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Students present financial projections to USU

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Maz Khosravi and Gala Lawrence presented financial projections for CSUN’s bicycle co-op before the USU’s board of directors. Steffanie Tate / Staff Reporter

Correction: It was stated that business and marketing graduate students presented a business plan for CSUN’s Bicycle Co-op to the USU Board of Directors. In fact, graduate and undergraduate business and marketing, and engineering students presented an independent academic project about a feasibility study for a bike shop.

Business and marketing masters students presented future projections for CSUN’s fledgling Bicycle Co-Op before the USU board of directors. They focused more on the club’s student service mission rather than its ability to be lucrative which, researchers said, would be difficult.

Maz Khosravi, engineering and management masters student, was one the two students that presented the financial package as part of a class project.

“A very optimistic outlook (for profitability) would be about three years,” he said. “A more reasonable projection would be about five years.”

The initial start-up costs for the co-op program would be about $140,000, according to the students’ research.  This figure includes labor, utilities, start-up fees and inventory, the latter comprising the majority of the budget.

Students estimated the recurring annual fee of the club, which would be located in the USU Plaza del Sol, to be approximately $52,000.  Khosravi said the co-op would need to earn upwards of $4,000 per month to turn a profit.

Bicycle Co-Op Organizer Carlos Hernandez, 24, said the group has submitted an application to the university to be included in the campus quality fee.  If approved, a portion of that student-wide fee would be directed to the club.

CSUN has housed a bicycle shop in the past but it was not well received, closing after the 1994 Northridge earthquake.

“Business was marginal, to say the least,” said Debra Hammond, USU executive director.

While it was unclear what the initial bicycle shop focused their efforts on, the proposed co-op would base a significant portion of its services on bike rentals.

By analyzing a similar bicycle program at UCLA, the student researchers proposed a business outline.  Students wishing to rent a bicycle for a semester would pay $60, weekly rentals cost $27 and daily rentals cost $8.

The group would buy 50 bicycles at $280 per unit, using 40 of those bikes for semester-long rentals and the remaining 10 for weekly and daily rentals.

Khosravi and his teammate, Gala Lawrence, compared CSUN to surrounding universities.  They concluded that the campus trailed behind CSU Long Beach, CSU Fullerton and San Diego State University in bike-friendliness.

The masters students surveyed 240 students and concluded the top reasons students choose two wheels over four were economic and environmental, followed closely by health consciousness.

While Hammond said bicycle business was limited, Lawrence noted that of those students surveyed, half lived within five miles of campus.

“Those students could potentially be converted,” she said.

Khosravi and Lawrence analyzed the managerial functions of other campus’ bicycle programs.  They rejected UC Berkley’s volunteer-run structure, noting that it was unsuccessful and there was no accountability in the organization.

The student researchers also cited UC Irvine’s program.  The 1,500-acre campus spend about $40,000 a year to rent 50 bicycles for three-hour intervals.

If approved, CSUN’s Bicycle Co-Op would employ a faculty director, student manager and two part-time student employees to run the shop during the proposed business hours of Monday through Friday, 10 a.m. to 4 p.m.

Lawrence said the club would make repairs available during those hours, including inspections, tune-ups and tire repairs, similar to UCI and UCLA programs.  They would also host workshops, such as Beginner Bike Repair, Theft Prevention and Traffic 101.

Khosravi and Lawrence recognized local competition.  They specifically mentioned Atomic Cycles in Van Nuys, two miles away from campus, whose main business is refurbishing bicycles.  Some of their business is generated from abandoned CSUN bikes handed over to the business by University Police.

More professional operations, such as Cycle World and Bicycle Johns, cater to markets with expert customers.  The students suggested creating partnerships with these shops, perhaps incorporating discounts with student IDs or referrals.

“We have a built in target market,” Khosravi said, referencing the thousands of freshman and international students, the audience that would be catered to by the Co-op.

Lawrence said she chose this project for her small business consulting class because it seemed realistic and the beginning of something great.

“It was a real campus project, something we may be able to see implemented,” she said.

 

4 Comments

  1. Amir & Mazyar May 12, 2011

    This poorly developed article will put
    the whole reputation of Daily Sundial under question. We
    expected this daily newspaper to address all the needs and wants of
    CSUN students fairly in a way which promotes the quality of education
    and the reputation of school as well. But, unfortunately by
    addressing one section (Financial Analyze) out of sixteen sections of
    the business plan, the writer tried to imply the wrong impression to
    the readers about the infeasibility of this Bike Shop. Whereas that
    all researches and surveys have proved that this business is a great
    opportunity for CSUN to go green and become one of great green
    campuses such as UCLA, UC Davis, etc. Really!! what is the
    intention??

    Although Daily Sundial has
    posted two corrections about this article so far, but still there are
    too many ridiculous mistakes. First of all , the title alone has two
    huge mistakes in it:

    1)It was a team effort of Marketing and
    Engineering student but the title completely has ignored the eight
    members of engineering team. (In alphabetic order: M.Aram, S.Askari,
    N.Chainuru, J.Colon, M.Khosravi, J.Luna, S.Maknoni, A.Salahi)

    2)The title conveys wrong subject of
    the presentation. Just 2 minutes of the whole presentation was about
    financial projections but the title seems to censor the contents
    intentionally.

    It also has not clarified the
    distinction between Bike Co-op proposal and this business plan which
    was done for Wells Fargo small business center upon their request.

    Over the past few months we were happy
    to receive our school’s news through Daily Sundial, but now we
    are deeply disappointed. It is so unfair to change contents
    carelessly and publish unrealistic information. Since, we have been
    involved in this project for the past 4 months and we are well
    familiar with all aspects of it, we can realize that this article is
    not relaying the accurate information to its readers. With that said,
    we are suspicious to the credibility and reliability of the articles
    that we have read so far.

    1. Aziz'CYRUS' Askari May 12, 2011

      I am very disappointed and grief to see how your reporter misrepresent the Matador Bike Shop news and Daily Sundial
      editor

      does not want to correct their editorial mistakes which are as follow:

      1- This Project conducted by two group of students from two different departments, graduate students from Manufacturing System Engineering School – Engineering Management and
      undergraduate
      students of Marketing from Business /Marketing school. Credit must be given to engineering team and is due.

      2- This project was conducted in connection with WELL FARGO Bank Investor groups.

      3- As a witness of entire presentation myself, I can say your reporter arrival was when our presentation half way through. How can she collect the entire story?

      4- Your entire article misrepresent our and CSUN “s goals which is promoting and
      sustain energy.

      5- Your effort is to undermine our hardwork for while semester meeting after meeting, field trips and countless hours of research. As Mr. Mazyar and Amir haves said ” We were happy to receive our school’s news through Daily Sundial, but now we

      are deeply disappointed. It is so unfair to change contents

      carelessly and publish unrealistic information. Since, we have been

      involved in this project for the past 4 months and we are well

      familiar with all aspects of it, we can realize that this article is

      not relaying the accurate information to its readers. With that said,

      we are suspicious to the credibility and reliability of the articles

      that we have read so far”. What are you gaining to report such a fails report?

      Aziz

  2. Maz Khosravi May 12, 2011

    It is not really pleasant when your campus newspaper
    misrepresent your work of 12 people over 4 months. It is painful when you
    realize that both you and the newspaper staff are trying to serve the students.
    But why they fail to accept the fact that inaccurate information and should not
    be fed to the campus community?… Wish we all were able to think out of the box.

    We selected the CSUN bike shop project because we felt that it would be
    enriching the campus services for the CSUN student body. This is the mission of
    the Matador Bike Shop:

    “To encourage a bike culture at CSUN through education,
    while providing bicycle repair and rental services at competitive prices on
    campus”

    Our research shows that there is a need for bike shop
    products and services on campus: rentals, repairs, sale of accessory and
    necessity items and educational workshops/seminars. We believe that the business
    may not turn profitable immediately but, the non-monetary aspects of the bike
    shop on campus are more important. This trend (biking) has been encouraged on
    campuses in Europe and the United States for many years; our research shows
    that CSUN is not even among the bike friendly campuses in southern California.

    The goal of Campus Quality Fee is to enhance the students’ CSUN experience. We
    argue that students say that they need this bike shop, why not use some of Campus
    Quality Fee on bike shop in short term before it becomes sustatinable?

    Short list of errors in the article:


    Our consulting team is not a part of the CSUN Bike
    Co-op•
    The author failed to acknowledge that the
    program was part of the Wells Fargo Center for Small Business and
    Entrepreneurship, the sponsor of the consulting project•
    There is no marketing graduate program at CSUN•
    No faculty member is supposed to run the business, the team is not all masters students and the team is not a club and the proposed plan is not for a club either

  3. Ankur Patel May 10, 2011

    This article incorrectly (and insultingly) equates the Matador Bike Shop (which was what business students presented) to a Bicycle Cooperative (which is a different entity altogether, run by different people, with different goals and objectives).

    Equating the two shows an incredible lack of understanding on the issue, which reflects poorly on the Sundial.

    The Matador Bike Shop is a the title of a business plan that business students put together for one of their class projects. The Matador Bike Shop is an idea that is not close to mater

    The Bicycle Collective (aka Bike Club) is a student club on campus that has been active for the past year helping people with bicycle issues, education, and have been the strongest bicycle advocates on this campus. They have been pushing for space in order to start a Bicycle Cooperative on campus — no profit motive intended, just a service to the community. They received that space from the USU just a little while ago, which the Sundial covered. The cooperative will cover its own expenses through grants, funding from community organizations, and perhaps the campus quality fee.

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