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HomeMy WebLinkAboutStreamline Business Plan Final, 2011.docxMONTANA STATE UNIVERSITY  HRDC Streamline  Business Plan    Cassi Olden, Lynette Plymale, Brian Rueb  4/15/2011     Executive Summary In a college town, there is no such thing as too many transportation options. The HRDC Streamline provides the Bozeman, Belgrade, and Livingston communities with safe, dependable transportation to almost anywhere in the Gallatin Valley. Streamline was founded in 2006 and is currently directed by Lee Hazelbaker. It was created to provide free transportation to local citizens with various options on routes and driving times. Due to current economical times, businesses are being forced to adapt financially to a more secure strategy. In the near future, Streamline plans to increase community awareness by improving communication between riders and buses, expanding operating hours, and the extension of bus routes. In order to do this, Streamline has a few options to better their nonprofit organization. One option is to lease out space on the buses for paid advertising, lease buses to organizations or groups, and charging a fee of a dollar per ride. The proceeds from these promotions will be used towards the purchase of additional buses for future expansion. After the implementation of these strategies, Streamline will build better customer and business relationships with the community and the business will have an extensive start to the expansion of their services to the Gallatin Valley and neighboring communities. Streamline has prepared themselves for competition and potential protection from any future loss in government funding. Table of Contents Company Overview 4 Vision Statement 4 Mission Statement 4 Objectives 4 Company Background 5 Service and Industry 7 Service Description 7 Industry Description 8 Market and Target Customers 9 Competition and Competitive Advantage 9 Marketing Strategy 11 Overall Strategy 11 Sales Plan 11 Competitive Plan 12 Research and Development/Growth Plan 12 Organization 14 Legal Structure 14 Key Personnel and Job Descriptions 14 Related Services 15 Location 16 Financials 16 Financial Appendix 20 Bibliography 25 Company Overview Vision Statement ‘Upstream to Downtown’ is more than a catchy title, Streamline offers service throughout the Bozeman area to fulfill everyone’s transportation needs. Economical, efficient, eco-conscience and fare free! Mission Statement Streamline’s mission statement is “To be the provider of mobility services and alternatives to the single occupancy vehicle in Southwest Montana. We will accomplish this mission by providing alternative modes of transportation, including the following: carpooling services, van pools, demand-responsive transportation, and fixed route transportation. Streamline will accomplish its mission by providing services to the following clientele: senior citizens general public, persons with disabilities, persons with low incomes, Montana State University students, Montana State University facility and staff, non-driving high school and middle school students, and downtown shoppers and workers.” Objectives A business objective is a map you will use to reach the goals you have for your organization. Streamline has three main goals: Maintain service- To maintain superior service to the public, Streamline will continue to provide reliable routes and meet customer expectations. Better communication system- Streamline wishes to improve on the communication systems between riders and buses, as well as the communication between buses and the office. Extended hours- Streamline plans to extend Monday-Friday hours 1 hour to better meet the consumer’s needs. Saturday hours will also be extended to match week hours. Streamline wishes to maintain their reliable service to their customers by keeping their current routes running and to continue to provide all of their clientele with satisfactory transportation. Streamline wishes to provide cheap and affordable transportation options for all people in the Gallatin Valley. Streamline wants the passengers and office personnel to be able to tell where the buses are at all times so there is no guessing how close the buses are and if they are running late. By extending hours, Streamline wishes to be able to provide the community with more rides. As of now the Streamline currently operates Monday through Friday 7AM to 6:30 PM and Saturdays 8:30 AM to 5:30 PM, Streamline wants to extend the Weekday operating hours to 7:30 and make the Saturday hours the same as the weekday hours. Company Background Since the beginning, the needs of the people in our community have driven the planning process of a Bozeman transportation system. What’s more, those evolving needs will still guide us as we expand our routes and services. Funding levels, ridership trends, locations of new neighborhoods, roads, facilities and public input will all contribute to shaping our future routes and services. Although planning for the new line began in 2001, the genesis of the project goes back to a 1986 study by the College of Engineering at Montana State University that analyzed the possibility of a transit system in Bozeman. In 2001, the results of much analysis developed the Greater Bozeman Area Transit Development Plan. Which, this laid the foundation for a public bus system and supplied the information needed to request Federal funding for a transit system. Also, as a result of that study, the City of Bozeman created a Transit Task Force, which studied transit systems across Montana and surrounding regions. The task force then created the Feasibility Report: Bozeman Area Transit. Additional studies were conducted until the cities of Bozeman and Belgrade, along with Gallatin County established the Public Transportation Stakeholders Advisory Board and invested $50,000 for a study to be completed by LSC Transportation Consultants, transportation planning and traffic engineering consultants based in Tahoe City, CA. The long-term portion of that study is still underway, but the board had the information it needed to begin a transit system in Bozeman utilizing existing resources and buses until the arrival of the signature classic yellow buses. This is just the beginning; Streamline is committed to serving you over the long term, by changing with your needs, evolving with our community. So, watch this site for updates as we continue to develop. Better yet, take a ride on us and find out for yourself how fast, convenient and reliable traveling can be. The ride is free and you’ll be a part of writing the next page in the history of Streamline. Service and Industry Service Description Streamline offers service throughout the Bozeman area to fulfill everyone’s transportation needs. Streamline routes provide service to and from Bozeman, Belgrade, Livingston and seasonal routes for Bridger Bowl. Streamline also connects up with the Skyline Bus System for travel to and from Big Sky. Streamline is committed to serving you over the long term, changing with your needs, evolving with our community. The Streamline runs four different bus lines; red, yellow, blue, and green. Redline The Redline Downtown Route runs several times daily up and down Main Street from the heart of downtown, to Bozeman High and connecting with MSU campus. The Redline was planned with timed transfer points along several of the routes for greater access to the city. Being the main route running from campus to the east end of Main Street and heading west, the Redline is designed for downtown access and connecting with intersecting routes. Yellowline The Yellowline University Route is follows a figure eight loop with the Montana State University campus as a centralized hub. The Yellowline makes a continuous run beginning at the Strand Union Building, to Bozeman Deaconess Hospital, returning to campus and heading west past the Mall to the Valley Commons area. With several transfer connections, the Yellowline offers expanded reach to the far east and west areas of Bozeman. Blueline The Blueline Retail Route provides runs from the Montana State University campus, crossing main and heading north up North 19th Avenue with several stops along the way at retail locations. Designed to provide access to retailers, grocers and businesses on the north side of town, the Blueline also stops a key transfer points for travel to the east and west areas of the city. The downtown transfer hub allows for access to the Redline and Yellowline. Greenline The Greenline Express Route was created to meet increasing demand for a public commuter route between Bozeman and Belgrade. Beginning in Belgrade every weekday, the first bus leaves from Belgrade at 6:50 a.m. and heads into Bozeman with several stops along the way before reaching the MSU campus. In total, the Greenline makes six trips between Bozeman, Four Corners and Belgrade, with the last stop in Belgrade at 6:39 p.m. Industry Description Nearly every company, business, government and consumer in the world is dependent on the transportation industry. The transportation industry in Bozeman consists of vehicles, buses, biking, or walking. The majority of the public chooses to drive a vehicle because of the convenience and time efficiency involved. The Gallatin Valley community is aware of the Streamline. Everyone has certainly seen the yellow buses around town but may not all be aware of the purpose of them or the fact that they are completely FREE! Market and Target Customers Competition and Competitive Advantage Strengths No cost Serves large clientele Many routes Weaknesses Communication between riders and bus Communication between buses and headquarters Depends on government funding  Opportunities Add small charge More routes Extended hours Renting out buses Advertising on buses Threats Cost of operating increases Other forms of transportation Gas prices rising   Strengths One of the streamlines biggest strengths is that it is free service to the riders. Riders of all income levels have a dependable ride to work, school, or just to run errands. There are many different routes for Streamline riders to choose from. There are four different routes that service Bozeman, Belgrade, Livingston, and Bridger. Weaknesses A few areas the Streamline could improve in are the communication between riders and the buses and the buses and the headquarters. It would be beneficial for both the riders and the headquarters know where the buses were at all times. If riders knew where the buses were they could plan the times they leave for the bus stops better so they could be more productive with their time. If headquarters knew where the buses were at all times they could report to riders if buses were running on time or if problems have come up. The last weakness of Streamline is that they have to depend a lot on the funds they get from the government. Opportunities There are a lot of opportunities for the Streamline if they want to grow. By adding a small charge to the riders, but keeping it cheap and affordable, Streamline would be able to raise some money so they would not have to depend so much on the money from the government. Streamline would also be able to get more money by possibly renting out the buses to groups or events while they are in their down time and selling blank space on the outside of the bus for advertisements. Another couple opportunities for the streamline would be for them to extend the operating hours and add more routes. By adding more routes Streamline could possibly run routes to and from Three Forks, Manhattan, and Big Sky. By extending operating hours Streamline could possibly get more riders that start their workdays earlier or work a later shift. Threats A huge threat to the Streamline is the increasing cost in operating the buses. Gas prices and maintenance on the buses is a huge threat to Streamline because if the prices go up too much Streamline may have to cut routes and or operating hours. Any other forms of transportation are also threats to Streamline. For some it is more convenient for them to provide their own transportation because it is there for them right away and there is no wait time. Marketing Strategy Overall Strategy The overall strategy to market the Streamline is to maintain great customer service while increasing the awareness and availability to the community. Streamline also would like to extend hours of operation and increase routes as well as buses. Along with increasing awareness, better communication between bus system and the riders will be improved. Sales Plan We developed a sales plan to make a small amount of profit so Streamline can add more buses and bus routes around Gallatin Valley. The definition of a nonprofit organization is that the organization does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals. Nonprofit organizations do not have private owners but they have controlling members or boards but cannot sell their shares to others or personally benefit in any taxable way. Competitive Plan This marketing strategy gives Streamline the competitive advantage because there isn’t any other bus system in Gallatin Valley. The community can choose to bike, walk, or drive to places compared to using the bus system. Rhetorically speaking… If another bus system starts doing business in Bozeman, Streamline would need to anticipate competitors’ actions and reactions to their moves. If a competitor decides to offer new products and services, possibly over the Internet that have the potential to completely undermine Streamline’s existing strategy. Streamline needs to anticipate such moves, and prepare to respond to them. When Streamline develops a competitive marketing strategy, it will teach them how to anticipate competitors’ moves during the planning stage so that they are prepared and not caught off guard. Streamline can do this by analyzing their strengths and weaknesses and develop ways to analyze competition. These tools will be beneficial in the long term. Research and Development/Growth Plan After looking at Streamline’s financials, we realized that Streamline pays $2,000 a year to Obvious Advertising to take care of all marketing needs. We have developed a less expensive method to advertise as well as making some money to use towards the purchase of buses, extending hours, and adding bus routes. Obvious Advertising assists in the layout of the Streamline brochures. The brochures provide maps of the routes, times the buses will be at each location, and the bus stops around Gallatin County. Obvious Advertising puts together print ads for local papers, video ads for the Streamline buses, and works with promoters to make sure the Streamline name is out in the public. If Streamline leases advertising space on each of the buses, business can pay a certain dollar amount to have their company brand or logo placed on the bus. Streamline would then use the money to purchase more buses, increase routes, and hire more employees to work for them. The spaces on the bus to advertise could include the side door and back door, back of seats, and possibly the ceiling on the inside of the buses. Streamline is currently working on improving communication to the riders about the routes and times of pick up. They are working on a system that would feed GPS locations into computers and cell phones. Riders would be able to go online or check on their phone to see where the buses are at and approximately how close they are to their location. The community would be able to plan according to the position of the buses and it would save on wasted time of waiting for the buses. By making these small improvements, lack of communication will be minimized. The implementation of this marketing strategy will help Streamline grow as a nonprofit organization as well as increase awareness to the public. To measure the success of this marketing approach, Streamline can compare the rider count to previous months or years and see if it has increased or not. If rider count increases then the strategic approach has been beneficial to Streamline. Organization Legal Structure Streamline is a Non-Profit Corporation which means there are no owners and all profits are retained by the corporation and are reinvested back into the organization. Key Personnel and Job Descriptions The Streamline Board oversees the operation of the Streamline and Galavan transportation systems. They are also the main the policy makers. The director oversees the day to day operations of Streamline and Galavan, with direction from the Streamline Board of Directors while the CEO has direct supervision over the Streamline director. The Transportation Advisory Committee (TAC) is a group of service providers who get together to discuss how to better coordinate our individual efforts. They are designated by the state to approve Streamlines coordination report and application for federal funds. The demand/response drivers are our Galavan drivers who pick up and deliver clients who are elderly, disabled or disadvantaged who cannot ride the Streamline bus for whatever reason. The main function of the dispatcher is to answer the phones and to dispatch rides for the following day’s schedule for Galavan. The contracted fixed route manager manages the fixed routes the Streamline provides. The Coordinator position is one that works to bring all transportation providers under one set of guidelines.  Related Services Galavan is a door to door bus system in the Bozeman area that provides rides to people that are older than 59 or have a disability. Riders that are eligible to ride the Galavan have to call the day before so they are put on the schedule. Galavan works well with the streamline and helps potential riders learn more about the streamline. The Galavan is dispatched out of Bozeman and works hard to accommodate its rider to the best of their ability. A few benefits of the Streamline and Galavan are: Galavan and Streamline provide persons with disabilities with the transportation they need to be gainfully employed. Galavan and Streamline allow seniors to remain active and involved in their community by providing transportation to and from volunteer commitments. Galavan and Streamline help senior citizens and persons with disabilities stay independent by providing rides to medical appointments and personal errands. Location The Streamline office is currently located at 1812 North Rouse in Bozeman Montana. The Streamline bus system serves Bozeman, Belgrade, and Livingston Monday through Friday, and Bozeman and Bridger Bowl on Saturdays. Financials Yearly Budgets Annual income is provided by grants from the state and contracts from Right Now Technologies, Big Sky, Bridger Bowl, Yellowstone National Park, and Montana State University. Yearly budgets pretty much provide enough revenue to cover expenses. Annually there is an excess of around $25,000 per year. These costs are enough to cover the bare essentials and keep the business operational, but there is nothing to spare in order to think about expansion and upgrades. Outsourcing Drivers and Buses The Streamline does not currently hire or schedule their drivers for their buses. All maintenance, staffing, hiring, and training is provided by Karst Stages. Other Cities are Charging Riders   Billings Great Falls Missoula  Cash Fare        Youth 18 and under  $1.25 $1.00 $0.35   General   $1.25 $11.00 $1.00   Seniors 60+  $0.50 $0.50 $0.50   Children 5 and under  $0.00 $0.00 $0.00   GiftCard and EZ Pass Holders $0.00 $0.00 $0.00   Student   $1.25 $0.75 $1.25         Passes and Tickets       10-11 Ride Ticket - General $10.00 $10.00 $10.00   10-11 Ride Ticket - 60+  $10.00 $10.00 $4.00   Monthly Pass - General  $22.00 $30.00 $25.00   Monthly Pass - 18 and under $22.00 $30.00 $8.00   Monthly Pass - 60+  $6.00 $21.00 $12.50   Monthly Pass - Student  $15.00 $25.00 $25.00   After performing a fee analysis of the competition we think it could be a good idea to begin charging riders. Government grants and funding are safe for right now, but who knows with the way the economy is heading and the government trying to cut all the spending it can. The Streamline is currently operating at about even, and if expansion is the goal of the organization then additional revenue has to come in. Bidding out advertising will bring in a beneficial boost to the organization, but it may not fully cover the contracting of additional busses, drivers, and maintenance. Beginning to charge riders a fee must become an element of serious consideration. How much should Streamline charge riders? Streamline should begin charging at around $1.00 per customer. After coming from a free riding system, riders will be very resistant to anything more than $1.00 per ride. Other companies in the industry maintain the $1.00 per trip average except for Billings who is a quarter per ride higher. # Riders #Days Revenue  55 313 $17,215.00  300 313 $93,900.00  1000 313 $313,000.00   As this figure shows, the increase in riders would be very beneficial. Possible Future Financial Ideas to Gather Customers and Create Revenue Introducing a fee system in the Gallatin Valley is not the only option that can help the Streamline gather potential revenue. There are other ways to try and gain additional customers and money. Bid out advertising space on the Streamline (sides, doors, tires, top, inside) Businesses Politicians Schools/University Churches Offer contracts and bus rentals during off hours to local groups and organizations (churches, youth groups, traveling sports clubs, large community organizations) Will not only add revenue, but this will provide more jobs for drivers and staff Possible donation system in buses and in strategic locations Offer Wi-Fi Internet to attract more riders (Missoula got local hospital to donate system). At the moment there is no charge for services. Yet, the advertising budget costs are around 40,000 a year. Why advertise for customers that do not pay? Offer new customer communication system to spark interest and accessibility along with convenience for riders (GPS, Internet for both phone and computer, Social Media). Build more weather protectors at bus stops with benches to: Advertise Pick up more customers Create flashier pick-ups for Streamline recognition and word of mouth Create Interactive Social Media pages (Blogs, Twitter) to gain customer word of mouth and feedback Integrate mail-merge software to create newsletters and e-mails for customer updates and Streamline advertising (FREE advertising) On Board television for advertising and movies Team up with MSU to courier fans to/from stadium for basketball and football games Offer pick-up from parking lots and drive to stadium Financial Appendix / / / / / Bibliography Great Falls Transit District (2011). Fares and Passes. Retrieved from http://www.gftransit.com/fares_&_passes.htm Mountain Line. (2011). Fares and Passes. Retrieved from http://www.mountainline.com/index.php/fares/ Streamlinebus.com. (2011). Retrieved February 28, 2011, from Upstream to Downtown: http://www.streamlinebus.com/ The City of Billings MET Transit. (2011). Bus Fares. Retrieved from http://ci.billing.mt.us/index.aspx?NID=285 Thorsell, Mark. (2011). Missoula Bus System Sets Record. Kaj18.com. Retrieved from http://www.kaj18.com/news/missoula-bus-system-sets-record/