Business Plan

Running Mate Ltd
 
 
 
Table of contents
Executive summary…………………………………………………………………………………….. 2
Business details………………………………………………………………………………………….. 2
What we do and how we do it…………………………………………………………………….. 3
Business background………………………………………………………………………………….. 4
Our goal/mission………………………………………………………………………………………… 5
Our strategy………………………………………………………………………………………………. 5
Current team……………………………………………………………………………………………… 5
Market analysis………………………………………………………………………………………….. 8
Competitor analysis……………………………………………………………………………………. 9
SWOT analysis and strategy………………………………………………………………………… 9
Marketing strategy……………………………………………………………………………………. 10
Financial plan…………………………………………………………………………………………… 11
References………………………………………………………………………………………………. 19
 
 
 
 

Executive summary

Our business is called Running Mate. We are offering running errands services, community service and barter service. Our three ideal customers are those who work from home, new mothers and the elderly in retirement villages and the disabled. We are trying to develop a blue ocean strategy in a red ocean market. Therefore, the core competitiveness of our platform is customization and localization. We pursue customized services to meet the needs of individuals and communities.
Our value proposition is established in the sharing economy. For example, we take advantage of network technology and the concept of the sharing economy to build a social platform that matches the needs of people who want to sell their free time to those who need help. We want our platform to really help and support their communities, which is also the social responsibility. Besides, we are also proposing another very important concept: Barter service. People can volunteer to help with requests from other people in your community, like when someone needs to mow the lawn, you help them, and then you get a credit. You can use this credit to post what you need on the platform. We do not make profit in this mode.
In terms of revenue stream, we adopt two kinds of business: the first is the normal business based on running errands services and outsourcing services. Our revenue comes from commissions paid by our customers. In terms of cost, our Running Mate focuses on asset-light and low fixed cost models. We don’t need warehousing, we don’t need to buy our own vehicles, and we don’t need a large office space. All we need is a small office space and the basic service cost of building a platform and maintaining the platform. In terms of human capital cost, we will prefer to employ people less full-time and more part-time and we will share our Commission revenue with our Running Mate.

Business details

Business name Running Mate Ltd
Trading name Running Mate Ltd
Established October 6th, 2020
Structure Limited Partnership Company

What we do and how we do it

Our business is called Running Mate. We provide errand services, community services and barter services. The three ideal customers for our company are people working at home, new mothers and elderly people in retirement villages and disabled people. The value of our platform brand proposition is established in the era of the prevalence of the sharing economy and great demand in contemporary society. The sharing economy is a new type of economic format, which is based on the maturity of mobile Internet information technology.
On the other hand, the core competitiveness of our platform is customization and localization. We pursue tailor-made services to meet the needs of individuals and communities. The value proposition we established on the sharing economy, for example, we use network technology and the concept of sharing economy to build a social platform that can meet the necessaries of those who want to sell their free time to those in need. Our services are divided into running errands, community services, and barter services. In addition to helping people pick up or deliver any goods, community service is vital to our platform. We have found that community life and connection are important to New Zealanders. Simple interpersonal relationships and neighborhood mutual assistance are an important foundation for maintaining the peace of New Zealander.
However, in modern society, due to the lack of efficiency and management of community services and the increasingly dense apartment construction, it is difficult for people to have opportunities to communicate with their neighbors. They lack a dedicated channel to put forward their demands, or it is difficult to find efficient institutions to solve their necessaries. Therefore, for daily community services, we provide daily cleaning, maintenance and other fee-based services. We also put forward another very important concept: barter service. People can voluntarily help other people in your community’s requests. For example, when someone needs to mow the lawn, you
can help them, and then you can get honor. You can use this point to publish the content you need on the platform. We will not make a profit in this model. The reason is that what we want is to break the stereotypes and bring closer the relationship between people through such a cooperative exchange service model. We hope that we can build a warm social platform.
From the perspective of industry competition, we are the first such service provider in Hamilton. We can offer customers diversified services, pay more attention to save customer’s time, and provide running errands, innovative community services and barter services to improve the quality of life for people.

Business background

Business history
Our company name is Running Mate Ltd. We issued our business and company in Hamilton in 2020, Oct. Our business is including six founders, we are sharing the same stake of 16.7% each of us. Our initial investment is 10,000 NZD per person. Total initial investment will be 60,000 NZD. Our full-time jobs in the first year will be ourselves in order to save operating fees.
We are a social service platform that offers three main core services: Running errands service, community service and barter service.
Current position
Our company currently mainly focuses on the Hamilton market. It will be one of our strengths due to there being no direct competitors in Hamilton so far. We are beginning with taking self-employees. Our six founders, we take ourselves as full-time jobs. It reduces our labor cost and allows us to have more expenditure on developing our products. Meanwhile, we will also hire some part-time employees, we take them as our partners, and we share our profit with them. Our initial capital is overall 60,000 NZD, comes from our 6 founders. So, we do not borrow any capital from third parties. We do not owe money. Besides, our intellectual property cost is quite low, we will purchase 3 laptops for operating in the first year. In the first year operating, we are seeking 10% of market share. Our first year turnover forecast will be 60,000 NZD. And net profit will be 3,888 NZD.

Our goal/mission

Our final goal is after 5 years’ growth, our marketing share could reach 50% percent of our ideal customers market in Hamilton. Annual turnover could reach out around 20 % growth starting from second year. And our final existing strategy is buying-out by giant internet companies with 1,000,000 NZD dollars acquisition fee.

Our strategy

To achieve our goals, we have to put lots of effort into keeping our company operating well in these five-years. We use barter service to attract more potential customers. In the future, with the model becoming more mature and more users beginning to use our platform, it will not only increase the loyalty of our customers but also enhance the users’ viscosity. This is what we want to achieve in the end.  In order to gain our edge to market, we should focus on developing customization and localization. These two are our core competitiveness. We also need to look for differentiation with other competitors, try to develop a blue ocean marketing strategy in a red ocean market.
We will continue to pay attention to the improvement and expansion of our business. We aim to increase the consuming experience both for our end users and employees. Such as optimizing our ordering system according to our current operational experience, designing subsidy promotion to our running mates. Meanwhile, we are going to continue to expand our customer group. We will provide more personal services for the particular customer group, such as one-parent family, and the Dual-employee family. We will also cooperate with SMBs, such as small grocery shops, restaurants, retirement villages to help them carry the delivery and pick up services in order to save their labor costs.

Current team

Name Jovi Chen
Role title Strategy Analyst
Key responsibilities Conduct in-depth research on the industry, accurately judge the industry development trend, and make suggestions
Qualifications Master degree of Business Management
Experience Engaged in related industries for years; Analyzed and predicted the direction of the future market for several listed companies, then made portfolio investments and made plans

 

Name Sunny Sun
Role title Operation Manager
Key responsibilities Responsible for the overall planning, operation, promotion and management of the platform, and carry out project planning according to the positioning and operation of the platform.
Qualifications Master degree of Business Management
Experience Years of relevant work experience; Familiar with the operating models of major companies and have the own unique understanding of business operations.

 

Name Choice Kunnappillil George
Role title Finance Analyst
Key responsibilities Analyze the company’s financial status, study company information in the industry, and predict the company’s financial benefits and risks based on the important differences between actual situation judgments, interpretations and budgets
Qualifications Master degree of Business Management
Experience Many years of accounting work experience has given him a very sensitive thinking about finances and figures, and he is very professional

 
 

Name Manish Sugumar
Role title Marketing Manager
Key responsibilities Formulate the company’s overall market strategy and market development goals, and make market development plan according to the company’s development strategy
Qualifications Master degree of Business Management
Experience He worked in many companies in charge of business information collection and information platform planning, and researched the macro aspects of the market.

 

Name Shan Liu
Role title Product Manager
Key responsibilities Responsible for the market research and analysis in the early stage of the project, understand the market in depth, and dig out user necessary.
Qualifications Master degree of Business Management
Experience She worked as a product manager in an Internet company, understands the market direction and customer needs, and is extremely sensitive to market changes

 

Name Xinya Wang
Role title Business Development Manager
Key responsibilities Responsible for following up the implementation of the target plan, supervising the implementation of the marketing target of the subordinate department, and formulating an annual work plan
Qualifications Master degree of Business Management
Experience She has years of experience for planning the medium and long-term development direction of the domestic market and the international market in the enterprise, including the operation, planning and product development of all overseas markets

Mentors, consultants, advisors and other outside help

Name Role/Job title
Dr Michele Schoenberger-Orgad Our Mentor. She provided many constructive opinions for us, and also gave us many recommendations for us for improvement.

 
Retention, engagement and recruitment policies and practices
We treat our employees as our partners, not just an employment relationship. We are using the sharing economy. We would like to share a bigger portion of profit with our employees. So that increases our employees’ loyalty to our organization.
We are creating an agreement with our employees. Transparency, comprehensive one, makes our employees know every detail of our partnerships. It helps us to build trust relationships with our employees too. We are also going to increase our subsidy to our employees in the next following years. We would like to give their compensation for their petrol, insurance, fine and etc. We hope that we could build an interdependence relationship with our employees, in order to decrease the high staff turnover in this kind of industry.

Market analysis

  • Customer segmentation

Our Market is based on Hamilton.

  • Working from home, more people prefer working from home after COVID-19.
  • New Mums, there are 2445 new babies born in 2019 in Hamilton (Stats NZ, 2019).
  • The elderly and The Disabled

There are 16,155 elderly people over 65 years old in Hamilton (Stats NZ, 2013).
There are 1,440 people with mobility difficulties, accounting for 8.6% of Hamilton’s total population.
 

  • Market share estimated:
  2021 2022 2023 2024 2025
Target Customer 10% 15% 25% 35% 50%

 

Competitor analysis

  Company Name Base Service
1 Auckland Errands Auckland Errand Services
Business Services
Home Services
2 Concierge NZ Auckland Personal concierge services
Concierge services for business
Lobby services
Services for international visitors
3 One Street Wellington Cleaning
Gardening
Life-assist
4
Goodest
Auckland
 
Provides a line service platform
Web platform and the mobile application based
Brokerage fee from the local professional

 
The shortcomings of the competitors

  • Customers cannot place orders directly through websites or apps conveniently, and online information is more used for information collection of both parties with service needs.
  • Customers cannot get the required service price directly from the website.

SWOT analysis and strategy

Strengths
–          The first this kind of service provider in Hamilton.
–          Diversified services
Running errands service, Community Service Barter Service.
Weaknesses
–          Hard to collect data in a new market
 
 
Opportunities
–          There is a market demand in Hamilton.
–          Existing services are scattered and lack of customization.
Threats
– More competitors will enter when the market become mature.
 

 
Our Strengths is we will be the first, this kind of service provider in Hamilton, no direct
competitors. Another strength is the diversified services we could offer: Running errands
service, community service and the barter service. However, because of we are the first
entrant in the Hamilton market. It will be hard for us to collect the enough data for
analyzing this new market.
But this weakness is also accompanied by opportunities: Our three ideal customers in Hamilton need this kind of service we provide, especially in Post-COVID time. Because what services people get in Hamilton so far is not centralized and customized enough.
In terms of the threats. There are already have some existing competitors in New Zealand, which offering the similar services with ours, they would come into Hamilton one day and become our competitors.
Strategy
Strengths Opportunities Strategy
So, our strategy under Strengths and opportunities is we should not fall common. We should focus on developing customization and localization. These two are our core competitiveness.
Strengths Threats Strategy
As for Strength and threats. We need to look for differentiation with other competitors, try to develop a blue ocean marketing strategy in a red ocean market.

Marketing strategy

  • Customer centered services
  • Effective and efficient services
  • Productive partnership

We use this service to attract more potential customers. In the future, with the model becoming more mature and more users beginning to use our platform, we will not only increase the loyalty of our customers but also enhance the users’ viscosity. This is what we want to achieve in the end. Our social responsibility is to make the society more efficient and sustainable. We want our platform to really support Kiwi’s life.
Besides, regarding the advertisements we planned. We will use online ways, like social media, website and broadcast. Customers could receive the promotional information timely. We will also go for offline ways to seek customers. Such as flyer, posters as well as the regular roadshow and field trip to retirement villages are also good options for us to communicate with customers.

 Financial plan

The main revenue stream of the Running mates is through the Delivery Mates Service Agreements with end-users, drivers. The Running Mate comes into mate’s service contracts with running mates and institutions to use this Platform.
Mates Service Agreements
The Mates Service Agreement (MSA) defines the service fees that the company charges for each transaction for running mates and organization. The runners and organizations agree to perform the running as requested by the end-user upon accepting a transaction. Combined with the MSA, the acceptance of transaction requests sets out enforceable rights and obligations for each transaction. There is an agreement between the Corporation and the Runners. An agreement has been reached between the Company and Runners and individuals after a transaction request is accepted. The runners and organizations have the right to cancel the transaction lapses. End-users have unrestricted access to the network, and end-users are not responsible for the company’s success. As a result, these same end-users are not the company’s consumers. The role of the Company for Runnings and shipment transactions is to provide the service of the Runners and company to enable end-users with a good trip or home delivery.
Before its transfer to the end-user, the Running Mate does not pre-purchase. Running mate will obtain control over the goods or services of the Runners. The Running Mate does not direct Runners to conduct transactions on the Company’s behalf. And Runners have the sole right to eliminate a requirement for purchase and, the Company does not integrate services provided by Running Mate.
The Running Mate reviews other specific functions for understanding the agents. The Running Mate is not responsible for all the transactions, The Company has no inventory, so the dangers associated with is not applicable in the business. The company fixes the price for the running and delivery of the services and goods. Many market risks are avoided by such a way of doing business.
Running mates are the receivers of the business. The money to the Business is received from the end customer of the delivery. The Business earns a sluggish revenue in the first year due to the satisfaction and execution of the deal. Running buddy becomes an advocate for end-users and an entity that needs the aid of a runner to fix their problems. So sometimes, the running mate earns money from 30% of the order if, in the first year, the net income for the company is $60,000 if the money of 200,000 is required to achieve the net income. If the order, we receive on a day is thirty-seven, then the predicted order quantity is 1111 for a month and 13,333 for the first year. We hold a bare minimum of $15 per order, then the estimated sum can be reached. So, the company, therefore, thinks that there may be a possibility of refunding. Sometimes the end customer is disappointed.
Revenue recognition
The company shall derive its revenue mainly from running buddies and associations that use this Platform and other operations, such as the involvement of end-users in orders. The demand for the end-users is to be acknowledged by the runners to allow the income. There is communication between the end customer and the running mate. Running buddy is still analyzing new revenue platforms. Both transactions both orders by consumers from the data gathered. This business model is executed until the enterprise has been verified by the battery framework through the sharing economy concept.
Runs
To meet the revenue forecast, the Company collects 30% on each purchase. The processes are related to the operation and the openness of the drivers to consider the customer’s request. To obtain the commission from the end customers, it is important to complete the ride. The drivers are runners in front of the company.
The premium of 30% is the amount paid additionally after the purchase of the good, which means that the end customer needs to compensate for the service and payment of the goods. The service fee shall be paid in the accounts within a limited period. There will also be no funds receivable by the close of the financial year.
In such situations, there is an opportunity for end-users to pay in cash rather than by online accounts. Calculations are not counted and would be considered an advantage for the driver.  Because online transfer is the best way to receive the money from the client. To monitor the cash payment, a new method is to be implemented to fix the problem. Uncollected payments are shown in the budget, which will not be included in the cash inflow outflow figures. It would be deemed to be a credit.
Delivery
The business gets its benefits primarily from the fee of 30 percent of each sale. Running buddy and end-users use the portal to complete the approved and received orders.
Other Operations
Other operations consist of the batter system and, the shared economy concept is no revenue generated here.
Other Technology Programs
The Company will make use of the technology in the future for the development of cloud-based service control and allocation of the drivers and location.
Income Taxes
The company is considering the tax. The effects of tax variations in the future are also a matter of risk to the company. The forecast finds certain differences in the mission in the sentence. All future projected revenue, toll revenue, is calculated in the 5-year forecast.
Equipment
As of 2021 to 2025, the components of as follows: For mobile app and website, 20% depreciation is calculated each year. And for the website maintenance, the same percentage is counted into account.
Expenses
A brief description of company expenses is mentioned below.
Wages First year no wages second-year wages are $ 2,000 per month, then third-year $ 3,000 per month, fourth-year $ 4,000 per month. Rent $ 9,600 in the first year and $30,000 in the second year and increases 10% from the second year. Electronic Devices $3000, These figures include the charges as assets-depreciation 5 years, depreciation $600/year. Mobile App and Website Maintenance The first year we use free software available in the market the second year onwards a $ 20,000 and an increase of 10% up to 26,620 in 2025.
Advertising expenses totalled $ 10.000, $ 20,000, and $ 26,000, $33,800, $43,940 for the five years 2021, 2022, 2023, 2024 and 2025, respectively. Refunds and credits to end-users totaled $ 43,940. General administration shall consist of legal fees and correspondence charges, insurance costs and financial matters. The Senior Management Committee and the Management of Staff shall be reserved for the years to come in the second year.
Depreciation
Depreciation is considered primarily for electronic products such as laptops and other accessories associated with it $600 is reduced from the statements to make it correct and achievable.
Investment
Initial Capital: $60,000, $10,000/ person. $300,000 Venture capital. Shares distribution 80%, 20%. $60000 for the first year, 6 of us are investing together. After 5 years, they’ll get $200,000 back. Because we sell goodwill and data for 1000000 dollars to someone. The first year’s total operating profit is 432000, 518400 in the second year, and 622080 in the third year, which means 20 percent profit every year. The internal rate of return is 375%. More than 100 percent of the NPV.
Goodwill and Intangible assets
In the second year, the Company will determine its operating things. The change in operating and reportable segments will result in the goodwill generated from upcoming acquisitions and the new developments.
Cost forecast – money out
The cash outflow of operating activities is Expenses are mainly wage, rent, software, and hardware. Paychecks: In the first year, there are no wages; second-year wages are $ 2,000 per month, then third-year $ 3,000 per month, and the fourth year is $ 4,000 per month. Rent $ 9,600 in the first year and $30,000 in the second year and increases 10% from the second year. Electronic Devices $3000, these figures include the charges as assets-depreciation 5 years, depreciation $600/year. Mobile App and Website Maintenance The first year, we use free software available in the market the second year onwards a $ 20,000 and an increase of 10% up to 26,620 in 2025.

Area of spend First-year ($) Second year ($) Third year ($) Fourth year ($) Fifth year ($)
Accommodation 9,600 30,000 33,000 36,300 39,930
Power 3,600 8,000 8,400 8,820 9,261
Electronic devices 3,000        
Mobile App and website 10,000        
Mobile App and website maintenance   20,000 22,000 24,200 26,620
Registration and Lawyer 5,000 20,000 22,000 24,200 26,620
Accountant 3,000 6,000 6,600 7,260 7,986
Marketing promotion 10,000 20,000 26,000 33,800 43,940
CRM 1,800 3,600 3,960 4,356 4,792
Uniform 1,000 3,000 4,000 5,000 6,000
Consultant (Marketing and data analysis)   10,000 15,000 22,500  
Salary   144,000 216,000 288,000 288,000
Subsidy (Petrol, toll)   5,000 10,000    
Total 47,000 269,600 366,960 454,436 453,149

 
Revenue forecast – money in
The inflow from operating activities. The Company’s primary revenue is through delivery. The organization acknowledges the sales only after the sale is concluded. The primary income of the company is 30 percent of the commission that comes with each sale. Runners receive the items and transport them to the site and site. Revenue is received after the commodity has been paid to the company that has been bought.

Types of Revenue First-year ($) Second year ($) Third year ($) Fourth year ($) Fifth-year ($)
Revenue 60,000 300,000 500,000 600,000 700,000
Investment / Funding          
Owner’s Capital 60,000
Investment from dragon’s     90,000 45,000 45,000 120,000
Total 120,000 390,000 950,000 105,000 820,000

Cash flow from financing activities is an investment of $ 60.000 in the first year and the Venture capital $90,000 in 2022 in the second year and 45,000 for the third and fourth years.
 
Break-even forecast

Types of Revenue First-year ($) Second-year ($) Third year ($) Fourth year ($) Fifth-year ($)
Running Mate 60,000 300,000 500,000 600,000 700,000
Commission- the amount of the orders 30% 30% 30% 30% 30%
The revenue of order amount 200,000 1,000,000 1,666,667 2,000,000 2,333,333
The price of each order 15 15 15 15 15
The order quantity/ year 13,333 66,667 111,111 133,333 155,556
The order quantity/ month 1,111 5,556 9,259 11,111 12,963
The order quantity/ day 37 185 309 370 432
Increasing % 500% 167% 120% 117%

 
Profit and loss forecast

Profit and loss forecast First year ($) Second year ($) Third year ($) Fourth year ($) Fifth-year ($)
Estimated Revenue 60,000 300,000 500,000 600,000 700,000
Estimated Cost 47,000 269,600 366,960 454,436 453,149
Estimated profit/Loss 3,888 21,456 105,797 117,388 176,388

 
Cash flow forecast
The cash outflow of operating activities is Expenses are mainly waging, rent, software, and hardware. Wages: In the first year, there are no wages; second-year wages are $ 2,000 per month, then the third year $ 3,000 per month, and the fourth year is $ 4,000 per month. Rent $ 9,600 in the first year and $30,000 in the second year and increases 10% from the second year. Electronic Devices $3000. These figures include the charges as assets-depreciation 5 years, depreciation $600/year. Mobile App and Website Maintenance The first year, we use free software available in the market the second year onwards a $ 20,000 and an increase of 10% up to 26,620 in 2025.Cash flow from financing activities is an investment of $ 60.000 in the first year and the Venture capital $90,000 in 2022 in the second year and 45,000 for the third and fourth year.

Particulars First-year ($) Second-year ($) Third year ($) Fourth year ($) Fifth-year ($)
Cash Flow from Operating Activities
Cash collected from customers 60,000 300,000 500,000 600,000 700,000
Payments (excluding depreciation)
Tax -1,512 -8,344 -41,143 -45,651 -68,595
Operating expenses paid -57,000 -269,600 -352,460 -436,361 -454,417
Net inflow from Operating 1,488 22,056 106,397 117,988 176,988
Cash Flow from Financial Activities
Initial Capital 60,000
Investors Capital 90,000 45,000 45,000 120,000
Net inflow from Financing 60,000 90,000 45,000 45,000 120,000
Net increase in cash held 61,488 112,056 151,397 162,988 296,988
Plus: Opening cash balance 61,488 173,544 324,941 487,929
Closing cash balance 61,488 173,544 324,941 487,929 784,916

 
Balance sheet forecast

  First year ($) Second year ($) Third year ($) Fourth year ($) Fifth-year ($)
Current Assets          
Bank 61,488 173,544     324,941     487,929     784,916
Non- Current Assets          
Property, Plant & Equipment 3,000 2,400         1,800         1,200            600
Less: depreciation 600 600            600            600            600
Total Non-current Assets 2,400 1,800         1,200            600              –
Total Assets 63,888 175,344   326,141   488,529   784,916
Liabilities          
Non-current liability          –            –              –              –              –
Current Liabilities          –            –              –              –              –
Total Liability          –            –              –              –              –
Equity          
Capital at start   63,888     175,344     326,141     488,529
Owner’s Capital 60,000            –              –              –              –
Investment from dragon’s          – 90,000       45,000       45,000     120,000
Retained Earnings 3,888 21,456 105,797 117,388 176,388
Total Equity 63,888 175,344   326,141   488,529   784,916

 
 
 
 
 

References

Status NZ. (2013). Population by age group in Hamilton City, New Zealand. Figure. NZ. https://figure.nz/chart/3pRQhmIcVu2QCTlm-75WBAmh11EmQD0tL
Status NZ. (2019). Babies born in Hamilton City, New Zealand. Figure. NZ. https://figure.nz/chart/2IHZyVDwywc2c2zo-mNSHpNiTD2eqnlsk