Start-up Funding | |
Start-up Expenses to Fund | $9,100 |
Start-up Assets to Fund | $22,900 |
Total Funding Required | $32,000 |
Assets | |
Non-cash Assets from Start-up | $20,000 |
Cash Requirements from Start-up | $2,900 |
Additional Cash Raised | $0 |
Cash Balance on Starting Date | $2,900 |
Total Assets | $22,900 |
Liabilities and Capital | |
Liabilities | |
Current Borrowing | $0 |
Long-term Liabilities | $20,000 |
Accounts Payable (Outstanding Bills) | $0 |
Other Current Liabilities (interest-free) | $0 |
Total Liabilities | $20,000 |
Capital | |
Planned Investment | |
John Ford | $6,000 |
Michael Ronald | $6,000 |
Other | $0 |
Additional Investment Requirement | $0 |
Total Planned Investment | $12,000 |
Loss at Start-up (Start-up Expenses) | ($9,100) |
Total Capital | $2,900 |
Total Capital and Liabilities | $22,900 |
Total Funding | $32,000 |
F & R Auto offers a wide range of services as outlined in the detailed sections below. It is ultimately the goal of the company to offer a one-stop facility for all auto servicing needs, including brakes, transmission, wheel alignment, etc. In this way the company can offer greater perceived value for the customer than many other shops which specialize in certain areas.
The industry is highly competitive with suppliers having a great deal of power in setting and negotiating the prices of their products and services to repair shops. In addition, because the customers see the service as undifferentiated and a “commodity” with little value separation between competitors, buyer power is also very high. Finally, the barriers to entry are moderately low, and the large number of competitors in this field, including substitutes (such as do-it-yourself work) mean that the pricing for such services are very competitive. The only way to have an advantage in this industry is a low cost leadership principal applied aggressively or to create higher switching costs through the building of strong business to customer ties.
F & R Auto will hire trained and certified mechanics who are able to prove they have superior customer awareness and interaction. It is the company’s professional people who will fulfill the firm’s contracts and goals. The largest part of the company’s expenses will be in labor costs.
F & R Auto provides a wide range of auto repair services. These include:
Each job or project will be on a reservation basis, although we will accept a small percentage of drive in repair work.
The auto repair industry is highly competitive. Each company within this field has high capital costs, low margins, and a high intensity of competition.
Suppliers have a great deal of power in setting and negotiating the prices of their products and services to repair shops. This is due to the fact that the suppliers who absorb the greatest amounts of cash from repair shops are large auto part companies. These companies are more consolidated that the repair industry, have deeper pockets, an almost limitless number of substitute customers, and finally they are the single most important supplier to F & R’s industry. Therefore, these companies can set whatever price they wish to. Furthermore, labor is a supplier in this industry as well, and salaries for such individuals are well known and not very flexible.
In addition, because the customers see the service as undifferentiated and a “commodity” with little value separation between competitors (if they offer a suitable level of quality) buyer power is also very high. Additionally, the costs of our services are not cheap, and buyers are willing to search for the most favorable combination of price and acceptable service.
The barriers to entry and exit are moderately low in this industry. Switching costs are virtually non-existent and the costs to entry and exist the market are low. The large number of competitors in this field including substitutes mean that the pricing for such services are very competitive. The only way to have an advantage in this industry is a low cost leadership principal applied aggressively to all aspects of the business or to build up customer relations to a point where the switching costs are raised.
The technological revolution in computers has enhanced our abilities to diagnose and repair our clients vehicles. F &R will remain on the cutting edge by instituting the use of computer diagnostic equipment in its shop. The company will continue to seek new ways to provide a better service through technology.
The company does not have any plans to create further services at this time.
The following table and chart show the market analysis for F & R Auto Repair.
Market Analysis | |||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||
Potential Customers | Growth | CAGR | |||||
Number of cars in Seattle | 3% | 145,833 | 150,208 | 154,714 | 159,355 | 164,136 | 3.00% |
Other | 0% | 0 | 0 | 0 | 0 | 0 | 0.00% |
Total | 3.00% | 145,833 | 150,208 | 154,714 | 159,355 | 164,136 | 3.00% |
This section is covered in the Competitive Comparison section of the Plan.
While many customers looking to purchase automotive repair services are concerned with price, the primary concern is with building a relationship of trust between themselves and their service provider. A large number of people within the country have experienced or heard of bad service encounters within this market. As a person’s car is usually connected in one way or another with that individual’s livelihood, a dependable automobile is crucial. Therefore, many clients are willing to pay a little more for a mechanic they feel does a quality job and understands their needs.
An automotive repair company that can anticipate, meet, and even exceed customer’s needs can build a defensible position within the market place and acquire market share at the expense of other rivals.
As stated before, the automotive repair market is very fragmented. The chief competitors in this industry for F & R are the high quality automobile dealerships and licensed service reps. This includes Toyota, Ford, Chrysler, and other major brand names. Within F & R’s immediate service vicinity, There is Rodham’s Toyota, Lester Ford and Woodmark’s Chrysler dealerships. Each of these direct competitors have a service facility. These competitors dominate the market place, have the largest market share, and have advantages such as specially trained personnel, access to lower priced parts and tools, and deep pockets. The other competitors are mostly “mom & pop” style outfits that make up the majority of the competition. For F & R this includes Dave’s Auto Repair, The Taller Mechanico, Kirkland Auto and Body, and Vancouver Auto. The advantages of these firms is that they can seek a low cost leadership strategy due to lower personnel costs. However, they have a much more fluid customer base and higher customer turnover.
F & R will seek to compete initially in the low cost strategy. At the same time, it will seek to provide a higher level of customer satisfaction by having more rigorous quality control and seeking ways to enhance the entire service experience (not just repairing a person’s car). In this way it will lock in a loyal customer base who value the client-service provider relationship.
The auto repair industry is highly fragmented. In fact, there are so many small providers that any company in this industry is facing a purely competitive environment. It is very difficult to create a differentiation, or niche, strategy in this environment and until F & R is able to establish a reputation for quality, on time, superior customer service, the company will seek a low cost role. Once it has achieved what management believes to be a sufficient reputation for its services along with a profitable customer base, the company plans to leverage this advantage into a differentiation strategy that will be able to charge more for its services.
The following section outlines the company’s strategic focus in growing the business.
F & R Auto’s competitive edge lies in the vision of its partners, who understand better than many of their rivals that a service visit does not just include repairing a client’s car, it includes the entire service experience from the first time a client talks to their mechanic until they decide to stop driving. The long-term profitability of a service firm of this type lies in the repeat customer that finds F & R’s services an excellent experience, DESPITE the fact that they usually have suffered a inconvenient breakdown. The company will seek to examine ALL aspects of the service experience to seek ways to improve its customer satisfaction. In addition, all employees will be rigorously trained and retrained to think about customer satisfaction in order to create a self-sustaining company culture that revolves around this issue.
It is the express purpose of F & R to become the local leader in quality and service experience of all the small (non-dealerships) automotive repair firms within the Seattle area while maintaining a low cost plan. Once a reputation for quality and service experience is created, and an ongoing network of referrals is bringing in new business, the company plans to re-evaluate its strategy and positioning within the market to see if a differentiation strategy is viable. If so, this will allow the company to raise prices and increase profit margins in relation to its rivals. This in turn is expected to leverage long-term growth until F & R can reach a regional scope of operations.
The company has a modest program of marketing its services that include the following:
Each of these marketing approaches has the advantage of being low cost and creating service awareness. The company’s long-term marketing goals are to use local radio and TV ads similar to the Les Schwab Tire Center ads.
The company is also investigating the possibility of having a grand opening program that would feature discounts, food, a local radio disc jockey, and other promotional ideas.
The principal owners of F & R Auto expect that a significant number of their pre-existing clients (where Ford and Ronald currently work) will desire to switch to F & R Auto to retain the services of their personal mechanics. This will provide a sufficient income until F & R can build up a reputation and see its marketing program take effect.
This promotion strategy will take the form of flyers, direct mailers, price discounts, and advertisements in newspapers and yellow pages. F & R does not desire to spend a large amount on marketing until the firm is ready to expand either into new facilities or open up new ones. It is estimated this will occur sometime after year five.
F & R Auto exists in a purely competitive environment where each firm must be a price taker. In other words, the firm has no ability to affect the market price of its services, regardless of how many automobiles it repairs. In this case, therefore, marginal revenue (the revenue incurred by producing or servicing one more unit) is equal to the price charged. Furthermore, because the demand curve is essentially horizontal, F & R can service automobiles at total capacity without effecting the price.
Since the automotive repair industry is, operationally, a job-shop environment, it is somewhat difficult to estimate sales. For job-shops, each individual product or service is tailored or unique to that job, and is only initiated once an order is made. However, the sales forecast reflect the professional opinion of Mr. Ford in how much sales he will make based on the following assumptions:
For the most part, sales for an automobile repair firm are steady year round and reflect little seasonality.
The table and charts below outline the sales forecast. Three years of annual sales and costs of sales are shown. Twelve monthly tallies are included in the appendices.
Sales Forecast | |||
Year 1 | Year 2 | Year 3 | |
Sales | |||
Routine maintenance | $51,000 | $57,120 | $62,261 |
Small repair jobs | $60,000 | $67,200 | $71,904 |
Large repair jobs | $67,800 | $75,936 | $81,252 |
Total Sales | $178,800 | $200,256 | $215,417 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
Routine maintenance | $5,100 | $5,712 | $6,226 |
Small repair jobs | $6,000 | $6,720 | $7,190 |
Large repair jobs | $6,780 | $7,594 | $8,125 |
Subtotal Direct Cost of Sales | $17,880 | $20,026 | $21,542 |
John Ford began working as an apprentice mechanic in his father’s shop in 1984. Since that time, he has worked for a variety of automotive shops and dealerships and has numerous certificates in automobile repair. During the past two years Mr. Ford has attended Bellevue Community College where he received an Associates degree in business administration in June of 2000.
Michael Ronald attended ITT Technical Institute where he received a certificate in electronics repair in 1980. In 1983 Mr. Ronald went to work for Jim Click Ford Dealership in Tucson AZ, where he worked on automotive electrical and electronic systems. Desiring to expand his skills, Mr. Ronald received a mechanic’s certificate in 1988 and since then has become certified in various automotive fields. In anticipation of F & R’s business needs, Mr. Ronald is taking night classes at Seattle University in marketing.
F & R’s initial staffing will consist of Ford and Ronald, plus Ronald’s wife who will act as a part-time office manager. The company will seek two entry level mechanics to be hired within a few months after the company is operating. Accounting, bookkeeping, and marketing services will be outsourced. The company’s intermediate goal is to have four full time, fully trained mechanics at the original facility, plus a full-time office manager. However, management has decided to await future developments before determining the best time to bring on such personnel.
Personnel Plan | |||
Year 1 | Year 2 | Year 3 | |
Mr. Ford | $36,000 | $36,000 | $36,000 |
Mr. Ronald | $36,000 | $36,000 | $36,000 |
Office manager (part time) | $14,400 | $15,000 | $15,000 |
Apprentice mechanic (part time) | $6,900 | $15,000 | $15,000 |
Apprentice mechanic (part time) | $0 | $0 | $15,000 |
Apprentice mechanic (part time) | $0 | $0 | $0 |
Total People | 4 | 4 | 5 |
Total Payroll | $93,300 | $102,000 | $117,000 |
The following sections outline the financial plan for F & R Auto Repair.
The company’s Break-even Analysis is based on an average company’s running costs within this industry, including payroll, and its fixed costs for such things as rent, utilities, etc.
Break-even Analysis | |
Monthly Revenue Break-even | $14,564 |
Assumptions: | |
Average Percent Variable Cost | 10% |
Estimated Monthly Fixed Cost | $13,107 |
The following table and chart show the projected profit and loss for F & R Auto Repair.
Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $178,800 | $200,256 | $215,417 |
Direct Cost of Sales | $17,880 | $20,026 | $21,542 |
Other Production Expenses | $0 | $0 | $0 |
Total Cost of Sales | $17,880 | $20,026 | $21,542 |
Gross Margin | $160,920 | $180,230 | $193,875 |
Gross Margin % | 90.00% | 90.00% | 90.00% |
Expenses | |||
Payroll | $93,300 | $102,000 | $117,000 |
Sales and Marketing and Other Expenses | $6,000 | $7,200 | $7,400 |
Depreciation | $1,992 | $2,000 | $2,000 |
Leased Equipment | $6,000 | $1,000 | $1,000 |
Utilities | $4,800 | $5,000 | $5,000 |
Insurance | $7,200 | $7,400 | $7,400 |
Rent | $24,000 | $24,000 | $24,000 |
Payroll Taxes | $13,995 | $15,300 | $17,550 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $157,287 | $163,900 | $181,350 |
Profit Before Interest and Taxes | $3,633 | $16,330 | $12,525 |
EBITDA | $5,625 | $18,330 | $14,525 |
Interest Expense | $1,892 | $1,700 | $1,500 |
Taxes Incurred | $522 | $4,389 | $3,308 |
Net Profit | $1,219 | $10,241 | $7,718 |
Net Profit/Sales | 0.68% | 5.11% | 3.58% |
The following table and chart are the projected cash flow figures for F & R.
Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $160,920 | $180,230 | $193,875 |
Cash from Receivables | $14,635 | $19,636 | $21,267 |
Subtotal Cash from Operations | $175,555 | $199,867 | $215,142 |
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 | $175,555 | $199,867 | $215,142 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $93,300 | $102,000 | $117,000 |
Bill Payments | $77,017 | $86,232 | $88,638 |
Subtotal Spent on Operations | $170,317 | $188,232 | $205,638 |
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 | $2,000 | $2,000 | $2,000 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $172,317 | $190,232 | $207,638 |
Net Cash Flow | $3,238 | $9,634 | $7,504 |
Cash Balance | $6,138 | $15,773 | $23,277 |
The following table shows the projected balance sheet.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $6,138 | $15,773 | $23,277 |
Accounts Receivable | $3,245 | $3,634 | $3,910 |
Inventory | $1,815 | $2,033 | $2,187 |
Other Current Assets | $0 | $0 | $0 |
Total Current Assets | $11,198 | $21,440 | $29,373 |
Long-term Assets | |||
Long-term Assets | $20,000 | $20,000 | $20,000 |
Accumulated Depreciation | $1,992 | $3,992 | $5,992 |
Total Long-term Assets | $18,008 | $16,008 | $14,008 |
Total Assets | $29,206 | $37,448 | $43,381 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $7,088 | $7,088 | $7,303 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $7,088 | $7,088 | $7,303 |
Long-term Liabilities | $18,000 | $16,000 | $14,000 |
Total Liabilities | $25,088 | $23,088 | $21,303 |
Paid-in Capital | $12,000 | $12,000 | $12,000 |
Retained Earnings | ($9,100) | ($7,881) | $2,360 |
Earnings | $1,219 | $10,241 | $7,718 |
Total Capital | $4,119 | $14,360 | $22,078 |
Total Liabilities and Capital | $29,206 | $37,448 | $43,381 |
Net Worth | $4,119 | $14,360 | $22,078 |
The Business ratios give an overall idea of how profitable and at what risk level F & R Auto will operate at. The ratio table gives both time series analysis and cross-sectional analysis by including industry average ratios. As can be seen from the comparison between industry standards and F&R’s own ratios, there is some differences. Most of these are due to the fact that there is a very large variance in assets, liabilities, financing, and net income between companies in this industry due to the vast differences in company size.
Overall the company’s projections show a company that faces the usual risks of companies in this industry and one that will be profitable in the long-run. The company shows that it has higher SG&A costs than other competitors, however management has deliberately overstated costs and minimized profits in order to create a “safe” or “buffer” zone in case of hard times or other unforeseeable problems. Pre-tax return on net worth and pre-tax return on assets appears to be very high, especially within the first two years, however this is due to the fact that the company will be operating with fewer assets than most companies in the first few years until it can build up enough cash to acquire the tools and facilities that are desired and go beyond the “adequate” level.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 12.00% | 7.57% | 7.00% |
Percent of Total Assets | ||||
Accounts Receivable | 11.11% | 9.71% | 9.01% | 8.80% |
Inventory | 6.21% | 5.43% | 5.04% | 9.60% |
Other Current Assets | 0.00% | 0.00% | 0.00% | 23.80% |
Total Current Assets | 38.34% | 57.25% | 67.71% | 42.20% |
Long-term Assets | 61.66% | 42.75% | 32.29% | 57.80% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 24.27% | 18.93% | 16.83% | 34.80% |
Long-term Liabilities | 61.63% | 42.73% | 32.27% | 24.70% |
Total Liabilities | 85.90% | 61.65% | 49.11% | 59.50% |
Net Worth | 14.10% | 38.35% | 50.89% | 40.50% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 90.00% | 90.00% | 90.00% | n.a. |
Selling, General & Administrative Expenses | 89.32% | 84.89% | 86.42% | 75.20% |
Advertising Expenses | 1.34% | 1.50% | 1.39% | 1.30% |
Profit Before Interest and Taxes | 2.03% | 8.15% | 5.81% | 1.70% |
Main Ratios | ||||
Current | 1.58 | 3.02 | 4.02 | 1.17 |
Quick | 1.32 | 2.74 | 3.72 | 0.65 |
Total Debt to Total Assets | 85.90% | 61.65% | 49.11% | 59.50% |
Pre-tax Return on Net Worth | 42.28% | 101.88% | 49.94% | 1.80% |
Pre-tax Return on Assets | 5.96% | 39.07% | 25.41% | 4.60% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | 0.68% | 5.11% | 3.58% | n.a |
Return on Equity | 29.59% | 71.32% | 34.96% | n.a |
Activity Ratios | ||||
Accounts Receivable Turnover | 5.51 | 5.51 | 5.51 | n.a |
Collection Days | 57 | 63 | 64 | n.a |
Inventory Turnover | 10.91 | 10.41 | 10.21 | n.a |
Accounts Payable Turnover | 11.87 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 30 | 30 | n.a |
Total Asset Turnover | 6.12 | 5.35 | 4.97 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 6.09 | 1.61 | 0.96 | n.a |
Current Liab. to Liab. | 0.28 | 0.31 | 0.34 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $4,111 | $14,352 | $22,070 | n.a |
Interest Coverage | 1.92 | 9.61 | 8.35 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.16 | 0.19 | 0.20 | n.a |
Current Debt/Total Assets | 24% | 19% | 17% | n.a |
Acid Test | 0.87 | 2.23 | 3.19 | n.a |
Sales/Net Worth | 43.41 | 13.95 | 9.76 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
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 | |||||||||||||
Routine maintenance | 0% | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,500 | $4,500 | $4,500 | $4,500 | $4,500 | $4,500 |
Small repair jobs | 0% | $4,500 | $4,500 | $4,500 | $4,500 | $4,500 | $4,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 | $5,500 |
Large repair jobs | 0% | $4,800 | $4,800 | $4,800 | $4,800 | $4,800 | $4,800 | $6,500 | $6,500 | $6,500 | $6,500 | $6,500 | $6,500 |
Total Sales | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $16,500 | $16,500 | $16,500 | $16,500 | $16,500 | $16,500 | |
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 | |
Routine maintenance | $400 | $400 | $400 | $400 | $400 | $400 | $450 | $450 | $450 | $450 | $450 | $450 | |
Small repair jobs | $450 | $450 | $450 | $450 | $450 | $450 | $550 | $550 | $550 | $550 | $550 | $550 | |
Large repair jobs | $480 | $480 | $480 | $480 | $480 | $480 | $650 | $650 | $650 | $650 | $650 | $650 | |
Subtotal Direct Cost of Sales | $1,330 | $1,330 | $1,330 | $1,330 | $1,330 | $1,330 | $1,650 | $1,650 | $1,650 | $1,650 | $1,650 | $1,650 |
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 | ||
Mr. Ford | 0% | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 |
Mr. Ronald | 0% | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 |
Office manager (part time) | 0% | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 |
Apprentice mechanic (part time) | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $1,150 | $1,150 | $1,150 | $1,150 | $1,150 | $1,150 |
Apprentice mechanic (part time) | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Apprentice mechanic (part time) | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total People | 3 | 3 | 3 | 3 | 3 | 3 | 4 | 4 | 4 | 4 | 4 | 4 | |
Total Payroll | $7,200 | $7,200 | $7,200 | $7,200 | $7,200 | $7,200 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 |
General Assumptions | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
Current Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Tax Rate | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | |
Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
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 | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $16,500 | $16,500 | $16,500 | $16,500 | $16,500 | $16,500 | |
Direct Cost of Sales | $1,330 | $1,330 | $1,330 | $1,330 | $1,330 | $1,330 | $1,650 | $1,650 | $1,650 | $1,650 | $1,650 | $1,650 | |
Other Production Expenses | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $1,330 | $1,330 | $1,330 | $1,330 | $1,330 | $1,330 | $1,650 | $1,650 | $1,650 | $1,650 | $1,650 | $1,650 | |
Gross Margin | $11,970 | $11,970 | $11,970 | $11,970 | $11,970 | $11,970 | $14,850 | $14,850 | $14,850 | $14,850 | $14,850 | $14,850 | |
Gross Margin % | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% | 90.00% | |
Expenses | |||||||||||||
Payroll | $7,200 | $7,200 | $7,200 | $7,200 | $7,200 | $7,200 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | |
Sales and Marketing and Other Expenses | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | |
Depreciation | $166 | $166 | $166 | $166 | $166 | $166 | $166 | $166 | $166 | $166 | $166 | $166 | |
Leased Equipment | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | |
Utilities | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | |
Insurance | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | $600 | |
Rent | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | $2,000 | |
Payroll Taxes | 15% | $1,080 | $1,080 | $1,080 | $1,080 | $1,080 | $1,080 | $1,253 | $1,253 | $1,253 | $1,253 | $1,253 | $1,253 |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Operating Expenses | $12,446 | $12,446 | $12,446 | $12,446 | $12,446 | $12,446 | $13,769 | $13,769 | $13,769 | $13,769 | $13,769 | $13,769 | |
Profit Before Interest and Taxes | ($476) | ($476) | ($476) | ($476) | ($476) | ($476) | $1,082 | $1,082 | $1,082 | $1,082 | $1,082 | $1,082 | |
EBITDA | ($310) | ($310) | ($310) | ($310) | ($310) | ($310) | $1,248 | $1,248 | $1,248 | $1,248 | $1,248 | $1,248 | |
Interest Expense | $165 | $164 | $162 | $161 | $160 | $158 | $157 | $156 | $154 | $153 | $151 | $150 | |
Taxes Incurred | ($192) | ($192) | ($192) | ($191) | ($191) | ($190) | $277 | $278 | $278 | $279 | $279 | $279 | |
Net Profit | ($449) | ($448) | ($447) | ($446) | ($445) | ($444) | $647 | $648 | $649 | $650 | $651 | $652 | |
Net Profit/Sales | -3.38% | -3.37% | -3.36% | -3.35% | -3.35% | -3.34% | 3.92% | 3.93% | 3.93% | 3.94% | 3.95% | 3.95% |
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 | $11,970 | $11,970 | $11,970 | $11,970 | $11,970 | $11,970 | $14,850 | $14,850 | $14,850 | $14,850 | $14,850 | $14,850 | |
Cash from Receivables | $0 | $44 | $1,330 | $1,330 | $1,330 | $1,330 | $1,330 | $1,341 | $1,650 | $1,650 | $1,650 | $1,650 | |
Subtotal Cash from Operations | $11,970 | $12,014 | $13,300 | $13,300 | $13,300 | $13,300 | $16,180 | $16,191 | $16,500 | $16,500 | $16,500 | $16,500 | |
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 | $11,970 | $12,014 | $13,300 | $13,300 | $13,300 | $13,300 | $16,180 | $16,191 | $16,500 | $16,500 | $16,500 | $16,500 | |
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 | $7,200 | $7,200 | $7,200 | $7,200 | $7,200 | $7,200 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | $8,350 | |
Bill Payments | $262 | $7,797 | $6,382 | $6,381 | $6,380 | $6,379 | $6,422 | $7,677 | $7,336 | $7,335 | $7,334 | $7,333 | |
Subtotal Spent on Operations | $7,462 | $14,997 | $13,582 | $13,581 | $13,580 | $13,579 | $14,772 | $16,027 | $15,686 | $15,685 | $15,684 | $15,683 | |
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 | $167 | $167 | $167 | $167 | $167 | $167 | $167 | $167 | $167 | $167 | $167 | $167 | |
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 | $7,628 | $15,164 | $13,749 | $13,748 | $13,747 | $13,746 | $14,938 | $16,194 | $15,852 | $15,852 | $15,851 | $15,850 | |
Net Cash Flow | $4,342 | ($3,149) | ($449) | ($448) | ($447) | ($446) | $1,242 | ($3) | $648 | $648 | $649 | $650 | |
Cash Balance | $7,242 | $4,092 | $3,644 | $3,196 | $2,750 | $2,304 | $3,546 | $3,543 | $4,190 | $4,839 | $5,488 | $6,138 |
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 | $2,900 | $7,242 | $4,092 | $3,644 | $3,196 | $2,750 | $2,304 | $3,546 | $3,543 | $4,190 | $4,839 | $5,488 | $6,138 |
Accounts Receivable | $0 | $1,330 | $2,616 | $2,616 | $2,616 | $2,616 | $2,616 | $2,936 | $3,245 | $3,245 | $3,245 | $3,245 | $3,245 |
Inventory | $0 | $1,463 | $1,463 | $1,463 | $1,463 | $1,463 | $1,463 | $1,815 | $1,815 | $1,815 | $1,815 | $1,815 | $1,815 |
Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Current Assets | $2,900 | $10,035 | $8,171 | $7,722 | $7,275 | $6,828 | $6,383 | $8,296 | $8,603 | $9,250 | $9,899 | $10,548 | $11,198 |
Long-term Assets | |||||||||||||
Long-term Assets | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 |
Accumulated Depreciation | $0 | $166 | $332 | $498 | $664 | $830 | $996 | $1,162 | $1,328 | $1,494 | $1,660 | $1,826 | $1,992 |
Total Long-term Assets | $20,000 | $19,834 | $19,668 | $19,502 | $19,336 | $19,170 | $19,004 | $18,838 | $18,672 | $18,506 | $18,340 | $18,174 | $18,008 |
Total Assets | $22,900 | $29,869 | $27,839 | $27,224 | $26,611 | $25,998 | $25,387 | $27,134 | $27,275 | $27,756 | $28,239 | $28,722 | $29,206 |
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 | $0 | $7,584 | $6,169 | $6,168 | $6,167 | $6,166 | $6,165 | $7,433 | $7,091 | $7,090 | $7,089 | $7,088 | $7,088 |
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 | $0 | $7,584 | $6,169 | $6,168 | $6,167 | $6,166 | $6,165 | $7,433 | $7,091 | $7,090 | $7,089 | $7,088 | $7,088 |
Long-term Liabilities | $20,000 | $19,833 | $19,667 | $19,500 | $19,333 | $19,167 | $19,000 | $18,833 | $18,667 | $18,500 | $18,333 | $18,167 | $18,000 |
Total Liabilities | $20,000 | $27,418 | $25,836 | $25,668 | $25,501 | $25,333 | $25,165 | $26,266 | $25,758 | $25,590 | $25,423 | $25,255 | $25,088 |
Paid-in Capital | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 | $12,000 |
Retained Earnings | ($9,100) | ($9,100) | ($9,100) | ($9,100) | ($9,100) | ($9,100) | ($9,100) | ($9,100) | ($9,100) | ($9,100) | ($9,100) | ($9,100) | ($9,100) |
Earnings | $0 | ($449) | ($897) | ($1,344) | ($1,790) | ($2,235) | ($2,679) | ($2,032) | ($1,383) | ($734) | ($84) | $567 | $1,219 |
Total Capital | $2,900 | $2,451 | $2,003 | $1,556 | $1,110 | $665 | $221 | $868 | $1,517 | $2,166 | $2,816 | $3,467 | $4,119 |
Total Liabilities and Capital | $22,900 | $29,869 | $27,839 | $27,224 | $26,611 | $25,998 | $25,387 | $27,134 | $27,275 | $27,756 | $28,239 | $28,722 | $29,206 |
Net Worth | $2,900 | $2,451 | $2,003 | $1,556 | $1,110 | $665 | $221 | $868 | $1,517 | $2,166 | $2,816 | $3,467 | $4,119 |
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Here is a free business plan sample for an auto repair shop.
Have you been toying with the idea of opening your own auto repair shop but feel overwhelmed about where to start?
Look no further, as we're about to guide you through a comprehensive business plan tailored for the auto repair industry.
As any seasoned entrepreneur will tell you, a robust business plan is crucial to navigating the road to success. It serves as a roadmap, outlining your vision, objectives, and the strategies you'll employ to steer your business to profitability.
To shift your planning into high gear without any detours, you can utilize our auto repair shop business plan template. Our specialists are also on standby to provide a free review and fine-tuning of your plan.
A good business plan for an auto repair shop must reflect the unique aspects of the automotive service industry.
To start, it's crucial to provide a comprehensive overview of the auto repair market. This includes up-to-date statistics and identifying emerging trends within the industry, similar to what we've incorporated in our auto repair shop business plan template .
Then, you need to articulate your business concept effectively. This encompasses your vision, pinpointing your target market (such as local residents, fleet services, or corporate clients), and the distinct positioning of your auto repair shop (specializing in certain types of vehicles, offering quick services, eco-friendly practices, etc.).
The market analysis section is vital. It requires a thorough understanding of local competitors, automotive industry trends, and customer needs and preferences.
For an auto repair shop, particular emphasis should be placed on the services you plan to provide. Detail your service offerings - general maintenance, specialized repairs, diagnostics, tire services - and explain how they cater to the demands and expectations of your target customers.
The operational plan is equally important. It should outline the location of your shop, the layout of the service bays, equipment and tool investments, supplier relationships for parts, and the repair process.
In the auto repair business, it is critical to highlight the expertise of your technicians, the quality of parts used, and adherence to safety and environmental regulations.
Then, delve into your marketing and sales strategy. How will you draw in and keep customers coming back? Consider advertising tactics, customer loyalty programs, and value-added services (like courtesy cars or shuttle services).
Utilizing digital strategies, such as a professional website or an active social media presence, is also vital in the modern marketplace.
The financial plan is another fundamental component. This includes the initial investment, revenue projections, ongoing expenses, and the point at which the business will start to turn a profit.
In an auto repair shop, understanding the profit margins for various services is essential, so meticulous planning and a firm grasp of your financials are necessary. For assistance, you can refer to our financial forecast for an auto repair shop .
Compared to other business plans, an auto repair shop's plan must pay special attention to factors such as inventory management for parts, certifications and training for technicians, and the potential for insurance partnerships or contracts.
A well-crafted business plan will not only help the owner to define their strategies and vision but also to attract investors or secure loans.
Lenders and investors are looking for a solid market analysis, realistic financial projections, and a clear understanding of the day-to-day operations of an auto repair shop.
By presenting a thorough and substantiated plan, you showcase your dedication and preparedness for the success of your venture.
To achieve these goals while saving time, you can simply fill out our auto repair shop business plan template .
Here, we will provide a concise and illustrative example of a business plan for a specific project.
This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.
To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.
All these elements have been thoroughly included by our experts in the business plan template they have designed for an auto repair shop .
Here, we will follow the same structure as in our business plan template.
Market data and figures.
The auto repair industry is a vital component of the global economy with significant growth potential.
Recent estimates value the global automotive repair and maintenance services market at over 700 billion dollars, with expectations for continued growth driven by the increasing number of vehicles on the road and the aging vehicle fleet.
In the United States alone, there are over 230,000 auto repair shops, generating a combined annual revenue of approximately 115 billion dollars. This underscores the critical role auto repair shops play in the American economy and in the daily lives of vehicle owners.
The auto repair industry is witnessing several key trends that are shaping its future.
There is a growing emphasis on technology, with shops incorporating advanced diagnostic tools and software to efficiently service modern vehicles. This includes the use of telematics to predict maintenance issues before they occur.
Electric and hybrid vehicles are becoming more prevalent, leading to a demand for specialized repair services for these types of vehicles.
Environmental concerns are also influencing the industry, with a push towards more sustainable practices, such as recycling parts and fluids, and using eco-friendly products.
Convenience services, such as mobile repair units and online appointment scheduling, are becoming more popular, reflecting customers' desires for more accessible and time-saving options.
Lastly, transparency in service, pricing, and customer communication is increasingly important to consumers, who want to ensure they are getting fair and honest service.
Several factors contribute to the success of an auto repair shop.
Quality of service is paramount. Shops that offer reliable, efficient, and high-quality repairs are more likely to build a loyal customer base.
Expertise in a wide range of services, including the latest automotive technologies, can set a shop apart in a competitive market.
Location is also critical, as a conveniently located shop can attract more customers and provide easier access for vehicle drop-off and pick-up.
Exceptional customer service is essential for creating a positive experience and encouraging repeat business.
Finally, effective cost management, the ability to adapt to industry changes, and a commitment to sustainability are important for the long-term success of an auto repair shop.
Project presentation.
Our auto repair shop project is designed to cater to the increasing number of vehicle owners who require reliable, high-quality maintenance and repair services. Situated in an area with high vehicle traffic or near automotive hubs, this shop will offer a comprehensive range of services, from routine maintenance and oil changes to complex engine repairs and diagnostics, all performed by certified mechanics using state-of-the-art equipment.
The focus will be on providing exceptional service, transparent pricing, and quick turnaround times to ensure customer satisfaction and vehicle safety.
This auto repair shop aims to become a trusted destination for vehicle owners, thereby enhancing the reliability and longevity of their vehicles.
The value proposition of our auto repair shop project is based on delivering trustworthy and expert automotive repair and maintenance services that vehicle owners can depend on.
Our commitment to quality workmanship, fair pricing, and efficient service offers a superior automotive care experience, while contributing to the safety and performance of our customers' vehicles.
We are dedicated to fostering a transparent and customer-focused environment where vehicle owners can receive honest advice and top-notch service, and aim to educate our customers about the importance of regular vehicle maintenance.
Our auto repair shop aspires to become a cornerstone of the community, providing a reliable alternative to dealership services and enhancing the overall vehicle ownership experience for our customers.
The project owner is an automotive enthusiast with a comprehensive understanding of the automotive repair industry.
With a background in mechanical engineering and years of experience in auto repair management, he is determined to establish an auto repair shop that stands out for its dedication to excellence, customer service, and technical expertise.
With a vision of integrity and customer education, he is committed to offering high-quality automotive services that contribute to the safety and satisfaction of the local community.
His commitment to superior service and his passion for automobiles make him the driving force behind this project, aiming to enhance the vehicle maintenance experience for all customers.
Market segments.
The market segments for this auto repair shop are divided into several categories.
First, there are individual car owners who require regular maintenance and repair services to keep their vehicles in optimal condition.
Next, there are car enthusiasts and hobbyists who seek specialized modification and customization services for their vehicles.
The market also includes corporate clients with fleet vehicles that need consistent maintenance and repair to ensure business operations run smoothly.
Finally, insurance companies can be a key segment by partnering with the repair shop to handle claims for vehicle repairs after accidents or damages.
A SWOT analysis of this auto repair shop project reveals several aspects.
Strengths include a team of certified and experienced mechanics, a strong reputation for quality service, and a strategic location accessible to a large customer base.
Weaknesses could include the initial costs of setting up a fully equipped shop and the challenge of building a customer base in a competitive market.
Opportunities lie in the increasing number of vehicles on the road, the potential for partnerships with local businesses, and the ability to specialize in certain types of repairs or services.
Finally, threats could include the rapid advancement of automotive technology requiring continuous training and investment in new equipment, and the potential for economic downturns affecting consumer spending on non-essential services.
Competitor analysis in the auto repair industry reveals a mix of competition.
Among direct competitors are other local auto repair shops, franchise operations, and dealerships with service departments.
These players compete on factors such as price, service speed, customer service, and expertise in specific types of repairs.
Potential competitive advantages include a strong focus on customer satisfaction, the ability to provide a wide range of services, and the establishment of a loyal customer base through trust and transparency.
A thorough understanding of competitors' strengths and weaknesses is essential for developing effective differentiation and customer retention strategies.
Our commitment to providing high-quality and reliable auto repair services is at the heart of our success.
We offer a comprehensive range of services, from routine maintenance to complex repairs, all performed by our team of skilled and certified mechanics.
Furthermore, our focus on customer education helps clients understand the importance of vehicle maintenance, thus fostering long-term relationships.
We take pride in our honesty and integrity, providing upfront pricing and clear communication about the services needed, which reassures our customers and builds trust in our brand.
You can also read our articles about: - how to open an auto repair shop: a complete guide - the customer segments of an auto repair shop - the competition study for an auto repair shop
Development plan.
Our three-year development plan for the auto repair shop is designed to establish us as a leader in vehicle maintenance and repair services.
In the first year, we will concentrate on building a strong local reputation for reliability and expert service. We will invest in state-of-the-art diagnostic equipment and ensure our technicians are highly trained.
The second year will focus on expanding our services to include specialized repairs and performance upgrades, as well as establishing fleet maintenance contracts with local businesses.
In the third year, we plan to explore the possibility of opening additional locations and offering mobile repair services to increase convenience for our customers.
Throughout this period, we will commit to exceptional customer service, continuous improvement, and staying abreast of the latest automotive technology trends.
The Business Model Canvas for our auto repair shop targets vehicle owners in need of maintenance, repair services, and performance enhancements.
Our value proposition is centered on providing reliable, high-quality, and timely automotive services with a focus on customer education and transparency.
We offer our services through our physical shop location and potential mobile repair units, utilizing key resources such as our certified mechanics and advanced diagnostic tools.
Key activities include vehicle diagnostics, repairs, maintenance services, and customer service excellence.
Our revenue streams are generated from the various automotive services we provide, while our costs are mainly associated with labor, parts inventory, and operational expenses.
Find a complete and editable real Business Model Canvas in our business plan template .
Our marketing strategy is focused on building trust and demonstrating expertise in the automotive repair industry.
We aim to educate our customers on the importance of regular vehicle maintenance and the value of quality repairs. Our approach includes local advertising, community engagement events, and informative content on vehicle care.
We will also develop partnerships with local businesses and car dealerships to expand our customer base.
Additionally, we will leverage social media and online reviews to showcase our work and customer satisfaction, while offering promotions and loyalty programs to retain and attract new clients.
The risk policy for our auto repair shop is designed to minimize operational and financial risks.
We will adhere to industry standards and regulations, ensuring all repairs meet or exceed safety requirements. Our technicians will undergo continuous training to stay current with automotive advancements.
We will implement rigorous inventory management and cost control measures to maintain profitability.
Furthermore, we will secure comprehensive insurance coverage to protect against potential liabilities associated with vehicle repairs. Our priority is to deliver safe and dependable services while safeguarding our business and customers.
We are committed to establishing an auto repair shop that meets the growing demand for professional and trustworthy vehicle maintenance services.
With our dedication to quality, customer education, and staying ahead of automotive trends, we are confident in our ability to thrive in this competitive market.
We are enthusiastic about enhancing the driving experience of our customers and building a robust business.
We remain adaptable to industry changes to ensure our goals are met, and we look forward to a successful future in the auto repair industry.
You can also read our articles about: - the Business Model Canvas of an auto repair shop - the marketing strategy for an auto repair shop
Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.
All these elements are available in our business plan template for an auto repair shop and our financial plan for an auto repair shop .
Initial expenses for our auto repair shop include acquiring a suitable location, purchasing state-of-the-art automotive repair equipment, obtaining necessary permits and licenses, investing in high-quality tools and diagnostic software, and costs related to branding and launching targeted marketing campaigns to attract vehicle owners in the area.
Our revenue assumptions are based on a thorough analysis of local demand for auto repair services, taking into account the number of vehicles in the area, the average age of these vehicles, and the propensity of owners to invest in vehicle maintenance and repair.
We anticipate a steady increase in customer patronage, starting with a conservative estimate and expanding as our reputation for reliable and efficient service grows.
The projected income statement outlines expected revenues from our auto repair services, including labor, parts markup, and other services, as well as operating expenses (rent, marketing, salaries, utilities, insurance, etc.).
This results in a forecasted net profit that is essential for assessing the long-term viability of our auto repair shop.
The projected balance sheet reflects assets specific to our business, such as automotive repair equipment, parts inventory, and receivables, along with liabilities including loans and accounts payable.
It provides a snapshot of the financial standing of our auto repair shop at the end of each fiscal period.
Our projected cash flow statement details the inflows and outflows of cash, enabling us to plan for cash requirements throughout the year. This is crucial for maintaining a healthy cash balance to support day-to-day operations.
The projected financing plan identifies the sources of funding we intend to use to cover our initial setup costs and any additional equipment purchases.
The working capital requirement for our auto repair shop will be carefully managed to ensure we have sufficient funds to cover routine expenses such as parts procurement, inventory management, and payroll.
The break-even analysis for our auto repair shop will calculate the volume of services we need to provide to cover all our costs, including the initial investment, and begin generating a profit.
It will signal the point at which our business becomes financially sustainable.
Key performance indicators we will monitor include the gross profit margin on services provided, the current ratio to evaluate our ability to meet short-term obligations, and the return on investment to determine the profitability of the capital invested in our auto repair shop.
These metrics will assist us in gauging the financial health and success of our business venture.
If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for an auto repair shop .
Written by Dave Lavinsky
Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their auto repair businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an auto repair business plan template step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
A business plan provides a snapshot of your auto repair business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
If you’re looking to start an auto repair business, or grow your existing auto repair business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your auto repair business in order to improve your chances of success. Your auto repair business plan is a living document that should be updated annually as your company grows and changes.
With regards to funding, the main sources of funding for an auto repair business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings is the other most common form of funding for an auto repair business.
If you want to start an auto repair business or expand your current one, you need a business plan. Below are links to each section of your auto repair business plan template:
Your executive summary provides an introduction to your mechanic shop business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of auto repair business you are operating and the status. For example, are you a startup, do you have an auto repair business that you would like to grow, or are you operating a chain of auto repair businesses?
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the auto repair industry. Discuss the type of auto repair business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
In your company analysis, you will detail the type of auto repair business you are operating.
For example, you might operate one of the following types of auto repair businesses:
In addition to explaining the type of auto repair business you will operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
In your industry analysis, you need to provide an overview of the auto repair industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the auto repair industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy, particularly if your research identifies market trends.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your automotive business plan:
The customer analysis section of your mechanic business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: car owners, truck owners, luxury vehicle owners, classic vehicle owners, and businesses that own vehicles such as car rentals, car dealers, delivery businesses, and repairmen.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of auto repair business you operate. Clearly, luxury vehicle owners would respond to different marketing promotions than truck owners, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most auto repair businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
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Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other auto repair businesses.
Indirect competitors are other options that customers have to choose from that aren’t direct competitors. This includes auto parts stores (for DIY repair). You need to mention such competition as well.
With regards to direct competition, you want to describe the other auto repair businesses with which you compete. Most likely, your direct competitors will be auto repairs located very close to your location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a car service business plan, your marketing plan should include the following:
Product : In the product section, you should reiterate the type of auto repair company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to auto repair, will you provide car rental services, repair financing or any other services?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.
Place : Place refers to the location of your auto repair company. Document your location and mention how the location will impact your success. For example, is your auto repair business located in a busy retail district, industrial area, etc. Discuss how your location might be the ideal location for your customers.
Promotions : The final part of your auto repair marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your auto repair business, including speaking with vehicle owners in person or on the phone, maintenancing and repairing vehicles.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to repair your 50th car, or when you hope to reach $X in revenue. It could also be when you expect to expand your auto repair business to a new city.
To demonstrate your auto repair business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in managing auto repair businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing auto repair shops or successfully running small businesses.
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, how many cars will you repair per week? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your auto repair business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an auto repair business:
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your shop location lease or descriptions of repairs you are working on. Summary Putting together a business plan for your auto repair business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the auto repair industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful auto repair business.
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If you want to start an Auto Repair Shop or expand your current Auto Repair Shop, you need a business plan.
The following Auto Repair Shop business plan template gives you the key elements to include in a winning auto repair business plan. An automotive business plan is a plan to start and/or grow your business.
You can download our Business Plan Template (including a full, customizable financial model) to your computer here.
Below are links to each of the key sections of your Auto Repair business plan: Auto Repair Shop Business Plan Sample I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan
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Auto Repair Shop Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan
Have you ever considered opening an automotive repair shop? Auto shops are known as businesses that have strong cash flow, and fair profits. In this auto repair shop business plan sample we will show you what goes into developing a strong plan. Please remember this is merely a guide, and the best business plans are fully-customized to each individual company.
Before commencing on your auto repair shop, you may have a few questions. How profitable are auto repair shops? How to grow an auto repair business? How much does it cost to start an auto repair shop? How do I get more customers in my auto repair shop? How to market an auto repair business?
Brace yourself, because in this article, our team has prepared a comprehensive automotive repair shop business plan, which should help address these queries.
To conquer the largest auto repair companies in the USA, you must first grasp the auto repair industries intricate nuances. Automotive repair service companies in the US provide a wide range of automotive repair and mechanic services to ensure optimal performance and longevity of vehicles. Whether you are looking to start a mechanic business or small auto shop, we can help you with a customized automotive repair business plan or mechanic shop business plan, which is catered to your specific goals and requirements.
As things take shape, it will be time to paint the operational landscape of your auto repair shop. Envision the perfect location, layout, and equipment needed to manifest your vision. Map out the staffing requirements, employee training protocols, and the smooth workflow process, which will ultimately define your mechanic shop’s efficiency.
Seek out and foster relationships with trustworthy vendors and suppliers who can provide you with leading automotive parts, tools, and supplies. Engage with those who offer competitive prices, exceptional quality, and lightning-fast delivery to fortify your shop’s operations.
Navigate regulations. Familiarize yourself with local, state, and federal rules governing the auto repair industry. Obtain the necessary licenses and permits to properly operate your shop, and of course, ensure your business adheres to the highest environmental and safety standards.
In conclusion, for an ambitious entrepreneur , crafting a comprehensive business plan for your auto repair shop is your ticket to triumph in this fiercely competitive industry. We hope you enjoy this auto shop business plan example.
“Your Canadian Auto Shop” (The Company) is a Tire and Customization Shop with nine locations spanning across British Columbia, Alberta and Saskatchewan. Over the past ten years the company has gained recognition across Western Canada as a leader in tire, wheel, rim and accessory customization. With a sprawling population, the City of Saskatoon has been identified as an ideal location for Your Canadian Auto Shop’s tenth Tire and Customization Shop.
With the support of senior management, Ralph Walzek will open an incorporated business, and raise $122,750 through the Canada Small Business Financing Program (CSBFP) for the equipment and leasehold improvements required to successfully launch this location. Ralph Walzek will receive an annual management salary of $75,000, and 20% of the Saskatoon Location’s net income.
Given the essential role that cars, trucks and other vehicles play in everyday life, overall demand for vehicle support services is projected to expand over the next five years, in line with rising population figures and increased consumer spending. This demand, and low-barriers to entry has resulted in a level of saturation within the industry; notwithstanding, Your Canadian Auto Shop has established a process which sets them apart in this competitive landscape.
By offering affordable customizations, unmatched selection, a culture of customer satisfaction, and a convenient selection of payment options, Your Canadian Auto Shop stands out in an otherwise crowded marketplace. Regardless of this increasingly competitive landscape, the company has continued to grow year after year. In partnership with senior management, Ralph Walzek will utilize over two decades of professional management experience to guarantee the success of this tenth Your Canadian Auto Shop location.
According to Statistics Canada’s 2020 Consensus, Saskatoon is currently the third fastest growing metropolitan region in Canada. With a thriving business sector, Saskatoon is an attractive and vibrant city that is a primary engine for the province’s wider economy. With an experienced management team, reputable brand, profitable business model, and strong demographics, this location is positioned to be a flourishing Tire and Customization shop for many years to come. Furthermore, Ralph Walzek is committed to being a fair and equitable employer, to support the local labour market, and the community of Saskatoon at large.
Your Canadian Auto Shop was established 10 years ago in Edmonton, Alberta. Since then, the company has grown to nine locations across Western Canada, and is poised to continue it’s track record of growth. Ralph Walzek seeks to incorporate a company and secure a $122,750 loan for the equipment and leasehold improvements of this tenth location in Saskatoon, Saskatchewan. This incorporated business will operate under the Your Canadian Auto Shop brand in the Tire and Customization Industry.
North American Industry Classification System (NAICS) Code – 44132
Tire Dealerships
Establishments: 2,383
0-99 Employees: 100%
Average Revenue: $1.1 million
Profitable: 76.1%
This industry comprises establishments primarily engaged in retailing tires and tubes. These establishments also typically provide complementary services, such as tire mounting and wheel balancing and aligning.
OUR MISSION IS TO PROVIDE THE CITY OF SASKATOON WITH LEADING AUTO REPAIR SERVICES.
Safety in the Workplace : Focus on maintaining safe working conditions. In addition to protecting our staff, our location’s image revolves around safety and consciousness.
Inventory Management Skills : Able to control stock on hand and install accurate costing systems.
Employment of Skilled Automotive Technicians : Access to skilled technicians in a workforce that is becoming more technologically advanced.
After Sales Service and Support : Provide superior customer service in a segment that can be very competitive.
Location Close to Key Markets: Location in the heart of Saskatoon, therefore determining market size, average customer income, vehicle count, population, and competition.
AUTOMOTIVE TIRE TECHNICIAN
Requirements
We specialize in getting customers the right tire that suits the vehicle and application. Snowflake Rated All Terrain Tires, All-Weather Tires, All-Season Tires, Performance Tires, Track Tires, Mud Tires, All Terrain Tires, Rugged Terrains, Mud Boggers, Winter Tires, Semi, Agricultural, and the list goes on. We are committed to providing tires for every price point.
WHEELS & RIMS
Your Canadian Auto Shop has access to all types of rims and custom wheels. We are factory direct, which means huge discounts and quick turnaround times for our customers. We specialize in high offset and low offset wheels, staggered wheel fitment, American muscle, tuner cars, winter rim & tire combos, concave wheels, deep dish, and all sizes. We are confident our offering of Armed Brand Wheels will be well received in the Saskatoon area.
ACCESSORIES
Securing a strategic and busy location, prominently visible within Saskatoon, will be a key element of our operations. Not only will our shop be easily accessible, but also well positioned; therefore, increasing market exposure.
Ensuring a safe and healthy workplace will be our highest priority. Owner and Location Manager, Ralph Walzek has extensive experience in ensuring the health and safety of his team members. “Safety starts at the top” and by utilizing over two decades of safe work practices, Ralphwill lead by example in day to day operations. Each and every morning a safety meeting will be conducted to review best work practices, and weekly topics; while everyone on the team will be encouraged to participate.
Monday 9AM – 6PM
Tuesday 9AM – 6PM
Wednesday 9AM – 6PM
Thursday 9AM – 6PM
Friday 9AM – 6PM
Saturday 9AM – 5PM
Sunday – CLOSED
Please refer to “6.0 Financial Plan” for a complete list of required equipment.
Over the coming years, operators in the Tire Dealers industry in Canada are set to benefit from improving economic conditions, particularly within several of the industry’s key commercial markets, as the Canadian economy recovers from the COVID-19 pandemic.
With expected growth in corporate profit over the five years to 2025, which will be coming off a relatively low base level, many companies are expected to expand or upgrade their existing vehicle fleets and generate significant demand for retailers of tires, repair services and miscellaneous vehicle parts and accessories. Moving forward, rising levels of disposable income are expected to bolster demand for industry services, as these trends are anticipated to enable a greater number of Canadian consumers to upgrade existing vehicles, causing the industry’s customer base to expand.
As a result of these factors, IBISWorld projects industry revenue will increase at an annualized rate of 3.0% to $5.5 billion over the five years to 2025.
Commercial markets are anticipated to expand as industrial production growth is expected to occur within the Canadian economy. Moreover, corporate profit in Canada is forecast to increase at an annualized rate of 8.3% over the five years to 2025, enabling many of the industry’s transportation and wholesaling clients to increase investments in their vehicle fleets.
To further strengthen demand from this segment, operators are expected to grow business relationships and secure long-term distribution contracts over the next five years. For example, national and regional repair garages are expected to work to gain a competitive edge against smaller shops by entering into long-term commercial relationships with tire dealers.
Given the essential role that cars, trucks and other vehicles play in everyday life, overall demand for vehicle support services is projected to expand over the next five years, in line with rising population figures and increased consumer spending.
In turn, these positive trends are expected to support demand for industry operators. Industry profit is also expected to increase marginally over the next five years, as the profit margin is expected to recover from a low level in 2020. At the same time, rising levels of disposable income are anticipated to encourage many consumers to purchase tires and repair services from external car dealerships or mechanics.
6.2 Competitive Advantage
The following list outlines the three competitive advantages that will differentiate Your Canadian Auto Shop Saskatoon from the competition:
Total vehicle-kilometres.
Tires most often degrade from extended use and age. As a result, the more a vehicle is driven, the more often replacement tires or retreads will be required. The number of total vehicle-kilometres was expected to increase in 2020. However, due to the COVID-19 pandemic, people have reduced nonessential travel and have commuted less by car, leading to an expected decline in the number of total vehicle-kilometres driven, which poses a potential threat to the industry.
High gasoline prices, which are dictated by crude oil price trends, generally decrease vehicle sales and cause consumers to switch to alternative modes of transportation. For instance, consumers may use public transportation when gasoline prices are high instead of driving their own vehicles and incurring the expense of gasoline. As a result, when consumers use their cars less, they will not require tires as quickly, thus decreasing industry demand.
Per capita disposable income influences the timing and value of tire purchases. Consumers with more disposable income are quicker to replace worn tires and are more likely to purchase expensive, high-performance tires. Alternatively, consumers with less disposable income may be hesitant to purchase expensive products or to replace worn tires.
New vehicles are sold with a set of factory-installed tires. Increases in vehicles sold boost industry revenue for the long term as it increases the base of potential vehicles that need replacement tires. In the short term, new cars typically do not need replacement tires. When consumers buy new vehicles over maintaining their current ones, industry revenue is negatively affected. As of its last update, new vehicle sales were expected to increase in 2020. Due to the coronavirus pandemic, however, consumers are expected to purchase fewer new vehicles, which represents a potential opportunity for the industry. 3
Our Sales & Marketing Plan is founded on the strength of Your Canadian Auto Shop’ well-established brand. The company has a proven marketing strategy that targets multiple social media platforms in order to attract an array of target customers. The Saskatoon shop will have the benefit of people already recognizing the name and stellar reputation of the Canadian Custom Autoworks’ brand. Our Saskatoon Shop will leverage the brand through signage, placement on the company’s website, and awareness on social media.
HOUSEHOLD CONSUMERS
The Tire Dealers industry in Canada serves a broad range of customers, with everyday household consumers accounting for the vast majority of the industry’s total revenue.
BUSINESSES FOR END USE
Businesses for end use, including trucking companies, construction companies, farmers and mining outfits, represent the second-largest source of revenue for industry operators.
DEALERSHIPS
We understand the nature of our referral based industry. Our focus is to provide the most professional experience available, consequently laying the groundwork for a consistent stream of referrals.
SOCIAL MEDIA
Social media will reach our target customers in two ways; pre-established Your Canadian Auto Shop pages will drive wider brand recognition and messaging, while our location will create a Facebook page for our community of direct customers in the Saskatoon area.
GOOGLE MY BUSINESS
A Google My Business account will be established to receive reviews from customers, to assist customers with finding the shop, to keep the public up to date on hours of operation, and provide additional contact information.
GOOGLE SEARCH
The company’s website will be imperative in assisting buyers through the sales process. By learning more about our products in one central place, people can transition from prospects to paying customers quickly.
7.3 swot analysis.
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Craft your auto repair shop business plan to achieve your objectives. select a shop management system that can help you bring your vision to life..
Starting a business can be a big risk. But if you map out a plan and execute it right, the outcome is well worth it. Having a solid automotive repair workshop business plan in place is especially important if you ever plan on owning multiple shops.
When you realized that you wanted to be a shop owner, it’s likely you considered the good you can do for both yourself and other people. Helping customers get their vehicles back on the road, and helping service advisors and mechanics grow in their careers is an exceptionally rewarding aspect of owning and operating a repair shop.
In order to make the ride to becoming a successful shop owner a smooth one, your present self will need to have your future self’s back. You’ll need to ensure all of your ducks are in a row. And by ducks, we mean your people, processes, and systems. And most importantly, you’ll need to make sure that you are ready to take on this venture.
You may even get excited thinking about the far future of your business—when it’s feasible to expand your business to include multiple shops. It’s good to dream big, and especially in auto repair, more shops means that you can help more people. But it’s important to understand how you’re going to get there, and what pitfalls to avoid.
Before we jump into how your business can expand, let’s take a look at some of the reasons why new business ventures don’t make it . Don’t let this waiver your goals as a shop owner though. In fact, we’re writing these out so you can beat the odds.
Each business, and each story, is different. But there are a few common themes that usually lead to new businesses failing.
When you’re opening up a new business, it’s crucial to consider the demand for auto repair and the unmet auto repair needs within the area you plan on opening shop. It’s easier to satisfy a known need rather than creating a need and having to convince your customers.
Your business plan is like your company’s Bible. You’ll spend months, or even years, making sure it is the perfect guidebook for your shop. Once your business plan is created, it’s important to follow it.
Taking chances that aren’t outlined in your plan could lead to further setbacks. Although setbacks are less common if you’ve carefully and diligently mapped out your plan, there’s always the possibility that your plan isn’t 100% sound. If that’s the case, determine the issue, find a solution, and adjust your plan accordingly.
Financial planning is crucial for any new business venture. If you don’t start off with enough money and end up having to stretch the financial line too thin, it’s possible your business may never get off the ground.
The location of your business, the online presence of your business, and the marketing efforts conducted throughout your business’ lifecycle are pivotal to your shop’s success. If you start an auto mechanic shop that focuses on truck repairs in the middle of a city where there aren’t a lot of truck drivers, it’s likely your shop won’t succeed. The same goes for online presence and marketing efforts.
You need to reach the people who may not regularly drive by your shop by considering where they spend their time online. What social media channels are they on? How do they use search engines to find local businesses? Tailored advertising efforts and five-star raving reviews will help bring more business to your shop. Without the best location, an established online presence, and the right marketing strategies , your business has less potential to last.
Just because you’ve finished up your business plan and started your business doesn’t mean the research should stop there. It’s always important to remain in-the-know on key market trends. By keeping an eye on the auto repair market, you’ll know exactly when and how you need to make adjustments to your business in order to keep growing.
Sometimes a business owner that is experiencing newfound success may keep reaching and reaching, and reaching, until their finances are drained. While it’s important to have an entrepreneurial spirit, it’s just as important to make smart investments.
If you want to open up more shops in the future, it’s important to give your new shop just as much tender love and care as you gave your first location.
Make sure you have a solid understanding of where you want your next location to be, who your intended customers are, whether you want to try selling new products or services, and how exactly you plan on testing the success of any new ideas.
According to Investopedia.org , the bottom line is this: “Though the rate of business failure in the first two years is around 20%, it doesn't mean that you have to fail. Through research, planning, and flexibility, you can avoid many of the pitfalls of a new business and be a part of the 25% that make it to 15 years and beyond.”
The best way to execute your business is with a plan. An automotive repair shop business plan will outline your auto repair shop business so that you can present it to investors or any other stakeholders that you want to bring along on your business venture.
A business plan is the overall vision of your business, the goals you want to achieve, and the roadmap that will keep your company afloat.
A clear auto repair workshop business plan will provide you with:
An auto repair shop business plan will make it easy for you to explain your business model and where your shop is headed. You’re going to encounter obstacles, and in order to tackle them head on, you need to stick to your strategic plan and adjust accordingly.
Your automotive repair shop business plan will provide you with clarity on:
To prevent setbacks, you need to invest in the right things. The way you invest prior to opening up your shop, during your business’ lifecycle, and once expansion is on the horizon, will make or break your business.
Your car repair shop business plan will help you determine the right routes to take when it comes to investing in:
By carefully mapping out your business’ roadmap, you’ll have the ability to achieve a sustainable and viable business model.
Your auto repair shop business plan will help you:
Each three of these categories can be more attainable with a clear mind. According to Walter Isaacson’s The Book of Jobs , Steve Jobs would often stress that the driving factor behind his creative inspiration was a clear mind through meditation.
So, before you get started crafting your quintessential mechanic shop business plan, try to gift yourself the ability to tune out the noise during important decision-making matters. Here are three ways you can go into your business ownership journey with a clear state of mind:
These are just three tips. What works for one person may not work for you. Our primary recommendation for new business owners is to commit to not only working on your auto repair shop business plan but also commit to working on yourself so that when you hit the road, you’re able to face any and all obstacles with a clear, open mind.
There are nine steps to crafting the quintessential automotive repair shop business plan that will help you achieve your business goals—from owning one auto repair shop to becoming a multi-shop owner.
Sure, those nine steps may sound tedious, but it pays to plan.
According to entrepreneur masterminds Francis J. Greene and Christian Hopp , high-growth oriented entrepreneurs are 7% more likely to plan out their business.
Furthermore, entrepreneurs who write business plans are 16% more likely to achieve viability than entrepreneurs who don’t develop a plan.
You can build a successful launching pad for your auto repair business by conducting market research, developing a marketing plan for your auto repair shop, and evaluating the operational costs and investments you will need to make.
Here are four steps you can follow to successfully conduct local market research:
Remember that drivers are typically willing to drive a few miles to get their vehicle serviced, but driving over 10 miles might not be realistic for someone if their vehicle has an issue. So you may want to start looking at the demographics within a 10 mile radius of your auto repair shop.
When looking at your target area, you can ask the following questions to get a good sense of your business’ market:
Even after you open shop, keep conducting market research. You want to be able to keep up with the latest auto repair industry trends so that your shop’s profits keep growing. Getting a feel for the type of customers your shop serves will set a strong foundation for your auto repair shop business plan.
Once you know your audience, develop a marketing plan that aligns your vision with the people you plan on serving. Here’s an overview of marketing strategies you can use to attract customers to your new shop:
When it comes to successfully launch i ng your business, you’ll need to weigh any potential costs and investments that you intend on making. Always leave a bit of wiggle room for unexpected expenses, like hiring one more person that you anticipated, or paying a little extra for a more reliable shop management system. Sometimes spending a little extra means getting a higher return on investment, making it well worth the cost. But you have to ensure that you have the wiggle room first.
The investments you put into your shop at the beginning will play a huge role in determining how profitable your auto repair shop will be in the future . You’ll want to evaluate:
But before we get too excited about finding the right shop management system, here’s the moment you’ve been waiting for: the nine steps you can take to craft an automotive repair shop business plan that will help you reach new heights and open up more shops in the future.
Your business plan’s executive summary is designed to capture any investors’ or stakeholders’ attention. It gives them an overview of your shop’s business opportunities and an overview of the rest of your auto repair shop business plan.
In your executive summary, you will briefly explain the problem you are solving, your business ideas, the target audience, and any key financial information. Your business plan’s executive summary should capture each of the aforementioned topics in no more than two pages .
The problem statement: this introduces the reader to the gap and/or problem in the auto repair industry that your business aims to solve.
The business statement (aka your business model): this will show the reader exactly how you plan to tackle the problem—both how you plan to approach the problem and how you plan to solve it. During this section, you want to briefly explain how your auto repair business will help solve whatever problem you found in the market.
The target audience statement: during this section, you’ll map out any customer demographic details and how you plan on targeting these audiences.
The financial plan summary: any financial institution or investor you approach will want to know how you plan on spending their funds. During this section of the executive summary, you want to cover where you plan on allocating funds and any applicable financial projections.
For those of you who are current shop owners and want to craft a new automotive repair shop business plan, the financial plan in your executive summary will have to include a history of your shop’s past financial performance. With Tekmetric, you can use accurate, real-time data to easily track how money flows through your shop. Tekmetric’s Real-Time Financial Reports include three reports that are particularly useful during this step of your auto repair shop business plan: 1. End of Day Report The End of Day Report is an overview of how effectively your shop has been selling repair work during a given time range. You can select what time range you want to view a financial report for. The End of Day Report breaks down your shop’s overall shop metrics, including Total RO’s, Hours Presented, Hours Sold, Close Ratio, Effective Labor Rate, Average Repair Order (ARO) Sales, ARO Profit, ARO Profit Margin, Gross Sales, and Gross Profit. 2. Profit Details Report The Profit Details Report will show you the exact profit you’ve made across all of your shop’s ROs. A perk to the Profit Details Report is that you can also break it down even further to show the profit your shop has made within individual ROs. 3. Sales Details Report The Sales Details Report will show you how much your shop has sold in parts and labor over a given time range, how much money has been collected from sublets, fees, and taxes, as well as the dollar amount of the discount your shop has provided to customers.
What makes your business stand out? What’s your company’s mission? What are the most important aspects of your business? These are the questions this section of your auto repair shop business plan will answer.
When determining your shop’s mission statement, try to keep the following tips in mind:
Let’s take a look at ten popular mission statements. If you can think of the company’s name, then their mission statement did its job.
In order from top to bottom, the mission statements belong to Nike, Warby Parker, JetBlue, Tesla, TED, Twitter, Google, Walmart, Sony, and Tekmetric.
What do each of the above mission statements have in common? They uncover the primary existence for each company, and they deliver their purpose and overall intention.
As you’re developing your automotive repair shop business plan, think of ways your auto shop can stand out in your community. If you want a good example, check out our Shop Spotlight of Turbo Tim’s Anything Automotive . Turbo Tim’s shop owner Tim Suggs crafted his shop around a unique and relatable culture that gives back to the community. Their focus is on “average cars, average people.”
“Early on, it was apparent that if I put people first, the money would come. I focused on building an atmosphere that was both fun and professional for employees and customers alike. One of the most instrumental, yet unintentional, parts of our culture came from a cat I found at a machine shop. I’ve always been a cat person, and I asked the technicians there if that was their cat. They said it was a stray that they regularly fed. After checking that he wasn’t microchipped and didn’t belong to anyone, I brought him home with me.
And that’s the origin story of Bobby, our original shop cat. We now have multiple cats who greet folks in our waiting room. Bobby also positively affected our marketing. Halfway through our growth, we began branding ourselves with a cat logo inspired by Bobby. Today, customers who put Bobby bumper stickers on their cars get 10% off for life. Less productive are our chickens, who ‘work’ in the chicken coop on our outdoor patio.”
When you describe your company in your auto repair workshop business plan, you want to unveil what you see your shop being. Yes, you’ll want to mention the mission, but you also want to capture your shop’s values and culture, and what sets your shop apart from the rest.
Tekmetric partners with other industry-leading solutions to let shop owners fine-tune the repair experience for their team and their customers.
See how the right mix of automotive computer programs fuels business innovation.
The next section of your auto mechanic business plan is where you should state your business goals. Here you’ll want to list out the short-term, medium-term, and long-term goals that you want to achieve with your business.
As you’re coming up with your shop’s goals, you need to make sure that they are realistic, attainable, and strategic. Ask yourself these six questions as you come up with your business goals:
Now that you have those six guiding questions, you can start to come up with your shop’s unique business goals. Ask yourself the following questions to help you come up with your company goals:
Whether your goal is to have a 20% profit margin year one or open up a second location in the next five years, the business goals section in your automotive repair shop business plan will help you remember why you set that goal in the first place.
If your goal is to increase your sales and ARO, then you’ll like Tekmetric’s Digital Vehicle Inspection (DVI) feature. Tekmetric’s DVIs are designed to inform and show your customers exactly what’s going on under the hood. And the better you can explain vehicle issues, the more likely your customers will be on board with getting the recommended repair work done. Tekmetric’s DVIs include six core features that will benefit both your team and your customers:
See what else Tekmetric’s DVIs can do for your shop.
In the products and services section of your auto repair workshop business plan, it’s important to focus on your customers’ perspective and needs. The overall goal of the products and services section is to prove that your shop will fill a market need and remain viable.
Here are some questions you’ll want to answer in this section:
What kind of vehicles will your shop fix?
Do you want to run a general auto repair shop or a specialty auto repair shop? You can determine whether your shop will focus on exotic vehicle repairs, diesel engine repairs, fleet work, or stick with the standard independent garage clientele.
What type of services will your shop provide?
Along with determining the kinds of vehicles you’ll service, you’ll also want to consider each service your shop will provide. Will your main focus be on oil changes, tune-ups, and regular maintenance? Will you want to sublet some of your repair work? It could be that you focus on standard repairs, but when a customer comes in with a specific job that you don’t want to turn down, you can have that repair work done through a subcontractor, but you’d have to establish that partnership .
How will your shop’s name and brand clarify your audience and services?
Your shop’s main focus may be something you’ve already thought of, but what about your shop’s name? It’s a good idea to choose a name that speaks to your shop’s target customers and the types of services you provide. For example, Bavarian Motor Repairs specializes in servicing BMWs, MINIs, and Rolls Royces. Or maybe you want your shop to cater to everything auto repair related like Turbo Tim’s Anything Automotive.
What types of products will your shop provide?
Knowing the types of vehicles and services your shop will provide to customers is great, but what about the types of products you plan to sell to your customers? Many shops choose to sell specific types of fluids that their customers can rely on. Similarly, shop owners may sell products and equipment that can make their customers’ vehicles last longer and perform better. You can also offer products that make for an easy upsell such as air fresheners, floor mats, or even merchandise with your shop’s logo on it.
Find a Shop Management System That Expedites The Parts Purchasing Process
Tekmetric’s Canned Jobs Board pulls from inventory to see what parts you already have on hand and what parts you need to purchase. You can also set a parts markup on inventory items that are added to canned jobs so that you can lock in your parts margin.
This addition to your parts management strategy will cut out all the guesswork and streamline jobs. Your team can save time sorting through parts and spend it actually repairing vehicles and providing excellent customer service.
In Tekmetric, you can view and sort canned jobs by:
To make your parts purchasing experience even easier, Tekmetric has partnered with some of the most trusted parts vendors in the industry:
You probably did some market research when you first began forming your business plan. But as you write this section, you’ll really want to sharpen your market research and organize your findings.
There are two main types of market research that you can do when planning your business.
Primary Market Research: any type of research that you collect yourself. Examples include surveys, interviews, and observations.
Secondary Market Research: any type of research that involves compiling existing data. Examples include searching websites, going to libraries, looking at government statistics, or even using internal resources like your shop’s average revenue per sale, customer retention rates, and any other historical data you see fit (this is especially useful for current shop owners looking to expand).
To successfully conduct market research, you should follow these fives steps:
1. Determine the purpose of your market research
Before starting your market research, determine your goal for doing it in the first place (aside from creating the business plan, of course). Common reasons why business owners conduct market research include wanting to understand a new market or to gauge the success and strategies of competitors.
2. Research the current state of the auto repair industry
Look at where the auto repair industry currently is and where it seems to be heading. The goal here is to determine any potential trends and projected growth that can give your business a competitive edge in the auto repair industry. Check out Ratchet+Wrench for the latest auto care insights.
3. Define your buyers’ personas, aka “marketing personas”
Creating buyer personas will help you understand who your customers are. Your buyer personas should include age, gender, location, job titles, family sizes, incomes, needs, interests, etc. Keep in mind that as you build out your buyer personas, you don’t have to limit yourself to just one persona. There are many different types of drivers and people that need auto repair services.
There are many useful tools you can use to develop your personas. Here is HubSpot’s free tool that might come in handy while you’re building your personas.
4. Understand your competition
To understand your competition, we recommend listing out each of your shop’s competitors. From there, determine what those shops do differently from what you plan to do. Consider their strengths and weaknesses, and any advantages they have in the auto repair market in your area. You can also do a SWOT analysis where you determine their strengths, weaknesses, opportunities, and threats. It’s also good to do a SWOT analysis of your own business, too.
5. Gather, analyze, and summarize your findings
Any information you find during your market research will be your friend. You can never have too much data—as long as it’s from a credible source. Here are some resources you can use for credible research:
When it comes to analyzing your market data, it’s best to organize it all into sections that make the most sense to you, your stakeholders, and your investors. The main topics you want to focus on are your shop’s purpose, the target market, and your competition. Examples of elements within your market research analysis can include your customers’ buying trends, forecasted growth, how much customers are willing to pay for your services, and an industry overlook, including the industry’s size and growth rate.
Tekmetric’s customer reports help keep your market research fresh. You can see which service you sell is the most popular and who your most frequent customers are. You can also get more accurate data about different customers’ buying behavior when you start generating with Tekmetric’s customer reports.
Customer List Report: Tekmetric’s Customer List Report gives you an overview of each customer’s Lifetime Visits, Lifetime Spend, Lifetime Profit, Lifetime ARO, Lifetime Close Ratio and other key stats.
Declined Jobs Report: With the Declined Jobs Report, service advisors can see all jobs that have been declined on past ROs so that they can get them back in the shop. Identify which jobs are declined most often so that you can create effective promotional campaigns that upsell, cross-sell and improve your Close Ratio.
After conducting market research and deciding on the products and services your shop will provide, you can work on your marketing strategy. Your marketing strategy should specify how you plan on marketing different services and products to different demographics.
For example, if you decide you want to focus on diagnostics for BMWs, then your marketing plan will show how you plan to target BMW owners for that particular service. Maybe you could go find BMW groups or figure out where BMW owners like to shop or frequent, and advertise there.
A strong marketing and sales strategy will help your shop maximize and leverage profits. Marketing expenses are something you need to invest in, but you also need to ensure that you’re getting a strong return on your marketing investments.
Here are a few examples of impactful marketing strategies:
Whatever marketing efforts you choose to invest in, make sure you track the data so you know what works and what doesn’t.
A shop management system like Tekmetric can show you whether or not your strategies are working.
Marketing Source Report: You can track the payoff that each marketing strategy brings your shop by using Tekmetric’s Marketing Source Report. With the RO Marketing Source Report, you can explore how much of your business comes from new sales or repeat sales, and identify which marketing sources are bringing in the most business.
Integrations: Tekmetric integrates with several marketing solutions that will help your shop further grow its customer base. Our marketing integrations include Mechanic Advisor, KUKUI, MyShopManager, MechanicNet, RepairPal, and more.
In the financial analysis portion of your auto repair shop business plan, you want to unpack how much money your shop will need to get off the ground and exactly how you plan on spending it.
Some common capital and startup expenses include:
Another key component to your financial analysis is your break-even analysis. A break-even analysis is when you factor in both your costs and your shop’s sales to determine the moment you will break even.
So, what is a break-even point? A break-even point is when your business will begin making a revenue that should cover your total amount of overhead costs—both the fixed and variable costs accumulated over time.
Break-Even Point Formula:
(Overhead Costs + Balance Sheet Payments) / Gross Margin = Break-Even Point
For example: ($30,000 + $10,000) / 95% = $42,105.26
In the example above, it concludes that you need to sell a total of $42,105 to make sure that you cover your overhead costs and balance sheet payments.
While Tekmetric can help you track the cost of goods through reports, your accounting tools such as QuickBooks, is where you’ll track a lot of your daily expenses. Tekmetric doesn’t include a built-in accounting system, but we do have an accounting link through one of our integration partners, The Back Office, which gives you the ability to manage your books, track income and expenses, and easily perform audits for all your accounting needs with just a few clicks.
Tek-Tip: improve your profits and fine-tune your shop’s goals with Tekmetric’s built-in Parts Matrix and Labor Matrix. Tekmetric makes it easy for shop owners and service advisors to include the right markups on each and every job.
According to Entrepreneur.com , here are some ways you can make financial forecasts more realistic:
Tekmetric’s real-time reports empower shop owners to forecast and strategize by choosing between annual and weekly forecasting.
Annual Forecasting: With annual forecasting, you can get a sense of where your shop is at and how the rest of the year is likely to play out. If you notice that business is slowing down month to month, it might be time to adjust your marketing strategies. Or maybe you notice that the year has been busier than usual, in which case you may want to consider bringing on more talent to help service your new influx of customers.
Weekly Forecasting: With weekly forecasting, you can combine sales in progress with closed sales data to get an idea of how much profit your shop is lined up to make by the end of the week. Read more about how you can forecast with real-time reports .
Although this section isn’t necessarily a part of a standard business plan, you’ll want to incorporate it into your automotive repair shop business plan if you eventually want to open additional repair shops.
To prepare yourself for future growth, you’ll want to ensure that 1) the car repair shop business plan you’re creating now can be replicated if all goes according to plan and 2) the shop management system you select can grow with you.
If you play your cards right—or in this case, you craft the optimal automotive repair shop business plan and invest in foundational tools—you’ll be well on your way to becoming a successful owner of multiple auto repair businesses.
Just as your automotive repair shop business plan will help you navigate any potential setbacks, the Tekmetric shop management system will help you hammer away as you grow your business.
The right planning and shop management system will help you determine—in advance—things that can help you achieve your goals, as well as avoid things that can potentially prevent you from achieving those goals.
Tekmetric will:
Not only will investing time into planning help your vision come to fruition, but it will also help you achieve the dream you stood by since day one: helping your customers get their vehicles back on the road safely.
Mapping out an auto repair shop business plan and investing in a shop management system like Tekmetric will help you help more people in the long run.
Need a business plan? Call now:
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Published Nov.11, 2016
Updated May.16, 2024
By: Jakub Babkins
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Table of Content
Are you thinking of starting an auto repair shop? Well, auto repair is one of those businesses that allow you to earn considerable profits even by managing a small team. The business provides repair and maintenance services for automobiles. Moreover, in many cases, auto repair shops also offer aftermarket modifications and upgradation services.
So, if you have made up your mind to enter this venture, you should first prepare a auto repair shop business plan . If you don’t know how to open an auto repair shop or how to make an accurate auto repair shop business plan , you can take help from here.
Over the years, we have been monitoring the operations and success of some auto repair shops in a bid to determine the strategies that they use to grow their enterprises. Here are some of the findings that we feel will have a great impact on your new auto repair shop.
It is important that you learn how to cope with these problems to business continuity plan checklist reigning supreme and achieve your short and long-term goals such as achieving financial stability. Here are some of the challenges that you will face if you venture into this business without a proper auto repair shop business plan.
As the auto business grows and attracts more clients, you will encounter many challenges that need to be responded to well. Simple mistakes can bring down your business no matter the success that you have achieved so far. For instance, an increase in customers can lead to the lack of enough space to store business the various materials. The most plausible solution to such a problem is by expanding your workspace or renting a large facility.
A auto repair shop business plan is not complete if it does not give instructions on how scalability challenges or issues will be resolved. As mentioned earlier, we have been monitoring some facilities over the last three years. The research has given us an in-depth understanding of the industry, and we will use the same knowledge to come up with credible recommendations that you can use to jump the hurdles.
In this blog, we’re providing a sample auto repair shop business plan of a startup, Auto Fix & Services.
2.1 the business.
Auto Fix & Services will be a registered and licensed auto repair shop in Austin. The business will provide usual repair and maintenance services ranging from oil change to parts replacement. The business will also offer car modification and upgradation services such as window tinting, installing air filters, etc.
Running an auto repair shop requires a relatively smaller team. Still, you need to have a proper management plan. Because, without strict supervision, your workers may do some negligence during repair work – resulting in losing your customer’s trust.
The best way to ensure efficient management is to create a comprehensive auto repair shop business plan . In which you’ll list all the details of how to start a auto repair shop and how to manage it successfully.
Before exploring how to open up a auto repair shop you should think of who’ll be your customers. As that will enable you to do the relevant preparations.
Auto Fix & Services identified its customers as the following groups:
3.1 company owner.
Auto Fix & Services will be owned by Robin Redford. Robin is a talented person with exceptional managing skills. He started his career by working in an auto repair shop as an auto mechanic. After working for four years, he got promoted to a managing post. However, he served as a manager for just three years and eventually decided to start his own business.
Due to a great demand for trustworthy auto repair works, Robin decided to start his own shop. By starting a auto repair shop Robin wanted to make considerable profits and introduce 100 percent reliable services.
Step1: Write Auto Repair Shop Description
To start an auto repair shop, the first step is to make a detailed auto repair shop business plan . For that purpose, you can read any example auto repair shop business plan available on the web like this sample business plan for auto repair shop. Or you can hire a professional to make your auto repair shop business plan .
Step2: Make The Arrangements
The second step is to get the licenses and permits to start an auto repair shop. After getting his business registered, Robin will rent a facility to turn it into a repair shop. At the same time, he’ll procure the machinery and tools required to provide his services.
Step3: Recruit Your Staff
Robin will hire the expert and certified auto mechanics for his shop. The complete list of his employees will be given in the upcoming sections.
Step4: Promote & Market
After that Robin will devise his sales strategy to reach out to his customers. He has decided to offer several discounts in the startup phase to get more and more customers.
Step5: Ensure Strong Web Presence
Lastly, you have to ensure a strong online presence so that people can find you whenever they search for the relevant services on Google.
The costs required to carry out all of the above steps are provided in the following table:
Legal | $250,000 |
Consultants | $0 |
Insurance | $34,000 |
Rent | $30,000 |
Research and Development | $26,000 |
Expensed Equipment | $59,000 |
Signs | $3,800 |
Start-up Assets | $320,000 |
Cash Required | $341,000 |
Start-up Inventory | $60,000 |
Other Current Assets | $219,000 |
Long-term Assets | $230,000 |
Start-up Expenses to Fund | $402,800 |
Start-up Assets to Fund | $1,170,000 |
Assets | |
Non-cash Assets from Start-up | $1,550,000 |
Cash Requirements from Start-up | $373,000 |
Additional Cash Raised | $54,000 |
Cash Balance on Starting Date | $34,000 |
Liabilities and Capital | |
Liabilities | $30,000 |
Current Borrowing | $0 |
Long-term Liabilities | $0 |
Accounts Payable (Outstanding Bills) | $50,000 |
Other Current Liabilities (interest-free) | $0 |
Capital | |
Planned Investment | $1,572,800 |
Investor 1 | $0 |
Investor 2 | $0 |
Other | $0 |
Additional Investment Requirement | $0 |
Loss at Start-up (Start-up Expenses) | $358,200 |
Owning your own auto repair shop allows you to offer a wide range of services. From this business plan for auto repair shop , you can see the services provided by Auto Fix & Services.
Before opening an auto repair shop business plan you should carry out detailed marketing analysis to explore the market trends and the competitors’ strategies. This critical examination will help you in introducing competitive aspects for your own shop. Moreover, in your auto repair workshop business plan you should also identify the groups of your target customers so that you can devise your policies and pricing plan accordingly.
If you are starting an auto repair shop business plan but don’t know how to write a business plan for auto repair shop, you can take help from here. However, if you think that you don’t possess the skillset to make an accurate marketing plan, you should prefer hiring a professional marketing analyst.
According to SBDCNet, nearly 160k auto repair and maintenance shops are running in the United States – generating a collective annual revenue of $115 billion. The demand for such services is increasing because of an overall increase in automobile purchases. Along with the fact that cars need regular maintenance after a certain mileage. And that maintenance and upgradation cannot be done without proper space and machinery.
Auto Fix & Services divided its target market into separate groups to study their needs and expectations thoroughly. The detailed marketing segmentation done by them is provided below:
5.2.1 professional automobile drivers.
This will be the group of our major target customers. Professional automobile drivers such as Uber drivers, taxi drivers, bus drivers, and others, need car maintenance and repair services much frequently than all other groups. It is because of their long hour driving and large mileage. Moreover, this group is also expected to be a significant buyer of our car parts and accessories.
Our second target customers will be the owners of used cars. People who buy used cars often get the old parts such as seat covers, engine, brakes, replaced by newer ones. Thus, they are expected to avail of all of our services especially car upgradation and repairs.
Lastly, new car owners who would want to upgrade their automobiles will also be our target customers. This group is usually very careful about their cars. Thus, they are expected to avail of our regular maintenance services more frequently. Moreover, they’ll also acquire our upgradation services.
To turn these people into potential/ repeat purchasers, we’ll offer several benefits to them. The biggest benefit our repeat customers will get is free video consultation. Whenever they encounter any problem while being far away from us, we’ll help them to resolve the issue themselves. Moreover, we’ll also send our auto mechanics to their location if the fault is of complicated nature.
Potential Customers | Growth | ||||||
Professional Automobile Drivers | 41% | 45,000 | 48,000 | 49,000 | 51,000 | 53,000 | 10.00% |
Used Car Owners (Households/ Individuals) | 37% | 39,000 | 40,000 | 43,000 | 44,000 | 47,000 | 10.00% |
New Car Owners (Households/ Individuals) | 22% | 18,000 | 20,000 | 23,000 | 26,000 | 29,000 | 11.00% |
10% |
Our business targets are:
Our prices are almost in a similar range as that of our competitors. However, we still expect to get more customers due to our competitive advantages.
After you have fulfilled all the requirements to open an auto repair shop business plan , you should start thinking about its promotion. To get introduced to a larger audience, you need to develop an accurate auto repair shop marketing plan.
For your help, we’re providing the marketing strategy planned by Auto Fix & Services.
Unit Sales | |||
General Automotive Repairs | 46,000 | 48,760 | 51,686 |
Regular Maintenance/ Service | 42,000 | 44,520 | 47,191 |
Automobile Upgradations | 31,000 | 32,860 | 34,832 |
Car Accessories | 13,000 | 13,780 | 14,607 |
Unit Prices | Year 1 | Year 2 | Year 3 |
General Automotive Repairs | $53.00 | $61.48 | $71.32 |
Regular Maintenance/ Service | $48.00 | $55.68 | $64.59 |
Automobile Upgradations | $49.00 | $56.84 | $65.93 |
Car Accessories | $49.00 | $56.84 | $65.93 |
Sales | |||
Direct Unit Costs | Year 1 | Year 2 | Year 3 |
General Automotive Repairs | $51.00 | $58.00 | $68.00 |
Regular Maintenance/ Service | $45.00 | $51.00 | $60.00 |
Automobile Upgradations | $45.00 | $51.00 | $58.00 |
Car Accessories | $44.00 | $52.00 | $57.00 |
Direct Cost of Sales | |||
It is essential to make a list of the employees you’ll need to run your business. When you write business plan auto repair shop you must make your personnel plan enlisting required staff and their expected salaries.
Robin will hire the following people for his assistance:
Supervisor | $14,000 | $15,400 | $16,940 |
Auto Mechanics | $97,000 | $106,700 | $117,370 |
Technicians | $28,000 | $30,800 | $33,880 |
Database Manager | $11,000 | $12,100 | $13,310 |
Accountant | $9,000 | $9,900 | $10,890 |
Front Desk Manager/ Call Operator | $7,000 | $7,700 | $8,470 |
General Assistants | $16,000 | $17,600 | $19,360 |
Sales Executives | $9,000 | $9,900 | $10,890 |
Cleaners | $15,000 | $16,500 | $18,150 |
Driver | $7,000 | $7,700 | $8,470 |
Great service.
Great service. Good turnaround time and quality work. Thanks!
The last thing to do before launching your auto repair shop business plan is to create a detailed financial plan. Your financial plan should describe the expenses, net worth of your startup, projected loss and profits, and balance sheets for at least three years.
Since startup and running costs for auto repair shops are usually high, it is essential to devise a trajectory to achieve your financial goals – provided the limited resources, sales, and investment. Understanding the importance of an accurate financial plan, Robin hired a professional financial analyst to create an auto repair shop business plan . The financial plan developed by him is given here to provide you an idea of auto repair shop finances.
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 8.08% | 8.13% | 8.20% |
Long-term Interest Rate | 8.30% | 8.33% | 8.37% |
Tax Rate | 23.30% | 24.70% | 25.20% |
Other | 0 | 0 | 0 |
Monthly Units Break-even | 5353 |
Monthly Revenue Break-even | $135,600 |
Assumptions: | |
Average Per-Unit Revenue | $237.00 |
Average Per-Unit Variable Cost | $0.68 |
Estimated Monthly Fixed Cost | $163,020 |
Other | $0 | $0 | $0 |
TOTAL COST OF SALES | |||
Expenses | |||
Payroll | $213,000 | $234,300 | $257,730 |
Sales and Marketing and Other Expenses | $120,000 | $122,000 | $124,000 |
Depreciation | $2,490 | $2,550 | $2,600 |
Leased Equipment | $0 | $0 | $0 |
Utilities | $3,000 | $3,080 | $3,120 |
Insurance | $2,200 | $2,270 | $2,400 |
Rent | $4,000 | $4,300 | $4,600 |
Payroll Taxes | $30,000 | $31,000 | $32,000 |
Other | $0 | $0 | $0 |
Profit Before Interest and Taxes | $32,310 | $237,136 | $368,403 |
EBITDA | $32,310 | $237,136 | $368,403 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $6,462 | $47,427 | $73,681 |
Net Profit | $25,848 | $189,709 | $294,722 |
Net Profit/Sales | 0.39% | 2.33% | 2.95% |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $56,000 | $60,480 | $65,318 |
Cash from Receivables | $18,000 | $19,440 | $20,995 |
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 | $37,000 | $38,000 | $39,000 |
Bill Payments | $26,000 | $28,000 | $30,000 |
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 | $13,000 | $14,900 | $16,700 |
Cash Balance | $26,500 | $28,100 | $29,400 |
Assets | |||
Current Assets | |||
Cash | $281,000 | $314,720 | $346,192 |
Accounts Receivable | $25,600 | $28,672 | $32,227 |
Inventory | $4,300 | $4,816 | $4,988 |
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 | $18,000 | $20,160 | $22,680 |
TOTAL LONG-TERM ASSETS | |||
TOTAL ASSETS | |||
Liabilities and Capital | Year 4 | Year 5 | Year 6 |
Current Liabilities | |||
Accounts Payable | $20,200 | $22,624 | $25,429 |
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 | $31,100 | $32,000 | $33,000 |
Retained Earnings | $56,770 | $61,879 | $68,067 |
Earnings | $219,000 | $238,710 | $262,581 |
TOTAL CAPITAL | |||
TOTAL LIABILITIES AND CAPITAL | |||
Net Worth | $279,000 | $304,110 | $334,521 |
Sales Growth | 7.05% | 7.81% | 8.66% | 3.00% |
Percent of Total Assets | ||||
Accounts Receivable | 9.17% | 10.16% | 11.26% | 9.80% |
Inventory | 5.33% | 5.91% | 6.54% | 9.90% |
Other Current Assets | 2.10% | 2.33% | 2.58% | 2.40% |
Total Current Assets | 150.05% | 151.20% | 151.80% | 158.00% |
Long-term Assets | 11.72% | 11.78% | 11.84% | 12.00% |
TOTAL ASSETS | ||||
Current Liabilities | 4.62% | 4.66% | 4.70% | 4.34% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
Total Liabilities | 7.37% | 7.43% | 7.50% | 7.38% |
NET WORTH | ||||
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 94.72% | 97.28% | 100.00% | 99.00% |
Selling, General & Administrative Expenses | 94.01% | 96.55% | 99.25% | 97.80% |
Advertising Expenses | 1.62% | 1.66% | 1.71% | 1.40% |
Profit Before Interest and Taxes | 40.97% | 42.08% | 43.25% | 33.90% |
Main Ratios | ||||
Current | 37 | 37 | 38 | 32 |
Quick | 31 | 32 | 32.8 | 33 |
Total Debt to Total Assets | 0.19% | 0.17% | 0.16% | 0.40% |
Pre-tax Return on Net Worth | 74.70% | 75.10% | 75.70% | 75.00% |
Pre-tax Return on Assets | 94.09% | 98.79% | 103.73% | 111.30% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | 32.87% | 33.89% | 34.94% | N.A. |
Return on Equity | 56.18% | 57.92% | 59.72% | N.A. |
Activity Ratios | ||||
Accounts Receivable Turnover | 7.7 | 7.7 | 7.8 | N.A. |
Collection Days | 100 | 100 | 100 | N.A. |
Inventory Turnover | 32.2 | 33.81 | 35.098 | N.A. |
Accounts Payable Turnover | 16.2 | 16.4 | 16.45 | N.A. |
Payment Days | 27 | 27 | 27 | N.A. |
Total Asset Turnover | 2.4 | 2.4 | 2.6 | N.A. |
Debt Ratios | ||||
Debt to Net Worth | -0.03 | -0.03 | -0.03 | N.A. |
Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
Liquidity Ratios | ||||
Net Working Capital | $240,000 | $253,440 | $267,633 | N.A. |
Interest Coverage | 0 | 0 | 0 | N.A. |
Additional Ratios | ||||
Assets to Sales | 0.82 | 0.83 | 0.86 | N.A. |
Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
Acid Test | 27.3 | 28.1 | 28.9 | N.A. |
Sales/Net Worth | 2.1 | 2.1 | 2.1 | N.A. |
Dividend Payout | 0 | 0 | 0 | N.A. |
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By: Author Tony Martins Ajaero
Home » Business ideas » Automotive Industry » Auto Repair
Are you about starting an auto repair shop ? If YES, here is a complete sample auto repair shop business plan template & feasibility report you can use for FREE .
All over the globe, the auto repair business is such that is important. This is because of the need to have cars fixed. Since the invention of automobile, a whole lot of business opportunities have been created around the automobile industry and the auto repair garage is one of them.
All over the world, car repairs is one business that never goes into extinction. This is because daily, fleets of cars are being added to the garages of people and so whether it is a brand new car or a fairly used one, you can be sure that sometime in the future car repair would be inevitable.
As long as people use their cars and trucks regularly, there will always be reasons for them to visit an auto workshop if indeed they want these vehicles to continue to ply the roads. This is because you can never rule out wear and tear when a machine is in use.
People visit auto garages for different reasons; it could be for routine servicing, major repair works, or for refurbishing their cars. For whatever reasons; auto repair garage will always translate to money for the owner of the repair garage.
1. industry overview.
Auto repair business is amongst the highly thriving and profitable easy to setup auto services related business idea an entrepreneur can successfully start.
The Auto Repair Shop industry provides mechanical and electrical repair and maintenance work for cars, trucks, vans and trailers et al. Players in this industry include self-employed mechanics, auto repair shops, garages and car care centers established by automobile manufacturing companies.
It is important to state that the auto repair shop industry does not include car dealerships, auto parts retailers or gas stations that provide industry services. So also, the industry services do not include auto bodywork, car washes, oil changes or air conditioning repair
The Auto Repair Shop industry is an open industry hence a low level of market share concentration. Even though large automobile companies operate in the industry , revenue is also spread among thousands of small auto garages and even mobile auto repair businesses.
As a matter of fact, no single auto repair shop or auto company can account for more than 5.0 percent of the total revenue generated in the industry. This is the reason why smaller auto repair shops accounts for a large percent of the players in the auto repair services industry.
The Auto Repair Shop industry has grown steadily over the last five years and it is projected to continue to enjoy steady growth. Individuals and businesses have increased demand for auto repair services, as rising per capita disposable income and corporate profit encourages consumers to opt for auto repair and maintenance services over do-it-yourself repair.
Going forward, disposable income levels are expected to continue to grow, encouraging some consumers to spend more on the maintenance and repair of their automobiles.
Statistics has it that the Auto Repair Shop industry in the united states of America, is worth $58bn, with an estimated growth rate of 1.4 percent. There are about 251,016 registered and licensed auto repair garages in the United States and they are responsible for employing about 530,978 people.
Over and above, the auto repair shop industry is very open to any aspiring entrepreneur who has acquired the required trainings, skills and perhaps professional certifications to start his or her own auto repair business and of course make good money from the industry.
Jack & James Auto Garage®, LLC is a U.S based and licensed auto repair garage. We have been able to secure a standard and well – positioned garage facility in a central and busy district in Fairhope – Alabama.
We are an auto repair services company that is set to compete in the highly competitive and fragmented auto repair and maintenance services industry not only in Fairhope – Alabama, but also throughout the United States market because we intend opening our outlets in key cities across the United States.
Jack & James Auto Garage®, LLC will offers services such as mechanical and electrical repair and maintenance work for cars, trucks, vans and trailers et al.
Our business goal is to become one of the leading auto repair garages in the United States and we will make sure that we do all we can to compete favorably with leaders in the industry such as Jiffy Lube, Midas and Monro and also automobile manufacturing companies who have services centers.
Our workers are going to be selected from a pool of certified and highly experienced auto repair engineers and technicians in and around Fairhope – Alabama and also from any part of the United States of America as the business grows.
We will make sure that we take all the members of our workforce through the required trainings that will position them to meet the expectation of the company and to compete with leading auto repair garages and services centers in the United States and throughout the globe.
At Jack & James Auto Garage®, LLC, our client’s best interest will always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for all our partners, employees and for our clients.
Jack & James Auto Garage®, LLC is founded by Engr. Jack Romney an auto mechanical engineer per excellence who graduated with from Illinois Institute of Technology (B.Engr.) and his twin brother and business partner for many years James Romney.
They have a combine experience that can help them build Jack & James Auto Garage®, LLC to favorably compete with leaders in the industry such as Jiffy Lube, Midas and Monro and also automobile manufacturing companies who have services centers.
Jack & James Auto Garage®, LLC was established with the aim of maximizing profits in the auto repair shop industry. We want to compete favorably with the leading auto garages in the United States which is why we have but in place a competent quality assurance team that will ensure that every repairs, services and maintenance carried out or related services rendered meet and even surpass our customers’ expectations.
We will work hard to ensure that Jack & James Auto Garage®, LLC is not just accepted in Fairhope – Alabama but also in other cities in the United States of America where we intend opening our garages. Our products and services are listed below;
Our Business Structure
Jack & James Auto Garage®, LLC is an auto repair and maintenance garage that intend starting small in Fairhope – Alabama, but hope to grow big in order to compete favorably with leading automobile repair garages and automobile servicing centers in the industry both in the United States and on a global stage.
We are aware of the importance of building a solid business structure that can support the picture of the kind of world class business we want to own. This is why we are committed to only hire the best hands within our area of operations.
At Jack & James Auto Garage®, LLC, we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (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 five years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions;
Human Resources and Admin Manager
Client Service Executive
Chief Executive Officer – CEO:
Auto Garage Supervisor:
Sales and Marketing Manager
Accountant / Cashier:
Auto Repair and Maintenance Engineers (2) and Technicians (8)
Jack & James Auto Garage®, LLC engaged the services of a core professional in the area of business consulting and structuring to assist our organization in building a well – structured auto repair garage business that can favorably compete in the highly competitive auto maintenance and repair service industry in the United States and the world at large.
Part of what the team of business consultant did was to work with the management of our organization in conducting a comprehensive SWOT analysis for Jack & James Auto Garage®, LLC. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Jack & James Auto Garage®, LLC;
Our core strength lies in the power of our team; our workforce. We have a team of certified and highly trained and experience automobile maintenance and repair engineers and technicians, a team with excellent qualifications and experience in various niche areas in the automobile maintenance and repair service industry.
Aside from the synergy that exists in our carefully selected workforce, our services will be guided by best practices in the industry.
As a new auto repair and maintenance garage in Fairhope – Alabama, it might take some time for our auto repair and maintenance garage to break into the market and gain acceptance especially from top profile clients in the already saturated and highly competitive auto maintenance and repair services industry; that is perhaps our major weakness. Another weakness is that we may not have the required cash to pump into promoting our business the way we would want to.
No doubt, the opportunities in the auto maintenance and repair services industry is massive considering the number of individuals and corporate organizations who owns automobile in the United States. As an auto repair and maintenance garage, we are ready to take advantage of any opportunity that is available in the industry.
Just like any other business, one of the major threats that we are likely going 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 auto repair and maintenance garage in same location where our target market exist and who may want to adopt same Business model like us.
One good thing about the Auto Repair Shop industry is that, it is an open industry hence a low level of market share concentration. Even though large automobile companies operate in the industry , revenue is also spread among thousands of small auto garages and even mobile auto repair businesses.
It is a known trend in developed world and even developing world to find steady growth in the Auto Repair Shop Industry, As a matter of fact, the Auto Repair Shop industry has grown steadily over the last five years in the United States of America and it is projected to continue to enjoy steady growth.
Individuals and businesses have increased demand for auto repair services, as rising per capita disposable income and corporate profit encourages consumers to opt for auto repair and maintenance services over do-it-yourself repair. Going forward, disposable income levels are expected to continue to grow, encouraging some consumers to spend more on the maintenance and repair of their automobiles.
Lastly, it is now becoming trendy to find automobile engineers and technicians who do not have the required finance to rent a shop opt for mobile auto repair garage business; they are known to move around especially on highways with their complete tool box looking for broken down cars, trucks and vans et al to fix.
Before starting our auto repair and maintenance garage in Fairhope – Alabama, we conducted a market survey and feasibility studies and we are certain that there is a wide range of both corporate and individual clients who would need the services of auto repair and maintenance garages especially haulage companies and transport companies.
In view of that, we have created strategies that will enable us reach out to various corporate organizations and households who we know can’t afford to do without our services. Below is a list of the people and organizations that we have specifically market our products and services to;
Our Competitive Advantage
Surviving in the business world as an auto repair and maintenance garage requires more than, your expertise, knowing how to deliver standard repairs and maintenance jobs but also how to network with key people that matters; decision makers that can decide who will get an auto repair and maintenance contract.
Without a shadow of doubt, there are loads of big time investors (Automobile manufacturing companies), that have a stake in the automobile maintenance and repair services industry; but one thing is certain, there is room big enough to accommodate both the big solar automobile repair, servicing and maintenance garages and the small ones as well.
What smaller auto maintenance, servicing and repair garages need to do to survive in the industry is to concentrate on providing automobile repair, maintenance and servicing to households, individuals, haulage companies, small transport companies, schools, hospitals and hotels et al before bidding for big auto repair, servicing and maintenance contracts from large corporations (franchise from automobile manufacturing companies to run their service centers) and government agencies (Public Works Department et al).
We are quite aware that to be highly competitive in the automobile maintenance, servicing and repair industry means that you are not only expected to be able to deliver consistent and highly reliable auto repair, servicing and maintenance jobs, but you must be able to meet set targets. No one would want to continue to hire your services if don’t always meet up with the target date of completion of projects.
Our competitive advantage lies in the power of our team; our workforce. We have a team of certified and highly trained and experience automobile maintenance and repair engineers and technicians, a team with excellent qualifications and experience in various niche areas in the automobile maintenance and repair service industry.
Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category (startups automobile maintenance, servicing and repair businesses in the United States) in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.
Jack & James Auto Garage®, LLC is established with the aim of maximizing profits in the auto repair, maintenance and servicing industry and we are going to go all the way to ensure that we do all it takes to meet and surpass the expectations of all our clients.
Jack & James Auto Garage®, LLC will generate income by offering the following auto maintenance, servicing and repair related services;
One thing is certain, there would always be haulage companies, transportation companies, corporate organization, government agencies, households and individual who would need to take their cars, vans, and trucks et al for routine maintenance and servicing or for outright repairs.
We are well positioned to take on the available market in the automobile maintenance, servicing and repair services industry and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow our solar panel installation, maintenance and repair company to enviable heights.
We have been able to critically examine the automobile maintenance, servicing and repair market and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projection is based on information gathered on the field and some assumptions that are peculiar to similar startups in Fairhope – Alabama.
Below is the sales projection for Jack & James Auto Garage®, LLC. It is based on the location of our business and of course the wide range of auto repair, servicing and maintenance services and target market;
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 offering same auto maintenance, servicing and repair services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
We are mindful of the fact that there is stiffer competition in the automobile maintenance, servicing and repair industry; hence we have been able to hire some of the best marketing experts to handle our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in the automobile maintenance, servicing and repair industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall business goal of Jack & James Auto Garage®, LLC.
Our corporate goal is to grow Jack & James Auto Garage®, LLC to become one of the top 10 automobile maintenance, servicing and repair garage brands in the United States of America which is why we have mapped out strategy that will help us take advantage of the available market and grow to become a major force to reckon with not only in Fairhope – Alabama but also in other cities in the United States of America where we intend opening our garages.
Jack & James Auto Garage®, LLC is set to make use of the following marketing and sales strategies to attract clients;
We have been able to work with our brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market.
We are set to become the number one choice for both corporate clients and individual clients in the whole of Fairhope – Alabama and other cities in the United States of America where we intend opening our garages which is why we have made provisions for effective publicity and advertisement of our solar panel installation, maintenance and repair company.
Below are the platforms we intend to leverage on to promote and advertise Jack & James Auto Garage®, LLC;
At Jack & James Auto Garage®, LLC we will keep the prices of our services below the average market rate for all of our customers by keeping our overhead low and by collecting payment in advance from corporate organizations who would steadily bring in their fleet of automobiles for routine servicing, maintenance and repairs. In addition, we will also offer special discounted rates to all our customers at regular intervals.
We are aware that there are some one – off jobs or government contracts which are always lucrative, we will ensure that we abide by the pricing model that is expected from contractors or organizations that bid for such contracts.
At Jack & James Auto Garage®, LLC, our payment policy will be all inclusive because we are quite aware that different people prefer different payment options as it suits them. Here are the payment options that we will make available to our clients;
In view of the above, we have chosen banking platforms that will help us achieve our plans with little or no itches.
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 a place, 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 tools 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 an automobile repair and maintenance garage; it might differ in other countries due to the value of their money. However, this is what it would cost us to set up Jack & James Auto Garage®, LLC in the United of America;
Going by the report from the market research and feasibility studies conducted, we will need about two hundred and fifty thousand (250,000) U.S. dollars to successfully set – up a medium scale but standard auto repair, maintenance and servicing garage in the United States of America.
Generating Funding / Startup Capital for Jack & James Auto Garage®, LLC
Jack & James Auto Garage®, LLC is a business that will be owned and managed by Engr. Jack Romney and his twin brother and business partner for many years James Romney.They are the sole financial of the business which is why they decided to restrict the sourcing of the start – up capital for the business to just three major sources.
These are the areas we intend generating our start – up capital;
N.B: We have been able to generate about $100,000 (Personal savings $70,000 and soft loan from family members $30,000) and we are at the final stages of obtaining a loan facility of $150,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
The future of a business lies in the numbers 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 close shop.
One of our major goals of starting Jack & James Auto Garage®, LLC 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 offer our auto maintenance, servicing and repair services 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.
Jack & James Auto Garage®, LLC 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 three 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
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This is a practical guide that will walk you step by step through all the essentials of starting your business. The book is packed with guides, worksheets and checklists. These strategies are absolutely crucial to your business' success yet are simple and easy to apply.
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If you are thinking about going into business, it is imperative that you watch this video first! it will take you by the hand and walk you through each and every phase of starting a business. It features all the essential aspects you must consider BEFORE you start a business. This will allow you to predict problems before they happen and keep you from losing your shirt on dog business ideas. Ignore it at your own peril!
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The Single Most Important Ingredient for Business Success
The first and most important thing you need to acquire in order to succeed in a small business is... knowledge.
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"Why Invent Mediocrity, When You Can Copy Genius?"
That's an excellent quote I picked up from a fellow business owner a few years back. What this means is that you should see what is working and try to duplicate Printing Business. Why go through all the trouble of inventing something new, that you don't even know will ever work, when you can easily learn from and duplicate something that has been a proven success?
[ Note: One of the BIGGEST mistakes almost all new businesses make is that they WASTE tons of valuable time, energy and money on trying to create something "new", that has never been tested or proven... only to find out later that it was a total loss. Don't make the same mistake! ]
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Here's what you'll discover in the 'How to Start a Auto Repair Business' book:
Success Tip: Setting Goals
Good management is the key to success and good management starts with setting goals. Set goals for yourself for the accomplishment of the many tasks necessary in starting and managing your business successfully. Be specific. Write down the goals in measurable terms of performance. Break major goals down into sub-goals, showing what you expect to achieve in the next two to three months, the next six months, the next year, and the next five years. Beside each goal and sub-goal place a specific date showing when it is to be achieved.
Plan the action you must take to attain the goals. While the effort required to reach each sub-goal should be great enough to challenge you, it should not be so great or unreasonable as to discourage you. Do not plan to reach too many goals all at one time.
Establish priorities. Plan in advance how to measure results so you can know exactly how well you are doing. This is what is meant by "measurable" goals. If you can’t keep score as you go along you are likely to lose motivation. Re-work your plan of action to allow for obstacles which may stand in your way. Try to foresee obstacles and plan ways to avert or minimize them.
Click here! to download your Auto Repair Proposal PDF book for free
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Here're other free books in the "how to start a business" series that may interest you:
Here's a Sample 'Executive Summary' for an Auto Repair business plan :
COMPANY NAME is located in Burlingame, CA a town of about 28,000 residents located in the San Francisco Bay area. The company focuses on general automotive repair on both foreign and domestic models. COMPANY NAME also gains revenue from the sale of parts and fluids associated with its service repairs. COMPANY NAME has realized it is not a specialist in a major item in auto repair; transmission repair, and thus has decided to cease subletting these jobs out and acquire a division for this purpose. The plan calls for COMPANY NAME to purchase an existing facility and the business associated with it, in order to provide its customers with a complete line of automotive repair service. The company will accomplish this through the receipt of grant funding in the amount of $1.2 million. With these funds, the owner OWNER’S NAME will purchase the new building and United Transmission's company. United Transmission's owners will remain onboard to work in the shop but under its acquirer COMPANY NAME, moreover OWNER’S NAME will buy-out one of two COMPANY NAME partners to become 66.66% owner.
The Objectives of COMPANY NAME are: 1. To exceed customer's expectations by providing superior service 2. Sales increase by at least 50% through acquisition and 10% per year after 3. Have a clientele return rate of 90% 4. Maintain an average gross margin of 50%+ throughout the entire operation
The Company's mission is to provide the Burlingame, CA community with quality auto parts and services, along with reliability and trustworthiness, as it has for the past 20 years. It also strives to assist the community through providing stimulation to fellow businesses by referring its bodywork and paint clients to them. COMPANY NAME strives to be honest and to serve their extended community completely.
The keys to success in this business are:
COMPANY NAME is incorporated as a c-corporation. Its headquarters is in Burlingame, CA. At present, it has one location; however, as mentioned it plans to acquire United Transmission, which is located right next door to its current location through a company buy-out.
COMPANY NAME is currently owned by [INSERT OWNERS’ NAMES] each with 33.33% ownership.
The company was formed on October 31, 1990. It had historically focused on general automotive repair and service, while shying away from transmission repair and replacement. Over time, the company realized it was loosing substantial revenue though outsourcing these jobs to another shop. In 2010, OWNER’S NAME decided to gain more control of the business and bring in a transmission business. To date, he plans to acquire United Transmission and buy-out one partner's share of the business. This will give him sole control of the transmission venture and 66.66 percent control of COMPANY NAME.
|
|
|
|
| FY 2007 | FY 2008 | FY 2009 |
| $1,031,261 | $1,087,444 | $1,133,869 |
| $671,223 | $712,943 | $748,125 |
| 65.09% | 65.56% | 65.98% |
| $691,345 | $702,481 | $736,525 |
|
|
|
|
|
|
|
|
| FY 2007 | FY 2008 | FY 2009 |
|
|
|
|
|
|
|
|
| $4,473 | $9,582 | $8,236 |
| $10,684 | $8,451 | $9,873 |
| $15,157 | $18,033 | $18,109 |
|
|
|
|
|
|
|
|
| $243,901 | $256,481 | $252,172 |
| $187,739 | $225,484 | $218,484 |
| $56,162 | $30,997 | $33,688 |
|
|
|
|
| $71,319 | $49,030 | $51,797 |
|
|
|
|
|
|
|
|
| $37,739 | $28,657 | $40,811 |
| $0 | $0 | $0 |
| $4,171 | $3,282 | $3,319 |
| $41,910 | $31,939 | $44,130 |
|
|
|
|
| $0 | $0 | $0 |
| $41,910 | $31,939 | $44,130 |
|
|
|
|
| $73,733 | $73,733 | $73,733 |
| ($15,642) | ($64,521) | ($48,552) |
| ($28,682) | $7,879 | ($17,514) |
| $29,409 | $17,091 | $7,667 |
|
|
|
|
| $71,319 | $49,030 | $51,797 |
|
|
|
|
|
|
|
|
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3.0 Services
COMPANY NAME sells both automotive, and truck repair service and parts. The Company also services vehicles including: 10-minute quick oil changes (a fast lube), performance factory service intervals, computer diagnostics and repair, clutch, timing belts and break replacement. As a full service facility, we also include wiper blade replacements, all fluid and drive belt checks, at any time. COMPANY NAME will stand behind any services performed, ensuring the customer is fully satisfied. " We offer a wide variety of full service automotive repairs along with excellence in customer care. Our warranty is a whopping 12 months or 12,000 miles for parts and labor ."
1. Set goals for your campaign
increase sales, attract advertisers, drive traffic to your site, build brand awareness
2. Develop unique selling proposition (USP)
about your company, its products and services; create key message points about the benefits to end users
3. Determine your target audiences
Internet industry, advertisers, consumers, Wall Street, etc.
4. Begin a publicity program
write a press release about significant company announcements (ie: new product launch, a strategic partnership, a new source of funding, advertising sponsorship, an experienced executive joining the company)
5. Select appropriate spokespersons for the media--yourself, your marketing manager, your technical expert
6. Create a target media list
business editor and Internet/technology reporter for local newspaper, advertising and interactive trade editors, business reporters, TV reporters covering cyberspace
7. Send release to reporters by E-mail or fax by 8 A.M. of the day you issue it
follow up with a phone call by late morning; talk to your messages points; you'll only have time to give the top line of the story
8. Follow what reporters are writing every day and know their interests
9. pot industry trends by checking online media and traditional print and broadcast coverage daily or several times a day
10. Build relationships with reporters
invite them to lunch; see them at industry events.
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3. Marketing plan and competitive analysis. The marketing plan focuses on analyzing the auto repair shop market in your area, both in terms of potential customers' needs, and how other shops in the area are (or aren't) meeting those needs. Researching your market involves researching local demand for auto repair services.
Learn how to start an auto repair shop with a sample business plan. Download a free pdf template and use Upmetrics software to create your own plan easily.
Our auto repair business plan is structured to cover all essential aspects needed for a comprehensive strategy. It outlines the garage's operations, marketing strategy, market environment, competitors, management team, and financial forecasts. Executive Summary: Offers an overview of your auto repair business's concept, market analysis ...
Maxwell Auto Garage, LLC will offer services such as mechanical and electrical repair and maintenance work for cars, trucks, vans, and trailers et al. Our business goal is to become one. of the leading auto repair garages in the United States and we will. Maxwell Auto make sure that we do all we. Garage.
For streamlined customization, we provide an "sample business plan for auto repair shop pdf" for download. This document is vital for entrepreneurs committed to developing a robust and effective strategy for starting or growing their auto repair shop. The 'AI Business Plan Generator' serves as a comprehensive guide, offering profound insights ...
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 any example or template you come across.
Download a customizable auto repair business plan template and example to start or grow your own shop. Learn how to create a financial model, market analysis, and competitive advantages for your auto repair business.
1.3 Mission. The mission of F & R Auto Repair is to provide high quality, convenient and comprehensive auto repair at low cost. The most important aspect of our business is trust. It is the goal of our firm to have 100% customer satisfaction in regards to quality, friendliness, time to completion and to discover new ways to exceed the ...
For an auto repair shop, particular emphasis should be placed on the services you plan to provide. Detail your service offerings - general maintenance, specialized repairs, diagnostics, tire services - and explain how they cater to the demands and expectations of your target customers. The operational plan is equally important.
Auto Repair Business Plan. Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their auto repair businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an auto repair ...
Auto Repair Shop Business Plan Template. If you want to start an Auto Repair Shop or expand your current Auto Repair Shop, you need a business plan. The following Auto Repair Shop business plan template gives you the key elements to include in a winning auto repair business plan. An automotive business plan is a plan to start and/or grow your ...
Edit the auto repair shop business plan template online, or download it. There are 3 ways to use this template: Edit it online: you can adapt this template to your business idea by changing the text or the financial forecast directly in our business planning software. Download in PDF: if you're just after a little inspiration, you can download ...
Secure $122,750 through the Canada Small Business Financing Program. Secure a location for the shop in Saskatoon, Saskatchewan. Purchase all equipment and inventory outlined in "6.0 Financial Plan". Recruit one Sales Rep and Tire Technician from the Regina location, as agreed upon. Open for business on July 1, 2021.
1. Not investigating the market. When you're opening up a new business, it's crucial to consider the demand for auto repair and the unmet auto repair needs within the area you plan on opening shop. It's easier to satisfy a known need rather than creating a need and having to convince your customers. 2.
Step1: Write Auto Repair Shop Description. To start an auto repair shop, the first step is to make a detailed auto repair shop business plan. For that purpose, you can read any example auto repair shop business plan available on the web like this sample business plan for auto repair shop. Or you can hire a professional to make your auto repair ...
A Sample Auto Repair Shop Business Plan Template 1. Industry Overview. Auto repair business is amongst the highly thriving and profitable easy to setup auto services related business idea an entrepreneur can successfully start. All over the world, car repairs is one business that never goes into extinction. This is because daily, fleets of cars ...
Here's a Sample 'Executive Summary' for an Auto Repair business plan: COMPANY NAME is located in Burlingame, CA a town of about 28,000 residents located in the San Francisco Bay area. The company focuses on general automotive repair on both foreign and domestic models. COMPANY NAME also gains revenue from the sale of parts and fluids associated ...
Automotive Repair Shop Business Plan Template - Free download as PDF File (.pdf), Text File (.txt) or read online for free.
This business plan provides a blueprint for how to start and manage your Auto Repair Shop business. Our detailed research and analysis, including interviews with entrepreneurs and stakeholders, will ensure that you plan your future business for success. A business plan is used for various purposes including to (a) Raise funding from investors ...
Automotive Repair Shop Business Plan eBook Subscription Services Automotive Repair Shop Business Plan Budget-Friendly Options 6. Navigating Automotive Repair Shop Business Plan eBook Formats ePub, PDF, MOBI, and More Automotive Repair Shop Business Plan Compatibility with Devices Automotive Repair Shop Business Plan Enhanced eBook Features 7.
21531374-auto-repair-sample-business-plan.pdf - Free download as PDF File (.pdf), Text File (.txt) or read online for free. Scribd is the world's largest social reading and publishing site.
This document is a business plan for an auto repair shop. It includes sections on the executive summary, company summary, products/services, market analysis, SWOT analysis, strategy, and financial plan. The financial plan projects sales, expenses, profits, cash flow, and the balance sheet over the first three years. It makes assumptions about routine maintenance, small repair jobs, and large ...
auto repair shop business plan - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free. F & R Auto is a new auto repair business being started by John Ford and Michael Ronald, who have 30 years of experience as mechanics. Their objectives over the next three years are to steadily increase sales revenues, institute a superior customer service ...