NOTL Cycle Tours: Business Proposal

Outdoor Adventure Business

Algonquin College
Jeff Jackson
March 21, 2015
Brandon MacIntosh

NOTL Cycle Tours: Business Proposal

Logo Explanation- Our logo is a simple elegant design with grapes to

represent the world famous wineries and a silhouette of a bike to represent
our business. I chose this logo because its minimal and gives off a
symmetrical feeling.

NOTL Cycle Tours: Business Proposal

TABLE OF CONTENTS

Title Page.......1

Logo..2

Table of Contents.......3

Executive Summary...4

Business Overview and Objective.5

Industry Background6

Market Approach .......8

Location and Facility..14

Financial needs and projections16

Legal.......22

Appendix.24

NOTL Cycle Tours: Business Proposal

Executive Summary
My business proposal is a rental/cycle touring company based out of
Niagara-on-the-Lake Ontario. The current cycle touring and bike rental
companies arent capitalising on N.O.T.L. surrounding towns, trails, and land
marks and are more or less exclusively wine tours. In the Niagara region
there are already many established trails including the Niagara parks Trail
which goes runs from Niagara on the lake thru Niagara Falls to Fort Erie and
the Lake Ontario & Lake Erie Waterfront trail.
The Cycle touring and rental industry is a perfect competition. clients
who are willing to travel these long distances by bike will still travel to them
for the experience regardless of start point and within each community,
there are always differences and iniquities that they have to offer. Since
there are no regulations in terms of stopping someone from starting this
business and the relative simplicity of start up makes this a perfect
competition industry.
The initial cost for this business is with most of the expenses being
guide wages, purchasing initial equipment, and leasing the property

NOTL Cycle Tours: Business Proposal

Business Overview and Objectives

Mission Statement
Our mission statement is to deliver a high quality product that will
enable people to see the Niagara regions beauty in a healthy and
environmentally friendly manner.

Objective
The Short Term objective for NOTL Cycle Tours is to break even and
increase market share to 5% after two years and begin to offer more trips
for longer days that go farther into the Niagara region.
The Long term goal is to expand operations after 10 years by offering more
activities like sea kayaking and hiking as well as team leadership and skill
development courses.

History, Overview, Business model, Ownership, Product Summary

NOTL Cycle Tours will generate profit from bike rentals, self guided
cycle touring trips, and guided trips to begin with. Eventually we may sell
merchandise from our location, but that will come potentially later on in the
maturity stage of my business.
The products we offer have some fundamental differences from my
competitors. Rentals will have a variety of different styled bikes depending

NOTL Cycle Tours: Business Proposal

on whether youre going mountain biking, multi day trips, or for a few hours.
The trips we offer will encompass the local must sees in Niagara both

Industry Background
The industry been around since the bicycles inception in 1816 by Baron
Karl von Drais de Sauerbrun. 200 years later, and some advancements in
technology, bicycling has strong cultural roots across the world Cycle touring
is know throughout the world, the participation rates vary largely from
countries though. In the EU I believe from all the research and proposed
infrastructure for cycle tourism development as well as the already larger
incorporation of bicycles into daily life in the majority of the nations
belonging to the EU with this being said, the way their lifestyles are trending
more to the energy neutral standpoint which in turn will focus more
attention onto cycle path and sustainable low-impact transportation
development and an even brighter attitude towards cycling and the
industries behind it. Also America is developing their cycling infrastructure,
with more demand towards dedicated trails and lanes for cyclist to become
more common throughout the country. The more northern countries
specifically of the European Union have already much higher statistics in
terms of bike use and happiness with the government supported programs
with bikes, particularly the Netherlands, Denmark, Sweden, and Norway.

NOTL Cycle Tours: Business Proposal

Opportunity and Proof it exists
Niagara-on-the-Lake named one of the Top 10 destinations in Canada by Trip
Advisor's Travelers Choice in 2015 in contrast to Niagara Falls or buffalo, its slow
paced and offers unique scenery and restaurants that attract people for the day.

The local cycle touring companies are currently offering similar wine tours,
and rent bikes. For roughly the same price and quality. What none of these
companys offer are hard skilled mountain biking or cycle touring trips. Cycle
tourism is on the growth regionally nationally and internationally. Ontario is
investing $25 million to expand bike trails and other bike infrastructure like bike
paths, lanes and, signs over the course of the next 3 years. Many cities are already
restricting cars and intend to expand their bike paths and propose the idea of going
car free. This will prevent congestion in the streets and lower pollution. There are
more operators in higher populated areas and where cycling infrastructure is more
of a concern considering the higher amount of traffic in a small area. Cycle touring

will continue on this trend as the baby boomers get older but still want to
travel and remain active. Older clients are showing up more because theyre
comfortable with having guided trips. With people wanting to live healthier
lives, as well as being more environmentally conscious, people are using
bikes more for transportation than they use to.

NOTL Cycle Tours: Business Proposal

Strategy Canvas of NOTL Cycleing Business

6

0
Price
Zoom Leisure

Location

Bike Rental

Niagara Wine Tours

Quality

Variety

Grape Escape Wine Tours

Niagara Getaway

NOTL Cycle Tours: Business Proposal

Market Approach
Target market

In a paper written for a research and data class at Ryerson University,

several students wrote a thorough report on the impacts of cycle tourism, in
that paper included demographics of the Ontarian cycle tourists. It stated
that out of the total population 14% of men and 7% of woman are said to
have participated in cycle touring where as the belief before was that the
gender representative in cycle touring was close to equal. Of this majority of
men in this industry, the average age of participants were 30 years old, with
65+ years coming at a close second. Leaving room to speculate for the
growing baby boomer population getting into retirement and investing in
healthy recreational activities, cycle touring being one picking up popularity.
These men average an $80,000 salary annually are typically well traveled.
The Niagara Region (Green Belt) and Toronto were major destinations for
tours, as well as The Ottawa Valley (Quebec Side Included).

NOTL Cycle Tours: Business Proposal

Product offering

My business NOTL Cycle Tours located in Niagara-on-the-Lake offers

rentals mountain biking, and cycle touring trips between $80-$100per day.
Consumers can book tours on our website or by. People can make book
trips, or rentals either in person at our store, by calling us, or by going
online and using our website.

Product

Days

Bike rentals
Day tour on NOTL
Craft Beer tour
Winery Tour
Cuisine tour
Historic Tour

Half day (6 hours)

Full day
Half day
Half day
Half day
Half day

Price
29
99
99
99
99
99

Day Tour of NOTL- this consist of taking clients to significant cultural

centers around Niagara-on-the-Lake including Fort George, Brocks
Monument, and Inniskillin winery
Craft beer Tour- visits local microbrewerys trying great beers that are
unique to Niagara.
Winery Tours- on our winery tours you will learn about the history local
wineries and try some world famous ice wines.
Cuisine Tours- make sure you save room for some top food pared great
with local wines.
Historic Tour- our historic Tour takes you back in time where you will visit
local forts, monuments and museums.

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NOTL Cycle Tours: Business Proposal

Promotion Strategy
Our promotional strategy will begin with achieving a strong online
presence. Social media sites are cheap to manage and in this digital age,
most people research products before they make the purchase. Taking it a
step forward we will use both Facebook Ads and Google and AdWords to to
promote NOTL Cycle Tours online. Guest will also have the ability to sign up
for our newsletter.
locally we will be advertising in newspapers, magazines, and flyers

Comparative Advantage/ Competition

The comparative advantages we offer our clients that our
competition doesnt are high quality rentals, and cycle touring trip that focus
on the local and natural history

National Direct Competition

Cycle Canada
Affordable supported tours from 2 days to 10 weeks throughout Canada.
(Cycle Canada 2015) This company specializes in Cross Canada tours and
interprovincial travel. They offer vans that tow gear and food on the cross
Canada tours and have campsites and dormitories as their accommodations
along the trip.

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NOTL Cycle Tours: Business Proposal

Freewheeling Adventures
(Freewheeling Adventures 2015) This company has tours ranging from
week tours in single provinces, or tours taking you across multiple provinces,
the whole country and even trips internationally. Always kitchenette and
backed up with a truck crew that carries, gear, food, and tired bikers. They
offer all the gear you would need for solo trips if the backup isnt necessary.

East wind Cycle

This company specializes in the Eastern side of Canada, touring through
Quebec, New Brunswick, Nova Scotia, Newfoundland, P.E.I. They also have
personalized options where you plan a trip through them and they provide
all the gear necessary.

Local Direct Competition

Zoom Leisure
Zoom offer wine tours, self guide tours and bike rentals, theyre the most
popular bike rental shop in the immediate area and will be my to competitor.

Niagara getaways
Niagara getaways offers one wine cycle tour trip and no rentals. They also
have wine touring trips that dont involve bikes so they arent exclusively a

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NOTL Cycle Tours: Business Proposal

cycle touring company. I foresee NOTL Cycle Tours to be able to grab the
more serious cyclist who want variety

Niagara wine tours International

This company has more than a 100 bikes, and offer a keepsake map,
handlebar pouches, and locks. They also have four different wine related
trips that are more leisurely and less distance. doesnt target the harder
skilled cycle enthusiast that I do.

Indirect Local Completion

Fort George
Fort George is a rebuilt fort that stood there 200 years ago before it was
burned down. Parks Canada runs the sight and offers high quality musket
demos, drills and tours around the fort.

Whirlpool Jet Boats

Whirlpool jet boats runs jet boat trips up the Niagara river. These trips will
get you

Location and Facility

Niagara-on-the-Lake is a Canadian town located in Southern Ontario.
The Location requirements for my rental shop is on Queen street or close by.

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NOTL Cycle Tours: Business Proposal

Queen street is the hub for tourist in NOTL and it will allow me to attract
more clients and compete more effectively with my competition. The building
Im interested in is one of the largest on the street, allowing me to fit all
bikes as well as have offices and space to fix bikes.

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NOTL Cycle Tours: Business Proposal

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NOTL Cycle Tours: Business Proposal

Financial needs and projections

START UP EXPENSES

COST

RENT

30,600

BIKE PURCHASES

25,000

OFFICE SUPPLIES

1,800

RENOVATIONS

10,000

VEICHLE PAYMENT

6,000

INSURANCE

5,000

PROMOTION

2,200

UTILITY TRAILER

2,000

Our start up cost are $88,000. Getting a $88,000 loan 10-year

mortgage at 4.5% interest will make the monthly total $912.02. with
interest included the loan will cost $109,442.16 with interest costing
21,442.16.

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NOTL Cycle Tours: Business Proposal

January December 2017 Projections

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NOTL Cycle Tours: Business Proposal

January December 2018 Projections

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NOTL Cycle Tours: Business Proposal

January December 2019 Projections

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NOTL Cycle Tours: Business Proposal

Income Statement
12 Months

24 Months

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NOTL Cycle Tours: Business Proposal

Break Even Analysis

PV

= Rev - Variable Cost

Rev
= 214,628 65,849.08
214,628
= 148,779
214,628

= 0.69
BEP

= Fixed Cost
PV

= 120,886.24
0.69

= $ 175,197.44

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NOTL Cycle Tours: Business Proposal

Legality
The cycle tourism industry has no laws regulating cycle guides or
business that are specific to only bicycling. What most affects bicyclers are
Traffic laws and they tend to be the biggest legal barrier to get over. This
industry is perfect competition anyone can feasibly guide without certificates
and get away with it for a bit. Certifications are only peer practice and
guides mostly obey the standards commonly practiced. The organization
Ontario by bike is a collection of bicycle friendly business that all abide by
the same standards, certifications and criterias in order to gain the benefits
that comes with this network. This include cross promotion and traffic from
both guided and recreational bikers. Some countries in western Europe such
as Switzerland, Germany and Austria, France and Italy follow a set of trail
standards that are ranked out of five stars rating the quality and experience
of the trail.

Legal Ownership and structure

NOTL Cycle Tours legal ownership structure will be an LLC. The reason
behind this is to shield myself from any potential liability, and because both
the profits and losses can be passed through to me without the business
being taxed itself.

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NOTL Cycle Tours: Business Proposal

Laws and regulations
Cyclist who either rent bikes or embark on a journey with NOTL Cycle
Tours are required to wear helmets at all times and sign our waivers.
Employees driving company vehicles are required to have the proper license

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NOTL Cycle Tours: Business Proposal

Appendixs
https://notl.civicweb.net/document/3183/CSR%20Report_Final_July%204_2012.pd
f?handle=202CE08518A647F1A64E803B856C8127
http://www.notl.org/content/tourism
http://www.theloop.ca/10-bike-trips-that-will-make-you-fall-in-love-with-canada/
http://www.mtc.gov.on.ca/en/research/studies/Niagara_Report_Tourism_Opportuni
ties_2008.pdf
http://www.searchlawrence.com/mortgage_calculator/amortization_schedule.php?a
mount=88000&rate=4.5&months=120
http://www.visitniagaracanada.com/places/niagara-on-the-lake

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