An Example of Using MVOSSTE to create a New Business
I have used the MVOSSTE framework in my classes at The C.T. Bauer College of Business ay the University of Houston. Shown below is a project for a new project created in one of my undergraduate classes. My classes are divided into teams with 5 or six students on team. Each team must use the MVOSSTE approach to create a marketing plan for a new company.
This process takes a semester which is about 45 classroom hours plus the time the team spends outside the class doing research and having team meetings.
I have also used this process with my MBA consulting classes. The MBA teams worked with real companies solving real problems.
If you like the process and want it enhanced by using AI, my book, Winning Marketing Strategies Using Generative AI, shows you a step by step approach. If you would like your team trained in this approach you can contact me at gary@gwrresearch.com
Here is the project report from the undergraduate team:
ON D GO PRODUCT DEVELOPMENT & MARKETING STRATEGY
Overview
The fast-paced ridesharing industry is packed with companies, notably Uber and Lyft, that have
been in the business for decades. These businesses were thriving up until the COVID-19
pandemic. The effects of COVID-19 on the ridesharing industry were particularly devastating.
The demand for transportation services greatly decreased, with people reducing contact with the
outside world by traveling less for fear of catching the communicable disease. The financial
impact of the pandemic resulted in a decrease in revenues for transportation businesses, as Uber
and Lyft struggled to maintain their monthly users. Uber saw a 16 percent decrease in monthly
users, and Lyft saw a 45 percent decrease. Ultimately, Uber lost $6.7 billion and Lyft lost $1.8
billion (The V erge). Additionally, drivers who relied on ridesharing for income, were forced to
find new jobs due to financial instability.
To curb the threats brought on by COVID-19, Uber and Lyft shifted to offering delivery services,
enabling them to increase their market shares by 14 percent. The ridesharing industry managed
to survive the pandemic by diversifying its services to accommodate remote workers and adding
promotional discounts to increase the demand for drivers. However, the ridesharing industry is
not shielded from potential disruptors, such as labor issues that lead to price surges, public
transportation safety concerns, and the work-from-home job market trend.
Labor issues involve the lack of retirement plans, paid time off, health insurance, paid time off,
or 401(k) plans for drivers. The lack of benefits and inability to earn a decent living driving for
ridesharing companies has led to many drivers opting to leave the industry altogether. This has
caused a driver deficit, which makes it difficult to accommodate rider demand during peak hours.
The lack of surge price protection for riders in the event that there are insufficient drivers to meet
the demand from several riders requesting rides at once is another prevalent drawback in the
ridesharing sector.
Ridesharing users have become increasingly concerned about the safety of ridesharing services.
Although it has stated that it prioritizes the safety of its users and that 99% of its rides are
completed without any incidents, Uber has been sued for 550 sexual assaults and attacks (USA
Today). According to market research company Mordor Intelligence, the ridesharing market size
is predicted to increase from $47.62 billion in 2024 to $86.99 billion by 2029. However, the
growing public concerns regarding the safety of driving with virtual strangers is likely to affect
this projected market growth.COVID-19 germinated work-from-home culture, which has persisted even after the global
lockdown. People who grew fond of the convenience and comfortability of working from home
continue to opt for remote work, decreasing their need to use ridesharing services. This trend
might encourage some ridesharing companies to shift their target market to demographics who
are less likely to be employed and own a personal car.
In the post-COVID era, ON-d-GO is zooming in to provide dependable transportation services,
overcome challenges, and take advantage of opportunities in the dynamic ridesharing market.
With the goal of collaborating primarily with the University of Houston to market services to
college students, ON-d-GO is dedicated to delivering a ridesharing service that is reliable,
affordable, and safe for college students commuting to campuses in Harris County.
Mission
ON-d-GO’s mission is to consistently deliver reliable, affordable, and safe solutions for a better
tomorrow. It aims to serve all, address safety concerns, and be as reliable and affordable as
possible for college students. The purpose of ON-d-GO is to provide students with a means of
safe and efficient transportation between school, home, and other destinations.
Vision
Our vision is to become the premier choice for all by offering a complete and affordable
ridesharing service that prioritizes safety and reliability. We aspire to continually refine and
expand our services to meet the changing needs of our customers while maintaining our
unwavering commitment to providing quality transportation for the communities we serve.
Objective
In pursuit of our mission, ON-d-GO has set a tangible objective: to achieve a return on
investment (ROI) within the first two years of operation. This measurable goal serves as a
cornerstone of our financial strategy, guiding our efforts to sustainably grow and expand our
reach within the student community. The company will implement rigorous budgeting practices
and financial controls to optimize resource allocation and minimize expenses. Another goal we
have in the next two years is to try and expand to other states and campuses.
Situational Analysis
Customers
For ON-d-GO, our customer base primarily consists of University of Houston students in their
20s, a demographic that highly values reliable, safe, and economical transportation solutions for
their daily needs. These young adults, predominantly millennials and Gen Z, rely on our service
for efficient travel to and from campus, part-time jobs, and social engagements. They prefer
ridesharing over traditional public transportation for its speed, convenience, and the integration
with digital technologies that align with their connected lifestyles. This group is particularly
tech-savvy, extensively using smartphones for daily activities, including transportation. They
appreciate features such as app-based booking, real-time tracking, and cashless payments, which
are all provided by ON-d-GO. These features not only offer convenience but also enhance the
safety and reliability of their travel experience. Understanding these specific preferences and
needs is crucial for ON-d-GO as we aim to tailor our services to better suit our customers. Byfocusing on providing a service that aligns with the digital and dynamic lifestyle of University of
Houston students, ON-d-GO seeks to improve customer satisfaction and strengthen its position
in the competitive ridesharing market.
Collaborators
In our vibrant ecosystem of innovation, collaboration is at the heart of everything we do at
ON-d-GO. As we navigate the bustling streets of Houston, we want to seamlessly connect the
University of Houston community. Our collaborators extend far beyond the confines of our
offices, they are the heart of our service.
Our main collaborator is the University of Houston and the specific departments within the
university that we will work with are: Dean of Students via UH Commuters Services (DoS),
Parking and Transportation Services (PTS), Coogs with Cars, University Career Services (UCS),
Registered Student Organizations (RSO), UH Dining Services (UH Dining), and the Center for
Student Media (CSM). We are outsourcing our cars from Enterprise, and they will be an
important relationship for us so we can be successful. Another collaborator for us will be
Eadough Coffee Shop. This is where we will be purchasing our client add-ons or just because
gifts from. Lastly, our need for financial investments is crucial so future investors and
stakeholders will also play a key part in the success we want to see in the future.
From local businesses to campus organizations, our collaborators share our commitment to
convenience, affordability, and safety. We believe in fostering partnerships that amplify the
student experience. Together, we're transforming transportation for the Cougar community,
providing reliable rides with the press of a button on their mobile device. Every driver, every
rider, and every stakeholder plays a crucial role in our shared journey.
Competitors
Scenario University of Houston to the Galleria
Company: Lyft: ON-d-GO: Alto: Uber
Price $15-$18 $9.15 $58-$70 $14-$18.70
Discount price: $15-$18 $4.57 $41-$50 $14-$18.70
Our main competitors are Uber, Lyft, and Alto. Listed above is a chart that provides a scenario
for a person to be transported from the University of Houston to the Galleria Mall. ON-d-GO is
committed to having affordable prices for college students to travel from one place to another in
a safe and timely manner. Our company provides the cheapest option. We also understand that
our employees should have good pay, health benefits, and retirement funds. ON-d-Go has come
up with a pricing strategy to price our rides. Every price is unique to the rider depending on
multiple factors, such as time and distance similar to Uber and Alto.Competitors Pricing Factors/ Competitor Price Point:
Uber Pricing
● Base Fare
● Distance
● Time
● Surge Pricing: When demand for rides exceeds the number of available drivers in a
particular area (Uber may implement surge pricing)
● Traffic Condition: If traffic is heavy it increases the fare
● Service Fee
Lyft Pricing
● Base Fare
● Distance
● Time
● Prime Time (Surge Pricing): When demand for rides surpasses the number of available
drivers in a particular area, Lyft may implement prime time, which increases the fare to
encourage more drivers to become available. Riders are notified of the increased fare
percentage before confirming the ride.
● Traffic conditions: Lyft takes into account current traffic conditions to adjust the pricing.
If there is heavy traffic, the fare may increase to compensate for the additional time the
driver spends in traffic.
● Service Fee
Alto Pricing
● Base Fare
● Distance
● Time
● V ehicle Types such as Standard or Premium vehicles
● Peak Pricing: During periods of high demand, Ride-hailing services may implement
surge or peak pricing to encourage more drivers to be available. This can result in
increased fares, and customers are typically notified before confirming the ride.
Alto Pass Subscription
$12.95 per month
$99 per year
● Discounted Rides 30% percent off all booked trips
● Priority Booking
● No Surge Pricing
● Exclusive Events or Promotions
● Flexibility
ON-d-GO is committed to having affordable prices for college students to travel from one place
to another in a safe and timely manner. We also understand that our employees should have good
pay, health benefits, and retirement funds. ON-d-GO has come up with a pricing strategy to priceour rides every price is unique to the rider depending on multiple factors such as time and
distance similar to Uber and Alto.
Each company in the ridesharing industry comes with its pros and cons. Some common cons
include the lack of benefits for drivers. Well-known companies Uber and Lyft, do not provide
benefits for their drivers such as 401k, health insurance, sick leave, paid-time holidays, or
retirement plans. Alto however does provide health benefits for drivers. Additionally, there’s a
shortage of drivers, which leads to challenges in meeting rider demands during rush hours.
Another common con in the ridesharing industry is there is no surge price protection for its riders
when there are not enough drivers to meet the demand for riders requesting rides at the same
time. This can lead to higher fares for some riders.
ON-d-GO is not just another ridesharing company, unlike our competitors we plan to take a new
approach to the ridesharing industry, we plan to offer ridesharing that is reliable, affordable, and
safe for college students commuting to campuses
V alue
At ON-d-GO, we believe that offering great transportation services creates genuine value for our
customers as well as for our company as a whole. For our customers, we provide a reliable,
affordable, and safe ridesharing service that goes beyond mere transportation and provides peace
of mind and convenience, enriching their everyday commute experience. Our collaborative
approach with the University of Houston not only improves student access to our services, but
also builds a solid relationship that benefits both sides. As a company, our dedication to
reliability, affordability, and safety not only promotes client happiness, but also establishes us as
a trusted and acknowledged organization in the ridesharing sector, paving the path for continued
business success and expansion.
Core Competencies
Our two core competencies at ON-d-GO encompass the true character of our company. These are
operational efficiency and affordable pricing. Our goal is to get students to and from destinations
safely and efficiently. We want to streamline and optimize processes and workflows to enable
our company to deliver services more efficiently and cost-effectively than our competitors.
Operational efficiency plays a crucial role in delivering reliable and convenient transportation
services while optimizing resources and costs. Offering competitive and student-friendly pricing
options, discounts, and promotions to accommodate limited budgets and make ON-d-GO an
accessible transportation solution provides many benefits to the students at the University of
Houston. By implementing both of these core competencies, this will help us maintain a
competitive edge within the market.
Product
Strategy
At ON-d-GO, our strategy revolves around providing reliable, affordable, and safe transportation
options that cater to the needs of college students while upholding our core values of
affordability, convenience, safety, sustainability, inclusivity, and transparency.Our primary focus is on providing safe and efficient transportation for college students,
addressing their specific needs and concerns. By offering convenient campus pick-up/drop-off
points and late-night safety features, we aim to ensure that students can travel conveniently and
economically, prioritizing their safety and peace of mind.
We offer a free basic membership that includes ride booking and scheduling, customized ride
options, student event promotions, and accessibility features. Additionally, our ON-d-GO plus~
membership offers further benefits such as discounted rides, priority pickup, and an exclusive
student rewards program, aligning with our commitment to affordability and customer value.
Basic Membership
ON-d-GO
● Ride Booking and Scheduling
● Campus pick-up/drop-off points
● Pick-up/drop-off points (within 35 miles of downtown)
● Late-night safety features
● Customized ride options
● Student event promotions
● Accessibility features
● Payment integration
Paid Subscription
ON-d-GO plus~
● All basic membership features
● 50% off all rides
● No price surge/priority pickup
● Cancel Anytime/ no cancellation fees
● Exclusive Events/Promotions
● Student rewards program
○ Limited-time offers
○ 10 rides, get 1 free ride (valid for only one month)fzz
We are committed to collaborating with key stakeholders at the UH Main campus, including the
Dean of Students, Parking and Transportation Services, University Career Services, and other
student organizations. Through these partnerships, we aim to address parking challenges on
event days and enhance students' college experience in various aspects, including career
development and health and nutrition.
At ON-d-GO, our company values are centered around affordability, safety, sustainability,
inclusivity, and transparency. We prioritize creating a trustworthy environment for all riders
through community engagement and transparent interactions with customers, collaborators, and
employees.
Key Focus Areas:● Affordability: We understand the financial constraints of college life and strive to keep
our rates affordable, offering discounted subscriptions to make transportation more
accessible for students.
● Convenience: Recognizing the busy schedules of college students, we prioritize quick
bookings and speedy pickups, ensuring that students can easily manage their
transportation needs.
● Safety: Our commitment to safety is evident through stringent driver background checks,
real-time ride tracking, and emergency response measures.
● Sustainability: We are dedicated to reducing our carbon footprint by utilizing hybrid
vehicles, aligning with our commitment to sustainability.
● Inclusivity: Creating an environment where every individual feels valued and respected
is at the core of our operations.
● Transparency: We believe in open and honest communication with our customers,
ensuring that our pricing, policies, and feedback channels are transparent and trustworthy.
At ON-d-GO, our strategy is not just about providing transportation; it's about empowering
college students, enhancing their college experience, and contributing to a better tomorrow
through safe, reliable, and affordable transportation solutions.
Tactics
Manpower
ON-d-GO's dedicated staff consists of 34 full-time employees, including the six founders who
play essential roles in the firm's success, working together to drive marketing activities and
provide the best level of service. This team consists of 20 full-time drivers who are the
foundation of our service, responsible for delivering safe and dependable transportation to our
customers, ensuring on-time pickups and drop-offs, and preserving our commitment to safety
and customer satisfaction. Our team also includes a human resource manager, two customer
service colleagues, one finance associate, four marketing associates, two human resource
associates, a payroll accountant, an IT manager, and two fleet managers.
The human resource manager is responsible for all elements of human resources, including
recruitment, employee relations, training, and compliance with employment laws and
regulations. Our customer service representatives are committed to delivering great support to
our passengers, including answering questions, resolving difficulties, and guaranteeing a positive
customer experience. The finance associate is responsible for financial operations such as
budgeting, financial reporting, and regulatory compliance. In addition, the marketing staff creates
and implements marketing strategies, oversees promotional programs, and improves brand
visibility and engagement with the campus community.
We have two human resource associates who assist the human resource manager with various
HR duties, such as recruitment, employee onboarding, and HR-related administrative tasks. The
payroll accountant oversees payroll processes to ensure that all employees are paid accurately
and on schedule. The IT manager is in charge of all aspects of information technology, including
the proper running of our technical infrastructure and the ON-d-GO mobile app. Also, two fleet
managers are in charge of managing and maintaining our fleet of cars, ensuring they are in topshape and satisfy safety regulations. It is vital to highlight that all roles are located on-site,
ensuring a collaborative and friendly work environment.
Money
ON-d-GO's dedication to optimizing its service to boost operating margins, inventory turns, and
cash flows has resulted in strategic decisions to outsource certain operational areas in order to
generate significant cost reductions. By leasing automobiles from a third party that offers
mechanical maintenance, the company expects to reduce operational costs associated with
vehicle ownership. Leasing will result in cheaper upfront acquisition prices, lower monthly
payments, and greater flexibility in vehicle planning, all of which contribute to significant cost
savings. Also, delegating the legal aspect of the business to a specialist law firm is expected to
result in a 15% yearly cost savings. This collaboration is projected to streamline legal services,
provide access to a broader spectrum of expertise, and efficiently meet the company's legal
needs, resulting in significant cost savings while ensuring legal compliance and protection.
Methods
ON-d-GO will use key performance indicators, such as customer satisfaction ratings, surveys,
conversion rate and user subscriptions, to measure its ROI. By tracking and analyzing these
metrics regularly, ON-d-GO can identify areas for improvement, make data-driven decisions, and
ultimately optimize its development. Additionally, setting clear goals and targets for each metric
can help the team stay focused and motivated towards achieving success in their product
development efforts. Regularly reviewing and adjusting these metrics as needed can ensure that
the ridesharing service continues to evolve and improve over time.
Customer satisfaction will depend on whether ON-d-GO meets the needs of college students and
fulfills its mission to provide them with safe, reliable, and affordable transportation. Surveys and
ratings will be operative measures for that and are already guiding the development of
ON-d-GO. A preliminary survey created by the ON-d-GO team has been completed by 22
University of Houston students. Despite its minuscule sample size, the survey provides
invaluable insights about students’ daily mode of transportation, commuting times, and gas
expenses. For instance, 86.4% and 90.9% of students, respectively, said they were often late to
class due to leaving home late or getting stuck in traffic jams. This exclusive piece of
information gives the team a better understanding of what their target audience needs. Upon
reviewing the responses of the survey, ON-d-GO might consider hosting time management
workshops for students or developing a robust wake-up alarm feature in the service app.
Machinery
Since customers will be accessing the service via an app, it is highly critical that the app is
designed to be user-friendly, ensuring a speedy and hassle-free transactional process for students
on the go. The usability of the app can be measured by tracking the conversion rate. Identifying
key conversion points within the app, such as number of subscriptions, bookings, and purchased
rides and utilizing analytics tools, such as Google Analytics, to track and analyze user behavior
can inform the company on the areas for improvement in the conversion process.Other metrics, such as waste per unit and payroll divided by unit will be used to measure driver
performance and ensure proper maintenance of our vehicles. The waste per unit for ON-d-GO
can be analyzed by tracking metrics such as fuel consumption, vehicle maintenance costs, and
idle time. To protect its ROI, ON-d-GO might consider implementing strategies such as route
optimization algorithms, vehicle maintenance schedules, and driver training programs to help
minimize waste per unit, and it is advised that these strategies are routinely monitored and
adjusted. These strategies based on performance metrics are crucial to maintaining efficiency and
reducing waste over time.
As for calculating payroll divided by unit, this involves assessing the cost of human resources
relative to the output or unit of service provided. To calculate the payroll divided by unit, the
ON-d-GO team will divide its drivers’ compensation by the number of rides the drivers are able
complete within a given period. This calculation will help ON-d-GO evaluate its workers’
productivity and allow the company to make changes regarding drivers’ pay and staffing size.
The team should take care to regularly review and adjust payroll strategies in response to
changes in demand and operational needs within the industry to protect its interests.
Price
Strategy
ON-d-GO Plus membership will cost $16 monthly and $99 yearly for our consumers. This price
takes into account our fixed and variable costs. We have a 74.58% price markup with a profit
margin of 43.71%.
On-d-Go base fare/per mile fare & subscription price:
$16 per month
$99 Y early
Fare Prices
Base Fare=$1
Miles Rate =$0.25
Time Rate =$0.25
Service Fee= $1
On-d-Go Ride Fare Formula:
Ride Fare= B + (M x Distance)+ (T x Time) + SF
Example using the formula below
B=$1
M=$0.25
T=$0.25
SF= $1
Distance=10 miles
Time= 30 minutes
1+(0.25x10)+(0.25x 30)+1= ,Fare=$12
When determining price we did not exclude dynamic pricing, so we use something similar to our
competitors called surge pricing when traffic conditions get worse and we have limited drivers
available in time of a customer needing a ride we proposed the surge pricing formula. On-d-Go
surge pricing formula will only be used during periods of high demand.
On-d-Go Surge Pricing formula:
Surge Price= Multiplier X (Base Fare + (M x Distance) + ( T x Time)+SF)
Surge Price Rate is $2
2x (1+(0.50x10)+(0.25x 30)+1=
Fare=$29 with surge pricing
Driver Payout:
The Texas minimum wage is $7.25 per hour and the poverty wage is $7.24. According to the
living wage calculator for Houston: https://livingwage.mit.edu/metros/26420
1 Adult
0 Children 1 Child 2 Children 3 Children
Living Wage $20.83 $35.78 $44.29 $57.65
Poverty Wage $7.24 $9.83 $12.41 $15.00
Minimum
Wage
$7.25 $7.25 $7.25 $7.25
Based on this graph from the Living wage calculator, these are our calculations on how much a
person would need to make an hour to live comfortably to handle everyday expenses and a place
to live, eat, etc.
Estimate of how much our competitors pay drivers an hour in Houston: please keep in mind
location is a factor
Alto full-time drivers on average make 600 dollars a week for 40 hours, and part-time Alto
drivers make around an average of $16.50 an hour.
Alto Full Time Drivers Avg Y ear: Estimated yearly average salary 40 hours: $31,680
Alto Part Time Drivers Avg Y ear: Estimated Y early average salary 24 hours: $19,008
Lyft Driver's average hourly pay is around $14.30 an hour
Lyft Full Time Drivers Avg Y ear: Estimated yearly average salary 40 hours: $27,456
Lyft Part Time Drivers Avg Y ear: Estimated yearly average salary 24 hours: $16,473ON-d-GO hourly starting pay is $20 an hour
ON-d-GO Full Time Drivers Avg Y ear: Estimated yearly average salary 40 hours:$38,400
ON-d-GO estimates that we will hire 20 full-time drivers
Estimated Total Full Time Drivers Payout per year: $768,000
Vehicle Contracts:
ON-d-GO plans to get a vehicle contract with Enterprise for a one-year contract for the first year
and lease 20 vehicles. Enterprise will handle any maintenance fee or problems that come with the
car. The vehicle contract is difficult to estimate. It depends on many factors such as what kind of
car, how long is the lease, etc. Due to the lack of details on ridesharing vehicle contracts, the
closest vehicle contract we found was based on the U.S. General Services Administration their
vehicle leasing chart.
U.S. General Services Administration Leasing Chart for 2024
Type Vehicle Description 2024 Monthly
Rate
2024 Mileage Rate
Sedans Midsize Special Services $553 $0.28
Sedans Large Special Services $344 $0.28
Sedans Midsize Special Services Hybrid $465 $0.26
Sedans Large Special Services $215 $0.33
SUVs AWD SUV Police Use $490 $0.32
SUVs 4x2 SUV Police Use $261 $0.43
SUVs 4x4 SUV Police USe $555 $0.20
Pickup Trucks Full, Size, Crew Cab, Special
Services
$339 $0.32
ON-d-GO Plans to lease the 224 Buick Envista Sport Touring package the estimated price for all
20 vehicles over two years is estimated at $117,600 for the first year for the vehicle contract or
$490 per month for each vehicle.
Administration Salaries:
ON-d-GO administration salaries will include HR Manager, Customer Service Associates,
Finance Associate, SEO Specialist, Social Media Marketer, Marketing Sales Representative,
Marketing Research Analyst, human Resource Associate, Payroll Accountant, IT managers, andFleet Managers. Each position below is the expected pay market rate for these positions
according to ZipRecruiter in Houston TX.
Job Title: Market Rate Rang Houston,
TX:
Market Rate Avg Houston,
Tx:
HR Manager $24,352 - $145,157 $ 77,649
Customer Service Manager $23,397 - $96,451 $52,282
Finance Associate $29,127 - $131,786 $60,725
SEO Specialist $32,947 - $98,362 $65,504
Social Media Marketer $23,397 - $104,569 $56,116
Marketing Sales Representative $26,552 - $68,477 $41,943
Market Research Analyst $36,766 - $125,101 $75,420
Human Resource Associate $26,552 - $80,588 $45,523
Customer Service Associate $17,667 - $54,433 $54,433
Payroll Accountant $35,334 - $122,237 $77,021
IT Manager $47,749 - $142,769 $95,379
Fleet Managers $51,000 - $86,900 $50,000
ON-d-Go Admin Starting Salaries:
HR Manager: $70,000
Customer Service Associates (2): $40,000
Finance Associate: $60,000
SEO Specialist: $65,00
Social Media Marketer: $50,000
Marketing Sales Representative: $45,000
Market Research Analyst: $70,000
Human Resource Associate: $45,000
Payroll Accountant: $65,000
IT Manager: $65,000
2 Fleet Managers $50,000
Total= $715,000Utility Fees
ON-d-Go utility fees include a wide range of water, electricity, garbage disposal, and telephone.
Water and electricity usage are hard to predict because they vary on usage, however we can do
research based on how much the watts rate from our electricity provider and water usage.
Houston TX's average commercial electricity rate is 8.76 kWh or 87.6 cents it is estimated that
most businesses use between 15,000 and 25,000 kWh per year. Water will be essential for the
buildings. A small business building uses around 50 gallons of water a day, according to Houston
Tx city water bill calculator it is estimated we will be charged $22.13 a day for water and
$1,410.41 per month. The yearly total for water consumption is estimated at $16,924.92
Estimated Total Range For Electricity Y early: $13,140 - $21,295
Estimated Total for Water Y early: $16,924.92
Estimated Total Garbage Fee Y early $660
Estimated Total Telephone line $599.4
Total Y early Utility fees: $39,479
Customer Expense:
ON-d-Go plans to provide customers with the best ride experience. We want to include snacks
and water for our customers which for one year is estimated at $3,000. Included in this will also
be coffee from Eadough coffee shop served on special occasions (finals week, first day of
school).
Office Supplies
Our yearly office supplies budget is 2,000. We are trying to cut back on unused office supplies.
These office supplies will include printing paper, ink, and pens.
Car Gas Fees
Based on the car we will be using the 2024 Buick Envista Sport Touring car it holds 13.2 gallons
and averages 28/32/30 MPG (City/Hwy/Combined). ON-d-Go estimates that we will fuel up
each car twice a week for all 20 cars. Houston's average gas price is currently $2.880.
13.2 x $2.880 = $38.016
$38.016 x 2 = $76.032 a week for each car
$76.032 x 20 = $1,520.64 cars each week
$1,520.64 x 4= $6,082.56 20 cars each month
$6,082.56 x 12 = $72,990.72 20 cars each year
Estimated Y early Total for Gas is $72,991
Health Insurance/ Retirement Benefits
On-D-Go plans to provide health insurance and retirement benefits to all employees no matter if
you are a driver or you are a janitor you will be covered. We plan to partner with Blue Cross
Blue Shield for health and we plan to partner with Fidelity for our 401k benefits. We plan to
match 6% of your contributions. According to Nerdwallet a small business that paid for familycoverage insurance estimated paying $21,804 a year for family coverage and the employers
contributed $13,737. 401k is estimated to contribute $30,000 a year to retirement
Estimated Total For Insurance and Retirement Benefits: $44,000
Marketing Department Budget Cost
Our total budget to start out during year one will be $65,000 for all marketing costs. We will
have three main categories within our marketing budget: digital, in-person, and merchandise.
The two main platforms we are using for digital ads are Instagram and Facebook. Our plan is to
post 8 times a month totaling to 96 posts a year for each platform. Instagram will cost us $7,200
and Facebook will cost $4,800. We will also be utilizing digital ads throughout campus during
the school year. We will do 20 ads per week each semester totaling to $14,500 based on the
estimated 29 weeks we will advertise. In person ads will be on campus during the school year.
We plan on choosing 40 days throughout the school year to rent out a table space and this will
total to $1,800. The 500 flyers we will print will cost $450 and the 500 yard signs will cost
$7,475. For merchandise we will need ambassador boxes for our ambassador program. These
boxes will include a shirt, a stanley cup, a bucket hat, and a lulu lemon belt bag. The total cost
for 20 ambassador boxes comes out to $2,160. On campus giveaway items will be stickers,
keychains, and mini crumbl cookies (on specified days throughout the year). All of these
products will cost us $20,490. After totaling every aspect together, our startup marketing costs
will be $58,875. We have saved the remaining money in our budget for emergencies or
necessities we might need throughout the year. Our competitor Uber spent 184 million on
marketing cost for the year of 2022 they had an estimated 131 million users in 2022. When you
divide 184 million by 131 million you get 1.4 which is $1.4 of how much marketing goes to one
person. Our marketing budget is 65,000 a year please note Uber is a worldwide company we are
only in Houston. When you divide our budget by the estimated total number of people on
University of Houston campus which is 49,121 you get 1.3 which $1.3 of how much marketing
goes to one person. We understand that our marketing budget is 1 cent short of Uber however
we aim to be profitable and cheaper for our customers.
Uber Marketing Cost for one person: $1.4
ON-d-GO Marketing Cost for one person:$1.3
“Uber Technologies invested 98 million U.S. dollars in advertising activities in the first nine
months of 2023. In the entire 2022, the ad expenses stood at 184 million dollars”(Statista)
“Millions of Uber users - Over 131 million users at its peak in 2022” (The Tufts Daily).
Human Resource Department Budget
The On-d-Go Human Resource Department budget will include money for recruiting employees
and onboarding. On-d-Go HR's starting budget will be $25,000 for onboarding and background
checks excluding the job position
IT Department BudgetOn-d-GO IT Department Budget is $25,000 for software, wifi, the On-d-Go app, live monitoring
systems, cameras, and GPS for all our cars. We have allocated $7,000 from the budget to start up
our app and $9,000 to start up our website.
Cars Insurance Policy:
On-d-Go car insurance policy will be Progressive which will include full coverage for all our
cars and medical coverage up to 1 million for our drivers and passengers which is estimated at
$120,000 per year for all 20 vehicles and all passengers.
Building Lot & Rent
On-d-Go plans to rent an office space in downtown Houston Tx, and we plan to rent another
building outside of downtown for our car station where our workers will report to work and
where the cars will be kept. Lyric Tower 440 Louisiana St will be an On-d-Go administrative
office which is estimated to cost $86,430 per year to lease. The second building with the lot will
be located at the Heights Center 102 Heights Blvd, Houston TX 77007 which is estimated to cost
$63,945 a year.
Estimated Total Y early Total for Building Lease: $150,375
Y early Operating Cost
Operating Expenses Average Cost (USD)
Driver Payout & Hourly Associates $806,400
V ehicles Contract $117,600
Administration Salaries: $715,000
Customers Expense $3,000
Office Supplies $2,000
Utility Costs $39,479
Car Gas Fees $72,991
Health Insurance/Retirement Benefits $44,000
Marketing/Advertising Dept Budget $65,000
Human Resource Dept Budget $25,000
IT Dept Budget $25,000
Car Insurance policy fees $120,000Building & lot rent fee $150,375
Building Insurance $1,600
Total Operating Costs per year: $2,187,445
Extra Business startup cost:
Office Equipment Fees
ON-d-Go office equipment will include items for our office such as computers and laptops,
printers and scanners, communication devices, office furniture, software licenses, security
systems, etc.
Dell All-in-One computer (35): $990.15
Industrial Steel Office Desk (35): $870
Business Software Licenses: $500 - $1,500
Office Supplies: $200 - $500 per month
Security Systems: $1,000 - $5,000
Brother Business Color Laser Printer (3): $549
Estimated Total for Office Furniture: $73,752.25
LLC/License
LLC License is $300 filing fee in Texas
Break Even Point
The Breakeven point is $2,187,455 in order to hit this target we need 12,848 people to sign up
for our subscription and maintain it a year. However our goal is to have 20,000 students enrolled
the first year which would yield a profit of $1,217,955.00. One of the biggest challenges is
meeting monthly costs and payroll. On-D-Go monthly operating cost such as payroll and rent to
keep the business running is $162,486.13 On-d-Go needs 10,155.3 Subscribers Per month to
make payroll and cost However our goal is to have 11,000 subscribers enrolled every monthPrice Optimization
-Demand
According to the University of Houston the Fall 2023, there were 46,676 students enrolled for
the Fall 2023 semester, 37,356 undergraduate students, 708 post-baccalaureate, and 6,838
graduate students. The total number of faculty is 1,087 and 1,358 Teaching Assistants.
Understanding the wants and needs of rideshare is hard to find on campus due to the lack of time
for market research for surveys. However, not excluding anyone we can make an assumption
based on logical reasons that many people may want to ride with rideshare regardless of having a
car or not. Ask yourself how many times college kids go out partying or drinking, ON-d-GO’s
biggest value is safety. How many times do professors or faculty members take a ride share to
campus? These are all factors to be considered when finding demand for price optimization. The
total Students and Faculty is 49,121
Estimated Demand 25,000 (this is only an estimate)
-V ariable Cost
The cost of producing one item, things to consider when finding the variable cost are raw
materials, direct labor, utilities, production supplies, and shipping and distribution cost. In our
case, the variable cost would be the cost of producing one trip to our customer. To find this we
can consider our cost for gas, leasing a car, and payroll for our driver. Average 10 miles per ride
The Buick Envista offers 28 mpg in the city based on that information one trip of 10 miles would
use little less than half of a gallon of gas. The average gas price is $2.88 per gallon assuming half
gallon that is $1.44 per ride for gas is 10 miles. Payroll drivers earn 20 dollars an hour working 8
hours that's $160 earned in a day. Assuming the average ride takes 15 minutes 1 hour divided by
15 is 4 meaning 4 dollars of payroll per ride. Leasing the car is estimated at $117,600 for 1 year
of 20 vehicles dividing that number by 12 is 9,800meaning $9,800 a month for 20 cars, dividing
that number by 30 is $490 which is how much it costs to lease one car each month. $490 divided
by 30, 30 days in a month comes out to $16.333. How much it costs to lease that car out per day.
$16.3
$1.44
$4
Estimated Total Variable cost is $21.74
Tactics
Variable Cost $21.74
Lease a car per day $16.3
The gas cost for a 10-mile trip $1.44
Payroll for a 15-minute trip $4
Total Fixed Cost: $2,187,445
Driver Payout & Hourly Associate: $806,400
V ehicles Contract: $117,600
Administration Salaries: $715,000
Customers Expense: $3,000
Office Supplies $2,000
Utility Costs $39,479
Car Gas Fees $72,990.72
Health Insurance/Retirement Benefits: $44,000
Marketing/Advertising Dept Budget: $65,000
Human Resource Dept Budget: $25,000
IT Dept Budget: $25,000Car Insurance policy fees: $120,000
Building & lot rent fee: $150,375
Building Insurance: $1,600
Break Even Point…………………$2,187,445
……………………………12,848 Subscribers
Selling Price ……………………$16 per month
Price Markup…………………………..74.58%
Profit Margin……………………………43.71%
Goal Profit ………………………$2,069,305.00
per Y ear
Price …………………….$192 or $16 per month
Demand…………………… 25,000 subscribers
Fixed Cost …………………$2,187, 445 per year
Revenue…………………….$4,800,00.00 per year
ON-d-GO Revenue Streams
Ride Fares
Subscriptions
Manpower
The ManPower to run this company is dependent on multiple factors. The total number of people
that are needed for the first 2 years will be 34 people. 20 Full Time Drivers, 1 Human Resource
Manager, 2 Customer Service associates, 1 Finance associate, 4 Marketing associates, 1 Human
Resource associates, 1 Payroll Accountant, 1 IT Manager, and 2 fleet managers, 1 Janitor.
ON-d-Go Salaries
HR Manager: $70,000
Customer Service Associates (2): $40,000
Finance Associate: $60,000
SEO Specialist: $65,00
Social Media Marketer: $50,000
Marketing Sales Representative: $45,000
Market Research Analyst: $70,000
Human Resource Associate (1): $45,000
Payroll Accountant (1): $65,000
IT Manager: $65,000
2 Fleet Managers $50,000
On-D-Go Hourly Associates
1 Janitor $20 per hour 38,400 per year
20 drivers $20 per hour 38,400 per yearTotal Manpower is 34 people.
Money (Cash Requirements)
On-d-go has a total operating cost per year of $2,187,445 which includes driver payout & hourly
associates, vehicles contract, administration salaries, customer expenses, office supplies, utility
costs, car gas fees, health insurance/retirement benefits, marketing/advertising department
budget, human resource department budget, IT department budget, car insurance policy, building
& lot rent, and building insurance. The Breakeven point is $2,187,455 in order to hit this target
we need 12,848 people to sign up for our subscription and maintain it a year. However our goal
is to have 20,000 students enrolled the first year which would yield a profit of $1,217,955.00.
One of the biggest challenges is meeting monthly costs and payroll. On-D-Go monthly operating
cost such as payroll and rent to keep the business running is $162,486.13 On-d-Go needs
10,155.3 Subscribers Per month to make payroll and cost However our goal is to have 11,000
subscribers enrolled every month
On-D-go- Monthly Costs:
Payroll Drivers & Hourly Associates: $67,200
Administration Salary: $59,582.8
Building Rent: $12,531.25
Utility Cost $3,289.92
Car gas fees $6,082.56
Health Insurance/Retirement Benefits $3,666.6
Car Insurance Policy $10,000
Building Insurance $133
Monthly Total Operating Costs to keep the company alive: $162,486.13
How many subscribers do we need monthly: $162,486.13/16= 10,155.3 Subscribers Per Month
to make payroll and cost
How Much Revenue is Needed Monthly
10,155.3 Subscribers per month 10,155.3831 x 16 =$162,486.13
On-D-Go plans to fund this project with the help of Bank of America Corporation to start this
project. We are asking Bank of America Corporation for a loan of $4,418,042.33 that would
cover the startup cost and operating cost for the first two years. We plan to make profit, to be on
our own in two years. However, the loan we are asking to not have to pay it back but allow the
bank to own half 50% of the company.
The on-D-Go pricing strategy is setting the price for our subscription this includes a markup of
74.58% which yields a profit margin of 43.71% the base price of the subscription to be able to
make a profit is $9.16 however we are marking our prices up to $16 per month. This decision
was based on demand, variable cost, and fixed costs using Excel Solver.
Methods
On-D-Go operating products will be done effectively to be able to hit our goal.On-D-Go operating hours
Hours of Operation
Sunday Off
Monday 6 am - 10:00 pm
Tuesday 6am - 10:00 pm
Wednesday 6am - 10:00 pm
Thursday 6am - 10:00 pm
Friday 7 am - 3:00 am
Saturday 10am - 3:00 am
On-D-Go drivers shifts will include 2 shifts a day for drivers a total of 20 drivers per day
Monday- Thursday and a total of 10 drivers Friday - Saturday, drivers will have Sunday off. The
reason for the hours of operation is that Monday-Thursday is when most college students have
class so you want to maximize your drivers through school days. We understand that some kids
have classes at 8 am and would like to be on campus early while taking in the fact of rush hour
we decided to set our morning shift to start at 6:00 am Monday - Thursday. No ride request will
be accepted after 10:00 pm. We also decided to extend our hours of operation on the weekends
because college students like to party and go out on the weekends therefore we extended our
shift to close at 1:00 am on Friday and 3:00 am on Saturday because safety is one of our biggest
values and we want college students to be safe. To ensure that we remain cost-effective we
decided to have all full-time drivers and no driver will work more than 40 hours because of
paying overtime. Each Shift is scheduled for 9 hours but everyone will work 8 hours. All drivers
will take a 1-hour lunch break that will be on the driver's time and not the company's time. Each
shift will be 8 hours long however drivers are scheduled for 9 hours to take a 1-hour break that
will be on the driver's time and not the company's.
Sunday
Off
Monday, Tuesday, Wednesday, Thursday
Morning Shift: 6:00 am - 3:00 pm
Evening Shift: 1:00 pm - 10:00 pm
Friday
Morning Shift: 7:00 am - 4:00 pm
Evening Shift: 4:00 pm - 1:00 am
Saturday
Morning Shift: 10:00 am - 7:00 pm
Evening Shift: 6:00 pm - 3:00 am
The drivers will report to the station before their shift, this is where the cars will be housed at
102 Heights Blvd, Houston TX 77007, The drivers will ensure that the car is clean on the inside
before each ride. The drivers will report to a designated area in Houston and wait for a request topopulate. There will be 2 fleet managers whom the drivers answer to. The two fleet managers
will be located at the station.
On-D-Go sales goal is to obtain 11,000 subscribers per month. This goal is based on market
conditions and price markup as well as cost to keep the business up and running every month.
We will be using multiple metrics to track and monitor this goal. These metrics will include
customer satisfaction, sales, churn rate, retention rate, waste management, etc. We plan to
monitor the metrics and make any necessary changes to make this company more profitable and
efficient. Our discount strategy is 50% off all rides for our subscribers only.
Machinery
On-D-G0 has decided it will be better to lease our workplace, this will help keep our costs down
low and make more profit. It is also cheaper to have to lease the cars and have a service contract
so we don’t have to put our resources into maintenance on vehicles which can be expensive.
Other fixed assets include technology infrastructure and safety equipment such as gps.
Place
Strategy
At ON-d-GO, our strategic approach to the "Place" aspect of our service meticulously integrates
a comprehensive online presence with a flexible physical operation model. This synergy is
designed to provide efficient and reliable transportation within a 35-mile radius around the
University of Houston, catering perfectly to the needs of its student population. Our strategy
begins with a robust digital infrastructure, including a user-friendly website and mobile app.
These platforms are crucial for enabling students to easily book rides and track vehicles in
real-time. The ability to manage their travel plans from their smartphones or computers not only
meets the tech-savvy expectations of modern university students but also integrates seamlessly
into their connected lifestyles. This digital convenience is paramount in maintaining a
competitive edge, ensuring that students can engage with our services in a way that is intuitive
and responsive to their needs.
In terms of physical operation, rather than limiting our service to fixed locations, we have
expanded our reach to cover any pick-up point within a 35-mile radius of the campus. This
strategic decision was guided by the recognition that university students often travel between a
variety of destinations – from residential areas to campuses, part-time job locations, and social
hangouts across a wide area. By offering a flexible pick-up and drop-off model, we
accommodate the dynamic and varied schedules of this demographic, enhancing the appeal and
utility of our service. The ability to be picked up from virtually anywhere within this radius is not
just about covering more ground; it’s about ingraining ON-d-GO into the daily lives of students.
It assures them that, whether they're studying late at the library or attending a social event across
town, reliable transportation is just a few taps away on their mobile device. This level of
accessibility is a key part of our strategy to increase user satisfaction and loyalty, as it directly
addresses the common pain points experienced by students relying on public transport or
fixed-route services. Moreover, this approach allows us to efficiently manage our vehicle fleetacross a broad area, optimizing the allocation of resources and reducing idle time between rides.
Our drivers are equipped with tools and technology that help them navigate quickly and
efficiently, minimizing delays and ensuring that students spend less time waiting and more time
moving towards their destination.
Overall, our strategic placement of digital and physical resources ensures that ON-d-GO not only
meets the immediate transportation needs of University of Houston students but is also
well-positioned to adapt to future growth and changes in student patterns. This forward-thinking
approach helps cement our reputation as a dependable, convenient transportation solution,
encouraging ongoing engagement and setting us apart in the competitive ridesharing landscape.
By focusing on both the expansive service area and the ease of digital access, we ensure that our
service is not just a ride; it's a reliable part of their university life, ready to help them navigate
their daily needs with ease and efficiency.
Tactics
Manpower
ON-d-GO's MANPOWER strategy is designed to optimize workforce availability in key
locations, ensuring efficient service delivery and supply chain support. By strategically situating
operational hubs near University of Houston and student-populated areas, the workforce is
positioned to meet demand effectively. This includes deploying drivers to high-traffic zones
during peak times, guaranteeing timely transportation services. Centralizing support functions
such as human resources, customer service, and finance streamlines operations, fostering
collaboration and effective resource allocation. With all roles onsite, a cohesive work
environment is cultivated, promoting teamwork and problem-solving. Regular monitoring
enables adjustments in staffing and resource distribution to maintain operational efficiency and
meet customer needs promptly, ultimately enhancing supply chain effectiveness and customer
satisfaction.
Money
Since we are a service that users need an app for, we had to create a budget specifically for these
costs. Our overall budget for our technology is $25,000 and this will include the startup costs for
our website and app. We have allocated 28% of our IT budget towards our app which is roughly
$7,000. For our website, 36% of our budget will be used for our website development and we are
estimating these costs to be around $9,000.
Although we will only be interacting with our customers through the app, we still need a
headquarters for our company and a place where our employees can go to and house our vehicles
when they are not in use. The combined estimated costs for the building leases totals to
$150,375. On top of that we had to include utilities, office furniture/office setup, and building
insurance. This totals to $43,079 for our extra costs with the offices. Our overall budget for the
offices is $193,454 and this is incorporated in startup costs for the company.
With both of our lots being located in the downtown area of Houston, we see the benefits of
being closer to public transportation for employees and in proximity to our collaborators and
service suppliers. There is also the opportunity for more efficient day-to-day operations including
customer service and driver coordination. This can overall reduce overhead costs, helpstreamline processes, and improve our service delivery. Being located where we are can also lead
to positive partnerships which in turn can help lower company costs.
Methods
We've taken a multifaceted marketing approach that includes a variety of platforms and
techniques for effectively communicating our brand's message and services. To reach college
students where they are most engaged, we use digital marketing strategies such as social media
platforms, student-centric applications, and email campaigns. We've also built a physical
presence on the UH campus through promotional events, kiosks, and partnerships with student
organizations to raise brand awareness and engagement. We've also worked with student
influencers and campus ambassadors to generate honest and relatable material that speaks to our
target demographic, dramatically increasing our visibility in the college community.
Machinery
For ON-d-GO's "Place" aspect, our focus extends beyond service locations to include the critical
"machinery" that underpins our operations—our fleet of vehicles. These vehicles are
meticulously selected for their safety, reliability, and comfort, catering specifically to the needs
of the University of Houston's student population. Strategically deployed throughout a 35-mile
radius encompassing the university and popular student locales, they ensure timely and efficient
service delivery. This careful placement optimizes the utility of our fixed assets and enhances our
operational capabilities. In addition, our digital infrastructure, essential to our operational
"machinery," supports our physical presence. The ON-d-GO app, central to our service, is
designed for ease of use and is equipped with features tailored to the college lifestyle, such as
scheduling rides in advance, ordering coffee via the app, and tracking rides in real time. This
integration of physical and digital assets ensures that ON-d-GO is not just available, but a
prominent, reliable fixture in the daily lives of students, making their transportation experience
safer, more convenient, and integrated with their everyday needs. By effectively managing these
assets, we reinforce our commitment to providing top-notch service and establish ON-d-GO as
the go-to transportation solution within the University of Houston community.
Promotion
Strategy
On-D-Go will use a specific strategy that includes a multitude of diverse ways that promote our
service to the public. Through specific social media campaigns, our goal is to capture the
attention of students due to them spending a large amount of time online. By creating compelling
and targeted advertisements, we will effectively share the benefits of the service we provide and
give students an incentive to download our app. We will tap into existing networks by partnering
with student organizations and this will also allow us to gain credibility among the Houston
community. We will be able to host events on campus and promotions that give students the
opportunity to create a relationship with the company and offer exclusive incentives with our
service. Referral programs will be helpful as we look to spread our service not just through
digital ads and media but also by word of mouth and other trusted opinions. By using targeted
advertising, in-depth analysis, ambassador programs, and monitoring trends, we will be able to
ensure that our promotion reaches the right audience at a convenient time which will maximizeour impact and ultimately create a positive reputation for our ridesharing service to the
University of Houston students.
Tactics
Manpower
ON-d-GO will be using a strategically picked marketing and research team to help promote our
service to our target market. Since we are just starting out as a small company, we have kept our
team smaller but still are factoring in the importance of marketing as a smaller company to create
awareness to consumers.
Positions:
● Social Media Marketer
○ Salary: $50,000
○ Tasks:
■ Content creation and curating engagement for our social media channels
■ Community Engagement
■ Execute paid advertising campaigns
■ Collaborate with potential influencer partnerships
■ Monitoring social media trends
■ Building brand awareness
● Marketing Sales Representative
○ Salary: $45,000
○ Tasks:
■ Outreach and relationship building with prospective customers
■ Educate prospects on our services
■ Negotiating and closing sales deals with customers
■ Customer retention and upselling
■ Feedback gathering
● Marketing Research Analyst
○ Salary: $70,000
○ Tasks:
■ Conduct in-depth analysis
■ Create details profiles of our target audience
■ Design and administer surveys/questionnaires and focus groups
■ Analyze quantitative data and interpretation
■ Monitor competitors activities, pricing, and strategy
■ Trend monitoring with technological advancements and changes to the
ridesharing industry
■ Prepare reports and presentations over findings, insights, and
recommendations
● SEO Specialist
○ Salary: $65,000
○ Tasks:
■ Keyword research and understanding user intent
■ Optimizing website content
■ Website technicalities■ Developing blog posts, articles, and guides
■ Tracking key SEO metrics
■ Drive more organic traffic
■ Increase online visibility
Money
To successfully promote our service to our intended target market, we have chosen to utilize
Instagram and Facebook as our primary social media outlets that we will promote from. We
found that these are the most commonly used platforms among our consumers.
When looking at our highest competitor, Uber, we see that they have 1.5 Million followers on
Instagram and their average plays (for videos or reels) is between 250,000 to 300,000 while their
average likes on a post is between 200 and 500 likes. Since 2022, Uber has increased their
interactions that they are obtaining on Instagram from users. On Facebook, Uber has 21 million
followers. They consistently are receiving between 200 and 500 likes on facebook for each post.
With our digital ads we have broken our budget down and allocated it based on where our users
are more active. We have assigned 11.1% of our marketing budget towards Instagram. Starting
out we will be making one instagram post per month assuming that around 93 people will
interact with that post in said month. Each post is $75 times 96 a year totaling to $7,200 in
instagram ads. Our CPC is $0.80 and that is also based on us getting around 93 people per post.
For Facebook, with it being our lesser social media platform, we have assigned 7.3% of our
budget towards those ads. We will only be posting on facebook 96 times a year as well and each
ad costs $50 thus totaling $4,800 in total for these ads. We estimate that each ad will reach 178
people and our CPC is $0.28. Lastly, with our digital side of marketing, we will have digital ads
throughout campus and we are allocating 22.3% of our budget for them. We will be advertising
twenty ads per week and each ad is $25 totaling $500 each week which then is multiplied by the
29 weeks of active school throughout the year. This overall is going to cost $14,500 for these ads
within campus.
Another piece of our marketing budget will be used for in person advertising. This will include
table-spaces on campus, graphic flyers, and yard signs which will all be placed in strategic spots
throughout the university. Table spaces will cost us $1,800 because we plan to rent out a table
space 40 days out of the school year. The flyers will cost $450 and the signs will cost $7,475. We
have set aside 14.6% of our budget for in person marketing with an overall cost for these ads
coming out to $9,500.
Finally, our last category in our budget will be merchandise. During giveaway days we will
provide keychains, stickers, and mini crumbl cookies to students. The custom keychains will cost
$4,950 and the custom stickers will cost $600. We will order 500 of each. The crumbl cookies
will cost us $14,940 and we have allocated more money towards the cookies because they are
very popular among Americans and college students and we feel it will draw more people to
come learn about our service. This part of our budget will make up 34.8% of our total budget.
Our overall costs come out to $58,875 and our total budget will be $65,00 so we will use the restof our budget for any other necessities throughout the year that we deem necessary to help better
our promotion for the company.
Methods
The promotional strategy for ON-d-GO revolves around clear objectives tailored to its mission of
safe and efficient transportation for University of Houston students. Budget allocation prioritizes
platforms like social media and campus partnerships, while performance tracking utilizes
advanced analytics to monitor engagement and app downloads. Cost management ensures
spending efficiency while maintaining affordability for students. Continuous optimization refines
messages to highlight unique features, and stakeholder engagement keeps investors informed for
potential expansion. A feedback loop gathers and analyzes student feedback to fine-tune
strategies. By aligning marketing efforts with its mission, ON-d-GO aims to efficiently connect
with students, foster loyalty, and establish a strong brand presence within the University of
Houston community and beyond.
Machinery
In the context of ON-d-GO's promotion, focusing on the "Fixed Assets" involves leveraging
every element of our promotional toolkit to its fullest potential, aligning with the principle that
optimal promotion maximizes the productivity of these required assets or the "machinery" of our
marketing efforts. This machinery includes the digital backbone of our operations, such as the
app designed specifically for University of Houston students, offering features that cater directly
to their needs like scheduling rides and ordering coffee on the go. It extends to our presence on
social media platforms, where our campaigns are meticulously tailored to engage the student
demographic with content that resonates with their daily lives and preferences. Additionally,
physical promotional materials and gear, distributed during campus events or in collaboration
with local businesses like Eadough, play a crucial role. By ensuring these digital and physical
assets are utilized to their maximum capacity, whether through engaging social media
campaigns, strategic partnerships, or on-the-ground brand visibility efforts, we not only optimize
our promotional expenditure but significantly enhance our reach and impact within the student
community. This comprehensive approach to utilizing our promotional machinery aims to
solidify ON-d-GO's position as the preferred choice for safe, reliable, and student-friendly
transportation around the University of Houston.
Execution
Workforce
Planning
ON-d-Go will have a total of 34 full-time employees including the six founders who play
essential roles in the firm’s success. There will be a marketing department, finance department,
IT Department, drivers department, and customer service department. The majority of the
employees will be the 20 full-time drivers, who will be supervised by two fleet managers. The
human resource department will consist of a human resource manager and a human resource
specialist. two customer service associates, a finance associate, The marketing team would
include a search engine optimization specialist, a social media marketer, a marketing salesrepresentative, a market research analyst, all supervised by the chief marketing officer. The
payroll accountant would be supervised by the chief financial officer. The staff would also
include an IT manager and a custodian. Standards and regulations that will be enforced will vary
in each department.
Finance Department
The payroll accountant and finance associate will be responsible for managing the organization’s
financial resources, ensuring financial stability, and supporting strategic decision-making, they
will also work closely with the accountant for managing payroll for all employees. The finance
department will report weekly to the CFO.
Weekly Metrics:
● Company’s Cash Balance
● Cash Flow
● Budget V ariance
● Cost Per Unit
● Accounts Receivable Turnover Ratio
● Days Sales outstanding
● Gross Profit Margin
● Operating Profit Margin
● Net Profit Margin
● Inventory turnover ratio
● Accounts payable turnover ratio
● Return on Investment
● Return on Assets
● Return on Equity
● Revenue Per Employee
● Financial Transactions Processed Per Employee
Marketing Department
The marketing department will be responsible for promoting the company’s products or services,
building brand awareness, managing all social media platforms, conducting market research to
better understand customer needs and behaviors, analyzing market trends, and launching
marketing campaigns. The marketing department will also work closely with the marketing sales
representative.
Weekly Metrics:● Total Website Visits
Bounce Rate
● Conversion Rate
posts
● Click Through Rate
● Unsubscribe Rate
● Return on Ad Spend
● Cost Per Acquisition
● Ad Impression
● Subscriptions Sold
● Customer Satisfaction Score
● Customer Retention Rate
● Net Promoter Score
● Customer Lifetime V alue
● Brand mentions
Social Media Instagram, X, Snapchat, Facebook likes, followers, comments, number of
HR Department
The human resource manager will be responsible for overseeing all aspects of the HR functions.
They will work closely with the HR specialist to develop and implement HR strategies and
initiatives aligned with the overall business objectives. The primary goal will be to ensure that
our organization attracts, develops, and retains top talents while fostering a positive and inclusive
work environment. These key day-to-day responsibilities include recruitment and talent
acquisition, maintaining employee relations and engagement, performance management
implementing and managing a performance appraisal system to ensure fair constraint evaluation
of employee performance, and Enforce HR policies and procedures in compliance with legal
regulatory requirements. The HR department will report weekly to one of the sitting founders.
Weekly Metric:
● Number of Job postings published
● Number of Applications Received
● Number of New Hires Onboarded
● Employee satisfaction with Onboarding Process
● Diversity representation
● Cost Per Hire
● HR Spending for the week
● Turnover RateCustomer Service
The customer service representative will be responsible for providing assistance and support to
customers before, during, and after their interaction with ON-d-Go services. The goal is to
ensure a positive customer experience and maintain a high level of customer stratification which
is essential for the growth of our business. The customer service department will report weekly
to one of the sitting founders.
Weekly Metrics:
● Average Response Time Customer is Helped
● Escalation Rate
● Customer Satisfaction Score
● Total Number of inquiries
● Total Number of complaints
● Customer Service Representative Score Percentage
● Email Response Time
● Drivers Satisfaction Score Percentage
Drivers
Drivers will be responsible for managing all rides with customers. They will provide safe, timely,
and efficient travel for everyone. Key responsibilities include safely transporting passengers to
their destination, and ensuring that the inside of the vehicle is clean and vacuumed after the ride.
Adhere to safety protocols and procedures to ensure the well-being of passengers at all times.
Navigate routes efficiently, provide excellent customer service, and comply with company
policies and regulations such as on the phone when driving, which will lead to termination.
Drivers will report weekly to one of the sitting founders.
Weekly Metrics:
● Percentage of time drivers are actively driving
● Number of hours spent driving per shift or day
● Percentage of trips completed on time
● Number of completed trips per driver per day
● Number of accidents or incidents per driver
● Driving score per driver
● Average number of miles driven per day per driver
● Average downtime for drivers
● Cost per mile or cost per trip for each driver
● Percentage of customer complaints or issues related to driver behavior or service
● Customer ratings and feedback from driversIT Department Manager
The IT manager will be responsible for managing ON-d-Go technology infrastructure and
systems, such as the company website and the subscriptions app. Ensuring the platforms are easy
to navigate and simple to use. The IT manager will also ensure that there is a protective firewall
and cybersecurity to prevent customer information from being hacked. They will also be
responsible for managing all the technology at the offices and ensuring a safe VPN for
employees. The IT manager will report weekly to one of the sitting founders.
Weekly Metrics:
● Percentage of time IT systems are operational and available for use
● Average time taken to resolve IT incidents or service requests
● Percentage of IT changes or updates implemented successfully without causing
disruptions
● Number of cybersecurity incidents detected and resolved
● Backup success rate
● Recovery time objective
● Hardware/software utilization
Organizing
The six founders of ON-d-Go will be in charge of setting goals for the company. All of our
departments will have a head manager whom he or she reports to, The head managers of each
department will report weekly to the 6 founders meeting the weekly KPI reports that is listed on
each department above. The managers will also help achieve the goals set by the founders. This
will ensure that the business structure is organized and every one has a direct manager. Listed
below is an organizational chart to show how our organization is sturcutre.
Directing
We will direct our workforce through strategic planning, and effective decision-making based on
research. Our mission is to “provide reliable, affordable, and safe solutions for a better
tomorrow”. We set high standards to achieve this goal from defining our vision and goals to
understanding our market while building a strong team is the key to achieving our mission.
Controlling
We plan to control and measure this goal using KPIs for each department that have to be met
every week to ensure that the business is on the right track. Some of the KPIs for the finance
department include the company’s cash balance, cash flow, budget variance, cost per unit,
accounts receivable turnover ratio, days sales outstanding, gross profit margin, operating profit
margin, net profit margin, inventory turnover ratio, accounts payable turnover ratio, return on
investment, return on assets, return on equity, revenue per employee, financial transactions
processed per employee. The marketing department KPIs will be total website visits, bounce
rate, conversion rate, social media likes, followers, comments, click-through rate, unsubscribe
rate, return on ad spend, cost per acquisition, ad impression, subscriptions sold, customersatisfaction score, customer retention rate, net promoter score, customer lifetime value, brand
mentions.
The human resource department KPIs will be the number of job postings published, number of
applications received, the number of new hires onboarded, employee satisfaction with the
onboarding process, diversity representation, cost per hire, HR spending for the week, and
turnover rate.
The customer service department KPIs will be the average response time a customer is helped,
escalation rate, customer satisfaction score, total number of complaints, customer service
representative score percentage, email response time, and driver satisfaction score percentage.
The drivers department KPIs will be the percentage of time drivers are actively driving, number
of hours spent driving per shift or day, percentage of trips completed on time, number of
completed trips per driver per day, number of accidents or incidents per driver, driving score per
driver, average number of miles driven per day per driver, average downtime for drivers, cost per
mile or cost per trip for each driver, percentage of customer complaints or issues related to driver
behavior or service, customer ratings and feedback form drivers.
The IT department KPIs will be percentage of time IT systems are operational and available for
use, average time taken to resolve IT incidents or service requests, percentage of IT changes or
updates implemented successfully without causing disruptions, number of cybersecurity
incidents detected and resolved, backup success rate, recovery time objective, hardware/software
utilization. As you can see each department has KPIs established this will be how we track our
success and find out what's working and what is not working.Cash Requirements
Planning
Accounts receivable procedures:
-Implement clear credit policies: set credit limits for customers, establish terms of payment to
ensure timely collection.
-Offer discounts for early payment: incentivize customers to pay invoices sooner by offering
discounts for early settlements.
-Send timely and accurate invoices: Ensure invoices are sent promptly and contain all necessary
details to avoid payment delays.
Accounts Payable Procedures:
-Negotiate favorable payment terms: Negotiate extended payment terms with suppliers to
preserve cash flow.
-Take advantage of discounts: Pay invoices early to take advantage of discounts offered by
suppliers.
-Monitor payment schedules: Keep track of payment due dates to avoid late fees and maintain
positive relationships with vendors.
-Review expenses: Regularly review and analyze expenses to identify opportunities for cost
savings and optimize cash outflows.Organizing
Cash Flow Forecasting:
-Implement a robust cash flow forecasting system to predict future cash inflows and outflows
-Regularly update forecasts review and update cash flow forecasts regularly to reflect changes in
business conditions and operations.
-Scenario analysis: conduct scenario analysis to assess the impact of different business decisions
on cash flow and identify potential cash shortages or surpluses.
Cash Reserves:
-Establish cash reserves: set aside a portion of cash reserves to cover unexpected expenses or
downturns in business.
-Determine optimal reserve levels: determine the appropriate level of cash reserves based on
factors such as business volatility, industry trends, and growth projections.
Directing
Promotion vs. Expansion vs. Acquisition:
-Assess investment opportunities: Evaluate various investment opportunities, including
promotional activities, expansion initiatives, and potential acquisitions.
-Consider risk and return: assess the risk and potential return of each investment option to
determine the optimal allocation of cash resources.
-Align with strategic objectives: ensure that cash allocation decisions align with the
organization's strategic objectives and long-term growth plans.
Controlling
-Cash Conversion Cycle (CCC): measure the efficiency of cash flows from the purchase of
inventory to the collection of receivables.
-Days Sales Outstanding (DSO): track the average number of days it takes to collect accounts
receivable to monitor the effectiveness of credit policies.
-Days Payable Outstanding (DPO): monitor the average number of days it takes to pay accounts
payable to optimize cash flow management.
-Cash Burn Rate: calculate the rate at which cash is being depleted to manage cash reserves
effectively.
By implementing these strategies for planning, organizing, directing, and controlling cash flow
we can optimize cash usage and enhance our overall financial performance.Operating Procedures
Planning
Our strategic planning at ON-d-GO is dedicated to developing robust operating procedures that
ensure the highest quality control and consistent value delivery to our customers. This includes
creating detailed processes for driver recruitment, training, and performance evaluation to uphold
high service standards. Additionally, we are focused on optimizing travel routes and schedules to
maximize efficiency and minimize wait times for University of Houston students, utilizing data
analytics to predict peak times and adjust fleet deployment accordingly. We are also integrating
advanced technology solutions, including real-time tracking, enhanced mobile app
functionalities, and automated feedback systems, to enhance the customer experience and
streamline our operations. These strategic initiatives are designed to maintain our commitment to
quality and efficiency, ensuring ON-d-GO remains a top choice for campus transportation.
Organizing
Our quality assurance team diligently monitors the transportation services provided to students,
with each member overseeing a designated area within the 35-mile radius around the University
of Houston to ensure compliance with safety and service standards. To maintain these standards,
our fleet undergoes weekly inspections for safety and cleanliness, coordinated by the assigned
quality assurance personnel who also resolve any issues related to drivers or vehicle
maintenance. To enhance oversight and prevent complacency, we implement a rotation systemwhere quality assurance inspectors switch areas weekly, improving service reliability and safety
across all zones.
Directing
Our operations team at ON-d-GO is dedicated to optimizing the supply chain for our fleet, which
includes the timely procurement of vehicles and efficient scheduling of maintenance to ensure all
logistical aspects like fuel management and parts inventory are streamlined. This minimizes
downtime and maximizes fleet availability. We enhance operational efficiency through precise
coordination of ride schedules and vehicle assignments, using route optimization algorithms and
a central dashboard for real-time ride management, ensuring all decisions support our strategic
goals. Additionally, quality assurance is seamlessly integrated into our operations, with rigorous
standards for every vehicle and driver to prevent issues and maintain high service quality. This
comprehensive approach ensures operational excellence and consistent customer satisfaction.
Controlling
At ON-d-GO, we meticulously track each vehicle's performance metrics, including fuel
efficiency, maintenance costs, and operational uptime, through regular reports that assess
compliance with expected standards. Additionally, we scrutinize customer feedback and ride
quality reports to maintain high service standards, focusing on metrics such as driver punctuality,
professionalism, and overall customer satisfaction. Our operations team continuously monitors
the fleet size and number of drivers to ensure resources are optimally allocated, making
adjustments based on demand fluctuations, special events, or maintenance requirements to
ensure smooth operations. Furthermore, we uphold strict minimum standards for our operations;
no vehicle is put into service without undergoing a comprehensive check to confirm it meets all
safety and operational standards, with continuous monitoring and quality assurance as our
standard protocol to guarantee reliability and safety in our services.
Fixed Assets
Planning
For ON-d-GO, we have two assets that are essential for our company to be successful long term.
The first asset is our technology infrastructure which is the app and website that our team will
design. Our app is how customers will be able to use our service so it is vital that we invest
heavily into it. Investing in our app features that enhance the customer experience and make our
service easy to use can lead to higher user satisfaction and retention. Our second major asset is
the office where our headquarters will be located. Having all of our different teams including
marketing, customer service, and driver support in one place can lead to cost savings by reducing
communication barriers and streamlining workflows. Leasing our office and securing favorable
lease terms will also provide cost control and stability in the long run when it comes to potential
rent increases in the future.
● Technology Infrastructure
○ App investment: $7,000
○ Website investment: $9,000
● Office space
○ Lease cost: $86,430 per year
○ Location: Lyric Tower 440 Louisiana St, Houston, TexasOrganizing
With our workspace in the office we have decided to be flexible with the layout. Providing our
employees with flexible workspaces can accommodate different styles of work which can boost
efficiency. This may include quiet spaces for focus or team rooms for collaborative projects.
Employees will have the option to choose which environment works best for them while working
on specific tasks further leading to comfort and productivity. We want to promote successful
communication and efficiency with this layout.
Our user-friendly app layout can decrease the need for extensive customer support which can
lead to lower customer support staffing requirements and costs associated with that. By reducing
complexity and optimizing usability, our developers can build and update the app more
effectively in turn reducing time and costs. Lastly, having an easy to use app, we can develop
high retention rates with our customers who can promote our service through word of mouth to
other potential customers driving up our revenue.
Directing
In managing ON-d-GO's fixed assets—the website, app, and infrastructure—each plays a vital
role in driving the company's success. The website serves as the main digital platform, attracting
and retaining users. By ensuring that website tasks are aligned with company goals, ON-d-GO
can maintain a user-friendly interface that encourages engagement and supports growth.
Similarly, the mobile app is crucial for customer convenience and satisfaction. By aligning
app-related responsibilities with company objectives, ON-d-GO ensures that the app meets
evolving user needs, driving loyalty and retention. The infrastructure provides the necessary
support for seamless operations and future expansion. By prioritizing investments in
infrastructure upgrades, ON-d-GO can scale its operations sustainably. Metrics tracking website
traffic, app downloads, and infrastructure performance offer valuable insights, allowing for
timely adjustments to optimize effectiveness. Clear operating procedures ensure that tasks related
to each asset are carried out efficiently and effectively, maintaining quality and timeliness. By
coordinating efforts across these areas, ON-d-GO strengthens its position in the student
transportation market, driving ongoing success and growth.
Controlling
In overseeing ON-d-GO's operations, each fixed asset—the website, mobile app, and
infrastructure—serves a distinct yet critical role in meeting established success criteria. The
website acts as the primary interface for users, and its effectiveness is measured by factors such
as user engagement and conversion rates, ensuring alignment with the company's objectives of
attracting and retaining customers. Similarly, the mobile app's performance is evaluated based on
metrics like downloads, user ratings, and retention rates, reflecting its contribution to customer
satisfaction and loyalty. The infrastructure, including servers and technical infrastructure, is
assessed based on factors like uptime, scalability, and security measures, ensuring that it supports
the smooth functioning of both the website and app. By regularly monitoring and optimizing
these fixed assets against preset success criteria, ON-d-GO can ensure their effective utilization
in driving operational efficiency, enhancing customer experience, and ultimately achieving its
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