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 an 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
Franchise Business Planning 
Helps the franchisee get business case approval from the franchisor

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 
Research and Development$10,000
Expensed Equipment$52,200
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 Requirements$1,238,200
Start-up Expenses to Fund$258,800
Start-up Assets to Fund$979,400
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 
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$58,000
Other Current Liabilities (interest-free)$0
Planned Investment$1,238,200
Investor 1$0
Investor 2$0
Additional Investment Requirement$0
Loss at Start-up (Start-up Expenses)$133,400
Total Funding$1,238,200
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    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

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    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 CustomersGrowthYear 1Year 2Year 3Year 4Year 5CAGR
    Personal Vehicle Owners39%59,90071,88086,256103,507124,20910.00%
    Private Dealerships37%45,80054,96065,95279,14294,97110.00%
    Cargo Vehicle Businesses14%22,70027,24032,68839,22647,07110.00%
    Professional Racers10%22,30026,76032,11238,53446,24111.00%

    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 SalesYear 1Year 2Year 3
    Spare Parts8,2008,6929,214
    Repair Service1,4501,5371,629
    Cleaning Service1,5501,6431,742
    TOTAL UNIT SALES15,75016,69517,697
    Unit PricesYear 1Year 2Year 3
    Spare Parts$60.00$69.60$80.74
    Repair Service$350.00$406.00$470.96
    Cleaning Service$150.00$174.00$201.84
    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 CostsYear 1Year 2Year 3
    Spare Parts$20.00$22.00$23.10
    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 1Year 2Year 3
    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 1Year 2Year 3
    Plan Month123
    Current Interest Rate8.12%8.20%8.26%
    Long-term Interest Rate8.40%8.44%8.47%
    Tax Rate24.03%24.21%24.60%

    8.2 Break-even Analysis

    Auto Parts Store - Break-even Analysis
     Break-Even Analysis 
    Monthly Units Break-even5340
    Monthly Revenue Break-even$132,500
    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 1Year 2Year 3
    Sales$1,573,250 $1,934,468 $2,378,622
    Direct Cost of Sales$501,250 $584,458 $650,501
    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%
    Sales and Marketing and Other Expenses$145,000$148,000$156,000
    Leased Equipment$0$0$0
    Payroll Taxes$24,000$25,000$27,000
    Total Operating Expenses$515,200 $553,050 $600,460
    Profit Before Interest and Taxes$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/Sales28.31%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 ReceivedYear 1Year 2Year 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
    ExpendituresYear 1Year 2Year 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
    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  
    AssetsYear 1Year 2Year 3
    Current Assets   
    Accounts Receivable$24,000$26,880$30,213
    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 CapitalYear 4Year 5Year 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
    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 1Year 2Year 3INDUSTRY PROFILE
    Sales Growth7.25%8.03%8.90%3.00%
    Percent of Total Assets    
    Accounts Receivable9.21%10.20%11.31%9.80%
    Other Current Assets2.11%2.34%2.59%2.40%
    Total Current Assets149.80%151.00%152.00%158.00%
    Long-term Assets11.55%11.60%11.64%12.00%
    TOTAL ASSETS100.00%100.00%100.00%100.00%
    Current Liabilities4.90%4.94%4.98%4.34%
    Long-term Liabilities0.00%0.00%0.00%0.00%
    Total Liabilities7.59%7.65%7.72%7.38%
    NET WORTH100.45%101.25%102.19%110.00%
    Percent of Sales    
    Gross Margin94.60%97.15%99.87%99.00%
    Selling, General & Administrative Expenses93.56%96.09%98.78%97.80%
    Advertising Expenses1.52%1.56%1.60%1.40%
    Profit Before Interest and Taxes41.50%42.62%43.81%33.90%
    Main Ratios    
    Total Debt to Total Assets0.18%0.18%0.17%0.40%
    Pre-tax Return on Net Worth74.08%74.89%75.00%75.00%
    Pre-tax Return on Assets96.30%101.12%106.17%111.30%
    Additional RatiosYear 1Year 2Year 3 
    Net Profit Margin33.56%34.60%35.67%N.A.
    Return on Equity55.80%57.53%59.31%N.A.
    Activity Ratios    
    Accounts Receivable Turnover7.77.87.8N.A.
    Collection Days100100100N.A.
    Inventory Turnover32.434.0235N.A.
    Accounts Payable Turnover15.61616.3N.A.
    Payment Days272727N.A.
    Total Asset Turnover2.52.52.6N.A.
    Debt Ratios    
    Debt to Net Worth-0.04-0.03-0.04N.A.
    Current Liab. to Liab.111N.A.
    Liquidity Ratios    
    Net Working Capital$244,000$257,664$272,093N.A.
    Interest Coverage000N.A.
    Additional Ratios    
    Assets to Sales0.850.870.89N.A.
    Current Debt/Total Assets1%0%0%N.A.
    Acid Test2929.1229.16N.A.
    Sales/Net Worth2.12.22.2N.A.
    Dividend Payout000N.A.


    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