Bike Rental Using Automated Bicycle Rental System in Kuwait

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BikeRental Using Automated Bicycle Rental System in Kuwait

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BikeRental Using Automated Bicycle Rental System in Kuwait

  1. Technical Feasibility

Morecompanies in the developed countries have embraced the use ofbicycles thus supplementing the use vehicles with bicycles.Additionally, cycling is not only healthy but also eco-friendly. As aresult, because other companies are doing this business, it is a big‘YES’ that bike rental using automated bicycle rental system canbe done. Moreover, it should be done because it will ease the meansof transport in Kuwait, especially when covering shorter distances(Midgley,2009).However, most of the core technologies are not available becausepeople in Kuwait are used to the normal bicycles and not theautomated ones. Nevertheless, apart from the traffic rules and makingsure that the bicycles are in good working condition, there are nolaws or regulations that are set against this business. The reasonfor not setting regulations is because the business saves money andparking space, especially in the workplaces.

Ethically,every business is supposed to ensure that the customers’ andemployees’ behaviors meet the set codes of conduct. For thisreason, the bicycle rental business will require good businesspractices. Business ethics should be used to know what is right orwrong when running the business. For example, the business will needto meet all the Kuwait government`s legal policies required to startthe business such as licensing, business registration, andenvironmental sustainability (Squire,Degani, &amp Blakeman, 2009).

  1. Human resource feasibility

Dueto the current demand in the transport industry in Kuwait, bicyclerental using the automated bicycle system is the best business tostart today. The main interest is to help people who go to a job,college students, promoters, advertisers excreta to use bicycles tocut short the time that is spent queuing in huge rush hour traffic.Weiss(2008) argue that every businessshould be guided by values such as integrity, honesty, and teamworkthe slogan will be “ease your mobility using automated rentalbusiness.” Additionally, to promote record keeping the system willgenerate a statement on every single business to show every monthlyinvoice.

Thecore value is motivation to the employees, companies, and individualswho are willing to use bicycles for their mobility (Chemla,Meunier, &amp Calvo, 2013).The skills and abilities at hand are fit for the business because thebusiness requires simple management skills and creation good customerrelations. The skill that is crucial and must be employed is thebusiness is advertising and promotion strategies to win morecustomers. As a result, the business should employ a businessanalyst, advertisers, and customers` attendees. The business analystscan be employed after few months of running the business while theadvertisers and the customers` attendees should be employed at theonset of the business.

  1. Financial feasibility

Accordingto DeMaio&amp Gifford (2004), theventure is worthwhile financially because the overhaul maintenanceand servicing of the business is minimal. Additionally, according tobusiness analysts, the project of a business during the first yearcan stagnant depending on the advertising methods and promotions usedto capture the attention of the customers. However, it is expectedthat the business will grow by the end of the first year operationsand make huge returns to the business owners. The fixed costs are asdistributed below:

Table1: start up expenditures and Expenses worksheet

Total cost

Cash required

Land

$300, 000

$300, 000

Capital Equipments

$1.5 million

$1.5 million

Computer

$1500

$1500

Beginning inventory

$650,000

$650,000

Set-up Supplies

$150,000

$150,000

Licenses and Permits

$90,000

$90,000

Leasehold Improvements

$45,000

$45,000

Utility Hookups and Installation

$79,000

$79,000

Advertising (Preopening)

$100,000

$100,000

Insurance

$50,000

$50,000

Others

$100,000

$100,000

Total Estimated One-Time Cash Requirements

$3,065,500

$ 3,065,500

Thisis because the fixed costs include the cost of buying the automatedrental bicycles and the system the variable costs include themaintenance costs, salaries to the employees, and other miscellaneouscosts.

Table2: Start up operating expenses: estimate No of Months Total cash

Monthly Expense x

Before break even=

Required

Owners salary

$5,000×6

$30,000

$30,000

Employee’s salary, wages, benefits

$50,000×6

$300,000

$300,000

Rent

$10,000×6

$60,000

$60,000

Promotion expenses

$20,000×6

$120,000

$120,000

Supplies and postage

$50,000×6

$300,000

$300,000

Vehicle expenses

$600×6

$3,600

$3,600

Telephone

$200×6

$1,200

$1,200

Travel

$400×6

$2,400

$2,400

Interest

$150×6

$900

Maintenance

$800×6

$4,800

$4,800

Others

$1000×6

$6,000

$6,000

Total cash required to cover operating expenses

$828,900

Plus: total one-time cash requirements

$3,065,500

10% safety factor

$389,440

Total Cash required for start up

$828,900

$4,283, 840

Thenet margin will vary depending on the number of bicycles the businesswill start with. For start, if the business start operating with 50bicycles and every bicycle is hired at $10 in a day then, thebusiness will make returns of $500 in day that translate to $180,000in a year this means that the business is viable and gives potentialand attractive opportunities to make durable profits that are morethan 10 percent. This is because the only assets required whenstarting the business is the collection are or a house, bicycles, andprotective gears (DeMaio,2009).For this reason, I would encourage the business owners to increasethe capital for this ventures where possible because the more theinput the high the returns.

Bibliography

Chemla,D., Meunier, F., &amp Calvo, R. W. (2013). Bike sharing systems:Solving the static rebalancing problem. DiscreteOptimization,10(2),120-146.

DeMaio,P. (2009). Bike-sharing: History, impacts, models of provision, andfuture. Journalof Public Transportation,12(4),3.

DeMaio,P., &amp Gifford, J. (2004). Will smart bikes succeed as publictransportation in the United States?. Journalof Public Transportation,7(2),1.

Midgley,P. (2009). The role of smart bike-sharing systems in urban mobility.Journeys,2,23-31.

Squire,J. H., Degani, Y., &amp Blakeman, D. (2009). U.S.Patent No. 5,917,407.Washington, DC: U.S. Patent and Trademark Office

Weiss,J. (2008). BusinessEthics: A stakeholder and issues management approach.Cengage Learning.

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