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Auto Parts Business Plan

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The auto parts industry has not experienced the same deep decline many other industries experienced during the current economic slowdown. In fact, people are more likely to repair their own vehicles when the economy is slow. However, not all auto parts businesses cater to just the home-based do-it-yourself repair market. Other markets include the auto manufacturing industry, classic car restorations, high performance vehicle industry and motorsports, to name a few. The auto parts business plan quickly identifies, in the Executive Summary and Company Description, the niche market the auto parts business will target, but also completes an in-depth analysis of the state of the industry and trends to establish the need for the new business. The business plan reviews information like the industry demand for the products and the interrelationship of the commercial and consumer markets. The business plan also needs to define whether the business will sell wholesale or retail and the demographics of the targeted customers. Will the business sell directly to vehicle owners who do their own repairs to save money, sell to auto repair businesses, operate as a wholesale distributor, or function as both retailer and wholesaler?

There are many potential investor issues addressed in a business plan, and they are the same ones the business owner needs to consider. In the business plan there is a discussion of:

  • The location that has enough space for the inventory and retail floor and offers visibility to the general public if retail is the primary source of income

  • Primary competitors and how a small-box operation can successfully compete against the large, chain auto parts retailers like Advance Auto Parts and AutoZone (to name just a couple)

  • Product line and how it meets the needs of the market niche, i.e. parts only for large trucks, products for all makes and models, etc.

  • Market entry strategy to gain attention and initiate early auto parts sales

  • Marketing strategies to build business awareness and generate sales

  • How products and services are differentiated, i.e. technicians help install parts on the spot, online pre-ordering of parts, parts for specific types of vehicles, etc.

  • Details like the types of vehicle licenses required for doing business in the auto industry, i.e. in-state used motor vehicle parts license, required  licenses if shipping parts interstate via a website, wholesale license, etc.

  • Staffing requirements for the retail store, including sales staff, inventory stockers and pickers, vehicle repair technicians

  • Specialized equipment and software needs, i.e. computerized engine diagnostic equipment that helps identify needed auto parts, computerized inventory system and catalogue, and so on

High brand recognition is one of the reasons the large-box auto parts businesses do well. When a new Pep Boys store opens, people know what the main product line is without going inside the store. Even a small auto parts business can and should develop a brand. For example, the business owner may decide to develop a brand that is associated with being a friendly, neighborhood business that gives personalized assistance to local consumers. There are many ways to increase demand for the auto parts, including offering special online or in-store discounts, or marketing to ancillary businesses like auto repair shops and auto dealers that can drive customers to your business.


Our support in preparation the Auto Parts Business Plan

The auto parts business plan will be heavily focused on describing how the business owner plans on creating a regular flow of customers to achieve profitability as quickly as possible. As a cash intensive business, the business plan needs solid, reliable sales projections. OGS Capital helps new auto parts businesses develop business plans with a powerful impact and honest assessment of the industry and market. Contact us via the online form to get the process of writing an auto parts business plan started now.

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