Auto Detailing Business - Research Paper Example

Any Business Venture needs a plan to be able to tackle every hurdle successfully. It has to have a timeline that would reflect the detailed accomplishments and determine the next decisions to undertake. Business Plans must be made with the company objectives in mind, taking into consideration many factors such as financial requirements and external factors such as political, economic and social conditions. This Business Plan aims to list down step-by-step the things needed to be accomplished for the business to launch and thrive in the competitive world of automobile care and detailing business segment. It targets to identify the action points given the budgetary limits and the external factors surrounding the business. The owner thought of naming the business Royal Bay, and the following business plan will discuss the characteristics, highlights, as well as the limitations of the business. This business plan includes a discussion of the company’s objectives, the promotional plan, its competitive edge, external factors affecting the owner’s decisions and the financials for the first year of operations. The promotional plan will further discuss the company’s marketing strategies to achieve the objectives set. It will tackle how the owners will plan to penetrate their target market to get their desired return of investments within the given period of time. Table of Contents Topic Page I. Executive Summary and Fact Sheet 3 II. Body of the Plan 5 III. Market Analysis 7 IV. Marketing Plan 9 V. Development Plan 11 VI. Product/ Operations Plan 12 VII. Management Team 13 VIII. Implementation And Risk Associated With Venture 13 IX. Financial Plan 14 I. Executive Summary and Fact Sheet The Auto Detailing Business is perhaps the most interesting entrepreneurial venture that a car enthusiast can do. Not only can he enjoy dressing and cleaning up assorted type of vehicles. He could also practice his creativity and get paid for it. This is why the author thought of opening this kind of business. More than targeting to get a successful business, the author wishes to display his expertise when it comes to automobile care. He also wishes to share his passion for cars for other individuals who have the same interests, while creating business opportunities out of it. It is with these interests in mind that the owner came up with Royal Bay Auto Detailing Center. Royal Bay will be a professional detailing company providing customers with three main services from hand car wash, interior cleaning (power wash and vacuum), and professional interior / exterior detailing (wax, buff, shine). Royal Bay will build strong brand recognition by providing its customers with a promising and fulfilling service experience at a reasonable rate. It will target all vehicle owners from economic vehicles to luxury vehicles. Customers will be from word of mouth, and dealerships, as the quality of Royal Bay’s work will be well known. The company will be able to provide quality services by employing the best skilled employees available, as Royal Bay believes that quality comes first. It will ensure that customers will feel that their vehicles are handled by the best and are taken care of, by providing guaranteed customer satisfaction. Royal Bay is as start up company to be located at Toronto, Canada. It aims to capture its target market through its professional approach to the business, capped with outstanding customer care and after sales services. The owner is part entrepreneur, part-hobbyist, which explains the business’ dedication towards this cause. Royal Bay targets to launch in June 2009, opening its first branch that would offer full detailing and cleaning services. It further plans to expand with two other branches in neighboring cities after its first year of operations, and this would only happen if the management gets a 100% return of investment during their first year of operations. Royal Bay is a corporation owned by the principal investor and four other friends who are car enthusiasts as well. The incorporators will invest a total of $ 100,000 each for the initial branch. The owners will open stocks ownership by the third month of operations, if needed. No lendors will be needed to support the company financials, and therefore, there are no deemed benefits for their purpose. Royal Bay’s product concepts are believed to be all original, and this is a unique concept created by the owners. There are no registered patents or trademarks needed to support the business. The company’s projected market share by the end of its 6th month of operations would be 25%, in contrast to other car detailing businesses in the area, and a higher rate of 35% by the end of its first year of operations. Royal Bay targets market dominance by creating a loyal base of customers who will return to them for repeat purchase and patronage. Other personalities involved in the business, and who will serve as advisors are the owners’ parents who have considerable experience in businesses and could contribute to the betterment of the company. II. BODY OF THE PLAN The planning and conceptualization of Royal Bay dates back to April 1, 2009. From then on, the owners have started the construction of its first branch, a 200 square meter property at Toronto, Canada to be leased long-term by the company. The concept was a product of the similar hobbies and interests of the incorporators, which is their fondness for automotives, particularly racing and high end cars. Inspired by this, the incorporators decided to create a business that compliments their interests. The concept of an Automobile Detailing business came to mind because they have seen the demands for car care in the area. The basic service, which is car wash serves as the company’s bread and butter, so to speak, since this is a basic need of a car, and would definitely form majority of the company’s clientele. Hand car washing will be offered with the value added service of car waxing, without the premium cost. This service would be highly attractive to low, mid and high end cars. Interior cleaning is also an essential need for private vehicles. This is another service that the owners thought of offering, since many car owners prefer detailed cleaning and vacuuming of their vehicles. Auto detailing is a secondary service that would cater to owners who have extra money to accessorize and further beautify their vehicles. Though the owners believe that the service comes second in terms of demand, the company will earn profits due to relatively higher cost of service due to the crew’s expertise on the matter. The incorporators are all business graduates, and have been employed in different companies before arriving at a decision to focus on a real business. The names are as follows: (Note to the customer: please provide names – I can’t think of anything realistic at this point since I barely even know your name) Competition wise, there are about a handful of other shops offering similar service in Toronto, Canada. Others have been in the business for a very long time already, therefore having loyal customer base from the last few years. But competition makes the owner feel positive in the venture, in such a way that they are confident that they could contend both technology and customer-service wise. Royal Bay will put a premium in their professional and personalized services, and would offer after sales car care particularly to loyal customers of the shop. Royal Bay would also embark in pricing war, creating introductory prices that would create advantage over th e competition. Royal Bay sees Mr. Steam Car Wash and Ocean Auto Detailing as two of the most remarkable competitors. These two are very visible in terms of promotions are highly popular among the target market. Royal Bay’s expansion plan for two other branches in other cities is motivated by the owner’s desire to achieve a positive return of investment by its first year of operations. The plan is invest wisely in highly- dependable machineries sourced out from the most cost-efficient suppliers to be able to establish good pricing advantage. Royal Bay would like to rely more on customer count than offering relatively high prices to attract the target market. This would also ensure that Royal Bay will be able to compete heads on with the other businesses identified. III. MARKET ANALYSIS Royal Bay’s primary target market is private car owners who are residents of Toronto Canada. These are people who use their cars as their primary means of transportation to work and to other personal errands. This group of people have sufficient budget allocated for the care and maintenance of their cars, and they give utmost importance to their vehicles, being their primary means for mobilization. They can spend on car care, particularly car washing and interior cleaning as they have no time to perform this due to their busy schedules. For this group of people, it is a need to maintain and care for their vehicles as this supports them in their daily activities particularly going to and from work. Royal Bay will cater to all car types, and would offer relatively similar prices for car care for any model. There would be a slight difference, of course, in basic car care for low and high end cars, but it will see to it that it will attract both ends of the market to ensure that it will cover a wide range of clientele. In 1995, studies show that among the 11.2 Million residents of Canada, approximately 9 Million have at least one vehicle and a little more than four Million have two vehicles (Enerinfo Road Transportation. 2009). With this number, the automobile care industry has plenty of opportunities to thrive and expand. Royal Bay also targets public utility vehicles for their car wash service. As mentioned earlier, the company will give importance to the transaction count and would definitely serve the commercial vehicles as well as private vehicles. There are over 20 large car care shops in the city of Toronto, and about the same number of small ones. Competition is indeed very stiff, and basically, there are no distinctive qualities that would really make any one of the shops stand out. However, Royal Bay will compete in terms of pricing, in such a way that its pricing strategy will slightly be lower than most of the competition. It will also focus on outstanding customer service and after-sales benefits such as follow up check up, and extended warranty on selected services. This way, the company could offer its customers value for money and be able to make a mark in the industry. Major players in the industry are Mr. Steam Car Wash and Ocean Auto Detailing, both of which are using state of the art technology in their services. Mr. Steam Car Wash boasts of its service quality at a reasonable price (Power of Steam 2009), while Ocean Auto Detailing emphasizes on their packaged costs that offer comprehensive products and services to its customers (Ocean Auto Detailing. 2009). Both are similarly priced in terms of its services and have their own websites to help promote the services. Royal Bay will position itself as a shop that offers similar services at a lower cost. It will also highlight its after-sales benefits to entice the customers to keep coming back for more, and other value added services while customers wait. The small shop will showcase a cafeteria where customers can wait, and a small express spa and salon where the customers could relax while Royal Bay works on their vehicles. IV. MARKETING PLAN As discussed earlier, Royal Bay will position itself as a full service auto detailing shop that is priced lower than most of the competition. The target is to get many customers to purchase frequently to obtain growth in sales. It will focus on raising transaction count versus putting higher profit margin for every product or service sold. For example, a typical hand car wash costs about $10.00 in most of the competitor stores. Royal Bay will price at $ 9, with free snacks for one. The small difference in pricing, capped with a value added product, will put the shop to its advantage. To achieve positive revenues, Royal Bay will manage the usual costs for one regular hand car wash. Operational costs on water and soap, as well as other components will be managed in such a way that the production cost will be reduced without sacrificing the quality of course. The trick is to go micro in terms of pricing, and purchase the raw materials in bulk, where applicable. The company plans to spend 30% of its monthly operational budget to Marketing, Advertising and Promotions to be able to launch, advertise and sustain market visibility. Again, to cut on costs, Royal Bay shall employ full time marketing officers to implement the promotional plan to do away with the additional costs that an ad agency will entail. Advertising and promotions will be in house, and budgets for these shall be controlled to be able to maintain the company’s pricing strategy. Management will tie up with suppliers for other possible promotional strategies that may be executed jointly. Tie ups would mean lower costs for both parties in terms of product promotions and gimmicks. This way, there would also be other opportunities for free PR publicity. As earlier mentioned, Royal Bay will highlight its after-sales services and to create advantage over competition. This means that a free check up will be offered for applicable services. This would also serve as the company’s warranty for its services. To achieve the desired effect, which is to have the customer return for positive reasons, there should be a given timeframe for every free check up. Customer complaints will be entertained with utmost care, and would be handled to ensure that the customers get their satisfaction from Royal Bay’s services. Royal Bay’s SWOT Analysis is as follows: 1. Strengths – Royal Bay will invest in its workforce to ensure that the desired image will be achieved. It will employ experts of this field and will subscribe to trainings to further equip its employees with the right skills and attitude to be able to service the customer better. 2. Weakness – As a start up company, it has yet to establish its customer base and understand the needs of its customers. This might give the company the disadvantage during the first few months of operations especially that it will attempt to beat veterans that have been in the service years ahead of them. 3. Opportunities – Canada’s growing number of vehicle owners and the economic improvements indicate that there is still a market for auto detailing shops despite the presence of competitors. 4. Threats – Competitors will serve as a threat to Royal Bay. It would be a make or break for the company that’s why it is important to be able to establish customer rapport for the first few months of operations. V. DEVELOPMENT PLAN Automobile Detailing companies usually offer three major services: cash hand washing, automobile interior cleaning and interior/ exterior detailing. Variations usually come when these services are packaged together at a lesser cost. Companies could only create an advantage over competitors in terms of pricing and the quality of services. There may also be value added services such as free applicable product samples or after sales services. In this case, Royal Bay will work on creating product packages that would add more benefits for the customer. The primary aim is to be priced lower than the competitors to be able to give the customers a quantifiable reason to switch. Next is to ensure professional service level standard to would make the customer satisfied upon leaving the shop. Finally, the packages would provide the customers with an opportunity to relax while they wait for their automobiles to be served. This strategy is truly different from the competitors and this is the first of its kind in the city. VI. PRODUCT/ OPERATIONS PLAN Royal Bay will operate on a 200 square meter property at Toronto, Canada. All needed facilities such as efficient water supply and other machineries are already integrated into the branch. Supplies needed for the operations (e.g. washing and auto detailing supplies) shall be ordered from a fixed supplier monthly, quantities of which shall be determined through an analysis of the demand for each service. A probable environmental issue to be discussed would be the use of natural resources during the operations. As such, management will ensure that the water supply is well regulated, and that there is a certain level of usage that the crew should adhere to avoid confronting environmental concerns . VII. MANAGEMENT TEAM The management team is consists of five individuals who share a common passion for automobiles: (Note to the customer: please provide names – I can’t think of anything realistic at this point since I barely even know your name) They will also be hands on in terms of operations and will hold key positions in the management. Each one of them shall be assigned the following responsibilities: Operations, Sales and Marketing, Administration and Procurement, Finance and Human Resource Management. VIII. IMPLEMENTATION AND RISK ASSOCIATED WITH VENTURE Construction of the service shop and installation of needed facilities is ongoing, and target for completion is by the end of this month. By May, all promotional activities are set for implementation. These series of marketing activities will make or break the business, in such a way that it will determine the level of awareness for the brand and the success of the launch as a whole. Management will ensure that the Sales and Marketing team will do their jobs in terms of promotions. The promotional plan still needs further elaboration, and the promo calendar has yet to be fixed, but it is highly important for management to adhere to the timelines determined in the promo execution plan to ensure a successful launch and equally successful operations for the next six months. IX. FINANCIAL PLAN The principal investor and his four other incorporators plans to shell out $ 200,000 each as start up fund for the business. Additional funding may be needed and this will be executed through a bank loan. Bulk of the total budget will go the construction expenses and acquisition of needed facilities. Second aspect that would need a large chunk of the budget would be marketing and promotions. A considerable amount shall also be allocated for Human Resource concerns, not only for wages but for training expenses as well. PROFIT AND LOSS STATEMENT BALANCE SHEET PROJECTIONS AND BREAK EVEN ANALYSIS Royal Bay plans to break even by the first six months of operations, and start earning back the start up investments on the 7th month. This is on the assumption that the shop will hit 100% or more of the targeted sales per month. REFERENCES Did you know… 1999. Retrieved April 21, 2009 from http://www.cdat.ecn.ulaval.ca/english/enerInfo-en/enerinfoen-v4n1.pdf Ocean Auto Detailing 2009. Retrieved from http://www.oceanautodetailing.com/ Power of Steam 2009. Retrieived from http://www.mrsteamcarwash.ca/index-2.html Read More