Impressive business plan for taxi startups

According to the latest data, 26.4% of startups fail within their first year. Unsurprisingly, the lack of funds to function and scale is the main failure reason (38% of all failed enterprises).

A well-composed business plan is proven to help startups to:

• Successfully pitch potential investors;
• Convince future business partners to collaborate;
• Draw out a clear roadmap for short- and long-term business development;
• Define the market value proposition to build a strong brand;
• Be clear about the company’s strengths and weaknesses;
• Estimate necessary marketing and promotional activities.

Most entrepreneurs start a business with their own funding (globally, around US$20.000, depending on the specific market). However, a sound business plan can help you persuade investors such as business angels, startup accelerators, banks, or other entrepreneurs to invest in your business.

While a business plan should accommodate changes along the way, it must also be a solid ground for you to launch a venture.

Here’s a step-by-step for drawing up a business plan for a taxi startup to check all the boxes. We’ll also discuss the AI tools that can help you compose and improve a business plan.

1. Formulate a clear mission statement

A mission statement describes the company’s functions, markets, and competitive advantage.

First and foremost, a mission statement should be meaningful. It needs to clearly convey what your business is bringing to the table.

To formulate a sound mission statement, start with identifying the target audience. Then, highlight your company’s strengths. Make sure to involve stakeholders: explain clearly and concisely what the main stakeholders (customers, business partners, investors, or even governmental organizations) gain from your venture.

A comprehensive analysis of your startup’s internal and external environment should lead you to answer the following mission statement questions:

• What people will form your client base?
• What will your services contribute to the market? 
• How are your services unique, and why will your clients choose them above the competitors?

As the branding tycoon Richard Branson notes, it’s best to avoid overly abstract statements in your business mission formulation. Most people aren’t great at thinking abstractly. What sounds more appealing: ‘improving mobility in the region’ or ‘safe transportation for people with disabilities’? Right.

2. Tell what problem your business is solving

Based on your market analysis, you’ve defined a problem some (or even all!) customers are facing.

While describing the problem, stick to the facts and substantiate your takes with numbers where possible. During the market research phase, you can gain the statistics you need from governmental and open-source data, the numbers published in general market research, or your own surveys and interviews.

This part of your business plan should be persuasive for potential investors and business partners. What difficulties do your potential customers face and how do they cope now? What change in the market would they truly desire? Ideally, use quotes from the results of customer development interviews or other talks you had with potential customers.

Here are just several examples of such problems:

• Transportation in the region isn’t reliable enough for large groups of customers.
• On-demand mobility hasn’t yet been introduced to the market.
• The existing mobility providers ignore niche groups of customers, such as people with disabilities, people willing to order deliveries, or people traveling specific routes.

In the problem statement, you can appeal to emotion and human experience to highlight the urgency of your business solution. 

A well-defined problem statement is the first thing the investors will check out in your business plan. Make sure to use it in the executive summary as well.

3. Formulate a sound solution to the market problem

How is your taxi startup going to address this problem, exactly? It’s time to explain the benefits of your solution!

The solution description has a lot in common with the famous elevator pitch: concise, catchy, and making perfect sense to the investors. 

The solution is where your brand’s value and customer’s needs meet. It’s your unique value proposition to the market — the magic sauce your startup adds to the situation.

Ideally, mention the actual gains real customers would get from your market entry. Will they save time? Money? Will they gain comfort, safety, and service satisfaction? How exactly will your company contribute to that gain? Emphasize why exactly your services are better than those of the competitors. Simply providing taxi services at a cheaper price isn’t enough to get a market share in the long run.

4. Describe your target market on macro- and micro-levels

Explain the background for your startup by summarizing the market and industry research. Highlight the trends that make this the right time to launch your business.

The focal point here is your customers: describe them as specifically as you can. Don’t use any generic categories, be specific.

Segment your target audience. Which people from the audience will be the happiest with your services at the planned price? How large is this segment? At what pace do you expect it to grow and how? This is also a good place to mention possible other segments your business might want to enter as it scales.

Make sure to show proof of your plans—in numbers, quotes, trend forecasts, and similar cases. Corroborate your answers to the following questions:

• What percentage of your target market has used similar services before?
• How often will your target market book your services?
• What percentage of your clients will become repeat customers?
• How might trends such as demographic shifts, changes in the local economy, growth or decline of tourism, or changes in policies and regulations influence your target market?

Do not forget to outline specific strategies your business will use to contribute to the customer experience. While the quality of the service is paramount, in this part of your business plan, mention aspects like the aimed accessibility, personalization, and working with customer feedback. This will create space for your business to grow and improve and persuade the investors you’re planning for the long run.

5. Address the competition

In this part, you prove the industry is attractive enough to launch your business and further convey how your services will differ from the competition and thus appeal to customers.

A competitor can be any business pursuing the same group of customers. Based on a SWOT analysis of each competitor, summarize their key strengths and weaknesses in a structured overview such as a T-shaped matrix.

Here’s an example of a SWOT analysis.

The competition assessment should be truthful, not wishful. But that’s not enough. Focus on market differentiation. State your business’ competitive advantages clearly. They may come from innovation, business partnerships, human resources, marketing strategy, or unique relationships with the customer.

6. Outline the revenue model and revenue streams

How is your taxi business going to generate income? How do you expect it to take before the company becomes profitable? This chapter differs from the business model description in that it focuses on planning sustainable revenue streams and predicting income.

Within the Business Model Canvas framework or any other similar model, you’ll find questions to define the revenue model and further specify the revenue streams.

• What is your startup’s revenue model? Most on-demand mobility (taxi or delivery) businesses work on a pay-per-use revenue model (business to customer). However, there’s space for a multifaceted revenue model: consider providing the services to companies or governmental organizations per use or on a subscription basis. If your service will connect drivers to passengers, consider commission-based revenue, too.
• What is your pricing strategy? How will high/low demand, drivers’ commissions, change in competition, and marketing efforts such as referral programs influence the pricing? Are delayed or subscription-like payments a good option (for instance, for corporate clients)?
• What revenue streams are there for your business? Show your calculations for price per ride, driver’s commissions, subscriptions, or memberships. Account for the customers’ willingness to pay here, too. What is the maximum price for your service? What would be the reasons for the clients to pay more?
• What are the payment channels? Will your service process cash, cards, mobile money, bank transfers, digital wallets, cryptocurrencies? What channels will your business use for drivers’ payouts?

That part of your business plan not only conveys the viability of your startup to potential investors. It also helps you realistically define the key performance indicators, such as Revenue growth rate, Customer lifetime value, and Customer acquisition cost.

7. Plan out the marketing strategy

Branding

To stand out in a market, the company needs to be recognizable. Use your mission statement to outline the look and feel of your brand. No need to include elaborate descriptions of brand identity in the business plan. However, do mention what vibes your business will convey and how it will appeal to the target audience.

Building up brand awareness and recognition through marketing

The marketing plan should include the following elements:

• Highlighted ways of differentiating your business from the competition through branding and marketing.
• A timeline of planned marketing and promotional activities from the pre-launch phase into the realistic future, including required investments and aimed results.
• A list of promotional tools (online and offline) with concise explanations of how they fit the customer’s profile.
• Substantiation of the marketing mix choices. For instance, the advertising channels and materials need to match the preferences of the audience, the pricing strategy, and the needs of the local market.

8. Account for business operating expenditures

Operating expenses are usually calculated as a sum of the following figures:

• Legal and licensing expenses, insurance costs
• The total costs of the fleet
• Team and employee payroll
• Fleet and other equipment maintenance
• Eventually, rent and utilities
• Research and development
• Marketing budget.

Depending on how you’re financing your enterprise, you may emphasize different aspects of your expenditure planning.

If you seek debt financing, it’s best to emphasize the proof of turnover compared to business expenses such as fleet upkeep, drivers’ payouts, and marketing activities. When working with equity funding (venture, corporate or angel investors, crowdfunding, or governmental funding), obtaining proof of business expenses and revenue stream planning is a smart move.

9. Introduce the team and define the key roles

The team overview should demonstrate that your team is the most fitting for the job. Several sentences per team member should do the trick. The absolute minimum of the roles that should be included in the initial business plan of a taxi company are:

• a founder/CEO for managing day-to-day operations,
• CFO to manage the financial and (ideally) legal processes,
• a customer service representative for processing clients’ feedback.

Include a short bio for each team member with their role in the company and the responsibilities in that position, relevant professional background, and some information on what makes them uniquely qualified for that role. This part needs to be very factual.

10. Present meaningful milestones

Use the milestones/traction chapter to persuade the potential investors your company is making all the right moves. In this section, you can list the achievements demonstrating the target audience is enthusiastic about your company.

• Where is your startup in terms of business development? What steps towards launch have you made?
• What has been done for service provision? Do you have reliable software to run your taxi booking business? Is there a fleet to carry out the first orders? Are there any established business partnerships like with hotels, business hubs, or cafes?
• Are there customers and revenue? Have you tested your idea on a smaller scale? Use the data gathered to forecast how fast the company can grow.
• Are there customers and revenue? Have you tested your idea on a smaller scale? Use the data gathered to forecast how fast the company can grow.
• Are the clients happy with your taxi service? Reviews and feedback would do. 
• Has the company been mentioned in local press and media outlets or by influencers and opinion makers? List here the mentions and positive reviews in the media.

An executive summary is written when all other business plan sections are complete. Here, you can highlight how your business can complement what the investors typically finance. If you think the investor’s expertise fits in well with your business initiative, emphasize it in your executive summary.

11. Use technology to enhance your business plan

Generative artificial intelligence (AI) can be helpful at different stages of composing a business plan. Tools like ChatGPT won’t replace thorough market research—but they can:

• Streamline your writing and help organize your thoughts.
• Help you run the numbers and test hypotheses based on known business cases.
• Cite industry examples, both positive and negative, and their elaborate analysis.

This way, you can draw your inspiration all in one place.

The bigger players in the market, such as ChatGPT4 (OpenAI), Notion, and Grammarly, provide technology to assist you with writing a business plan. Use any of them to deliver sharper, more to-the-point writing or create an initial framework for your business plan contents.

Here are some AI tools that can be helpful at different stages of your business planning.

At Pandadoc.com you can find various high-quality templates for business plans. All ready to use and free.

Brixx.com uses AI for financial forecast generation. Basically an extremely clever calculator, Brixx’s system projects the cash flow depending on the business model, revenue streams, and more. Brixx’s AI can help you present investors with a soundly planned timeline for your startup development. This tool can run through various scenarios of business development and make predictions based on historical data.

Bit.ai provides handy and easy-to-use responsive templates for business development. You can use their business plan template to make your writing fit the chosen investors’ expectations, use their structuring and content-oriented prompts, and track engagement with your document when sent to investors or business partners.

Simplified is a business plan generation tool with the free plan (allows you to work with a document of up to 2,000 words). After you provide the AI with your taxi business details and objectives, the tool will generate a market analysis, financial projections, and even value proposition options. Edit, make the text fit specific investors, and you're good to go!