Auto Accessories and Detailing

BUSINESS PLAN

AUTO ACCESSORIES UNLIMITED

1012 Lafayette Blvd.
Allen Park, MI 48101

This business plan for an auto accessories and detailing facility contains a comprehensive list of the physical needs of the business, as well as a detailed account of the financial status of the business.

• business description
• market analysis
• products and services
• marketing strategy

BUSINESS DESCRIPTION

Auto Accessories Unlimited provides automotive aftermarket accessories, electronics, and glass repair and replacement.

Name

Auto Accessories Unlimited's corporate experience includes 29 stores in the Michigan tri-state area. Franchises for the stores have been offered since 1984. The Allen Park location has approximately 4,800 square feet, consisting of a 2,000 sqare foot retail showroom, 500 square feet in office space, and a 2,300 square foot on-site installation service area divided into six bays.

Products and Services

Auto Accessories Unlimited's products and services consist of:

• Auto security
• Car audio systems
• Cellular
• Car and truck accessories
• Auto care protection
• Glass repair and replacement
• Classic car parts

Market and Competition

Nationally: steady continuous growth for the last ten years

Regionally: very popular, some areas fairly unexposed but continuous growth

Locally: untapped, virtually no advertising done. Not a single company in area offering even half as much. Very few of those companies even offer such products or services.

Competition:

Auto security - three players in town. No advertising.

Car audio systems - same three players. One major advertiser.

Cellular - many players. Both GTE and Cellular One. Very little advertising. Some newspaper, very little radio.

Auto accessories - almost non-existent. No advertising.

Truck accessories - no real competition.

Auto care protection - one major player; little advertising.

Glass replacement - three major players; one well established.

Classic car parts - no competition.

Management Expertise

Auto Accessories Unlimited is a partnership between Jane De Vries and Mike Hansen. As coowner, Jane will be the sales manager, with nine years of increased responsibilities in automotive aftermarket and cellular sales, including management of Car Tunes of Grand Rapids, Michigan. Mike will be the service shop manager, with more than five years of aftermarket installation experience. Both will be responsible for customer service in the overall operations of the business.

Business Goals

• To establish and maintain the number one market position of the automotive after-market accessories business in the local market, opening two additional stores within the next five years.
• To strive for 100% customer satisfaction by establishing a loyal and repeat customer base.
• To provide consistent services and affordable quality products.

Summary of Financial Needs and Applications of Funds

The following table lists the top-level approximate investment needed to provide the resources to build, establish, and maintain a successful business. The second table lists business collateral along with a proforma with estimated annual sales of $500,000 for the first year.

Funds Breakdown

Shop Equipment

100 gallon air compressor
Heavy-duty pressure washer
Gold/chrome plating machine
Drive-on auto lift (7000 lb.)
Large tool chest with complete set of tools (approx. $2,500)
Makita cordless drills
Electric Makita drill
Assorted air drills
Makita air snips
Makita electric snips
Two shampoo interior extractors
Wet/dry heavy-duty vacuums
Two buffers
Two polishers
Heavy-duty jig saws
Impact air tools
Air ratchets
Heavy duty washer and dryer
Battery charger
Jumper cables
Dremeltool
Solder guns
Heat guns
Die grinders
Vice
Bench grinder
Fender covers
File set
Blow guns
Drop-cord lights
Tube lights
Extension cords
Air hoses
Multi-meters
Heavy-duty drill bit set
Punch and chisels
Tape measures
Rubbermallets
Utility knives
Large supply of electrical connectors
Various nuts and bolts
Ozonemachine (odorremover)
Metal storage cabinets
Large metal bins
Heavy-duty folding tables
Numerous detailing accessories
Miscellaneous

Office Equipment

Fax machine
Copier
Phone system
Computers
486 × 100 pentium services
CD ROM drive
1 grey scale scanner
1 laser printer
1 dotmatrix printer
3 14" color VGA monitors
Software
3 large desks and 6 chairs
Assorted filing cabinets
Credit-card terminal and printer
Metal storage cabinets
Large deluxe customer counter (to be built)
Office supplies

Showroom Equipment

Large audio display and comparator/sound room (to be built)
Waiting room seating
Small TV for waiting room
Water cooler
Display racks
232 square feet of slatwall and hangers
Tint display

NOTE: Numbered items below correspond to items listed in the table - "Applications of Funds "

MARKET ANALYSIS

Auto Accessories Unlimited covers the retail, wholesale, commercial fleet, insurance and business-to-business markets.

Description of Total Market

The primary market consist of females between the ages of 18-50 and males between the ages of 16-5 5. We will target high-school graduates with an annual income of at least $15,000.

The county-wide market (population) to be targeted is 78,000+ of 130,000. The eight-county market targeted is 203,000 of 290,000. Market ratio of men to women is 50/50.

Average income of the target market is $27,500 with roughly 22% of income going toward automobile purchase and improvements. Eleven percent of additional income is used toward vehicle maintenance and insurance.

• Average number of cars per household is 2.
• Average amount paid for new vehicles is $17,000.
• Average amount paid for used vehicles is $7,100.
• Average finance time for new vehicles is 4+ years
• Average age of vehicles on road today is 7+ years.
• Average mileage per year is 13,000-18,000.
• Average daily amount of time spent in vehicles is 60 minutes.

Industry Trends

Economic

In good times—more cars are purchased (in turn providing more miles to be driven). Steady production of new cars and a very high trend toward leasing. Usually spend more money on service and appearance work. Costs for service is greater. Increased number of cars on the road. Tradein market becomes healthier but much more inexpensive, thus allowing owners to spend more money on extras.

In poor times—people keep cars longer, thus requiring more service and care of cars. Owners try to make cars look better and last longer. The market keeps resale value higher. People like to feel good about their older cars being in such good shape.

Vehicles

The number-one selling vehicle in America is the truck. With that comes the need for a number of accessories and vehicle protection. Trucks and sports cars have the highest theft rate of all stolen vehicles, thus a need for auto security (insurance) increases.

Because today's vehicles have more glass than earlier models, the need has increased for glass repair and replacement. Today's vehicles also have thinner paint and more clearcoat than before, requiring more outside attention and care.

Vehicle owners today feel more secure with the help of cellular phones and security systems.

These trends develop almost as fast as a new model or design arrives on the market.

Market Segments

Retail (Primary Target Market)

Retail sales are generated in three ways: 1) walk-in traffic; 2) advertising traffic; 3) phone inquiries and orders. Retail sales payment methods include cash, check, special financing (90 days same as cash), and major charge credits. Specific areas defining sales terms are shown later in this document.

Wholesale

Wholesale accounts consist of auto accessories, window tinting, rust-proofing, and sunroofs. These accounts are subject to net-thirty sales terms and are usually automobile dealerships within the eight-county market.

Insurance

These accounts are set up on an as-needed basis. They are for the recovery of stolen or vandalize property, interior damage due to fire or water damage, exterior reconditioning and rustproofing, and after-collision repair, etc.

Commercial Fleet and Business-to-Business

This includes communications equipment and car care products for large businesses (blanket protection), employee discount programs, incentives, bonuses and additional auto security for large business fleets.

Competition

Auto Security

Good Vibes Sound
Pro Audio
Soundlab

Car Audio Systems

Same three listed above.

Cellular

Cellular Express
Cellular One

Car and Truck Accessories

Zeibart Tidy Car
Unique Auto Options

Auto Care Protection

Zeibart Tidy Car
Two or three small detail shops (wash and wax)

Glass Repair and Replacement

Lafayette Glass
Magie Glass
Safe Lite Autoglass

Classic Car Parts

None

PRODUCTS AND SERVICES

Description of Products and Services

Auto Security

Complete security systems including remote car starters, power windows and door locks, trunk releases, sunroof closers, and complete keyless entry systems. State-of-the-art vehicle recovery systems.

Car Audio Systems

From the most basic to the most exotic, including all installations and a wide range of audio name brands. Interactive radar systems that interface with stereo components.

Cellular

The most complete line of cellular phones including name brands and a complete line of cellular accessories in the eight-county area. Service provided by Cellular One.

Car Accessories

Sunroofs, ground effects, spoilers, luggage racks, trim molding, light covers, driving lights, rear wings, splash guards, interior woodgrain kits, body side moldings, bras, louvres, etc.

Truck Accessories

Running boards, tonneau covers, brush guards, bed liners, roll bars, driving lights, lift kits, lowering kits, tailgate nets, bumpers, bug shields, hitches, grills, light covers, rear sliding windows, etc.

Auto Care Protection

Rustproofing, electronic rustproofing, undercoating, paint protection, scotchguarding, buff and shine, washing, detailing, ozoning (odor removal), steam cleaning, engine cleaning, waxing, pinstriping, leather and vinyl protection. Rustproofing, paint protection, and scotchguarding are exclusive service and guarantees.

Glass Repair and Replacement

Complete autoglass replacement and minor chip repair; the area's most complete auto window tinting, shades, and colors.

Classic Car Parts

The most extensive classic car parts catalog center in the Midwest.

MARKETING STRATEGY

Auto Accessories Unlimited is a retail store. Sixty percent of the business base will be storegenerated customers. Thirty percent of the business will be wholesale/dealership generated business. The remaining ten percent will be commercial and business-to-business. All retail business will be generated by incoming phone inquiries and sales and over-the-counter product purchase, service, and installation.

The retail sales will be generated through advertising media such as newspaper, radio, and direct mail. Wholesale sales will be generated through dealership and business-to-business outside sales personnel. Commercial and business-to-business sales will be generated through phone contact and direct contact from the owners.

Pricing Policy

Auto Accessories Unlimited will maintain a 50-60% price margin on all in-store products. A basic shop labor rate of $3 5 per hour will be charged on all service and non-warranty work. Electronics, bench-testing work rate of $25 per hour (with a one hour minimum) will be assessed on all electronics out-of-warranty date or being purchased from outside sources.

Sales Terms

Retail services and products carry a limited lifetime product and labor warranty. This warranty covers all workmanship and/or product to be free from defect. All over-the-counter electronics will have an exchange only policy. These products must be returned within 15 of purchase. After 15 days have lapsed, customers may receive in-store credits for the amount of purchase.

Any problems or discrepancies of products or services not reported within 48 hours of installation are subject to void warranty.

Wholesale terms will consist of general business practices, net 30 days. 30-on will carry APR interest rate of 2% per month.

Method of Selling, Distributing, and Servicing Products

All products sold by Auto Accessories Unlimited will be purchased from industry distributors.

Auto Accessories Unlimited offers monthly sales. These sales change every month, providing better customer awareness for different products.

Hours of Operation

Monday through Friday 7:30 a.m. to 7:00 p.m.

Saturday 8:00 a.m. to 3:00 p.m.

Closed for all national holidays.