VELOX CABS - Reach in Time

INTRODUCTION

The radio taxi service has emerged as a fast growing business in cities. Less

than a decade old, it consists of private operators backed by call centres to man

the calls, aggressive fleet acquisition plans, latest gadgets and technology and

hiring as well as training modules for drivers. The cabs industry is growing

above 35 per cent and the organised segment can grow to 25 per cent in next

five years. Cars such as Maruti Esteem, Maruti Omni, Mahindra Logan, Tata

Indica and Tata Indigo are fairly popular among taxicab operators. The radio

cabs industry alone has an annual turnover of Rs 1100 Cr in India with 35%

annual industry growth in 2014 with 70% market share. The radio taxi services

market in India has huge untapped opportunities.

 Demand for radio cabs have been soaring in the metros and large cities as

MNC executives, tourists, IT sector executives as also affluent Indians opt for a

faster and smoother means of transportation through well maintained radio cabs.

Today, radio cabs capitalize on its comfort quotient and availability quotient to

attract people with fares acceptable and affordable than normal cabs. Looking at

the business opportunities and the heart to do quality service here is the plan ,

Velox is a radio cab company that provides radio taxi services in and around

Coimbatore.

INDUSTRY : Radio Taxi Industry , Transport Industry

NAME OF THE TAXI COMPANY : Velox Cabs

TAGLINE : Reach in time

LOCATION : In and around Coimbatore

DETAILS OF VELOX TAXI OFFICE AND PARKING AREA

The taxi office along with parking will be setup in Coimbatore with 1900 square

feet, the office and the parking area will be a rented with an advance amount of

Rs 600000 and the monthly rent for the shop will be 35000. The reason for

choosing Coimbatore to set a taxi company is there is still a demand for the

availability of taxi's on time with convenient travel facilities in all areas in and

around Coimbatore . At present, the metered fare prescribed is Rs. 15/- per km.

During 11 PM to 5AM, night charges @ 25% over the normal applicable fare of

Rs.15/-per Km.

SWOT

STRENGTHS WEAKNESSES

- Well-trained employees.

- An innovative compensation system

that prizes customer satisfaction,

customer referrals, and repeat

business.

- A strong, market-driven business

model.

- A lack of brand equity because of the

start-up nature of this organization.

- The inability to raise large amounts

of capital.

- The difficulty to find above average

employees.

OPPORTUNITIES THREATS

- Participation in a high-demand

industry.

- Increased profits as operating

efficiencies are gained.

- Steady future demand.

- Future/potential competition from a

franchise from another market.

- Some sort of catastrophic event that

has a significant, negative effect on the

travel industry.

- Unexpected governmental regulation

of the transportation industry.

FORMALITIES AND PROCEDURES

PROCEDURES

Constructing a business plan that includes your start-up costs, management

strategy, marketing plan, and expansion plan.

Apply for a loan from your bank to raise the capital you need to start a taxi

company.

Apply for a commercial driver's license at Coimbatore.

Register your taxi company with your city to obtain your business license.

Purchase vehicles that is modified for use as a taxi and choose a location for

taxi office and parking.

Purchase property, comprehensive, and liability insurance for your taxi

company.

Use GPS location software to help the central location keep an eye on taxis.

Advertise your taxi company on flyers, in local publications, and on the

Internet.

Interview and hire drivers along with setting up rules for drivers and company.

LEGAL FORMALITIES

LICENSEE PROFILE - The licensee must be financially sound and must be

either a company under the Companies Act, 1956 or a society under the

Societies Registration Act, 18603 with an intimate knowledge of transport

business.

OPERATIONAL INFRASTRUCTURE - Necessary infrastructure for

maintenance of the vehicle should be available.

VEHICLE PROFILE - The motor cab should be driven on clean fuel with

engine capacity of 999CC along with electronic fare meters and maintained in a

proper working order ,an LCD board to display that the vehicle is a radio taxi

and should meet emission standards as prescribed form time to time with

GPS/GPRS based tracking devises.

DRIVER PROFILE - The driver must have a driving license of the appropriate

category for at least five years issued by an authority

GENERAL CONDITIONS TO BE ADHERED BY THE HOLDER OF THE

LICENSE - Not shift the principle place of business mentioned in the license

without the prior approval, in writing of the licensing authority and displayed at

a prominent place in its main office the license issued in original and certified

copies there have attested by the Licensing Authority.

EXCEL CALCULATIONS

RADIO

TAXI

Capital 2500000 owner 500000 Ke 15%

Fixed Assests 1500000

Loan(Year

s)

200000

0 Kd 35% 0.18

Depreciation(SLM) 10% Tax 50%

Ko

17.00

%

Growth

1 2 3 4 5

Revenue 0% 20% 20% 25% 25%

Expenses 0% 10% 10% 15% 15%

0 1 2 3 4 5

Expected Revenues572300

0686760

0824112

01030140

01287675

0Expected ExpensesRent (office and parking) 504000 554400 609840 701316 806513

Salary100800

0110880

0121968

0 1402632 1613027Petrol/Diesel 336000 369600 406560 467544 537676Telephone 180000 198000 217800 250470 288041Insurance 42000 46200 50820 58443 67209RC 600000 660000 726000 834900 960135Maintenance 90000 99000 108900 125235 144020Maintenance 360000 396000 435600 500940 576081Advertisement 96000 105600 116160 133584 153622Other Expenses 480000 528000 580800 667920 768108Interest 32562 29392 26167 22887 19550Depreciation 150000 150000 150000 150000 150000

PBT184443

8262260

8359279

3 4985529 6792768

Tax 922219131130

4179639

7 2492765 3396384

PAT 922219131130

4179639

7 2492765 3396384Depreciation 150000 150000 150000 150000 150000

PATBD -2500000107221

9146130

4194639

7 2642765 3546384

NPV$37,27,058.3

2IRR 59%

LOAN AMORTISATION SCHEDULE

Loan

Amt 2000000

IR 17.00%

0.001416

7

Maturi

ty 10

Month

s 120

EMI

($18,135.23

)

$18,135.

23

PeriodPrincipal Amt EMI

Interest

Principal Repayment

Remaining Balance

Interest per Year

1 2000000$18,135.23 2833 $15,301.89

$19,84,698.11

2$19,84,698.11

$18,135.23 2812 $15,323.57

$19,69,374.53

3$19,69,374.53

$18,135.23 2790 $15,345.28

$19,54,029.25

4$19,54,029.25

$18,135.23 2768 $15,367.02

$19,38,662.24

5$19,38,662.24

$18,135.23 2746 $15,388.79

$19,23,273.45

6 $19,23,273. $18,135. 2725 $15,410.59 $19,07,862.

45 23 86

7$19,07,862.86

$18,135.23 2703 $15,432.42

$18,92,430.43

8$18,92,430.43

$18,135.23 2681 $15,454.28

$18,76,976.15

9$18,76,976.15

$18,135.23 2659 $15,476.18

$18,61,499.97

10$18,61,499.97

$18,135.23 2637 $15,498.10

$18,46,001.87

11$18,46,001.87

$18,135.23 2615 $15,520.06

$18,30,481.81

12$18,30,481.81

$18,135.23 2593 $15,542.04

$18,14,939.77 32562

13$18,14,939.77

$18,135.23 2571 $15,564.06

$17,99,375.70

14$17,99,375.70

$18,135.23 2549 $15,586.11

$17,83,789.59

15$17,83,789.59

$18,135.23 2527 $15,608.19

$17,68,181.40

16$17,68,181.40

$18,135.23 2505 $15,630.30

$17,52,551.10

17$17,52,551.10

$18,135.23 2483 $15,652.45

$17,36,898.65

18$17,36,898.65

$18,135.23 2461 $15,674.62

$17,21,224.03

19$17,21,224.03

$18,135.23 2438 $15,696.83

$17,05,527.20

20$17,05,527.20

$18,135.23 2416 $15,719.06

$16,89,808.14

21$16,89,808.14

$18,135.23 2394 $15,741.33

$16,74,066.81

22$16,74,066.81

$18,135.23 2372 $15,763.63

$16,58,303.17

23$16,58,303.17

$18,135.23 2349 $15,785.96

$16,42,517.21

24$16,42,517.21

$18,135.23 2327 $15,808.33

$16,26,708.88 29392

25$16,26,708.88

$18,135.23 2305 $15,830.72

$16,10,878.16

26$16,10,878.16

$18,135.23 2282 $15,853.15

$15,95,025.01

27$15,95,025.01

$18,135.23 2260 $15,875.61

$15,79,149.40

28$15,79,149.40

$18,135.23 2237 $15,898.10

$15,63,251.30

29$15,63,251.30

$18,135.23 2215 $15,920.62

$15,47,330.68

30$15,47,330.68

$18,135.23 2192 $15,943.18

$15,31,387.50

31$15,31,387.50

$18,135.23 2169 $15,965.76

$15,15,421.74

32$15,15,421.74

$18,135.23 2147 $15,988.38

$14,99,433.36

33$14,99,433.36

$18,135.23 2124 $16,011.03

$14,83,422.33

34$14,83,422.33

$18,135.23 2102 $16,033.71

$14,67,388.62

35$14,67,388.62

$18,135.23 2079 $16,056.43

$14,51,332.19

36$14,51,332.19

$18,135.23 2056 $16,079.17

$14,35,253.02 26167

37$14,35,253.02

$18,135.23 2033 $16,101.95

$14,19,151.07

38$14,19,151.07

$18,135.23 2010 $16,124.76

$14,03,026.31

39$14,03,026.31

$18,135.23 1988 $16,147.61

$13,86,878.70

40$13,86,878.70

$18,135.23 1965 $16,170.48

$13,70,708.22

41$13,70,708.22

$18,135.23 1942 $16,193.39

$13,54,514.83

42$13,54,514.83

$18,135.23 1919 $16,216.33

$13,38,298.49

43 $13,38,298. $18,135. 1896 $16,239.30 $13,22,059.

49 23 19

44$13,22,059.19

$18,135.23 1873 $16,262.31

$13,05,796.88

45$13,05,796.88

$18,135.23 1850 $16,285.35

$12,89,511.53

46$12,89,511.53

$18,135.23 1827 $16,308.42

$12,73,203.11

47$12,73,203.11

$18,135.23 1804 $16,331.52

$12,56,871.59

48$12,56,871.59

$18,135.23 1781 $16,354.66

$12,40,516.93 22887

49$12,40,516.93

$18,135.23 1757 $16,377.83

$12,24,139.10

50$12,24,139.10

$18,135.23 1734 $16,401.03

$12,07,738.07

51$12,07,738.07

$18,135.23 1711 $16,424.27

$11,91,313.81

52$11,91,313.81

$18,135.23 1688 $16,447.53

$11,74,866.27

53$11,74,866.27

$18,135.23 1664 $16,470.83

$11,58,395.44

54$11,58,395.44

$18,135.23 1641 $16,494.17

$11,41,901.27

55$11,41,901.27

$18,135.23 1618 $16,517.53

$11,25,383.74

56$11,25,383.74

$18,135.23 1594 $16,540.93

$11,08,842.81

57$11,08,842.81

$18,135.23 1571 $16,564.37

$10,92,278.44

58$10,92,278.44

$18,135.23 1547 $16,587.83

$10,75,690.61

59$10,75,690.61

$18,135.23 1524 $16,611.33

$10,59,079.27

60$10,59,079.27

$18,135.23 1500 $16,634.87

$10,42,444.41 19550

61$10,42,444.41

$18,135.23 1477 $16,658.43

$10,25,785.98

62$10,25,785.98

$18,135.23 1453 $16,682.03

$10,09,103.95

63$10,09,103.95

$18,135.23 1430 $16,705.66

$9,92,398.28

64$9,92,398.28

$18,135.23 1406 $16,729.33

$9,75,668.95

65$9,75,668.95

$18,135.23 1382 $16,753.03

$9,58,915.92

66$9,58,915.92

$18,135.23 1358 $16,776.76

$9,42,139.16

67$9,42,139.16

$18,135.23 1335 $16,800.53

$9,25,338.63

68$9,25,338.63

$18,135.23 1311 $16,824.33

$9,08,514.30

69$9,08,514.30

$18,135.23 1287 $16,848.17

$8,91,666.13

70$8,91,666.13

$18,135.23 1263 $16,872.03

$8,74,794.10

71$8,74,794.10

$18,135.23 1239 $16,895.94

$8,57,898.17

72$8,57,898.17

$18,135.23 1215 $16,919.87

$8,40,978.29 16157

73$8,40,978.29

$18,135.23 1191 $16,943.84

$8,24,034.45

74$8,24,034.45

$18,135.23 1167 $16,967.85

$8,07,066.61

75$8,07,066.61

$18,135.23 1143 $16,991.88

$7,90,074.72

76$7,90,074.72

$18,135.23 1119 $17,015.95

$7,73,058.77

77$7,73,058.77

$18,135.23 1095 $17,040.06

$7,56,018.71

78$7,56,018.71

$18,135.23 1071 $17,064.20

$7,38,954.51

79$7,38,954.51

$18,135.23 1047 $17,088.38

$7,21,866.13

80 $7,21,866.1 $18,135. 1023 $17,112.58 $7,04,753.5

3 23 5

81$7,04,753.55

$18,135.23 998 $17,136.83

$6,87,616.72

82$6,87,616.72

$18,135.23 974 $17,161.10

$6,70,455.62

83$6,70,455.62

$18,135.23 950 $17,185.42

$6,53,270.20

84$6,53,270.20

$18,135.23 925 $17,209.76

$6,36,060.44 12705

85$6,36,060.44

$18,135.23 901 $17,234.14

$6,18,826.30

86$6,18,826.30

$18,135.23 877 $17,258.56

$6,01,567.74

87$6,01,567.74

$18,135.23 852 $17,283.01

$5,84,284.74

88$5,84,284.74

$18,135.23 828 $17,307.49

$5,66,977.25

89$5,66,977.25

$18,135.23 803 $17,332.01

$5,49,645.24

90$5,49,645.24

$18,135.23 779 $17,356.56

$5,32,288.67

91$5,32,288.67

$18,135.23 754 $17,381.15

$5,14,907.52

92$5,14,907.52

$18,135.23 729 $17,405.77

$4,97,501.75

93$4,97,501.75

$18,135.23 705 $17,430.43

$4,80,071.31

94$4,80,071.31

$18,135.23 680 $17,455.13

$4,62,616.19

95$4,62,616.19

$18,135.23 655 $17,479.85

$4,45,136.33

96$4,45,136.33

$18,135.23 631 $17,504.62

$4,27,631.72 9194

97$4,27,631.72

$18,135.23 606 $17,529.42

$4,10,102.30

98$4,10,102.30

$18,135.23 581 $17,554.25

$3,92,548.05

99$3,92,548.05

$18,135.23 556 $17,579.12

$3,74,968.93

100$3,74,968.93

$18,135.23 531 $17,604.02

$3,57,364.91

101$3,57,364.91

$18,135.23 506 $17,628.96

$3,39,735.95

102$3,39,735.95

$18,135.23 481 $17,653.93

$3,22,082.02

103$3,22,082.02

$18,135.23 456 $17,678.94

$3,04,403.07

104$3,04,403.07

$18,135.23 431 $17,703.99

$2,86,699.08

105$2,86,699.08

$18,135.23 406 $17,729.07

$2,68,970.01

106$2,68,970.01

$18,135.23 381 $17,754.19

$2,51,215.83

107$2,51,215.83

$18,135.23 356 $17,779.34

$2,33,436.49

108$2,33,436.49

$18,135.23 331 $17,804.53

$2,15,631.96 5623

109$2,15,631.96

$18,135.23 305 $17,829.75

$1,97,802.21

110$1,97,802.21

$18,135.23 280 $17,855.01

$1,79,947.21

111$1,79,947.21

$18,135.23 255 $17,880.30

$1,62,066.91

112$1,62,066.91

$18,135.23 230 $17,905.63

$1,44,161.27

113$1,44,161.27

$18,135.23 204 $17,931.00

$1,26,230.27

114$1,26,230.27

$18,135.23 179 $17,956.40

$1,08,273.87

115$1,08,273.87

$18,135.23 153 $17,981.84 $90,292.03

116 $90,292.03$18,135.23 128 $18,007.31 $72,284.72

117 $72,284.72 $18,135. 102 $18,032.82 $54,251.90

23

118 $54,251.90$18,135.23 77 $18,058.37 $36,193.53

119 $36,193.53$18,135.23 51 $18,083.95 $18,109.57

120 $18,109.57$18,135.23 26 $18,109.57 ($0.00) 1991

RECOMMENDATIONS

The profit after tax comes to Rs 1072219 in the first year, then it is increased to

Rs 1461304 in the second year, then increased to Rs 1946397 in the third year,

then again increased to Rs 2642765 and Rs 3546384in the next two years. From

this we can infer that the profit of the firm is good and the business is doing

good. Next few year expand the area covered and the number of cabs to other

nearby town.