Table of Content

    Do you want to start Auto Parts Store business plan?

    Are you looking to learn how to open auto part store? The business can be a great investment if you have a basic understanding of different kinds of automobiles and their part requirements. Starting an auto parts business is relatively simpler as it doesn’t require abundant resources.

    The business management side is also relatively easy as you can start it on a small scale. There isn’t a need to have a huge team or a large shop to start up the business initially. This can significantly benefit you if you are new to management and business.

    You can also easily draft up an ecommerce startup business plan for your business. As a guide you can look at related plans such as convenience store business plan. For a better reference, you can take help from this automobile parts business plan.

    Executive Summary

    2.1 The Business

    Best Rev will be an auto parts store owned by Sheldon Cooper in Manhattan. The primary aim of the business will be to reduce the hassle of vehicle owners by providing them best condition spare parts for their automobiles. The business will offer a wide range of services and products for the ease of its customers.

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    2.2 Management of Auto Parts Store

    If you are just learning how to start a auto parts business, the best advice you will find is to establish strong management. You can have good management through adequate planning. And there is no better way to plan out every aspect of your store than through an auto parts store business plan pdf like the one presented here.

    You can also take aid from relevant business plans like used auto parts business plan or an auto dealership business plan.

    In this business plan motor parts shop example, we will guide you about all the components of a strong business plan. Of course, you can alternatively also hire business plan experts to do this work for you.

    2.3 Customers of Auto Parts Store

    The customers of Best Rev will belong to all classes, and work domains as vehicles have become a fundamental part of life for a majority of the world’s population. The recurring customers of the business will be:

    • Personal Vehicle Owners
    • Private Dealerships
    • Professional Racers
    • Cargo Vehicle Businesses

    2.4 Business Target

    The main aim of Best Rev is to become a reliable and trustworthy source of good auto parts and maintenance services among its customers.

    The financial targets that the business wants to achieve within the first five years are mentioned below:

    Auto Parts Store - 3 Years Profit Forecast

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    Company Summary

    3.1 Company Owner

    Best Rev will be owned and operated by Sheldon Cooper. Sheldon completed his Bachelors in Mechanical Engineering two years ago, after which he pursued an engineering position in a noteworthy motor company. However, six months ago, he left the post to fulfill his lifelong passion of starting his own automobile parts and maintenance store.

    3.2 Why the Auto Parts Store is being started

    Sheldon noticed that Manhattan experiences a lot of traffic, but there are no auto shops or parts stores located in the area or anywhere in the 15-mile radius. Here, he saw the opportunity to cater to vehicle owners of Manhattan and the nearby regions. The result was Best Rev, an auto parts store that deals with the maintenance and repair of vehicles and the provision of spare parts.

    3.3 How the Auto Parts Store will be started

    Step1: Plan Everything

    Good planning is the most crucial step when learning how to start a car parts business. The best aid in planning and managing a business is its business plan. To write your vehicle spare parts business plan, you can take help from this automobile spare parts business plan. Best Rev is an automobile spare parts shop, for which the business plan is detailed here. You can take help from this example or go through other examples like used car dealership business plan to get an idea of what to include when planning for a start-up.

    Step2: Define the Brand

    What comes next is to highlight your business and its unique propositions. This can be achieved by creating a brand around your business idea. This will include everything from the principles it follows to its unique value above its competitors. This will introduce a good image of your business to your customers and also help you create a space for yourself in the market.

    Step3: Establish Your Corporate Office

    The next step is to manage the physical aspect of the business. Sheldon decided to rent out two back-to-back small shops in the main Manhattan commercial area. He decided that one of these shops would be the face of the business where all dealing will customers will take place. All the spare parts will also be stored in this area. In contrast, the other shop will be used to maintain and repair vehicles.

    Step4: Establish a Web Presence

    Establishing a web presence is integral in today’s market. Therefore, Sheldon decided to develop a website for the business and social media presences for marketing.

    Step5: Promote and Market

    The final step is to develop a good marketing plan and stick to it.

    Auto Parts Store - Startup Cost

    Start-up Expenses  
    Legal $134,400
    Consultants $0
    Insurance $22,200
    Rent $36,600
    Research and Development $10,000
    Expensed Equipment $52,200
    Signs $3,400
    TOTAL START-UP EXPENSES $258,800
    Start-up Assets $222,400
    Cash Required $209,000
    Start-up Inventory $39,000
    Other Current Assets $222,000
    Long-term Assets $287,000
    TOTAL ASSETS $979,400
    Total Requirements $1,238,200
    START-UP FUNDING
    Start-up Expenses to Fund $258,800
    Start-up Assets to Fund $979,400
    TOTAL FUNDING REQUIRED $1,238,200
    Assets
    Non-cash Assets from Start-up $1,240,800
    Cash Requirements from Start-up $122,000
    Additional Cash Raised $50,000
    Cash Balance on Starting Date $35,000
    TOTAL ASSETS $1,447,800
    Liabilities and Capital
    Liabilities $18,200
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $58,000
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $76,200
    Capital
    Planned Investment $1,238,200
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $1,238,200
    Loss at Start-up (Start-up Expenses) $133,400
    TOTAL CAPITAL $1,371,600
    TOTAL CAPITAL AND LIABILITIES $1,447,800
    Total Funding $1,238,200

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     Services

    Before you start an auto part business, you need to decide on your business’s services to your customers. You may have many auto parts business ideas, but you can’t implement everything in the business initially. Therefore, you have to pick and choose what you will start with.

    You can follow this guide on how to start an auto parts business to figure out what the market for the business looks like and what services are ideal to be included in your start-up.

    The series of steps to follow can be confusing when learning how to become an auto parts distributor. Therefore, we have described everything here in detail. Since Sheldon started with a variety of services, this format can be used to develop even a flower shop business plan.

    • Spare Parts Distribution

    Best Rev will sell spare parts for all kinds of automobiles as its base service. As a result, most of the auto parts in demand will be readily available, while there will also be an option for customers to order the parts custom to their vehicle.

    • Maintenance

    In addition to providing spare parts, Best Rev will also offer maintenance services to its customers. This will include

    • Oil Change
    • Engine Check
    • Break and Battery Fluid change
    • Thorough cleaning of the engine
    • Repair Services

    The customers of Best Rev can also bring their vehicles to the store to get any part fixed. In addition, the business will have mechanics available at all times who will deal with any problems a vehicle might have.

    • Cleaning Service

    Our last service will be the cleaning service. Our customers can bring their vehicles and get them serviced and cleaned in just 20-40 minutes, depending on vehicle type.

    Marketing Analysis of Auto Parts Store

    When starting an auto parts business, you should have an excellent understanding of your target market. You can gain this understanding by doing an extensive market analysis as a part of your automobile spare parts business plan pdf. This analysis should look into the past, present, and future market trends for you to make the best choices.

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    Your automobile parts business plan should also analyze the price of similar services in the market. This data should be used to forecast the prices you will set for your own products and services.

    If you don’t know what to include in your motor vehicle spare parts business plan, then you can take help from the document here. Also, if you are having difficulty conducting a marketing analysis, you can look at the marketing plan of this business plan motor parts shop.

    5.1 Market Trends

    According to IBISWorld, the auto parts industry holds a market size of $66 Billion in the United States, employing almost 400 thousand people. The industry is continuously in demand as more and more people adopt automotive vehicles in their life. So, opening a business in this industry is a very smart move as the demand will only get bigger.

    5.2 Marketing Segmentation

    The potential customers of Best Rev will be as follows:

    Auto Parts Store - Marketing Segmentation

    Business Plan for Investors

    5.2.1 Personal Vehicle Owners

    The primary customers of Best Rev will be people who own cars for personal use. As a majority of the population of Manhattan owns cars, our business will expect these customers to be quite regular. They are expected to avail maintenance and cleaning services most often.

    5.2.2 Private Dealerships

    Our second target customer will be private dealerships looking to fix up cars and sell them. We will provide them with the spare parts and maintenance services required.

    5.2.3 Cargo Vehicle Businesses

    Due to the vast amounts of construction being carried out in Manhattan and surrounding areas, we expect our third most frequent customers to be cargo vehicle businesses looking for spare parts, maintenance, and cleaning services.

    5.2.4 Professional Racers

    Our final customer group will be professional racers. They are expected to avail our spare parts and maintenance services, although not that often.

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Personal Vehicle Owners 39% 59,900 71,880 86,256 103,507 124,209 10.00%
    Private Dealerships 37% 45,800 54,960 65,952 79,142 94,971 10.00%
    Cargo Vehicle Businesses 14% 22,700 27,240 32,688 39,226 47,071 10.00%
    Professional Racers 10% 22,300 26,760 32,112 38,534 46,241 11.00%
    Total 100% 150,700 180,840 217,008 260,410 312,492 10%

     

    5.3 Business Target

    • To become the most reliable distributor of spare parts across Manhattan
    • To provide quick services to our clients
    • To earn a net profit of $40k/month at the end of three years
    • To keep itself in the good graces of customers.

    5.4 Product Pricing

    Our prices will be economical compared to our competitors since they won’t pay extra shipping fees for spare parts.

    Marketing Strategy

    To gain attention in the market among your competitors, you need to highlight your competitive advantages. This is crucial in developing a business, especially an online auto parts business.

    You can market what makes you unique in the industry through a solid marketing plan. A market plan will not only allow you to bring light to your strongest features, but it will also help you in learning how to become an auto parts distributor in a saturated market.

    So, if you want to develop a strong marketing strategy for your business, you can take help from this motor parts business plan pdf. You can also look at other business plans such as skateboard store business plan to understand how to build a marketing strategy.

    6.1 Competitive Analysis

    • We have quick customer care services. We respond to customer queries efficiently.
    • We have a fast turnaround time as we take customer orders and requests and fulfill them as soon as possible.
    • We have excellent customer support staff that guides our customers in choosing the best parts for their vehicle and their budget.
    • Through our 24/7 online services, customers can peruse the parts available at the shop or order them on request.

    6.2 Sales Strategy

    • We will advertise our services through social media platforms like Instagram and Facebook.
    • We will offer a 25% discount on our first 25 purchases.
    • We will offer significant discounts to our regulars.

    6.3 Sales Monthly

    Auto Parts Store - Sales Monthly

    6.4 Sales Yearly

    Auto Parts Store - Sales Yearly

    6.5 Sales Forecast

    Auto Parts Store - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Spare Parts 8,200 8,692 9,214
    Maintenance 4,550 4,823 5,112
    Repair Service 1,450 1,537 1,629
    Cleaning Service 1,550 1,643 1,742
    TOTAL UNIT SALES 15,750 16,695 17,697
    Unit Prices Year 1 Year 2 Year 3
    Spare Parts $60.00 $69.60 $80.74
    Maintenance $75.00 $87.00 $100.92
    Repair Service $350.00 $406.00 $470.96
    Cleaning Service $150.00 $174.00 $201.84
    Sales
    Spare Parts $492,000.00 $604,963.20 $743,862.75
    Maintenance $341,250.00 $419,601.00 $515,941.39
    Repair Service $507,500.00 $624,022.00 $767,297.45
    Cleaning Service $232,500.00 $285,882.00 $351,520.51
    TOTAL SALES $1,573,250.00 $1,934,468.20 $2,378,622.10
    Direct Unit Costs Year 1 Year 2 Year 3
    Spare Parts $20.00 $22.00 $23.10
    Maintenance $15.00 $16.50 $17.33
    Repair Service $100.00 $110.00 $115.50
    Cleaning Service $80.00 $88.00 $92.40
    Direct Cost of Sales
    Spare Parts $164,000.00 $191,224.00 $212,832.31
    Maintenance $68,250.00 $79,579.50 $88,571.98
    Repair Service $145,000.00 $169,070.00 $188,174.91
    Cleaning Service $124,000.00 $144,584.00 $160,921.99
    Subtotal Direct Cost of Sales $501,250.00 $584,457.50 $650,501.20

    Personnel plan

    There are a lot of auto parts stores in the world. But only those are popular that make customers happy and satisfied. The success of a business, especially in the automobile industry, depends not only on the quality of parts but also on the customer support staff.

    Understanding this importance, Sheldon included some essential features as a part of employee hiring criteria in the automobile spare parts business plan. He also formed a list of employees necessary for running his business. This list can be seen in this auto parts store business plan sample.

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    7.1 Company Staff

    • 1 Manager
    • 1 Receptionist
    • 3 Cleaners/Servicers
    • 4 Mechanics
    • 1 Social Media Strategist and Manager
    • 1 Web Developer

    7.2 Average Salary of Employees

     Personnel Plan      
    Year 1 Year 2 Year 3
    Manager $45,000 $49,500 $54,450
    Receptionist $30,000 $33,000 $36,300
    Cleaners $92,000 $101,200 $111,320
    Mechanics $123,000 $135,300 $148,830
    Social Media Manager $23,500 $25,850 $28,435
    Web Developer $22,500 $24,750 $27,225
    Total Salaries $336,000 $369,600 $406,560

    Financial Plan

    You can’t ensure the success of an automobile parts business through just sales. You need to ensure that all the resources are efficiently managed so that your business doesn’t go into a loss.

    You can prevent your business from losing resources by developing a financial plan as a part of your motor spare parts business plan. This will include the costs associated with your business’s essential aspects, such as an auto parts franchise cost. In addition, it will analyze where you are spending your money and how you are earning to keep everything in balance.

    Here, we are describing the details of the financial plan of Best Rev.

    You can also look at a business plan for e-commerce to get a good idea of managing business finances.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 8.12% 8.20% 8.26%
    Long-term Interest Rate 8.40% 8.44% 8.47%
    Tax Rate 24.03% 24.21% 24.60%
    Other 0 0 0

    8.2 Break-even Analysis

    Auto Parts Store - Break-even Analysis

     Break-Even Analysis  
    Monthly Units Break-even 5340
    Monthly Revenue Break-even $132,500
    Assumptions:
    Average Per-Unit Revenue $231.00
    Average Per-Unit Variable Cost $0.62
    Estimated Monthly Fixed Cost $163,800

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss    
    Year 1 Year 2 Year 3
    Sales $1,573,250 $1,934,468 $2,378,622
    Direct Cost of Sales $501,250 $584,458 $650,501
    Other $0 $0 $0
    TOTAL COST OF SALES $501,250 $584,458 $650,501
    Gross Margin $1,072,000 $1,350,011 $1,728,121
    Gross Margin % 68.14% 69.79% 72.65%
    Expenses
    Payroll $336,000 $369,600 $406,560
    Sales and Marketing and Other Expenses $145,000 $148,000 $156,000
    Depreciation $2,300 $2,350 $2,500
    Leased Equipment $0 $0 $0
    Utilities $2,900 $3,000 $3,100
    Insurance $2,100 $2,100 $2,100
    Rent $2,900 $3,000 $3,200
    Payroll Taxes $24,000 $25,000 $27,000
    Other $0 $0 $0
    Total Operating Expenses $515,200 $553,050 $600,460
    Profit Before Interest and Taxes $556,800 $796,961 $1,127,661
    EBITDA $556,800 $796,961 $1,127,661
    Interest Expense $0 $0 $0
    Taxes Incurred $111,360 $159,392 $225,532
    Net Profit $445,440 $637,569 $902,129
    Net Profit/Sales 28.31% 32.96% 37.93%
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    8.3.1 Profit Monthly

    Auto Parts Store - Profit Monthly

    8.3.2 Profit Yearly

    Auto Parts Store - Profit Yearly

    8.3.3 Gross Margin Monthly

    Auto Parts Store - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Auto Parts Store - Gross Margin Yearly

    8.4 Projected Cash Flow

    Auto Parts Store - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $51,000 $55,080 $59,486
    Cash from Receivables $22,000 $23,760 $25,661
    SUBTOTAL CASH FROM OPERATIONS $73,000 $79,570 $85,936
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $74,000 $79,000 $85,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $42,000 $42,000 $45,000
    Bill Payments $27,000 $28,000 $31,000
    SUBTOTAL SPENT ON OPERATIONS $69,000 $70,000 $76,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $69,000 $74,520 $80,482
    Net Cash Flow $21,000 $23,000 $25,000
    Cash Balance $27,000 $30,000 $33,000

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet    
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $275,000 $308,000 $338,800
    Accounts Receivable $24,000 $26,880 $30,213
    Inventory $4,300 $4,816 $4,900
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $282,000 $315,840 $355,004
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $19,400 $21,728 $24,444
    TOTAL LONG-TERM ASSETS $24,400 $27,328 $30,744
    TOTAL ASSETS $294,000 $329,280 $370,440
    Liabilities and Capital Year 4 Year 5 Year 6
    Current Liabilities
    Accounts Payable $18,700 $20,944 $23,541
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $19,000 $21,280 $23,919
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $15,000 $16,800 $18,883
    Paid-in Capital $30,000 $30,000 $31,000
    Retained Earnings $53,000 $57,770 $63,547
    Earnings $193,400 $210,806 $231,887
    TOTAL CAPITAL $285,000 $310,650 $341,715
    TOTAL LIABILITIES AND CAPITAL $300,000 $329,280 $370,440
    Net Worth $293,400 $319,806 $351,787

    8.6 Business Ratios

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 7.25% 8.03% 8.90% 3.00%
    Percent of Total Assets
    Accounts Receivable 9.21% 10.20% 11.31% 9.80%
    Inventory 5.39% 5.97% 6.62% 9.90%
    Other Current Assets 2.11% 2.34% 2.59% 2.40%
    Total Current Assets 149.80% 151.00% 152.00% 158.00%
    Long-term Assets 11.55% 11.60% 11.64% 12.00%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.90% 4.94% 4.98% 4.34%
    Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
    Total Liabilities 7.59% 7.65% 7.72% 7.38%
    NET WORTH 100.45% 101.25% 102.19% 110.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.60% 97.15% 99.87% 99.00%
    Selling, General & Administrative Expenses 93.56% 96.09% 98.78% 97.80%
    Advertising Expenses 1.52% 1.56% 1.60% 1.40%
    Profit Before Interest and Taxes 41.50% 42.62% 43.81% 33.90%
    Main Ratios
    Current 34 35 36 32
    Quick 33 33.8 34.645 33
    Total Debt to Total Assets 0.18% 0.18% 0.17% 0.40%
    Pre-tax Return on Net Worth 74.08% 74.89% 75.00% 75.00%
    Pre-tax Return on Assets 96.30% 101.12% 106.17% 111.30%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 33.56% 34.60% 35.67% N.A.
    Return on Equity 55.80% 57.53% 59.31% N.A.
    Activity Ratios
    Accounts Receivable Turnover 7.7 7.8 7.8 N.A.
    Collection Days 100 100 100 N.A.
    Inventory Turnover 32.4 34.02 35 N.A.
    Accounts Payable Turnover 15.6 16 16.3 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 2.5 2.5 2.6 N.A.
    Debt Ratios
    Debt to Net Worth -0.04 -0.03 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $244,000 $257,664 $272,093 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.85 0.87 0.89 N.A.
    Current Debt/Total Assets 1% 0% 0% N.A.
    Acid Test 29 29.12 29.16 N.A.
    Sales/Net Worth 2.1 2.2 2.2 N.A.
    Dividend Payout 0 0 0 N.A.

    FAQ

    1. How to start an auto parts store?

    You can start an auto parts store by developing a good auto parts store business plan.

    2. How to open an auto parts store?

    For starting an auto parts store, you will need to rent or buy a physical space and create management plans.

    3. How to start an online auto parts business?

    To start an online auto parts business, you will need to manage your business finances and develop a strong marketing plan. Furthermore, you will need to establish social media presence as well.

    Download Auto Parts Store Business Plan Sample in pdf