3476443 mechanic auto repair sample business plan

8/6/2019 3476443 Mechanic Auto Repair Sample Business Plan

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February 2006

This sample business plan has been made available to users of Business Plan Pro,business planning software published by Palo Alto Software. Names, loc ations and numbers may have been c hanged, and substantial portions of the original plantext may have been omitted to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but

you do not have permission to reproduce, publish, distribute or even c opy thisplan as it exists here. Requests for reprints, ac ademic use, and other dissemination of this sample plan should be emailed to the marketing department of PaloAlto Software at [email protected]. For product information visit our Website: www.paloalto.co.uk or call: 0845 351 9924.

Copyright Palo Alto Software, Ltd., 2007 All rights reserved.


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Confidentiality Agreement The undersigned reader ac knowledges that the information provided by _______________ in this business plan is confidential; therefore, reader agrees not to disc lose it without the express written permission of _______________. It is ac knowledged by reader that information to be furnished inthis business plan is in all respec ts confidential in nature, other than information which is in the public domain through other means and that any disc losure or use of same by reader, may cause serious harm or damage to _______________.

Upon request, this document is to be immediately returned to _______________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities.


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Table of Contents1.0 Executive Summary.............................................................................................................................1 1.1 Mission........................................................................................................................................1 1.2 Objectives ...................................................................................................................................2 1.3 Keys to Success ...............

................................................................................

.........................2 2.0 Company Summary..................................

................................................................................

...........2 2.1 Company History................................................

........................................................................2 3.0 Products and Services........................................................................................................................4 4.0 Market AnalysisSummary..................................................................................................................5 4.1 Market Segmentation ................................................................................................................5 4.2 Target Market Segment Strategy.............................................................................................6 4.3 Servi

ce Business Analysis........................................................................................................7 4.3.1 Competition and Buying Patterns .........................................................................................7 5.0 Strategy and Implementation Summary ............................................................................................7 5.1 Competitive Edge ......................................................................................................................7 5.2 Marketing Strategy.....................................................................................................................7 5.3 Sales Strategy............................................................................................................................8 5.3.1 Sales Forecast........................................................................................................................8 5.4Milestones.....................................................................

..............................................................9 6.0 Web Plan Summary ..........................................................................................................................11 6.1 Website Marketing Strategy...................................................................................................12 6.2 Development Requirements ...................................................................................................13 6.2.1 Technical Specifications......................................................................................................14 7.0 Management Summary ....................................................................................................................14 7.1 Personnel Plan.........................................................................................................................15 8.0 Financial Plan ....................................................................................................................................16 8.1 Break-even Analysis................................................................................................................17 8.2 Projected Profit and Loss .......................................................................................................18 8.3 Projected Cash Flow...............................................................................................................21 8.4 Projected Balance Sheet ........................................................................................................24 8.5 Business Ratios .......................................................................................................................24 8.6 Financial Risks and Contingencies-2....................................................................................26

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Mad Keen Motors1.0 Executive SummaryMad Keen Motors is a family-owned business loc ated in Bac kwater Downs, a suburb of London. It has been under the ownership of the Keen family for 35 years andhas grown from a single mec hanical repair shop to five loc ations that deal with body and mechanical repairs, vehicle storage and towing, washing and valetingand used car sales. This plan is an internal document, outlining the effects on

the company of adding a website. The Mad Keen Motors website will ac t as an additional customer service element for all our garages, offering basic advice oncar maintenance, information about our services, staff, and loc ation, and regular disc ount offers for website visitors on featured repairs and maintenance. Our current phone-based and fac e-to-fac e customer service is excellent, but requires that potential customers make ac tive contac t with the company to learn about us. Most of our new business comes from referrals from current satisfied customers. We hope to make the referral proc ess easier, by encouraging existing customers to point out our website to their friends, colleagues, neighbours and family members, building familiarity with our company long before they need emergency car care or consider buying another car. The "advice" section will be crucial in establishing customers' trust in our expertise, as will our affiliation wit

h nationallysyndicated car experts. By helping loc al customers help themselves,Mad Keen hopes to build trust and relationships with existing and potential customers.

1.1 MissionMad Keen Motors provides excellent automotive care and service to all of our customers, whether they need to buy a used car, contrac t major body work or get asimple wash and wax.

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Mad Keen Motors1.2 ObjectivesThe objec tives of the Mad Keen Motors website are: 1. To drive traffic from thewebsite to the garage. 2. To expand the community of Mad Keen Motors customers.3. To provide customers with a substantial list of questions and answers regarding typical car repairs. 4. To allow convenient bookings for service and repairs.

1.3 Keys to SuccessThe keys to success for the company's website will be: 1. Compiling an extensiveand thorough listing of questions and answers that will encourage customers toreturn to the site whenever they have a problem with their cars. 2. Providing additional expert advice for answers that customers don't find in the base list ofquestions in a timely and thorough manner. 3. Offering Web-based promotions that will encourage customers to book cars into the garage through the website. 4.Communicating the site's existence to the businesses and residents within the loc al area. 5. Getting existing customers to rec ommend the website to others.

2.0 Company Summary

Mad Keen Motors is a family-owned business loc ated in Bac kwater Downs, a suburb of London. It has been under the ownership of the Keen family for 35 years andhas grown from a single mec hanical repair shop to five loc ations that deal with body and mechanical repairs, vehicle storage and towing, washing and valetingand used car sales.

2.1 Company HistoryMad Keen Motors has done very well. Annual net profits have exceeded 30,000 for the last two years. We dec reased the marketing budget last year, which led to asmall dec line in sales. By directing the missing amount (and a bit more) towards the creation of a website, we hope to increase overall sales and net profits.The table shows only last year's performance.

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Mad Keen Motors

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Mad Keen MotorsTable: Past PerformancePast Performance Sales Gross Margin Gross Margin % Operating Expenses Stock Turnover Balance Sheet FY 2003 Current Assets Cash Stock Other Current Assets TotalCurrent Assets Fixed Assets Capital Assets Accumulated Depreciation Total FixedAssets Total Assets Current Liabilities Accounts Payable Current Borrowing OtherCurrent Liabilities (interest free) Total Current Liabilities Fixed Liabilities

Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Capital and Liabilities Other Inputs Payment Days FY 2004 FY 2005 FY 2003 0 0 0.00% 0 0.00 FY 2004 0 0 0.00% 0 0.00 FY 2005 798,000 767,853 96.22% 695,820 5.01

0 0 0 0

0 0 0 0

203,488 12,040 70,000 285,528

0 0 0 0

0 0 0 0

1,250,000 15,000 1,235,000 1,520,528

0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0

20,000 0 0 20,000 750,000 770,000 400,000 314,488 36,040 750,528 1,520,528

0

0

30

3.0 Products and ServicesMad Keen Motors offers body and mec hanical repairs, vehicle storage and towing,washing and valeting and used car sales.

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Mad Keen Motors4.0 Market Analysis SummaryMad Keen will target the following market segments with its website: 1. 2. 3. 4.5. New car owners Older luxury car owners Sports car owners Lifetime owners Buyers

4.1 Market Segmentation

Mad Keen Motors segments its customers by type of car ownership. We believe thatthe type of car that a person owns says volumes about their driving and therefore their garage requirements. 1. New car owners: owners of newer cars are likelynot to use the company's garage repair service. If they do have problems with their car, they will return to the dealer where they bought it. These owners, though, will take great pride in their cars and will bring them often to the wash and valet service. The goal with these customers is to promote regular use of thewash and valet service. Eventually, as their warranty runs out, the goal will be to sell them on the efficiency, excellent service and price competitiveness ofMad Keen Motors' repair services. 2. Older luxury car owners: people who have either owned their high-end luxury cars for some years, or are unable to afford the expense of a brand new luxury car but want the feel of relaxed driving. Both

of these groups want to keep their cars in the best shape possible. Those who have bought second-hand cars will often spend many hours in their cars and will plac e much importance on reliability. These owners will bring their cars in for regular services and oc casional valets. 3. Sports car owners: people who are younger, or middle-aged men, and will regard performance as important. They will also pride themselves on the look of their car and if involved in a minor sc rapewill have the body repaired very quickly, since looks are also important. Thesepeople will have regular service and tune-ups on their cars. 4. Lifetime owners:many of these people have owned their cars for more than five or six years. They are more likely to be women. They are attac hed to their cars as friends and though it may be more sensible for them to purchase a new car, they will continueto have repairs done on their "old faithful." 5. Buyers: the site will providelinks to information on new and used car prices and include tips on what to look

for when buying a car.

Table: Market AnalysisMarket Analysis 2005 Potential Customers New Car Owners Sports Car Owner Older luxury car owner Lifetime Owners Used Car Buyers Total Growth 2% 5% 10% 2% 12% 5.40% 52,000 25,000 30,000 80,000 40,000 227,000 2006 53,040 26,250 33,000 81,60044,800 238,690 2007 54,101 27,563 36,300 83,232 50,176 251,372 2008 55,183 28,941 39,930 84,897 56,197 265,148 2009 56,287 30,388 43,923 86,595 62,941 280,134 CAGR 2.00% 5.00% 10.00% 2.00% 12.00% 5.40%

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Mad Keen Motors

4.2 Target Market Segment StrategyAside from the washing and valet services, we are currently targeting owners ofolder cars or cars in need of much maintenance, since that will provide us the greatest revenue.

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Mad Keen Motors4.3 Service Business AnalysisThe garage repair business as a whole is fragmented. There are a few major dealerships in eac h area, with a larger number of small garage repair shops, like Mad Keen Motors. Dealers target customers who buy new and used cars from them. Small garages rely on word of mouth and get most new customers bec ause of emergency car care needs.

4.3.1 Competition and Buying PatternsWord of mouth is important in the car repair business, since people are very wary of garages, due to their lac k of knowledge of cars and engines. Mad Keen Motors leads the loc al competition in regards to word of mouth, having been in business for over three dec ades under the same ownership. Competition from dealerships is bec oming stiffer. Car design is bec oming more and more specialized, ascar manufacturers aim to encourage owners of their vehicles to have services carried out at their franchised dealerships. However, small garages like Mad Keen have a price advantage over dealership, usually charging 50-70% less per hour forrepair work.

5.0 Strategy and Implementation SummaryThe marketing budget for this website is limited, so we will be relying on grassroots and viral marketing to spread the word about the site. In addition, the narrow geographical foc us of the business does not necessitate large sc ale advertising and marketing support. We will foc us on communicating with neighbours, nearby businesses, and existing customers to get the word out about the new website.

5.1 Competitive EdgeThe website's competitive edge is that it: 1. Provides a loc al service for Backwater Downs car owners and wannabe car owners; 2. Has the benefit of over 60 years of automobile repair experience to draw from; 3. Provides an additional modeof communication for customers. In addition, the website itself will be a compe

titive edge for the company as a whole, opening up new methods of communicatingwith our customers and potential customers, and making bookings and customer service faster and more convenient.

5.2 Marketing StrategyEach of the car-owning groups identified in the Market Segmentation will be targeted, with different portions of the website directed at their unique needs. Ourmarketing strategy for the website itself involves mailing fliers to all existing customers in our database, as well as to nearby neighbours and businesses. The fliers will include a special savings code - by going to the website and entering the code on the mailer, they ac cess a 10% off coupon they can use on theirnext visit.

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Mad Keen Motors5.3 Sales StrategyMad Keen c loses the sale by always putting our best fac e forward. Employees are thoroughly trained in c ustomer service, the fac ilities are attrac tive and clean, and estimates for repair work are prepared promptly. A customer who is notsuffering an immediate emergency will "shop around" until he finds a shop thatfeels trustworthy - it is our job to earn that trust in every encounter and cont

rac t.

5.3.1 Sales Forecast"Standard revenues" represents projec tions of existing revenue streams over thenext three years. The second line shows projec tions for additional sales and costs directly related to the new website, either from increased visibility or online coupons. By the end of the 2006, we expec t almost 2.5% of monthly sales tobe directly trac eable to the website, rising to 4% by the end of 2008.

Table: Sales ForecastSales Forecast FY 2006 Sales Revenue from all Standard Streams Increased Sales through website Other Total Sales Direct Cost of Sales Direct Costs Other Subtota

l Direct Cost of Sales 804,000 18,360 0 822,360 FY 2006 32,894 0 32,894 FY 2007 823,000 0 843,080 FY 2007 33,723 0 33,723 FY 2008 836,482 35,000 0 871,482 FY 2008,859

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Mad Keen Motors

5.4 MilestonesThe following milestones illustrate the timeline for the development and implementation of our website.

Table: Milestones

Milestones Milestone Draft layout to owners Website Content Developed Initial UICompleted Back End Developed Design Approved Graphics & Logos Completed BETA Complete User Testing Necessary Changes Site Launch Totals Start Date 01/02/2006 01/02/2006 10/02/2006 01/03/2006 16/03/2006 20/03/2006 20/03/2006 01/04/2006 07/04/2006 12/04/2006 End Date 10/02/2006 01/03/2006 01/03/2006 15/03/2006 20/03/2006 30/03/2006 30/03/2006 07/04/2006 11/04/2006 12/04/2006 Budget 250 0 500 700 0 0 50 200 0 2,350 Manager Adrian Mark/Barry Adrian Adrian Mark/Barry Elisabeth Adrian Adrian Adrian Adrian Department Consultant Owners Consultant Consultant Owners Admin Consultant Consultant Consultant Consultant

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Mad Keen Motors

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Mad Keen Motors6.0 Web Plan SummaryThe key champion for the development of the website is the co-owner of Mad KeenMotors, Mark Keen. He will be responsible for managing the development of the site and will work closely with Adrian Monkey on the design and creation. He willalso be responsible for implementing the promotions that will be run at least monthly on the site and will maintain the "Ask the Mechanic" section on the site.

Most of the site development will be carried out by the consultant, Adrian Monkey. He will initially be paid a pre-arranged fee as he completes eac h stage of development. Later he will be paid a monthly retainer to maintain the site. BarryKeen will work with Mark to develop the content section of the site dealing with typical car problems and tips on maintaining your vehicle during the differentseasons. Website Demographics Strategy The website will foc us on the the firstthree segments, since the last segment of lifetime owners are less likely to beconnec ted to the Internet. It will also target people in the loc al area who aim to move into any of these categories (buyers), by providing information on how to buy a used car, and links to sites that contain new car reviews and pricinginformation. Traffic Forecast The following traffic forec ast has been c reatedafter researching other small loc al service websites, and based on the size of

the potential market with Internet presence in the Bac kwater Downs area. It isa conservative estimate of monthly page views and unique user sessions. Feb Unique Users Page Views Total 100 500 Mar 175 800 Apr 250 1250 May 450 2200 Jun 6002900 Jul 400 2000 Aug 400 2000 Sep 600 2900 Oct 600 2900 Nov 500 2400 Dec 400 2000 Jan 600 2900

600

975

1500

2650

3500

2400

2400

3500

3500

2900

2400

3500

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Mad Keen Motors6.1 Website Marketing StrategyThe website will have two main goals: 1. To provide potential and existing customers with information about their cars through the provision of a typical problems area, plus an Ask the Mechanic Question and Answer section, where they can have specific questions about their cars answered. 2. To ease the service experience and improve customer service through online booking database section that wil

l allow them to review their cars service and repair rec ords. Key sections of the website will be: Question and Answer section. Ask the Mechanic section. Buyers guide--how to look for a new car. Links to information on car reviews--new andused.

Strategic Internet Alliances Mad Keen Motors will rely on its alliance with Webconsultant Adrian Monkey to ensure that the site is maintained and regularly updated. Business Model The aim of this site is not to earn direc t sales, but to increase customer satisfac tion rates, and therefore increase retention levels by10%. In addition, the goal will be to encourage other customers in the Bac kwater Downs area to choose Mad Keen Motors over other service and repair fac ilities. The overall goal of the site in terms of increased sales is 7-10% over the ne

xt year. Site Positioning For sports car owners who value the importance of their car's performance Mad Keen Motors website will give them tips on how to keep their car in tip-top running condition, with things that they can do themselves,as well as solutions that their loc al garage can provide. Unlike the loc al quick stop garages, it will provide part of the full-service solution for sports car owners. Unlike dealerships, prices will be competitive. For older luxury car owners who value personal service, Mad Keen Motors website will provide another way for them to interac t with the garage and provide excellent customer service.Unlike dealerships websites, it will not simply foc us on new cars, it will provide them valuable information on their make and model of older luxury car as well as a full database of information on their car that they will be able to ac cess at any time. For buyers who require an abundance of information when makinga purchase, Mad Keen Motors website will provide an extensive list of online res

ources, so will ac t as a starting point for their search for information eac htime they ac cess the Web. Unlike other online sites it will also give customersinformation about what to look for in a used car, that may save them the time and money of a mec hanics inspec tion.

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Mad Keen Motors6.2 Development RequirementsWebsite Outline The site will be designed with the following technology: ColdFusion, SQL and HTML. Home Page: explains the website's relation to the company, with visible links to the other sections of the site. Section 1 - Q&A: begins withsearch. Visible links will go off to the subsections below. Ask the Mechanic: simple form that sends directly to the head mechanic. Q&A Browse: users will be a

ble to browse through other customer's Q&A sessions. Section 2 - Booking Page 1:first page will display available dates, customer clicks on preferred availabletime, and proc eeds to the next page. Page 2: customer fills out name, phone number, and car problem. Page 3: confirmation page for customer to print off as areminder. User Car Information: first page has two links: "Buying a car" and "Selling a car." Buying a car: first half of page with summary information, bottomhalf contains links to helpful sites. Selling a car: first half of page with summary information, bottom half contains links to helpful sites.

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Mad Keen Motors6.2.1 Technical SpecificationsFront End Bec ause most people in the UK currently ac cess the Web from their homes at 56.6k or less, the user interfac e will be a simple as possible, though still looking professional. Graphics will be kept to a minimum in order to keep download times short. Though pictures of cars for sale will take up room, thumbnail views with access to larger views will be used. Information will be organized

in buckets listed on front of eac h page so navigation will be as simple as possible for users. The Objectives of the User Interfac e will be: 1. To allow easyand fast navigation for the users. 2. To create interest so that people will use and return to the site. 3. Display a lot of content information in a simple amanner as possible. 4. To encourage user interac tion, i.e. bookings online andquestions to the mec hanics. Back End The bac k end of the site will be very simple, since it is really an information only website. There will be a number of areas where a visitor can send an email to request an answer to an expert question, to get information about a used car for sale or to book in their car for service. Visitors will be able to interac t with the site in two ways: 1. Send an email requesting an appointment to have their car cleaned, valeted or repaired. 2.To ask questions about problems they may be having with their car, for example

"I had new brake pads fitted on my car approximately eight moths ago and they have started squeaking. Is it possible that they are worn out already?" We will behiring a Web engineer, Adrian Monkey, to build the website, so he will build this functionality into the site. We will rely on Adrian to give us rec ommendations for the database we will use to support the site. Resource Requirements Mad Keen Motors will hire the services of a consultant, Adrian Monkey, to build the website. Both the bac k end and the front end will be outsourced. The contents ofthe Website will be developed by the company owners, who between them have over60 years of automobile repair experience, and the secretary who has excellent writing skills. Future Development Future development will be assessed after thewebsite has been launched and user tested. It is hoped that the site will be popular enough to include an area for online repair bookings.

7.0 Management SummaryMad Keen Motors is a family business, in which eac h employed family member oversees the area of operations best suited to his or her talents. Mark Keen is in charge of marketing and advertising, and non-mec hanic employee training and personnel issues. Mark will oversee the company's new website Barry Keen is head mec hanic, and supervises all the mec hanics working for Mad Keen Motors. Elisabeth Keen oversees the financial aspec ts of the business, including billing, ac counting, and taxes. In weekly meetings, these managers follow up on planned goalsand deadlines and plan for the ongoing operations of the business. Page 14


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Mad Keen Motors7.1 Personnel PlanMad Keen employees ten full-time mec hanics, as well as eight other full-time workers who serve as rec eptionists, car wash and valet attendants, and salespeople.

Table: Personnel

Personnel Plan Mark Keen, Co-Owner Barry Keen, Co-Owner Mechanics Other Staff Elisabeth Keen, Admin Total People Total Payroll FY 2006 24,000 18,000 240,000 102,00018,000 17 402,000 FY 2007 20,000 20,000 242,000 103,000 20,000 17 405,000 FY 200820,000 243,000 104,000 20,000 19 407,000

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Mad Keen Motors8.0 Financial PlanWebsite Expenses and Costs: We expec t to spend 6,200 over the next year on developing and then maintaining the website, with regular updates. We project another6,200 will be needed for the same areas over the following two years. In addition, we will have a slightly lower price/c ost spread for website-related sales, once online coupons and other disc ounts are included. These have been fac tored

in to the cost of sales. We will trac k this amount with a special record for "website coupons" in our sales and customer database. Website Revenues: We anticipate an additional 18,360 of sales in the next year direc tly related to the development of the website. This is based on reports from other loc ally foc used service businesses which implemented websites to enhance visibility and promote sales through online disc ounts.

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Mad Keen Motors8.1 Break-even AnalysisThe following table and chart show our break-even analysis with the website in plac e.

Table: Break-even AnalysisBreak-even Analysis Monthly Revenue Break-even Assumptions: Average Percent Vari

able Cost Estimated Monthly Fixed Cost 40,547

4% 38,925

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Mad Keen Motors8.2 Projected Profit and LossThis table outlines additions to the standard operating expenses for developingand maintaining the website. Detailed monthly numbers can be found in the appendix.

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Mad Keen Motors

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Mad Keen MotorsTable: Profit and LossPro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales TotalCost of Sales Gross Margin Gross Margin % FY 2006 822,360 32,894 0 32,894 789,466 96.00% FY 2007 843,080 33,723 0 33,723 809,357 96.00% FY 2008 871,482 34,859 0 34,8596.00%

Expenses Payroll Other Expense Account Name Depreciation Standard Operating Expenses Website Infrastructure Website Development Website Maintenance Expensed Equipment Payroll Taxes (National Insurance, etc.) Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales

402,000 0 4,800 0 0 0 0 0 60,300 0 467,100 322,366 327,166 73,700 74,600 1

405,000 0 4,800 190,000 0 0 1,500 2,000 60,750 0 470,550 338,807 343,607 71,2.20%

407,000 0 4,800 196,000 0 0 1,500 1,200 61,050 0 472,850 363,772 368,572 69,

3.68%

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Mad Keen Motors

8.3 Projected Cash FlowMad Keen Motors is in a strong c ash position right now, and can afford the relatively small expenses to start up the website. The following table and chart show our projected cash flow and cash balance.

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Mad Keen MotorsTable: Cash FlowPro Forma Cash Flow FY 2006 Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received VAT Received (Output Tax) VAT Repayments New Current Borrowing New Other Liabilities (interest-free) New FixedLiabilities Sales of Other Current Assets Sales of Fixed Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Sp

ending Bill Payments Subtotal Spent on Operations Additional Cash Spent VAT PaidOut (Input Tax) VAT Payments Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Fixed Liabilities Principal Repayment Purchase Other Current Assets Purchase Fixed Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance FY 2007 FY 2008

822,360 822,360

843,080 843,080

871,482 871,482

143,913 0 0 0 0 0 0 0 966,273 FY 2006

147,539 0 0 0 0 0 0 0 990,619 FY 2007

152,509 0 0 0 0 0 0 0 1,023,991 FY 2008

402,000 232,757 634,757

405,000 245,377 650,377

407,000 252,838 659,838

13,175 98,254 0 0 24,000 0 0 0 770,186 196,087 399,575

15,026 164,996 0 0 24,000 0 0 0 854,400 136,219 535,794

15,274 137,235 0 0 24,000 0 0 0 836,348 187,643 723,438

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Mad Keen Motors

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Mad Keen Motors8.4 Projected Balance SheetOur Net Worth will continue to grow as we pay off the mortgage for the two newest Mad Keen Motors loc ations.

Table: Balance SheetPro Forma Balance Sheet FY 2006 Assets Current Assets Cash Stock Other Current A

ssets Total Current Assets Fixed Assets Fixed Assets Accumulated Depreciation Total Fixed Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Fixed Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth 19,446 0 130,738 150,183 726,000 876,183 400,000 350,528 174,066 924,594 1,800,777 826,340 20,233 0 263,250000 985,483 400,000 524,594 187,185 1,111,779 2,097,262 848,528 20,830 0 400,485,000 1,099,316 400,000 711,779 206,341 1,318,119 2,417,435 917,634 FY 2007 FY 2008

399,575 2,748 70,000 472,323

535,794 2,817 70,000 608,611

723,438 2,912 70,000 796,350

1,250,000 19,800 1,230,200 1,702,523 FY 2006

1,250,000 24,600 1,225,400 1,834,011 FY 2007

1,250,000 29,400 1,220,600 2,016,950 FY 2008

8.5 Business RatiosThe following table outlines some of the more important ratios from the GeneralAutomotive Repair Shop industry. The final column, Industry Profile, details specific ratios based on the industry.

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Mad Keen MotorsTable: RatiosRatio Analysis Sales Growth Percent of Total Assets Stock Other Current Assets Total Current Assets Fixed Assets Total Assets Current Liabilities Fixed Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net

Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Stock Turnover Accounts Payable Turnover Payment Days TotalAsset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout FY 2006 3.05% FY 2007 2.52% FY 2008 3.37% Industry Profile 5.37%

0.16% 4.11% 27.74% 72.26% 100.00% 8.82% 42.64% 51.46% 48.54%

0.15% 3.82% 33.18% 66.82% 100.00% 15.46% 38.28% 53.73% 46.27%

0.14% 3.47% 39.48% 60.52% 100.00% 20.89% 33.62% 54.50% 45.50%

8.50% 24.67% 45.07% 54.93% 100.00% 22.43% 26.48% 48.91% 51.09%

100.00% 96.00% 74.83% 0.00% 39.20%

100.00% 96.00% 73.80% 0.00% 40.19%

100.00% 96.00% 72.32% 0.00% 41.74%

100.00% 100.00% 71.18% 1.75% 2.37%

3.14 3.13 51.46% 30.09% 14.61% FY 2006 21.17% 21.06%

2.15 2.14 53.73% 31.51% 14.58% FY 2007 22.20% 22.06%

1.89 1.88 54.50% 32.12% 14.61% FY 2008 23.68% 22.49%

1.48 0.91 54.67% 3.63% 8.00%

n.a n.a

8.86 11.94 30 0.48

12.12 12.17 29 0.46

12.17 12.17 30 0.43

n.a n.a n.a n.a

1.06 0.17

1.16 0.29

1.20 0.38

n.a n.a

322,140 4.37

325,128 4.75


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375,034 5.27

n.a n.a

2.07 9% 3.13 1.00 0.00

2.18 15% 2.14 0.99 0.00

2.31 21% 1.88 0.95 0.00

n.a n.a n.a n.a n.a

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Mad Keen Motors8.6 Financial Risks and Contingencies-2Risks and Assumptions The key risk with this website for Mad Keen Motors is thatpeople will get information on their cars from other plac es. Since it is not typical for small garages to have this much c ontent on their sites, Bac kwater Downs loc als may not think to search for car and garage information on the Web.As cars and components bec ome more specialized and car owners may tend to trust

dealerships more, they will be less likely to use their loc al garage. This isa risk to the business as a whole, though we hope that the website will help toreduce Mad Keen Motors' exposure to this risk. If the site is not supported properly and people do not get quick answers to their questions, they may assume that service from the garage itself is lac king too. Therefore, emails must be answered promptly, the site must be updated regularly and the garage workers shouldalso be aware of information and features on the website, and be educated aboutit when they speak to customers. Contingency Plan Since there will be minimal integration between the website and Mad Keen Motors' c ore business, a contingencyplan is not a huge concern. If use of the site falls well below forec asted levels and it proves not to be cost effective to continue the site in its current format, the site will be changed to essentially a business card site, where peopl

e can get information about the garage, loc ation, hours, ownership information,etc.

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AppendixTable: Sales ForecastSales Forecast Feb Sales Revenue from all Standard Streams Increased Sales through website Other Total Sales Direct Cost of Sales Direct Costs Other Subtotal Direct Cost of Sales VAT Rate 17.50% 17.50% 17.50% 67,000 660 0 67,660 Feb 2,706 0 2,Mar 67,000 1,000 0 68,000 Mar 2,720 0 2,720 Apr 67,000 1,400 0 68,400 Apr 2,73000 1,700 0 68,700 May 2,748 0 2,748 Jun 67,000 1,350 0 68,350 Jun 2,734 0 2,

50 0 68,350 Jul 2,734 0 2,734 Aug 67,000 1,350 0 68,350 Aug 2,734 0 2,734 Sep700 Sep 2,748 0 2,748 Oct 67,000 2,050 0 69,050 Oct 2,762 0 2,762 Nov 67,000 2v 2,776 0 2,776 Dec 67,000 1,700 0 68,700 Dec 2,748 0 2,748 Jan 67,000 1,700 0 2,748

VAT Rate 17.50% 17.50%

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AppendixTable: PersonnelPersonnel Plan Feb Mark Keen, Co-Owner Barry Keen, Co-Owner Mechanics Other Staff Elisabeth Keen, Admin Total People Total Payroll 0% 0% 0% 0% 0% 2,000 1,500 20,000 8,500 1,500 17 33,500 Mar 2,000 1,500 20,000 8,500 1,500 17 33,500 Apr 2,000 ,500 1,500 17 33,500 May 2,000 1,500 20,000 8,500 1,500 17 33,500 Jun 2,000 1,5000 1,500 17 33,500 Jul 2,000 1,500 20,000 8,500 1,500 17 33,500 Aug 2,000 1,500

1,500 17 33,500 Sep 2,000 1,500 20,000 8,500 1,500 17 33,500 Oct 2,000 1,500 2500 17 33,500 Nov 2,000 1,500 20,000 8,500 1,500 17 33,500 Dec 2,000 1,500 20,000 17 33,500 Jan 2,000 1,500 20,000 8,500 1,500 17 33,500

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AppendixTable: Profit and LossPro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales TotalCost of Sales Gross Margin Gross Margin % VAT Rate 17.50% Feb 67,660 2,706 0 2,706 64,954 96.00% Mar 68,000 2,720 0 2,720 65,280 96.00% Apr 68,400 2,736 0 2,736 65,6May 68,700 2,748 0 2,748 65,952 96.00% Jun 68,350 2,734 0 2,734 65,616 96.00% Ju34 0 2,734 65,616 96.00% Aug 68,350 2,734 0 2,734 65,616 96.00% Sep 68,700 2,748

52 96.00% Oct 69,050 2,762 0 2,762 66,288 96.00% Nov 69,400 2,776 0 2,776 66,624c 68,700 2,748 0 2,748 65,952 96.00% Jan 68,700 2,748 0 2,748 65,952 96.00%

Expenses Payroll Other Expense Account Name Depreciation Standard Operating Expenses Website Infrastructure Website Development Website Maintenance Expensed Equipment Payroll Taxes (National Insurance, etc.) Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales

VAT Rate 33,500 17.50% 15.00% 0.00% 17.50% 17.50% 17.50% 15.00% 17.50% VAT Rate 0 400 15,000 0 600 0 2,000 5,025 0 38,925 26,029 26,429 6,233 5,939 13,857 20.480 0 600 0 0 5,025 0 38,925 26,355 26,755 6,217 6,041 14,097 20.73% 33,500 0

5 0 38,925 26,739 27,139 6,200 6,162 14,377 21.02% 33,500 0 400 15,000 350 07,027 27,427 6,183 6,253 14,591 21.24% 33,500 0 400 15,000 350 0 150 0 5,02591 6,167 6,157 14,367 21.02% 33,500 0 400 15,000 350 0 150 0 5,025 0 38,925162 14,379 21.04% 33,500 0 400 15,000 0 0 150 0 5,025 0 38,925 26,691 27,0911.05% 33,500 0 400 15,000 0 0 150 0 5,025 0 38,925 27,027 27,427 6,117 6,270 400 15,000 0 0 150 0 5,025 0 38,925 27,363 27,763 6,100 6,379 14,884 21.0 150 0 5,025 0 38,925 27,699 28,099 6,083 6,485 15,131 21.80% 33,500 0 40038,925 27,027 27,427 6,067 6,288 14,672 21.36% 33,500 0 400 15,000 0 0 150 7 27,427 6,050 6,293 14,684 21.37%

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AppendixTable: Cash FlowPro Forma Cash Flow Feb Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received VAT Received (Output Tax) VAT Repayments New Current Borrowing New Other Liabilities (interest-free) New Fixed Liabilities Sales of Other Current Assets Sales of Fix ed Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spend

ing Bill Payments Subtotal Spent on Operations Additional Cash Spent VAT Paid Out (Input Tax) VAT Payments Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Fix ed Liabilities Principal Repayment Purchase OtherCurrent Assets Purchase Fix ed Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance 17.50% 17.50% VAT Rate 754 0 0 0 2,000 0 0 0 56,827 22,674 226,10 0 0 0 53,454 26,446 252,608 754 0 0 0 2,000 0 0 0 53,540 26,830 279,438429 (6,707) 272,731 1,230 0 0 0 2,000 0 0 0 55,843 24,469 297,199 1,232 0 320,709 1,232 32,446 0 0 2,000 0 0 0 89,249 (8,938) 311,772 1,237 0 0 0 693 1,240 0 0 0 2,000 0 0 0 56,920 24,214 359,907 1,242 32,359 0 0 2,000 ,230 0 0 0 2,000 0 0 0 57,103 23,619 375,688 1,235 0 0 0 2,000 0 0 0 563 54,073 33,500 17,200 50,700 33,500 17,287 50,787 33,500 17,443 50,943 33,5003,500 20,069 53,569 33,500 20,071 53,571 33,500 20,064 53,564 33,500 20,180 53,

283 53,783 33,500 20,374 53,874 33,500 20,100 53,600 17.50% 17.50% VAT Rate 11,8410 79,501 Feb 11,900 0 0 0 0 0 0 0 79,900 Mar 11,970 0 0 0 0 0 0 0 80,11,961 0 0 0 0 0 0 0 80,311 Jun 11,961 0 0 0 0 0 0 0 80,311 Jul 11,9610 0 80,723 Sep 12,084 0 0 0 0 0 0 0 81,134 Oct 12,145 0 0 0 0 0 0 0 c 12,023 0 0 0 0 0 0 0 80,723 Jan Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

67,660 67,660

68,000 68,000

68,400 68,400

68,700 68,700

68,350 68,350

68,350 68,350

68,350 68,350

68,700 68,700

69,050 69,050

69,400 69,400

68,700 68,700

68,700 68,700

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AppendixTable: Balance SheetPro Forma Balance Sheet Feb Assets Current Assets Cash Stock Other Current Assets Total Current Assets Fix ed Assets Fix ed Assets Accumulated Depreciation Total Fixed Assets Total Assets Liabilities and Capital Current Liabilities AccountsPayable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Fix ed Liabilities Total Liabilities Paid-in Capital Retained Earnings Earning

s Total Capital Total Liabilities and Capital Net Worth 20,000 0 0 20,000 750,000 77000 400,000 314,488 36,040 750,528 1,520,528 750,528 16,624 0 11,087 27,710 74800,000 350,528 13,857 764,385 1,540,095 764,385 16,707 0 22,233 38,940 746,000 00 350,528 27,954 778,482 1,563,422 778,482 16,807 0 33,449 50,256 744,000 794,0,528 42,331 792,859 1,587,115 792,859 18,444 0 44,435 62,879 742,000 804,879 48 56,921 807,449 1,612,328 774,000 19,400 0 55,166 74,566 740,000 814,566 400,0288 821,816 1,636,383 788,367 19,402 0 65,895 85,298 738,000 823,298 400,000 3536,195 1,659,493 802,746 19,391 0 76,624 96,015 736,000 832,015 400,000 350,528585 1,682,601 784,690 19,504 0 87,410 106,914 734,000 840,914 400,000 350,528 13 1,706,137 799,327 19,604 0 98,254 117,858 732,000 849,858 400,000 350,528 129,729,965 814,211 19,704 0 109,157 128,861 730,000 858,861 400,000 350,528 144,71754,098 796,984 19,430 0 119,950 139,380 728,000 867,380 400,000 350,528 159,382

77,290 811,656 19,446 0 130,738 150,183 726,000 876,183 400,000 350,528 174,0660,777 826,340 203,488 12,040 70,000 285,528 226,162 9,334 70,000 305,495 252,6080 329,222 279,438 3,878 70,000 353,315 272,731 2,748 70,000 345,479 297,199 2,7933 320,709 2,734 70,000 393,443 311,772 2,734 70,000 384,506 335,693 2,748 70,9,907 2,762 70,000 432,669 352,068 2,776 70,000 424,844 375,688 2,748 70,000 442,748 70,000 472,323 Starting Balances Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

1,250,000 15,000 1,235,000 1,520,528

1,250,000 15,400 1,234,600 1,540,095 Feb

1,250,000 15,800 1,234,200 1,563,422 Mar

1,250,000 16,200 1,233,800 1,587,115 Apr

1,250,000 16,600 1,233,400 1,578,879 May

1,250,000 17,000 1,233,000 1,602,933 Jun

1,250,000 17,400 1,232,600 1,626,043 Jul

1,250,000 17,800 1,232,200 1,616,706 Aug

1,250,000 18,200 1,231,800 1,640,241 Sep

1,250,000 18,600 1,231,400 1,664,069 Oct

1,250,000 19,000 1,231,000 1,655,844 Nov

1,250,000 19,400 1,230,600 1,679,036 Dec

1,250,000 19,800 1,230,200 1,702,523 Jan

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3476443 mechanic auto repair sample business plan

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