Business Plan for Truspeed Performance

I. Business Plan for TruSpeed Performance

V. OWNER: John R. Beasley

TruSpeed Performance LLC 1922 E Southbridge Way Sandy, UT 84093 801-948-0877 [email protected] Table of Contents

VI. VII.

General Company Description This section is too long and saying the same thing many times in different ways. If you want I can help you rewrite it. Sometimes bullet points may work better too. TruSpeed Performance is an Auto Repair and Performance Company built on the basis of making our customers cars look good, run well, and perform at their maximum performance at an affordable price. My company offers a wide range of products that are produced all over the world from over 400 brands, offering the absolute best options for our customers. I also plan to produce custom products for rare cars that don’t have a huge aftermarket support, but have a large following of enthusiasts. The company is owned and operated by an automotive enthusiast. I know our industry and I know what my customers like. By having this knowledge I am able to cater to my customers and give them the best experience possible.

TruSpeed Performance was started to change the face of the aftermarket and automotive repair industry. I wanted to give my customers the feeling of security and trust when leaving their vehicles with us. TruSpeed Performance is built to be an honest, no hassle, low cost alternative for our customers' performance needs. We take pride in learning as much as we can and sharing our skills with auto enthusiasts.

Everyone at TruSpeed works on every car with the same passion we have working on our own vehicles. I'd love to see my customers' tuner looking clean, driving fast, and expressing them and their style without. We pride ourselves on

2 being the company that says yes when others would say no. The company who will take on a custom project others would turn down.

At TruSpeed Performance we're all about making our customers dreams and ideas into reality and doing it right. We won't recommend parts we don't think our customer need or would really see a benefit from. We'll recommend options that we personally would want to try if their car was our own.

I believe the idea of starting this business with low overhead, working my way up, and building a quality reputation of a shop that started as an enthusiast modifying cars in a garage, was the smartest strategy.

What makes us different from every other speed shop out there? We have a variety of customers, those who want their everyday repairs, also those that plan to take their cars to the track or to custom car shows. Our customers want to win races, win competitions and be the envy of their car club and friends. We have the tools and know how to make their car out perform their competitors, and out shine their peers. Being able to not only repair a vehicle to factory specifications, but to also be able to add power where needed, increase responsiveness of handling and other important factors, we are able to better serve our customers.

Use of Loan Funds Through my planning process I have determined that UMLF would be the right fit to help us make the next step in our business growth. In order to have the most up to date tools to best serve customers and to have the best looking shop to aid in our customers’ comfort, the loan from UMLF for $25,000 would be the best option. We plan to use the funds to purchase a two post lift, diagnostic and tuning tools, showcases, and display items for the show room, as well as pay for marketing to help TruSpeed to get noticed.

Products and Services At TruSpeed we pride ourselves on doing everything right the first time. We aren’t going to take shortcuts just to get a car out of the shop. We practice the industry’s standard and original manufactures methods of repairs. We run an AllData Certified repair shop, which means we use the same information the dealers do to repair our customer’s vehicles. We keep up to date on all the recalls and technical service bulletins released around the industry.

I believe that we can do the work that most other shops can with more attention to detail, and at a lower cost. That is why I have set my rates the way I have. I strive to keep my prices less than our competitors and do a better job. I feel that too many dealerships today claim a high standard of excellence because they are the Original Equipment Manufacturer, but fail to do so. I have found that many dealerships cut corners or charge customers for services that are not needed. This is why I feel that by being honest and upfront, I will have a competitive advantage, not only in price but in quality of service.

Our company installs and recommends parts to our customers from the aftermarket performance industry. These are not just replacement parts, but parts that will make their vehicles gain horsepower, increase handling characteristics, and help them to make their cars unique. These parts include but are not limited to larger turbos, high flow exhaust, bigger fuel rails, cold air intakes, projector headlights, and custom fabricated parts that we manufacture in house with the help of some of our industry partners.

Operational Plan TruSpeed is currently set up through appointment only. We only work on as many cars as we can handle at one time. Right now I have between one and two techs on a vehicle at one time. I have one receptionist who helps with paperwork, accounting and scheduling. I plan to keep these numbers until the customer flow increases enough to need more. Equipment used includes air tools, hand tools, lifts etc.

I plan to acquire an alignment rack with accessories to help me better fine tune and adjust the customers steering and suspension. This will help them to handle better on the roads and on the track as well as get the most out of their sport

3 and race suspensions. With many people lowering their cars or using them for performance purposes, the conventional alignment isn’t going to be sufficient for their needs. I feel that by offering this service to customers I will be able present to them a service that no one is currently offering.

I also plan to invest in more tuning and diagnostic tools to help us diagnose and tune vehicle’s engine management systems. These will help to get more power and/or better fuel economy out of their vehicle. All of the power upgrades that we offer to our customers can benefit from tuning their computer system. Because we are dealing with high horsepower engines we need more diagnostic and engine tuning tools than the average repair shop. Our customers expect that if we build an engine for them, or tune their system, that they will be able to push it to its limits without any issues.

Production The products we offer our customers come from all the industry leading aftermarket manufactures. We are authorized dealers for some of the industry leaders including, K&N, AEM, and Magnaflow. We import some products from different countries including Japan, Australia, and some European countries. I also use distributors, wholesalers and local parts stores to get parts for our customers. All of the products we sell come with manufactures warrantees and we guarantee our services. Of the products I am currently working on manufacturing to sell with the TruSpeed name, go through many tests and are manufactured with top quality materials.

Location The next step is to take my shop from the residential garage to a new commercial location that will help support the growth of the company. By moving to a commercial location, we are increasing our exposure, and improving our overall professional image as a company. Also, with a larger location I can hire an assistant to accommodate my expected growth.

In order to run efficiently I need space to pull in vehicles, pull them apart and stay organized. I need a building that will allow automotive service and repair and the hazardous materials that are involved. I need an area that is easy for a tow truck to drop off a non running vehicle or a large vehicle to bring in engines or other large heavy parts in as well as space for our customers cars I feel that by having walk-in access and a nice looking show room not only will we increase our sales but we will also increase the trust and impression we make on our customers. I need to be in an area that my suppliers can find easily and near auto parts suppliers and dealers. We deal with a lot of lowered cars so I need a driveway that is easily accessible.

In order to make the building look like it should, I’ll need to do very minimal signage. I will add a few machines and lifts to make an effective work environment. I will need adequate seating for our customers if they choose to wait. I would also need display cases and racks in the show room in order to hold some display items.

I need to get a new alignment rack in order to perform the proper tuning of the steering and suspension parts on performance vehicles. With our alignments and suspension tuning of lowered cars I would like to be able to have an alignment rack that is easy to drive onto without chancing damaging the customer’s vehicle. The alignment rack I am looking into purchasing will cost $58,462.27. I plan to lease it from Hunter Engineering Company. We have a strategy set up with hunter to work into this alignment system and scissor rack, however it is a progressive plan that includes starting with a cheaper four post rack and upgrading in the future. I will also need to purchase other miscellaneous machines and tools to help me to run the shop. Total cost for other shop machines be approximately $2,700.

I plan to operate Monday through Friday 9am-5pm and Saturdays 10am-4pm. The average utilities for the building run between $150 and $300 per month. I also need a few services to make the business run efficiently including AllData information services which costs $150 per month. The other services I need are internet and phones which I

4 have had quoted through Comcast for $114 per month. I need to be able to process credit cards; these services range from $20- $40 per month depending on the services and amount of transactions. Payroll services will cost $23 per month.

I am proposing to move into a shop on 3762 W 5400 S. With the shop being in a central location with easy access to all major freeway systems in the Salt Lake Valley and TRAX, our potential customer base increases significantly and with the location being in the heart of the valley, we are in the heart of our target customer base. The shop has two 12’ x12’ doors and a large shop. There is also a good size show room to display product and accommodate our customers. It also has a back warehouse area that is great for stocking product, doing fabrication and other work, and space to train employees, overall plenty of space to effectively do my job. There are also plenty of spaces for my customers to park.

The shop will have a nice, well lit and professional show room that will work perfectly to keep with our professional image and help my customers to feel comfortable and accommodated. The exposure of being in a prime location with 39,300 annual average daily traffic, this will be very beneficial. Having a well advertised grand opening will be a great opportunity for new customers to find me, as well as reach out to previous customers. For all these reasons, as well as the close vicinity of manufacturers and dealers, makes this shop a clear choice to efficiently and effectively target our customer base.

Legal Environment We are currently licensed and have insurance set up to start when we move into the new shop in order to cover all of the tools, machines and a few customers’ cars if they stay overnight. My shop will be equipped with fire extinguishers and flame resistant cabinets for flammable substances. I will be submitting for Trademark rights to TruSpeed Performance, and the logo. The cost for filing has been included in the startup budget. I will also have to apply for a new license under Taylorsville City. I am also required to have unemployment insurance, workers compensation, and plan to offer my employees health insurance after their probationary period.

Personnel I have two techs on my payroll, one part time tech that has many years of experience and is planning to take his ASE certification tests soon, and the other who is new to the industry but has the skills and motivation to be a great asset to the company. The owner is ASE Certified and All Data Certified as well as has over 5 years experience in the automotive industry. All techs I employ will be required to have at least two years experience and be in pursuit of certifications or be certified. I will be encouraging all my employees to continue their education outside of their work with TruSpeed. I will continue to work as a technician, parts manager, webmaster, and account manager.

All new employees will go through background checks and drivers’ license checks. Pay structure will be based on experience and certifications. Bonuses for certifications will be given to employees who obtain them after they begin working for TruSpeed. I will require all of my employees to become AllData Information Specialists.

Inventory & Suppliers We currently stock oils and recharge kits. We obtain products needed through wholesale distributors with whom we have accounts. Some items are also ordered directly from manufacturers. In the new location we will stock more commonly needed items. We also will maintain an inventory of parts in the showroom to showcase some of the available options for our customers.

Our Market Based on my research I have found that the number of small cars and light trucks in the state of Utah, both new and used, being purchased during the last few months of the fourth quarter of 2010 has gone up 6.27%. We have also found that not only have more vehicles of this type been purchased, but also more have been registered since last year. I have also found that shops are beginning to only perform the most basic maintenance or repairs; and not working on

5 the custom tuners. Most of the race shops will only build the very expensive track only cars that they build from the ground up.

I have found that by being available to not only build and tune high performance vehicles, but also to be able to do the regular maintenance on vehicles, we are able to appeal to a broader spectrum of people. In Salt Lake County alone 13,381 used vehicles were purchased in the fourth quarter of 2010. These vehicles, unlike the new models, aren’t covered under a manufacturer’s warranty and people need a reliable place to take their car for service. With the elimination of some of the industry’s well known auto manufacturers, owners will need a reliable shop to turn to for their repair needs. With fewer choices people are looking for more ways to make their vehicle unique. By being versatile in not only helping customers to help their cars to perform better, we are also equipped to help their cars run better.

This strategy opens up our market. There are 1,932,492 of Utahns who registered their passenger cars this year who next year will be looking to get their emissions and inspection requirements taken care of to re-register next year that could be potential new customers for us. We will also be able to help the 1,929,033 of Utahns passenger cars and light trucks who registered last year whose vehicles registration will soon be expiring. A new study commissioned by SEMA indicates that aftermarket products influence about 1,180,000 new-vehicle sales each year. The automotive marketing research and consultancy firm AutoPacific collected and analyzed consumer data to quantify the effect that accessorization has on the sale of new vehicles. The resulting report, "Influence of Accessories on New-Vehicle Sales", details the findings.

Our specialty is performance. Of the new vehicles purchased during the fourth quarter of last year, 2,157 of those vehicles are a part of our specialty target market. Currently the performance aftermarket is growing significantly. With shows like Street Customs, American Choppers, and even the old reruns of Pimp My Ride and movies like The Fast and The Furious, people are getting more excited about customized vehicles. The groups of people who are enthusiastic about certain vehicles and modifying them are growing too. Almost every weekend, year round, the SCCA hosts at least one autocross, rallycross, or wintercross event. Miller Motor Sports Park offers their Wide Open Wednesdays in which many cars are street cars with a few modifications. The tracks and racing communities are booming and they need a reliable shop to help them meet their performance needs. Most of these people are weekend racers who work all week. They aren’t professional racers with an unlimited budget. This is why I feel that my company is a huge asset to this economy and its auto enthusiasts.

With the price of gas consistently going up, many people are looking to get the best fuel economy out of a vehicle. Many people don’t want to sacrifice the feeling of a performance vehicle and are left with poor gas mileage. With my skills in tuning the modern computers in vehicles today, I would be able to help customers not only get more power, but also better fuel economy out of their vehicles. Many people today don’t realize the importance of their alignment and suspension in the drivability of their vehicle. I feel that by helping drivers fine tune their suspension not only will we be helping their car perform better and their tires last longer but I’d be helping to make those vehicles safer.

Some of the hurdles of being a new company in the automotive industry today are competing with the chain stores and the brand recognition that they already have built. There can be an advantage to not being a big name store with huge waiting lines and appointments. We can give our customers a professional impression by our methods and professional appearance and a homey feel with our honesty, sincerity, and genuine 100% attention to detail. I feel that our customers will leave feeling that they were treated fairly and got their money’s worth. With a convenient prime location in the center of the Salt Lake Valley, we are right in the heart of our target market. Word of mouth will be our best asset. What will set us above the rest of the performance and repair shops in the area? Competitive prices, being versatile, being in a convenient location, and exceeding the expectation of the customer.

TruSpeed has the strength of a professional image, a prime location, recognizable logo, and competitive price. We have versatility in service and product selection as well as the types of vehicles we will service. My techs are professional in their image as well as their training. Our weakness lies in being new, but our strength is in our

6 passion, integrity and professional work ethic.

Strategy I feel that by starting small with little overhead we have been able to establish a name for ourselves in our quality of work, our honesty and willingness to work above and beyond for our customers. Now that we have built a strong platform to stand on we feel that we can stand up and take things to the next level by becoming a performance shop in the heart of the valley that offers more products, better prices and service at reasonable rates. By exposing ourselves to the rest of the world and putting ourselves in a convenient location for our current customers and in a location for new customers to discover us, we are able to not only make performance easier and more affordable to obtain, but also more convenient.

Promotion and image I plan to promote through a grand opening barbecue with appearances some of our well known vendors and a DJ to help keep an excited feeling at the event. We have been attending local car shows and enthusiast meets as well as race events getting our name out there. We participate in online forums for local enthusiasts and will be promoting the grand opening on there. We also have a Facebook page in which we will also be heavily promoting. At these events we plan to hand out promotional materials including pens, logo-wear, pamphlets and business cards. The paid events will be specifically marketed to the target audience of our core customer base. I also plan to do a branding campaign with one of the local radio stations for the two months following the grand opening.

In order to give us a professional image we plan to wear professional attire with our logo to all meets and events, and wear professional industry standard safe working uniforms while working on our customers cars. We feel that by having a clean well designed show room not only will we entice our customers to purchase more product that they see displayed in the showroom, but they will feel like they can relax in our waiting areas. We also like to follow up and make sure we met their needs, and talk about their future plans with their vehicles and how we can help them in the future.

We take part in local and national automotive industry events including Autorama, Utah Auto Expo, and the annual SEMA show, where we network and make contacts with manufacturers and make sure that we are on the cutting edge of the latest technology in the industry. I also talk to manufacturers about our customer’s projects to help produce new products for our customers. We enjoy participating in local track events as well as going out to events and showing our support and talking with local enthusiasts and explaining how we can help them make their vehicles perform better. We also attend the local enthusiast meetings to immerse ourselves in their culture and be able to better serve their needs.

Pricing The pricing for our work is set at a reasonable rate that we are able to, repay loans and other obligations, compensate employees, put some money toward growing the business, and also make satisfied customers. Our labor prices are as follows:

Standard Labor Rate $65/hr Diagnostic Flat Rate $60/hr with minimum of one hr. Dyno Tuning Rate $250/hr * Street Tuning Rate $100/hr GM ECU Unlocking fee $150** Custom Projects minimum $300 R&D Labor *does not include dyno rental time ** excludes GM V6 Alloytec

Automatic and Manual Transmission Service offered with standard or synthetic gear oil. We offer performance oils for an added cost. Standard $70 Performance $140 Oil Changes offered with standard or synthetic oil. We offer performance oils and filters for an added cost. Prices for Up to 4 Qt. Standard $32, Performance $75+ Cold Air Intakes Install $60 Labor+Parts Aftermarket gauge install $70-90 Labor+Parts (depending on type of gauge) Powder coating or Ceramic coating services $Price varies

7 depending on type of coating and item being coated Brake Pad Install $45 per axle Labor+Parts Brake Pad and Rotor Install $65 per axle Labor+Parts Brake Flush $65 Stainless Steel Brake Lines Price varies per vehicle Free Tire Rotation on request with purchase of any service

Sales Forecast Based on the numbers and progression we have seen over the history of business of our business during times with our service department open we have developed a sales forecast that takes into account the increased advertisement, new location, and new services we will be offering. I feel that these figures are realistic because of our strategy, increased exposure and attention to detail which have proven to give us a good name and constant increase in interest in the business and our services.

Management and Organization TruSpeed will be run at very minimal staff to begin with. All future employees will be required to be experienced in either the automotive field or in the field in which they will be working to help TruSpeed. We plan to have more detailed organization in the future. We will be applying for the ASE Blue Seal program therefore each person in a supervisory position must be ASE Certified in the area in which they work.

Owner: John R Beasley has over 5 years of automotive experience. He is an ASE Certified Technician and AllData Certified Information Specialist

Advisors For financial advisement purposes TruSpeed used Jeff Neilson, Vice President and Sr. Business Relationship Manager with South Towne Business Banking Group of Wells Fargo. Jeff helped us in starting this business plan. We also worked with H.J. and Associates and Ken Klingler to get our QuickBooks in order. For insurance purposes we are working with Todd Kiser with Insurance Network for advising on insurance for the shop and the business. For advising on media marketing, we are working with NAME with Simmons Media Group. For TV Marketing we have talked with Julie with Fox 13 and plan in the future to work with other networks.

We have been working with Jonathan Hanks of Ascendus Law. We have also consulted with family friends who have run successful businesses in the area, attended business seminars for the Automotive Industry and sought advice from local successes such as Dave Kindig, and even some of our local distributors and mystery shopped other competing shops that have been quite successful through the past years.

Financial Projections The costs that have been estimated for startup include what we feel would best allow us this company to be successful. We have accounted for the machines that we need to perform the services that we offer to our customers. In order to completely service our customers vehicles we need to not only be able to install aftermarket parts, but to also be able to fine tune them for them to be safe and for our customers vehicles to make the most of them. It is important for our customers to have a show room where they feel comfortable and they can view products we sell. We have estimated for a POS System to make cash and credit transactions. We have estimated for one shop computer for our techs to look up information on all data to help them better do their job and to have the manufactures specs on hand. We have estimated for one computer for the show room to show our customers potential modifications or products for their vehicles. We have estimated for display cases to display some of the product we sell to our customers. We have budgeted for accommodations for our customers including chairs, and a TV. We have allotted for ink, paper pens and other office supplies required to be able to handle our customers accordingly. We have also budgeted for a grand opening and advertising to help promote it. Our initial budget has been included in this plan. Based on our research we find that a loan in the amount of $25,000 is sufficient to effectively start this business and for it to be successful.

8 Appendices

 Detailed annual Sales Forecast

 Renovation Budget

 Start-Up Expenses

 Detailed Expense Budget

 Marketing Budget

 Shop Pamphlet

 Property Info from County Assessor

 Lease Agreement

 Competitive Analysis

 Usage Statistics for www.truspeed-performance.com

 09/10 Utah Current Registration list

 11 Utah Current Registration list

 New Passenger Vehicle and Light Truck Sales List Fourth Quarter 2010

 Used Vehicle and Light Truck Sales Fourth Quarter 2010

 X96 Listener Profile and Studies

 U92 Listener Profile and Studies

 Comcast Business Class Price Offer

 Valpak/MoneyMailer Media Package Offers

 Google Adwords Statistics

 Google Places Advertizing info

9  Best Buy for business Quote

 Ease Diagnostics info

 ECUTek Mazda Flash Software info

 Tactrix Flash Adapters Price Sheet

 Hunter Alignment Rack Quote

 TruSpeed Services List

 April 2011 SEMA Market Research Study

 Owner’s Taxes

 Business Taxes

 Company Profile (Quickbooks)

I messed up this part SLS Importance to TruSpeed Strength Weakness Solid Autowerks but there Performance Customer was an empty page above They have some We don’t accounts we don’t Having the parts on stock as and have some Have huge line Our product selection hand and not having We import and get many parts better prices on of products Products is comparable to our to wait is definitely more unique parts as our things because including some competitors. important to competitors they’ve been in of their own customers yet. business for longer We beat out Price is definitely a Equal or Higher Equal or Higher Price Best Value everyone’s prices or Less profit factor to the Prices Prices match them customers. We give a personal Customers want to Industry Standard of Track proven Quality touch to our Good quality work make sure their stuff Excellence results customers cars is done right. Selection on hand is Limited in People want We have a good Huge selection One of our big something selection of choices; they want selection of products of parts but strengths is our we need to services and types to feel like they are Selection and services and we’ll don’t offer versatility in products work on but of vehicles they the boss especially take on more than our services to and services. will come choose to work when a lot of money competitors. everyone. with more on. is concerned. business. Service We offer a quality Our work ethic is a Our limited Limited in Good customer People want to be service, with honesty huge strength. staff and services and service and the treated well and and integrity time vehicles they work products they they expect the

10 I messed up this part SLS Importance to TruSpeed Strength Weakness Solid Autowerks but there Performance Customer was an empty page above schedule has hurt our offer are customer same for their on. reasonable and service vehicles. reliable. reputation slightly Scheduling You can guarantee and call back Our service is reliable if Solid makes an Reliable People expect that if times or however callbacks Quality products at a appointment products with they trust you to completion Reliability and ease of competitive price they’ll be there, track proven work on their car times aren’t scheduling needs guaranteed answering their results to back ,job will be done as reliable as work phones isn’t them up right the first time.. they should always reliable. be. We need to get our name Questionable, but Customers need to We need a stronger Good name Commitment to out there and building. They believe that shop Stability clientele base and well success. start getting have had their ups will be around for a more income established. more money and downs. while. in. Huge Not as many People want to knowledge for Professional training, years of Specialize in know that the Still growing but American cars Expertise industry recognition experience Subaru and person working on decent knowledge however and certifications. as our Mitsubishi only their vehicle knows base imports aren’t competitors their stuff. their specialty

We lose a lot Some people won’t of business check out a new Huge reputation because we Widely known place unless they’ve Company Quality work, We’ve wowed our with the Subaru aren’t yet in for doing good heard someone else Reputation attention to detail customers so far and Mitsubishi a full size work. had a good crowd. shop experience there. People want to feel The new location is like it’s convenient. Currently Right now our right in the heart of They don’t want to running a Near dealers, but Small signage location is lacking, The Valley near spend a lot of time small hard to find and and hard to see, Location however the move to many of our suppliers trying to find a shop operation in off the beaten however on a the new place will and very easy for our and they want to residential path. main street. really help. customers to find and feel comfortable area. for people to see. leaving their vehicle there. Shop is clean, however no People love a showroom. professional We keep our things Professional Cramped Building doesn’t appearance. A Appearanc looking nice and Shop needs appearance, clean residential look like a shop, quality showroom e ourselves looking better signage work environment. shop. and techs don’t and professional professional. wear logo or have employees help uniform business. appearance Sales We are able to up-sell We offer the best Our website Their site is easily Professional People don’t want to and get the customers parts at competitive shop and navigable and site set up for feel like they’re

11 I messed up this part SLS Importance to TruSpeed Strength Weakness Solid Autowerks but there Performance Customer was an empty page above being hustled, and parts are described prices and suggest really want to feel well, however services that our selling parts like they know excited about extra eBay store they don’t sell Method customers really need only, very about what they are services. need work. online and don’t and that we know strong set up. buying. Also they offer services or they’ll want. expect a good up sell in person. website. Not as Not the most Credit Accept visa and convenient Accept most important thing Less expense Policies MasterCard for our cards. Very supported. however is a customers. convenience. Good word of mouth but no Needs a walk in support Customers don’t Good word of bigger However they really like ads but Word of mouth is the mouth but no walk Advertising Very limited budget and have other they like to have best advertisement. in support or other more shops that carry heard of you before advertizing visibility their products they work with you. that help them advertize Good People who know Very limited Not very Good image, reputation, your image or your following; however Professional logo and Image well known strong logo, good bland non name, they feel what has been said professional image. yet. reputation. recognizable comfortable doing has been good. logo. business with you.