______________________________________________________________________________

Business Plan

Author: Michael Ramzi Jreidini

Director of Operations, Campus Cycles
mrjreidini@gmail.com

Campus Cycles
1 Lovebikes Street
State College, PA 16801
 Campus Cycles Business Plan
Transmittal Document
_________________________________________________________________________________________________________

April 20, 2010

Jeanette Novakovich
The Pennsylvania State University
University Park, PA 16802

Ms. Novakovich:

Campus Cycles would like to submit the Business Plan Report you requested. This
report illustrates our plan to achieve our ultimate goal: offer college campuses a bicycle
sharing program, in order to provide students with quick and safe transportation around
university grounds. This plan will evaluate and explain Campus Cycle’s business, product
offerings, competitors, and overall strategic approach in order to accomplish our target
aspiration. If any comments or questions arise, please do not hesitate to contact Michael
Jreidini at mrjreidini@gmail.com

Sincerely,

Michael Jreidini
Director of Operations, Campus Cycles

1
 Campus Cycles Business Plan
Table of Contents
_________________________________________________________________________________________________________

Transmittal Document…………………………………………………………………………………………………… 1

Executive Summary……………………………………………………………………………………………………….. 3

Service Development…………………………………………………………………………………………………… 4-6

Market and Competitor Analysis…………………………………………………………………………………….. 6

Strategy and Implementation Summary…………………………………………………………………………. 7

Financials………………………………………………………………………………………………………... 7-9

Marketing Approach……………………………………………………………………………………… 9-10

Conclusion………………………………………………………………………………………………………………….. 11

2
 Campus Cycles Business Plan
Executive Summary
_________________________________________________________________________________________________________

Campus Cycles is a self-service bicycle sharing program for students. Our goal is to
provide students with a fast, easy, and safe mode of transportation around campus. With
bike racks located near many buildings on school grounds as well as neighboring areas,
students can forget about driving around campus and go green! A simple swipe of the
student ID sends students cycling around university grounds!
We cannot envision a better time to bring this unique bicycle sharing program to
colleges and universities. Everyone on the Campus Cycles’ team, being graduates of large
“college-town” universities, understands the advantages of riding a bike as transportation.
No waiting for buses. No stress over finding a parking spot (and double-stress reliever as
student parking tends to be far from classes). No sprinting to class in order to avoid
tardiness, only to sit uncomfortably after an unexpected midday workout (basically, we
offer students the opportunity to not “run late” and arrive to class on-time, avoid
unnecessary absences, missed classed notes, and especially that awkward walking-into-
class-late and disrupting the class moment). Not even a worry about locking up a bike, as
merely placing our bikes back on the specially created bike-racks (until a “click” is heard)
successfully secures the bike for the next user. Our users do not even require much use of
the bike, as shown in the chart below, 85% of cyclists ride for a max of 30 minutes (for New
York City bikers). With the ability to return the short-term
rental bike at any rack location, Campus Cycles are the
environmentally-friendly express ride to class.
Campus Cycles is dedicated to spreading green
across all college campuses! We truly believe this unique
service will not only provide students with a worry-free,
safe, and rapid mode of transportation, but without any
harmful emissions, playing a part in the world's green
initiative will be as easy as riding a bike!

3
 Campus Cycles Business Plan
Service Development
_________________________________________________________________________________________________________

Campus Cycles offer a bicycle sharing service to students and faculty at a college or
university. In order to become a member of the bicycle sharing program at a particular
university, an individual must comply with these rules and regulations:

• Active student (full-time or part-time) or faculty member at the school with a

valid school identification card.
• Wear, and correctly tighten, a bike helmet (on the head) at all times when
operating a Campus Cycles’ bicycle.
• Return the bike in the condition in which the individual rented it.
• Never reveal their unique pin number (created by the member) to a third party.
If revealed, the individual accepts any and all responsibility for the actions done
by the third party.
• Follow all laws (differ by state) for riding bicycles or non-motorized vehicles.
This includes obeying traffic signs, not being under the influence of any drug or
alcohol, and learning all bicycle hand-signals.

Assuming these policies are followed, an individual may become a member of our
system. The goal of our company is to link our membership fee with the school’s tuition. In
this situation, our company receives revenues in lump-sum amounts from a reliable
institution (rather than each individual student). Another advantage to connecting our
membership fee to tuition is that only paying students of the university have the ability to
rent a bike (as others would not have a valid student ID).

By using the individual’s student (or faculty) ID, we believe theft and damages to
bikes will be minimized, as our database would have any and all pertinent information on
the individual to return a damaged bike (or not return it at all). In order to assure the
person renting the bike is, in fact, the student on the swiped identification card, an
individual will also need a four digit pin number, which will be keyed-in after the card is
recognized as a member at the bike rack. With the extra security provided by the pin

4
 Campus Cycles Business Plan
number, we believe identifying the last user of a damaged (or stolen) bike will extremely
easy.

With little damage and theft, the major problem with this service is liability of
Campus Cycles. In order to prevent lawsuits, our company has required riders to wear a
helmet (properly), follow all state laws and regulations, and never ride a bike when under
the influence of any drug or alcohol. Campus Cycles believes that if these rules are
respected, our bikes are 100% safe.

Now that we have discussed the rules and requirements of this bike sharing system,
it is time to move onto development of the service. In order to thrive, Campus Cycles bike
racks must be located at a variety of locations on campus, as well as in surrounding areas
and neighborhoods. This will allow for students to rent a bike just outside their housing,
ride it as close to class as possible, and return it at a rack at that location. This involves the
installment of a multitude of bike-racks around the university grounds. This said, more
congested areas will boast more (or bigger) racks to appease the high demand for bikes
and spots to return them. Our team is ready to survey students, research campuses, and
truly understand all Campus Cycles locations in order to allow for the most effective and
efficient placement of bike racks. We trust that when our bike racks are placed properly,
Campus Cycles will flourish as students will ride our bikes wherever they need to go.

After placement of our bike racks has been completed, servicing and repairing bikes
arises as our next issue. Although a small, on-location shop is necessary, our team has
come to the realization that servicing and repairing bikes cannot happen at every school, as
this would become extremely costly. We have decided that it makes most sense to perform
simple repairs and servicing at a small shop on-location (this also serves as a
representation of Campus Cycles, available for all campus-specific problems for all
customers), while major repairs will take place at regional locations. These regional
warehouses will aid on-location shops with extra bikes and a full inventory of spare-parts
(just complete an order form, and all spare-parts or extra bikes will arrive within the
week). These drivers will not only deliver all spare-parts and extra bikes, but also receive
and transport any severely damaged bikes back to the regional warehouse for repair.

5
 Campus Cycles Business Plan
Campus Cycles has faith that with the proper implementation of our service, we can
thrive at all higher-education schools. Although competition may arise, we know our
superior development plan will allow us to easily surpass any new entrant to our market.

Market & Competitor Analysis

_________________________________________________________________________________________________________

Campus Cycles offers a unique opportunity to be the first entrant into a market. In
fact, we are creating the market! Although many cities have bicycle sharing systems,
including cities such as Paris, Barcelona, and Washington D.C., none of these programs are
directed at students and none operate on university grounds through a reliable institution.
This guaranteed customer-base and stable revenue source allows our company to be one-
of-a-kind in a market that does not even exist yet! And with the plethora of colleges and
universities that are compatible for a system such as Campus Cycles, our growth
opportunities are virtually endless!
This is an exciting time for our company, as our every move expands the market,
and with minimal competition from others, we look to dominate the market share. Even
though no competitors have arrived yet, it is hard to believe one will not arise. The systems
that take place in the other cities listed above may not be as in-depth and customer-specific
as Campus Cycles, but a company with knowledge and technology of an industry will
certainly enter the niche of that industry.
In order to cement ourselves as the best student bike-sharing system available,
Campus Cycles will have to gain a positive reputation fast. First-class feedback from our
customers (which remember word-of-mouth will help our company significantly, as our
customers are the universities we offer our system to and students who use the bikes), will
prove very valuable in this market. Officials at these schools will accept the offer of a well-
backed, respected, and experienced company over any other competitor. By proving we
are the best at efficiently implementing a well-thought-out bike sharing system (each
university must have its own system, as all campuses are different, there is no “one formula
for success”), Campus Cycles will control the market.

6
 Campus Cycles Business Plan
Strategy and Implementation Summary
_________________________________________________________________________________________________________

Campus Cycles strategic approach is to not only become the best at effectively and
efficiently implementing bike sharing systems on university grounds, but also provide
excellent customer service and keep the users of the bikes and universities happy. We
believe our on-location shops will allow us to quickly fix any minor problems that occur,
while all major dilemmas will be handled immediately by an executive representative. It is
our goal to provide users with safe and easy-to-use bikes that encounter minimal problems,
and universities with a worry-free mode of transportation for its occupants. Although we
relish the opportunity to expand, Campus Cycles plans to evaluate any and all prospective
locations (number one reason profitable firms fail is because they expand too fast). The
simple fact is this, we need to implement a few test campuses (3-4 in the same region) in
order to smooth out our plans and work out any kinks. We cannot become the best without
first perfecting our methods. Once our company has successfully applied our system to
these campuses, we plan to expand and dominate the market.
Financials
As mentioned above, Campus Cycles plans to open and operate 3-4 “test campuses”
with the intention of truly understanding the service, market, and any problems that arise.
With endless growth potential, we believe establishing ourselves at our test campuses as
soon as possible is key to controlling the market. However, in order to launch our test
campaign, Campus Cycles would like to calculate and discuss our start-up costs and capital
requirements. By using the New York City Bike-Sharing System Plan, we were able to
break down our costs into installation fees and operating costs. First, one must understand
that total costs vary on the number of bikes and bike-stations used at each campus. The
table below shows similar bike sharing programs in cities across the world, and the exact
number of bikes (and bike racks) at each location.1
Program Velib’ Bicing Smartbike Bixi Velo
Paris, France Barcelona, Spain Wasington, DC Montreal, Toulouse,
City
Canada France

7
 Campus Cycles Business Plan
Start Date July 2007 March 2007 August 2007 Spring 2009 Nov. 2007
City Size 44 sq miles 39 sq miles 68 sq miles 141 sq miles 45 sq miles
City 2.2 million 1.6 million 588,000 1.8 million 435,000
Population
Bicycles 20,600 6,000 120 * 5,000 1,400
Bike Racks 1,451 400 10 Unknown 135
*Note – Program in D.C. is solely for the use of tourists and is only located around main attractions.
To determine the number of bikes necessary for each of our campuses, we need to
make some basic assumptions. Campus Cycles plans to use relatively large universities as
our test grounds, as more students and more campus grounds will allow for maximum
exposure. We plan to start-up our company at 3 test campuses, all of which need to be
located in the same region of the country. Say we begin Campus Cycles in the south, at the
University of Florida, the Florida State University, and University of Georgia. According to
valid sources, the total number of students at these universities are 52,271 3 ; 30, 803 2 ;
and 34, 883 4 respectively. Add a total faculty of about 10,000 per school, and our total
number of members in this region comes to nearly 150,000!
Seeing as 150,000 does not coincide with any of the programs shown above, we
must make an estimate as to how many bikes (and racks) are necessary at each location.
To make it simple, we will assume all three universities require the same number of bikes
and racks. In order for this region to run properly, we believe a total of 1,500 bikes and
150 bike stations are necessary (500 bikes/50 bike racks per school). Again, we use
historical figures (from the programs above) to calculate our total start-up costs1:
Bicycle Costs: $600 per bike. Total Bicycle Costs = $900,000
Capital Costs: $4,000 per bike. Total Capital Costs = $6,000,000
“Capital costs for a bike-share program include provision of bicycles, manufacture
and installation of bike-stations, purchase of service and distribution vehicles, development
of a website, and purchase and installation of necessary hardware and software.” 1
Operating Costs: $1,500 per bike. Total Operating Costs = $2,250,000
“Operating costs include salaries for maintenance and administrative staff,
insurance, replacement costs for broken or stolen equipment, debt-service, gasoline and

8
 Campus Cycles Business Plan
upkeep costs for redistribution vehicles, website hosting and maintenance, electricity
charges for the bike-stations, membership cards and warehouse/storage fees.” 1
Total Start-up Costs: $9,150,000
Although the capital necessary seems like a lofty investment, take into account an
annual membership fee of $60 per customer (150,000 student/faculty members) to get an
year one revenue stream of $9,000,000. This first year cash flow is solely from
membership fees, and yet it still nearly covers our total start-up costs. Also, we could factor
in advertising placed on the bikes (and bike stations), which has the potential to be a high-
growth market in itself (advertise on a bike and get constant moving exposure around a
college campus). However, these revenues are speculated and not guaranteed, thus we will
not include them in our analysis.
After one year of operation, our net income is negative, but our capital costs and
costs per bike are one-time investments that we milk over years. This means our operating
cost of $1,500 per bike make up our costs for years to come. Yet, just to be totally secure,
we believe including some unexpected fees is necessary (inflation is one factor but also
nothing goes 100% to plan), so let’s estimate operating costs at $2,000 per bike after year
one. This makes our total cost of operation (per year) amount to only $3,000,000.
Remember, our revenue from membership fees alone is $9,000,000 , giving Campus Cycles
a year two net income of $6,000,000!
Despite requiring a high initial capital cost, Campus Cycles proposes significant
profits in future periods, as most costs are up-front. However, we are assuming popularity
of our business, which cannot occur without a well-prepared marketing scheme.
Marketing Approach
The marketing approach of our company is more complex than many others, as we
have to “sell” our idea not only to the schools but also to the students. Our method to reach
universities is to research and study the campuses; this includes student surveys,
researching top schools within the college in order to find more congested areas, and even
understanding the most popular means of transportation currently at that campus. After
thoroughly examining the specific campus, our team will compile the results and present
our system to the university. To help convince the leaders of the school, we must

9
 Campus Cycles Business Plan
communicate a specific implementation plan for that university and explain how the
system will function (and why that school will benefit).
Following our presentation to the school (and likely local area officials), and
assuming we are granted the rights to govern a bicycle sharing system on the property
(and surrounding areas), we now have to go get our customers! This is the easier part of
our marketing approach, as research shows that young-people are more inclined to ride a
bike around town (the pie-chart shows the popularity by age of cycling in New York City).
In order to do this properly, we must reach students and
inform them! Signs, flyers, commercials, internet
advertisements, emails, and campus representatives are a
few ways to notify our potential customers. However, just
telling these students that they could rent a bike is not
enough; we must enlighten them on why! To do this, we
must use our research of the campus to identify why driving
is not practical and why biking is better than walking. Defeating driving is not difficult, as
most campuses struggle with parking spaces (especially for students, who usually park far
away from central campus), mass crowds of pedestrians (who wants to drive in stop and go
pedestrian traffic?), and also, biking is healthier for the environment!
Although driving is easy to conquer, convincing students that biking is better than
walking will be tricky. We believe the best approach to persuading students to pick up a
bike over riding is the time factor. Running late and do not want to run to or miss class?
Grab a Campus Cycle! Want that extra ten minutes of sleep before class? Sleep and get to
class faster on a bike. We all know riding a bike is significantly faster than walking, thus
our marketing must emphasize this so our customers learn to rent a bike whenever they
need to make up lost time. In the end, we must market to students well. With no student
usage, school officials will cancel the program, so we must please our students and
convince them bikes are better!

10
 Campus Cycles Business Plan
Conclusion
_________________________________________________________________________________________________________
Campus Cycles has enormous potential in an emerging market, do not miss this
opportunity! With the correct implementation and marketing approach, our team truly
believes Campus Cycles will become profitable within two years. We need your help to
make it a reality, with such lucrative and successful operations, expansion to other regions
and domination of the market will be as easy as riding a bike!

Works Cited
_________________________________________________________________________________________________

1. Share Opportunities in New York City. Rep. no. PTCP08D00.G05. NYC Department of
City Planning, Spring 2009. Web. 1 Apr. 2010.
<http://www.nyc.gov/html/dcp/pdf/transportation/bike_share_part1.pdf>.

2. Florida State University. The Princeton Review, 2008. Web. 4 Apr. 2010.
<http://www.princetonreview.com/FloridaStateUniversity.aspx>.

3. Stats and Facts for Prospective Students. The University of Florida, 2010. Web. 4 Apr.
2010. <http://www.admissions.ufl.edu/ufprofile.html>.

4. The University of Georgia: Quick Facts. The University of Georgia, 25 Feb. 2010. Web. 4
Apr. 2010. <http://www.uga.edu/profile/facts.html>.

11