MotoTrend AutoSports Sample Business Plan


Table of Contents

SECTION 1.0 EXECUTIVE SUMMARY

SECTIONS 2.0 MANAGEMENT PLAN
2.1 Ownership Structure
2.2 Management Profile

SECTION 3.0 INDUSTRY AND MARKET ASSESSMENT
3.1 Industry Definition
3.2 Industry Overview
3.3 Target Market
3.4 Market Summary and Calculation
3.5 Competitive Environment

SECTION 4.0 MARKETING PLAN
4.1 Services and Pricing
4.2 Distribution Plan
4.3 Suppliers
4.3 Promotional Plan
4.5 Risk Analysis and Survival Strategy

SECTION 5.0 OPERATIONAL PLANS
5.1 General Operating Requirements
5.2 Human Resource Requirements
5.3 Insurance Requirements
5.4 Government Requirements
5.5 Working Capital Requirements
5.6 Capitalization Activities
5.7 Operational Workflow

SECTION 6.0 FINANCIAL PLAN
6.1 Costs and Financing
6.2 Financial Projections and Notes

FINANCIAL PROJECTIONS


Executive Summary

MotoTrend AutoSports will be wholly owned and operated by Mr. Bernie Spotman. MotoTrend AutoSports Ltd. will be a franchisee of the MotoTrend AutoSports Franchise. MotoTrend AutoSports is a proposed Ontario based company which will provide a wide array of automotive parts and accessories services which include:

•  Performance Parts sales & installation

•  Customization services & Installation

•  Wheel & tire repair & installation

•  Audio / Alarm sales & installation services

•  Auto Maintenance Plans

•  Window tinting and Vinyl service

•  Detailing services for auto dealers Vehicle detailing services

•  Commercial Vehicle conversions including mining vehicles

•  Vehicle Detailing Packages

This company will be located at;

MotoTrend AutoSports
1801 Riverside Drive
Anytown, Ontario

MotoTrend AutoSports has identified its target market as the residential automotive aftermarket within Anytown and Surrounding Area. The primary function of MotoTrend AutoSports is to provide automotive parts, accessories and tire services to the aftermarket automotive market in Anytown and the surrounding areas.

In Canada, the automotive parts, accessories and tire store industry is an evolving and dynamic services sector comprised of companies that provide aftermarket automotive services which:

•  Provides autosport performance products;

•  Accessories;

•  Enhances the look and performance of residential vehicles;

•  Provides standard mechanical services

In total, the Canadian automotive part, accessories and tire store industry is represented by over 6,046 companies. Firms in this industry remain relatively small. Of the 6,046 companies in this sector, 65% had fewer than 100 employees while 35% had fewer than 5 employees.

Overall revenues for automotive parts, accessories and tire stores sector have increased 3.8% per year, on average for years 2002 to 2012. As of 2002, industry revenues have increased from $5.3 billion to $7.4 billion representing a 3.8% increase. Between November 2012 and November 2013 there has been an increase in overall revenue by 10.5%. This represents a growth rate that is roughly two times that of the Canadian economy (1.9% growth rate). Compared to the rest of the economy, which grew by 2.6%, the automotive parts, accessories and tire store sector has grown by 3.8%.

Based on this data, there is a clear indication that consumer spending trends in this industry is continuing to build.

MotoTrend AutoSports sales strategy is two tiered. First the company will plan on achieving first year direct sales of $392,011. This is a very realistic projection based on the market research conducted. Due to the type of service provided, competition and barriers to entry are minimal.

Secondly, the company will plan to achieve a more profitable level of sales equal to or better than $490,014 in years two and $612,517 in year three. Thirdly, the company plans to more aggressively promote its services with higher profit margins to allow for maximized profits.

The initial start-up expense for MotoTrend AutoSports includes: capital $185,303; marketing $10,000; and business support $3,000. Capital funds will be used to purchase materials and supplies, equipment, and the initial franchise fee. Marketing funds will be used to for a Digital Strategy (Mobile website design, website seo), direct marketing campaigns, online advertising, media ads and signage. Business support funds will be utilized to hire an accountant. The costs and financing table below summarizes the proposed costs and how Bernie Spotman proposes to finance these costs.

Projected Costs

Financing

Capital & Operating $ Capital & Operating Amount %
         
Working capital $14,053 Cash equity $27,795 15%
Equipment $105,000 ADPC $74,121 40%
Materials/Stock $16,250 Commercial financing $83,387 45%
Franchise Fees $50,000      
Sub total $185,303 Sub total $185,303 100%
         
Marketing
$
Marketing
$
%
         
Start up/on-going activities $10,000 Cash from operations $4,000 40%
Marketing   ADPC funding $6,000 60%
Sub total $10,000 Sub total $10,000 100%
         
Business support
$
Business support
$
%
         
Accounting/Management Support $3,000 Cash from operations $750 25%
    ADPC funding $2,250 75%
Sub total $3,000 Sub total $3,000 100%
         
Total project costs
$
Total project financing
$
%
         
Capital & operating $185,303 Cash equity $27,795 11%
Marketing $10,000 Cash from operations $4,750 9%
Business support $3,000 Commercial financing $83,387 20%
    ADPC $82,371 60%
         
Grand Total $198,303 Grand Total $198,303 100%

In order to properly fund the start-up of MotoTrend AutoSports, Mr. Bernie Spotman has designed a financing package that consists of personal equity, federal assistance and traditional borrowing. Mr. Bernie Spotman will invest $27,795 or 15% of the project's total capital costs. ADPC will be approached to invest $74,121 or 45% of the project's total capital costs and the remaining balance of $83,387 will be financed by a commercial bank over a 5 year term. Bridge financing will be sought from the same institution to ensure cashflow is manageable. ADPC will be asked to contribute 60% and 75% towards the business' marketing and business support costs respectively. The remaining funds will come from revenue generated by the business.

SECTION 2.0 MANAGEMENT PLAN

Section 2.1 Ownership Structure

MotoTrend AutoSports will be owned and operated by Bernie Spotman. The company will be a franchisee of the MotoTrend AutoSports Franchise within its target market of Anytown and surrounding area.

This business structure well suits the type and nature of the business and will give Mr. Bernie Spotman the freedom he needs to make this project a success.

Section 2.2 Management Team

Mr. Bernie Spotman will draw upon his specialized experience to manage the overall operation and direction of the business to ensure its present and future success. For over 20 years, Mr. Bernie Spotman has invested time and money into becoming an accomplished heavy equipment operator in the mining sector with numerous years maintaining that equipment. Some of the key highlights of Mr. Bernie Spotman's employment history, education and relevant experience include:

•  Over 20 years' experience of underground mining

•  Experienced loader and welder

•  Vast experience using bulldozers, back hoes and scoop tram

•  Experience in maintaining mechanical equipment including engines and parts

•  Numerous years' experience as a mechanic

As identified, Mr. Bernie Spotman has accumulated a number of specialized industry skills, and managed projects and jobs which will assist him in the successful management of this business. A detailed resume for Mr. Bernie Spotman is included in attachment #1.

As the owner of the company, Mr. Bernie Spotman will be required to fulfill the following key duties and responsibilities. They are:

•  Overall management of MotoTrend AutoSports;

•  Establish and maintain client relationships;

•  Maintain strategic alliances and partnership with key partners;

•  Human resource management;

•  Project/job management and direction;

•  Oversee day to day activities of the business;

•  Help deliver and complete services of the company;

•  Maintain the business' assets and buildings

In addition, the head franchise will provide management and business support training to Mr. Bernie Spotman in order to ensure a successful launch and operation.

Bernie Spotman will also employ his son, Jake to help manage in the daily operations. Jake Spotman has been directly involved in the automotive industry for more than 4 years.

He has also been involved for the past 10 years as an avid hobbyist, enhancing personal as well as other friends' vehicles with aftermarket modifications.

Jake will be required to fulfill the following key duties and responsibilities. They are:

•  Sales/counter service clerk

•  Management/overseeing weekend mechanics and tire crew

•  Help with the day to day operations

Mr. Bernie Spotman will hire a local and experienced accountant to provide and prepare all financial reporting requirements of the company. This will include:

•  Provide updates to lending institutions and government agencies including monthly reports and filing of ADPC Claims;

•  Management of new marketing and administrative techniques;

•  Provide quarterly financial statements

•  Formalization of accounting systems to provide the necessary annual revenues and expense reports

The estimated cost for those specialized service is $3,000.00. Once these systems are in place, Mr. Bernie Spotman will take over these key functions.

Mr. Bernie Spotman will determine the business' administrative and technical needs on an on-going basis. When sufficient work exists to maintain salaried staff in either realm, the appropriate personnel will be hired. A detailed summary of the additional human resource needs for the company is identified in the operations section of this plan.

SECTION 3.0 INDUSTRY & MARKET ASSESSMENT >>>

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