Start-up Funding | |
Start-up Expenses to Fund | $2,625 |
Start-up Assets to Fund | $80,000 |
Total Funding Required | $82,625 |
Assets | |
Non-cash Assets from Start-up | $79,000 |
Cash Requirements from Start-up | $1,000 |
Additional Cash Raised | $0 |
Cash Balance on Starting Date | $1,000 |
Total Assets | $80,000 |
Liabilities and Capital | |
Liabilities | |
Current Borrowing | $0 |
Long-term Liabilities | $0 |
Accounts Payable (Outstanding Bills) | $2,000 |
Other Current Liabilities (interest-free) | $0 |
Total Liabilities | $2,000 |
Capital | |
Planned Investment | |
Personal Investment | $80,625 |
Other | $0 |
Additional Investment Requirement | $0 |
Total Planned Investment | $80,625 |
Loss at Start-up (Start-up Expenses) | ($2,625) |
Total Capital | $78,000 |
Total Capital and Liabilities | $80,000 |
Total Funding | $82,625 |
Southeast Racing Parts will be located at 123 Main Street, Anytown, North Carolina. This location will afford us good visibility along with convenient access for traveling race teams wishing to stop at our location.
Another advantage of this location is the recent announcement of a go-kart/entertainment complex, which will be located directly across the street. This complex will attract many potential customers to our immediate vicinity.
By locating in close proximity to Charlotte, Southeast Racing Parts will enjoy a large built-in customer base. The skyrocketing popularity of NASCAR Winston Cup racing in the last 15 years has only strengthened its role as the hub for most race teams and all the related businesses they’ve spawned.
The sport’s explosion has been so boundless that University of North Carolina-Charlotte researchers conducted a study of the industry to try to determine its impact. The study, completed in December 1996, found that in its surrounding counties, NASCAR racing is responsible for about 2,000 jobs producing more than $200 million in expenditures annually — figures that many in the industry consider conservative in 1998. Many of the people employed within the industry along with their children, other relatives, and friends, take up racing as a hobby.
The Facility We will initially be leasing 3,000 sq. ft. of a new 10,000 sq. ft. building. As needs dictate, our office and/or warehouse facilities could be expanded into an additional 2,500 sq. ft.
We will be sharing this facility with another business that is also involved in racing, and their business attracts many of the local racers. In light of this, we will meet many potential customers simply because of our association with them.
This location will consist of a showroom, office space, and warehousing. All deliveries and shipments will be serviced at this location. We will also have ample parking available.
Southeast Racing Parts will sell racing products to the entry-level/novice racer. These products will include engine and chassis parts along with safety and set-up equipment. Services that we will provide include coil spring rating, along with a scaling service for race cars.
Southeast Racing Parts will assist its customers in selecting the best parts for their application at a price that meets or exceeds their expectations. In the event of a problem, we will be there to assist and counsel the customer to a speedy solution.
We will carry or have quick access to most major lines of racing equipment. We will also carry generic “plain label” merchandise that we will market under our own performance name. Private labeling will allow us, in most cases, to greatly increase our profit margins since the procurement costs are much lower for these types of items.
Even though our target market is the entry-level racer, our product mix will be sufficient to fill most of the needs of even the most hard-core racer. With leisure time at a premium, our reputation for having needed items in-stock will save our customers both time and money. We will be open Monday through Saturday with hours yet to be determined.
Our experience has shown that most entry-level racers’ preference is for low prices. We believe we can offer products that indeed are lower in price without sacrificing the performance and safety concerns that our customers will demand. Southeast Racing Parts will provide precisely the level of service that today’s entry-level racer requires.
Within our niche, we only have one significant competitor. They, however, do not carry engine parts, which should give us an edge in that respect.
In general, however, our competition is not in our targeted portion of the market. This competition consists mainly of these three groups:
More discussion is included later in this plan on competitive businesses.
To drive sales initially, Southeast Racing Parts will utilize an existing supply catalog. This four-color catalog will have a different cover with the Southeast Racing Parts logo, phone number, etc., printed on it.
After much research, we found that the product mix in this catalog most closely resembles the needs of the consumer niche that we are focusing upon. An agreement was reached to supply these catalogs to us at no charge. This precludes the need to invest in catalog production at the outset. In turn, we will be using the catalog company as a supplier for some of the inventory lines that we carry. We have developed a price sheet to be enclosed with each catalog.
We will produce flyers in-house on an as-needed basis. These will primarily be to showcase new products and/or to advertise special sales promotions. The flyers will be distributed in the same fashion as the catalogs.
Following are planned means of catalog distribution:
This is an area that we feel we will enjoy a distinct advantage over much of our competition. Because of our past work experience in purchasing, we have a vast number of supplier contacts within the racing industry. We have good, long-term, solid relationships with many of these vendors which, in many cases, will allow us to achieve decreased cost-of-goods and/or additional terms. Many of these suppliers have already committed to special deals for us, such as waiving their buy-in requirements, additional payment terms, sales referrals, etc.
We will purchase our inventory from both regional wholesalers and direct from the manufacturers. We will use the regional wholesalers more initially because of their ability to service us faster. This will lower our margins slightly; however, we feel that the upside will be that it will allow us to turn our inventory faster. As our sales volume increases, we will shift our buying patterns away from the wholesalers and purchase more of our inventory direct, which will result in increased profits.
All computer hardware and software systems that will be utilized by Southeast Racing Parts have been carefully and diligently evaluated. We will use off-the-shelf, PC-based software for accounting purposes including AR/AP, inventory, purchasing, sales, and returns. We will start out with three workstations and expand upon that as necessary.
Many of the computer systems used in the racing industry today are outmoded and obsolete. The major suppliers are reluctant to change because of the huge capital expense to change over their systems at one time. Hence, they keep going with the old and outdated.
By choosing this software, our training costs will be reduced tremendously. Much of the software used by competitors takes weeks to learn and master. Southeast Racing Parts’s use of this software will enable a basic, computer-literate employee to learn the system in one day.
This system will speed our order entry process, assist us in sales forecasting, and allow us to give a higher level of customer service.
We must remain on top of new products and trends. The most important factor in developing future products is market need. Our understanding of the needs in our market niche is one of our competitive advantages.
As stated earlier, we will have our own private label brand. Not only are profit margins better than name brands, but these accessories will help build name identity and awareness for Southeast Racing Parts when they are used on the race track. As our sales volume increases, this will be an area that we can expand.
Another natural area for expansion in the future would be the implementation of a website. On-line commerce is becoming an increasingly attractive option, due to relatively low cost of operation, the global reach of the medium, and the increasing security. Our business model could quite easily expand to include a form of Internet commerce in a variety of racing equipment.
Overall it is estimated that the total retail market for hardcore racing products is $1.5 billion annually and it still continues to grow.
The only real threat to our venture would be a similar new entry to the marketplace. This opportunity may best be described as one ready and waiting for the first entrant who arrives with a well-conceived plan, sufficient industry experience, and the required capitalization.
The racing industry is in a boom period. While there are many items from various vendors available, Southeast Racing Parts has approached the market as a specialty retailer — a provider of parts and services to the entry-level racer.
Our target customer in this segment will have a wide range of racing and automotive skills, but our most important target customers are relatively unsophisticated at racing. We will be able to serve this customer well not only by offering them parts at an affordable price, but also by giving them advice that ensures they get the task done correctly, therefore improving their on-track performance.
Our segment definition is in and of itself strategic. We are not intending to satisfy all users of racing equipment, but rather those who are just starting out and those who are struggling to keep up. We can save our customers time and money, not so much within our pricing structure, but by assessing their needs and directing them toward the proper product. Racers, by nature, tend to desire a high-end product, when often a low to mid-end product will do as good as, or sometimes even a better job. By always dealing in an honest and ethical manner, we will build customer loyalty and word-of-mouth sales that many of our competitors are lacking.
Trends are in our favor. We have identified four major trends that help us:
Since our target market is the entry-level racer, the most important needs are service, price, and availability, in that order. One of the key points of our strategy is to focus on target segments that know and understand these needs and are willing for us to fulfill those needs.
With expanded television coverage and an enormous base of grassroots motorsports activity, auto racing is a thriving industry, as well as the fastest growing sport in America. As with baseball, it could be argued that auto racing has grown to such popularity because of its vital grassroots foundation. Our customers will be the Little Leagues and softball leagues of auto racing. Outsiders to the racing industry must understand that racers may be the most obsessive consumers of any industry. Because of the pressure to win, they avidly purchase new technology. In most race cars, several parts will become obsolete in the course of a season, even though they function perfectly well.
Racers are hard on their investment, too. New tires might be a weekly purchase, and several engine freshening expenditures might be called for in a season. A good whack at the outside wall, and a racing retailer has a customer or two for shocks, a-arms, fasteners, hubs, and more.
Racers spend what it takes to win; they are not out merely to enjoy the ride. Any person who has spent any time at all in the racing pit has heard the guy in front of him in the snack bar line describe how he postponed a key household expense–the telephone bill or a new household appliance–to purchase a new right rear tire, or other critical racing part.
To service this sport, there are thousands of small businesses across the country skilled in the ways of horsepower and hooking it to the ground. Whether they make their money from parts or services, retailing or building engines, these businesses make it an easy and convenient matter to go racing. Without these local ambassadors of speed, it is hard to imagine the existence of auto racing in a large scale.
Generally, traditional distribution channels are followed. The products are bought from distributors and/or direct from the manufacturers, who have little say in how products are marketed. As in most industries, price levels decrease as volume increases.
We feel that racers understand the concept of service and availability, and are much more likely to pay for it when the offering is clearly stated.
There is no doubt that we will compete much more against the large mail order outfits than against any small local suppliers. We have good indications that racers/customers would rather pay 5-15% more for a long-term relationship with a vendor providing quality service and support. To this point, the racer thinks about price because that’s what he sees emphasized by the mail order companies.
Availability is of utmost importance. The buyer tends to want immediate, local solutions to their problems and/or needs.
By positioning ourselves at the lower end of the market, we will present ourselves to consumers just getting into racing, and we will sell to a base of customers that we can grow with together.
The above are all targeted towards the professional (NASCAR Winston Cup, etc.) market. They carry a totally different product mix to service that market. Their prices are high, and their interest in selling to the entry-level market is basically nonexistent.
These are both late model chassis builders not targeting the entry-level market. Basically, they stock inventory that’s used just on their own cars. They are both located in the Anytown Motorsports Center business park which is in an out-of-the-way, hard to find location.
They are a large drag racing mail order firm that is skimming the circle track gravy. Since Southeast Racing Parts will cater to the circle track market, we believe that whatever local circle track customers they have will switch suppliers. We will have more knowledge and experience to suit their needs.
As implied in their name, they sell used parts, so in most cases they’re not usable for our target market. They also sell a limited amount of new parts; however, because of their name, most people are not aware of this. Also, they are located in an area which was described earlier as a poor location.
They are the only local competitor that we could identify that was targeting our niche. Following are what we feel are some of our competitive advantages: We feel that we are in a much better location. They utilize a black and white flyer as their main sales tool, and we will have a professional four-color catalog. Also, they concentrate mainly on chassis and safety equipment, where we will also offer a full array of engine parts.
We are part of the Performance Racing Industry, which includes several kinds of businesses.
Speed Shops : Most of these are small, sometimes part-time ventures run from the individual’s home. Sometimes they will service a local race track; however, they usually carry a very minimal amount of inventory, and are usually operated by a racer or an ex-racer depending solely upon a small circle of friends or acquaintances as customers. They normally are short on business and marketing skills.
Engine & Chassis Builders : Typically these are well-respected firms supplying engines and chassis to the racing industry. Their customer profile lies in the mid to upper end of the market. They offer superb technical support; however, it is only available to customers utilizing their engine or chassis. They stock parts to service their engine or chassis, but are usually limited in areas areas beyond that. Normally their pricing structure is slightly above average.
Mail Order : The racing industry is served increasingly by large mail order firms that offer aggressive pricing on racing components. They are usually impersonal, and have little or no technical support available. For the purely price-driven buyer who purchases parts and expects no support, these firms offer a good option.
Others : There are many other channels through which people buy their racing parts, usually variations of the main three types above.
Our strategy is based on serving the niche of entry-level racers well. This area is full of small race teams that can’t get products or services from the major vendors who focus only on professional race teams. Also:
The retail marketing strategy of Southeast Racing Parts centers on creating a corporate identity that clearly defines our market niche in terms that benefit our customer. Other specific strategies that will be used follow:
All marketing decisions with regard to specific media choices, frequency, size, and expenditures will be conducted on an on-going basis with careful considerations of returns generated.
Our most important vehicle for sales promotion will be our catalog, which is discussed earlier in this plan.
Our customers will buy our products at our location. However, we anticipate a significant amount of mail order sales in order to meet or exceed our Sales Forecast. We will receive orders by mail, phone, or fax, process them immediately, and ship the goods via United Parcel Service.
In the event we are out of an item or we don’t stock it, many of our vendors have offered drop shipping as a service to us. This will allow us to keep our service at a high level, yet let us keep our inventory levels in check.
In the future, electronic commerce with a secure website will be thoroughly investigated for feasibility.
Our customers are especially sensitive to value. We must ensure that our price and service are perceived to be a good value to the racers. However, in the nearly thirty years of experience that we have accumulated in the racing industry, one message rings true: someone can always beat you on price.
Therefore, our pricing strategy is to be competitive within the various product categories, but not to rely on the selling price to overshadow the other advantages of doing business with our company. We will sell ourselves on the basis of a diverse line of quality products, that are readily available, reasonably priced, and backed up by our extraordinary customer service. The products will be checked prior to shipment and all promised shipping dates will be met.
We will strive for a modest gross profit margin, increasing that steadily by year four.
Because Southeast Racing Parts is a new entity, we understand that we will have to prove our company’s worth to racers in order to earn their respect and business.
Most importantly, we need to sell our company, not necessarily the products. We will need to push our service and support capabilities.
The following table and related charts show our present sales forecast. We are projecting sales to grow at steadily for the next three years.
Our seasonality, as shown in the chart, is a factor in the racing industry. We will tend to sell much better in the period January through June, while sales trail off in late summer and fall.
Management feels these forecasts are highly attainable.
When Performance Racing Industry completed its annual survey, the resulting figure for total number of racers was 385,000. Within the survey they also found that 150,000 of those were oval track racers. The survey also showed $1.5 billion in annual retail sales for all segments, with 48% of that total ($720 million) derived from the oval track segment.
By dividing that number ($720 million) by the number of oval track racers (150,000), the average annual retail purchases of oval track racers equals $4,800. From our past experience, we believe that each customer we have would spend on average 25% of that figure ($1,200) with our company. Finally, by dividing our first year sales forecast ($350,000) by $1,200 (average annual customer purchases), it shows that we will need 292 customers to support the sales forecast numbers. We believe, by and large, that these are realistic and attainable numbers.
Sales Forecast | |||
Year 1 | Year 2 | Year 3 | |
Sales | |||
Inventory Sales | $350,219 | $455,285 | $591,870 |
Internet Marketing | $16,800 | $16,800 | $16,800 |
Total Sales | $367,019 | $472,085 | $608,670 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
Inventory | $245,154 | $314,147 | $402,472 |
Internet Marketing | $0 | $0 | $0 |
Subtotal Direct Cost of Sales | $245,154 | $314,147 | $402,472 |
We have the ability to build strong strategic alliances with many of our suppliers, some of which are listed below.
The following two local warehouses will help us immensely in keeping our own inventory levels in check, while still giving our customers fast service:
Approached properly, these vendors and many others will assist Southeast Racing Parts in becoming a force in the marketplace.
Sample Milestones topic text.
The milestones table and chart show the specific detail about actual program activities that should be taking place during the year. Each one has its manager, starting date, ending date, and budget. During the year we will be keeping track of implementation against plan, with reports on the timely completion of these activities as planned.
Milestones | |||||
Milestone | Start Date | End Date | Budget | Manager | Department |
Sample Milestones | 1/4/2008 | 1/4/2008 | $0 | ABC | Department |
Finish Business Plan | 5/7/2009 | 6/6/2009 | $100 | Dude | LeGrande Fromage |
Acquire Financing | 5/17/2009 | 7/6/2009 | $200 | Dudette | Legumers |
Ah HA! Event | 5/27/2009 | 6/1/2009 | $60 | Marianne | Bosses |
Oooooh Noooooo! Event | 6/26/2009 | 7/1/2009 | $250 | Marionette | Chèvre deBlâme |
Grande Opening | 7/6/2009 | 7/11/2009 | $500 | Gloworm | Nobs |
Marketing Program Starts | 6/6/2009 | 7/1/2009 | $1,000 | Glower | Marketeers |
Plan vs. Actual Review | 11/1/2009 | 11/8/2009 | $0 | Galore | Alles |
First Break-even Month | 3/5/2010 | 4/4/2010 | $0 | Bouys | Salers |
Hire Employees | 2/1/2010 | 3/3/2010 | $150 | Gulls | HRM |
Upgrade Business Plan Pro | 4/22/2010 | 4/24/2010 | $100 | Brass | Bossies |
Totals | $2,360 |
We are a small company owned and operated by Tim and Molly Jones, husband and wife, as a Subchapter S corporation.
Tim Jones – President Tim will be the main salesperson. He will also be responsible for shipping and receiving, inventory management, and the marketing and promotion of products. Tim will assist with record keeping and cost containment.
Molly Jones – Corporate Secretary Molly will maintain the company records and be in direct communication with the accountant and other advisors. She will also be in charge of the computer system and perform all of the desktop publishing for the company. She will assist as needed with sales, shipping and receiving, and customer service related issues. In addition to her regular duties, Molly will be doing Internet marketing from her office at Southeast Racing Parts. We anticipate that 20 hours every week will be dedicated to this marketing. The revenue that will be generated by this is reflected in the Sales Forecast.
The initial management team depends on the founders themselves, with little back-up. We plan on hiring additional personnel as the need for them arises, and as we have the ability to pay them.
Tim and Molly not only have the desire to succeed, but will bring a wealth of knowledge and experience to the Southeast Racing Parts team. They have nearly thirty years of combined experience in the racing industry and have both performed nearly all facets of daily operations for a racing business. Following is a synopsis of their abilities and accomplishments:
Tim Jones (40) – President (background omitted to protect confidentiality)
Molly Jones (29) – Corporate Secretary (background omitted to protect confidentiality)
We depend on professionals, particularly our CPA, for some key management help. We have retained a local CPA to help us with financial and business management questions since we don’t have a strong background in those areas. Also, we are short on experience concerning human resource issues; however, we plan on utilizing our network of business associates to advise us when the need arises.
The cornerstone of the personnel plan is to maximize productivity and minimize the labor burden on the company’s operating expenses. As we grow, we expect to see steady increases in our personnel to match the increases in sales.
Personnel Plan | |||
Year 1 | Year 2 | Year 3 | |
Tim Jones | $16,800 | $20,160 | $24,192 |
Molly Jones | $9,600 | $11,520 | $13,824 |
Salesperson (PT) | $0 | $8,000 | $8,000 |
Salesperson (FT) | $0 | $0 | $20,000 |
Total People | 2 | 3 | 4 |
Total Payroll | $26,400 | $39,680 | $66,016 |
Sales Forecast | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | |||||||||||||
Inventory Sales | 0% | $16,000 | $20,800 | $24,960 | $22,464 | $20,217 | $23,250 | $26,737 | $32,084 | $38,501 | $46,202 | $41,581 | $37,423 |
Internet Marketing | 0% | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 |
Total Sales | $17,400 | $22,200 | $26,360 | $23,864 | $21,617 | $24,650 | $28,137 | $33,484 | $39,901 | $47,602 | $42,981 | $38,823 | |
Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Inventory | $11,200 | $14,560 | $17,472 | $15,725 | $14,152 | $16,275 | $18,716 | $22,459 | $26,951 | $32,341 | $29,107 | $26,196 | |
Internet Marketing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Direct Cost of Sales | $11,200 | $14,560 | $17,472 | $15,725 | $14,152 | $16,275 | $18,716 | $22,459 | $26,951 | $32,341 | $29,107 | $26,196 |
Personnel Plan | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Tim Jones | 0% | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 | $1,400 |
Molly Jones | 0% | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 |
Salesperson (PT) | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Salesperson (FT) | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total People | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | |
Total Payroll | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 |
Pro Forma Profit and Loss | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | $17,400 | $22,200 | $26,360 | $23,864 | $21,617 | $24,650 | $28,137 | $33,484 | $39,901 | $47,602 | $42,981 | $38,823 | |
Direct Cost of Sales | $11,200 | $14,560 | $17,472 | $15,725 | $14,152 | $16,275 | $18,716 | $22,459 | $26,951 | $32,341 | $29,107 | $26,196 | |
Other Costs of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $11,200 | $14,560 | $17,472 | $15,725 | $14,152 | $16,275 | $18,716 | $22,459 | $26,951 | $32,341 | $29,107 | $26,196 | |
Gross Margin | $6,200 | $7,640 | $8,888 | $8,139 | $7,465 | $8,375 | $9,421 | $11,025 | $12,950 | $15,261 | $13,874 | $12,627 | |
Gross Margin % | 35.63% | 34.41% | 33.72% | 34.11% | 34.53% | 33.98% | 33.48% | 32.93% | 32.46% | 32.06% | 32.28% | 32.52% | |
Expenses | |||||||||||||
Payroll | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | |
Marketing/Promotion | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | |
Depreciation | $345 | $345 | $345 | $345 | $345 | $345 | $345 | $345 | $345 | $345 | $345 | $345 | |
Vehicle Expense | $150 | $150 | $150 | $125 | $125 | $125 | $125 | $150 | $150 | $150 | $150 | $150 | |
Credit Card Surcharge | $160 | $208 | $249 | $224 | $202 | $232 | $267 | $320 | $385 | $462 | $415 | $374 | |
Inbound Freight Charges | $224 | $350 | $350 | $314 | $284 | $326 | $374 | $450 | $540 | $646 | $582 | $524 | |
Office Supplies | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | |
Security/alarm | $30 | $30 | $30 | $30 | $30 | $30 | $30 | $30 | $30 | $30 | $30 | $30 | |
Telephone | $150 | $156 | $187 | $168 | $150 | $174 | $200 | $240 | $288 | $346 | $311 | $280 | |
Accounting Costs | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | |
Rent | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | $1,600 | |
Utilities | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
Insurance | $70 | $70 | $70 | $70 | $70 | $70 | $70 | $70 | $70 | $70 | $70 | $70 | |
Payroll Taxes | 15% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Operating Expenses | $5,454 | $5,634 | $5,706 | $5,601 | $5,531 | $5,627 | $5,736 | $5,930 | $6,133 | $6,374 | $6,228 | $6,098 | |
Profit Before Interest and Taxes | $746 | $2,006 | $3,182 | $2,538 | $1,934 | $2,748 | $3,685 | $5,095 | $6,817 | $8,887 | $7,646 | $6,529 | |
EBITDA | $1,091 | $2,351 | $3,527 | $2,883 | $2,279 | $3,093 | $4,030 | $5,440 | $7,162 | $9,232 | $7,991 | $6,874 | |
Interest Expense | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Taxes Incurred | $224 | $602 | $955 | $761 | $580 | $824 | $1,106 | $1,529 | $2,045 | $2,666 | $2,294 | $1,959 | |
Net Profit | $522 | $1,404 | $2,227 | $1,777 | $1,354 | $1,924 | $2,580 | $3,567 | $4,772 | $6,221 | $5,352 | $4,570 | |
Net Profit/Sales | 3.00% | 6.33% | 8.45% | 7.44% | 6.26% | 7.80% | 9.17% | 10.65% | 11.96% | 13.07% | 12.45% | 11.77% |
Pro Forma Cash Flow | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $17,400 | $22,200 | $26,360 | $23,864 | $21,617 | $24,650 | $28,137 | $33,484 | $39,901 | $47,602 | $42,981 | $38,823 | |
Subtotal Cash from Operations | $17,400 | $22,200 | $26,360 | $23,864 | $21,617 | $24,650 | $28,137 | $33,484 | $39,901 | $47,602 | $42,981 | $38,823 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $17,400 | $22,200 | $26,360 | $23,864 | $21,617 | $24,650 | $28,137 | $33,484 | $39,901 | $47,602 | $42,981 | $38,823 | |
Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Expenditures from Operations | |||||||||||||
Cash Spending | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | $2,200 | |
Bill Payments | $2,104 | $3,151 | $4,120 | $16,602 | $17,566 | $16,206 | $22,623 | $25,891 | $31,691 | $37,767 | $44,324 | $31,426 | |
Subtotal Spent on Operations | $4,304 | $5,351 | $6,320 | $18,802 | $19,766 | $18,406 | $24,823 | $28,091 | $33,891 | $39,967 | $46,524 | $33,626 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $4,304 | $5,351 | $6,320 | $18,802 | $19,766 | $18,406 | $24,823 | $28,091 | $33,891 | $39,967 | $46,524 | $33,626 | |
Net Cash Flow | $13,096 | $16,849 | $20,040 | $5,062 | $1,851 | $6,244 | $3,314 | $5,393 | $6,010 | $7,635 | ($3,543) | $5,197 | |
Cash Balance | $14,096 | $30,944 | $50,984 | $56,046 | $57,897 | $64,141 | $67,456 | $72,849 | $78,859 | $86,494 | $82,952 | $88,149 |
Pro Forma Balance Sheet | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $1,000 | $14,096 | $30,944 | $50,984 | $56,046 | $57,897 | $64,141 | $67,456 | $72,849 | $78,859 | $86,494 | $82,952 | $88,149 |
Inventory | $50,000 | $38,800 | $24,240 | $19,219 | $17,298 | $15,567 | $17,903 | $20,588 | $24,705 | $29,646 | $35,575 | $32,018 | $28,816 |
Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Current Assets | $51,000 | $52,896 | $55,184 | $70,203 | $73,344 | $73,464 | $82,044 | $88,043 | $97,554 | $108,505 | $122,070 | $114,969 | $116,965 |
Long-term Assets | |||||||||||||
Long-term Assets | $29,000 | $29,000 | $29,000 | $29,000 | $29,000 | $29,000 | $29,000 | $29,000 | $29,000 | $29,000 | $29,000 | $29,000 | $29,000 |
Accumulated Depreciation | $0 | $345 | $690 | $1,035 | $1,380 | $1,725 | $2,070 | $2,415 | $2,760 | $3,105 | $3,450 | $3,795 | $4,140 |
Total Long-term Assets | $29,000 | $28,655 | $28,310 | $27,965 | $27,620 | $27,275 | $26,930 | $26,585 | $26,240 | $25,895 | $25,550 | $25,205 | $24,860 |
Total Assets | $80,000 | $81,551 | $83,494 | $98,168 | $100,964 | $100,739 | $108,974 | $114,628 | $123,794 | $134,400 | $147,620 | $140,174 | $141,825 |
Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Current Liabilities | |||||||||||||
Accounts Payable | $2,000 | $3,028 | $3,568 | $16,015 | $17,033 | $15,455 | $21,766 | $24,841 | $30,440 | $36,274 | $43,273 | $30,476 | $27,555 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $2,000 | $3,028 | $3,568 | $16,015 | $17,033 | $15,455 | $21,766 | $24,841 | $30,440 | $36,274 | $43,273 | $30,476 | $27,555 |
Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Liabilities | $2,000 | $3,028 | $3,568 | $16,015 | $17,033 | $15,455 | $21,766 | $24,841 | $30,440 | $36,274 | $43,273 | $30,476 | $27,555 |
Paid-in Capital | $80,625 | $80,625 | $80,625 | $80,625 | $80,625 | $80,625 | $80,625 | $80,625 | $80,625 | $80,625 | $80,625 | $80,625 | $80,625 |
Retained Earnings | ($2,625) | ($2,625) | ($2,625) | ($2,625) | ($2,625) | ($2,625) | ($2,625) | ($2,625) | ($2,625) | ($2,625) | ($2,625) | ($2,625) | ($2,625) |
Earnings | $0 | $522 | $1,926 | $4,154 | $5,930 | $7,284 | $9,208 | $11,787 | $15,354 | $20,126 | $26,347 | $31,699 | $36,269 |
Total Capital | $78,000 | $78,522 | $79,926 | $82,154 | $83,930 | $85,284 | $87,208 | $89,787 | $93,354 | $98,126 | $104,347 | $109,699 | $114,269 |
Total Liabilities and Capital | $80,000 | $81,551 | $83,494 | $98,168 | $100,964 | $100,739 | $108,974 | $114,628 | $123,794 | $134,400 | $147,620 | $140,174 | $141,825 |
Net Worth | $78,000 | $78,522 | $79,926 | $82,154 | $83,930 | $85,284 | $87,208 | $89,787 | $93,354 | $98,126 | $104,347 | $109,699 | $114,269 |
Fill-in-the-blanks and automatic financials make it easy.
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1. describe the purpose of your auto parts business..
The first step to writing your business plan is to describe the purpose of your auto parts business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.
It also helps to include a vision statement so that readers can understand what type of company you want to build.
Here is an example of a purpose mission statement for a auto parts business:
Our mission at ABC Auto Parts is to be the leading provider of quality, affordable automotive parts and services in the region by providing exceptional customer service and top of the line products. We strive to create a trustworthy and welcoming atmosphere for our customers and employees alike, while providing knowledgeable guidance throughout the experience.
The next step is to outline your products and services for your auto parts business.
When you think about the products and services that you offer, it's helpful to ask yourself the following questions:
You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.
If you don't have a marketing plan for your auto parts business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals.
A good marketing plan for your auto parts business includes the following elements:
Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations.
In it, you should list:
The second part of your auto parts business plan is to develop a management and organization section.
This section will cover all of the following:
This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.
Typically, expenses for your business can be broken into a few basic categories:
Startup Costs
Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a auto parts business varies based on many different variables, but below are a few different types of startup costs for a auto parts business.
Running & Operating Costs
Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.
Marketing & Sales Expenses
You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your auto parts business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.
A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your auto parts business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses.
Here are some steps you can follow to devise a financial plan for your auto parts business plan:
Why do you need a business plan for a auto parts business.
A business plan is an essential tool for any business, including an auto parts business. It helps to provide a roadmap and direction, enabling you to plan your short-term and long-term goals, identify potential risks and opportunities, define how you will finance the venture, and track progress as you launch and grow your business. A business plan also helps to ensure that all relevant stakeholders are informed of the venture’s details and structure.
You should consider reaching out to a business consultant or a financial advisor for help with your auto parts business plan. They can provide you with tailored advice and resources to ensure that your plan is comprehensive and effective. Additionally, if you are able to join an auto parts trade association, they may be able to provide additional support.
Writing a business plan for an auto parts business is a complex process that requires research and dedication. It is best to consult with an experienced business plan writer who can provide expertise and guidance to make sure all aspects of the plan are covered. An experienced business planwriter can provide an effective outline for the plan and help with key areas such as market analysis, competitive advantage, financial projections, and more.
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Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.
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Published Sep.23, 2013
Updated Apr.19, 2024
By: Cynthia Turner
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Table of Content
Are you looking to learn how to open auto part store? The business can be a great investment if you have a basic understanding of different kinds of automobiles and their part requirements. Starting an auto parts business is relatively simpler as it doesn’t require abundant resources.
The business management side is also relatively easy as you can start it on a small scale. There isn’t a need to have a huge team or a large shop to start up the business initially. This can significantly benefit you if you are new to management and business.
You can also easily draft up an ecommerce startup business plan for your business. As a guide you can look at related plans such as convenience store business plan . For a better reference, you can take help from this automobile parts business plan.
2.1 the business.
Best Rev will be an auto parts store owned by Sheldon Cooper in Manhattan. The primary aim of the business will be to reduce the hassle of vehicle owners by providing them best condition spare parts for their automobiles. The business will offer a wide range of services and products for the ease of its customers.
If you are just learning how to start an auto parts business , the best advice you will find is to establish strong management. You can have good management through adequate planning. And there is no better way to plan out every aspect of your store than through an auto parts store business plan pdf like the one presented here.
You can also take aid from relevant business plans like used auto parts business plan or an auto dealership business plan .
In this business plan motor parts shop example, we will guide you about all the components of a strong business plan. Of course, you can alternatively also hire business plan experts to do this work for you.
The customers of Best Rev will belong to all classes, and work domains as vehicles have become a fundamental part of life for a majority of the world’s population. The recurring customers of the business will be:
The main aim of Best Rev is to become a reliable and trustworthy source of good auto parts and maintenance services among its customers.
The financial targets that the business wants to achieve within the first five years are mentioned below:
3.1 company owner.
Best Rev will be owned and operated by Sheldon Cooper. Sheldon completed his Bachelors in Mechanical Engineering two years ago, after which he pursued an engineering position in a noteworthy motor company. However, six months ago, he left the post to fulfill his lifelong passion of starting his own automobile parts and maintenance store.
Sheldon noticed that Manhattan experiences a lot of traffic, but there are no auto shops or parts stores located in the area or anywhere in the 15-mile radius. Here, he saw the opportunity to cater to vehicle owners of Manhattan and the nearby regions. The result was Best Rev, an auto parts store that deals with the maintenance and repair of vehicles and the provision of spare parts.
Step1: Plan Everything
Good planning is the most crucial step when learning how to start a car parts business. The best aid in planning and managing a business is its business plan. To write your vehicle spare parts business plan, you can take help from this automobile spare parts business plan. Best Rev is an automobile spare parts shop, for which the business plan is detailed here. You can take help from this example or go through other examples like used car dealership business plan to get an idea of what to include when planning for a start-up.
Step2: Define the Brand
What comes next is to highlight your business and its unique propositions. This can be achieved by creating a brand around your business idea. This will include everything from the principles it follows to its unique value above its competitors. This will introduce a good image of your business to your customers and also help you create a space for yourself in the market.
Step3: Establish Your Corporate Office
The next step is to manage the physical aspect of the business. Sheldon decided to rent out two back-to-back small shops in the main Manhattan commercial area. He decided that one of these shops would be the face of the business where all dealing will customers will take place. All the spare parts will also be stored in this area. In contrast, the other shop will be used to maintain and repair vehicles.
Step4: Establish a Web Presence
Establishing a web presence is integral in today’s market. Therefore, Sheldon decided to develop a website for the business and social media presences for marketing.
Step5: Promote and Market
The final step is to develop a good marketing plan and stick to it.
Legal | $134,400 |
Consultants | $0 |
Insurance | $22,200 |
Rent | $36,600 |
Research and Development | $10,000 |
Expensed Equipment | $52,200 |
Signs | $3,400 |
Start-up Assets | $222,400 |
Cash Required | $209,000 |
Start-up Inventory | $39,000 |
Other Current Assets | $222,000 |
Long-term Assets | $287,000 |
Start-up Expenses to Fund | $258,800 |
Start-up Assets to Fund | $979,400 |
Assets | |
Non-cash Assets from Start-up | $1,240,800 |
Cash Requirements from Start-up | $122,000 |
Additional Cash Raised | $50,000 |
Cash Balance on Starting Date | $35,000 |
Liabilities and Capital | |
Liabilities | $18,200 |
Current Borrowing | $0 |
Long-term Liabilities | $0 |
Accounts Payable (Outstanding Bills) | $58,000 |
Other Current Liabilities (interest-free) | $0 |
Capital | |
Planned Investment | $1,238,200 |
Investor 1 | $0 |
Investor 2 | $0 |
Other | $0 |
Additional Investment Requirement | $0 |
Loss at Start-up (Start-up Expenses) | $133,400 |
Before you start an auto part business, you need to decide on your business’s services to your customers. You may have many auto parts business ideas, but you can’t implement everything in the business initially. Therefore, you have to pick and choose what you will start with.
You can follow this guide on how to start an auto parts business to figure out what the market for the business looks like and what services are ideal to be included in your start-up.
The series of steps to follow can be confusing when learning how to become an auto parts distributor. Therefore, we have described everything here in detail. Since Sheldon started with a variety of services, this format can be used to develop even a flower shop business plan .
Best Rev will sell spare parts for all kinds of automobiles as its base service. As a result, most of the auto parts in demand will be readily available, while there will also be an option for customers to order the parts custom to their vehicle.
In addition to providing spare parts, Best Rev will also offer maintenance services to its customers. This will include
The customers of Best Rev can also bring their vehicles to the store to get any part fixed. In addition, the business will have mechanics available at all times who will deal with any problems a vehicle might have.
Our last service will be the cleaning service. Our customers can bring their vehicles and get them serviced and cleaned in just 20-40 minutes, depending on vehicle type.
When starting an auto parts business, you should have an excellent understanding of your target market. You can gain this understanding by doing an extensive market analysis as a part of your automobile spare parts business plan pdf. This analysis should look into the past, present, and future market trends for you to make the best choices.
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Your automobile parts business plan should also analyze the price of similar services in the market. This data should be used to forecast the prices you will set for your own products and services.
If you don’t know what to include in your motor vehicle spare parts business plan, then you can take help from the document here. Also, if you are having difficulty conducting a marketing analysis, you can look at the marketing plan of this business plan motor parts shop.
According to IBISWorld, the auto parts industry holds a market size of $66 Billion in the United States, employing almost 400 thousand people. The industry is continuously in demand as more and more people adopt automotive vehicles in their life. So, opening a business in this industry is a very smart move as the demand will only get bigger.
The potential customers of Best Rev will be as follows:
5.2.1 personal vehicle owners.
The primary customers of Best Rev will be people who own cars for personal use. As a majority of the population of Manhattan owns cars, our business will expect these customers to be quite regular. They are expected to avail maintenance and cleaning services most often.
Our second target customer will be private dealerships looking to fix up cars and sell them. We will provide them with the spare parts and maintenance services required.
Due to the vast amounts of construction being carried out in Manhattan and surrounding areas, we expect our third most frequent customers to be cargo vehicle businesses looking for spare parts, maintenance, and cleaning services.
Our final customer group will be professional racers. They are expected to avail our spare parts and maintenance services, although not that often.
Personal Vehicle Owners | 39% | 59,900 | 71,880 | 86,256 | 103,507 | 124,209 | 10.00% |
Private Dealerships | 37% | 45,800 | 54,960 | 65,952 | 79,142 | 94,971 | 10.00% |
Cargo Vehicle Businesses | 14% | 22,700 | 27,240 | 32,688 | 39,226 | 47,071 | 10.00% |
Professional Racers | 10% | 22,300 | 26,760 | 32,112 | 38,534 | 46,241 | 11.00% |
10% |
Our prices will be economical compared to our competitors since they won’t pay extra shipping fees for spare parts.
To gain attention in the market among your competitors, you need to highlight your competitive advantages. This is crucial in developing a business, especially an online auto parts business.
You can market what makes you unique in the industry through a solid marketing plan. A market plan will not only allow you to bring light to your strongest features, but it will also help you in learning how to become an auto parts distributor in a saturated market.
So, if you want to develop a strong marketing strategy for your business, you can take help from this motor parts business plan pdf. You can also look at other business plans such as skateboard store business plan to understand how to build a marketing strategy.
Unit Sales | |||
Spare Parts | 8,200 | 8,692 | 9,214 |
Maintenance | 4,550 | 4,823 | 5,112 |
Repair Service | 1,450 | 1,537 | 1,629 |
Cleaning Service | 1,550 | 1,643 | 1,742 |
Unit Prices | Year 1 | Year 2 | Year 3 |
Spare Parts | $60.00 | $69.60 | $80.74 |
Maintenance | $75.00 | $87.00 | $100.92 |
Repair Service | $350.00 | $406.00 | $470.96 |
Cleaning Service | $150.00 | $174.00 | $201.84 |
Sales | |||
Direct Unit Costs | Year 1 | Year 2 | Year 3 |
Spare Parts | $20.00 | $22.00 | $23.10 |
Maintenance | $15.00 | $16.50 | $17.33 |
Repair Service | $100.00 | $110.00 | $115.50 |
Cleaning Service | $80.00 | $88.00 | $92.40 |
Direct Cost of Sales | |||
There are a lot of auto parts stores in the world. But only those are popular that make customers happy and satisfied. The success of a business, especially in the automobile industry, depends not only on the quality of parts but also on the customer support staff.
Understanding this importance, Sheldon included some essential features as a part of employee hiring criteria in the automobile spare parts business plan. He also formed a list of employees necessary for running his business. This list can be seen in this auto parts store business plan sample.
Manager | $45,000 | $49,500 | $54,450 |
Receptionist | $30,000 | $33,000 | $36,300 |
Cleaners | $92,000 | $101,200 | $111,320 |
Mechanics | $123,000 | $135,300 | $148,830 |
Social Media Manager | $23,500 | $25,850 | $28,435 |
Web Developer | $22,500 | $24,750 | $27,225 |
You can’t ensure the success of an automobile parts business through just sales. You need to ensure that all the resources are efficiently managed so that your business doesn’t go into a loss.
You can prevent your business from losing resources by developing a financial plan as a part of your motor spare parts business plan. This will include the costs associated with your business’s essential aspects, such as an auto parts franchise cost. In addition, it will analyze where you are spending your money and how you are earning to keep everything in balance.
Here, we are describing the details of the financial plan of Best Rev.
You can also look at a business plan for e-commerce to get a good idea of managing business finances.
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 8.12% | 8.20% | 8.26% |
Long-term Interest Rate | 8.40% | 8.44% | 8.47% |
Tax Rate | 24.03% | 24.21% | 24.60% |
Other | 0 | 0 | 0 |
Monthly Units Break-even | 5340 |
Monthly Revenue Break-even | $132,500 |
Assumptions: | |
Average Per-Unit Revenue | $231.00 |
Average Per-Unit Variable Cost | $0.62 |
Estimated Monthly Fixed Cost | $163,800 |
Other | $0 | $0 | $0 |
TOTAL COST OF SALES | |||
Expenses | |||
Payroll | $336,000 | $369,600 | $406,560 |
Sales and Marketing and Other Expenses | $145,000 | $148,000 | $156,000 |
Depreciation | $2,300 | $2,350 | $2,500 |
Leased Equipment | $0 | $0 | $0 |
Utilities | $2,900 | $3,000 | $3,100 |
Insurance | $2,100 | $2,100 | $2,100 |
Rent | $2,900 | $3,000 | $3,200 |
Payroll Taxes | $24,000 | $25,000 | $27,000 |
Other | $0 | $0 | $0 |
Profit Before Interest and Taxes | $556,800 | $796,961 | $1,127,661 |
EBITDA | $556,800 | $796,961 | $1,127,661 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $111,360 | $159,392 | $225,532 |
Net Profit | $445,440 | $637,569 | $902,129 |
Net Profit/Sales | 28.31% | 32.96% | 37.93% |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $51,000 | $55,080 | $59,486 |
Cash from Receivables | $22,000 | $23,760 | $25,661 |
SUBTOTAL CASH FROM OPERATIONS | |||
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $0 | $0 | $0 |
SUBTOTAL CASH RECEIVED | |||
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $42,000 | $42,000 | $45,000 |
Bill Payments | $27,000 | $28,000 | $31,000 |
SUBTOTAL SPENT ON OPERATIONS | |||
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
SUBTOTAL CASH SPENT | |||
Net Cash Flow | $21,000 | $23,000 | $25,000 |
Cash Balance | $27,000 | $30,000 | $33,000 |
Assets | |||
Current Assets | |||
Cash | $275,000 | $308,000 | $338,800 |
Accounts Receivable | $24,000 | $26,880 | $30,213 |
Inventory | $4,300 | $4,816 | $4,900 |
Other Current Assets | $1,000 | $1,000 | $1,000 |
TOTAL CURRENT ASSETS | |||
Long-term Assets | |||
Long-term Assets | $10,000 | $10,000 | $10,000 |
Accumulated Depreciation | $19,400 | $21,728 | $24,444 |
TOTAL LONG-TERM ASSETS | |||
TOTAL ASSETS | |||
Liabilities and Capital | Year 4 | Year 5 | Year 6 |
Current Liabilities | |||
Accounts Payable | $18,700 | $20,944 | $23,541 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
SUBTOTAL CURRENT LIABILITIES | |||
Long-term Liabilities | $0 | $0 | $0 |
TOTAL LIABILITIES | |||
Paid-in Capital | $30,000 | $30,000 | $31,000 |
Retained Earnings | $53,000 | $57,770 | $63,547 |
Earnings | $193,400 | $210,806 | $231,887 |
TOTAL CAPITAL | |||
TOTAL LIABILITIES AND CAPITAL | |||
Net Worth | $293,400 | $319,806 | $351,787 |
Sales Growth | 7.25% | 8.03% | 8.90% | 3.00% |
Percent of Total Assets | ||||
Accounts Receivable | 9.21% | 10.20% | 11.31% | 9.80% |
Inventory | 5.39% | 5.97% | 6.62% | 9.90% |
Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
Total Current Assets | 149.80% | 151.00% | 152.00% | 158.00% |
Long-term Assets | 11.55% | 11.60% | 11.64% | 12.00% |
TOTAL ASSETS | ||||
Current Liabilities | 4.90% | 4.94% | 4.98% | 4.34% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
Total Liabilities | 7.59% | 7.65% | 7.72% | 7.38% |
NET WORTH | ||||
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 94.60% | 97.15% | 99.87% | 99.00% |
Selling, General & Administrative Expenses | 93.56% | 96.09% | 98.78% | 97.80% |
Advertising Expenses | 1.52% | 1.56% | 1.60% | 1.40% |
Profit Before Interest and Taxes | 41.50% | 42.62% | 43.81% | 33.90% |
Main Ratios | ||||
Current | 34 | 35 | 36 | 32 |
Quick | 33 | 33.8 | 34.645 | 33 |
Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
Pre-tax Return on Net Worth | 74.08% | 74.89% | 75.00% | 75.00% |
Pre-tax Return on Assets | 96.30% | 101.12% | 106.17% | 111.30% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | 33.56% | 34.60% | 35.67% | N.A. |
Return on Equity | 55.80% | 57.53% | 59.31% | N.A. |
Activity Ratios | ||||
Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
Collection Days | 100 | 100 | 100 | N.A. |
Inventory Turnover | 32.4 | 34.02 | 35 | N.A. |
Accounts Payable Turnover | 15.6 | 16 | 16.3 | N.A. |
Payment Days | 27 | 27 | 27 | N.A. |
Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
Debt Ratios | ||||
Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
Liquidity Ratios | ||||
Net Working Capital | $244,000 | $257,664 | $272,093 | N.A. |
Interest Coverage | 0 | 0 | 0 | N.A. |
Additional Ratios | ||||
Assets to Sales | 0.85 | 0.87 | 0.89 | N.A. |
Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
Acid Test | 29 | 29.12 | 29.16 | N.A. |
Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
Dividend Payout | 0 | 0 | 0 | N.A. |
1. How to start an auto parts store?
You can start an auto parts store by developing a good auto parts store business plan.
2. How to open an auto parts store?
For starting an auto parts store, you will need to rent or buy a physical space and create management plans.
3. How to start an online auto parts business?
To start an online auto parts business, you will need to manage your business finances and develop a strong marketing plan. Furthermore, you will need to establish social media presence as well.
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Last Updated: April 1, 2024 Approved
This article was co-authored by Jay Goninen . Jay Goninen is an Automotive Expert and the Co-Founder and President of WrenchWay. Jay started working in his family's repair shop when he was nine and has been deeply passionate about the industry since then. He has experience as a technician and is currently a Board Member for both the Diesel Technology Program at Madison Area Technical College and the Community Alliance for the Skilled Trades. wikiHow marks an article as reader-approved once it receives enough positive feedback. In this case, several readers have written to tell us that this article was helpful to them, earning it our reader-approved status. This article has been viewed 251,679 times.
Starting a used auto parts business can be an excellent way to make money and prevent older car parts ending up in landfills. In addition to helping the environment, you can assist people who cannot afford brand-new car parts to keep their cars in working condition.
Thanks for reading our article! If you’d like to learn more about starting an auto business, check out our in-depth interview with Jay Goninen .
To start a used auto parts business, develop a thorough business plan that outlines your budget, inventory, marketing strategies, and the areas you plan to specialize in. Choose a good location for your business and obtain any licenses, permits, and insurance required by law to sell to the public. Then, find a few good suppliers, stock your shelves with merchandise, and get the word out about your store to attract customers! For tips on monitoring your inventory, read on! Did this summary help you? Yes No
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If you want to start a retail business related to an automobile business, which will be profitable, you might consider starting an automobile spare parts business. Your profit margin can be as high as 30 to 40 percent, as this has a good opportunity. As, during the entire lifespan of the vehicle, every automobile spare parts require frequent changes and modification. This single reason makes the automobile spare parts industry profitable, lucrative, and evergreen.
As an entrepreneur you must need to have a solid business plan if you wish to learn how to start an automobile parts business. Having a meticulously drafted action plan ensures to meet the goals. We might be able to help you with that if you’re interested.
A business can be started in a variety of ways depending on your investment capacity, just like any other business. As, to be successful in a business, continuous dedication and effort are required. Also, the trick is to never attempt to start your business as a part-timer. Having developed an automobile business plan is the next step to figuring out how to start an automobile spare parts business. After deciding what type of business you want to start. By developing the business plan, you can keep track of all the essential details related to the business that you need to consider. There are a few basic details that should be included in your automobile spare parts business plan:
To understand the market conditions and opportunities, you must conduct a market feasibility study first. Although there is no specific educational requirement for this, still you will need to have some knowledge about the industry. You must have a clear understanding of the specifications of the different spare parts, as you might need to advise your customers about what to buy and whatnot. These all demand specific knowledge about the spare parts industry. Doing good market research and understanding the industry is the most important aspect you must consider before commencing any business.
Moreover, this will assist you in understanding the competition from other operators. Also, it will enable you to develop winning strategies that will help you get break-even within a few months of starting a business. Furthermore, you can identify the most popular spare part brands in your local market. Moreover, you will also need to identify the different models of bikes and cars that are common in the city. For all this, working with other established owners might enhance your trade knowledge.
For a successful automobile spare parts business, you need to create a detailed business plan. Which will be defining the goal and the path of reaching there. This will serve as a blueprint but most importantly, it will help in securing the startup. Your business plan should include information about your operations and marketing plans. If you have any specialties, mention them and how you plan to open and maintain your business. How you will obtain your car parts, and how you will price them to earn a profit.
The marketing part should include information about your target audience and your local competition. As well as how you intend to reach your target audience. You must calculate startup capital after receiving knowledge and finalizing the business model. In general, you have to consider the rent of the retail space, store setup costs, and purchasing the spare parts from the wholesaler or manufacturer. It is also important to calculate and keep track of operating expenses. It will help you in calculating the breakeven and expected ROI of your business. As an alternative, you can hire a professional to assist you in making this plan.
China for new parts and junkyards for used ones are the best sources of spare parts. If you approach the manufacturers of spare parts, they will welcome you as new distributors and wholesalers. Another source of used parts is purchasing used vehicles and scrapping.
Also, think about selling online. The internet audience is too important to ignore in today’s digital world. Your own online store or an online marketplace can be used to sell auto spare parts.
Providing quality spare parts is the key to growing the business. Though quality automobile spare parts are more expensive, they are more durable, so they are a better alternative to cheap parts of low quality. The reason is that it’s hard to find and attract premium prices. Moreover, it requires the constant replacement of high-volume parts. Yet, choosing quality over quantity will be a wise decision.
Apart from the above steps relating to starting an automobile spare parts business, other things might help you. Such as offering wholesale/retail both, building an Inventory of spare parts, offering delivery services, obtaining insurance, etc.
By aktorka odniosła sukces, powinna mieć twarz Wenus, umysł Minewry, wdzięk Terpsychory, pamięć wziętego prawnika oraz skórę z gaźnika. E. Barrymore UMS*
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Home » Business ideas » Automotive Industry » Auto Parts Store
Are you about starting a car accessories store? If YES, here’s a complete sample car parts & accessories business plan template & FREE feasibility report.
Okay, so we have considered all the requirements for starting a car accessories store business . We also took it further by analyzing and drafting a sample car accessories store marketing plan template backed up by actionable guerrilla marketing ideas for car accessories stores. So let’s proceed to the business planning section.
In as much as people still use automobiles, car accessories and auto spare parts will continue to be in demand. The car accessories and auto spare parts store business is indeed a profitable business because the replacement of damaged or worn – out auto parts and car accessories is compulsory if you want your vehicle to continue to be on the road and serve the purpose you bought it for.
If you are looking for a business to start as an entrepreneur and you know you have got an interest in the automobile industry, then you should consider starting your own car accessories store business.
Although you don’t need a college degree to establish your own car accessories and auto spare parts store, but you would need some form of informal training, you may have to work as an apprentice with someone who owns a car accessories and auto spare parts store. It makes it easier for you to learn the ropes on how to manage your own car accessories and auto spare parts store.
It is important to point out that the car accessories and auto spare parts store business is one business that can’t go out of fashion- this is because of the role it plays in the auto industry.
Depending on the scale you are looking to start, the startup capital for this type of business can be considered to be moderate. As a matter of fact, you can start your own car accessories and auto spare parts store and then grow it big within a short period of time by re–investing your profits back to the business.
If you are sure this type of business is what you truly want to do after you must have conducted your feasibility studies and market research, then the next step to follow is to write a good business plan. Below is a sample car accessories store business plan template that will help you successfully write yours without much stress.
1. industry overview.
The auto parts stores industry includes stores/shops that retail new and used automotive parts and car accessories, repair automobiles and install automotive accessories.
Players in this industry can choose to operate a single store in just one location or chains of stores in several locations scattered all across the united states of America. As a matter of fact, auto stores can be found in all parts of the world as long as there are automobiles there.
IBISWorld projected that the Auto Parts Stores industry is expected to grow slowly over the five years to 2016. It stated that per capita disposable income and corporate profit boosted the demand for auto parts. Furthermore, favorable car usage trends have led to growth in demand for industry products in the short term.
Nevertheless, advancements in motor vehicle technology have made it increasingly difficult for vehicle owners to repair and maintain vehicles without professional help. Going forward, the revenue generated by operators in the industry is expected to grow at the same pace as the previous period.
As the national level of per capita disposable income continues to rise, some consumers will increase their spending on maintaining and fixing their automobiles hence the increase in demand for products and services from the Auto Stores industry.
The Auto Parts Stores Industry is indeed a large industry and pretty much active in all the countries of the world. Statistics has it that in the United States of America alone, there are about 43,136 registered and licensed auto spare parts stores scattered all across the United States responsible for directly employing about 376,102 people and the industry rakes in a whooping sum of $56 billion annually.
The industry is projected to grow at 1.9 percent annual growth within 2011 and 2016. It is important to state that Advance Auto Parts, AutoZone Inc., Genuine Parts Company and O’Reilly Automotive Inc have the largest chunk of the available market share in the industry.
A close observation of the Auto Parts Stores industry shows that the industry has low barrier to entry. In the United States, the industry is subject to few restrictive regulations, and industry employees typically do not need to be trained formally to be able to carry out their duties.
The truth is that the startup capital for opening an auto parts store especially when it involves establishing a standard auto parts store with products from various automobile companies is intensive. But if you choose to start a spare parts store like the average mom and pop business, then you would not have to stress yourself because you will only need minimal startup capital to launch the business.
The tough part as it relates to start-up costs is the need to establish a supply of auto parts from wholesalers or directly from auto parts manufacturing companies. This is so because an auto parts business cannot be started without sourcing products for sale.
Regardless of low barriers to entry, the competitive nature of the industry makes it very difficult for new operators to break even within a short period of time in the industry.
Lastly, the auto spare parts industry is pretty much open for aspiring entrepreneurs to launch their business in the industry.
One good thing about car accessories and auto spare parts stores business is that the business can be opened in any part of the United States and if proper market survey and feasibility studies are conducted, then you can be rest assured of the profitability of the business.
Ken Garland® Car Accessories Stores, Inc. is a standard and registered car accessories and auto spare part store that will be located in one of the busiest streets in Charleston – South Carolina.
We have been able to lease a facility that is big enough (a 5 thousand square foot facility) to fit into the design of the kind of standard car accessories and auto spare part store that we intend launching and the facility is located in a corner piece along a major road close to one of the largest residential estates in Charleston – South Carolina.
Ken Garland® Car Accessories Stores, Inc. will retail bumpers and parts, airbags, HVAC, interiors and seatbelts, brake systems, gear boxes, clutches and parts, drive axles and differentials, steering systems and wheels, mufflers, exhausts and radiators, and electrical systems et al from different manufacturers (brands) from the United States and abroad. We are set to service a wide range of clientele in and around Charleston – South Carolina.
We are aware that there are several large and small chains of car accessories and auto spare parts store outlets all around Charleston – South Carolina, which is why we spent time and resources to conduct thorough feasibility studies and market survey so as to be well positioned to favorably compete with our competitors. We have an online – service option for our customers, and our outlet is well secured with various payment options.
Ken Garland® Car Accessories Stores, Inc. will ensure that all our customers are given first class treatment whenever they visit our store.
We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large our customer base may grow to. We will ensure that we get our customers involved in the selection of brands that will be in our store and also when making some business decisions that directly affect them.
Ken Garland® Car Accessories Stores, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our community and integrating sustainable business practices wherever possible.
We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs completely whenever they patronize our products. We will cultivate a working environment that provides a sustainable approach to earning a living.
Ken Garland® Car Accessories Stores, Inc. is a family business that is owned by Kennedy Garland and his immediate family members. Kennedy Garland has a Diploma in Automotive Technology, with over 5 years’ experience in the retail stores industry, working for some of the leading brands in the United States.
Although the business is launching out with just one outlet in Charleston – South Carolina, but there is a plan to open other outlets all around major cities in the United States and Canada.
Ken Garland® Car Accessories Stores, Inc. is in the car accessories and auto spare parts stores industry to service a wide range of clients and of course to make profit, which is why we will ensure that we go all the way to make available a wide range of car accessories and auto spare parts from top manufacturing brands in the United States and other countries of the world.
We will ensure that we do all that is permitted by the law of the United States to achieve our aim and ambition of starting the business. Our product offerings are listed below;
Our Business Structure
Ken Garland® Car Accessories Stores, Inc. do not intend to start a car accessories and auto spare parts retail store business like the usual mom and pop business around the street corner; our intention of starting a car accessories and auto spare parts retail store business is to build a standard and one stop car accessories and auto spare parts retail store outlet in Charleston – South Carolina.
Although our car accessories and auto spare parts retail store business might not be as big as Advance Auto Parts, AutoZone Inc., Genuine Parts Company and O’Reilly Automotive Inc et al, but we will ensure that we put the right structures in place that will support the kind of growth we have in mind while setting up the business.
We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders (the owners, workforce and customers). As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more.
In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
Merchandize Manager
Sales and Marketing Manager
Information Technologist
Chief Executive Officer – CEO:
Admin and HR Manager
Store Manager:
Accountant/Cashier:
Client Service Executive
Our intention of starting just one outlet of our car accessories and auto spare parts retail store in Charleston – South Carolina is to test run the business for a period of 2 to 5 years to know if we will invest more money, expand the business and then open other outlets all over major towns in South Carolina and key cities in the United States and Canada.
We are quite aware that there are several car accessories and auto spare parts retail stores all over Charleston and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.
We know that if proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.
Ken Garland® Car Accessories Stores, Inc. employed the services of an expert HR and Business Analyst with bias in retailing to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our goals and objectives.
This is the summary of the SWOT analysis that was conducted for Ken Garland® Car Accessories Stores, Inc.;
Our location (our business will operate both physical and online store), varieties of payment options, wide range of car accessories and auto spare parts from different manufacturing brands and for different vehicles and our excellent customer service culture will definitely count as a strong strength for Ken Garland® Car Accessories Stores, Inc. Our team of highly qualified staff is also a plus for us.
A major weakness that may count against us is the fact that we are a new car accessories and spare parts retail store outlet in Charleston – South Carolina and we don’t have the financial capacity to compete with multi – million dollars car accessories and auto spare parts retail store outlets like Advanced Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co when it comes to retailing all their car accessories and auto spare parts at rock bottom prices.
The fact that we are going to be operating our car accessories and auto spare parts retail store in a corner piece property along a major road close to one of the largest residential estate in Charleston – South Carolina provides us with unlimited opportunities to sell our car accessories and auto spare parts to a large number of individuals and corporate organizations that own automobiles and also automotive repair garages.
We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our car accessories and auto spare parts store outlets; we are well positioned to take on the opportunities that will come our way.
Just like any other business, one of the major threats that we are likely to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power. Another threat that may likely confront us is the arrival of a new car accessories and auto spare part outlet in the same location where ours is located. unfavorable government policies may also pose a threat to businesses such as ours.
Experts projected that in 2017, the car accessories and auto spare parts stores industry is expected to profit from growing global economic conditions. Per capita income levels have scaled across the globe and the growing middle class in emerging economies have looked to purchase their own cars. As the demand for new automobiles increase, original equipment manufacturers supply more components to industry operators.
Resurgence in demand for new automobiles has stimulated industry profit, as operators were able to increase sales. Steady growth in economic conditions will create avenues for consumers to release pent-up demand for cars, hence the increase in demand for upstream supplies
If you are conversant with the car accessories and auto spare parts stores Industry, you will quite agree that the original equipment refers to motor vehicle parts and accessories that are manufactured to the specification of motor vehicle manufacturers. These standards are global and motor vehicle manufacturers typically source the same parts from different suppliers.
Even though these parts and accessories are manufactured by companies in the industry, original equipment carries the name of the final vehicle assembler. For example, electronic systems manufactured by Delphi and used in GM vehicles would carry the GM brand name.
Lastly, in recent time, the car accessories and auto spare parts retail stores landscape has seen tremendous changes in the last 20 years; it has grown from smaller outlets to a more organized and far reaching venture. The introduction of franchise and online store makes it easier for a car accessories and auto spare parts retailer to reach out to a larger market far beyond the areas where his physical store is located.
Those who patronize car accessories stores cut across all genders; male and female above 18 years with the financial means and who own automobiles, hence the target market for the car accessories and auto spare parts store business is all encompassing. In essence, your target market can’t be restricted to just a group of people, but all those who own automobiles.
In view of that, we have positioned our car accessories and auto spare parts retail store to service the residents of Charleston – South Carolina and every other location where franchise cum outlets of our car accessories and auto spare parts retail stores will be located all over key cities in the United States of America and Canada. We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us.
We are in business to retail a wide range of car accessories and auto spare parts to the following groups of people and corporate organizations;
Our competitive advantage
A close study of the car accessories and auto spare parts stores industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.
We are aware of the stiff competition and we are well prepared to compete favorably with other leading car accessories and auto spare parts retail stores in Charleston – South Carolina and throughout the United States and Canada.
Ken Garland® Car Accessories Stores, Inc. is launching a standard one stop car accessories and auto retail store that will indeed become the preferred choice of residents of Charleston – South Carolina and every other location where our outlets will be opened.
Our car accessories and auto spare parts retail store is located in a corner piece along a major road close to one of the largest residential estates in Charleston – South Carolina. We have enough parking space that can accommodate well over 10 cars per time.
One thing is certain; we will ensure that we have a wide range of car accessories and auto spare parts from leading manufacturers available in our store at all time. It will be difficult for customers to visit our store and not see the type of car accessory or auto spare parts they are looking for. One of our business goals is to make Ken Garland® Car Accessories Stores, Inc. a one stop car accessories and auto spare part retail shop. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.
Lastly, our employees will be well taken care of and their welfare package will be among the best within our category (startup car accessories and auto spare parts retail stores) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
Ken Garland® Car Accessories Stores, Inc. is in business to retail a wide range of car accessories and auto spare parts to the residents of Charleston – South Carolina. We are in the car accessories and auto spare parts retail stores industry to maximize profit and we are going to go all the way out to ensure that we achieve our business goals and objectives.
Our source of income will be the retailing of a wide range of car accessories and auto spare parts at affordable prices.
Ken Garland® Car Accessories Stores, Inc. will generate income by selling the following products;
One thing is certain when it comes to car accessories and auto spare parts retail stores, if your store is well stocked with various types of car accessories and auto spare parts and centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in Charleston – South Carolina and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six month of operation and grow the business and our clientele base.
We have been able to critically examine the car accessories and auto spare parts retail stores industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Charleston – South Carolina.
Below are the sales projections for Ken Garland® Car Accessories Stores, Inc. it is based on the location of our business and other factors as it relates to startup car accessories and auto spare parts retail stores in the United States;
N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor within our market space. Please note that the above projection might be lower and at the same time it might be higher.
Before choosing a location for Ken Garland® Car Accessories Stores, Inc. we conducted a thorough market survey and feasibility studies in order for us to be able to penetrate the available market and become the preferred choice for residents of Charleston – South Carolina. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.
We hired experts who have good understanding of the car accessories and auto spare parts retail stores industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Charleston – South Carolina.
In other to continue to be in business and grow, we must continue to sell the car accessories and auto spare parts that are available in our store which is why we will go all out to empower our sales and marketing team to deliver. In summary, Ken Garland® Car Accessories Stores, Inc. will adopt the following sales and marketing approach to win customers over;
Despite the fact that our car accessories and auto spare parts retail store is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our sporting goods retail store.
Ken Garland® Car Accessories Stores, Inc. has a long-term plan of opening outlets in various locations all around South Carolina and key cities in the United States and Canada which is why we will deliberately build our brand to be well accepted in Charleston before venturing out.
As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Ken Garland® Car Accessories Stores, Inc.;
Aside from quality, pricing is one of the key factors that gives leverage to car accessories and auto spare part retail stores, it is normal for consumers to go to places (car accessories and auto spare parts retail outlets) where they can get car accessories and auto spare parts at cheaper price which is why big player in the car accessories and auto spare parts stores industry like Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co will attract loads of corporate and individual clients.
We know we don’t have the capacity to compete with Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co but we will ensure that the prices and quality of all the car accessories and auto spare parts that are available in our store are competitive with what is obtainable amongst car accessories and auto spare parts stores within our level.
The payment policy adopted by Ken Garland® Car Accessories Stores, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Ken Garland® Car Accessories Stores, Inc. will make available to her clients;
In view of the above, we have chosen banking platforms that will enable our clients make payment for our car accessories and auto spare parts purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our products.
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting/leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business.
The materials and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a car accessories and auto spare parts retail store business; it might differ in other countries due to the value of their money.
These are the key areas where we will spend our start–up capital on;
We would need an estimate of $750,000 to successfully set up our standard car accessories and auto spare parts retail store in Charleston – South Carolina. Please note that this amount includes the salaries of all the staff for the first three months of operation.
Generating Funds/Startup Capital for Ken Garland® Car Accessories Stores, Inc.
Ken Garland® Car Accessories Stores, Inc. is a private registered business that is solely owned and financed by Kennedy Garland and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the start – up capital to 3 major sources.
These are the areas we intend generating our start – up capital;
N.B: We have been able to generate about $250,000 ( Personal savings $200,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
The future of a business lies in the number of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business closes shop.
One of our major goals of starting Ken Garland® Car Accessories Stores, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to retail our wide range of quality car accessories and auto spare parts a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Ken Garland® Car Accessories Stores, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List / Milestone
Starting an auto spare part business can be a smart move for anyone who likes and understands the automotive industry. Indeed, even with huge organizations, smaller contenders such as private automotive industries in the auto parts business can still flourish with the perfect technique.
This article will help you determine how to start an auto parts business.
📖 Key takeaways
According to Grand View Research , the global automotive aftermarket size was valued at approximately 448.24 billion in 2023. It is projected to grow at a compound annual growth rate (CAGR) of 3.9% from 2024 to 2030.
The automotive aftermarket industry’s growth is mainly due to the increased number of vehicles on the roads. According to Statista , 283.4 million vehicles, including passenger cars, motorcycles, trucks, buses, and other vehicles, were registered in the US in 2022. Also, the second important factor for growth is the continuously rising average age of vehicles, which can be seen from the latest data from the Bureau of Transportation Statistics in the US .
The third reason for industry growth lies in the growth of the e-commerce industry and many platforms that make it easy for customers to search for all the parts they need based on the right vehicle model. These new and improved customer experiences allow many people to buy spare car parts for their vehicles through these online platforms.
Accidents go hand in glove with running traffic, and people like to replace the damaged car parts immediately. After assessing all the accident costs, insurance companies suggest aftermarket parts instead of original manufacturer parts (OEM). So, both parts can capture a good sale. Ensuring you provide the right parts for different makes and models is crucial for customer satisfaction and retention.
You can foster a spare parts business by establishing short-term promotions to improve sales or by investing in high-level expertise & excellence in your shop. You may deal in both OEM and aftermarket parts, offering all the parts such as AC compressor, brakes, turbocharger, steering rack, suspension, shocks, struts, and fuel pumps, all with a full warranty and guaranteed exact fit.
Besides offering your clients better value, prompt delivery, a wider range, and better quality or specialty items that are hard to get elsewhere, you can also offer work to build more grounded, long-term client relationships .
If you are determined to make a successful start, you have to complete your market research . In this regard, you have to make many game-changing decisions, such as:
Studying the target market will help you decide what products your customers tend to buy.
Plus, learn how to tackle a competitive market. The marketing of your projected area needs a thorough study. You must have a decent auto spare business plan before you take risks in this business .
The location matters much in shaping the success of your auto parts business if you base your business model only on traditional shops. You should choose your business location where many cars and trucks are seen en route. It is needless to say, you should avoid starting an auto parts business in a rural area. Many locations can be attractive for this business, such as:
People would prefer to visit your auto spare parts business because of the quality service and the kind of parts you offer.
Related : How to Make Money Online with Cars
Your target market and business strategy combined to play a major role in selling your automotive parts. There are various parts for you to choose from. Some would like to deal with just one brand, such as Toyota’s spare parts. Others may have some expertise in one-product selling comprising:
There are several parts you can deal with. The parts that you can comfortably sell in your spare-parts shop consisting:
In addition to these parts, your shop can also sell car accessories such as car cleaning gel, tire inflators, emergency car tools, car mounts, seat organizers, LED lights, air fresheners, car storage organizers, car care kits, steering wheel covers, scratch removers, and car maintenance products like tire pressure gauges and windshield covers.
The parts can be shipped from local suppliers and global suppliers.
The size of your business will decide how many employees you need to hire. There may be a need for a bookkeeper who can be answerable for all the everyday exchanges representing the auto spare parts store business. You will also need a cashier and shop assistants for traditional stores.
You should be answerable for all the business cash inflows and cash outflows. Work to ensure that you have a decent inventory management system so you don’t come up short on items that customers require, including a wide range of automotive accessories.
Stocking your store with all items might be hard due to occasional parts shortages. Security is also crucial in managing inventory and preventing theft. You can begin with fast-moving products and order extra to ensure fast-moving parts are in stock.
If you want to establish your auto parts business, you need to develop effective strategies to maximize your spare parts sales. This includes offering a wide range of products, such as motorcycle accessories and parts.
Additionally, providing repair kits and tools for automotive maintenance can attract more customers looking for comprehensive solutions.
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Pre-Written Auto Spare Parts Store Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements. For an in-depth analysis of the auto spare parts store business, we encourage you to purchase our well-researched and comprehensive auto spare parts store business plan. We introduced ...
The financial plan overview should succinctly summarize your financial goals and projections, including revenue targets and profit margins, to provide a clear picture of your store's financial trajectory. Example: Precision Auto Parts aims for $4.5 million in annual revenue by 2028, targeting a 10% EBITDA margin.
Marketing promotion expenses for the grand opening of Freeway Auto Parts Stores®, LLC in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580. The cost for hiring business consultant - $2,500.
After getting the plan properly, you must secure a retail location according to your business model. Choose a location that is easily accessible to your target customers and suppliers. Also, set up a spacious and organized warehouse to store and manage your spare parts inventory. 5. Licensing & Registration.
Get the most out of your business plan example. Follow these tips to quickly develop a working business plan from this sample. 1. Don't worry about finding an exact match. We have over 550 sample business plan templates. So, make sure the plan is a close match, but don't get hung up on the details. Your business is unique and will differ from ...
Executive Summary. Southeast Racing Parts (SRP) is a small, North Carolina-based automobile racing parts brick and mortar and mail order organization. SRP will remain small in order to offer unprecedented customer attention. Southeast Racing Parts will become the premier destination for entry level and novice racing parts.
How it works Learn More. 2. Draft a auto parts business plan. Creating a business plan is a crucial step in establishing a successful auto parts business. It serves as a roadmap, outlining your business goals, strategies, and the methods you'll employ to overcome challenges and achieve success.
Developing a comprehensive business plan is vital for the success of your auto parts business. This plan serves as a roadmap, outlining strategies, financial projections, and operational details to guide your business's growth and sustainability. It helps you identify your target market, competitors, and unique selling propositions, allowing ...
How to Write a Auto Parts Business Plan in 7 Steps: 1. Describe the Purpose of Your Auto Parts Business. The first step to writing your business plan is to describe the purpose of your auto parts business. This includes describing why you are starting this type of business, and what problems it will solve for customers.
This guide will help you create a comprehensive sales and marketing plan tailored to the business plan of an auto parts store. We'll begin by stressing the significance of a thorough market analysis to understand competitors and discern potential customer needs. Following that, we'll focus on establishing your store's brand identity and ...
3.3 How the Auto Parts Store will be started. Step1: Plan Everything. Good planning is the most crucial step when learning how to start a car parts business. The best aid in planning and managing a business is its business plan. To write your vehicle spare parts business plan, you can take help from this automobile spare parts business plan.
This document provides a sample business plan for an auto spare parts shop. It discusses the auto parts store industry overview, including market size and growth projections. It then provides an executive summary of a sample business called Freeway Auto Parts Stores, which will be located in Charleston, South Carolina and will sell automotive parts, distribute brands, and offer repairs. The ...
The business plan of the auto spare part business aims to maximize profit margins and ensure that the business achieves its goals and objectives. In essence, the main source of income is the retailing of a wide range of auto spare parts at attractive prices. This includes selling automotive parts and accessories including critical parts ...
If customers don't find what they need at your business, they will happily shop elsewhere. Staying profitable in the field of used auto parts requires you keep an extensive selection of parts for a wide variety of vehicles at all times. 6. Control your cash flow. Monitor the flow of cash in and out of your business.
Planning and Calculating the Cost. For a successful automobile spare parts business, you need to create a detailed business plan. Which will be defining the goal and the path of reaching there. This will serve as a blueprint but most importantly, it will help in securing the startup.
4. Register Your Business and Obtain the Required License. It is important that you register your auto spare parts business before opening your shop to the public. In some states in the united states and some other countries, you would be required a license to be able to own an auto spare parts business.
The cost for start-up inventory (stocking with a wide range of car accessories and auto spare parts from different manufacturing brands) - $350,000. The cost for counter area equipment - $9,500. The cost for store equipment (cash register, security, ventilation, signage) - $13,750.
The parts can be shipped from local suppliers and global suppliers. 4. The Size of Staff and Management. The size of your business will decide how many employees you need to hire. There may be a need for a bookkeeper who can be answerable for all the everyday exchanges representing the auto spare parts store business.
Starting Auto Spare Parts Store Business Plan (PDF) - StartupBiz Global (2022) - Free download as PDF File (.pdf) or read online for free. Start up business plan for spare parts retails
This document outlines a business plan for an auto spare parts store that will sell auto parts and accessories. The plan discusses the mission, objectives, and keys to success of the business. It describes that the business will be solely owned and will sell a variety of auto parts and accessories from its physical location. Finally, it provides financial projections including startup costs ...
3. Develop a Business Plan: Your roadmap to success! Create a detailed business plan outlining: Executive Summary: Briefly introduce your business, its goals, and unique selling proposition. Business Description: Define your niche, target market, and the types of spare parts you'll offer. Market Analysis: Summarize your market research ...
abcd business plan auto spare part network solution microwagon information system business plan overview auto spare part network solution micro wagon report. Skip to document. ... The auto spare parts market continued to rise, reaching Dhs32 billion in 2010 and Dhs36 billion in 2011, most of which is made up from export and re-export activities ...