Business plan transportation

Executive Summary

United Transportation offers premier transportation services throughout the metro Detroit Area. Our company will provide personal transportation to all individuals but will focus on non-emergency medical transportation. There is a need for quality transportation services for non-emergency medical cliental in our area.

Our intention is to provide those services to clients and built a professional business that will expand based on our quality of professionalism and referrals.

Company Overview

United Transportation offers premier transportation services throughout the metro Detroit Area. Our company will provide personal transportation to all individuals but will focus on non-emergency medical transportation. Our business model for United Transportation is to provide quality, personal transportation. There is a need for quality transportation services for non-emergency medical cliental in our area.

Our intention is to provide those services to clients and built a professional business that will expand based on our quality of professionalism and referrals. The reason I chose this business model is because there is a strong need and desire for professional transportation companies in our area. It is our ultimate goal to be the number one sought out Transportation Company. The most important aspect of our business is our professionalism and going above and beyond any other transportation company. We want to develop that small local friendliness along with the stature of a solid and professional business.

Our cliental will be small to start and initially consist of transporting non-emergency medical individuals. We will then expand into servicing larger companies such as nursing homes and businesses in need for our services. There is a growing need in the Transportation Industry for the Detroit Metro Area. It’s pretty ironic given our current economic situation, you would think everyone is focused on quality services yet they aren’t. People aren’t as happy as they were before and this is even seen in the service industries. The one change I foresee is eventually, the non-personal companies will be over taken by those like us.

Due to this, we are in the perfect time period to take advantage of this. The reason this business came about is because of the people I have met in the medical field, I will get their referrals. Aside from this I’ve had hands on experience with a different transportation company, that isn’t doing as good as they could because of their lack of professionalism and organization. It isn’t often that you can predict mishaps such as this provides. I also have many years of background in management and working with people. The legal form of ownership for United Transportation is an LLC.

I feel that this is the best selection due to the fact that I am the sole owner and it is best to keep my personal finances separate from my business just in case anything legal happens I will at least be protected in that manner.

Marketing Analysis

Transportation companies currently exist in our area, but there are few and most unreliable. Our success will be based on our unique quality of professionalism. Our cliental is non-diminishing; people will always need non-emergency medical transportation and now is the time to take advantage of the market due to our competitor’s failure to fully provide to their cliental.

Our marketing strategy is based on advertising and promoting in medical facilities and most importantly referrals. Our pricing will be comparable to the current market which is highly profitable. Our aim is not to be the cheapest; someone can always be cheaper and compete through price. Our goal is to be the most professional, most reliable and top quality transportation service in our area.

Marketing and Sales Plan

There are currently only 15 nonemergency medical transportation companies in the Detroit Metro Area; only 9 of which are in the 30 mile radius of our target area.

We will also put our services above and beyond others, not only from online service center for scheduling, but also for payment plans. We will offer a wide variety of payment plans such as payment upon service, to daily, weekly, monthly and yearly payment processing. Economics The market size we are dealing with is currently large, and only growing. According to J. Davis: “The elderly population is the fastest growing niche market in the world- and its only getting bigger! By year 2030, the US elderly population will have doubled, reaching in excess of 70 million! In order to gain a big percentage of this ever growing cliental, we are to start building soon. This way we can grow as the demand for our services grow. The current demand for professional transportation is high; people are looking for a company they can rely on. Technology already gives up amazing options for computerizing our business and our clients. Within 6 months, our drivers and our clients will have their schedules at their fingertips and able to change times when needed at their convenience.

With the growing rate of the elderly, increasing the need for our services, the growth potential for our business is enormous. As long as we stand by our commitment of a professional company and live up to our own standards, we will surpass the competition. One barrier our company will face is consumer acceptance. Companies and clients who are in need of our services more than likely already have a company that they work with. It will be difficult initially to gain their trust, but not as hard as it may seem due to poor work of other transportation companies.

Another barrier that may arise is finding quality individuals who we will hire. The reason this is most difficult and a large concern of mine is because we will only have a few drivers and because we are customer service, they will be the sole representation of our company. Basically we need to find someone who we trust with the foundation of our business in their hands. We will overcome the first barrier simply by getting our name out and about in the different companies. Most of our advertising will be by word of mouth; we will start small and build our way up through a good reputation.

I believe this is the most solid way to build a good strong reputation as well as cliental. Any company can pay for advertising;it takes a good company to build a solid reputation through word of mouth. Technological changes can only benefit our company. Transportation is a service based industry that can’t be taken over by technology, but can only be enhanced. They aren’t any current potential regulations that are being discussed involving our company. The only changes I foresee that could negatively affect our company are regulations regarding our drivers; different certifications such as CPR and so forth.

These potential regulations will not be a threat to our company because our employees will be required to obtain a CPR license and Economic and industry changes won’t be much of a concern due to the fact that the elderly population is ever growing. Therefore there will only be an increasing need for nonemergency medical transportation. Our customers will be provided quality transportation; on time services, CPR certified first aid kit on site, and a cooled bottle of water per pick up. Customers Our targeted customers are: private paying clients who pay per service to and from their medical appointments.

Medicaid clients are also targeted clients; due to Article 1915 of the Social Security Act, Medicaid must provide transportation to and from their medical appointments. Other clients are from workers compensation insurance. They are required to pay for transportation to and from physical therapy and medical visits. Larger clients include hospitals, nursing homes and dialysis centers. These are places that will generate clients upon clients. Facilities like these are a huge source of revenue due to the fact that they have our potential clients in and out of their offices daily; people needed transportation services.

Our most valuable clients are workers compensations individuals as well as dialysis patients. The reason for this is because these are the two most reliable clients. They have set schedules to and from appointments. Gender and age are not set in stone for these individuals. Competition Our major competitors are other local NEMT (nonemergency medical transportation) services. There are many that specialize in specific areas, but usually only one from our cliental list we service. Our main competitor that offers the exact services as us is: Health System Transportation, 21700 Greenfield Rd, Ste 225, Oak Park, MI 48237.

Other companies compete but for specific services, not the range we provide. Table 1: Competitive Analysis FACTOR| Me| Strength| Weakness| Competitor A| Competitor B| Importance to Customer| Price| $35+ $2 per mile| | | $30 + $2 per mile| $35+ $2 per mile | 4| Service| Excellent | X| | Good| Fair| 1| Reliability| Excellent | X| | Good| Poor| 1| Stability| N/A| | X| Good | Good| 1| Expertise| Good| X| | Excellent| Good| 1| Company Reputation| N/A| | X| Good| Fair| 1| Location| N/A| | X| Excellent| Good| 5| Appearance| Excellent| X| | Good| Good| 1| Advertising| Word of mouth| | X| Excellent| Good| 5| Image| N/A| | X| Good| Fair| 1|

United Transportation’s strengths are in the quality of service, perfect reliability, expertise and appearance. Our weaknesses are related to the fact that we are a new company. Our image, reputation and stability are not applicable. Also, our advertising will be solely word of mouth so it will take time to build this type of advertising. Health System Transportation has more competitive pricing than us; their services, reliability company reputation and stability are good with excellent expertise. They have a great location with a good appearance and image to back them up.

Advance Medical Transportation is our second largest competitor who ranks a notch lower on average compared to Health System Transportation. Our strategy is to start off small and obtain just a few regular cliental. We will also take on one time clients during this process until we build a reputation within medical centers to be their number one referral. We will also use my network of friends and acquaintances in the medical field to obtain more referrals. The reason we aren’t going do other advertising is because the cost of advertising isn’t worth the payout.

This is because we aren’t trying to make it huge initially, we want to build slowly. We want our clients and customers to see us a reliable friendly and professional company. Our promotional items will include business cards, informational brochures and a website. Our pricing is based on the current competitive pricing. We will charge $35 per transportation as well as $2 per mile. This is not the lowest price, but as I’ve said we aren’t looking to be the cheapest, someone else can always beat you. We are looking to compete by providing the best services. Price is not the top priority, reliability is.

For our main cliental, they do not pay; Medicaid or Workers comp. Our location will be from my office out of my home, with a P. O box for mailing reasons. The majority of our business will by via phone and in person. Location is not of utmost importance, business is not done through offices, but through transportation.

Operations Production

Since our company is service based, we will not need to take or keep inventory. The only things we will need to keep track of are our business cards, brochures and bottled water. Location Our location will be through the office in my home.

Our business hours for contact will be 9am-5pm Monday through Friday. Our service hours will be when our clients need our services. Legal Environment All of our drivers will be required to obtain a chuffers license. We will carry business liability insurance and workers compensation so incase anything occurs everyone is protected. Personnel We will have 3 employees, 2 full time employees and one part time employee. We will find applicants offline and perform an extensive interview. We will have a biweekly pay plan for our employees. I will perform the tasks managing the driving times and money management.

Credit Policies We will not have any credit policies in play. We will be open-minded if we come across any ideas that will benefit us as well as our clients. With our payment plans through Medicaid and Workers comp, it is not likely we can set up a credit policy.


The sole manager in all operations will be myself, Danielle Lackie. I have a Master in Business Administration and Entrepreneurship. Hiring, scheduling and payroll will be done by me as well. I will hire 2-3 employees based on their background, previous employment and their personal skills.

The most important factors for my employees will be their work ethics: being on time and dressing in a professional manner and their communication skills. I will personally meet with my employee’s minimal one time per month to discuss and look over their previous month. They will also be required to sign a contract that they allow me to put a GPS tracking device on our company vehicles so I can ensure they are arriving on time to their locations. Professional and Advisory Support * Our attorney will be Micheal Smith who has been working with my family for years.

Our business accountant is James Rico who will be taking care of all our business accounting needs. Our in insurance broker is Eric Surkowski through state farm insurance. Ron Burnham with Hunting bank will be our business bankers.


There are many different ways in which you can finance a company. The most common ways are: bootstrapping, moonlighting, through family and friends, factoring and bank loans, angel financing and government loans. Each have their pros and cons but you must choose the ones most suitable for a specific business. The first category of funding is self-funding.

Self-funding is best used by business owners who are very motivated. Funding may come from personal accounts or earned through sweat equity which requires one to trade their time to earn or cut funding for their company. Moonlighting is when the business owner still obtains income from other employment in case there is a need to cover finances in their business. I will be moonlighting while United Transportation is growing. I will continue in my current occupation until the company succeeds my earnings and the initial failure risks have significantly lowered.

I believe this is a very smart business technique and should be used by all new business owners if their new company doesn’t require all of their time. Bootstrapping is a way of cutting costs through careful spending. This can be done through reducing overhead costs through: no or low rent, bartering for goods and services, trading intellectual property rights, renting or leasing equipment, purchasing used equipment, gaining access to expensive equipment, suppliers’ and customers’ help, cooperative purchases, outsourcing, and contingent litigation (Kaplan & Warren, 2010).

This is a very smart way of cutting expenses, one that I think all businesses should utilize and one which I will be using for United Transportation. Another source of gaining funding is through family and friends. Many people use this as a source of income because it is usually easier to portray your potential success to family because they believe and also because they may not have a business background to realize all the risks associated with new businesses. This is one way of funding that I will not utilize if I can help it.

I am open to changing my business funding sources if need be and do have the option of funding through family and friends if needed. I choose not to if I can help it merely because many people don’t understand how the finances of a business can go. Another funding source is credit cards. Credit cards aren’t always the best way to fund a business but they aren’t something to rule out. Depending upon the interest rate of a credit card, it could be a better or worse than a loan.

This is another funding source that I will not use unless absolutely called for. The reason for this is because it can affect your personal credit. Another category of funding is debt financing. This includes funding through bank loans, loan proposals, government sources and commercial banks. The advantage to using debt financing is that you don’t have to give up ownership to receive funds. The downside of this is that you have to pay interest. Factoring is simply a loan developed by factoring in the orders of customers and using this as their guarantee.

Factoring is not something I believe would be beneficial for United Transportation because we are not selling goods, we are selling a service. Bank loans are a highly increasing source for business loans. Unsecured loans would be my first choice because they are better than unsecured loans. Secured loans are granted because of the borrower’s good reputation and unsecured loans require you to use collateral in case it isn’t paid back. Government funding sources are funding provided by the government, such as the Small Business Administration. These are for businesses that can’t get a regular business loan.

The most important thing to remember when deciding which sources of funding to decide on is that you must choose which ones would work best for your business. You have to play out all of the potential errors and mishaps prior to them occurring, this will give you the upper hand in financing and allow you to be properly prepared. It is also very important to remember that businesses grow and change and you may need to change the types of funding from what you initially decided on. “Financial statements are the tools through which the company communicates its financial condition to others” (Kaplan & Warren, 2010).

Some of these tools include financial performance for a given period such as an income statement or a cash flow statement, supplemental financial information and balance sheets. The balance sheet estimates the future financial position. The balance sheet for United Transportation in one year would be as follows: estimated liabilities (such as monthly insurance at $12,000 per year) with about 40,000 in assets (2 vehicles) plus $120,000 from the first year profit. This leaves the projected net worth at $148,000. This type of transportation business does not need a lot of initial investment.

I will be the sole investor by which I will need to purchase two transportation vehicles along with software for accounting and managing appointments. I will run my office from home, with the exception of a P. O box for company mail. Other investments include credit merchant services. Startup Expenses and Capitalization Startup expenses will include: the software I will be using for the day to day management of appointments. It is called Transportation Software, costing $60. The majority of our initial expenses will come from the vehicles.

These will cost anywhere from $50,000-$70,000. Monthly fees include: insurance is $350-$400 per vehicle, merchant services of $10 a month. Other expenses include: bottled water for clients, office paper for invoices, business cards, and brochures. Of course we will leave financial room for contingencies. It’s usually safe to save at least 20% of the total of all other start-up costs; about 15,000 aside should be sufficient. Financial Plan 12-Month Profit and Loss Projection Many business owners think of the 12-month profit and loss projection as the centerpiece of their plan.

This is where you put it all together in numbers and get an idea of what it will take to make a profit and be successful. Over 12 months, our costs are projected to be about $85,000; $20,000 for contingencies, about $60,000 for vehicles, $600 per month, about $5,000 for insurance coverage. Our goal is to have 3 consistent clients at each time. With an average of 14 transportations per week yields an average of $490 per week per client, (plus an average of 20 miles per transportation= $3,360 per month) totaling $1,470, $5,880 per month, $70,560 per year.

This of course does not include the cost of miles or additional, nonscheduled/non regular clients. The estimated cost of the expense of employees is $38,400 per year. Sales projected to be $110,880 – expenses = profit of $60,280 per year. | | * * * * * * * References * Bent Flyvbjerg, Mette K. Skamris Holm, and Soren L. Buhl (2005), “How (In)accurate Are Demand Forecasts in Public Works Projects? “Journal of the American Planning Associationsidoo kale ayaawaxaa, vol. 71, no. 2, 131-146. Bent Flyvbjerg, Mette K. Skamris Holm, and Soren L.

Buhl (2002),”Underestimating Costs in Public Works Projects: Error or Lie? “Journal of the American Planning Association, vol. 68, no. 3, 279-295. * Eric S. Siegel, Brian R. Ford, Jay M. Bornstein (1993), ‘The Ernst & Young Business Plan Guide’ (New York: John Wiley and Sons) * J. Davis, How to Build Million Dollar Transportation Company. Pinson, Linda. (2004). Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future (6th Edition). Page 20. Dearborn Trade: Chicago, USA. *

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