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The Bike Corner Business Plan

The Bike Corner Business Plan. Brock Auerbach-Lynn Bryan Tillman December 03, 2012. Revenue Model The Bike Corner will earn revenue from 6 sources: Naming Rights (approx. 45 %) Individual Memberships (approx. 40%) Impact Consulting (approx. 6 %) Corporate Sponsors (approx. 5%)

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The Bike Corner Business Plan

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  1. The Bike Corner Business Plan Brock Auerbach-Lynn Bryan Tillman December 03, 2012

  2. Revenue Model • The Bike Corner will earn revenue from 6 sources: • Naming Rights (approx. 45%) • Individual Memberships (approx. 40%) • Impact Consulting (approx. 6%) • Corporate Sponsors (approx. 5%) • Classes (approx. 3%) • Non-Member Shower Use (approx. 1%)

  3. Financial Summary • The building will provide subsidized rent as The Bike Corner will occupy existing unutilized space and improve the retention and attraction of tenants • The President/Owner of The Bike Corner will earn a first year salary of $20,000, increasing year by year within the constraints of estimated profit. Fifth year salary is estimated at $72,000. • The initial $75,000 build-out costs will be financed as follows: $10,000

  4. Summary Financials Continued … • 55% capacity is required to break even (Expectation are for an average capacity of 67% the first year) • Occupant will vary by season. Year 1, predictions are for • 40% average occupancy in Winter • 70% average occupancy in Spring • 90% average occupancy in Summer • 70% average occupancy in Autumn • First Year Net Income before taxes is $6,180 • Expect year 5 revenue to top $194,000 and net income of $26,000 • Naming rights income is included in operational revenue • Other income includes impact consulting, classes, non-member shower use, company sponsors

  5. 5 Year Projections

  6. Financing Options • Congestion Mitigation & Air Quality (CMAQ) Program Grants • CMAQ purpose is to fund transportation and urban congestion mitigation projects/programs that will contribute to meeting/maintaining NAAQS for ozone, CO and PM”* ** • In October 2011, the Chicago Metropolitan Agency for Planning announced a five-year, $411 million CMAQ program, funding 115 projects designed to reduce congestion and improve air quality in metropolitan Chicago (Avg. $3.5 million per project)**** • Project selection should clearly identify emissions benefits, cost effectiveness, congestion relief, greenhouse gas reductions, system preservation, access to opportunity, sustainable development, reduced SOV reliance and multi-modal benefits*** • Building or Building Management Company Funded • International building management firm Jones Lang LaSalle has already expressed interest in the Bike Corner for several of their downtown Chicago buildings • Company or landlord could cover cost of build-out/renovation • Value to building or building management company: • LEED Points • Greener image • Tenant attraction/retention (differentiator)

  7. Financing Options Continued … • Public Private Partnership with the City • Chicago has entered into PPP’s around many of its physical assets such as tollways and garages* • CMAP, Dept of Transportation & Dept of Environment personnel would be involved • Leverage Active Transportation Alliance assistance • The Public-Private Partnerships for Transportation Act - promotes the sound development and operation of transportation facilities in Illinois, by authorizing PPPs for the construction of new transportation infrastructure projects.** • Social Impact Investment • Investment funds which target social impacts above or exclusively to financial returns • Investment opportunities occur at both early development stage and growth scaling stage • Such funds include: • William James Foundation • Social Impact Exchange • Echoing Green • Skoll Foundation • The Bike Corner qualifies for Program Related Investments from Foundations

  8. Financing Options Continued … • Kickstarter Model • Allows anyone to pledge support for an innovative product or service at a particular price and once a certain threshold of people are interested, each pays the designated amount and the venture is funded with all contributors receiving their promised product/service • Bike Corner can presell yearly memberships at $250 a piece to interested bikers within any feasible building, once there is a threshold of 100 people, there will be sufficient seed capital and interest to proceed • 100 memberships at $250 equals $25,000 (150 memberships equals $37,500) • Utilize online website to connect interested bikers and show progress – explore using Kickstarter’s website (kickstarter.com)

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