Airport Shuttle Business Plan

Valley Airporter plans to transport over 20,000 passengers this year. We will purchase three brand new 20-passenger buses to replace older 14-passenger buses to accommodate those passengers.

The new buses are necessary due to the expansion of airport service. The schedule has expanded from three times a day, Monday through Friday, to ten trips each weekday and nine trips on Saturday and Sunday, 365 days per year.

Valley Airporter operates out of Corvallis, home to Oregon State University, with over 18,000 students, and over 120 high-tech businesses. While Corvallis has a small airport and Eugene, a regional airport 50 miles south, most travelers prefer the Portland International Airport, which is 70 miles north of Corvallis.

Bob and Mary Wilson, co-owners of Valley Airporter, will invest in the purchase of the new vans. They will also secure a long-term commercial loan.

Airport Shuttle Business Plan Example

The mission of Valley Airporter is to ensure safety, convenience, and comfort for every customer. Valley Airporter’s chauffeurs are experienced, professional, and commercially certified drivers. The office staff is professional, friendly, and helpful, going above and beyond for customers. Valley Airporter is a caring company that regularly donates time and services to community schools and organizations.

Valley Airporter is a successful airport shuttle service that transports passengers between the Portland International Airport and Corvallis. They have office space in the Clairmont Inn and offer long-term parking for customers.

Bob and Mary Wilson are the co-owners of Valley Airporter.

In April 1998, Valley Airporter began its operation with three 14-passenger vans that were converted to 11-passenger vans with rear luggage area. Valley Airporter plans to travel over 2,000 miles per day and transport over 20,000 passengers. To accommodate these passengers, they plan to purchase three brand new 20-passenger replacement buses. All buses are equipped with seat belts and high back reclinable seats for comfort and safety. The schedule has continually expanded over the years from three times a day on weekdays to ten trips each weekday and nine trips on Saturday and Sunday, operating 365 days per year.

Airport Shuttle Business Plan Example

Past Performance
1999 2000 2001
Sales $138,600 $200,000 $290,000
Gross Margin $30,000 $40,000 $60,000
Gross Margin % 21.65% 20.00% 20.69%
Operating Expenses $75,000 $90,000 $120,000
Balance Sheet
1999 2000 2001
Current Assets
Cash $20,000 $30,000 $50,000
Other Current Assets $0 $0 $0
Total Current Assets $20,000 $30,000 $50,000
Long-term Assets
Long-term Assets $60,000 $60,000 $130,000
Accumulated Depreciation $8,000 $16,000 $24,000
Total Long-term Assets $52,000 $44,000 $106,000
Total Assets $72,000 $74,000 $156,000
Current Liabilities
Accounts Payable $10,000 $14,000 $16,000
Current Borrowing $0 $0 $0
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $10,000 $14,000 $16,000
Long-term Liabilities $20,000 $10,000 $80,000
Total Liabilities $30,000 $24,000 $96,000
Paid-in Capital $0 $0 $0
Retained Earnings $33,000 $38,400 $45,500
Earnings $9,000 $11,600 $14,500
Total Capital $42,000 $50,000 $60,000
Total Capital and Liabilities $72,000 $74,000 $156,000
Other Inputs
Payment Days 0 0 0

Services

Valley Airporter provides airport shuttle between Corvallis and Portland International Airport. The shuttle makes ten trips Monday through Friday and nine trips on Saturday and Sunday, 365 days per year.

Departure Times To Portland International Airport:

  • 3:00 a.m. (Monday to Friday only)
  • 4:30 a.m.
  • 6:30 a.m.
  • 8:30 a.m.
  • 10:30 a.m.
  • 12:30 p.m.
  • 2:30 p.m.
  • 4:30 p.m.
  • 6:30 p.m.
  • 8:30 p.m.
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Departure Times To Corvallis from the Portland International Airport:

  • 5:05 a.m.
  • 9:00 a.m.
  • 11:00 a.m.
  • 1:00 p.m.
  • 3:00 p.m.
  • 5:00 p.m.
  • 7:00 p.m.
  • 9:00 p.m.
  • 11:10 p.m.

Market Analysis Summary

There are several environmental factors that create an increasing demand for shuttle services between Corvallis and Portland International Airport:

  • The city of Portland has the state’s only international airport. The regional airport in Eugene (50 miles south of Corvallis) has flights to Portland but those flights cost more than the shuttle service from Corvallis.
  • The city of Corvallis has experienced significant growth during the past three years with a 20% increase in enrollment at Oregon State University. Moreover, the city is home to several high-tech businesses serving an international market.
  • The cost of long-term parking at Portland International Airport has increased by 20% to $10 per day.

4.1 Market Segmentation

Valley Airporter will focus on two customer groups:

  • University students, staff, faculty, and visitors.
  • Employees of high-tech companies.

Airport Shuttle Business Plan Example

Market Analysis:

Market Analysis
2002 2003 2004 2005 2006
Potential Customers Growth CAGR
University 15% 18,000 20,700 23,805 27,376 31,482 15.00%
High Tech 10% 10,000 11,000 12,100 13,310 14,641 10.00%
Total 13.29% 28,000 31,700 35,905 40,686 46,123 13.29%

Strategy and Implementation Summary:

Valley Airporter has developed a strong customer support base at Oregon State University and numerous high-tech companies in Corvallis. The expansion of services responds to growing demand for additional shuttle times and greater bus capacity.

To increase sales at Oregon State University, the shuttle will pick up and deliver customers in front of the university’s bookstore on campus.

To increase ridership with high-tech companies, Valley Airporter offers a round-trip fare package of $60 when a company purchases 10 or more advance round-trip tickets.

Sales Forecast:

The following is the sales forecast for three years.

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Airport Shuttle Business Plan Example

Airport Shuttle Business Plan Example

Sales Forecast

Sales Forecast
2002 2003 2004
Shuttle Tickets $550,000 $595,000 $650,000
Other $0 $0 $0
Total Sales $550,000 $595,000 $650,000

Management Summary

Bob and Mary Wilson, co-owners of Valley Airporter, perform management duties. Mary is the office manager and bookkeeper, supervising the office staff and overseeing customer service. Bob supervises and schedules shuttle drivers and is responsible for vehicle repair and maintenance.

6.1 Personnel Plan

The staff for Valley Airporter consists of:

– Office manager

– Shuttle manager

– Full-time drivers (3)

– Part-time drivers (2)

– Office staff (2)

Personnel Plan
2002 2003 2004
Bob Wilson $30,000 $32,000 $34,000
Mary Wilson $30,000 $32,000 $34,000
Drivers $192,000 $200,000 $210,000
Office Staff/Sales $36,000 $38,000 $40,000
Total People 9 9 9
Total Payroll $288,000 $302,000 $318,000

Financial Plan

The financial plan for Valley Airporter is as follows.

7.1 Break-even Analysis

The following table and chart show the break-even analysis for Valley Airporter.

Airport Shuttle Business Plan Example

Break-even Analysis:

Monthly Revenue Break-even: $41,161

Assumptions:

Average Percent Variable Cost: 12%

Estimated Monthly Fixed Cost: $36,147

Projected Profit and Loss:

The table and charts below show the projected profit and loss for three years.

Airport Shuttle Business Plan Example

Airport Shuttle Business Plan Example

Airport Shuttle Business Plan Example

Airport Shuttle Business Plan Example

Pro Forma Profit and Loss

Year | 2002 | 2003 | 2004

— | —– | —– | —–

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Sales | $550,000 | $595,000 | $650,000

Direct Cost of Sales | $67,000 | $73,000 | $78,000

Other Production Expenses | $0 | $0 | $0

Total Cost of Sales | $67,000 | $73,000 | $78,000

Gross Margin | $483,000 | $522,000 | $572,000

Gross Margin % | 87.82% | 87.73% | 88.00%

Expenses |

Payroll | $288,000 | $302,000 | $318,000

Sales and Marketing and Other Expenses | $24,000 | $27,000 | $30,000

Depreciation | $18,564 | $18,564 | $18,564

Leased Equipment | $0 | $0 | $0

Utilities | $0 | $0 | $0

Insurance | $12,000 | $12,000 | $12,000

Rent | $48,000 | $48,000 | $48,000

Payroll Taxes | $43,200 | $45,300 | $47,700

Other | $0 | $0 | $0

Total Operating Expenses | $433,764 | $452,864 | $474,264

Profit Before Interest and Taxes | $49,236 | $69,136 | $97,736

EBITDA | $67,800 | $87,700 | $116,300

Interest Expense | $7,090 | $6,680 | $7,400

Taxes Incurred | $12,644 | $18,737 | $27,101

Net Profit | $29,502 | $43,719 | $63,235

Net Profit/Sales | 5.36% | 7.35% | 9.73%

7.3 Projected Cash Flow

The following table and chart show the projected cash flow for three years.

Airport Shuttle Business Plan Example

Pro Forma Cash Flow
2002 2003 2004
Cash Received
Cash from Operations
Cash Sales $550,000 $595,000 $650,000
Subtotal Cash from Operations $550,000 $595,000 $650,000
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $24,000 $24,000 $24,000
New Long-term Liabilities $0 $24,000 $24,000
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $574,000 $643,000 $698,000
Expenditures 2002 2003 2004
Expenditures from Operations
Cash Spending $288,000 $302,000 $318,000
Bill Payments $211,253 $230,434 $248,599
Subtotal Spent on Operations $499,253 $532,434 $566,599
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $16,800 $16,800 $16,800
Purchase Other Current Assets $24,000 $24,000 $24,000
Purchase Long-term Assets $24,000 $24,000 $24,000
Dividends $0 $0 $0
Subtotal Cash Spent $564,053 $597,234 $631,399
Net Cash Flow $9,947 $45,766 $66,601
Cash Balance $59,947 $105,712 $172,313

7.4 Projected Balance Sheet

The following table is the projected balance sheet for three years.

Pro Forma Balance Sheet
2002 2003 2004
Assets
Current Assets
Cash $59,947 $105,712 $172,313
Other Current Assets $24,000 $48,000 $72,000
Total Current Assets $83,947 $153,712 $244,313
Long-term Assets
Long-term Assets $154,000 $178,000 $202,000
Accumulated Depreciation $42,564 $61,128 $79,692
Total Long-term Assets $111,436 $116,872 $122,308
Total Assets $195,383 $270,584 $366,621
Liabilities and Capital 2002 2003 2004
Current Liabilities
Accounts Payable $18,680 $18,963 $20,564
Current Borrowing $0 $0 $0
Other Current Liabilities $24,000 $48,000 $72,000
Subtotal Current Liabilities $42,680 $66,963 $92,564
Long-term Liabilities $63,200 $70,400 $77,600
Total Liabilities $105,880 $137,363 $170,164
Paid-in Capital $0 $0 $0
Retained Earnings $60,000 $89,502 $133,221
Earnings $29,502 $43,719 $63,235
Total Capital $89,502 $133,221 $196,457
Total Liabilities and Capital $195,383 $270,584 $366,621
Net Worth $89,502 $133,221 $196,457

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 4119, Local Passenger Transportation, are shown for comparison.

Ratio Analysis
2002 2003 2004 Industry Profile
Sales Growth 89.66% 8.18% 9.24% 3.70%
Percent of Total Assets
Other Current Assets 12.28% 17.74% 19.64% 47.00%
Total Current Assets 42.97% 56.81% 66.64% 64.90%
Long-term Assets 57.03% 43.19% 33.36% 35.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 21.84% 24.75% 25.25% 30.00%
Long-term Liabilities 32.35% 26.02% 21.17% 26.20%
Total Liabilities 54.19% 50.77% 46.41% 56.20%
Net Worth 45.81% 49.23% 53.59% 43.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 87.82% 87.73% 88.00% 78.20%
Selling, General & Administrative Expenses 82.45% 80.38% 78.27% 55.40%
Advertising Expenses 1.09% 1.34% 1.54% 0.70%
Profit Before Interest and Taxes 8.95% 11.62% 15.04% 2.10%
Main Ratios
Current 1.97 2.30 2.64 1.96
Quick 1.97 2.30 2.64 1.51
Total Debt

Pro Forma Profit and Loss

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales $40,000 $40,000 $45,000 $45,000 $50,000 $50,000 $50,000 $40,000 $50,000 $40,000 $50,000 $50,000
Direct Cost of Sales $0 $5,000 $6,000 $6,000 $7,000 $7,000 $7,000 $6,000 $6,000 $5,000 $6,000 $6,000
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $5,000 $6,000 $6,000 $7,000 $7,000 $7,000 $6,000 $6,000 $5,000 $6,000 $6,000
Gross Margin $40,000 $35,000 $39,000 $39,000 $43,000 $43,000 $43,000 $34,000 $44,000 $35,000 $44,000 $44,000
Gross Margin % 100.00% 87.50% 86.67% 86.67% 86.00% 86.00% 86.00% 85.00% 88.00% 87.50% 88.00% 88.00%
Expenses
Payroll $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000
Sales and Marketing and Other Expenses $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Depreciation $1,547 $1,547 $1,547 $1,547 $1,547 $1,547 $1,547 $1,547 $1,547 $1,547 $1,547 $1,547
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Insurance $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Rent $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Payroll Taxes 15% $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $36,147 $36,147 $36,147 $36,147 $36,147 $36,147 $36,147 $36,147 $36,147 $36,147 $36,147 $36,147
Profit Before Interest and Taxes $3,853 ($1,147) $2,853 $2,853 $6,853 $6,853 $6,853 ($2,147) $7,853 ($1,147) $7,853 $7,853
EBITDA $5,400 $400 $4,400 $4,400 $8,400 $8,400 $8,400 ($600) $9,400 $400 $9,400 $9,400
Interest Expense $655 $643 $632 $620 $608 $597 $585 $573 $562 $550 $538 $527
Taxes Incurred $959 ($537) $666 $670 $1,873 $1,877 $1,880 ($816) $2,187 ($509) $2,194 $2,198
Net Profit $2,239 ($1,253) $1,555 $1,563 $4,371 $4,379 $4,388 ($1,904) $5,104 ($1,188) $5,120 $5,128
Net Profit/Sales 5.60% -3.13% 3.46% 3.47% 8.74% 8.76% 8.78% -4.76% 10.21% -2.97% 10.24% 10.26%

Pro Forma Cash Flow

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Sales $40,000 $40,000 $45,000 $45,000 $50,000 $50

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