Are you about starting a party bike business? If YES, here is a complete sample party bike business plan template & feasibility report you can use for FREE. A good party bike business owner should have an engaging personality and be motivated to deliver exceptional customer service. You should also be based in an environment where your customers will want to rent bikes. This usually means a tourist venue and an inviting landscape for vacationers—not too hilly or congested.
Note that your customers in this business are likely to be vacationers who appreciate an active lifestyle. They’re likely unfamiliar with the region, eager to be involved with your establishment and very receptive to your advice on sights to see or avoid. You should also be receptive to their after-ride reviews, as these often offer helpful feedback, including what attractions you may want to add to your list of recommended sites.
It’s important to state that party bikes are relatively expensive and your customers can be hard on them, so mechanical skills and/or the ability to hire at least one full-time mechanic is very necessary. An out-of-service bike isn’t earning money and can lead to customer loss.
A Sample Party Bike Business Plan Template
Table of Content
- 2. Executive Summary
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 13. Startup Expenditure (Budget)
1. Industry Overview
According to industry statistics, the global bicycle market size was valued at USD 47.51 billion in 2017. Experts believe that it will expand at a CAGR of 6.1% from 2018 to 2025. Note that the growing number of people opting for bicycling as a form of leisure is expected to propel the growth. Preference for bicycle as a convenient form of exercise to ensure a healthy life, free from obesity and other disorders is expected to further drive the market expansion.
Report has it that the popularity of dock-less bicycle sharing systems has been rising lately. It is believed that this system gives users the opportunity to locate a bicycle nearby and unlock it electronically. Incepted originally in Europe, dock-less bicycle sharing systems are gaining popularity, particularly in Asian nations, including india and China.
Furthermore, recent advances in mobile app development and Global Positioning System (GPS) have resulted in app-based dock-less bicycle sharing systems. Also the increasing adoption of such dock-less bicycle sharing systems is expected to fuel the demand for cycles significantly.
Chinese bicycle sharing companies are particularly investing and expanding their operations aggressively in European nations to capitalize on the market opportunities, which is expected to boost market growth further over the forecast period.
Humans all over the world are beginning to understand the importance of staying fit and having a healthy life. They have also started realizing that regular bicycling can keep disorders, such as obesity, at bay. Experts believe that this market will grow as more and more people are resorting to bicycling as a regular form of exercise. Events, such as Tour de France and Ronde van Vlaanderen, are further adding to the popularity of these vehicles.
Report has it that the heightening traffic congestion and shortage of parking space, particularly in metropolitan cities, is prompting people to consider bicycle commutation for short distances to save time. At the same time, various governments are aggressively rolling out the infrastructure necessary to support bicycle commutation, thereby encouraging people to opt for bicycles.
Although bicycle has been a conventional mode of transport, bicycling has also been emerging as a leading sporting and leisure activity over the past few decades. The conventional segment accounted for the largest market share in 2017. However, the electric bicycle is expected to emerge as the fastest-growing segment expanding at a CAGR of over 6% over the forecast period.
2. Executive Summary
City Bike Production (CBP) is a Minneapolis-based company that will design, produce and sell tourist party bikes, bicycle seat posts, bike pedals and shocks. Our aim is to offer a range of party bikes and bike accessories that will fit the needs of our clients. There are no other manufacturers in our business location that offers the same exact services.
Our modern tourist party bike will feature open seating for eight to eighteen riders in a sociable configuration. They will be designed to look like early 20th century trolley cars and have side seating for the peddlers, a bench seat in the rear, rack-and-pinion steering, and a canopy top. Our party Bikes will also offer an electric assisted motor to aid the riders on hilly terrain.
We plan to make them seventeen feet long, seven feet wide and eight feet tall. Also because they will be driven on municipal streets, we plan to make them have headlights, tail lights, and turn signals, as well as lighting for use at night. We at City Bike Production plan to employ an outsource model for production to allow us concentrate on what we do best, serve the customer.
Production will be outsourced to three leaders within their respective industries. We at CBP will furnish the subcontractors will all the design details and they will make the parts to specification. All our subcontractors will be chosen based on their ability to scale production when needed.
We at CBP plan to sell our products directly to individual consumers and distributors. The annual growth rate for individual customers is 15% with 297,000 potential customers. The growth rate for distributors is 6% with 12 potential customers. Although the growth rate of distributors is not that high, the sheer volume that distributors will sell and buy relative to the individuals makes the potential market very exciting.
We at CBP plan to employ two unique marketing strategies to reach our target audience. The very first strategy is to leverage our company website to raise awareness of our bikes and bike parts to individual consumers. We will also be quite active at the various industry trade shows to develop sales relationships with the different distributors.
Note that the trade shows are the most effective place to develop close relationships with new and perspective distributors. Since the business relationships are based on trust, participation at the shows will allow us to invest a lot of trust into many different relationships.
We at CBP believe that our sales will reach $256,000 in Year 1, growing to $440,000 by Year 3. Note that over the next three years, we will strategically and steadily grow profitability and gross margins.
3. Our Products and Services
City Bike Production (CBP) will design, produce and sell tourist party bikes, bicycle seat posts, bike pedals and shocks. Our modern tourist party bike will feature open seating for eight to eighteen riders in a sociable configuration. They will be designed to look like early 20th century trolley cars and have side seating for the peddlers, a bench seat in the rear, rack-and-pinion steering, and a canopy top.
Our party Bikes will also offer an electric assisted motor to aid the riders on hilly terrain. We plan to make them seventeen feet long, seven feet wide and eight feet tall. Also because they will be driven on municipal streets, we plan to make them have headlights, tail lights, and turn signals, as well as lighting for use at night.
All our bike accessories will be constructed with mostly carbon fibres. Carbon fibre is the ideal material for this application because of its lightweight, ability to dampen road vibrations and the ability to structurally engineer the material for the specific application. Our accessories will come in three weight classes, weights of <150 lbs, 150-190 lbs, and >190 lbs.
4. Our Mission and Vision Statement
- Our vision at CBP is to build the best quality product, supply and provide exceptional customer service after the sale of the product.
- Our mission at CBP is to create the finest quality party bikes and party bikes accessories in the market.
- Our products will emphasize lightweight, comfort and a realistic safety margin for all of our products.
Our Business Structure
City Bikes Production is a Minneapolis-based L.L.C. started by Kelvin Warrington. CBP will use an outsource model for our production. All our product designs have been created and formalized. We will supply our three subcontractors with the design specifications and the products will be made to order. Have it in mind that the final assembly will be done in-house.
We at CBP will employ an outsource model in order to keep capital expenditures down. We also hope to leverage valuable industry relationships to confidently have a third party manufacture the components of the party bikes. Our vendor relationships all have delivery terms included in the contracts.
CBP typically has two weeks of inventory and the vendors have contractual obligations of three – fours week delivery time. Below are the portfolios we plan to employ at CBP, to help with rendering the unique services we plan to offer.
- Chief Executive Officer
- Service and Production Supervisor
- Operations Manager
- Sales and Marketing Executive
- Engineers / Technicians
- Client Service Executive
5. Job Roles and Responsibilities
Chief Executive Officer
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counselling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- In charge of providing direction for the business
- Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- In charge of signing checks and documents on behalf of the company
- Evaluates the success of the organization
Service and Production Supervisor
- Serve as project manager of the organization; works directly with employees
- Develops strategic plan by studying new party bike technological, and financial opportunities; presenting assumptions; recommending objectives.
- Builds company image by collaborating with customers, and employees; enforcing ethical business practices.
- Maintains quality service by establishing and enforcing organization standards.
- Maintains professional and technical knowledge by attending educational workshops; reviewing professional publications; establishing personal networks; benchmarking state-of-the-art practices; participating in professional societies.
- Make certain that the service and production department perform efficiently, coordinate employee efforts, and facilitate communication
- Make sure that the organization work in line with international best practices.
- In charge of overseeing the smooth running of HR and administrative tasks for the organization
- Defining job positions for recruitment
- Carrying out induction for new team members
- In charge of training, evaluation and assessment of employees
- In charge of arranging travel, meetings and appointments
- Oversee the smooth running of the daily office and factory activities.
Sales and Marketing Manager
- Manage external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Model demographic information and analyse the volumes of transactional data generated by customer
- Identifies development opportunities; follows up on development leads and contacts
- Writing winning proposal documents, negotiate fees and rates in line with organizations’ policy
- In charge of handling business research, market surveys and feasibility studies
- Create new markets cum businesses for the organization
- Empower and motivates the sales team to meet and surpass agreed targets
- In charge of preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- In charge of financial forecasting and risks analysis.
- In charge of developing and managing financial systems and policies
- In charge of administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the business
- Serves as internal auditor for the business
Engineers and Technicians
- In charge of developing party bike production techniques, procedures, and application of production equipment to problems involving production of metals, utilizing knowledge of production specifications, properties and characteristics of metals and metal alloys, and engineering principles.
- Conducts research to develop and test new products, improve existing or develop new production equipment, develop new or modify current production methods, techniques, and procedures, discover new patterns of production phenomena, or to correlate and substantiate hypotheses.
- Builds production procedures to guide production personnel relating to specification restrictions, material processes, pre- and post-adjustment requirements
- In charge of evaluating new developments in production field for possible application to current production problems or production processes.
- Responsible for directing and coordinating technical personnel in performing inspections to ensure workers’ compliance with established production procedures
- In charge of contacting personnel of other agencies, engineering personnel or clients to exchange ideas, information, or offer technical advice concerning production matters.
- May perform experimental production to evaluate new equipment, techniques, and materials.
Client Service Executive
- Welcomes clients and potential clients by greeting them in person or on the telephone; answering or directing inquiries.
- Make sure that all contacts with clients (e-mail, walk-In centre, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Serves as the accessories sell attendant
- Manages administrative duties assigned by the creative director in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to Make sure accurate and helpful information is supplied to clients when they make enquiries
6. SWOT Analysis
We at CBP understand that the bicycle industry is generally a three layered system (manufacturer, distributor, and retailer). Some manufacturers sell directly to the consumer, but most do not. Report has it that within the last four years, the industry has seen more direct marketing manufacturers, to a large degree a function of the operating efficiencies of the Internet.
We have taken our time to analyse our business and we believe everything is set for our success, especially our business location. Minneapolis lies on both banks of the Mississippi River, just north of the river’s confluence with the Minnesota River, and adjoins Saint Paul, the state’s capital.
The city is abundantly rich in water, with 13 lakes, wetlands, the Mississippi River, creeks and waterfalls; many connected by parkways in the Chain of Lakes and the Grand Rounds National Scenic Byway.
This city and surrounding region is the primary business centre between Chicago and Seattle. In 2011, Minneapolis proper was home to the fifth-highest number of Fortune 500 headquarters in the united states. Our Business city as an integral link to the global economy is categorized as a global city.
- Precisely well engineered products.
- Follow through on all commitments, both to vendors and customers.
- Strict financial controls.
Our weakness at CBP is simply the lack of adequate funds to grow the business. Grant money will be used to purchase equipment, company expansion, create website, advertise, and hire an employee.
A party bike is sometimes mistaken for a larger-scale version of a pedicab, but it is not, since the party bike is powered by the passengers while the steering and braking is controlled by a driver who does not provide pedalling power. These bikes also serve as rolling refreshment stands. Party bikes are often used for staff parties and bachelor or bachelorette parties. They are often available at tourist attractions where they are rented by the hour or day.
The only obstacle to our success at CBP would be further downsize in the economy of the world.
7. MARKET ANALYSIS
- Market Trend
From our detailed research, we at CBP were able to note that men have historically outnumbered women in the use of bicycles for commutation and leisure. The men segment accounted for the largest market share in 2017 and is expected to expand at a CAGR of over 5% over the forecast period as the number of men riding bicycles continues to be higher than the number of women and kids.
We also found out that bicycle makers are continuously simplifying the cycling mechanism and installing efficient gear systems and shock absorbers. Note that these developments are particularly attracting women to opt for bicycling for leisure.
Women have also been participating aggressively in bicycling events since the past few years. As a result, the women segment is expected to witness a steady growth. It is anticipated to expand at a CAGR of over 4.0% over the forecast period.
Industry statistics has it that the road bicycle segment accounted for the largest market share in 2017 and is expected to keep going as the fastest-growing segment over the forecast period. Experts believe that this growth can be attributed to the fact that these are the most basic vehicles which do not need any sophisticated accessories, such as those required by racing, mountain, or other special-purpose bicycles.
Also, the mountain bicycle segment is also expected to grow significantly over the forecast period, as consumers, particularly millennials, continue to opt for mountain bicycling as a form of leisure and adventure.
Also from our research, we were able to note that Asia Pacific was the dominant segment in 2017 with a revenue share exceeding 20%. According to industry data, this region is expected to expand at CAGR of over 6.0% over the forecast period.
Nations, such as China, Japan, and Singapore, among others, emphasize on rolling out the infrastructure necessary to encourage and support bicycle commutation. Some of the cities in Asia, such as Tokyo, are known for their lowest accident rates and are hence considered as ideal cities for urban bicycling.
Meanwhile, Chinese bicycle sharing companies are aggressively targeting countries, such as India and Australia, to expand their operations. As a result, the demand for bicycles is expected to rise over the forecast period. According to the same report, the European region accounted for the second-largest share of the global market in 2017 and is expected to expand significantly at a CAGR of over 5.0% over the forecast period.
Europe is home to some of the cities that are considered ideal for bicycle commutation. Some of the most popular bicycling events, such as Tour de France and Ronde van Vlaanderen, are also organized in Europe.
8. Our Target Market
Just like we stated above, the bicycle part industry is generally a three layered system (manufacturer, distributor, and retailer). Some manufacturers sell directly to the consumer, but most do not. Report has it that within the last four years the industry has seen more direct marketing manufacturers, to a large degree a function of the operating efficiencies of the Internet. We at CBP have segmented our target market into two customers:
- Individuals’ consumers
CBP products will be sold direct to the consumer through our company website. Our typical customer at CBP will be an individual who is looking to start a party bike business or is looking to buy accessories to repair already owned party bikes. This group enjoys cycling and enjoy making money from what they enjoy doing.
This particular segment is the middle layer of the distribution system. They sell to the individuals and businesses. The main distributors are Cycle Ride, System Overview, Clean bikes and Loft Bikes all in Minneapolis.
Our competitive advantage
Our competitive advantage at CBP is our product offering that is customized to the weight and aggressiveness of the riders and peddlers. Note that every other party bike manufacturer has only one design with the only variation in length. Nobody else offers distinct products for different weight class.
The competitors have only one product that generally has a weight limit. We at CBP offer our clients different bikes that are made for different weight groups. By increasing the amount of material in key areas, we at CBP have been able to make bikes for all weight riders with a huge safety margin.
We are aware of the liability risks involved with a Product liability suit. Having specific seats and pedals for specific riders is a competitive advantage because it provides the riders with the exact weight post that they can ride safely. It also provides them with the most comfortable riding post.
We have also constructed our bikes to come with more space to allow the serving of beers and drinks easily. Our party Bikes will also offer an electric assisted motor to aid the riders on hilly terrain.
9. SALES AND MARKETING STRATEGY
- Sources of Income
City Bike Production (CBP) will generate revenue majorly from designing, producing and selling tourist party bikes, bicycle seat posts, bike pedals and shocks. Our modern tourist party bike will feature open seating for eight to eighteen riders in a sociable configuration. They will be designed to look like early 20th century trolley cars and have side seating for the peddlers, a bench seat in the rear, rack-and-pinion steering, and a canopy top.
All our bike accessories will be constructed with mostly carbon fibres. We plan to sell our products directly to individual consumers and distributors. The annual growth rate for individual customers is 15% with 297,000 potential customers.
The growth rate for distributors is 6% with 12 potential customers. Although the growth rate of distributors is not that high, but the sheer volume that distributors will sell relative to individuals makes the potential market very exciting.
10. Sales Forecast
We at CBP believe that sales will be fairly slow and steady for our first year. With the Bicycle Industry Trade show coming up in February, our sales are forecasted to increase from the distributors that month or the following month. With more retailers carrying our products, there will be greater visibility of the products and it is reasonable to believe that individual sales will also increase.
We at CBP believe that our sales will reach $256,000 in Year 1, growing to $440,000 by Year 3. Note that over the next three years, we will strategically and steadily grow profitability and gross margins.
- Marketing Strategy and Sales Strategy
Our plan at CBP is to make use of different marketing strategy based on the two different market segments that we want to reach. First and foremost, marketing for the individual consumers will be done over the Internet. Although we will use some magazine advertisement space, our key plan will focus on promoting our company website through good positioning on search engines as well as pay per click advertising.
Pay per click advertising is a system of advertising that is done through search engines where payment is made to a search engine such as Google whenever the search engine refers a person to City Bike Production site based on the keyword that they entered into the search engine. We also plan to participate in industry trade shows which will be the major marketing effort for the distributors segment.
There are two main shows and 85% of industry business is transacted at the shows, for manufacturers, distributors, and retailers. No one who is seriously participating in the industry misses these shows. We believe that this presents us with an opportunity to show off our product to the distributor as well as create a relationship with them, especially since they don’t compete with us in the same city.
We at CBP plan to give these shows massive attention because this is where the deals are made and relationships established.
11. Publicity and Advertising Strategy
CBP will leverage email marketing campaigns as a platform to boost our business and reach our customers. We plan to make use of the modern technology that incorporates video with email and offers very powerful, robust and dynamic features.
We strongly believe that the use of this technology will give us a strong competitive edge and outreach to the community. We also hope to incorporate an email drip campaign with video into our marketing efforts. From our analysis, we believe that this technology will help us to effectively market to our customers and potential customer base.
We understand that it is cost effective (averaging about $99 per month), especially when compared to the $1,000’s spent on print advertising, mailing and postage. We believe that the built-in analytics provide immediate feedback as to the campaigns effectiveness and who actually viewed the message.
12. Our Pricing Strategy
We know that we are in a purely competitive industry where each business must be a price taker, meaning that a business that has no ability to affect the market price of its services, regardless of how much work it does is destined for a meltdown. Furthermore, because the demand curve is essentially horizontal, we at CBP plan to operate at total capacity without affecting the price in the market.
This means that we must strive or look to charge our clients at the market price (or lower). We believe that the price we charge will depend on the workload and duration of the said work, and we understand that as long as marginal costs do not surpass revenues, the method to increase short-run profits is to service party bikes at maximum capacity.
- Payment Options
After extensive research we found out that payment options are the forces that bring any business closer to the heart of the people, and we hope to make use of that extensively. We will be bringing payment options that are unique and will make the payment for the service we offer very easy for our customers.
We have partnered with a renowned bank in the country and we hope to make use of that relationship. Our bank account numbers will be made available on our website and promotional materials so that it will be easier for clients to make payments when necessary.
- Payment by via bank transfer
- Payment via POS machine
- Payment via online bank transfer
- Payment via mobile money
- Payment with cash
13. Startup Expenditure (Budget)
Our key objectives at CBP are to become the premier party bicycle manufacturer and increase sales to make CBP a sustainable business. We also plan to significantly increase sales by creating a new market segment. We have analysed the market and have decided on how we plan to spend our startup fund. These are the key areas where we will spend our startup capital on;
- Business incorporating fees in the United States of America will cost – $750.
- The budget for Liability insurance, permits and license will cost – $3,500
- Acquiring a work facility that can accommodate a good number of cars per time for at least 6 months (Re – Construction of the facility inclusive) will cost – $100,000.
- The amount required to purchase the needed tool box and repair equipment – $25,000
- Equipping the office (computers, printers, projectors, markers, servers / internet facility, furniture, telephones, filing cabinets, and electronics) will cost – $30,000
- Amount required to purchase the needed software applications to run our business – $ 3,500
- Launching an official Website will cost – $500
- Inventory – $1,000,000
- Amount need to pay bills and staff members for at least 2 to 3 months – $70,000
- Additional Expenditure such as Business cards, Signage, Adverts and Promotions will cost – $5,000
From our detailed cost analysis above, we will be needing approximately two hundred and fifty dollars ($250,000) and an inventory of One million Dollars to start CBP.
Generating Funding/Start up Capital
City Bikes Production is a Minneapolis-based L.L.C. started by Kelvin Warrington. CBP will use an outsource model for production. All our product designs have been created and formalised to suit the needs on the market. CBP will be funded by Kelvin Warrington and a passive investor. Ways we hope to raise our startup capital may include;
- Generate part of the startup capital from personal savings
- Generate part of the startup capital from friends and other extended family members
- Generate part of the capital from investors
Note: Kelvin Warrington has been able to raise $700,000 ($550,000 from personal savings and $150,000 as soft loans from family and friends) and we are at the final stages of obtaining an investment of $600,000 from our business investor and partner.
14. Sustainability and Expansion Strategy
We at CBP plan to leverage our competitive advantage of customization of our product for different riders. We believe that this will offer differentiation between our competitors, something that will be emphasized in our marketing materials. We plan to market all our products via the Internet for the individual customers and through trade shows for the distributors.
Our sales strategy at CBP will depend on communication of the fact that all our products are lightweight, safe, high end bikes. Our sales campaign will also stress our interest and ability to replenish distributor’s stock quickly and as promised.
Our sales focus for individuals will be the conversion of qualified leads through the emphasis of the products being customer designed for specific customers, combining comfort, lightweight, and a wide safety margin. We strongly believe that this will help differentiate CBP products from the competition. Concerns about durability will be eliminated by the industry’s best warranty of five years.
Our strategy for the distributors will be quite different from that of our individual customers. This strategy will emphasize a close relationship between the distributor and CBP. We believe that this is very important because it is of great concern to a distributor for them to carry and feature a manufacturer who
We at CBP will work hard to convince distributors that we will be able to meet all of the needs of the distributor, that production can be scaled quickly if necessary, and that CBP is quick to fill orders, allowing the distributor not to have to keep a large inventory of the product out of fear of not being able to fulfill orders from a bicycle retailer.
Lastly, we at CBP will work on impressing the distributors at the shows that they make high-quality products with a low failure rate and that if any warranty claims are made they will be addressed quickly and happily.
- Business Name Availability Check:>Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting Feasibility Studies: Completed
- Leasing, renovating and equipping our facility: Completed
- Generating part of the startup capital from the founder: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry: In Progress