Business Plan s8
Total Page：16
File Type：pdf, Size：1020Kb
Business Plan
For
MYCOMPANY
Doing Business As
MyCarWash
My Name MyCarWash Business Address Business City, State Zip
My Name My Address City, State Zip Executive Summary
MYCOMPANY is a New York based company doing business as the MyCarWash, a touch-free carwash complete with car care services. Located at the BUSINESS ADDRESS, In the CITY/VILLAGE/TOWN of CITY, the MyCarWash is everything the stereotypical carwash is not; Clean, attractive, well lit, and guaranteed to be damage free,
The Company's Mission
The MyCarWash is in business to be the premier provider of quality touch-free carwashes in MY MARKETING AREA by exceeding customers expectations. This is supported through the use of technologically advanced equipment, and innovative design and planning. By adhering to these policies, and emphasizing cleanliness and customer service, the MyCarWash plans on meeting its development goals set forth. These goals are profitability by the first year and steady, long-term expansion throughout Western New York.
Services & Amenities
The MyCarWash offers some unique services & amenities, not available with the competition. These include vehicle pickup and delivery, two detail centers that provide carpet shampooing, upholstery spot removal and fragrance application, and car care vending machines dispensing items such as towels and Armor All Protectant.
Competitive Advantages
The MyCarWash introduces several significant competitive advantages to the market place. By producing its own power, the MyCarWash will be able to reduce utility costs, a major expense, by almost half.
Customers
National research indicates that the MyCarWash's primary target market, households with income levels between __($25,000)__ and ___($75,000)___, is the largest consumer of touch-free carwashes. In the designated trade area for the MyCarWash, over XX% of the YY,YYY Households fall into this income bracket.
Management
President and founder MYNAME brings significant managerial and technology-related experience to his company. Previously, he/she served as ______
Stage of Development
MYCOMPANY is a start-up company founded by MYNAME in YEAR to develop and operate touch-free car washes in MYAREA. To date, suppliers have been secured, an operating land lease is in place, and the MYTOWN GOVERNMENT has granted approvals.
Financials
The financial strategy of MYCOMPANY emphasizes reinvestment of income for long-term growth and expansion, with the company reaching profitability in Year One with pretax profits of $______, based on $______in revenue. Pretax profits are projected to be $______by Year Three, based on $______in revenue.
Funds Sought
MYCOMPANY is currently seeking $______in subordinated debt financing. These funds will be used for construction, acquisition of equipment, and working capital. Table of Contents
SECTION
1. The Company's Mission Services Development to Date Legal Status And Ownership
2- Industry Analysis. Background Trends
3. Market Analysis Target Customers Two or More Vehicle Households Household Incomes Between $25,000 and $75,000 Dual-income Families Drive Alone Commuters Female Drivers Miscellaneous Market Segments
4. The Competifion Competitive Advantages Barriers to Entry Future Competition Strategic Opportunities Pricing Strategy Budget Promotions Flyers & Newsletters Advertising (Other) Direct Sales
6. Operations Facilities Capacity Utilization Environmental Financial Control inventory Control Lease Maintenance Quality Control Research & Development Security 7. Management & Organization Principal Management Structure Professional Assistance Advisory Committee 8. Financials Income Statement Explanation Income Statements Cash Flow Forecast Explanation Cash Flow Forecasts Appendix Company Description
MYCOMPANY is a New York based company doing business as the MyCarWash. Located at the MyWash Street in the Village of MyTown, the MyCarWash is a single bay touch-free automatic carwash complete with vacuums and vehicle cleaning accessories. Unlike other concepts, which use cloth or brushes, a touch-free system eliminates the possibility of damage or marring of a vehicles' finish. Only soap, water, and other customer chosen treatments touch the vehicle.
The Company's Mission
The MyCarWash is in business to be the premier provider of quality touch-free carwashes in Western New York by exceeding its customers' expectations. This is supported through the use of technologically advanced equipment, and innovative design and planning. By adhering to these policies, and emphasizing cleanliness and customer service, the MyCarWash plans on meeting its development goals set forth. These goals are profitability by the first year and steady, long-term expansion throughout Western New York.
Services
The MyCarWash offers the customer various cleaning options for their vehicles. From the base wash, which includes soap, rinse, and spot-free rinse applications, customers can add waxes, undercarriage rocker washes, wheel & tire washes, rust inhibitors, and automated drying options.
Besides vehicle washing, the MyCarWash offers additional services. These include self-serve vacuums, upholstery/carpet shampoo units with spot removers, fragrance application units, and vending machines with various car care products.
The MyCarWash will also offer vehicle pickup and delivery, primarily catered to commercial fleet accounts.
Development To Date
MYCOMPANYis a start-up company founded by ME in 2000 to develop and operate touch-free carwashes in Western New York. To date, suppliers have been secured, an operating land lease is in place with the plaza's owners, and the Village of MyTown has granted approvals.
Legal Status And Ownership
MYCOMPANY IS setup as a Limited Liability Company under the laws of the State of New York. Ten thousand shares in the company have been issued: ME and ____ own ______shares, and ______shares have been retained for future distribution.
Funding of the company to date has come from ______who have invested $xx,xxx. The company is now seeking $yyy,yyy in subordinated debt financing. These funds will be used for construction, acquisition of equipment, and working capital.
Industry Analysis
America's love affair with the automobile dates back to the time of Henry Ford. However, it wasn't until after World War 11 that carwashes; became popular. Able to clean vehicles with less labor than hand washing, the professional carwash has remained a popular choice throughout the years. Representing one of the largest expenditures a person will make, they are willing to spend money on keeping the vehicle looking new, often frequenting professional carwashes. Also, as consumers are driving their vehicles longer (the mean average age of passenger cars in use in the United States was 8.4 years in 1994 versus just 5.7 years in 1974), they are spending more on maintenance, which includes carwashing.
Background
There are three types of professional carwashes, each appealing to different consumer groups. Each type of professional carwash varies in their cleaning methods, start-up costs, and pricing to the consumer. The three types are the exterior conveyor/tunnel (also referred to as full-service if they offer interior cleaning), automatic rollover, and self-service.
With an exterior conveyor/tunnel carwash (the well-known Delta Sonics are exterior conveyor/tunnel carwashes), the customer drives their vehicle into the bay opening and places the transmission in neutral. An automatic conveyor pulls the vehicle through the bay where it is rinsed, washed with brushes or clothes, rinsed again, and dried. Many bays are over 100' in length by 30' wide to accommodate the stationary equipment. Many operators use manual labor at the bay exit to hand dry the vehicles. Exterior conveyor/tunnel carwashes are the most expensive to build (up to $3 million), the most expensive to operate due to the large number of employees required, and also the most expensive for the customer.
Automatic rollover carwashes are housed in a single bay, typically 30' long by 15' wide. Instead of the vehicle moving through the bay like an exterior conveyorttunnel carwash, the carwash equipment moves around the stationary vehicle. The most popular type of automatic rollover is the touch-free system, where the only thing that touches the vehicle is the high-pressure water and soap. They do not use any brushes or cloth curtains. Because they do not employee anyone, automatic rollover carwashes are priced less than exterior conveyorttunnel carwashes, while still maintaining a quality wash.
Self-serve carwashes do not use any motorized or moving equipment. The customer cleans the vehicle for himself or herself in an open bay 24' long by 12' wide using a high-pressure spray hose and a soft cloth brush that suds up. By inserting coins into a time-box, customers can choose various soap and rinse options.
Business hours typically run from 8:00 a.m. to 8:00 p.m. seven days per week for exterior conveyor/tunnel and automatic rollover carwashes, while self-serve carwashes are often open 24 hours. New carwashes are valued based on actual construction and equipment costs, while existing carwashes are valued based primarily on revenues.
The carwash industry is approximately 50 years old, and is primarily composed of individual owner/operators. Currently, there are 27,000 carwashes in the United States, generating over $3.1 billion dollars in gross revenue annually. Representing less than five percent of the overall car care industry, there exists significant growth opportunities for carwashes.
Trends
Over the past ten years there has been a growing trend to combine gas stations and/or quicklube service stations with carwashes. Some operators are even adding convenience stores to the mix, hoping to attract the fickle customer who is looking to accomplish more than one task at once.
Other businesses are also being successfully combined with the carwash, including Laundromats, dry cleaners, gourmet coffee shops, gift and card shops, and fast food restaurants. Many carwash owners believe that combining several businesses at one location provides a competitive advantage.
Besides combining synergistic businesses with their own, carwashes are offering additional car care services to keep and attract customers. Some of these services include detail centers, providing carpettupholstery shampooing and spot removal, fragrance application units, retail sales of car care products such as cleaners and waxes, windshield repair, dent and ding repair, tune up centers, etc.
New technology and construction methods have also made a significant impact within the industry. Talking teller machines walk the customer through the various options available, while accepting change, bills, tokens, credit cards, and pin numbers. Major equipment manufacturers are designing their equipment to be extremely energy efficient, resulting in lower utility costs for carwash operators. Air operated overhead doors and floor-heating systems are extending the operating season for many carwash operators in the northern climates. Market Analysis
The trade area for the MyCarWash is a 5-mile radius from the MyWash Street. This area has a population of approximately XX,XXX residents, with over YY,YYY households. Projections for 200X show a slight increase in both (Census '90, Updates & Projections). The trade area is primarily urban, with a mixed use of residential, retail, and commercial markets.
Target Customers
The MyCarWash, based on demographic studies and growing trends in the U.S. population, will be targeting the following market segments. These market segments exhibit characteristics favorable for touch-free carwashing:
• Two or more vehicle households (approximately YY,YYY households). • Household incomes >$25,000 and less than <$75,000 (ZZ,ZZZ households). • Dual-income families (approximately X,XXX families). • Drive alone commuters (approximately MM,MMM individuals). • Female drivers.
The market segments listed represent the residential market. The MyCarWash will also be aggressively targeting the commercial market. The commercial market encompasses rental car companies (MyTown Rent-A-Car is located at the MyWash Street), the U.S. Postal Service, new/used car and truck dealers (located along Route XX), the Village of MyTown Police Department, utility companies (Bell Atlantic and ABC Cable both have local operations), municipalities (MyTown County Highway Department and the NYSDOT, etc., have local operations), limousine services, transportation companies, and commercial businesses with either car or small truck fleets.
Two Or More Vehicle Households
Households with two or more vehicles are more likely to seek the services of a professional carwash (this is supported by a recent International Carwash Association/ICA study). Their first vehicle may be used for commuting only, while their second vehicle may be used for family activities. As this second vehicle may be an expensive SUV or minivan, the owner is more likely to take better care of it.
Household Incomes Between $25,000 and $76,000
The use of touch-free carwashes is maximized within this income spread. MyTown's demographics indicate that this amounts to over 58% of the households. Household incomes less than $25,000 are more likely to use self-serve carwashes or wash their vehicles at home, and household incomes greater than $75,000 are more likely to use exterior or full-service carwashes.
Dual - income Families
Today, in dual-income families with unrelenting schedules, drivers often do not have the time or want to spend the time washing, vacuuming, and detailing their vehicles. Using the MyCarWash, vehicle owners can save valuable time for other recreational or family activities.
Drive Alone Commuters
With the large number of single commuters/drivers, coupled with the average daily traffic flow of 14,000 vehicles along Lake Street, the MyCarWash offers convenient ingress/egress to those leaving work. Most commuters along Lake Street leaving work are southbound, which means that they only have to make a right/left hand turn into the parking lot on the traffic side.
Female Drivers
In a recent study conducted by the International Carwash Association (ICA), men were found to look for value, as indicated by their preference for self-serve washes, while women prefer convenience, as demonstrated by their frequent use of exterior car washes which do not require them to leave their vehicles.
Miscellaneous Market Segments
• Boat owners who need interior cleaning services can use the Detail Centers
• Special events such as the xxxxxxxxxxxxxxxx …held … The Competition
The MyCarWash's primary competition will come from the home car washer. An ICA (Intemational Carwash Association) study reveals that 48% of survey respondents tend to wash their vehicles at home instead of visiting a carwash. The typical home car washer, according to the ICA, is about as likely to be male as female, and be between the ages of 30 and 49.
To combat the home washer, the MyCarWash MyCarWash will advertise that a professional touch-free carwash is better for the car itself as well as the environment (this will be accomplished through their marketing plan). When home car washers clean their vehicles, particles accumulate on sponges or cloths and can make tiny scratches on a vehicle's painted surface. These scratches may not be noticeable at first, but after a few years, the finish will become noticeably scratched.
Professional touch-free car washes are not only more beneficial for the vehicles, they also provide benefits to the environment. When someone washes their vehicle at home, they rinse off the dirt, salt, oil, grease, and brake dust that accumulate on the vehicle. This untreated runoff then goes into the storm sewer, eventually leading to a body of water such as the Eighteen Mile Creek or Lake Erie. The wastewater from the MyCarWash is pretreated in an oilwater separator on-site, discharged into the sanitary sewer, and then treated at the Southtowns Sewage Treatment Plant. This wastewater is much cleaner after treatment than the wastewater produced by the home car washer.
The MyCarWash's secondary competition will come from the professional carwash operators in the target market area. Currently there are ___ operators located within a ____-mile radius from the MyCarWash (designated trade area). Two of these operators are located in ______, which is approximately ____ miles north from MyCarWash. {One is a self-serve with gasoline pumps, and the second is a full-service operation.}
HisCarWash, the self-service operation, is located ______. They have __ wash bays, two vacuums, and one air/tire station. Besides selling gasoline, they also retail cigarettes and propane. Construction is masonry with wood truss roofing. Overall appearance is fair (interior/exterior). They are open Monday through Sunday, 24 hours.
TheOtherCarwash, the full-service operation, is located ______. They have (… one conveyor-operated tunnel, one small bay for detailing, and four vacuums…). They also retail propane and have a ____ vending machine for customer use. Construction is masonry and wood truss roofing. Overall appearance is excellent (interior/exterior). They are open Monday through Sunday from 8:00 a.m. to 8:00 p.m.
Due to their outlying locations and type of operations, HisCarWash and TheOtherCarwash would both be classified as first-tier competitors.
The following _____ operators, all located along or near ______, all provide touch-free washing. ABC, CDE and FGH would be classified as head-to-head competitors due to their locations and type of operations.
ABC is located approximately …from MyCarWash along the … . They have seven __ self-service wash bays, ___ vacuums, and ___ vending machine dispensing ______. Construction is masonry and wood truss roofing. Overall appearance is good (interior/extedor). They are open Monday through Sunday, 24 hours.
CDE has … . Their touch-free wash bay, manufacturer unknown, is setup similar to FGH - there is no dryer and there are no overhead doors. Their cashier does not accept credit cards or pin numbers, nor does it explain what type of wash you receive. Their pricing is $5.00 (only offer one wash). Hours for the touch-free wash are Monday through Sunday, 24 hours.
ETC. … The MyCarWash's indirect competition will come from businesses and institutions that wash their own vehicles. Examples are car and truck dealerships and local municipalities. Some car and truck dealerships even have on-site automatic carwashes. Competitive Advantages
The MyCarWash offers numerous advantages over the competition, including improved facilities, equipment, services, lower costs of production, and a captive audience. By emphasizing quality washes within a clean, attractive environment, the MyCarWash believes it will be able to develop a large group of loyal and responsible customers who will be appreciative and supportive of the facility.
Facilities: The MyCarWashs large, open design creates a very pleasing experience for the customer, making them feel safe. Brightly colored and clutter-free, there is no equipment in the wash bays creating a crowded feeling for the customer. All of the equipment is located in a separate mechanical room, providing security, ease of maintenance, and long-term corrosion protection.
Equipment: Equipment specified for the MyCarWash is from the industries' leading manufacturer, PDQ Manufacturing. Based in Green Bay, Wisconsin, PDQ Manufactudng pioneered and perfected robotic technology for the carwash industry, leading to the Laserwash 4000, the touch-free system incorporated into the wash bay, and the new G-5. The Laserwash 4000 and G-5 electronically measures each vehicle, large or small, and self-adjusts to maintain the optimum cleaning distance from the front, back, and sides.
{Services: The MyCarWash offers some unique services not offered by the touch-free competition. These include vehicle pickup and delivery (primarily targeted to fleet accounts), detail centers (including high-power vacuums, upholstery/carpet shampooing, spot removers, and fragrance applicators), and car care vending machines.}
Also, it has been proven that the presence of other nearby retail activities strongly affects the capture rate, because it acts as a magnet for local traffic. With the proximity of the ______, ______, ______and ______the MyWash Street becomes a destination. Barriers to Entry
The largest obstacle for potential and existing carwash owners is zoning. Most municipalities do not recognize carwashes under their commercial zoning regulations. Special use permits are required, which have to be obtained under the auspices of the city, town, or village board. Permits for wastewater discharge are also required. These are becoming very difficult to obtain due to increasing environmental regulations concerning water usage and discharge.
Start-up costs are another major barrier. To either build a new carwash, or renovate and upgrade an existing carwash, takes a substantial investment. Other obstacles are finding the right location, availability and cost of utilities, and existing market saturation.
Future Competition
Future competition will most likely come from market expansion, product expansion, or forward integration. Market expansion could come from either a national or local carwash operator building a new store or buying out a competitor. Product expansion could come from someone in the car care industry, such as a quick-change oil station, who decides to offer full-service car care. Forward integration could come from an equipment supplier to the industry.
Strategic Opportunities
Due to the state of the local industry, there exists some real opportunities for expansion. The local industry (with the exception of Delta Sonic) is currently dominated by independents that have not invested in the type of customer service systems (marketing, operations, and technology) needed to compete today and in the future.
The MyCarWash at 206 Lake Street will be a springboard for new construction or strategic acquisitions with retooling of their facilities (either stand-alone or as a joint venture with a gas/convenience store). Future potential sites include Boston and Derby. Marketing Plan
By emphasizing the benefits of a touch-free wash (will not harm the vehicle's finish or the environment), choice of payment (cash, credit card, debit card, and fleet account), and clean, attractive, innovative facilities complete with vacuums and vehicle cleaning accessories, the MyCarWash will distinguish itself from the competition.
Pricing Strategy
The MyCarWash plans on setting the prices in the marketplace. Price cutting should not be necessary to gain market share since they are offering superior service and first class facilities. Customers will be willing to pay a small premium for this in return.
Budget
The MyCarWash plans on allocating 5% of gross sales to its marketing efforts. Depending on results, this may be either increased or decreased (the industry range is from 2 to 5 percent according to the International Carwash Association).
Promotions
The MyCarWash will be offering promotions and discounts to entice customers to use the facilities during "off-peak" hours (typically Monday through Thursday). This will help add capacity during peak weekend times so customers will not be turned away if the wash bay is in use.
Flyers & Newsletters
The MyCarWash plans on publishing monthly flyers and quarterly newsletters to communicate various topics and features to its customers. These will be sent by direct mail, distributed door-to-door, or simply placed next to the changer at the entrance to the carwash. Some of the topics and features which will be included are: An introduction and brief background about the owners, promotions, highlights of special equipment and services, Community News and Announcements, explanation of price increases (as required), and a Car Care Guide (recommended tire pressures and intervals for rotation, oil and filter changes, engine tune-up, chassis lubrication, upholstery spot removal, rust inhibitors, etc.).
Advertising (Other)
The MyCarWash's long-term strategy is to advertise regularly and continuously on a small scale versus placing large advertisements infrequently with simple and clear messages. The main vehicles to be used for its advertising strategy are the following:
• Local newspapers
• Yellow Pages (both Bell and the Talking Phone Book)
• Signage (interior & exterior)
• Billboards
• Web site
Direct Sales The MyCarWash will be using this approach for its commercial fleet accounts, using direct mail to follow-up (thank-you letter with flyer). Operations
The MyCarWash will be open Monday through Sunday from 7:00 a.m. to 10:00 p.m.
Facilities
The MyCarWash, located at the MyWash Street, offers excellent visibility, vehicle stacking space, and accessibility. Ingress/egress is aided by two entranceways, one with a traffic signal. Traffic flow is high (>xx,xxx cars/day) and slow moving ( Constructed will be of ______. The MyCarWash encompasses 1,000 square feet. A portion of this space (450 square feet) will house all of the mechanical equipment for the wash bay. This mechanical room provides security, ease of maintenance, and long-term corrosion protection for the housed equipment. All utilities are in place or accessible to accommodate design loads as well as future expansion. These include 3 phase, 208/230/480-volt electricity, natural gas, domestic/fire water service, and sanitary sewers. Significant Operational Issues: Capacity Utilization • Will offer discounts to encourage customers to wash their vehicles during "off-peak" periods, typically Monday through Thursday. • Will schedule fleet accounts during the same "off-peak" periods. Environmental • Weekly cleaning of floor drains. • Monthly inspection/cleaning of oil-water separator. • Will implement and maintain Hazardous Waste Management Plan. • Will implement and maintain Spill Prevention Plan. • Will implement and maintain Storm Water Pollution Plan. Financial Control • Cash-basis accounting system using ______.. • Daily cash collections and deposits. • Weekly income records. • Monthly financial statements (cash flow and profit/loss). Inventory Control • Reorder points will be setup depending on usage and lead times. • Physical daily, weekly, and monthly checks will be performed. • Will setup tracking program on ______. Lease/Ownership * A long-term land lease is in place with ______, owners of MyWash Property - OR - The propoerty is owned by ______/is leased backed by ______to MyCarWash. Maintenance • Will develop a computerized preventative maintenance (PM) schedule based on equipment usage and manufacturer's recommended service intervals. This will include cleaning, inspection, adjusting, and lubrication. • Will stock sufficient spare parts to minimize downtime if breakdown occurs. Quality Control • Will develop an Operations & Procedures manual outlining efficient and effective ways of doing things. • Will randomly audit vehicles exiting from the wash bays to determine level of cleanliness. • Will solicit customer feedback both positive and negative. Research & Development • Attend conventions and conferences to stay abreast of the latest developments in the industry. • Read trade journals and periodicals to further education. • Perform trial tests of various water temperatures combined with various soap concentrations to optimize vehicle cleanliness. Security Alarm system wired to exterior doors and windows to deter any criminal activity or possible environmental contamination. Management & Organization Principal Me, President. - Something About Me, my resume. Management Structure President Me will be responsible for administration and policy making as well as maintaining the day-to-day operations of all aspects of the business. Me intends to create an open door policy for all staff members by being both visible and accessible. Professional Assistance The MyCarWash will be utilizing the expertise of the following professionals to aid in the formation and growth of their business: • Accounting - My Accountant • Carwash Technology - Washing Equipment Technologies, Inc. • Legal - My Attorney The MyCarWash has also secured membership in the International Carwash Association and the New York State Carwash Association, professional trade associations for carwash owners. Advisory Committee MyCarWash will form an informal Advisory Committee within the first six months of operation. The committee will meet quarterly, and members of the committee will be available as resources to the company on an ongoing basis. Financials Shown below are the income statement explanations. These are based on forecasted revenues and costs ascertained from both local and national sources including suppliers, distributors, trade associations, and professional organizations. Revenue Explanation Retail revenues are based on an annual volume of YY,YYY cars. This is calculated by taking the daily traffic passing the carwash of ZZ,ZZZ cars x 0.70% (capture rate) x 20 days per month x 12 months. Using national seasonality factors for the Northeast further breaks down monthly sales. Annual business growth is assumed to be 3%. Vacuum revenues are based on $ 150 per vacuum per month. Vending revenues are based on 5% gross retail sales. Commercial revenues are based on 5% to 10% gross retail sales. Operating Expenses Explanation Building rent is based on $150,000 twenty year mortgage @ 9.5% interest (amount includes principal and interest payments). Office rent is based on 33% of total (balance is allocated to the carwash and third entity). Land lease is based on 50% of total (balance is allocated to the carwash). Utilities, solutions, and marketing costs are based on 10%, 7.50%, and 4% respectively of gross sales including retail, vacuum, vending, and commercial accounts. Maintenance costs are based on 1% to 1.25% gross sales, while pit cleaning costs are based on 1 % gross sales. Pit cleaning costs are based on 1 % gross sales. Depreciation is based on $200,000 seven year note @ 10% interest (amount includes principal and interest payments). Financials Shown below are the cash flow forecast explanations. These are based on forecasted revenues and costs ascertained from both local and national sources including suppliers, distributors, trade associations, and professional organizations. Receipts Explanation • Cash sales include retail sales plus vacuum sales plus vending sales. • Collections from Commercial Accounts are based on net 30 days. New equity inflow is based on the personal contribution of Chris and Jennifer Riefler. Payments Explanation Payments to creditors include carwash related equipment. Payments to contractors are for construction work performed. Utilities are based on bi-monthly payments. Insurance is based on quarterly payments. Loan repayments are based on $200,000 seven year note @ 10% interest (amounts includes principal and interest payments).