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Car accessories business plan for starting your own company
Are you looking for how to start car accessories business? Well, the business is quite easy to start and run. And yet is a very suitable choice for earning profits. Nearly everyone in the United States possess their own cars. To increase the convenience and comfort level, everyone looks forward to newest car accessories. Moreover, the demand is also seen in used car, or old car cases where people have to get some old car part replaced.
To start this business, the first step would be to create car accessories shop business plan. To help you understand how to write an accurate auto parts business plan, we’re providing here a sample plan made for a car parts startup, Road Partner.
Executive Summary
2.1 The Business
Road Partner will be a car accessories startup based in New York City. The business will mainly provide car accessories and parts. Besides, all services relevant to cars will also be provided, such as car repairing, car washing, and detailing etc.
2.2 Management of Car Accessories Company
Road Partner will be managed by its owner and a co-manager. Since the business will be providing multiple services, it will be needed to recruit specialists of each domain. To run the business, company owner will define available and missing resources in the car accessories business plan pdf so that the best way to utilize the limited resources can be formulated.
In this blog we’re providing a detailed plan on how to start up a car accessories business. However, if you are searching for business plan for buying a franchise, you must keep in mind that the legal and some startup requirements may differ.
2.3 Customers of Car Accessories Company
Before starting an auto parts business you should explore the groups of your target customers. This will help you in devising customer-care, advertisement and pricing policies according to them.
The customers of Road Partner are listed below:
- New Car Owners
- Used Car Owners
- Professional Drivers
2.4 Business Target
Our business aims to become the most visited and the most trusted car accessories stop in the entire city. Our customer-related goals will be listed in the upcoming sections. However, our profitability goals can be seen from the graph provided below:
Company Summary
3.1 Company Owner
Road Partner will be owned by Anderson Chris. Anderson in an MBA and has been serving as an integration manager in a car manufacturing company for four years.
3.2 Why the car accessories company is being started
Anderson is starting car accessories business due to his wide expereince in car-related businesses seconded by his desire of earning huge profits.
3.3 How the car accessories company will be started
Step1: Plan Your Business
The first step is to develop detailed business plan for starting your business. To help you with this part, we’re providing an automotive business plan template free of cost. As Road Partner will provide both interior and exterior accessories. Therefore, this car accessories business plan sample can be used even if you are looking for just car interior accessories business proposal. However, if you are also operating online, then you must see any ecommerce store business plan too.
Step3: Define The Brand
After planning, it’s now time to execute what you have planned. In the execution phase, you should acquire the licenses and permits and start defining your business values, culture and services.
Step3: Establish the Business
To provide your services, you will be needing a lot of space, inventory and manpower. Therefore, the next step after branding would be to establish your workplace and workforce.
Step4: Promote and Market
To get the desired number of customers, it is essential to develop an advertisement plan to reach out to them.
Step5: Ensure Web Presence
Lastly, web presence must not be ignored in this age. As people are likely to search for car accessories shops near them on Google, therefore you must have a website that is search engine optimized. Through inculcating the primary and secondary keywords, you can make sure to come in the top searches.
The startup costs for all these steps are listed here in this: accessories of car shop business plan.
| Start-up Expenses | |
| Legal | $257,000 |
| Consultants | $0 |
| Insurance | $35,000 |
| Rent | $30,000 |
| Research and Development | $26,000 |
| Expensed Equipment | $62,000 |
| Signs | $4,000 |
| TOTAL START-UP EXPENSES | $414,000 |
| Start-up Assets | $350,000 |
| Cash Required | $362,000 |
| Start-up Inventory | $52,000 |
| Other Current Assets | $230,000 |
| Long-term Assets | $250,000 |
| TOTAL ASSETS | $1,244,000 |
| Total Requirements | $1,658,000 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $414,000 |
| Start-up Assets to Fund | $1,244,000 |
| TOTAL FUNDING REQUIRED | $1,658,000 |
| Assets | |
| Non-cash Assets from Start-up | $1,646,000 |
| Cash Requirements from Start-up | $378,000 |
| Additional Cash Raised | $60,000 |
| Cash Balance on Starting Date | $38,000 |
| TOTAL ASSETS | $2,122,000 |
| Liabilities and Capital | |
| Liabilities | $30,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $48,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $78,000 |
| Capital | |
| Planned Investment | $1,658,000 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,658,000 |
| Loss at Start-up (Start-up Expenses) | $386,000 |
| TOTAL CAPITAL | $2,044,000 |
| TOTAL CAPITAL AND LIABILITIES | $2,122,000 |
| Total Funding | $1,658,000 |
Services
Before starting a car accessories business it essential to decide your services. Defining your services in your mechanic shop business plan will help you in arranging the required inventory and workforce.
In this business plan on how to start your own auto parts business we’re listing the services and products of Road Partner.
- Car Accessories: Our primary service will be to provide all types of car accessories. From door visors to rear lights, we’ll provide everything you can need in a car. Our major offerings will include:
- Blind Spot Mirrors
- Phone Mount
- Stinger
- Car Tool Set
- Hydraulic Jack
- Jump Starter
- Car Vacuum Cleaner
- Bluetooth Key Finder
- Seat Cushion
- Microfiber Cloth and more.
- Car Repair: We will also offer car repairing services. To do with some complex repairing works such as those relevant to fuel tanks, we’ll be hiring the experts of this field.
- Car Washing & Cleaning: We will provide car washing and cleaning service for both interior and exterior car body.
- Car Detailing & Modifications: In this service, we’ll work on the reconditioning of cars. This will include restoration and occasional car maintenance work as well as some trendy modifications.
Marketing Analysis of Car Accessories Company
Your car accessories business investment is not going to bring you enough benefits and profits if you fail at recognizing the market with the most demand. To make sure that your startup will be a success, it is essential to first carry out a detailed and accurate marketing analysis. In marketing analysis for car accessories business for sale, you have to keep focused on the following things:
- Who are the customers? What interests them? And how many purchases they are likely to make.
- What are the past, ongoing and forecasted market stats for car accessories business franchise or independently owned business?
- What pricing strategy can be set while considering average incomes of your potential customers, your costs and product qualities and your market competitors’ rates.
In this auto dealership business plan we’re listing the detailed marketing analysis of Road Partner. If you’re looking for a car wash business plan or business plan for auto repair shop, you can have immense help from here.
Note
However, if you are searching for how to start an online auto parts business you must also study some other examples available on the web, as Road Partner will be offering its products just in-store.
5.1 Market Trends
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Due to the surge in automobile purchases around the U.S. the businesses providing car-related services are also expected to bloom. According to IBISWorld, auto parts stores have experienced a growth rate of 0.9% during the past five years. The business is expected to grow by another 2.1% in 2021 alone. The market size reported by the same source is also way more than other usual startups. At present, the market size held by auto parts stores is about $64 billion.
5.2 Marketing Segmentation
Road Partner divided the heterogenous target market into homogeneous subgroups of target customers. This is done to ensure that the demands and interests of each of these groups are taken care of. Here you can see, how Road Partner divided its customer base into distinct groups.
5.2.1 New Car Owners
Our primary customers will be the new car owners. New car owners are very cautious about the well-being of their vehicle. Therefore, they make sure to get regular maintenance for their cars. Moreover, this category also purchases trendy car accessories such as car vacuum cleaners, phone mounts etc.
5.2.2 Used Car Owners
With the increase in mileage, cars demand their owners to replace certain car parts in order to maintain the same level of efficiency. Thus, the second group of our target customers will comprise of used car owners. They are expected to avail of our modification, detailing and car parts sales services.
5.2.3 Professional Drivers
The third target group of our target customers will comprise of professional drovers. Since they are the one who use cars more than the other two groups, they are expected to visit us frequently. They are expected to make use of all of our services on the largest scale.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Professional Drivers | 40% | 50,000 | 52,000 | 54,000 | 56,000 | 58,000 | 10.00% |
| Used Car Owners | 31% | 41,000 | 43,000 | 44,000 | 45,000 | 47,000 | 10.00% |
| New Car Owners | 29% | 39,000 | 41,000 | 43,000 | 44,000 | 46,000 | 11.00% |
| Total | 100% | 130,000 | 136,000 | 141,000 | 145,000 | 151,000 | 10% |
5.3 Business Target
Our business targets are
- To earn a net profit margin of $23.2k per month by the end of the second year and $37.1k per month by the end of the third year.
- To achieve and maintain a CSAT score above 90% throughout our service years.
- To achieve and maintain a Net Promoter Score above 60 throughout the service years.
5.4 Product Pricing
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Our prices are very reasonable. Most of them lie within the same range as that of our market competitors. However, charges for cleaning and detailing services are even lower than the market competitors. This is to ensure that our customers get maximum benefit whenever they come to our site.
Marketing Strategy of Car Accessories Company
Before finalizing your business plan for car detailing, you should research some car accessories business ideas. This will help you in identifying effective ways to target your customers. To give you an idea of effective advertisement means for this business, we are providing the sales strategy of car modification and accessories business plan.
6.1 Competitive Analysis
- Our offerings are more than any other car accessories business in the whole town.
- Our workers are highly expert and collaborative.
- Our prices are extremely reasonable.
- Our policies are highly customer benefitting and are expected to help us draw and retain more customers.
6.2 Sales Strategy
- We’ll advertise our startup through Google Local ads service, social media, and newspaper.
- We’ll offer a 20% discount on all our services for the first two months.
- We will offer 60% discount on car washing and detailing services on every purchase of $160.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Car Accessories | 54,000 | 57,240 | 60,674 |
| Car Repair | 35,000 | 37,100 | 39,326 |
| Car Washing & Cleaning | 50,000 | 53,000 | 56,180 |
| Car Detailing & Modifications | 47,000 | 49,820 | 52,809 |
| TOTAL UNIT SALES | 186,000 | 197,160 | 208,990 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Car Accessories | $68.00 | $78.88 | $91.50 |
| Car Repair | $57.00 | $66.12 | $76.70 |
| Car Washing & Cleaning | $36.00 | $41.76 | $48.44 |
| Car Detailing & Modifications | $48.00 | $55.68 | $64.59 |
| Sales | |||
| Car Accessories | $3,672,000.00 | $4,515,091.20 | $5,551,756.14 |
| Car Repair | $1,995,000.00 | $2,453,052.00 | $3,016,272.74 |
| Car Washing & Cleaning | $1,800,000.00 | $2,213,280.00 | $2,721,449.09 |
| Car Detailing & Modifications | $2,256,000.00 | $2,773,977.60 | $3,410,882.86 |
| TOTAL SALES | $9,723,000.00 | $11,955,400.80 | $14,700,360.82 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Car Accessories | $66.00 | $76.00 | $88.00 |
| Car Repair | $55.00 | $63.00 | $72.00 |
| Car Washing & Cleaning | $34.00 | $38.00 | $44.00 |
| Car Detailing & Modifications | $46.00 | $52.00 | $60.00 |
| Direct Cost of Sales | |||
| Car Accessories | $3,564,000.00 | $4,350,240.00 | $5,339,347.20 |
| Car Repair | $1,925,000.00 | $2,337,300.00 | $2,831,472.00 |
| Car Washing & Cleaning | $1,700,000.00 | $2,014,000.00 | $2,471,920.00 |
| Car Detailing & Modifications | $2,162,000.00 | $2,590,640.00 | $3,168,552.00 |
| Subtotal Direct Cost of Sales | $9,351,000.00 | $11,292,180.00 | $13,811,291.20 |
Personnel plan
Since all the tasks of your business will be planned and executed by humans. Thus, it is necessary to build a criterion for hiring the most competent employees. In this car accessories business plan sample we’re providing the personnel plan developed for Road Partner.
7.1 Company Staff
Anderson will hire the following people to run his business:
- 1 Co-Manager to help manage business operations
- 1 Accountant to maintain financial records
- 2 Store Operators to manage car accessories sales
- 4 Car Cleaning Experts
- 2 Auto Mechanics for minor repairs and modifications
- 1 Sales Executive to reach out to the potential buyers
- 1 Web Developer to manage the online presence
- 1 Receptionist/ Call Operator
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Co-Manager | $14,000 | $15,400 | $16,940 |
| Accountant | $9,000 | $9,900 | $10,890 |
| Store Operators | $8,000 | $8,800 | $9,680 |
| Car Cleaning Experts | $8,000 | $8,800 | $9,680 |
| Auto Mechanics | $53,000 | $58,300 | $64,130 |
| Sales Executive | $17,000 | $18,700 | $20,570 |
| Web Developer | $9,000 | $9,900 | $10,890 |
| Receptionist/ Call Operator | $7,000 | $7,700 | $8,470 |
| Total Salaries | $125,000 | $137,500 | $151,250 |
Financial Plan
Before starting car accessories business, you must calculate and analyze the car accessories business profit. That will help you in identifying whether or not it is feasible to start a business. Moreover, through this practice, you can also devise ways to manage your sales and expenses to optimize business profit.
In this sample plan, we are providing the financial plan of Road Partner. All the cash flows, projected profits and losses, balance sheets and gross margins are provided so that you can learn how to make an accurate and effective financial plan for your business.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.12% | 8.15% | 8.21% |
| Long-term Interest Rate | 8.29% | 8.33% | 8.38% |
| Tax Rate | 23.73% | 23.81% | 23.85% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5345 |
| Monthly Revenue Break-even | $133,550 |
| Assumptions: | |
| Average Per-Unit Revenue | $238.00 |
| Average Per-Unit Variable Cost | $0.70 |
| Estimated Monthly Fixed Cost | $162,670 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $9,723,000 | $11,955,401 | $14,700,361 |
| Direct Cost of Sales | $9,351,000 | $11,292,180 | $13,811,291 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $9,351,000 | $11,292,180 | $13,811,291 |
| Gross Margin | $372,000 | $663,221 | $889,070 |
| Gross Margin % | 3.83% | 5.55% | 6.05% |
| Expenses | |||
| Payroll | $125,000 | $137,500 | $151,250 |
| Sales and Marketing and Other Expenses | $134,000 | $138,000 | $140,000 |
| Depreciation | $2,443 | $2,500 | $2,580 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $3,000 | $3,010 | $3,200 |
| Insurance | $2,100 | $2,200 | $2,300 |
| Rent | $3,900 | $4,000 | $4,100 |
| Payroll Taxes | $27,000 | $28,000 | $29,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $297,443 | $315,210 | $332,430 |
| Profit Before Interest and Taxes | $74,557 | $348,011 | $556,640 |
| EBITDA | $74,557 | $348,011 | $556,640 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $14,911 | $69,602 | $111,328 |
| Net Profit | $59,646 | $278,409 | $445,312 |
| Net Profit/Sales | 0.61% | 2.33% | 3.03% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $55,000 | $59,400 | $64,152 |
| Cash from Receivables | $16,000 | $17,280 | $18,662 |
| SUBTOTAL CASH FROM OPERATIONS | $71,000 | $77,390 | $83,581 |
| 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 | $72,000 | $78,000 | $84,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $36,000 | $37,000 | $39,000 |
| Bill Payments | $21,000 | $23,000 | $24,000 |
| SUBTOTAL SPENT ON OPERATIONS | $57,000 | $61,000 | $63,000 |
| 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 | $58,000 | $62,640 | $67,651 |
| Net Cash Flow | $15,200 | $16,000 | $17,000 |
| Cash Balance | $28,000 | $29,000 | $30,020 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $283,000 | $316,960 | $348,656 |
| Accounts Receivable | $24,000 | $26,880 | $30,213 |
| Inventory | $4,000 | $4,480 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $294,000 | $329,280 | $370,111 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $18,200 | $20,384 | $22,932 |
| TOTAL LONG-TERM ASSETS | $24,000 | $26,880 | $30,240 |
| TOTAL ASSETS | $299,120 | $335,014 | $376,891 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $20,300 | $22,736 | $25,555 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $15,300 | $17,136 | $19,261 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $14,300 | $16,016 | $18,002 |
| Paid-in Capital | $30,000 | $31,000 | $32,000 |
| Retained Earnings | $56,000 | $61,040 | $67,144 |
| Earnings | $200,400 | $218,436 | $240,280 |
| TOTAL CAPITAL | $272,300 | $296,807 | $326,488 |
| TOTAL LIABILITIES AND CAPITAL | $286,600 | $335,014 | $376,891 |
| Net Worth | $291,300 | $317,517 | $349,269 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.04% | 7.80% | 8.64% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.23% | 10.23% | 11.33% | 9.80% |
| Inventory | 5.70% | 6.32% | 7.00% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 150.10% | 150.60% | 150.90% | 158.00% |
| Long-term Assets | 11.82% | 11.88% | 11.92% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.67% | 4.71% | 4.75% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.41% | 7.47% | 7.54% | 7.38% |
| NET WORTH | 100.24% | 101.04% | 101.97% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.80% | 97.36% | 100.09% | 99.00% |
| Selling, General & Administrative Expenses | 93.90% | 96.44% | 99.14% | 97.80% |
| Advertising Expenses | 1.62% | 1.66% | 1.71% | 1.40% |
| Profit Before Interest and Taxes | 40.94% | 42.05% | 43.22% | 33.90% |
| Main Ratios | ||||
| Current | 37 | 38 | 38 | 32 |
| Quick | 32 | 33.4 | 34.235 | 33 |
| Total Debt to Total Assets | 0.20% | 0.19% | 0.18% | 0.40% |
| Pre-tax Return on Net Worth | 73.49% | 75.00% | 76.69% | 75.00% |
| Pre-tax Return on Assets | 93.45% | 98.12% | 103.03% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 32.66% | 33.67% | 34.72% | N.A. |
| Return on Equity | 55.80% | 57.53% | 59.31% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.9 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 31 | 32.55 | 33 | N.A. |
| Accounts Payable Turnover | 16.1 | 16.3 | 16.54 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.4 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.03 | -0.03 | -0.03 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $240,000 | $253,440 | $267,633 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.82 | 0.84 | 0.86 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 27.7 | 28.1 | 28.6 | N.A. |
| Sales/Net Worth | 2.1 | 2.1 | 2.3 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
Download Car Accessories Business Plan Sample in pdf
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