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The Bike Corner Business Plan Brock Auerbach-Lynn Bryan Tillman December 03, 2012.

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Presentation on theme: "The Bike Corner Business Plan Brock Auerbach-Lynn Bryan Tillman December 03, 2012."— Presentation transcript:

1 The Bike Corner Business Plan Brock Auerbach-Lynn Bryan Tillman December 03, 2012

2 Revenue Model The Bike Corner will earn revenue from 6 sources: Naming Rights (approx. 45%) Individual Memberships (approx. 40%) Impact Consulting (approx. 6%) Corporate Sponsors (approx. 5%) Classes (approx. 3%) Non-Member Shower Use (approx. 1%)

3 Financial Summary The building will provide subsidized rent as The Bike Corner will occupy existing unutilized space and improve the retention and attraction of tenants The President/Owner of The Bike Corner will earn a first year salary of $20,000, increasing year by year within the constraints of estimated profit. Fifth year salary is estimated at $72,000. The initial $75,000 build-out costs will be financed as follows: $10,000

4 Summary Financials Continued … 55% capacity is required to break even (Expectation are for an average capacity of 67% the first year) Occupant will vary by season. Year 1, predictions are for – 40% average occupancy in Winter – 70% average occupancy in Spring – 90% average occupancy in Summer – 70% average occupancy in Autumn First Year Net Income before taxes is $6,180 Expect year 5 revenue to top $194,000 and net income of $26,000 Naming rights income is included in operational revenue Other income includes impact consulting, classes, non-member shower use, company sponsors

5 5 Year Projections Year 1Year 2Year 3Year 4Year 5 Income Assuming 15-25% growth in Membership Annually Yearly Members Yearly Pass$250 Monthly Members Monthly Pass$25 Weekly Members Weekly Pass$10 Average Membership Capacity % Of Capactiy67%88%82%93%87% Membership Revenue$33,400$41,460$76,580$85,870$119,050 Naming Rights Contract (5 Year Contract)$20,000 $40,000 $60,000 Other Income (ie. Environmental Impact Asessment, Biking Classes) $2,780$3,500$9,500$11,000$15,500 External Financing Mix$65,000 $75,000 Expenses Assuming 2.5% expense increase Construction$65,000$0$75,000$0$75,000 Rent$6,000$6,150$12,454$12,765$19,234 Marketing / Promotion$1,500$1,538$3,113$3,191$4,809 New facilities in Years 1, 3 & 5 at a cost of $75,000 each. First facility includes $10,000 in owners equity. Management Salary$20,000$25,000$45,000$50,000$72,000 Payroll$9,900$10,148$20,549$21,062$31,736 Insurance$2,400$2,460$4,982$5,106$7,694 Utilities$3,900$3,998$8,095$8,297$12,502 Incidental costs$1,200$1,230$2,491$2,553$3,847 Administrative Costs$1,500$1,538$3,113$3,191$4,809 Security System$1,200$1,230$2,491$2,553$3,847 Monthly Cleaning Service$2,400$2,460$4,982$5,106$7,694 Operating Revenue$56,180$64,960$126,080$136,870$194,550 Operating Expenses$50,000$55,750$107,269$113,825$168,171 Non Operating Revenue$65,000$0$75,000$0$75,000 Non Operating Expenses$65,000$0$75,000$0$75,000 Net Income$6,180$9,210$18,811$23,045$26,379 Cum Income$6,180$15,390$34,201$57,246$83,625

6 Financing Options 1.Congestion Mitigation & Air Quality (CMAQ) Program Grants – CMAQ purpose is to fund transportation and urban congestion mitigation projects/programs that will contribute to meeting/maintaining NAAQS for ozone, CO and PM* ** – In October 2011, the Chicago Metropolitan Agency for Planning announced a five-year, $411 million CMAQ program, funding 115 projects designed to reduce congestion and improve air quality in metropolitan Chicago (Avg. $3.5 million per project)**** – Project selection should clearly identify emissions benefits, cost effectiveness, congestion relief, greenhouse gas reductions, system preservation, access to opportunity, sustainable development, reduced SOV reliance and multi- modal benefits*** 2.Building or Building Management Company Funded – International building management firm Jones Lang LaSalle has already expressed interest in the Bike Corner for several of their downtown Chicago buildings – Company or landlord could cover cost of build-out/renovation – Value to building or building management company: LEED Points Greener image Tenant attraction/retention (differentiator)

7 Financing Options Continued … 3.Public Private Partnership with the City – Chicago has entered into PPPs around many of its physical assets such as tollways and garages* – CMAP, Dept of Transportation & Dept of Environment personnel would be involved – Leverage Active Transportation Alliance assistance – The Public-Private Partnerships for Transportation Act - promotes the sound development and operation of transportation facilities in Illinois, by authorizing PPPs for the construction of new transportation infrastructure projects.** 4.Social Impact Investment – Investment funds which target social impacts above or exclusively to financial returns – Investment opportunities occur at both early development stage and growth scaling stage – Such funds include: William James Foundation Social Impact Exchange Echoing Green Skoll Foundation – The Bike Corner qualifies for Program Related Investments from Foundations

8 Financing Options Continued … 5.Kickstarter Model – Allows anyone to pledge support for an innovative product or service at a particular price and once a certain threshold of people are interested, each pays the designated amount and the venture is funded with all contributors receiving their promised product/service – Bike Corner can presell yearly memberships at $250 a piece to interested bikers within any feasible building, once there is a threshold of 100 people, there will be sufficient seed capital and interest to proceed – 100 memberships at $250 equals $25,000 (150 memberships equals $37,500) – Utilize online website to connect interested bikers and show progress – explore using Kickstarters website (kickstarter.com)kickstarter.com


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