Twin city car wash
Automatic car wash
Executive summary
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TWIN CITY CARWASH Mission statement .............................................................................. 5 Business description ................................................................... 7 Business objectives .............................................................................. 7 Description of Indust y ............................................................................... 8 Context Analysis ............................................................................... 9 Internal Environment ........................................................................... 10 The PEST ANALYSIS ............................................................................ 11 SWOT ANALYSIS ....................................................................... ..... 12 Source of idea ............................................................................ 14 Technological plan ............................................................................ 18 Pricing Strategy ........................................................................... 19 Distribution Plan ....... .......................................................................... 20 Marketing Materials ........................................................................... 20 Financial Plan . ............................................................................ 21 Initial Investment ........................................................................... .. 22 Start-up Expenses ............................................................................. 22 Depreciation of fixed assets .............................................................................. 23 Sales Budget/ forecasting .............................................................................. 23 Income Statement ............................................................................. . 25 Cash budgeting ........................................................................ ...... 26 2 | Page
TWIN CITY CARWASH Balance Sheet . .............................................................................. 26 Projected Cash Flow statement ................................................................... 27 Notes to financial projections ....................................................................... 29 Organizational Plan ............ ............................................................................. 30 Production & Operational Plan ............................................................................ 31
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TWIN CITY CARWASH
MISSION STATEMENT We will always strive to meet our customer’s needs and provide them with quality equipment and services. Our car wash will be built to ensure our customers security and we will be environmental friendly.
Executive Summary The business idea which we are going to propose in our entrepreneurial finance course is automatic car wash. Automatic car wash is basically the new idea of car wash which we are going to launch in Rawalpindi. Basically as we know that now a day’s most of banks are giving cars on easy installments and every second person around is having car but the main problem or gap which we identified is that most of the people don’t have time for their cars and they don’t feel like waiting in queues for manual car wash and especially on their weekends as that is the only time or day which they get for their car wash. We have interviewed many people informally and asked them about their experience of manual car wash so what they stated is that they have to spend all day in queues in order to get their car wash done, when we shared our auto car wash with them so most of the people which we interviewed were so happy to see this technology as soon as possible because this new technology of auto car wash will allow the customers to get their car wash done in just few minutes.
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TWIN CITY CARWASH
BUSINESS DESCRIPTION This new idea of car wash will all be automatic in which what customers have to do this is that they just have to enter into the car wash booth and without even coming out of the car first they will enter into the initial booth in which they will get their car water spray which will be high pressured water which will remove all the dust and spots, after that the car will automatically shift into second booth which will spray the shampoo all over the car and that shampoo will be spread all over the car with the help of automated hand robots and then at the last stage the car will be enter into the final booth that will dry the car with in a second. This whole process of wash will take just 10-15 minutes. We hope that most of the people of twin cities will avail our automated car wash service as most of the people now a day’s don’t have much time to wait for their turn in manual car wash as well as people are more tilted toward technology so what we think is that this is the right time to enter into the market with technology because there is currently no direct competitor of automated car wash.
Working of Automatic Car Washing System: In this, car is parked on the platform, car is manually prewashed by jet spraying at high pressure and under chases wash. Further ph neutral shampoo is spread in form of foam, structure moves on rails along with rotating brush which cleans the car from top as well as from sides. Drying is done is also done automatically by the dryers. Water used is directly dumped into sewage. The following are the approximate consumption in system: Water (approx) -Cars wash 145ltrs -Under chassis wash 150ltrs Approx consumption (per car) -Shampoo 65ml -Wax 20 ml -Wash cycle time 8/10min -Drying cycle time 3/5min
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TWIN CITY CARWASH
High pressure pre-wash Wash
Brushing
Foam
Rinsing
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TWIN CITY CARWASH
Waxing Drying
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TWIN CITY CARWASH
THE MARKET AND OUR TARGET CUSTOMER Target Market Segment Strategy The strategy behind Twin City car wash target segmentation is to attract customers who will be repeat users and will frequent the business in the typically quiet times for a car wash business. It will not be difficult to attract customers during the summer months and on the weekends, the weekdays however, especially in the winter, people will not think about having their cars washed. For this reason, Twin City car wash will target people who will tend not to be restricted to these busy times. -Business owners (new car owners) tend to be very busy people, but are often able to make their own hours. -Retired people (older luxury car owners) are not restricted by typical work schedules so will be able to frequent the car wash during the week. -Dealerships will need cars detailed and washed regardless of the time of the day and week. This will supply a constant flow of traffic. -Businesses will need their fleet cars washed during the week during regular business hours. Twin City carwash will target three main groups of customers: individual car owner and leasers, car dealerships, and local businesses. The surrounding area is quite affluent, 40% of the residents earn handsome amount and mostly belong to the business community. Consequently, they have nice cars and want them to look nice. There are different car dealerships within a three-mile radius which will require car washing services for the various fleets. Lastly, there are many different local businesses that have company cars and that require clean appearances. Most importantly as we know that women in our society are reluctant to go for the car wash themselves, so we will target the female customers by providing them extra services such as separate waiting area room where they will have their privacy and maximum comfort level.
LOCATION We have chosen a prime location which is Shell Petrol Pump Murree Road Rawalpindi. The edge we have over this place is that this area is fully commercial plus it covers several residential colonies. Most importantly one of our partners owns this fuel station so it was the best option available for us. We have advantage of this location as it is situated in the border of twin cities so the customers from Islamabad will also avail this facility especially the residents of I-8 sector.
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TWIN CITY CARWASH
MARKETING The grand opening of Twin City Car Wash will consist of the following: -mass mailer that will be sent to target market population in a two mile radius - Advertising in two local papers - Flyers delivered to residences within a two mile radius. - Social media campaign through Facebook. Additionally, there will be an on-going marketing plan promoting the car wash throughout the year utilizing these methods as well as banners and signs and happy customer referrals.
Value Added Services -Debit/credit card machine -Separate sitting lounge for ladies -Detailing Facility (In near future) -Carwash facility from 9pm-12pm.
Pricing The pricing of the car wash has been set on realistic basis after getting the reviews of the potential customers. Most of the potential customers were willing to pay more than the selected price but we want to have maximum customers to utilize this service so we have decided to have best possible price to maximize our revenues.
1. Timing This pricing will be 500RS per car from 9am-12pm.
Competition and Buying Patterns There is no such direct competitor we have but we will be having indirect competitor. There is one other hand car wash shop in Murree Road about 0.5 miles near our station. It is quite old and is trying to compete with other manual car washes by offering low prices. However, it is not targeting the customers who seek quality cleaning. The customers who Twin City Carwash is targeting have their cars washed based on the quality of the job. They do not mind spending a little more each week to have their car washed and waxed in order to keep the paint work in excellent shape. The businesses that Twin City Carwash targets will be more cost conscious, so prices will be approximately 30% less for these customers to promote volume usage. 9 | Page
TWIN CITY CARWASH
INDUSRTY ANALYSIS As Manual carwash industry is highly established in twin cities however automatic carwash industry is new to the marker. Although one PSO fuel Station in Islamabad near Parliament had started this business few years back but it failed badly due to several reasons such it was located in red zone area where entry barriers were there for the people of twin cities. Although there are several colonies in those premises but most of the people living there are from upper class and have their own personal drivers to get the cars clean so they didn’t prefer to go for it. So we have no as such direct competitor, hence we have potential growth in the industry.
Operations The start-up expenses for Twin City Carwash will be financed by the partner’s personal savings. Rent on the location has been negotiated and will be $1,200 per month. In addition, insurance for the business will be approximately $200 per month and will be paid by direct debit on a monthly basis. Expensed equipment includes three high-power water pumps, one industrial vacuum cleaners, one computer terminals, and one cash register. All of the equipment will be depreciated over three years. The location was previously used as manual carwash, so it is set up to move vehicles quickly through the premises, but does not have all the necessary systems in place to host an automatic car wash facility. The services of a contracting company will be sought to convert the use of the facility and to improve the customer waiting room facilities. Most importantly we already have the facility of water boring available so it is great opportunity for us to run our operations smoothly.
Installation The equipment we are importing from China. The engineer of the company from which we are acquiring equipment will visit Pakistan and within a week the installation will be completed. Plus the engineer will also provide the training sessions to the lower management team. The supplier of equipment will be bearing the fare of the ticket, accommodation and food expenses of the engineer.
Corporate Social Responsibility As it is a part our mission to keep the environment healthy so we are acquiring the equipment which will provide us the facility to recycle the water.
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TWIN CITY CARWASH
Management Summary The management will comprise of upper management and lower management. The upper management will be in the control of the partners and the tasks and activities will be divided according to their specialties and skills. While the lower management will be in the hand of operations manager.
Upper management As we are having 4 partners so we have decided to divide the roles: Fahad Javed (Marketing Specialist) will be responsible for all the marketing related activities. Muhammad Furqan (Supply Chain Specialist) will be responsible for inventory and operations management. Badar Ul Islam Khan (Finance Specialist) will be responsible for all the financial related activities. Hammad Dadan (Legal specialist) will be responsible for all the legal and documentation activities.
Lower Management The company will hire one full-time technical specialist and 3 full-time car wash specialists when it opens for business. There will be total 3 workers including: 1 supervisor who will also look after the technical issues. 2 workers who will operate the machinery.
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TWIN CITY CARWASH
Financial Plan Financial plan explains the common lay man how the entrepreneur intends to meet financial obligations and maintain the venture’s liquidity. It provides the complete picture of: The amount funds and when they are coming into the organization. Where funds are going and how much cash is available. The projected financial position of the firm.
Initial Investment TwinCity Carwash is supposed to be launched with an investment of only Rs.4 Million which will be contributed by the partners. Whereas each of the four partners will bring in the investment of Rs.1000000.
Notes to financial projections All the transactions will be on cash basis. All the values are in Pakistani Rupees Sales are forecasted by 6% sustainable growth rate per month. CGS is 8 % of Sales per month. It is assumed that all the net income will be retained in the business. Wages and salaries are expected to be fixed and will be paid at the end of the month. Depreciation is calculated on assets assuming 10 year life and zero salvage value Minimum 36,000 cushion of inventory is always retained Marketing is considered to be a fixed cost The raw material will be purchased by auto gallery which is located in sadar, basically they are the importers of the required materials so we will not be facing inventory issues.
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TWIN CITY CARWASH
Important Assumptions The financial projections for twin city car wash are based on the following assumptions. These assumptions are thought to be quite conservative, as are the financial forecasts.
Startup Expenses
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TWIN CITY CARWASH
Sales forecast
Sales budget is an estimate of the expected volume of sales by month. It also includes estimated ending inventory required as a buffer Cost of sales can be determined from the sales forecasts. In manufacturing ventures, costs of internal production and subcontracting are compared. We have assumed that the % of sales method will be applied to the sales level. Hence the growth rate of sales is 6% per month. We have determined the sales level realistically by analyzing the sales level of existing manual car wash stations.
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TWIN CITY CARWASH
Cost of goods sold forecast
The cost of goods sold will be 6% of the total month sales throughout the period which is 6%.we will maintain the inventory level of 36000 Rs which is for 900 cars approximately.
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TWIN CITY CARWASH
Forecasted Income statement
Pro forma income statement is a projected net profit calculated from projected revenue minus projected costs and expenses. Operating costs includes fixed expenses incurred regardless of sales volume while variable expenses must be linked to strategy in the business plan. The income statement shows that we have positive net income which will be retained for the future expansion of the business.
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Forecasted Balance sheet
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TWIN CITY CARWASH
Here balance sheet is a financial tool that summarizes the projected assets, liabilities, and net worth of our venture. It is a picture of the business at a certain moment in time and does not cover a period of time. It consists of: Assets - Items that are owned or available to be used in the business operations that can either be current or fixed. Liabilities - Money that is owed to creditors and that can be current or long-term debt. Owner’s equity - Amount owners have invested and/or retained from the venture operations.
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TWIN CITY CARWASH
Forecasted Cash budget
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Forecasted Cash flow statement
Projected Cash Flow statement Projected cash available calculated from projected cash accumulations minus projected cash disbursements. It is not the same as profit. Sales may not be regarded as cash but however in our business sales are cash basis. Use of profit as a measure of success may be deceiving if there is significant positive cash flow. Cash flow can be projected using the indirect or direct method.
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