1. Introduction
Lyft Delivery is an app that allows users to order food with Lyft website and Lyft app. It is very simple and quick to use, and you can give your order online without having to call anyone from restaurant where you want to give your order. With this application you can see the customer reviews and restaurant’s special offers. This will make it easier to decide for the customers what they want to order and will provide more sale for restaurants. Also, with this application you can order your food in a safe way. You do not have to give your credit card information the restaurants. At the same time, with the background check for drives will also provide a more reliable service.
1.1. Value Proposition
Your favorite food, delivered by Lyft. Lyft Delivery is the easiest way to get food. All the restaurants around you are just a click away from you. It’s totally contactless delivery. Your driver knows where to get your food and he/she will drop it off in front of your door.
1.2. Business Concept
Time is money! This quote is known by all most all people around the world. People are giving up cook at home because the cost of cooking at home cost more than order from outside. Working or resting are much more profitable than cook at home. People, especially millennials, are giving up cook at home. Also, people texting each other instead of calling by phone. Therefore, ordering by phone is not something that people like. People want to give order without have to call restaurant. As we are currently providing a similar service with our independent contractors this new service will bring enormous added value to our company. In unexpected situations such as the Corona virus, our company’s revenues dropped a lot. People who did not leave their homes gave their orders over the phone. Therefore, I think this service will be a very good source of extra income for the company.
1.3. Vision
We dedicate to connecting customers with delicious restaurants via Delivery partners.
1.4. Mission
Our mission is to provide a reliable, efficient, socially responsible platform for restaurants and users and create job opportunity for our delivery partners.
1.5. Values
– A secure, reliable platform.
– Corporate Social Responsibility.
– Delighted users, drivers and restaurant
– Sustainability; Environment and social sustainability.
–
1.6. Major Goals
– Commencing service in 20 most populous cities in USA; New York, Los Angles, Chicago
– Reach %25 percent of actual Lyft platform users in the first year. Which equals to hundreds of thousands of people.
– %80 or higher satisfaction rate in the first year of our new service launch.
– First long-term goal is to reach %8 market share on online delivery industry
– Second long-term goal is to %20 of our total income from here
– Third long-term goal is to expand the market to other countries.
2. Operating Environment
Lyft is an on-demand transportation service platform that lets people hire a cab with the help of a tap on their smartphone (Jungleworks). The Lyft delivery application aims to serve its customers with the restaurants they have agreed with using their existing driver. So, the new service is compatible with the current service. There is only one difference with the current service: The current services combine only the driver and the customer but with the new service its combines restaurants and the customers by its drivers. Our company aims to reach all the Americans who order food from restaurants or various platforms regardless of gender difference or income level. According to Statista 85.4 million people in the United States ordered food in 2018. Of the 85.4 people, 66.3 million ordered food directly from the restaurant, while 19.1 ordered through various platforms such as UberEats, Doordash and Grubhub. When we look at the population of the 325 million Americans, 85.4 is a very serious figure. This means that one out of every four people in the United States ordered food in 2018. Also 26.2 million Americans are expected to give order with various platforms in 2023. And the expected revenue per user is $ 113.62 and estimated expected total revenue is 2.980 billion (Statista,2018).
SWOT analysis allows you to see your strengths and weaknesses in the areas related to your business, and to prepare you for the opportunities and dangers that are waiting for you in the future. As Lyft company, we have some advantages and disadvantages regarding of our new service. You can see our Swot analysis template on the below about our company’s new product about Lyft Delivery.
Helpful
to achieving the objective Harmful
to achieving the objective
Internal origin
(attributes of the system) Strengths
• Low cost
• Accessibility
• Flexible hours for drivers
• Fast delivery
• well-recognized brand
• High level of customer satisfaction
• High growth Weaknesses
• Driver’ Loyalty
• Drivers’ wrong attitude
• Ethically questionable
• Only through the app
External origin
(attributes of the environment) Opportunities
• Learn from other market players’ mistakes to innovate
• The desire of people to be more independent
• Technology
• Electric vehicles Threats
• Competitive food delivery industry
• Legal threat
• Artificial intelligence
• Economic recession
3. Operations Plan
Our business will be a for-profit and will be operated under name of Lyft Inc. in Lyft’s headquarters in San Francisco California. As everyone knows we have faced serious legal issues since the first day we started to operate. Our business model is a controversial business model which not allows to our driver to be our full or part time employee. But this makes our service different. There is no exact number of the market cap we want to reach. we plan to launch our service first in the 10 major American cities where we have the most market share after Uber since we entered the market later than them.
3.1. Operations Timeline
Lyft is an existing company already. That is why Operation timeline will take less time than comparing to start-ups. It probably will take a year to build infrastructure of the applications We already have 2 apps for our single service. With our existing Lyft application, we allow our costumer to call a ride. Everyone who has smart phone can install our app through the Apple store and Android. Our second app is Lyft Driver. Since we already have Driver app, we have to create two apps. First app will be Lyft Delivery app for our loyal customer. The second app will be for restaurants for listing their menus. if everything goes well, we will launch our new service in the beginning of 2022. Everything depends on how much revenue we will make on from our new service. If the new service will meet with our expectation, we would work on other services such as Lyft Grocery.
3.2. Start-Up
We need to build new mobile platform for both parties that serve-which are service providers and customers. Since we already have Driver app, we do not have to build new app for our delivery partners. While we were working on our app, we will talk our restaurants partner who would like to work us. With our marketing team we will contact most popular restaurants in the 10 cities that we have significant market share on ride sharing. After having agreement with major restaurants our popularity will bring new restaurants by their self. We will send email all our current customer in our database who already use our ride-sharing service.
3.2.1. Fixed Capital Requirements
Company costs consist of two different cost: Total fixed cost and Total variable cost. Fixed costs consist of various expenses some of those are; amortization, depreciation, insurance, interest expense, property taxes, rent, salaries, utilities and et cetera. Variable costs vary according to the service provided or the amount of product produced by the company. According to our research, the monthly fixed cost of our new service is $ 386,400.
3.2.2. Start-Up Expenses
As I mentioned above there is some expenses for our new service. 40 members of our team will be working on our new project. This will be bringing us new expenses, but we cannot give exactly amount for that. If I have to give approximate amount for it would be over $4 million dollars. Suggestion is the best advertisement. This may be costly for our company. With our rewards program we will try to bring new costumer to our new service.
3.3. Risk Management Strategies
• Your safety is our priority. Lyft serves millions of people in USA. We collect costumer’s data in order to provide better service. We are aware how important people’s private information that is why we have never avoided cyber-security standards and we will never.
• To minimize the undesirable incident, we will do the background checks of our drivers more frequently.
• If we provide cyber-security standards properly, we will not have any problem with payments because our service does not contain cash payment methods.
• After our employees complete their background checks, they will not be able to start working unless they meet other appropriate standards. One of the most important of these standards is the insurance of themselves and their vehicles.
• Our in depended contractors will have limited access to the personal information of our customers. They will know as much as they do. They will not know anything except their names and addresses. Nobody will be able to know each other’s phone numbers since the method of reaching each other by customers or employees will be through the app.
3.4. Operating Processes
Our new system shows the users where is their order exactly. With our perfect application, the users can see every process of their orders. You can see whether the order is completed or not by the restaurant when the driver receive the order and exactly where the driver is. Our application is programmed to inform the user when the driver approaches or reach the delivery point, so our drivers do not need to do anything.
Our system is focused on protecting our customers and drivers. With our unique communication system, we keep the special information about our drivers and customers from everyone. Our user and our user cannot reach each other’s phone number.
Our company gives great importance to transparency. When the delivery of the order is completed, our drivers, the restaurants and the users can see our charge calculation. in this way, we aim to ensure the trust of all parties.
3.5. Facilities
This is a three-floor work office facility.
3.6. Organizational Structure
The organization used a traditional hierarchical model the control will be downward and vertical this model stat from worker to supervisor then upper management to the end of the organization to the CEO as a traditional hierarchical model, there is a anther model called matrix model which divided the organization to tram leaders that give report about certain task to the project manager which is observed as flat management .
4. Human Resources Plan
Employees are the most important factor in company’s economic success. Therefore, one of the most important departments in the company is human resources. The human resources department has many duties. However, the most important task is to find the most suitable person for the company and to create the best possible working environment for them.
As you can see on Organizational structure part, we have traditional hierarchical model. But in today’s world, it is not possible for you to be a successful company with this system. Our company has a modern version of this model. Our employees are aware of the superior subordinate relationship, but this hierarchy does not restrict anyone’s area of freedom. Our employees can come and leave at any time they want. Productivity is important to us. We plan to hire 40 smart from 40 colleagues who are dear to everyone and who have high communication skills, without paying attention to the status. While choosing our colleagues, we plan to use platforms such as Indeed, Glassdoor and LinkedIn, which are effective search platforms. As we are a well-known company, we are aware that there will be thousands of applications for each position we seek, so we will go for a quick screening method on resumes. For the remaining applications, we will have a virtual interview with the questions we have previously determined on our online platform. We will invite each of our friends who pass this stage to meet face to face in our company. The company plans to find the most suitable candidates with the key questions we have identified earlier.
Encourage Recognition is our leadership strategy. Because it is one of the most important sources of motivation. The outdoor activities we will do as a company will increase the motivation and performance of the company employees.
Salary, premiums or other benefits are very effective reasons for the increase of employee performance, but these alone are not enough. You may not be able to give employees very high salaries and keep them. Because people spend more time with colleagues than their families, it is very important to create a family environment. It is difficult to create a family environment in large companies like ours, but it can be created across departments. On the other hand, it is not possible for me to write the figures we will give to our colleagues one by one, but for our new service, I have previously stated the salary budget on a monthly basis. An inclusive insurance package for our employees who will work in our office since our most important side benefits. As everyone knows, insurance is one of the biggest concerns of people in the United States, so offering employees an inclusive insurance package is one of our biggest goals. Since my drivers are independent contractors, we don’t have a salary policy for them. They will receive a fee per order completed at the stands we have determined. I will try to explain this below.
Lyft Delivery Payout = Pickup fee + Distance travelled from pickup to drop-off + time from pickup to delivery + drop-off fee
A average ride:
Pickup fee: $1.50
Drop-off fee: $1.00
Mileage fee: $0.60 per mile
Time: $0.20 per minute
Calculation for the 3-mile and 10-minute waiting period is as follows.
Pickup fee: $1.50
Drop-off fee: $1.00
Mileage fee: $0.60*3= $1.80
Time: $0.20*10 minutes=2.00
Total: $6.30
(These figures may vary depending on the density and the city.)
4.1. Leadership and Management Strategies
The best leadership and management strategy for our company is Strategic leadership philosophy. Because we believe everyone on the team has a specific duty. We intend to maximize the work product of everyone on the team. We will provide guidance while also managing high-level company needs.
4.2. Recruitment and Retention Strategies
Since our drivers are not our employees, I will not mention them much in this section. We have thousands of drivers in 50 states. We will accept people who have been found suitable for our service before, without any questions. Employees who will work in our headquarters can be recruited from the company. Since our company is close to the Silicon Valley, our company will not cover such as accommodation and travel. While choosing our colleagues, we plan to use platforms such as Indeed, Glassdoor and LinkedIn, which are effective search platforms.
4.3. Training
I have given information about this in the previous stages. Since our company is an existing company, priority will be given to the people who have mastered the company culture for our new service. Candidates that we will recruit from outside will be subjected to orientation for a certain period of time in order to learn the company culture and the work they will do after they meet the criteria we have determined. These orientations will be given frequently throughout the year.
4.4. Performance Appraisals
Performance reviews will be made periodically. everyone has to review the person they work for. There will be no discrimination between statuses. In field in the end of each transaction, customers, drivers and restaurants are required rate their experiences and share some comment each other.
4.5. Health and Safety
Our employees working in our headquarters will be obliged to obtain certain health reports from reliable institutions if they are recruited.
4.6. Compensation
Lyft is already an existing company. They have paid holidays, vacation. However, independent conductors working in the field, if they complete a certain order, they will receive a bonus.
5. Marketing Plan
– A formal marketing plan an be comprised of the following four major sections.
– Following the descriptions of the three major sections of a marketing plan, study the list of key questions that must be answered within a marketing plan in a business plan.
5.1. Market Analysis
– The market analysis contains customer profiles, constructed through primary and secondary research, for each market targeted. It also contains detailed information on the major product benefits you will deliver to the markets targeted.
o Describe the methodology used and the relevant results from the primary market research you completed. If you did not do any primary research, justify why this approach was acceptable and indicate what research will be done and by when and by whom.
o Include a complete description of the secondary research conducted and the conclusions reached.
5.2. Competitive Analysis
– The competition section fully describes the nature of your competitors. This section might be part of your market analysis if it makes more sense for you to include it there.
o describe all your direct competitors
o describe all your indirect competitors
– You should consider including a positioning (or perceptual) map, similar to that shown in Figure 6, to show where your product will be positioned relative to competitors’ products.
Figure 6. Positioning Map
– Another tool you can use is a competitor analysis like that showing in Table 6 in which you can develop a set of factors to rate on a scale to establish a competitive score against which to compare your company to your competitors.
Company Factor 1 Factor 2 Factor 3 Factor 4 Competitive Score
Table 6. Competitor Analysis
5.3. Organizational Analysis
– An organizational analysis primarily uses the firm-level analysis (they are essentially the same thing), which is one of the four levels of analysis (societal-level, industry-level, market-level, and firm-level) used to help make decisions and develop strategies. This section can use the firm-level analysis to provide needed context in preparation for presenting the marketing strategy. While the societal-level and industry-level analyses are often placed early in the business plan to provide the needed big-picture context early, an organizational plan is often placed within the marketing plan part (or sometimes in the operations plan section).
– A common approach to analyzing a new venture is to apply a SWOT analysis, but always ensure this analysis results in more than a simple list of internal strengths and weaknesses and external opportunities and threats. A SWOT analysis should always prove to the reader that there are organizational strategies in place to address each of the weaknesses and threats identified and to leverage each of the strengths and opportunities identified. A TOWS Matrix is a tool available to help with this. It evaluates each of the identified threats along with each of the weaknesses and then each of the strengths. It does the same with each of the identified opportunities. In this way, strategies are developed by considering pairs of factors.
5.4. Marketing Strategy
– The marketing strategy section is very important as this covers all aspects of the marketing mix including the promotional decisions you have made, product decisions, distribution decisions related to how you will deliver your product to the markets targeted, and pricing decisions.
5.4.1. Product/Service Strategy
– This section describes the strategic choices you are making relevant to your product or service. These strategies might describe elements like your planned quality levels relative to competing products and your plans for further product development. Refer to the list of key questions that must be answered within a marketing plan that starts on page 23 for insights into what your product strategies should address.
5.4.2. Pricing Strategy
– This section describes the strategic choices you are making relevant to the prices you will charge for your product or service. These strategies should usually be built upon the normal pricing strategies companies use like cost-plus pricing, penetration pricing, premium pricing, skimming, or any of a number of other pricing strategies you should research and consider for your business. Refer to the list of key questions that must be answered within a marketing plan that starts on page 23 for insights into what your pricing strategies should address.
5.4.3. Distribution Strategy
– This section describes the strategic choices you are making relevant to how you will distribute your product or service. You should consider the normal distribution strategies companies use like catalogue sales, retail store sales, online distribution, or any of a number of other distribution strategies you should consider using. Refer to the list of key questions that must be answered within a marketing plan that starts on page 23 for insights into what your distribution strategies should address.
– A mistake that some service-based business plan writers make is to simply state that customers will go their location to purchase the product. Use this section to describe the unique shopping experiences the customers will have or other reasons why they should want to go to this location.
5.4.4. Promotion Strategy
– This section describes the strategic choices you are making relevant to how you will promote your product or service. Refer to the list of key questions that must be answered within a marketing plan that starts on page 23 for insights into what your promotions strategies should address.
Some of the key questions that must be answered within marketing plans follow.
– Who are your customers going to be?
o Define your target market in terms of identifiable entities sharing common characteristics. For example, it is not meaningful to indicate you are targeting Canadian universities. It is, however, useful to define your target market as Canadian university students between the ages of 18 and 25 … or as information technology managers at Canadian universities … or as student leaders at Canadian universities.
o Your targeted customers should be able to make or significantly influence buying decisions.
o Make sure your defined target market aligns completely with your marketing mix (including product/service description, distribution channels, promotional methods, and pricing). For example, if the target market is defined as Canadian university students between the ages of 18 and 25, the product component of the marketing mix should clearly be something that appeals to this target market.
o Provide a strong justification for targeting potential customers. It is usually a very weak approach to target customers on the basis of their demographic characteristics. Your business may be better off targeting potential customers based on psychographic characteristics.
o There are important implications associated with where you will get your customers, so you must make it clear that you understand from where they will come. Remember that there are only two ways in which you can attract your customers:
You can steal them from other businesses they now patronize, or
You can create new customers who do not now purchase the product you want to sell. To do this, you need to convince them to re-allocate some of their money from something else they had planned to buy to your service or product instead.
– Prove that you understand how your targeted customers make their buying decisions. Tell the reader how you plan to influence them to buy from you.
– What is the optimum marketing mix, and why is this one better than the alternatives?
o You will need to access, or conduct research to find out how your targeted customers make their buying decisions. Based on what you discover, you will need to figure out the optimum mix of pricing, distribution, promotions, and product decisions to best appeal to how your targeted customers make their decisions.
– What is your competitive advantage? What distinguishes your business from that of your competitors in a way that will ensure your sales forecasts will be met? What is your venture’s value proposition?
o You must clearly communicate the answers to these questions in your business plan in order to attract the needed support for your business. One caution is that it may sound appealing to claim you will provide a superior service as compared to the existing competitors, but the only meaningful judge of your success in this regard will be customers. Although it is possible some of your competitors might be complacent in their current way of doing things, it is very unlikely that all your competitors provide an inferior service to that which you will be able to provide.
– As a new entrant into the market, must you (a) attract your customers away from the suppliers they currently buy from, or will you be (b) creating new customers for your product or service? If you are attracting customers away from competitors, how will these rivals respond to the threat you pose to them? If you intend to create new customers, how will you convince them to reallocate their dollars toward your product or service?
o Prove that you have anticipated the responses competitors will have to your entrance into the market, especially if your success depends on these businesses losing customers to you.
o If your entry into the market will not be a threat to direct competitors, it is likely you must convince potential customers to spend their money with you rather than on what they had previously earmarked those dollars toward. Write my Essay Online Writing Service with Professional Essay Writers – Explain in your business plan how you will do this.
– What is your product or service? Why will this particular product or service appeal to your targeted customers better than the alternatives available to them?
o If your product or service is standardized, you will need to compete on the basis of something else – like a more appealing price, having a superior location, better branding, or improved service.
o If you can differentiate your product or service you might be able to compete on the basis of better quality, more features, appealing style, or something else.
– In what ways will you communicate with your targeted customers? When will you communicate with them?
– What specific messages do you plan to convey to them? How much will this promotions plan cost?
o Carefully consider which promotional methods you will use. While using a medium like television may initially sound appealing, it is very expensive unless your ad runs during the non-prime times. If you think this type of medium might work for you, do a serious cost-benefit analysis to be sure.
o You will likely develop your promotional plan around measures like the following. Remember to include the costs for all of the measures you use in your promotional plan in your business plan.
newspaper ads
promotional pamphlets
business cards
advertising in telephone directories
sponsorships (like purchasing uniforms for a little league soccer team)
personalized pens and other promotional client give-away items
donating items to charity auctions
printing and mailing client Christmas cards
doing the many things businesses end up doing on-the-fly
join the local chamber of commerce
join relevant trade organizations through which to establish important business connections
setting up and staffing booths at trade fairs to help launch the business
o Add some discretionary money to your promotional budget if you are concerned that some important promotional opportunities might arise during the year.
o You should consider mapping out your promotional expenditures in a schedule like that shown in Table 7. Make sure that this schedule links directly with your projected cash flow statement and from there into your projected income statements.
o Be careful to avoid killer phrases which only serve to make a reader believe you have not done your homework. Some of these are common in the marketing sections of business plans. For example, avoid including phrases like these “there is no target market” and “any money left over will be allocated to a marketing budget”.
Table 7. Promotional Plan Years 1-2
– What are your sales forecasts? Why are these realistic?
– Your sales forecasts should be done on at least a monthly basis and linked directly with your projected cash flow statement. The projections must be accompanied by explanations indicating upon what assumptions and facts they were based. This is required to establish their credibility with readers of your business plan.
– Many readers will initially assume your planned time frames are too long, your revenues are overstated, and you have underestimated your expenses. Well crafted explanations for all of these numbers will help establish credibility.
– See Table 8 for an example of a month-by-month summary of projected sales per product line.
– Table 9 is an example of a year-by-year summary of projected sales.
– If an assumption was made that some sales will be made on credit, you can use a visual like Error! Reference source not found. to summarize the projected cash and accounts receivable collections from sales on a monthly basis by product line. Error! Reference source not found. shows a year-by-year summary of these collections. This is an important table in that this data feeds into the projected cash flow statement. The previous tables showing the projected sales cannot be used to calculate cash flow, but are needed to determine revenue for the projected income statements.
Table 8. Projected xxx Years 1-3
Table 9. Projected xxx Summary for Years 1-5
– What are your distribution strategies? What makes these strategies better than the alternatives?
o If you plan to use e-commerce, you should include all the costs associated with maintaining a website and accepting payments over the Internet.
– What are your pricing strategies? What makes these strategies better than the alternatives?
o If you intend to accept payment by credit card (which is probably a necessity for most companies), you should be aware of the fee you are charged as a percentage of the value of each transaction. If you don’t account for this you risk overstating your actual revenues by perhaps one percent or more.
– Be very careful how you phrase your statements.
o If you make a statement of fact, you must back it up with properly referenced supporting evidence.
o If you indicate a claim is based on your own assumptions, you must back this up with a description as to how you came to the conclusion.
o Unless you are stating something that is clearly common knowledge (but then you need to determine whether you need to make the statement), never make a statement without backing it up.
– What primary and secondary research have you done? Is it obvious to readers that you did research (indicated by properly referencing all of your sources). This research normally falls under the four levels of analysis, and you almost always must do analysis at all levels (see Error! Reference source not found.).
6. Financial Plan
6.1. Overview
Lyft Inc. has been in business all most for decades. Since the first day we were founded we were invested by millions people. In Mar. 29, 2019 Lyft (NASDAQ:LYFT) began trading on the NASDAQ and became the first ride-hailing company. Our IPO price was 72 dollars. the company raised about $2.3 billion from the listing. This is a great opportunity for us to invest in delivery business. The Food delivery business can save the company from these difficult times with our new enterprise, while our ride-sharing business has suffered a lot of damage with Covid-19. The new app will only require 40 employees and we will invest in new mobile infrastructure.
You can see the financial statements of the new service in the tables below.
6.1. Proforma Income Statements
Our drivers Completed 20 million rides in the first quarter of 2020. That’s 80 million a year on average. The first goal of our new service will be to reach 25% of our total number of rides in 2021. 25% of 80 million is 20 million. Our first goal is to reach our customers 20 million times in our first year. Our main goal in the first year will be to reach too many people and make very little profit. That’s why we plan to earn just $ 7 per ride.
LYFT DELIVERY
Stament of income
12/31/21
Revenues
Products 0
Services 140,000,000
Other 0
Total Revenue 140,000,000
Costs
Products 0
Services 126,000,000
Other 0
Total Cost 126,000,000
GROSS PROFIT 14,000,000
Operating Expenses
General and Administrative 12,000
Insurance 24,000
Rent 300,000
Research and Development 400,000
Salaries and Wages 3,840,000
Sales and Marketing 100,000
Utilities 72,000
Other 100,000
Total Operating Expenses 4,848,000
Operating Income 9,152,000
Non-Operating or Other
Interest Revenue 0
Interest Expense 0
Gain on Sale of Assets 0
Gain from Legal Action 0
Loss from legal Action 60,000
Depreciation and Amortization 324,000
Other Gain 0
Other Loss 0
Total Non-Operating or Other 384,000
Pre-Tax Income 8,768,000
Taxes
Income Tax Expense 1,841,280
Net Income 6,926,720
6.2. Proforma Balance Sheets
LYFT DELIVERY
BALANCE SHEET
31/12/2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents 6,248,060.00
Short-term investments 16,286,430.00
Prepaid expenses and other current assets 1,996,050.00
Prepaid Expenses 0.00
Notes Receivable 0.00
TOTAL CURRENT ASSETS 24,530,540.00
Restricted investments 8,998,330.00
Other investments 100,000.00
Property and equipment, net 2,357,380.00
Operating lease right-of-use assets 4,839,900.00
Intangible assets, net 1,717,920.00
Goodwill 3,827,250.00
Other assets 559,700.00
TOTAL ASSETS 46,931,020.00
CURRENT LIABILITIES
Accounts payable 260,200.00
Insurance reserves 9,199,560.00
Accrued and other current liabilities 6,354,120.00
Operating lease liabilities — current 489,790.00
Total current liabilities 16,303,670.00
Operating lease liabilities 2,787,730.00
Long-term debt, net of current portion 6,226,840.00
Other liabilities 186,060.00
Total liabilities 25,504,300.00
OWNER’S EQUITY
Paid-In Capital 2,000,000.00
Net Income 6,926,720.00
TOTAL EQUITY 8,926,720.00
TOTAL LIABILITIES & EOUITY 46,931,020.00
6.3. Proforma Cash Flow Statements
CASH INFLOW JANUARY FEBRUARY OCTOBER NOVEMBER DECEMBER TOTAL
2021
SERVICE SALES $11,666,667 $11,666,667 $11,666,667 $11,666,667 $11,666,667 $140,000,000
CASH OUTFLOW 2021 JANUARY FEBRUARY OCTOBER NOVEMBER DECEMBER TOTAL
SERVICE COST $10,500,000 $10,500,000 $10,500,000 $10,500,000 $10,500,000 $126,000,000.00
WAGES AND SALARIES $320,000 $320,000 $320,000 $320,000 $320,000 $3,840,000.00
GENERAL $1,000 $1,000 $1,000 $1,000 $1,000 $12,000.00
RENT $25,000 $25,000 $25,000 $25,000 $25,000 $300,000
RESEARCH DEVELOPMENT $33,333 $33,333 $33,333 $33,333 $33,333 $400,000
OTHER $8,333 $8,333 $8,333 $8,333 $8,333 $100,000
INSURANCE $2,000 $2,000 $2,000 $2,000 $2,000 $24,000
UTILITIES $6,000 $6,000 $6,000 $6,000 $6,000 $72,000
SALES MARKETING $8,340 $8,340 $8,340 $8,340 $8,340 $100,000
TOTAL $10,904,007 $10,904,007 $10,904,007 $10,904,007 $10,904,007 $130,848,000
CASH INFLOW JANUARY FEBRUARY OCTOBER NOVEMBER DECEMBER TOTAL
2022
SERVICE SALES %15 INCREASE $13,416,667 $13,416,667 $13,416,667 $13,416,667 $13,416,667 $161,000,000
CASH OUTFLOW 2021 %10 INCREASE JANUARY FEBRUARY OCTOBER NOVEMBER DECEMBER TOTAL
SERVICE COST $11,550,000 $11,550,000 $11,550,000 $11,550,000 $11,550,000 $138,600,000.00
WAGES AND SALARIES $352,000 $352,000 $352,000 $352,000 $352,000 $4,224,000.00
GENERAL $1,100 $1,100 $1,100 $1,100 $1,100 $13,200.00
RENT $27,500 $27,500 $27,500 $27,500 $27,500 $330,000
RESEARCH DEVELOPMENT $36,667 $36,667 $36,667 $36,667 $36,667 $440,000
OTHER $9,167 $9,167 $9,167 $9,167 $9,167 $100,000
INSURANCE $2,200 $2,200 $2,200 $2,200 $2,200 $26,400
UTILITIES $6,600 $6,600 $6,600 $6,600 $6,600 $79,200
SALES MARKETING $9,174 $9,174 $9,174 $9,174 $9,174 $110,088
TOTAL $11,994,407 $11,994,407 $11,994,407 $11,994,407 $11,994,407 $143,922,888
CASH INFLOW JANUARY FEBRUARY OCTOBER NOVEMBER DECEMBER TOTAL
2023
SERVICE SALES %25 INCREASE $16,333,333.33 $16,333,333.33 $16,333,333.33 $16,333,333.33 $16,333,333.33 $196,000,000
CASH OUTFLOW 2021 JANUARY FEBRUARY OCTOBER NOVEMBER DECEMBER TOTAL
SERVICE COST $13,282,500 $13,282,500 $13,282,500 $13,282,500 $13,282,500 $159,390,000.00
WAGES AND SALARIES $404,800 $404,800 $404,800 $404,800 $404,800 $4,857,600.00
GENERAL $1,265 $1,265 $1,265 $1,265 $1,265 $15,180.00
RENT $31,625 $31,625 $31,625 $31,625 $31,625 $379,500
RESEARCH DEVELOPMENT $42,167 $42,167 $42,167 $42,167 $42,167 $506,000
OTHER $10,542 $10,542 $10,542 $10,542 $10,542 $126,500
INSURANCE $2,530 $2,530 $2,530 $2,530 $2,530 $30,360
UTILITIES $7,590 $7,590 $7,590 $7,590 $7,590 $91,080
SALES MARKETING $10,550 $10,550 $10,550 $10,550 $10,550 $126,601
TOTAL $13,793,568 $13,793,568 $13,793,568 $13,793,568 $13,793,568 $165,522,821
CASH INFLOW JANUARY FEBRUARY OCTOBER NOVEMBER DECEMBER TOTAL
2021
SERVICE SALES %15 INCREASE $11,666,667 $11,666,667 $11,666,667 $11,666,667 $11,666,667 $140,000,000
CASH OUTFLOW 2021 JANUARY FEBRUARY OCTOBER NOVEMBER DECEMBER TOTAL
SERVICE COST $10,500,000 $10,500,000 $10,500,000 $10,500,000 $10,500,000 $126,000,000.00
WAGES AND SALARIES $320,000 $320,000 $320,000 $320,000 $320,000 $3,840,000.00
GENERAL $1,000 $1,000 $1,000 $1,000 $1,000 $12,000.00
RENT $25,000 $25,000 $25,000 $25,000 $25,000 $300,000
RESEARCH DEVELOPMENT $33,333 $33,333 $33,333 $33,333 $33,333 $400,000
OTHER $8,333 $8,333 $8,333 $8,333 $8,333 $100,000
INSURANCE $2,000 $2,000 $2,000 $2,000 $2,000 $24,000
UTILITIES $6,000 $6,000 $6,000 $6,000 $6,000 $72,000
SALES MARKETING $8,340 $8,340 $8,340 $8,340 $8,340 $100,080
TOTAL $375,010 $375,010 $375,010 $375,010 $375,010 $130,848,080
6.4. Investment Analysis
As we will analyze the above mentioned tables, our service does not have any trouble in generating income, but since it is the first year of our service, our share of profitability is seriously low.
6.5. Projected Financial Ratios and Industry Standard Ratios
Financial Ratios Industry Averages
Quick Ratio 1.38217
Current Ratio 1.5046
Working Capital Ratio 1.5046
Accounts Receivable Turnover Ratio #DIV/0!
Asset Turnover Ratio 5.18834
Inventory Turnover Ratio #DIV/0!
Inventory Turnover Ratio #DIV/0!
Gross Margin Ratio 0.1
Profit Margin Ratio 0.04948
Return on Assets Ratio 0.2567
Return on Capital Employed 228800
Quick Ratio: An acid ratio of 1.3 shows that the company has 1.3 times quick assets than current liabilities. That means the firm is be able to pay off its obligations without having to sell off any long-term or capital assets.
Current Ratio: The current ratio helps investors and creditors understand the liquidity of a company and how easily that company will be able to pay off its current liabilities. This ratio ex- presses a firm’s current debt in terms of current assets. That means company has 1.5 times more current asset than liabilities.
Working Capital Ratio: The ratio above 1 shows outsiders that the company can pay all of its current liabilities and still have current assets left over or positive working capital.
Asset Turnover Ratio: The total asset turnover ratio is a general efficiency ratio that measures how efficiently a company uses all of its assets. This gives investors and creditors an idea of how our company is managed and uses its assets to give service.
Gross Margin Ratio: This ratio measures how profitable our company can sell its service. 0.1 is a really low ratio but in the first year of our service we will not try to be high profitable.
Return on Assets Ratio: The return on assets ratio measures how effectively a company can turn earn a return on its investment in assets. we only turn one in four in the first year. It is not for first year.
Return on Capital Employed: The return on capital employed ratio shows how much profit each dollar of employed capital generates.
6.6. Break-Even Analysis
MONTLY SERVICE SALES BREAK-EVEN POINT
PRICE FIXED COST VARIABLE COST TOTAL EXPENSES
0-7M 7.00 2.50 3.80 6.30 0.78125
7-14M $7 $255.00 $3.80 $6.30 0.78125
14-20M $7 $2.50 $3.80 6.3 0.78125
The table above is calculated with the cost methods calculated per ride explained earlier. Variable costs vary with the concept of average miles per ride and time. There will be no change in our costs regarding the 20 million rides we will throw within the year.
6.7. Critical Success Factors
The data that the biggest companies in the world hold the biggest advantages in the market. We, as Lyft, keep the data of our customers with their permissions in order to serve them better while completing millions of rides across America. If we cannot reach the numbers we want during the years we serve, we will find ways to reach our customers healthier with the data we have.
7. References
Salinas S. (Mar 29, 2019) Lyft pops in trading debut, settles to modest gains Retrieved From:
https://www.cnbc.com/2019/03/29/lyft-ipo-stock-starts-trading-on-public-market.html
