1.0 Executive Summary
The purpose of this document is to showcase the ongoing development of a roadside assistance business based in Nassau County, New York. Deutsch Roadside Service LLC (“the Company”) was founded this year by Matthew Deutsch with the intention of providing a broad range of services specific for the needs of vehicle drivers and truck operators in this market. The business is currently seeking $150,000 in order to establish operations. The Company will begin providing services in the fourth quarter of this year.
Operations
The primary revenue driver for the business will come from providing roadside assistance and roadside repairs to non-commercial vehicle drivers within the Nassau County market. The Company’s service vehicle will have the ability to tow cars to mechanic locations in the event that the damage or an issue requires significant work. The Company will charge $75 per hour for these services during daytime hours and $150 per hour during evening hours. The Company will also generate income from the sale of small parts that are used during the course of roadside assistance.
The second revenue center will come from providing services specific for the needs of commercial vehicle operators and truck operators. The business will carry a number of parts and components that are common for these types of vehicles. These services will incur a fee of $200 per hour.
The third section of this roadside assistance business plan will further document the operations of the business.
The Financing
As discussed above, the company is currently seeking $150,000 of capital to establish its operations. Primarily, these funds will be used for the acquisition of a towing vehicle as well as furniture, fixtures, and equipment. Matthew Deutsch will contribute $25,000 towards the venture.
This Company is a strong candidate for ongoing expansion capital given the absolute necessity of services rendered and the fact that the business will be able to remain profitable with any economic climate. If the Company decides to add additional vehicles to its fleet, which it will over the next five years, lease financing or specialty vehicle financing may be acquired to purchase additional operating assets.
The Future
The Company will continue to expand the number of tow trucks and roadside assistance vehicles that it maintains in its fleet. Management will hire a number of highly qualified mechanics that can render these services on a mobile basis. The Company may also expanded operations into neighboring Suffolk County
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The $150,000 of debt capital and $25,000 of equity capital will be allocated as follows:
2.2 Management and Investor Equity
Matthew Deutsch is the 100% owner of Deutsch Roadside Service LLC.
2.3 Exit Strategies
As these businesses are highly economically stable, there is an immense demand for roadside assistance businesses that are profitable. In the event that the business is to be sold, the Company will first have a formal valuation completed in order to understand its fair market value. From there, a qualified business broker or business sales specialist will be retained to market the business to potential buyers.
3.0 Operations
As noted in the executive summary, Deutsch Roadside Service will be actively involved with providing a wide range of services specific for the needs of drivers that need immediate assistance. A significant component of the Company’s operations is expected to come from on-site battery replacement given that this is a cold climate. The Company will also be able to address common vehicle issues directly on the side of the road. As discussed, the business’ vehicles will be able to concurrently operate in a tow truck capacity so that the business can bring it to a mechanic location when needed.
The Company will maintain ongoing relationships with numerous automotive and truck repair companies within the target market. This will allow the business to properly drop off vehicles, even during late evening hours when a client needs specific services. As a valued added benefit to clients, the business will directly provide transportation back to their home if their vehicle requires significant mechanic work.
At all times, the Company will comply with all laws regarding the rendering of roadside assistance services. The business will maintain numerous insurance policies given the modest level of risk that is associated with providing roadside repairs.
4.0 Overview of the Organization
4.1 Registered Name
Deutsch Roadside Service LLC. The business is registered as a limited liability company in the State of New York.
4.2 Commencement of Operations
The company will commence its full-scale revenue generating operations in the fourth quarter of this year.
4.3 Mission Statement
To provide cost-effective and timely solutions when people need roadside assistance within the Nassau County area.
4.4 Vision Statement
To become a widely recognized and respected roadside assistance firm within the target market.
4.5 Organizational Objectives
• Conduct extensive direct outreach with automotive repair shops and truck repair shops within Nassau County to ensure that the business can drop off vehicle vehicles that need repairs.
• Properly onboard qualified mechanics that can render roadside assistance services.
• Use multiple forms of online advertising as people will most likely find the business through online searches when they are stranded on the side of the road.
• Continued to expand the scope of the Company’s operations to encompass all markets within Nassau County and expansion into Suffolk County.
• Establish ongoing relationships with freight brokerages and truck dispatch services as they will provide referrals when their drivers need assistance for their commercial vehicles.
• Adhere to all laws and regulations regarding providing roadside assistance services.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the roadside assistance business plan will focus on the current economic climate, the industry, the demographics of people using the Company’s services, and the ongoing competition that the business will face.
The economic climate within the United States at this time is moderate. Due to changing trade policies, as well as adjustments to government policy, there has been a higher-than-expected rate of inflation within the country. It should be noted that numerous government agencies spanning the Federal Reserve as well as the United States Treasury are taking the appropriate measures and implementing appropriate policies to reduce the rate of inflation.
This business is fully immune from negative changes in the economy. Cars and trucks will continue to break down from time to time, and will require comprehensive roadside assistance. This business is operating a very wealthy and population dense area. This will reduce many of the Company’s risks.
5.2 Industry Analysis
As of this year, there are 41,000 companies that provide roadside assistance services to drivers throughout the United States. The industry employees 106,000 people. Aggregately, companies within the roadside assistance, industry produce $11.5 billion a revenue.
This is a highly established industry. As it relates to common trends within the industry, it has become very popular to use multiple forms of online advertising in order to be quickly found when relevant searches are conducted. As this is a competitive industry, Deutsch Roadside Service will take a proactive approach with marketing campaigns to ensure that it has a substantial amount of brand visibility when roadside assistance engagements are required.
5.3 Customer Profile
The demographics of people that will use the company services are abroad. Any individual that operates a vehicle that is currently not functioning and requires immediate assistance is a potential client for the business. Generally, based on target market statistics, these individuals will typically have a household income in excess of $90,000. The scope of the target market radius is 25 miles.
5.4 Competitive Analysis
Roadside assistance is a competitive industry. Given the relatively low cost of starting these types of enterprises and the ongoing demand, any major market is going to have a number of competitors. Deutsch Roadside Service will maintain a competitive advantage by establishing ongoing relationships with numerous automotive repair and truck repair businesses within the market so that the Company can quickly work in tandem with third-parties when more substantial repairs are required.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Deutsch Roadside Service will have sustainable operations as a result of the following:
• Immense demand in any economic climate for roadside assistance services for both car drivers and commercial drivers.
• The Company can easily scale operations to the acquisition of additional roadside assistance vehicles and related operating assets.
• An experienced Founder that has more than ten years of experience in the field of providing roadside assistance and automotive mechanical services.
• The Company will have an ongoing relationship with numerous mechanic businesses within the market.
• The Company can further expand operations by creating a dedicated division specific for the needs of commercial drivers.
6.2 Basis of Growth
The Company will expand via the following methods:
• Expansion of operations throughout the entirety of Nassau County as well as an entrance into neighboring Suffolk County.
• Established additional locations within the State of New York.
• Continued expansion of the scope of the Company’s services specifically the needs of truck drivers and commercial vehicle operators.
7.0 Marketing Plan
7.1 Marketing Objectives
• Use multiple forms of online advertisement as it will be the primary method of driving roadside assistance engagements.
• Developer referral relationships with automotive repair shops that will dispatch the Company when they have a client that requires tow trucking services.
• Established ongoing relationships with fleet operators so the business can remain on call when they require services.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• The business will establish its operations in Nassau County.
• First year revenue will reach $319,000.
Year 2
• The business will further expand its operations.
• Revenue will reach $495,000.
Years 3-5
• By Year 5, total revenue from roadside assistance will reach $750,000.
• The business may expand into other markets at this time.
7.4 Marketing Strategies
Most importantly, the Company will use multiple forms of online advertising so that when searches for roadside assistance in Nassau County or Suffolk County are required – the businesses website will appear frequently. Given that people will be stranded on the side of the road when searching for these types of services, it is imperative that the business use multiple forms of online advertising in order to have substantial brand visibility.
During the development period of operations, the Company will use multiple forms of search engine optimization so that the business can be found organically. To complement these operations, the business will also use pay per click advertisements, which will ensure that the business appears as a sponsored result when searches are conducted on Google.
The Company will also conduct extensive direct reach with automotive repair shops and truck repair shops throughout Nassau County, Suffolk County, and Long Island. This will ensure that the business can be dispatched to certain areas where a stranded vehicle driver or commercial driver is stuck. This will create a highly recurring stream of revenue for the business that will further propels the profitability in the coming years.
The Company will also establish ongoing relationships with fleet operators that frequently have trucks that require roadside assistance that travel throughout the target market area. This will also create a highly predictable revenue as fleet operators typically require these services on an ongoing basis, especially as it relates to tire related issues or battery related issues.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The Company will acquire a $150,000 loan to establish its roadside assistance operations.
• Matthew Deutsch will contribute $25,000 towards a venture.
• Deutsch Roadside Service will achieve a compounded annual growth rate of 24%, which should be driven by the Company’s expansion into neighboring markets.
9.2 Financial Highlights
• The business will generate contribution margins of 95% on all roadside assistance services.
• Parts and component sales will generate contribution margins of 50%.
9.3 Sensitivity Analysis
The Company will be able to generate substantial revenue in any economic climate. Roadside assistance is an absolute necessity for any driver that is having an issue with their vehicle. The Company will generate substantial contribution margins from these engagements which will fully support the underlying operations of the business as well as its financial obligations.
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
Appendix A – SWOT Analysis
Strengths
• Strong demand for roadside assistance within the target market given its population density.
• The ability to provide onsite tire services as well as battery replacement will provide a major differentiating factor.
• The Company’s relationships with numerous mechanic locations once for a steady stream of ongoing referrals and dispatched engagements.
Weaknesses
• Operational complexities as this business is required to operate 24 hours a day.
• Ongoing competition for more established roadside assistance and tow trucking companies within the target market.
Opportunities
• Continued expansion of the number of operating assets that the business maintains to render roadside assistance services.
• Expansion to other economically viable markets in New York.
• Continued expansion, the Company’s services specifically the needs of commercial vehicles and fleet operators.
Threats
• Significant increases in the cost of energy can increase the cost of the business.
Appendix B – Critical Risks
Development Risk – Low
The service architecture that we offered through the Company’s roadside assistance operations has been already been developed. The primary matter that needs to be addressed to securing the funding required to establish operations.
Financing Risk – Low/Moderate
The $150,000 of debt capital sought in this document will be primarily used for the acquisition of roadside assistance vehicles and tangible assets. The ongoing demand for these services coupled with the significant contribution margins will ensure that the business is able to remain profitable.
Marketing Risk – Low
The Company will use and continue to leverage multiple online marketing strategies that the business can be found very quickly in the event of a roadside assistance issue. This will be complemented by the direct outreach initiatives that the Company will undertake with automotive repair and truck repair businesses in the target market.
Management Risk – Low
Matthew Deutsch is a highly experienced entrepreneur that will be able to effectively launch the operations of Deutsch Roadside Service a profitability.
Valuation Risk – Low
The valuation risk is offset by:
• Substantial economic stability as this service is a necessity.
• The Company can expand to easily include other markets in New York.
• The business is operating in a population dense market.
• Commercial services can be seamlessly integrated.
Exit Risk – Low
There would be an immense demand for the operations of this roadside assistance business given its relatively low risk and highly predictable streams of income. As noted earlier, numerous business sales professionals would be onboarded to assist with finding a suitable buyer for the Company at a fair market price.