Famous Honda Business Plan
FAMOUS HONDA BUSINESS PROPOSAL Presented by Famous Honda Directors
1.0 Executive Summary FAMOUS HONDA is a start-up organization that offers a complete domestic and foreign care repair service for all Honda motor vehicles as well as a full-featured Honda retail parts store. FAMOUS HONDA will serve the Harare market starting with the best convenient location. FAMOUS HONDA will grow into a business with outstanding sales by year three. The Concept The auto repair market has a lot of competition; however, almost all only offer service. FAMOUS HONDA will differentiate themselves by not only offering a hassle-free Honda repair service, but a fully stocked Honda parts store. Not only will this serve a wide range of customers for both service and parts, but the parts department will support the service department by allowing the service department to turnaround jobs far faster than the competition with generally all of the needed parts in stock and on location. FAMOUS HONDA will also differentiate itself by having 2 bays at the location. This offers incredible value to customers who need their cars fixed right away. Waits for service and parts are ideas not entertained by FAMOUS HONDA. Lastly, FAMOUS HONDA offers unlimited shuttle service for repair customers making the entire service experience as painless and convenient as possible. FAMOUS HONDA will attract and maintain a loyal customer base through their customer-oriented focus on business. All employees are trained and held responsible for providing superior service, developing a long lasting trust bond with customers. This is very important, especially in the auto repair industry where trust and honesty are not the image of repair facilities. 2.0 Business Description and Vision 2.1 Mission Famous Honda aims to offer high-quality Honda auto repair services and a full range of Honda parts focusing on personalized services to its customers by offering convenience and rapid service which is technologically savvy with computerized monitoring of all parts inventory, to ensure that parts are always in stock, while keeping a balanced level of inventory to maximize inventory turnover. 2.2 Company Vision We will be the leading Auto Repair Services Company for Honda vehicles, admired for our competencies, people by any measure in Zimbabwe. To be accessible in all major cities in Zimbabwe.
2.3 Business Goals and Objectives 1. 2. 3. 4. Expedient and convenient auto repair services. Growing and maintaining a referral network of local towing service companies. A wide range of auto parts inventory that is (nearly) never out of stock. Rapid order and delivery of major auto parts items.
2.4 Brief History of the Business State hw atha businesses are functioning,and detail th gap we found in the mkt. 2.5 Company Principles Safety, Integrity, Trust, Honesty, Sustainability and Respect 2.6 Values Passion for excellence, pushing beyond boundaries and flourishing through diversity.
3.0 Definition of the Market Industry Description
3.1 Describe the Critical Needs of the Market
The economic growth of the last several years has resulted in increased disposable income. Many people have chosen to spend part of their increased income on their automobiles. As a result, the need for reliable and convenient auto services has substantially risen as well. FAMOUS HONDA will position itself to capitalize on the growing need of the middle and upper class market for quality auto service in Harare. The company will be privately owned by two co-owners, with most of the additional funding coming from loan financing. 3.2 Target Market Individuals with Honda cars. 3.3 Profile of Targeted Clients
3.4 Market Share Overview
Chart: Market Analysis (Pie) Market Analysis (Pie)
Competitors Famous Honda
Table: Market Analysis
Market Analysis Year 1 Potential Customers Local Residents Freeway Traffic Other Total Growth 15% 10% 0% 13.64% 700 500 0 1,200 1,000 700 0 1,700 1,500 1,000 0 2,500 2,000 1, 200 0 3,200 2,500 1,500 0 4,00 Year 2 Year 3 Year 4 Year 5
4.0 Products and Services 4.1 Products and Services in Detail 4.2 Competitiveness of Products and Services 5.0 Organisation and Management Organisation Chart 5.1 Legal structure 5.2 Bio-Description of Key Managers 6.0 Marketing and Sales Strategy Market Identification 6.1 Channel of Distribution 6.2 Sales Strategy For 4ps 7.0 Financial Management Start Up Costs 7.1Projected Balance Sheet 7.2 Income Statement 7.3 Cashflow Statement
8.0 Company name, address, city
The Management Team FAMOUS HONDA has a strong management team that will allow them to execute on this exciting idea. FAMOUS HONDA has two partners Benson Nyahokwe & Tendai Muzenda. Benson has a background of sales; an undergraduate of a bachelors degree in Marketing has worked with an Auto repair company on his vacations. He will be overseeing the sales and marketing for the organization and the accounting and administration and will cover as the Director. Tendai is also a product of the auto industry, specifically the auto repair and parts sales industry. Tendai spent two years at Honda Twenty Ten the largest Honda independent auto repair facility and 4 years with Honda Mart Trading. At both organizations Tendai had multiple roles within the organization allowing him to bring to FAMOUS HONDA a broad skill set. The incredible breadth of skill sets and knowledge that the management team possesses will allow FAMOUS HONDA to accomplish their lofty sales goals. FAMOUS HONDA is an exciting business opportunity that addresses the unmet need of having a full Honda service auto repair facility that also has a complete retail parts center. These distinct but complimentary services will have benchmarked customer service, something that the industry is not known for having. FAMOUS HONDA will be led by a seasoned management team of two, all of whom have extensive industry experience.
2.0 Company Summary Famous Honda Auto Repair is a new start-up incorporated business managed by two partners. Both of the partners represent sales/management, and one focuses on the operations section of the business.
2.1 Company Ownership FAMOUS HONDA is incorporated in the companies act. It is privately owned by Benson Nyahokwe & Tendai Muzenda. To attract additional financing, the owners may consider taking FAMOUS HONDA public several years down the road. 2.2 Start-up Summary Each of the co-owners will invest an equal amount in terms of equipment. The remainder of the required financing will come from a loan from the Youth fund loan. In order to be fully equipped to start operating Famous Honda will only require a 150-pce Tool set however with the increase in number of jobs and mechanics hired there will be need to purchase more tools. Famous Honda will also need to renovate the location they will lease for the commissioning of the Auto repair shop; it will also require buying a computer, printer and phoning for the use by administration and ease of communication with clients Table: Start-up Start-up Requirements Start-up Expenses Legal Rent Total Start-up Expenses Start-up Assets Cash Required (Computer, printer, 1 pce tool box) Start-up Inventory (renovations and inventory) Other Current Assets Total Assets Total Requirements
$300 $2,000 $2,300
$1,000 $1,000 $500 $2,500 $4,800
Table: Start-up Funding Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets
$2,300 $2,500 $4,800
$500 $4,800 $0 $200 $4,800
Liabilities and Capital Liabilities Long-term Liabilities (Loan) Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Nyahokwe Benson Muzenda Tendai Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital
$5,000 $0 $0 $5,000
$0 $0 $5,000 $5,000 ($4,800) $5,000
Total Funding
$5,000
3.0 Products and Services FAMOUS HONDA has the core competencies amongst its large crew to work on all Honda makes and models vehicles. With two service bays at the location, and all employees focused on superior customer service, quick turnaround is always the standard at FAMOUS HONDA. FAMOUS HONDA strives to be accurate and honest with customers in terms of quoting cost estimates and repair completion time estimates. FAMOUS HONDA employees focus on delivering what they promise. This focus on building strong customer relationships based on trust and integrity will be the catalyst in establishing a strong regular customer base. FAMOUS HONDA utilizes the highest degree of technology in managing a full range of auto parts inventory. The goal is to never be out of a specific part, while maximizing inventory turnover. Strong vendor relationships have been established with the most reputable vendors in terms of shipping time of major parts. 4.0 Market Analysis Summary FAMOUS HONDA has a focus on meeting the demand of a regular local resident customer base, as well as towed vehicle drop-ins from local and freeway traffic traveling on nearby freeways. FAMOUS HONDA has established relationships with a few major local tow truck companies for referral business of stalled vehicles requiring a tow to an auto repair facility. The company estimates that about 80% of revenues will come from the established local clientele and 20% from the local and freeway traffic tow-ins. The table below further estimates the total market potential of type of services rendered by FAMOUS HONDA in Harare. 4.1 Company Location & Justification Famous Honda seeks to locate in Harare (Graniteside, Southerton, City center, Msasa or Adbennie) these locations highly suite the business. Consideration have been made on other cities and rural locations however the number of traffic flow in other locations have led to the decision to have the first branch in Harare.
4.2 Target Market Segment Strategy FAMOUS HONDA will focus on its target market, the middle and upper class market, and establish a reputable image from that target market's perspective, by offering convenience, expedient Honda repair services, customer service excellence, and by working with local towing companies. 4.2.1 Market Needs Between having a high level of Honda commuting traffic, and an equally high level of tourism traffic on local highways, there is a constant significant demand for auto repair services and auto parts. Convenience is a must for most middle and upper class consumers and travelers. 4.3 Service Business Analysis The market of auto repair services and parts sales is very fragmented. The majority of auto shops usually offer either repair services or parts inventory. The niche where FAMOUS HONDA positions itself represents a Honda center that offer both Honda services and parts at one convenient location. Middle and upper class customers to whom FAMOUS HONDA will cater its services are less price sensitive as they value the convenience of quick turnaround and high quality of services. 4.3.1 Competition and Buying Patterns FAMOUS HONDA faces over 20 auto parts competitors in Harare. Only one of these competitors offer both auto repair services and auto parts inventories i.e. Honda Twenty Ten. The remainder is small privately-owned establishments which have their shelves full of fake Chinese parts. FAMOUS HONDA will compete well by focusing on convenience and offering a high level of customer service and originality of their parts. Additionally, its honest reputation will be a major factor in repeat business and building a large base of regular, loyal customers. Large competitors' stores typically carry the same basic product line, with variations based on the number and type of Honda cars registered in the different markets. Famous Honda is going to operate the service division for the first three months before opening up its auto parts store. Automotive product lines usually include: Tires. Batteries. Honda parts, including: Suspension parts.
Ignition parts. Engines and engine parts. Service parts. Lighting. Wiper blades. brake parts. Chemicals, including oil, antifreeze, polishes, additives, cleansers and paints. Mobile electronics, including sound systems, alarms, and remote vehicle starters. Car accessories, including seat covers, floor mats, and exterior accessories. Hand tools, including sockets, wrenches, ratchets, paint and body tools, jacks and lift equipment, automotive specialty tools and test gauges.
Many competitors have adopted point-of-sale systems in their stores, which gather sales and gross profit data by a stock-keeping unit from each store on a daily basis. This information is then used to help formulate pricing, marketing and merchandising strategies. Electronic parts catalogs are available in many competitor stores along electronic commercial invoicing systems that offer commercial parts delivery. 5.0 Strategy and Implementation Summary FAMOUS HONDA will succeed by offering its customers high-quality, rapid and convenient Honda repair service. Additionally, FAMOUS HONDA will succeed by ensuring a full range of auto parts inventory and rapid shipping capability of major auto parts. 5.1 Competitive Edge FAMOUS HONDA's competitive edge is the heavy focus on customer convenience by offering unlimited shuttle service, rapid turnaround on Honda repair jobs, and a referral network of a few local major tow truck companies. 5.2 Sales Strategy FAMOUS HONDA will focus its sales strategy on effectively reaching the target customer segment of upper and middle class customers. For this purposes, the company will employ direct sales staff. At the same time, the company will further strengthen its relationships with the tow truck companies to capture auto repair needs of the local and highway traffic.
6.0 Management Summary Benson has experience in sales, marketing, and management within the auto repair and auto parts industries. Tendai has four years of experience in Honda auto repair and auto parts industries.
7.0 Financial Plan FAMOUS HONDA expects to raise much of its own capital, and to borrow a loan from the Youth Fund policy. This provides the bulk of the current financing required. 7.1 Break-even Analysis FAMOUS HONDA's break-even analysis is based on the averages of the first-year figures for total sales by units, and for operating expenses. These are presented as per-unit revenue, per-unit cost, and fixed costs. These conservative assumptions make for a more accurate estimate of real risk.
Table: Break-even Analysis
Break-even Analysis Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 6,969 $724,208
$103.92 $42.81 $425,871
Table: Sales Forecast
Sales Forecast Month 1 Unit Sales Honda Repair Jobs Auto Parts Other Total Unit Sales Unit Prices Auto Repair Jobs Auto Parts Other Sales Auto Repair Jobs Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 20 150 0 820 Month 11 25 200 0 825 Month 12 25 200 0 825
10 100 0 610
10 100 0 610
10 100 0 610
15 100 0 615
12 100 0 615
20 150 0 820
20 150 0 820
20 150 0 820
20 150 0 820
Month 1 $300.00 $50.00 $0.00
Month 2 $300.00 $50.00 $0.00
Month 3 $300.00 $50.00 $0.00
Month 4 $300.00 $50.00 $0.00
Month 5 $300.00 $50.00 $0.00
Month 6 $300.00 $50.00 $0.00
Month 7 $300.00 $50.00 $10.00
Month 8 $300.00 $50.00 $0.00
Month 9 $300.00 $50.00 $0.00
Month 10 $300.00 $50.00 $0.00
Month 11 $300.00 $50.00 $0.00
Month 12 $300.00 $50.00 $0.00
$3000
$3000
$3000
$3000
$3600
$6000
$6000
$6,000
$6,000
$6,000
$7,500
$7,500
Auto Parts Other Total Sales Direct Unit Costs Auto Repair Jobs Auto Parts Other Direct Cost of Sales Auto Repair Jobs Auto Parts Other Subtotal Direct Cost of Sales
$5,000 $0 $8,000 Month 1 $70.00 $10.00 $0.00
$5,000 $0 $8,000 Month 2 $70.00 $10.00 $0.00
$5,000 $0 $8,000 Month 3 $70.00 $10.00 $0.00
$5,000 $0 $8,000 Month 4 $70.00 $10.00 $0.00
$5,000 $0 $8,600 Month 5 $70.00 $10.00 $0.00
$7,500 $0 $13,500 Month 6 $70.00 $10.00 $0.00
$7,500 $0 $13,500 Month 7 $70.00 $10.00 $0.00
$7,500 $0 $13,500 Month 8 $70.00 $10.00 $0.00
$7,500 $0 $13,500 Month 9 $70.00 $10.00 $0.00
$7,500 $0 $13,500 Month 10 $70.00 $10.00 $0.00
$10,000 $0 $17,500 Month 11 $70.00 $10.00 $0.00
$10,000 $0 $17,500 Month 12 $70.00 $10.00 $0.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
$40.00 $20.00 $0 $140.00
6.1 Personnel Plan As the personnel plan shows, FAMOUS HONDA expects to make gradual investments in staffing as several new facilities are opened over the next five years. Table: Personnel
Personnel Plan Month 1 Mechanics Total People Total Payroll $500 2 $500 Month 2 $500 2 $500 Month 3 $500 2 $500 Month 4 $500 2 $500 Month 5 $750 3 $750 Month 6 $1,000 4 $1,000 Month 7 $1,000 4 $1,000 Month 8 $1,000 4 $1,000 Month 9 $1,000 4 $1,000 Month 10 $1,000 4 $1,000 Month 11 $1,000 4 $1,000 Month 12 $1,000 4 $1,000
7.2 Projected Profit and Loss As the profit and loss table shows, FAMOUS HONDA expects to continue its steady growth in profitability over the next three years of operations. Table: Profit and Loss overleaf
Pro Forma
Profit Month 1
and Loss Month 2 Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Sales Direct Cost of Sales Gross Margin Expenses Payroll Sales and Marketing and Other Expenses Utilities Rent Total Operating Expenses Net Profit
$8,000 $140
$8,000 $140
$8,000 $140
$8,000 $140
$8,000 $140
$13,500 $140
$13,500 $140
$13,500 $140
$13,500 $140
$13,500 $140
$17,500 $140
$17,500 $140
$7,860
$7,860
$7,860
$7,860
$7,860
$13,360
$13,360
$13,360
$13,360
$13,360
$17,360
$17,360
$500 $500
$500 $200
$500 $200
$500 $200
$750 $200
$1,000 $200
$1,000 $200
$1,000 $200
$1,000 $200
$1,000 $200
$1,000 $200
$1,000 $200
$100 $2,000 $3,100
$100 $2,000 $2,800
$100 $2,000 $2,800
$100 $2,000 $2,800
$100 $2,000 $3,050
$100 $2,000 $3,300
$100 $2,000 $3,300
$100 $2,000 $3,300
$100 $2,000 $3,300
$100 $2,000 $3,300
$100 $2,000 $3,300
$100 $2,000 $3,300
$4,760
$5060
$5060
$5060
$4,810
$10,060
$10,060
$10,060
$10,060
$10,060
$14,060
$14,060
7.3 Projected Cash Flow The cash flow projection shows that provisions for ongoing expenses are adequate to meet FAMOUS HONDA's needs as the business generates cash flow sufficient to support operations. The short-term loan is expected to be paid out within one year, while an SBA loan will be repaid in three years.
Pro Forma Cash Flow Month 1 Cash Received Loan Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received New Investment Received Subtotal Cash Received Expenditure s Expenditure s from Operations Other Bill Payments Subtotal Spent on Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$5,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$8,000 $8,000
$8,000 $8,000
$8,000 $8,000
$8,000 $8,000
$8,000 $8,000
$13,500 $13,500
$13,500 $13,500
$13,500 $13,500
$13,500 $13,500
$13,500 $13,500
$17,500 $17,500
$17,500 $17,500
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$13,000
$8,000
$8,000
$8,000
$8,000
$13,500
$13,500
$13,500
$13,500
$13,500
$17,500
$17,500
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$200 $3,100 $3,300
$100 $2,800 $2,900
$100 $2,800 $2,900
$100 $2,800 $2,900
$100 $3,050 $3,150
$100 $3,300 $3,400
$100 $3,300 $3,400
$100 $3,300 $3,400
$100 $3,300 $3,400
$100 $3,300 $3,400
$100 $3,300 $3,400
$100 $3,300 $3,400
Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Other Liabilities Principal Repayment Loan Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Cash Balance
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$00
$415
$415
$415
$415
$415
$415
$415
$415
$415
$415
$415
$1,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$1,500
$0
$00
$00
$00
$1,000
$00
$00
$00
$00
$00
$00
$0 $5,800
$0 $3,315
$0 $3,315
$0 $3,315
$0 $3,565
$0 $4,815
$0 $3,565
$0 $3,565
$0 $3,565
$0 $3,565
$0 $3,565
$0 $3,565
$7,200
$4,685
$4,685
$4,685
$4,435
$8,685
$9,935
$9,565
$9,565
$9,565
$13,935
$13,935
Loan Application Famous Honda is seeking a loan funding of Five Thousand Dollars US $ 5000 to start its operations. The loan will be used to pay commissioning expenses, advertising expenses and first month rentals for its premises. Contact Details Famous Honda Director Nyahokwe Benson Regina Coeli Mission Hospital Bag 4 Juliasdale +263774 119 692 or +263733 401 390
