1.0 Executive Summary
The purpose of this business plan is to secure $400,000, via an SBA loan, for the development of an automotive repair shop based in Austin, Texas. M&D Automotive LLC (“the Company”) was founded by Matthew Deutsch. The business intends to develop a stand-alone location, which is expected to launch in the fall of this year. The business will provide the full range of automotive services specific for the needs of individuals and fleet operators.
The Services
The primary revenue center for the business will come from the ongoing repairs of any make or model of vehicle among its clients. Through its state-of-the-art facilities, M&D Automotive will use the latest in diagnostic and repair equipment to provide seamless repairs. The Company will maintain a lean operating infrastructure so that all repair services can be provided on an affordable basis. Management is committed to providing complete transparency regarding all needed repairs.
Prior to the onset of operations, the Company will recruit numerous qualified mechanics that will work at the facilities. The business will source candidates from technical schools throughout the greater Austin area.
The business, when requested, will also be able to provide automotive performance enhancements. This will be a high margin revenue center for M&D Automotive.
The services offered by the Company will be further examined in the third section of the business plan.
The Financing
As noted above, M&D Automotive is currently seeking $400,000 to establish its operations. Matthew Deutsch will provide $100,000 towards the venture. The funds will be used for real estate, furniture, fixtures, and equipment. The working capital needs of the business will be provided through Mr. Deutsch’s investment.
If needed, the Company could secure additional capital to expand operations. As this is a highly economically secure enterprise, the business could acquire a revolving credit facility. This document assumes that additional capital will not be acquired during the first five years.
The Future
M&D Automotive will continually expand the scope of its market reach over the next five years through ongoing increases for its annual marketing budget. Given the size of the greater Austin area, there is an immense opportunity to develop additional locations as well. However, an additional location would not be developed until after the fifth year of operation. The business may also integrate mobile repairs services and roadside assistance. If it is feasible to do so, an existing vehicle repair shop may be acquired and rebranded under the M&D Automotive name.
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
A $400,000 SBA loan is sought for to develop M&D Automotive. Matthew Deutsch will provide an investment of $100,000. The funds are to be used as follows:
2.2 Management Equity
Matthew Deutsch is the 100% owner of the business.
2.3 Exit Strategies
If it is financially prudent to do so or if Mr. Deutsch intends to retire, a qualified business broker will be hired to manage the sale of the business to a third party. A formal valuation regarding the business and real estate will be conducted prior to sale. Based on the anticipated profitability of the business, the Company could have a value of $900,000 by the fifth year of operation (including the value of real estate).
3.0 Operations
M&D Automotive will be actively engaged in providing a wide range of vehicle repair services from its location in Austin. The business will principally focus on providing services for individuals. The Company will have the ability to service any make or model of vehicle. The business will maintain a wide inventory of automotive parts so that repairs can be made within a 24-to-48-hour period based on their complexity. Through the Company’s state-of-the-art equipment – the business will be able to complete engine overhauls and extremely complex repairs when needed.
Most importantly, the Company intends to onboard numerous mechanics that will render services at the M&D Automotive location. These individuals will be required to have undergone substantial formal training at a technical school so that they can operate in a mechanic capacity. Generally, at least three years of prior experience will be required.
M&D Automotive intends to operate as a licensed inspection station for the State of Texas. This state requires that all vehicles undergo a yearly inspection. This will further increase revenue while driving additional traffic to the location.
Moving forward, Management intends to integrate mobile and roadside assistance into its operations. These services will be offered 24/7, which will provide M&D Automotive with a substantial differentiating factor. This will also expand the market reach of the business throughout the greater Austin metropolitan area.
4.0 Overview of the Organization
4.1 Registered Name
M&D Automotive LLC. The business is registered as a limited liability company in the State of Texas.
4.2 Commencement of Operations
Full scale operations will start in the fall of this year.
4.3 Mission Statement
The Company’s mission is to provide seamless vehicle repairs that are provided transparently and at an affordable cost.
4.4 Vision Statement
M&D Automotive’s mission is to become a widely recognized and respected automotive repair shop in Austin.
4.5 Organizational Objectives
• Implement numerous marketing strategies that will create significant brand name visibility from the onset if operations (including a massive pre-launch campaign).
• Properly onboard mechanics that will work on behalf of M&D Automotive.
• Implement fiscally sound procedures to ensure the profitability of the business.
• Remain within the letter of the law regarding all facets of operation.
• Maintain an expansive online presence (including on all social media platforms).
• Use state-of-the-art vehicle diagnostic and repair technology.
• Establish relationships with fleet operators to provide ongoing service for corporations.
• Potentially include mobile services and roadside assistance to further boost revenue.
• Potentially establish additional locations (after the fifth year of operation).
5.0 Strategic Analysis
5.1 External Environment Analysis
This section of analysis will detail the overall economic climate, the industry, the Company’s customer profile, and the competition that the business will face as it expands it operations.
At this time, the economic climate is moderate. As a result of changing trade policies – volatility has been introduced into the economy. However, the Federal Reserve as global central banks have taken proactive measures to reduce inflation while concurrently ensuring economic growth.
Even during challenging economic climates, the demand for automotive repair services will remain strong. The vast majority of vehicle owners cannot safely complete their own vehicle repairs. As such, M&D Automotive will have a continued influx of clients that need repairs for their vehicles. It is an absolute necessity.
5.2 Industry Analysis
There are 100,000 companies that operate one or more automotive repair shops in the United States. These businesses generate $90 billion of revenue per annum while providing jobs for 800,000 people.
While this is a mature industry, one of the trends will be the need to provide services for the greater number of electric vehicles in the market. M&D Automotive will remain in line with this market trend to ensure that as more owners operate EVs – the Company will be able to provide comprehensive services for cars that do not operate via an internal combustion engine.
5.3 Customer Profile and Target Market Analysis
Management has developed the following demographic profile of customers that is be used in conjunction with marketing operations:
• Household income of $75,000 to $150,000
• Lives or works within 10 miles of the Company’s Austin location.
• Will spend $100 to $2,000 per engagement with M&D Automotive.
As of this year, the Austin area has a population base of 2.2 million people. The median household income is $85,000. The median home value is $600,000. Approximately 75% of the population is over the age of 18 (which indicates that there are approximately 1.5 million number of drivers in the target market).
5.4 Competitive Analysis
This business plan is being presented as a sample. If this was a business plan for an actual automotive repair shop, a full competitive analysis would be developed. This includes an overview of all competitors in the effective target market radius, how long they have been in operation, and the ways in which the Company will maintain a competitive advantage.
6.0 Key Strategic Issues
6.1 Sustainable Operations
M&D Automotive will thrive in the Austin market as a result of the following:
• The ability to provide automotive services affordably will drive a large customer based.
• The operations are scalable, and the Company can seamlessly develop new automotive repair locations.
• The Company will remain profitable even during challenging business climates.
• M&D Automotive can service any make or model of vehicle.
• The business has an extensive recruitment apparatus in place for onboarding mechanics as the Company expands.
• Pre-launch marketing will ensure that the M&D Automotive brand name is well established during the development period.
• An experienced Owner (Matthew Deutsch) who will be able to develop and expand the operations of the Company in the coming years.
6.2 Basis for Growth
M&D Automotive LLC will grow through three main avenues:
• Continued expansion of the Company’s marketing operations.
• Integration of mobile, towing, and roadside repair services.
• Potential development of additional locations.
7.0 Marketing Plan
7.1 Marketing Objectives
• Engage in a wide range of pre-launch marketing strategies to create brand name awareness prior to the launch of the business.
• Maintain an expansive online presence including a proprietary website and use of social media.
• Operate as a community minded business by supporting local civic organizations through co-branding opportunities.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• Management will launch the operations its new location in the fall of this year.
• Revenue will reach $838,000.
• Gross profits will reach $584,000.
Year 2
• During this time, the Company will expand the scope of its marketing operations to include direct outreach with referring partners in Austin.
• Revenues are expected to increase by 12%.
• The business will achieve revenue of $938,000.
Years 3-5
• By the fifth year of operation, the Company will achieve $1.3 million of revenue.
• At this time, the Company may develop additional locations within the Western Texas market area.
7.4 Marketing Strategies
Most importantly, the Company will lay the groundwork for its marketing operations during the development period. This will include establishing an online presence via both a proprietary website and through social media marketing. This will allow Austin residents to become aware of the wide range of automotive repair services that the Company will offer from the onset of operations. Management will coordinate these efforts with a third party digitally focused marketing firm.
Once the operations have commenced, the Company will distribute mailed advertisements within a 10-mile radius of Austin location. These mailers will have magnetic backings so that they can be affixed to metal surfaces (such as refrigerators). This type of marketing will occur twice per year. Specialized discounts on inspections and oil changes will be offered on a regular basis to drive traffic to the location.
The business will also conduct direct outreach within the Austin market. This will include establishing referral relationships with real estate brokerages as many people ask for recommendations when they move to new locations. The Company will also establish relationships with operators of vehicle fleets including limousine/livery businesses, taxi companies, and shuttle companies. As these businesses have ongoing needs for vehicle repair – this will be a major source of income in the coming years.
The Company will frequently post images of repaired vehicles among all social media platforms. This will assist with creating greater brand name visibility in the Austin area. Videos of the location will also be posted on a regular basis as will discounts on oil changes and general maintenance.
8.0 Organizational Plan
8.1 Corporate Organization
8.2 Organizational Budget
9.0 Financial Plan
9.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
• M&D Automotive will have a compounded annual growth rate of 12%.
• Management will acquire $400,000 to establish the Company’s operations (carrying a 20-year term and a 9% interest rate).
• John doe will contribute $100,000 toward the venture.
9.2 Financial Highlights
• M&D Automotive will achieve profitability in the first year of operation.
• Integration of mobile services will drastically boost revenue and profit.
• The operations of this auto repair shop are highly scalable.
9.3 Sensitivity Analysis
M&D Automotive will enjoy substantial economic stability given that automotive repairs need to be completed by competent professionals. The Company will generate substantial contribution margins from mechanic labor as well as the sale of automotive parts. Furthermore, the business will be based in the population dense market area of Austin. This will ensure a continued influx of clients throughout the life of the business.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
