Auto Accessories and Detailing: J.E.M. Ventures, Inc.

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Auto Accessories and Detailing

BUSINESS PLAN

J.E.M. VENTURES, INC.


342 Eastwind
Newport, MI 48299


The purpose of this business plan is to secure funding for opening an automobile accessories franchise. The franchise will offer a wide range of products and services for the care and protection of automobiles and for the convenience of their owners. The franchiser provides full training and support to franchisees in order to ensure a successful business venture.


  • executive summary
  • initial costs
  • the principals
  • management plan
  • marketing plan
  • history
  • the product
  • financials
  • supporting information

EXECUTIVE SUMMARY

J.E.M. Ventures, Inc., is seeking a loan and investment of $50,000,00 to be used toward the purchase of an Auto Extras franchise. This would include the franchise fee, inventory, equipment, and working capital. This money, in addition to the $30,000 to be invested by J.E.M. Ventures, will be sufficient financing through the growing phase so that the business can operate as an ongoing profitable enterprise.

The goal of an Auto Extras franchise is to take advantage of the concept that almost everyone has a vehicle and most people like to keep their vehicles clean and neat. Auto Extras is among the leading auto accessory and detailing franchisers in two states, with a very strong track record of supporting franchisees.

INITIAL COSTS

(per J.E.M. Ventures, Inc.)
Franchise Fee$20,000.00
Inventory7,500.00
Equipment8,000.00
Furniture1,000.00
Signs3,000.00
Training3,000.00
Grand Opening Advertising3,500.00
Insurance2,000.00
Leasehold Improvements5,000.00
Security Deposit2,000.00
Legal and Accounting1,000.00
Working Capital24,000.00
Total$80,000.00

INITIAL COSTS

(per Auto Extras)
Franchise Fee$20,000.00
Inventory7,500.00
Equipment10,000.00
Furniture3,000.00
Signs5,000.00
Training3,000.00
Grand Opening Advertising5,500.00
Insurance2,000.00
Leasehold Improvements12,000.00
Security Deposit2,000.00
Legal and Accounting2,000.00
Working Capital24,000.00
Total$96,000.00

THE PRINCIPALS

Ely Masters is presently employed as a warehouse manager for a large produce wholesaler in Newport. He oversees the shipping and receiving department, as well as doing the computerized inventory and billing for all production of the company.

Ely has also attended classes at Newport Business College. Course studies include Business Communications, Small Business Management, and Marketing.

Jeff Masters is presently employed at Cel-Phone, where he has been the Senior Maintenance Technician for the past three years. Jeff has attended Newport Institute of Technology and is certified in the field of H.V.A.C.

Both Ely's and Jeff's work ethic and past experience in the managing of personnel, scheduling, and budgeting will prove beneficial to this endeavor.

MANAGEMENT PLAN

In order to manage the business as an owner-operator, Ely Masters is going to resign from his position with Homefresh Foods. He will attend the 15-day training class held by Auto Extras before the opening of the store.

Jeff Masters will be an owner-operator also, but will only work at the store on a part-time basis. He will keep his employment at Cel-Phone in order to support his family and also to assist Ely with his personal financial needs.

One full-time employee will be hired prior to the opening of the store so that said employee may also attend the training class. Additional employees will be added as needed.

MARKETING PLAN

The location of the store and its visibility to the general public is a very important consideration in planning a marketing strategy. Therefore, site selection must be apriority. Additionally, traffic flow and traffic mix is also an important consideration in developing a plan.

Auto Extras franchisees share an established name and an aggressive advertising plan that includes radio and television advertisement, as well as advertising at many major sporting events. Ads are also placed in a number of major and community newspapers.

Franchisees also take advantage of the use of window and building signs. Many also send out direct mailings that include self-promotional materials to households in the community.

HISTORY

Auto Extras is in the business of automobile aftermarket, accessories, electronics, and glass replacement.

Auto Extras started in 1974 with 6 stores; currently, there are 33 franchises in Michigan and 2 franchises in Ohio. The company is projecting a total of 60 stores by Fall, 1996.

Auto Extras is a franchise system designed to put entrepreneurs in business with a moderate amount of up-front capital.

Franchisees have been successful in starting with basics and expanding as their sales and knowledge of their particular markets have increased. This reduced overhead has translated into a shorter, more direct route to profit.

The franchiser has also found it helpful to provide the following types of assistance:

  • Site location and store layout assistance;
  • fifteen days of training before store opening, and one or more weeks of training after store opening;
  • ongoing technical support;
  • marketing assistance;
  • advertising support;
  • equipment and inventory vendors.

THE PRODUCT

Auto Extras presents a diversified and well-balanced product mix to effectively respond to automotive customers' "wants and needs." Five products and services are the backbone of the business:

Glass Replacement: Auto glass is a product that customers always need, from a replacement windshield to a quick chip repair.

Security Systems: In today's world, car prices average around $20,000.00, and a car is stolen approximately every 28 seconds. Therefore, an auto security system is a necessary and in-demand product.

Cellular Phones: With just over 5% subscriber penetration, the cellular market is expected to triple by the end of the 1990s. Also, with phones and cellular service becoming more affordable, these are no longer only for the upscale customer.

Detailing: Auto Extras offers interior and exterior cleaning and protection products. These products and services are aimed at increasing a vehicle's value and protecting the vehicle's finish.

Accessories: Auto Extras offers a number of auto accessories, from running boards, tonneau covers, and sunroofs to a wide range of electronics, including remote car starters, car stereo systems, and personal pagers.

FINANCIALS

Personal Financials

Jeff Masters
Assets: Newport Bank
300 Mariner Square
Newport, MI 48299
State Bank
One Main Square
St. George, MI 48290
401K Cel-Phone retirement$5,389.00
One Touch Teleservice$748.06
Real Estate Value $110,000.00
Liabilities: Liens on Real Estate: Newport Bank
Note on Automobile: GMAC
Mortgage: Blue Lake Mortgage
Life Insurance:
Cel-Phone: 3 times base salary
Transamerica $ 100,000-Whole Life
Income: Salary: Base $34,519.16+overtime
Bonus: 10% of base salary & overtime
Ely Masters
Assets: First Commercial Bank
250 Sterling Dr.
St. George, MI 48290
Real Estate Value $85,000.00
Liabilities: Mortgage: Hillwood Mortgage
P.O. Box 100
Indianapolis, IN 46240
Automobile: National Bank of Newport
P.O. Box 330
Newport, MI 48299
Life Insurance: Central Life$15,000
Travelers Insurance (MMH)$10,000
Income:
Salary: Base $26,000
Bonus: $1,000
Spouse Income: $20,000

Sample Operations Budgets

360K Sales
JanFebMarchAprilMayJuneJulyAugustSeptOctNovDecTotalYTD %
Income
Sales-Auto Glass6,3006,3008,1008,1008,8807,2008,1007,2008,1008,1006,3007,20090,0000.25
Sales-Cellular3,0243,0243,8883,8884,3203,4563,8883,4563,8883,8883,0243,45643,2000.12
Sales-Security6,8046,8048,7488,7489,7207,7768,7487,7768,7488,7486,8047,77697,2000.27
Sales-Accessories5,5445,5447,1287,1287,9206,3367,1286,3367,1287,1285,5446,33679,2000.22
Sales-Detailing3,2763,2764,2124,2124,6803,7444,2123,7444,2124,2123,2763,74446,8000.13
Miscellaneous Income00000000000000
Net Income %25,20025,20032,40032,40036,00028,80032,40028,80032,40032,40025,20028,800360,000
Cost of Sales
Cost - Auto Glass2,5202,5203,2403,2403,5522,8803,2402,8803,2403,2402,5202,88036,0000.40
Cost-Cellular1511511941942161731941731941941511732,1600.05
Cost - Security2,3812,3813,0623,0623,4022,7223,0622,7223,0623,0622,3812,72234,0200.35
Cost - Accessories2,4952,4953,2083,2083,5642,8513,2082,8513,2083,2082,4952,85135,6400.45
Cost - Detailing1641642112112341872111872112111641872,3400.05
Direct Labor3,0243,0243,8883,8884,3203,4563,8883,4563,8883,8883,0243,45643,2000.12
Total Cost of Sales10,73510,73513,80213,80215,28812,26913,80212,26913,80213,80210,73512,269153,3600.43
Gross Profit Margin14,46514,46518,59818,59820,71216,53118,59816,53118,59818,59814,46516,531206,6400.57
G& A Expenses
Salaries-Office00000000000000.00
Salaries - Sales00000000000000.00
Salaries - Management2,1672,1672,1672,1672,1672,1672,1672,1672,1672,1672,1672,16726,0000.07
Casual Labor4242424242424242424242425000.00
Payroll Taxes5775775775775775775775775775775775776,9200.02
Outside services00000000000000.00
Royalties1,5001,5001,5001,5001,5001,5001,5001,5001,5001,5001,5001,50018,0000.05
Office supplies1251251251251251251251251251251251251,5000.00
Rent3,0003,0003,0003,0003,0003,0003,0003,0003,0003,0003,0003,00036,0000.10
Repairs & Maintenance4174174174174174174174174174174174175,0000.01
Uniforms1251251251251251251251251251251251251,5000.00
Utilities3753753753753753753753753753753753754,5000.01
Bldg & Grds Maintenance2502502502502502502502502502502502503,0000.01
Automobile lease00000000000000.00
Automobile expense1671671671671671671671671671671671672,0000.01
Postage2002002002002002002002002002002002002,4000.01
Printing1001001001001001001001001001001001001,2000.00
Forms & Stationery7575757575757575757575759000.00
Telephone3333333333333333333333333333333333334,0000.01
Advertising2,5002,5002,5002,5002,5002,5002,5002,5002,5002,5002,5002,50030,0000.08
Membership4242424242424242424242425000.00
Dues & Subscriptions1717171717171717171717172000.00
Office Equipment Rental2525252525252525252525253000.00
Contributions1717171717171717171717172000.00
Educational1251251251251251251251251251251251251,5000.00
Entertainment2502502502502502502502502502502502503,0000.01
Legal & Accounting3333333333333333333333333333333333334,0000.01
Bank Charges2672672672672672672672672672672672673,2000.01
Interest expense8888888888881000.00
Licenses & fees3333333333333333333333334000.00
Property tax3333333333333333333333333333333333334,0000.01
Property tax - personal8383838383838383838383831,0000.00
Insurance - general2502502502502502502502502502502502503,0000.01
Insurance - Medical2082082082082082082082082082082082082,5000.01
Insurance - Workers Comp.2082082082082082082082082082082082082,5000.01
Employee Benefits4242424242424242424242425000.00
Equipment lease1,0461,0461,0461,0461,0461,0461,0461,0461,0461,0461,0461,04612,5520.03
Total G & A Expenses15,23915,23915,23915,23915,23915,23915,23915,23915,23915,23915,23915,239182,8720.51
Operating Profit (Loss)(775)(775)3,3583,3585,4731,2923,3581,2923,3583,358(775)1,29223,7680.07
Break Even Point for:
Fixed Cost in DollarsBreak Even= 1 Variable Costs in %
Total G & A Exp.Break Even= 1 Total Operating Exp in %
182,872182,872
Break Even =1 .430.574Break Even $318,592.33 per year
182,872182,872
Break Even =1 .430.574Break Even $26,549.36 per month
182,872182,872
Break Even =1 .430.574Break Even $6,126.78 per week
460K Sales
JanFebMarchAprilMayJuneJulyAugustSeptOctNovDecTotalYTD %
Income
Sales-Auto Glass8,0508,05010,35010,35011,3479,20010,3509,20010,35010,3508,0509,200115,0000.25
Sales-Cellular3,8643,8644,9684,9685,5204,4164,9684,4164,9684,9683,8644,41655,2000.12
Sales-Security8,6948,69411,17811,17812,4209,93611,1789,93611,17811,1788,6949,936124,2000.27
Sales-Accessories7,0847,0849,1089,10810,1208,0969,1088,0969,1089,1087,0848,096101,2000.22
Sales-Detailing4,1864,1865,3825,3825,9804,7845,3824,7845,3825,3824,1864,78459,8000.13
Miscellaneous Income00000000000000.00
Net Income %32,20032,20041,40041,40046,00036,80011,40036,80041,40041,40032,20036,800460,000
Cost of Sales
Cost - Auto Glass3,2203,2204,1404,1404,5393,6804,1403,6804,1404,1403,2203,68046,0000.40
Cost-Cellular1931932482482762212482212482481932212,7600.05
Cost - Security3,0433,0433,9123,9124,3473,4783,9123,4783,9123,9123,0433,47843,470035
Cost - Accessories3,1883,1884,0994,0994,5543,6434,0993,6434,0994,0993,1883,64345,5400.45
Cost - Detailing2092092692692992392692392692692092392,9900.05
Direct Labor3,8643,8644,9684,9685,5204,4164,9684,4164,9684,9683,8644,41655,2000.12
Total Cost of Sales13,71713,71717,63617,63619,53515,67717,63615,67717,63617,63613,71715,677195,9600.43
Gross Profit Margin18,48318,48323,76423,76426,46521,12323,76421,12323,76423,76418,48321,123264,0400.57
G & A Expenses
Salaries-Office00000000000000.00
Salaries - Sales2,1672,1672,1672,1672,1672,1672,1672,1672,1672,1672,1672,16726,0000.06
Salaries - Management2,1672,1672,1672,1672,1672,1672,1672,1672,1672,1672,1672,16726,0000.06
Casual Labor4242424242424242424242425000.00
Payroll Taxes89389389389389389389389389389389389310,7200.02
Subcontract labor3333333333333333333333333333333333334,0000.01
Outside services8383838383838383838383831,0000.00
Royalties1,5001,5001,5001,5001,5001,5001,5001,5001,5001,5001,5001,50018,0000.04
Office supplies1751751751751751751751751751751751752,1000.00
Rent3,0003,0003,0003,0003,0003,0003,0003,0003,0003,0003,0003,00036,0000.08
Repairs & Maintenance4174174174174174174174174174174174175,0000.01
Uniforms2002002002002002002002002002002002002,4000.01
Utilities5005005005005005005005005005005005006,0000.01
Bldg & Grds Maintenance5005005005005005005005005005005005006,0000.01
Automobile lease1251251251251251251251251251251251251,0000.00
Automobile expense3333333333333333333333333333333333334,0000.01
Postage2502502502502502502502502502502502503,0000.01
Printing1671671671671671671671671671671671672,0000.00
Forms & Stationery9292929292929292929292921,1000.00
Telephone3813813813813813813813813813813813814,5720.01
Advertising3,3333,3333,3333,3333,3333,3333,3333,3333,3333,3333,3333,33340,0000.09
Membership4242424242424242424242425000.00
Dues & Subscriptions1717171717171717171717172000.00
Office Equipment Rental2525252525252525252525253000.00
Contributions1717171717171717171717172000.00
Educational1251251251251251251251251251251251251,5000.00
Entertainment2502502502502502502502502502502502503,0000.01
Legal & Accounting3333333333333333333333333333333333334,0000.01
Bank Charges2672672672672672672672672672672672673,2000.01
Interest expense8888888888881000.00
Licenses & fees3333333333333333333333334000.00
Property tax3333333333333333333333333333333333334,0000.01
Property tax - personal8383838383838383838383831,0000.00
Insurance - general2502502502502502502502502502502502503,0000.01
Insurance - Medical2082082082082082082082082082082082082,5000.01
Insurance - Workers Comp.2082082082082082082082082082082082082,5000.01
Employee Benefits4242424242424242424242425000.00
Equipment lease1,0461,0461,0461,0461,0461,0461,0461,0461,0461,0461,0461,04612,5520.03
Total G & A Expenses19,94519,94519,94519,94519,94519,94519,94519,94519,94519,94519,94519,945239,3440.52
Operating Profit (Loss)(1,463)(1,463)3,8183,8186,5201,1783,8181,1783,8183,818(1,463)1,17824,6960.05
Break Even Point for:
Fixed Cost in DollarsBreak Even=1Variable Costs in %
Total G & A Exp.Break Even=1-Total Operating Exp in %
239,344239,344
Break Even =1.430.574Break Even $416,975.61 per year
239,344239,344
Break Even =1.430.574Break Even $34,747.97 per month
239,344239,344
Break Even =1.430.574Break Even $8,018.76 per week
600K Sales
JanFebMarchAprilMayJuneJulyAugustSeptOctNovDecTotalYTD %
Income
Sales-Auto Glass10,50010,50013,50013,50014,79912,00013,50012,00013,50013,50010,50012,000150,0000.25
Sales-Cellular5,0405,0406,4806,4807,2005,7606,4805,7606,4806,4805,0405,76072,0000.12
Sales-Security11,34011,34014,58014,58016,20012,96014,58012,96014,58014,58011,34012,960162,0000.27
Sales-Accessories9,2409,24011,88011,88013,20010,56011,88010,56011,88011,8809,24010,560132,0000.22
Sales-Detailing5,4605,4607,0207,0207,8006,2407,0206,2407,0207,0205,4606,24078,0000.13
Miscellaneous Income00000000000000
Net Income %42,00042,00054,00054,00060,00048,00054,00048,00054,00054,00042,00048,000600,000
Cost of Sales
Cost - Auto Glass4,2004,2005,4005,4005,9204,8005,4004,8005,4005,4004,2004,80060,0000.40
Cost-Cellular2522523243243602883242883243242522883,6000.05
Cost - Security3,9693,9695,1035,1035,6704,5365,1034,5365,1035,1033,9694,53656,7000.35
Cost - Accessories4,1584,1585,3465,3465,9404,7525,3464,7525,3465,3464,1584,75259,4000.45
Cost-Detailing2732733513513903123513123513512733123,9000.05
Direct Labor5,0405,0406,4806,4807,2005,7606,4805,7606,4806,4805,0405,76072,0000.12
Total Cost of Sales17,89217,89223,00423,00425,48020,44823,00420,44823,00423,00417,89220,448!255,6000.43
Gross Profit Margin24,10824,10830,99630,99634,52027,55230,99627,55230,99630,99624,10827,552344,4000.57
G & A Expenses
Salaries - Office5005005005005005005005005005005005006,0000.01
Salaries - Sales2,1672,1672,1672,1672,1672,1672,1672,1672,1672,1672,1672,16726,0000.04
Salaries - Management2,1672,1672,1672,1672,1672,1672,1672,1672,1672,1672,1672,16726,0000.04
Casual Labor4242424242424242424242425000.00
Payroll Taxes1,0831,0831,0831,0831,0831,0831,0831,0831,0831,0831,0831,08313,0000.02
Subcontract labor4174174174174174174174174174174174175,0000.01
Outside services8383838383838383838383831,0000.00
Royalties1,5001,5001,5001,5001,5001,5001,5001,5001,5001,5001,5001,50018,0000.03
Office supplies2502502502502502502502502502502502503,0000.01
Rent3,0003,0003,0003,0003,0003,0003,0003,0003,0003,0003,0003,00036,0000.06
Repairs & Maintenance4174174174174174174174174174174174175,0000.01
Uniforms2002002002002002002002002002002002002,4000.00
Utilities5425425425425425425425425425425425426,5000.01
Bldg & Grds Maintenance5005005005005005005005005005005005006,0000.01
Automobile lease1251251251251251251251251251251251251,5000.00
Automobile expense4174174174174174174174174174174174175,0000.01
Postage2502502502502502502502502502502502503,0000.01
Printing1671671671671671671671671671671671672,0000.00
Forms & Stationery9292929292929292929292921,1000.00
Telephone3813813813813813813813813813813813814,5720.01
Advertising3,3333,3333,3333,3333,3333,3333,3333,3333,3333,3333,3333,33340,0000.07
Membership4242424242424242424242425000.00
Dues & Subscriptions1717171717171717171717172000.00
Office Equipment Rental2525252525252525252525253000.00
Contributions1717171717171717171717172000.00
Educational1671671671671671671671671671671671672,0000.00
Entertainment3333333333333333333333333333333333334,0000.01
Legal & Accounting3333333333333333333333333333333333334,0000.01
Bank Charges2672672672672672672672672672672672673,2000.01
Interest expense8888888888881000.00
Licenses & fees3333333333333333333333334000.00
Property tax3333333333333333333333333333333333334,0000.01
Property tax - personal8383838383838383838383831,0000.00
Insurance - general2502502502502502502502502502502502503,0000.01
Insurance - Medical2082082082082082082082082082082082082,5000.00
Insurance - Workers Comp.2082082082082082082082082082082082082,5000.00
Employee Benefits4242424242424242424242425000.00
Equipment lease1,0461,0461,0461,0461,0461,0461,0461,0461,0461,0461,0461,04612,5520.02
Total G & A Expenses21,04421,04421,04421,04421,04421,04421,04421,04421,04421,04421,04421,044252,5240.42
Operating Profit (Loss)3,0643,0649,9529,95213,4776,5089,9526,5089,9529,9523,0646,50891,8760.15
Break Even Point for:
Fixed Cost in DollarsBreak Even=1 Variable Costs In %
Total G & A Exp.Break Even=1 Total Operating Exp in %
252524252524
Break Even =1.000.574Break Even $439,937.28 per year
252524252524
Break Even=1.000.574Break Even $36,661.44 permonth
252524252524
Break Even=1.000.574Break Even $8,460.33 per week

SUPPORTING INFORMATION

Technical & Financial Training Schedule

Week 1
MondayTuesdayWednesdayThursdayFriday
Intro to Auto ExtrasAuto Glass SalesAuto Glass TechSecurity TechAuto Extras Financial
Products/Services
"What do we sell?"WindshieldInstall 2 AlarmsRoyalty Reports
Insurance ClaimsDoor Glass950 and Hawk?Forms
Detailing SalesQuotingChip RepairNecessary Info
Manual Look-upBasics
Protection
Chemicals
Procedures, etc.
Discuss warranty
Computer Look-upPrep Alarm TechSecurity SalesFinancial planning
Perform anPrice Quoting
environmentalToolsProduct KnowledgeI Can Plan
package on a carDifferencesBasic Features
ToolingPartsComparisons
Urethane
MondayTuesdayWednesdayThursdayFriday
Discuss WarrantyGeneral Procedure
QuizQuizQuizQuizQuiz
Week 2
Security SalesCommunicationCommunicationAccessories TechComputer
SalesSales
KeylessInstall SunroofInvoicing
StartersCellular ProductCellular
KnowledgeOther
More ProductFraudRunning Boards
KnowledgeService
Pagers - PK
Current PromoPricing
Contracts
Security TechService ApsCommunicationAccessories TechComputer
Install: Tonneau Cover
Install loaded alarmInstant CreditInstall phone ifA/R
and a remote startpossibleMud FlapsA/P
ProgrammingBedlinerG/L
HandsetActivate 1 phoneDEGCheckbook
ChipActivate 1 pager
BookReview Tech WorkReview
QuizQuizQuizQuizQuiz
Week 3
Accessory SalesMerchandisingInstall Your ChoiceSales Your ChoiceCourse Test
SunroofsShowroomClass picks productClass picks product60 minutes
Running BdsDisplaysto install andto discuss and get75-100 questions
Tonneau CoversPricingparticipatesmore product
BedlinersSet-up, etc.directly inknowledge/features
installationand benefits
Review Test
Accessory SalesAdvertisingInstall Your ChoiceFinancial/ComputerOpen Discussion
Your Choice
Review currentClass picks product
Any Salesto install andClass picks area inCourse Evaluation
ReviewAuto Oneparticipatesfinancial/computer
Localdirectly instudy to practice or
Direct Mailinstallationlearn more aboutCertificates/Awards
QuizQuiz

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