001

Hinterhuber, A. (2008). Customer value-based pricing strategies: Why companies resist. Journal of Business Strategy, 29(4), 41-50. https://doi.org/10.1108/02756660810887079

Ingenbleek, P., Debruyne, M., Frambach, R. T., & Verhallen, T. M. M. (2003). Successful new product pricing practices: A contingency approach. Marketing Letters, 14(4), 289-305. https://doi.org/10.1023/B:MARK.0000012473.92160.3d

McQueen, M., MacArthur, J., & Cherry, C. (2020). The e-bike potential: Estimating regional e-bike impacts on greenhouse gas emissions. Transportation Research Part D: Transport and Environment, 87, Article 102482. https://doi.org/10.1016/j.trd.2020.102482

Pucher, J., & Buehler, R. (2017). Cycling towards a more sustainable transport future. Transport Reviews, 37(6), 689-694. https://doi.org/10.1080/01441647.2017.1340234

Robb, A. M., & Robinson, D. T. (2014). The capital structure decisions of new firms. The Review of Financial Studies, 27(1), 153-179. https://doi.org/10.1093/rfs/hhs072