auto parts business plan template

Auto Spare Parts Shop Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Automotive Industry » Auto Parts Store

Are you about starting an auto spare parts shop? If YES, here is a complete sample auto spare parts shop business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting an auto spare parts shop. We also took it further by analyzing and drafting a sample auto spare parts shop marketing plan template backed up by actionable guerrilla marketing ideas for auto spare parts shops. So let’s proceed to the business planning section .

For as long as people still use automobile on our roads, the need for auto spare parts will continue to be in high  demand. Auto spare parts business is no doubt a profitable business because the replacement of damaged or worn – out auto parts is compulsory if you want your vehicle to continue to be on the road and serve the purpose you bought it for.

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If you are in search for a business to start as an entrepreneur and you know you have a penchant for the automobile industry, then you should consider starting your own auto spare parts sale business.

Even though you don’t need a college degree to establish your own auto spare parts store, but you would need some form of informal training, you might have to work as an apprentice with someone who owns an auto spare parts store. It makes it easier for you to learn the ropes and how to manage your own auto spare parts stores.

It is important to point out that auto spare parts business is one of the businesses that can’t go out of fashion and this is simply because of the role it plays in the auto industry. Depending on the scale you want to start, the startup capital for this type of business can be considered to be moderate.

As a matter of fact, you can start your own auto spare parts store and then grow it big within a short period of time by reinvesting your profits back to the business. Here below is a sample auto spare parts stores business plan template that will help you successfully write yours with little or no stress;

A Sample Auto Spare Parts Shop Business Plan Template

1. industry overview.

The auto parts stores industry includes stores / shops that retail new and used automotive parts and accessories, repair automobiles and install automotive accessories.

Players in this industry can choose to operate a single store in just one location or chains of stores in several locations scattered all across the united states of America. As a matter of fact, auto stores can be found in all parts of the world as long as there are automobiles there.

IBIS World projected that the Auto Parts Stores industry is expected to grow slowly over the five years to 2016. They stated that per capita disposable income and corporate profit boosted the demand for auto parts. Furthermore, favorable car usage trends have led to growth in demand for industry products in the short term.

Nevertheless, advancements in motor vehicle technology have made it increasingly difficult for vehicle owners to repair and maintain vehicles without professional help. Going forward, the revenue generated by operators in the industry is expected to grow at the same pace as the previous period.

As the national level of per capita disposable income continues to rise, some consumers will increase their spending on maintaining and fixing their automobile hence the increase in demand for products and services from the Auto Stores industry

The Auto Parts Stores Industry is indeed a large industry and pretty much active in all the countries of the world. Statistics has it that in the United States of America alone, there are about 43,136 registered and licensed auto spare parts stores scattered all across the United States responsible for directly employing about 376,102 people and the industry rakes in a whooping sum of $56 billion annually.

The industry is projected to grow at 1.9 percent annual growth within 2011 and 2016. It is important to state that Advance Auto Parts, AutoZone Inc., Genuine Parts Company, and O’Reilly Automotive Inc. have the largest chunk of the available market share in the industry.

A close observation of the Auto Parts Stores industry shows that the industry has low barriers to entry. In the United States, the industry is subject to few restrictive regulations, and industry employees typically do not need to be trained formally to be able to carry out their duties.

The truth is that, the start – up capital for opening an auto parts stores especially when it involves establishing a standard auto parts stores with products from various automobile companies. But if you choose to start a spare part store like the average mom and pop business, then you would not have to stress yourself because you will only need minimal start – up capital to launch the business.

The tough part as it relates to start-up costs most likely are the need to establish a supply of auto parts from wholesalers or directly from auto parts manufacturing companies.

This is so because an auto parts business cannot be started without sourcing products for sale. Regardless of low barriers to entry, the competitive nature of the industry make it very difficult for new operators to break even within a short period of time in the industry.

Lastly, the auto spare parts industry is pretty much open for aspiring entrepreneurs to launch their business in the industry. One good thing about auto spare parts stores business is that the business can be opened in any part of the United States and if proper market survey and feasibility studies are conducted, then you can rule out profitability of the business.

2. Executive Summary

Freeway Auto Parts Stores is a standard and registered auto spares parts retail store business that will be located in one of the busiest streets in Charleston – South Carolina.

We have been able to lease a facility that is big enough (a 5 thousand square foot facility) to fit into the design of the kind of standard auto spare parts retail store that we intend launching and the facility is located around the largest residential estate in Charleston – South Carolina.

Freeway Auto Parts Stores will be involved in selling automotive parts and accessories, distributing automotive parts from different manufacturers (brands) from the United States and abroad and repairing automobiles. We are set to services a wide range of clientele in and around Charleston – South Carolina.

We are aware that there are several large and small chains of auto spare parts retail store outlets all around Charleston – South Carolina, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors.

We have an online – service option for our customers, and our outlet is well secured with various payments of options. Freeway Auto Parts Stores will ensure that all her customers are given first class treatment whenever they visit our auto parts retail store.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large the numbers of our customers’ base may grow to.

We will ensure that we get our customers involved in the selection of brands that will be in our store and also when making some business decisions. Freeways Auto Parts Stores will at all-time demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our customers ‘needs precisely and completely whenever they patronize our products. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our customers.

Freeway Auto Parts Stores®, LLC is a family business that is owned by Jerry Herbert Godsons and his immediate family members.

Herbert Godsons has a B.Sc. in Business Administration, with well over 5 years of experience in the Auto Parts Stores industry, working for some of the leading brand in the United States. Although the business is launching out with just one outlet in Charleston – South Carolina, but there is a plan to open other outlets all around major cities in the United States and Canada.

3. Our Products and Services

Freeway Auto Parts Stores is in the auto parts stores industry to service a wide range of clients and of course to make profits, which is why we will ensure we go all the way to make available a wide range of auto parts from top manufacturing brands in the United States and other countries of the world.

We will ensure that we do all that is permitted by the law of the United States to achieve our aim and ambition of starting the business. Our product and services offerings are listed below;

• Selling automotive parts and accessories (critical parts (new), critical parts (used), maintenance parts, accessories and performance parts)
• Distributing automotive parts
• Repairing automobiles and installing automotive accessories

4. Our Mission and Vision Statement

• Our vision is to become one of the leading brands in the auto parts stores industry in South Carolina and to establish a one stop auto parts retail store in Charleston – South Carolina and in other key cities in the United States of America and Canada.
• Our mission is to establish a world – class auto parts retail store business that will make available a wide range of auto parts from top auto parts manufacturing brands at affordable prices to the residence of Charleston – South Carolina and other key cities in the United States of America and Canada where we intend opening of chains of auto parts retail stores and franchise.

Our Business Structure

Freeway Auto Parts Stores does not intend to start an auto parts retail store business like the usual mom and pop business around the street corner; our intention of starting an auto parts retail store business is to build a standard and one stop auto parts retail store outlet in Charleston – South Carolina.

Although our auto parts retail store business might not be as big as Advance Auto Parts, AutoZone Inc., Genuine Parts Company, and O’Reilly Automotive Inc et al, but will ensure that we put the right structure in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Store Manager
• Human Resources and Admin Manager

Merchandize Manager

Sales and Marketing Manager

Information Technologist

• Accountants / Cashiers
• Sales Agents / Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Raises management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives.
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Accountable for fixing prices and signing business deals
• In charge of providing direction for the busines
• Responsible for signing checks and documents on behalf of the company
• Appraises the success of the organization
• Reports to the board

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Informs job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Explains job positions for recruitment and managing interviewing process
• Carrying out staff induction for new team members
• In authority of working out, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Supervises the smooth running of the daily office activities.

Store Manager:

• In control of managing the daily activities in the store
• Guarantees that proper records of auto parts are kept and warehouse does not run out of products
• Ensures that the store facility is in tip top shape and goods are properly arranged and easy to locate
• Interfaces with third – party suppliers (vendors)
• Brings about vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Helps to guarantee consistent quality of auto parts from different manufacturers are purchased and retailed in good price that will ensure we make good profit
• Brings about external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Model demographic information and analyze the volumes of transactional data generated by customer purchases
• Recognizes, arranges, and stretches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Accomplishes the organization website goals
• Handles ecommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
• Manages the organization’s CCTV
• Handles any other technological and IT related duties.

Accountant / Cashier:

• Accountable for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries (answer customer queries regarding the store and the merchandise)
• Find out the customer’s needs, recommend, select and help locate the right merchandise, describe a product’s features and benefits.
• In control for cleaning all the goods and the store facility at all times
• Ensure that toiletries and supplies don’t run out of stock
• Cleans both the interior and exterior of the store facility
• Handle any other duty as assigned by the store manager.

6. SWOT Analysis

Our intention of starting just one outlet of our auto parts retail store in Charleston – South Carolina is to test run the business for a period of 2 to 5 years to know if we will invest more money, expand the business and then open other outlets all over major towns in South Carolina and key cities in the United States and Canada.

We are quite aware that there are several auto parts retail stores all over Charleston and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Freeway Auto Parts Stores®, LLC employed the services of an expert HR and Business Analyst with bias in retailing to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Freeway Auto Parts Stores®, LLC;

Our location, the business model we will be operating on both (physical store and online store), varieties of payment options, wide range of auto parts from different manufacturing brands both from the United States and abroad and our excellent customer service culture will definitely count as a strong strength for Freeway Auto Parts Stores®, LLC. So also, our team of highly qualify staff members is also a plus for the business.

A major weakness that may count against us is the fact that we are a new auto parts retail store outlet in Charleston – South Carolina and we don’t have the financial capacity to compete with multi – million dollars’ auto parts retail store outlets like Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co when it comes to retailing at a rock bottom prices for all their auto parts.

• Opportunities:

The fact that we are going to be operating our auto parts retail store close to one of the largest residential estates in Charleston – South Carolina provides us with unlimited opportunities to sell our auto parts to a large number of individuals, auto repair, services and maintenance garages and transport companies.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our auto parts store outlets; we are well positioned to take on the opportunities that will come our way.

Just like any other business, one of the major threats that we may face is economic downturn. It is a reality that  economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of a new auto parts retail outlet in same location where ours is located. So also, unfavorable government policies may also pose a threat for businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

If you are conversant with the Auto Parts Stores Industry, you will quite agree that the changes in disposable income, consumer sentiment, and ever changing trends are major growth drivers for sales in this industry. No doubt, a massive rise in consumer confidence has also contributed in helping the industry experience remarkable growth, but uneven performance in these drivers has led to slightly constrained revenue growth for the industry.

So also, the rising demand for parts manufactured by a third-party manufacturing company, as a result of increasing disposable income and consumer sentiment, will result in revenue growth, but profit margins will stagnate as auto retail stores keep prices low to attract more sales amid growing competition.

Lastly, in recent time, the auto parts retail stores landscape has seen tremendous changes in the last 20 years; it has grown from the smaller outlets to a more organized and far reaching venture. The introduction of franchise and online store makes it easier for a retailer to reach out to a larger market far beyond the areas where his physical auto parts retail store is located.

8. Our Target Market

Perhaps it will be safe to submit that the auto parts retail stores industry has one of the largest ranges of customers; almost every automobile owner would have one reason or the other to purchase automobile parts and accessories.

In view of that, we have positioned our auto parts retail store to service the residence of Charleston – South Carolina and every other location where franchise cum outlets of our auto parts retail stores will be located all over key cities in the United States of America and Canada.

We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us. We are in business to retail a wide range of auto parts to the following groups of people and corporate organizations;

• Auto repair, maintenance and servicing garages
• Transport companies
• Haulage companies

Our competitive advantage

A close study of the auto parts retail stores industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the stiffer competition and we are well prepared to compete favorably with other leading auto parts retail stores in Charleston – South Carolina and throughout the United States and Canada.

Freeway Auto Parts Stores®, LLC is launching a standard one stop auto parts retail store that will indeed become the preferred choice of residence / automobile owners of Charleston – South Carolina and every other location where our outlets will be opened.

Our auto parts retail store is located close to the largest residential estate in Charleston – South Carolina We have enough parking spaces that can accommodate well over 30 cars per time.

One thing is certain; we will ensure that we have a wide range of auto parts from leading auto parts manufacturers available in our store at all times. It will be difficult for customers to visit our auto parts retail store and not see the type of auto parts and accessories they are looking for.

One of our business goals is to make Freeway Auto Parts Stores®, LLC a one stop auto parts retail shop for automobile owners, auto repair, maintenance and servicing garages and transport companies. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups auto parts retail stores) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Freeway Auto Parts Stores®, LLC is in business to retail a wide range of auto parts to the residence of Charleston – South Carolina. We are in the auto parts retail stores industry to

10. Sales Forecast

One thing is certain when it comes to auto parts retail stores, if your store is well stocked with various types of auto parts and accessories and your store is centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Charleston – South Carolina and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base.

We have been able to critically examine the auto parts retail stores industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in Charleston – South Carolina.

Below are the sales projections for Freeway Auto Parts Stores®, LLC it is based on the location of our business and other factors as it relates to auto parts retail stores start – ups in the United States;

• First Fiscal Year-: $250,000
• Second Fiscal Year-: $450,000
• Third Fiscal Year-: $750,000

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor retailing same sporting goods brands and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Freeway Auto Parts Stores®, LLC we conduct a thorough market survey and feasibility studies in order for us to be able to be able to penetrate the available market and become the preferred choice for residence of Charleston – South Carolina.

We have detailed information and data that we were able to utilize to structure our business to attract the numbers of customers we want to attract per time.

We hired experts who have good understanding of the auto parts retail stores industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Charleston – South Carolina.

In other to continue to be in business and grow, we must continue to sell the auto parts and accessories that are available in our store which is why we will go all out to empower or sales and marketing team to deliver. In summary, Freeway Auto Parts Stores®, LLC will adopt the following sales and marketing approach to win customers over;

• Open our auto parts retail store in a grand style with a party for all
• Introduce our auto parts retail store by sending introductory letters alongside our brochure to organizations, households, auto repair, maintenance and servicing garages, transport companies and other key stake holders in Charleston – South Carolina
• Ensure that we have a wide range of auto parts and accessories from different brands at all times.
• Make use of attractive handbills to create awareness and also to give direction to our auto parts retail store
• Position our signage / flexi banners at strategic places around Charleston – South Carolina
• Position our greeters to welcome and direct potential customers
• Create a loyalty plan that will enable us reward our regular customers
• Engage on road shows within our neighborhood to create awareness for our auto parts retail store.
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)
• Join local chambers of commerce and industries to network and market our products

11. Publicity and Advertising Strategy

Despite the fact that our auto parts retail store is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our auto parts retail store.

Freeway Auto Parts Stores®, LLC has a long-term plan of opening outlets in various locations all around South Carolina and key cities in the United States and Canada which is why we will deliberately build our brand to be well accepted in Charleston before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Freeway Auto Parts Stores;

• Place adverts on community based newspapers, radio stations and TV stations.
• Encourage the use of word of mouth publicity from our loyal customers
• Ensure that our we position our banners and billboards in strategic positions all around Charleston – South Carolina
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Contact corporate organizations, households, landlord associations and auto repair, maintenance and servicing garages by calling them up and informing them of Freeway Auto Parts Stores®, LLC and the products we sell
• Advertise our auto parts retail store business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and trucks and ensure that all our staff members and management staff wears our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to auto parts retail stores, it is normal for consumers to go to places (auto parts retail outlets) where they can get auto parts and accessories at cheaper prices which is why big player in the auto parts stores industry like Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co will attract loads of corporate and individual clients.

We know we don’t have the capacity to compete with Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc. and co but we will ensure that the prices and quality of all the auto parts and accessories that are available in our store are competitive with what is obtainable amongst auto parts stores within our level.

• Payment Options

The payment policy adopted by Freeway Auto Parts Store is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that Freeway Auto Parts Stores®, LLC will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards / Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for the purchase of auto parts and accessories without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our products and services.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting / leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business. The materials and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked.

As for the detailed cost analysis for starting an auto parts retail store business; it might differ in other countries due to the value of their money. These are the key areas where we will spend our start – up capital on;

• The total fee for registering the business in the Unites States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
• Marketing promotion expenses for the grand opening of Freeway Auto Parts Stores®, LLC in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring business consultant – $2,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
• The cost for shop remodeling (construction of racks and shelves) – $20,000.
• Other start-up expenses including stationery ($500) and phone and utility deposits ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for start-up inventory (stocking with a wide range of auto parts and accessories from different manufacturing brands) – $200,000
• The cost for counter area equipment – $9,500
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs: $10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
• The cost of launching a website: $600
• The cost for our opening party: $7,000
• Miscellaneous: $10,000

We would need an estimate of five hundred thousand dollars ( $500,000 ) to successfully set up our auto parts retail store in Charleston – South Carolina. Please note that this amount includes the salaries of all the staff for the first month of operation.

Generating Funds / Startup Capital for Freeway Auto Parts Stores®, LLC

Freeway Auto Parts Stores®, LLC is a private registered business that is solely owned and financed by Herbert Godsons and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the start – up capital to 3 major sources. These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $150,000 ( Personal savings $100,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $350,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Freeway Auto Parts Stores®, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to retail our wide range of quality auto parts and accessories a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Freeway Auto Parts Stores®, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the shop: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party / launching party planning: In Progress
• Compilation of our list of products that will be available in our store: Completed
• Establishing business relationship with vendors – manufacturers and suppliers of auto parts and accessories: In Progress

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Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Southeast Racing Parts (SRP) is a small, North Carolina-based automobile racing parts brick and mortar and mail order organization. SRP will remain small in order to offer unprecedented customer attention. Southeast Racing Parts will become the premier destination for entry level and novice racing parts.

The Market Southeast Racing Parts will be participating in an exciting, growing market. Motorsports has seen explosive growth in the USA in the last decade. It is now the fastest-growing sport in the USA. The market is worth $1.5 billion annually. A recent survey indicates that over 385,000 people have competed in organized motorsport events with even more people who have “souped” up their cars but have yet to compete in organized events. Additionally, TV coverage for motorsports has increased dramatically helping fuel growth. Lastly, the Carolinas has experienced record population growth, 25% within the last decade making SRP’s chosen location attractive.

The Organization Southeast Racing Parts is founded on the idea that maintaining satisfied customers is essential to the financial health of the organization. With this in mind, SRP will be working hard to ensure that all of their customer’s expectations are exceeded in all transactions. To maintain a presence within the racing community and close relationships to customers, Southeast Racing Parts will be an active member of the local racing scene through participation and sponsorship.

Products, Services, and Delivery SRP will be both a brick and mortar company serving the local community as well as offering a catalog with a mail order service. The catalog will be a four-color edition and subsequent editions will be analyzed to determine the cost effectiveness of publishing in this format. SRP will offer engine and chassis parts for a wide variety of cars. Safety equipment and set up equipment will also be offered. All of the popular name brands will be offered in addition to an array of generic label parts. SRP will offer coil rating services as well as scaling services for race cars.

Financials Southeast Racing Parts will be profitable from month one. Margins are forecasted to be respectable. Year one sales will be exceptional with a steady growth rate for the first five years.

Southeast Racing Parts is an exciting opportunity that combines a customer-centric organization with an explosive industry. Motorsports is becoming increasingly popular in the United States with more and more people becoming active participants. Even for those who are not true participants, it is now “cool” to have your car “tweaked out” even just for aesthetics. An investment in Southeast Racing Parts is a high growth, reasonable risk opportunity.

1.1 Objectives

• To make Southeast Racing Parts the number one destination for the purchase of entry-level/novice racing supplies in the Carolinas.
• To achieve a modest initial gross profit margin, increasing that by at least 1% per year until reaching our final target.
• To sell a substantial amount of product the first year.
• To maintain a solid growth rate per year for the first five years.

1.2 Mission

Southeast Racing Parts is dedicated to providing racing products that combine quality performance with value pricing. We wish to establish a successful partnership with our customers, our employees, and our suppliers that respects the interests and goals of each party.

Constantly striving to supply what the consumer is asking for, we will continually review what is available in the marketplace, and what isn’t. Improving on what is available and providing new products and services to the areas of need will help ensure our success in a market driven by consumer demand.

Success will ultimately be measured by our customers choosing us because of their belief in our ability to meet or exceed their expectations of price, service, and selection.

1.3 Keys to Success

To succeed in this business, we must:

• Be an active member of the racing community; i.e., attend functions at local race tracks, attend regional and national trade shows.
• Deliver our products promptly.
• Work with our customers on a personal level, as opposed to the “What’s your customer number?” mentality of large mail order firms.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Southeast Racing Parts is a new company, which upon commencement of operations will provide entry-level oval track racers with affordable products and quality service.

2.1 Company Ownership

Southeast Racing Parts is a North Carolina corporation, subchapter S, owned entirely by Tim and Molly Jones.

2.2 Start-up Summary

Our start-up costs are listed on the following page. Major costs include computer hardware, software and setup support; rent, a telephone system, approximately office equipment and furniture, parts shelving and other warehouse equipment, leasehold improvements, and a company pick-up truck.

The company will start out with about three months’ inventory on hand. This means the majority of company assets will consist of inventory and the starting cash balance will not be significant.

You will find that we will need additional funding. The purpose of this plan is to secure financing for that amount.

Later in this plan, when you view the Projected Balance Sheet, Projected Cash Flow and the Projected Profit and Loss, you will notice that we do not show any debt or interest expense. However, by examining these same charts, you will see that we project a sufficient amount of earnings to service a debt load.

Upon negotiations of debt amount and terms, modified charts will be provided upon request.

2.3 Company Locations and Facilities

Southeast Racing Parts will be located at 123 Main Street, Anytown, North Carolina. This location will afford us good visibility along with convenient access for traveling race teams wishing to stop at our location.

Another advantage of this location is the recent announcement of a go-kart/entertainment complex, which will be located directly across the street. This complex will attract many potential customers to our immediate vicinity.

By locating in close proximity to Charlotte, Southeast Racing Parts will enjoy a large built-in customer base. The skyrocketing popularity of NASCAR Winston Cup racing in the last 15 years has only strengthened its role as the hub for most race teams and all the related businesses they’ve spawned.

The sport’s explosion has been so boundless that University of North Carolina-Charlotte researchers conducted a study of the industry to try to determine its impact. The study, completed in December 1996, found that in its surrounding counties, NASCAR racing is responsible for about 2,000 jobs producing more than $200 million in expenditures annually — figures that many in the industry consider conservative in 1998. Many of the people employed within the industry along with their children, other relatives, and friends, take up racing as a hobby.

The Facility We will initially be leasing 3,000 sq. ft. of a new 10,000 sq. ft. building. As needs dictate, our office and/or warehouse facilities could be expanded into an additional 2,500 sq. ft.

We will be sharing this facility with another business that is also involved in racing, and their business attracts many of the local racers. In light of this, we will meet many potential customers simply because of our association with them.

This location will consist of a showroom, office space, and warehousing. All deliveries and shipments will be serviced at this location. We will also have ample parking available.

Southeast Racing Parts will sell racing products to the entry-level/novice racer. These products will include engine and chassis parts along with safety and set-up equipment. Services that we will provide include coil spring rating, along with a scaling service for race cars.

3.1 Product Description

Southeast Racing Parts will assist its customers in selecting the best parts for their application at a price that meets or exceeds their expectations. In the event of a problem, we will be there to assist and counsel the customer to a speedy solution.

We will carry or have quick access to most major lines of racing equipment. We will also carry generic “plain label” merchandise that we will market under our own performance name. Private labeling will allow us, in most cases, to greatly increase our profit margins since the procurement costs are much lower for these types of items.

Even though our target market is the entry-level racer, our product mix will be sufficient to fill most of the needs of even the most hard-core racer. With leisure time at a premium, our reputation for having needed items in-stock will save our customers both time and money. We will be open Monday through Saturday with hours yet to be determined.

Our experience has shown that most entry-level racers’ preference is for low prices. We believe we can offer products that indeed are lower in price without sacrificing the performance and safety concerns that our customers will demand. Southeast Racing Parts will provide precisely the level of service that today’s entry-level racer requires.

3.2 Competitive Comparison

Within our niche, we only have one significant competitor. They, however, do not carry engine parts, which should give us an edge in that respect.

In general, however, our competition is not in our targeted portion of the market. This competition consists mainly of these three groups:

• NASCAR Winston Cup suppliers.
• Asphalt late model chassis builders.
• National mail order suppliers.

More discussion is included later in this plan on competitive businesses.

3.3 Sales Literature

To drive sales initially, Southeast Racing Parts will utilize an existing supply catalog. This four-color catalog will have a different cover with the Southeast Racing Parts logo, phone number, etc., printed on it.

After much research, we found that the product mix in this catalog most closely resembles the needs of the consumer niche that we are focusing upon. An agreement was reached to supply these catalogs to us at no charge. This precludes the need to invest in catalog production at the outset. In turn, we will be using the catalog company as a supplier for some of the inventory lines that we carry. We have developed a price sheet to be enclosed with each catalog.

We will produce flyers in-house on an as-needed basis. These will primarily be to showcase new products and/or to advertise special sales promotions. The flyers will be distributed in the same fashion as the catalogs.

Following are planned means of catalog distribution:

• Give away in-store.
• Enclose in mail order shipments.
• Personally hand out at area race tracks.
• Distribute at local trade shows and auctions.
• Sell for $3 through local racing newspaper business card advertisements.
• Upon the release of a new catalog, we would need to check into the financial feasibility of utilizing direct mail as a means of bulk distribution.

3.4 Sourcing

This is an area that we feel we will enjoy a distinct advantage over much of our competition. Because of our past work experience in purchasing, we have a vast number of supplier contacts within the racing industry. We have good, long-term, solid relationships with many of these vendors which, in many cases, will allow us to achieve decreased cost-of-goods and/or additional terms. Many of these suppliers have already committed to special deals for us, such as waiving their buy-in requirements, additional payment terms, sales referrals, etc.

We will purchase our inventory from both regional wholesalers and direct from the manufacturers. We will use the regional wholesalers more initially because of their ability to service us faster. This will lower our margins slightly; however, we feel that the upside will be that it will allow us to turn our inventory faster. As our sales volume increases, we will shift our buying patterns away from the wholesalers and purchase more of our inventory direct, which will result in increased profits.

3.5 Technology

All computer hardware and software systems that will be utilized by Southeast Racing Parts have been carefully and diligently evaluated. We will use off-the-shelf, PC-based software for accounting purposes including AR/AP, inventory, purchasing, sales, and returns. We will start out with three workstations and expand upon that as necessary.

Many of the computer systems used in the racing industry today are outmoded and obsolete. The major suppliers are reluctant to change because of the huge capital expense to change over their systems at one time. Hence, they keep going with the old and outdated.

By choosing this software, our training costs will be reduced tremendously. Much of the software used by competitors takes weeks to learn and master. Southeast Racing Parts’s use of this software will enable a basic, computer-literate employee to learn the system in one day.

This system will speed our order entry process, assist us in sales forecasting, and allow us to give a higher level of customer service.

3.6 Future Products

We must remain on top of new products and trends. The most important factor in developing future products is market need. Our understanding of the needs in our market niche is one of our competitive advantages.

As stated earlier, we will have our own private label brand. Not only are profit margins better than name brands, but these accessories will help build name identity and awareness for Southeast Racing Parts when they are used on the race track. As our sales volume increases, this will be an area that we can expand.

Another natural area for expansion in the future would be the implementation of a website. On-line commerce is becoming an increasingly attractive option, due to relatively low cost of operation, the global reach of the medium, and the increasing security. Our business model could quite easily expand to include a form of Internet commerce in a variety of racing equipment.

Market Analysis Summary how to do a market analysis for your business plan.">

Overall it is estimated that the total retail market for hardcore racing products is $1.5 billion annually and it still continues to grow.

The only real threat to our venture would be a similar new entry to the marketplace. This opportunity may best be described as one ready and waiting for the first entrant who arrives with a well-conceived plan, sufficient industry experience, and the required capitalization.

4.1 Market Segmentation

The racing industry is in a boom period. While there are many items from various vendors available, Southeast Racing Parts has approached the market as a specialty retailer — a provider of parts and services to the entry-level racer.

Our target customer in this segment will have a wide range of racing and automotive skills, but our most important target customers are relatively unsophisticated at racing. We will be able to serve this customer well not only by offering them parts at an affordable price, but also by giving them advice that ensures they get the task done correctly, therefore improving their on-track performance.

4.2 Target Market Segment Strategy

Our segment definition is in and of itself strategic. We are not intending to satisfy all users of racing equipment, but rather those who are just starting out and those who are struggling to keep up. We can save our customers time and money, not so much within our pricing structure, but by assessing their needs and directing them toward the proper product. Racers, by nature, tend to desire a high-end product, when often a low to mid-end product will do as good as, or sometimes even a better job. By always dealing in an honest and ethical manner, we will build customer loyalty and word-of-mouth sales that many of our competitors are lacking.

4.2.1 Market Trends

Trends are in our favor. We have identified four major trends that help us:

• Motorsports in general, and circle track racing in particular, have experienced explosive growth in the ’90s. Most experts attribute this growth to greatly expanded television coverage of motorsports events. This coverage exposes many more potential participants to the sport. By focusing on affordable entry-level racing, we feel that Southeast Racing Parts will be filling a niche in the market.
• This area has experienced tremendous population growth in the past decade, approximately 25%. As racing and the local population grow hand-in-hand, it should make many more potential customers available to us.
• There are a lot of fathers dreaming their son will be the next Jeff Gordon. In fact, there are tens of thousands of serious young kart racers who have chosen this sport over baseball, football, or basketball. They’ll be the ones that fill the fields in the next decade.
• Finally, there is the aging Baby Boomer generation. Many have discharged their duties to their children, who have grown and moved on, and now there is money and time again. They turn to something they always wanted to do, or return to the sport they loved, and they go racing.

4.2.2 Market Needs

Since our target market is the entry-level racer, the most important needs are service, price, and availability, in that order. One of the key points of our strategy is to focus on target segments that know and understand these needs and are willing for us to fulfill those needs.

4.3 Industry Analysis

With expanded television coverage and an enormous base of grassroots motorsports activity, auto racing is a thriving industry, as well as the fastest growing sport in America. As with baseball, it could be argued that auto racing has grown to such popularity because of its vital grassroots foundation. Our customers will be the Little Leagues and softball leagues of auto racing. Outsiders to the racing industry must understand that racers may be the most obsessive consumers of any industry. Because of the pressure to win, they avidly purchase new technology. In most race cars, several parts will become obsolete in the course of a season, even though they function perfectly well.

Racers are hard on their investment, too. New tires might be a weekly purchase, and several engine freshening expenditures might be called for in a season. A good whack at the outside wall, and a racing retailer has a customer or two for shocks, a-arms, fasteners, hubs, and more.

Racers spend what it takes to win; they are not out merely to enjoy the ride. Any person who has spent any time at all in the racing pit has heard the guy in front of him in the snack bar line describe how he postponed a key household expense–the telephone bill or a new household appliance–to purchase a new right rear tire, or other critical racing part.

To service this sport, there are thousands of small businesses across the country skilled in the ways of horsepower and hooking it to the ground. Whether they make their money from parts or services, retailing or building engines, these businesses make it an easy and convenient matter to go racing. Without these local ambassadors of speed, it is hard to imagine the existence of auto racing in a large scale.

4.3.1 Distribution Patterns

Generally, traditional distribution channels are followed. The products are bought from distributors and/or direct from the manufacturers, who have little say in how products are marketed. As in most industries, price levels decrease as volume increases.

4.3.2 Competition and Buying Patterns

We feel that racers understand the concept of service and availability, and are much more likely to pay for it when the offering is clearly stated.

There is no doubt that we will compete much more against the large mail order outfits than against any small local suppliers. We have good indications that racers/customers would rather pay 5-15% more for a long-term relationship with a vendor providing quality service and support. To this point, the racer thinks about price because that’s what he sees emphasized by the mail order companies.

Availability is of utmost importance. The buyer tends to want immediate, local solutions to their problems and/or needs.

By positioning ourselves at the lower end of the market, we will present ourselves to consumers just getting into racing, and we will sell to a base of customers that we can grow with together.

4.3.3 Main Competitors

• (omitted to protect confidentiality)

The above are all targeted towards the professional (NASCAR Winston Cup, etc.) market. They carry a totally different product mix to service that market. Their prices are high, and their interest in selling to the entry-level market is basically nonexistent.

These are both late model chassis builders not targeting the entry-level market. Basically, they stock inventory that’s used just on their own cars. They are both located in the Anytown Motorsports Center business park which is in an out-of-the-way, hard to find location.

They are a large drag racing mail order firm that is skimming the circle track gravy. Since Southeast Racing Parts will cater to the circle track market, we believe that whatever local circle track customers they have will switch suppliers. We will have more knowledge and experience to suit their needs.

As implied in their name, they sell used parts, so in most cases they’re not usable for our target market. They also sell a limited amount of new parts; however, because of their name, most people are not aware of this. Also, they are located in an area which was described earlier as a poor location.

They are the only local competitor that we could identify that was targeting our niche. Following are what we feel are some of our competitive advantages: We feel that we are in a much better location. They utilize a black and white flyer as their main sales tool, and we will have a professional four-color catalog. Also, they concentrate mainly on chassis and safety equipment, where we will also offer a full array of engine parts.

4.3.4 Industry Participants

We are part of the Performance Racing Industry, which includes several kinds of businesses.

Speed Shops : Most of these are small, sometimes part-time ventures run from the individual’s home. Sometimes they will service a local race track; however, they usually carry a very minimal amount of inventory, and are usually operated by a racer or an ex-racer depending solely upon a small circle of friends or acquaintances as customers. They normally are short on business and marketing skills.

Engine & Chassis Builders : Typically these are well-respected firms supplying engines and chassis to the racing industry. Their customer profile lies in the mid to upper end of the market. They offer superb technical support; however, it is only available to customers utilizing their engine or chassis. They stock parts to service their engine or chassis, but are usually limited in areas areas beyond that. Normally their pricing structure is slightly above average.

Mail Order : The racing industry is served increasingly by large mail order firms that offer aggressive pricing on racing components. They are usually impersonal, and have little or no technical support available. For the purely price-driven buyer who purchases parts and expects no support, these firms offer a good option.

Others : There are many other channels through which people buy their racing parts, usually variations of the main three types above.

Strategy and Implementation Summary

Our strategy is based on serving the niche of entry-level racers well. This area is full of small race teams that can’t get products or services from the major vendors who focus only on professional race teams. Also:

• What begins as a customized version of a standard product, tailored to the needs of local racers, can eventually become a niche product that will fill the needs of similar racers across the country.
• We are planning our marketing strategy so that we can eventually reach specific kinds of racers across broad geographic lines.
• We focus on satisfying the needs of entry-level race teams.
• We focus on follow-on technology that we can take to the masses, as opposed to leading edge technology that aims at the professional race teams.

5.1 Marketing Strategy

The retail marketing strategy of Southeast Racing Parts centers on creating a corporate identity that clearly defines our market niche in terms that benefit our customer. Other specific strategies that will be used follow:

• Print Ads – Keeping the Southeast Racing Parts name in front of the customer while getting established will be necessary. We plan on running limited space ads in the local racing newspapers to keep our name and phone number in front of the consumer. We may attempt to showcase a single product in an effort to return revenue from the ad. Our past experience has been that showing measurable revenue from these types of ads is difficult. In the future we plan on utilizing Stock Car Racing magazine and Circle Track magazine (both national magazines) as a method of increasing our sales revenue.
• Press Releases – The local racing papers: The Racing News, Late Model Digest, Dirt Late Model Digest, and The Pit List have offered to run releases and/or stories concerning the opening of Southeast Racing Parts. Stock Car Racing magazine has also extended us the same offer. We will also use the above media to run new product releases.
• Race Car Sponsorship – Entry-level racers can be persuaded into running the Southeast Racing Parts logo on their race car in exchange for a token discount on purchases and/or for receiving technical support.
• Decals – We will have decals manufactured with the Southeast Racing Parts logo. We will include the decals with all of the orders that we ship. Entry-level racers in particular enjoy displaying decals on their race cars, haulers, tool boxes, etc.
• Apparel – We know several people in the area who produce NASCAR apparel. A line of premium Southeast Racing Parts apparel could be designed and produced in very short runs to reduce inventory costs. These can be sold or given away with qualifying purchases to further expose the Southeast Racing Parts name.
• Grand Opening – A Grand Opening is the most successful of any in-store promotions. With manufacturer support, a large number of door prizes can be given away while instantly building a mailing list. Loss leader pricing on a few high volume consumable products will attract in-store traffic. Vendors will subsidize loss leader pricing with a rebate or kickback. Appearances by local racing celebrities would also expose potential customers to Southeast Racing Parts.
• Trade Shows – We will exhibit at approximately four local trade shows annually. Revenue that we produce at the shows will outweigh our expenses for attending.
• Word of Mouth – By giving first-time customers great service and a fair price, the word is sure to spread. Also, the many industry and racer contacts that we already have in the area will prove to be most beneficial in spreading the word.

All marketing decisions with regard to specific media choices, frequency, size, and expenditures will be conducted on an on-going basis with careful considerations of returns generated.

5.1.1 Promotion Strategy

Our most important vehicle for sales promotion will be our catalog, which is discussed earlier in this plan.

5.1.2 Distribution Strategy

Our customers will buy our products at our location. However, we anticipate a significant amount of mail order sales in order to meet or exceed our Sales Forecast. We will receive orders by mail, phone, or fax, process them immediately, and ship the goods via United Parcel Service.

In the event we are out of an item or we don’t stock it, many of our vendors have offered drop shipping as a service to us. This will allow us to keep our service at a high level, yet let us keep our inventory levels in check.

In the future, electronic commerce with a secure website will be thoroughly investigated for feasibility.

5.1.3 Pricing Strategy

Our customers are especially sensitive to value. We must ensure that our price and service are perceived to be a good value to the racers. However, in the nearly thirty years of experience that we have accumulated in the racing industry, one message rings true: someone can always beat you on price.

Therefore, our pricing strategy is to be competitive within the various product categories, but not to rely on the selling price to overshadow the other advantages of doing business with our company. We will sell ourselves on the basis of a diverse line of quality products, that are readily available, reasonably priced, and backed up by our extraordinary customer service. The products will be checked prior to shipment and all promised shipping dates will be met.

We will strive for a modest gross profit margin, increasing that steadily by year four.

5.2 Sales Strategy

Because Southeast Racing Parts is a new entity, we understand that we will have to prove our company’s worth to racers in order to earn their respect and business.

Most importantly, we need to sell our company, not necessarily the products. We will need to push our service and support capabilities.

5.2.1 Sales Forecast

The following table and related charts show our present sales forecast. We are projecting sales to grow at steadily for the next three years.

Our seasonality, as shown in the chart, is a factor in the racing industry. We will tend to sell much better in the period January through June, while sales trail off in late summer and fall.

Management feels these forecasts are highly attainable.

When Performance Racing Industry completed its annual survey, the resulting figure for total number of racers was 385,000. Within the survey they also found that 150,000 of those were oval track racers. The survey also showed $1.5 billion in annual retail sales for all segments, with 48% of that total ($720 million) derived from the oval track segment.

By dividing that number ($720 million) by the number of oval track racers (150,000), the average annual retail purchases of oval track racers equals $4,800. From our past experience, we believe that each customer we have would spend on average 25% of that figure ($1,200) with our company. Finally, by dividing our first year sales forecast ($350,000) by $1,200 (average annual customer purchases), it shows that we will need 292 customers to support the sales forecast numbers. We believe, by and large, that these are realistic and attainable numbers.

5.3 Strategic Alliances

We have the ability to build strong strategic alliances with many of our suppliers, some of which are listed below.

• (omitted to protect confidentiality). They will set us up as a Warehouse Distributor (W.D.) without the buy-in requirement.
• (omitted to protect confidentiality). They will do “whatever they can” to help us succeed. Possibly supply us with a show car to display in our showroom.
• (omitted to protect confidentiality). They will set us up as a W.D. without the buy-in requirement.
• (omitted to protect confidentiality). They will set us up as a W.D. and could also be persuaded into extending us special terms.
• (omitted to protect confidentiality). They will set us up as a W.D. and help out as needed with additional terms.
• (omitted to protect confidentiality). They have set us up as a dealer and will drop ship when needed.
• (omitted to protect confidentiality). They will work with us by drop shipping direct to our customers and also by acting as a “paper” warehouse so that we may order direct from the manufacturer for a nominal billing fee.
• (omitted to protect confidentiality). Could be persuaded into giving us extended dating on our initial stocking order.
• (omitted to protect confidentiality). They will supply us with used testing equipment at no charge. They have indicated that they would also extend special terms and/or dating on initial stocking order.
• (omitted to protect confidentiality). They will supply us with their 94-page 4-color catalog at no charge.
• (omitted to protect confidentiality). They will set us up as a direct W.D. without the buy-in requirement. Will also assist us in marketing their products in this area.

The following two local warehouses will help us immensely in keeping our own inventory levels in check, while still giving our customers fast service:

• (omitted to protect confidentiality).

Approached properly, these vendors and many others will assist Southeast Racing Parts in becoming a force in the marketplace.

5.4 Milestones

Sample Milestones topic text.

The milestones table and chart show the specific detail about actual program activities that should be taking place during the year. Each one has its manager, starting date, ending date, and budget. During the year we will be keeping track of implementation against plan, with reports on the timely completion of these activities as planned.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

We are a small company owned and operated by Tim and Molly Jones, husband and wife, as a Subchapter S corporation.

Tim Jones – President Tim will be the main salesperson. He will also be responsible for shipping and receiving, inventory management, and the marketing and promotion of products. Tim will assist with record keeping and cost containment.

Molly Jones – Corporate Secretary Molly will maintain the company records and be in direct communication with the accountant and other advisors. She will also be in charge of the computer system and perform all of the desktop publishing for the company. She will assist as needed with sales, shipping and receiving, and customer service related issues. In addition to her regular duties, Molly will be doing Internet marketing from her office at Southeast Racing Parts. We anticipate that 20 hours every week will be dedicated to this marketing. The revenue that will be generated by this is reflected in the Sales Forecast.

The initial management team depends on the founders themselves, with little back-up. We plan on hiring additional personnel as the need for them arises, and as we have the ability to pay them.

6.1 Management Team

Tim and Molly not only have the desire to succeed, but will bring a wealth of knowledge and experience to the Southeast Racing Parts team. They have nearly thirty years of combined experience in the racing industry and have both performed nearly all facets of daily operations for a racing business. Following is a synopsis of their abilities and accomplishments:

Tim Jones (40) – President (background omitted to protect confidentiality)

Molly Jones (29) – Corporate Secretary (background omitted to protect confidentiality)

6.2 Management Team Gaps

We depend on professionals, particularly our CPA, for some key management help. We have retained a local CPA to help us with financial and business management questions since we don’t have a strong background in those areas. Also, we are short on experience concerning human resource issues; however, we plan on utilizing our network of business associates to advise us when the need arises.

6.3 Personnel Plan

The cornerstone of the personnel plan is to maximize productivity and minimize the labor burden on the company’s operating expenses. As we grow, we expect to see steady increases in our personnel to match the increases in sales.

Financial Plan investor-ready personnel plan .">

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Auto Parts Business Plan Template & Guidebook

Starting an auto parts business may seem daunting, but with the right planning, you can open a successful shop. Our #1 Auto Parts Business Plan Template & Guidebook provides guidance for entrepreneurs looking to create a sustainable and profitable enterprise. This comprehensive guide is designed to help you make informed decisions about launching your own business and take advantage of the many opportunities the auto parts market has to offer.

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• How to Start a Profitable Auto Parts Business [11 Steps]
• 10+ Best & Profitable Auto Parts Business Ideas [2023]

How to Write a Auto Parts Business Plan in 7 Steps:

1. describe the purpose of your auto parts business..

The first step to writing your business plan is to describe the purpose of your auto parts business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a auto parts business:

Our mission at ABC Auto Parts is to be the leading provider of quality, affordable automotive parts and services in the region by providing exceptional customer service and top of the line products. We strive to create a trustworthy and welcoming atmosphere for our customers and employees alike, while providing knowledgeable guidance throughout the experience.

2. Products & Services Offered by Your Auto Parts Business.

The next step is to outline your products and services for your auto parts business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your auto parts business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your auto parts business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your auto parts business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a auto parts business?

• Computer or laptop
• Inventory management software
• Secure storage for inventory and parts
• Phone system with multiple lines
• High-speed internet connection
• Printer and printer supplies
• Receipts and invoices for transactions
• Business license from the relevant state and local authorities
• Permits to stock, sell and distribute auto parts, if applicable

5. Management & Organization of Your Auto Parts Business.

The second part of your auto parts business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your auto parts business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Auto Parts Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a auto parts business varies based on many different variables, but below are a few different types of startup costs for a auto parts business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your auto parts business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your auto parts business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your auto parts business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Auto Parts Business Plans:

Why do you need a business plan for a auto parts business.

A business plan is an essential tool for any business, including an auto parts business. It helps to provide a roadmap and direction, enabling you to plan your short-term and long-term goals, identify potential risks and opportunities, define how you will finance the venture, and track progress as you launch and grow your business. A business plan also helps to ensure that all relevant stakeholders are informed of the venture’s details and structure.

Who should you ask for help with your auto parts business plan?

You should consider reaching out to a business consultant or a financial advisor for help with your auto parts business plan. They can provide you with tailored advice and resources to ensure that your plan is comprehensive and effective. Additionally, if you are able to join an auto parts trade association, they may be able to provide additional support.

Can you write a auto parts business plan yourself?

Writing a business plan for an auto parts business is a complex process that requires research and dedication. It is best to consult with an experienced business plan writer who can provide expertise and guidance to make sure all aspects of the plan are covered. An experienced business planwriter can provide an effective outline for the plan and help with key areas such as market analysis, competitive advantage, financial projections, and more.

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