a complete business plan about a hypothetical business
DESCRIPTION
A full comprehensive business plan to a business. Great for HSC business studies assignment for the preliminary course.TRANSCRIPT
Table of contents
1. Vision & Mission Statment
1.1 Vision 1
1.2 Mission Statement 1
2. Market Research and Analysis
2.1 Socio-cultural Analysis 2
2.2 Environmental Analysis 3
2.3 Legal Analysis 3
2.4 Economical Analysis 4
2.5 Technological Analysis 4
2.6 Competitor analysis 5
3. Business Goals & Objectives
3.1 Overall Objectives 7
3.2 Marketing Objectives 7
3.3 Management Objectives 8
3.4 Operating Objectives 8
3.5 Financial Objectives 8
3.6 Business Strategy 9
4. Marketing plan
4.1 Product/Service Strategy 12
4.2 Target Market 12
4.3 Customers Motivation 12
4.4 Market Size & Trends 13
4.5 Advertising & Promotions 14
4.6 Pricing Strategy 16
4.7 Distribution Strategy 18
5. Management Plan
5.1 Management Details 19
5.2 Professionals Details 20
5.3 Organisational structure 20
5.4 Organisation chart 21
5.5 Job Profiles 21
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5.6 Staffing Strategies 22
5.7 Professional Advisers 24
5.8 Job Performance 25
5.9 Occupational Health and Safety Compliance 25
6. Operating Plan
6.1 Business Name 26
6.2 Ownership Structure 26
6.3 Business Location 26
6.4 Operational Processes 29
6.5 Legal Requirements & Regulations 32
7. Financial Plan
7.1 Establishment and Funding 34
7.2 Loan Repayment Schedule 35
7.3 Projected Income Statement -2010 36
7.4 Projected Balance Sheet -2010 37
7.5 Projected Income Statement -2011 38
7.6 Projected Balance Sheet -2011 39
7.7 Projected Income Statement - 2012 40
7.8 Projected Balance Sheet- 2012 41
7.9 Projected Cash Flow Statement 42
7.10 Ratio Analysis 43
7.11 Break-Even Analysis 43
8. Action Plan 44
9. Appendix 45
10.Reference lists
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Our Vision and Statement
1.1VisionOur over all vision is to have:
Satisfied Customers: We consider ourselves to be specialists in our field, being
licensed mechanics and technicians. As professionals we look forward to passing on
our knowledge and experience to our customers.
Happy employees: To keep employees happy, we aim to provide flexible
working hours and conditions. We also setup grievance procedures and offer bonuses
and incentives for constant excellent performance.
Satisfied Suppliers: We identified 3 keen suppliers who will be happy to work
along side our business (see operating plan). We hope to develop a strong relationship
by implementing supply management strategies. Such strategies include providing
payment for items before they are due can allow us to take advantage of discounts.
1.2 Mission Statement
Here at U-Spec Performance we aim to become the leading service provider
and workshop in the New South Wales region, and over the long term, become an
industry leader in Australia. We aim to do this by providing a high level of quality
performance modifications and general services to meet each individual customer’s
preferences at the orders.
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Research & Analysis
2.1 Socio-cultural Analysis
Since its introduction, the vehicle has evolved into something other than just a
means of transport. Car owners and enthusiasts have been searching for ways to make
there vehicles unique, and stand out from the crowd. This is particularly common
among younger drivers. Competitions such as Auto-Salon have provided a means for
car enthusiasts to show off there unique cars, with modifications done not only to the
engine, but also the interior and stereo systems. This growing culture has also lead to
the development of car forums- web sites set up where motor enthusiasts can
communicate, share and compare there vehicles.
A lot of positive aspects have risen from these forums. Many cruises have
been organised, for both fun and for charity. Most recently the 2008 cruise for kids
encouraged drivers to take there vehicles to the street in order raise money for the
children’s hospital.
Off the streets, the car culture is just as strong. The Holden v. Ford rivalry is a good
example. V8X (2007) reported that motorsports had the third highest attendance
rating, attracting 1.6 million spectators. The majority aged between 18- 45 years.
Raceways around NSW and Australia hold open events where drivers can bring there
vehicles to test their limits. Western Sydney International Drag way (WSID) holds
these events on Wednesday nights. We aim to develop a promotional vehicle in which
we can run at the track and immerse ourselves in this rapidly growing culture.
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2.2 Environmental Analysis
The two main type of environmental issues associated with this type of
industries include
Pollution from Waste: concern with the storage and disposal of waste oil,
oily wastewater, brake fluid, coolant and other liquids; the disposal of vehicles
parts; and the spillage of oils and other liquids when carrying out general
servicing and repair work.
Pollution from Emissions: impacts on both local and global levels. Locally, it
causes air pollution, whereas globally, it is a source of greenhouse gas
emission
For full detailed analysis on the issues refer to appendix 2a.
2.3 Legal Analysis
2.3.1 Regulation of the Industry
The auto mechanic industry is regulated by the Motor Vehicle Repairs Act
1980 (NSW) (Appendix 2b). The primary regulator body established by the Act is the
MVRIC which is responsible for regulating employers within the industry. This
regulation was later amended with the Motor Vehicle Legislation Amendment Act
2001 which provided a more effective enforcement regime.
2.3.2 Business Licensing Requirements
The business must be registered with the Motor Vehicle Repair Industry
Authority (MVRIA), and hold the appropriate licence for the auto mechanic repair
activities that is wished to be carried out in the business. A list of equipment permitted
to be used is also listed in the MVRIA which helps the business to meet the
requirements of environmental legislation and to minimise the risk of pollution fine.
2.3.4 Qualification and Training Requirements
Auto mechanics are required to exercise a high degree of technical skill and
knowledge in the performance of their trade. It involves a wide range of skills and
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knowledge that must be applied to effectively diagnose system faults and carry out
necessary maintenance, service and repair procedures.
2.4 Economical Analysis
2.4.1 Petrol Prices:
The most noticeable economic trend that is affecting the industry is the rising
cost of petrol. The price of petrol has increased by around 80 cents over the last 10
years, with a rapid increase over the last 4 years, which can be seen in the graph in
appendix 2c. Even though the price of petrol is starting fall, the already high cost of
petrol has significantly impacted on consumer lifestyle by forcing them to drive less,
buy fewer cars and switch to fuel efficient cars. This is a problem to our industry
since there would be less cars overall that would use our service and less need for
maintenance since people a driving less. However recently there has been a shift in
public opinion towards buying cars with figures showing a steady increase in the sale
of new cars, possibly due to the introduction of fuel saving technology, like clean
diesel, in a lot more cars.
2.4.2 Taxes on cars: refer to appendix 2d.
2.5 Technological Analysis
Technology plays an important part in the motor vehicle industry especially
due to recent concern over the environment and escalating petrol prices which meant
new technology had to be introduced to combat these issues. Hybrid technology in
cars is an example of recent developments that help sustain car sales by developing
fuel efficient cars that are friendly to the environment. Other similar technologies that
may help sustain car sales and hence our market includes ethanol-blended fuels, clean
diesel and new LPG technology. There has also been a recent push into making cars
electric motored, the idea has been around for awhile but with depleting oil reserves
and environmental concerns the idea is becoming a much more viable solution. Many
people may now want to convert their own cars to electric motors when technology
becomes more readily available and may be an opportunity for our business.
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High performance vehicles have also been known to use a lot more petrol than
normal vehicles which has deterred many people from buying them. However there
has been ongoing development to make high performance vehicles more fuel efficient
which will increase their sales hence lead to an increase in our focused market. An
example of this technology is a proposed development by Nissan to create a
hydrogen-fuelled cell high performance car which is one of the first projects to try to
make high performance vehicles more fuel efficient and environmental friendly.
2.6 Competitor analysis
Based on our research we have found a small number of direct competitors.
These include:
MRT Performance - mrtperformance.com.au/
Croydon Racing Developments (CRD) - croydonracingdevelopments.com/
Queen Street Racing (QSR) - www.queenstsmash.com.au/queenst/
Bel Garage- belgarage.com.au/
Tony Regoli Performance - tonyrigoliperformance.com.au/
All these performance mechanics sell similar products for a vehicle, including
upgrades for the engine, electronics, suspension, transmission, wheels and other
accessories. As well as providing products, they offer other services such as smash
repairs, towing services, and vehicle inspections.
Most of these companies have been around for some time, meaning they have
established a customer base and well known status among car enthusiasts. Take MRT
Performance for example, prior to opening up a store to the general public, MRT
designed and raced rally cars. They had won several NSW and ACT titles in the late
1980’s to early 90’s.
CRD has done something similar. In the early 1990’s CRD took a small 1.3L
Suzuki swift, and managed to enhance the 4 cylinder engine to pump out
approximately 400 Hp. CRD has continued its developments and now own several of
the worlds fastest production cars.
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Queen Street Racing is the biggest and most recognised business within this
market. Currently they have been invited to participate in a television show on fox8
called ‘Blood, Sweat and Gears.’ This was an invitation which they had accepted.
This provides a huge advantage as they now have the opportunity to gain free
publicity and target a larger audience, giving them the opportunity to further expand
there customer base.
Bel Garage has adopted a different approach. Unlike the previous mentioned
competitors, Bel did not begin operations with a racing background, but as a smash
repair mechanics. Soon after, it had expanded its operations into modifying vehicles,
and has had many of its vehicles in most car magazines.
Although they have strong and leading reputations among car enthusiasts,
proving to be strengths, there are weaknesses where we at U-Spec performance hope
to capitalize. This weakness is what we call car discrimination. Bel Performance for
example, only deals with late make Japanese vehicles- primarily Mitsubishi, Nissan,
Toyota and Honda. MRT also discriminates against a majority of vehicles, only
accepting certain vehicle makes to uphold its rally image. A majority of the vehicles
which they work on are the Mitsubishi Evolution series, and Subaru WRX.
Queen Street Racing caters to all vehicles, no matter the make and model.
However with there participation in the Foxtel program, they need to do considerable
work on there project vehicle to make sure it can meet the needs of the show. This
means that more staff and time will be spent on the vehicle and less on customers.
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Business Goals & Objectives
3.1 Overall Objectives
In the beginning, the business should plan on getting its feet on the ground. It
should promote its name, get its operations well established and try to invite new
customers by providing them something unique (differentiation strategy).
In the long run, the business should plan to expand the business to cover
remaining segments of market in. It should always keep trying to increase its market
share and gain an upper hand on its competitors. Management of operations also
becomes crucial, as many starting businesses tend to fail between the early and
medium phases of their life.
3.2 Marketing Objectives
3.2.1 Short-term objectives
Advertise to become well known in Parramatta and surrounding areas.
Raise awareness and reach every potential customer within the target market.
Have a web site up and running
Start promoting at events, such as Auto salon.
Making promo stickers for cars, to give to customers to display on cars.
3.2.2 Long-term objectives
Establish a track record and reputation within the industry and become well
known in NSW and to all car enthusiasts by advertising.
Get an up and running promo car and drag car.
Optimise level of awareness within the market.
Event sponsorships.
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3.3 Management Objectives
3.3.1 Short-term objectives
Better training for all employees for better customer service/care
More efficiency in each of the servicing jobs
3.3.2 Long-term objectives
Establish a good reputation within the industry
Hire more employees and take in apprentices
Expanding the professional team to include other line of work
3.4 Operating Objectives
3.4.1 Short Term objectives
Establish a strong relationship with suppliers
Create a customer database
Establish an online ordering service
3.4.2 Long Term objectives
Diversify inventory to include accessories such as seating and body kits
Take on apprentice mechanics
Introduce a customer gallery on our web page
Increase Employees as customer base grows
3.5 Financial Objectives
3.5.1 Short-Term Objectives
To be able to generate a revenue of approximately $360,000 for the first year
To increase revenue every 3 months of operations for first year
To have working capital available by the end of fist year
3.5.2 Long-Term Objectives
To increase revenue by $60,000 for every year after
To start generating profit within 5 years of operation
To remain liquid and have enough capital to further grow business
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3.6 Business Strategy
3.6.1 SWOT ANALYSIS
Major strengths, weaknesses, opportunities and threats identified are as
follows:
Strengths
Large number of car enthusiasts: as there are a large number of car
enthusiasts around and who want their car to be properly looked after.
Providing more then one service: not just a servicing centre but also a retail
outlet for all the best performance parts
Highly skill/experienced staff
Offering all the top brands in autocare
Cater to customers orders: We also any performance part requested by out
customers.
Location: Parramatta is located in the centre of Sydney making it accessible
to a majority of people in surrounding areas.
Management: Both Bob and John possess all the necessary skills needed to
manage the business successfully. They have both previously worked for
other mechanics, gaining valuable experience.
Latest technology infrastructure: Since the business is relatively new, it has
purchased all the latest equipment. This is not only beneficial to the
customers, but will also benefit the company in terms of keeping track of
inventories.
Weaknesses
Catering to only a limited number of people.
Un-expectance: Newly running company which has been established as well
as their competitors who are already established. New management may incur
problems that they might not have thought of when preparing the business
plan.
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New staff required: Recruit and training staff to meet the required level of
service.
Limited funding: There is a certain amount of capital available to purchase
the company as well as investing within to improve its status.
Opportunities
Expansion: expand into other types of services, eg. Mobile mechanic, panel
beating, spray painting/ air brushing.
More services: the new hybrid car and other car services
Car Audio and electronics: add car audio and electronics work
Apprentice: take on some apprentices can help us in gaining some benefits
such as governments grants.
Threats
Petrol prices: is the biggest treat as people are using more public transport
more and more these days, as petrol prices keep increasing.
New competitors: may enter the industry.
Existing Competitors: Currently there a number of existing competitors in the
market. Most of which have obtained sponsorship from part manufacturers,
allowing them to obtain parts at lower cost.
Price war from major competitors: Large competition means that there will
always be price wars. This will have a dramatic effect on revenue.
Management will need to be concentrating on keeping costs low so that the
expenses don’t eat away at the profit.
More legal regulation: There needs to be a sense of discipline in the
workplace. If somebody gets hurt due to negligence, then there will be a large
compensation payout which could skyrocket insurance premiums and destroy
the company.
Taxes: new taxes are being introduced for purchasing cars
Pollution: environment regulations for modified cars and OH&S issues in
regards to the workshop.
P-Plate regulations: the laws stopping P-platers from driving high
performance cars.
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Price war from major competitors: Large competition means that there will
always be price wars. This will have a dramatic effect on revenue.
Management will need to be concentrating on keeping costs low so that the
expenses don’t eat away at the profit.
Technology advances from competitors: there will be new equipment that
will be constantly available, and a well managed gym should keep up to date
with technology. New equipment may be required, and it will require a fair bit
of capital to purchase.
More legal regulation: There needs to be a sense of discipline in the
workplace. If somebody gets hurt due to negligence, then there will be a large
compensation payout which could skyrocket insurance premiums and destroy
the company.
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Marketing Plan
4.1 Product /Service Strategy
We are going to provide auto mechanic services for car enthusiasts also offer
the best and low price car performance parts and accessories. The business is trying to
differentiate by providing excellent customer service and support for our clients.
Keeping the best performance parts and services is also a key strategy. We also offer a
part ordering service where customers can get the exact brand and part they desire at
low prices.
4.2 Target Market
The general public will be the target market and that can be further broken down into:
Catering more to car enthusiasts
Age group – the business will accommodate to ages from 16 and up, as 16 is
legal age to get a learners licence.
Income – all income ranges.
Status – all types (single, married).
Geography – commencing in the Western Sydney area of Parramatta and want
to cater to all of Sydney.
Buying behaviour – the customers will be in need of performance parts and
accessories to enhance their cars, which will be supplied at low prices.
Backgrounds –There is no prejudice or discrimination. Anyone regardless of
their race, colour, religion, culture, physical appearance or background will be
welcome to use our services.
What are they looking for in the service – Something that is unique and that
will assist them in making their car what they want it to be.
4.3 Customers Motivation
The fact that we are only one of a few places that caters professionally to the
need and wants of the car enthusiasts all in one place, people need repairs and
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maintenance done to their cars on a regular basis and continues improvements such as
modifications. Since we know all about modification customers won’t hesitate to let
us work on their cars. The location is a major factor as well, as Parramatta is located
in the centre of Sydney
.
4.4 Market Size and Trends
4.4.1 Potential Market:
There is a very large potential for this kind of specialised service as the
customers will know that they are getting one of a kind service, as not all mechanics
specialise in this type of service. We offer all-in-one service where they can also
purchase top brand parts and accessories at lower prices then competitors. So it is
where car enthusiasts can do and get there car worked on and know its done by the
best who specialise in this type of service, also can get all the top brand parts from
one place at very competitive prices which makes it hassle free.
4.4.2 Trends:
People will argue that the trends are changing and that now people are not
after high performance cars as petrol prices are so high and the P-Plate restrictions in
place, but research shows that car enthusiasts will still spend money on their cars (as
shown in the surveys conducted and interviews also conducted, refer to appendix 5a)
that sales of sports cars is still stable and that business is good for them, “it is because
most car enthusiasts either have more then one car so they will have one as a project
and one run around car, or young people just want looks and performance and they
will spend money to do so” said Garry from Top Secret Imports Blacktown.
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4.5 Advertising & Promotions
From the research and the interviews conducted (see Appendix4a, 4b) we have
found that these are the most affective ways of advertising for this type of business.
4.5.1 Own Website: U-Spec Performance will have is own website
explaining every thing about the company including mission statement and future
goals. It will have all the services and products they offer, also prices and contract
numbers, bios on the mechanics and what they are qualified to do etc.
Costs involved from www.mdwebhosting.com.au
Domain name: U-Specperformace.com.au-$21.18 for 2years (after researching
cheapest found)
Website hosting: $36.95per month (for Business)
Search engine submission: $59once off (adds website to search engines
4.5.2 Other Websites: Advertising is other websites by putting banners and
links to our website. The websites will be car forums for enthusiasts such as
www.rexnet.com, www.skylinesausttralia.com etc, or magazine websites such as
www.hot4s.com.au,
Cost: depending on each site/forum.
For hot4s website which has and “Avg. Page Impressions per month: 99,000” (Mark
Cutajar, Markting, Hot4s)- email appendix 4c
Monthly Banner costs on Website (unlimited page impressions):
Large island banner: $600 + GST per month.
Sky Scraper: $1000 + GST per month
4.5.3 Directories: Advertise in the Yellow pages will help the business to start
off as a mechanic service also promote the niche side of the business. This was
considered but taken out as the costs of the advertising is very costly (around $20000)
and we are only targeting a certain type of people, so it would be more affective to do
something else with those funds.
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4.5.4 Events: Hand out brochures at events such as
Nightshift: Free (but have to register with event organisers) (www.night-
shift.com/)
Auto Saloon: Free (but have to register with event organisers)
(www.autosaloon.org/terams)
Drag day Eastern Creek:
4.5.5 Magazines: Placing a ad in an car enthusiast magazine such as, Fast Fours, Hot4s, Etc, is said to be great for business from interview with Top Secret Imports (Appendix 4a) as they advertise in the High Performance Imports Magazine, -Costs: for Hot 4s magazine who have a readership of 174,000
“Double Page Spread: $2,200 + GST per issue
Full Page: $1,200 + GST per issue
Half Page: $700 + GST per issue
Quarter Page: $400 + GST per issue
Business Card Size: $200 + GST per issue”
(Mark Cutajar, Markting, Hot4s)- email appendix 5c
So to start of with we will be for the fist 6 months (6issues) do full page then after maybe drop down to half page depending on exposure.
4.5.6 Cross Advertising
This involves using the advertising mediums of other business and promoting
U-Spec Performance within theses channels. For example, car accessories shops,
panel beating and audio systems shops. The company can easily design some sort of
agreement where those other businesses could promote U-Spec Performance only to
its customers. This favour could also be returned in the same way.
4.5.7 Other Advertising:
Selling parts from our retail shop to and offering them cheaper prices, so for
buying products valued more then $500 customers get a 10% discount.
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Have free stickers for customer cars and encourage them to display them
Size: 45cm x 10cm from http://www.stickerart.com.au/- saying U-Spec
Performance (appendix 4d for design) as used and recommended by Top Secret
Imports and MRT Performance
Cost: $5 each for 200 stickers to start with.
Word of mouth- by offering the best service possible, Recommended by
Top Secret Imports and MRT Performance
4.5.8 Other Promotional Strategies include:
Measuring success of selling not just by sales volume but also by customer
satisfaction.
When selling, emphasise customer’s benefits, not just the product features.
Following up customer service should be a part of every sale such as keeping
customer informed of the progress of their order.
4.6 Pricing strategy
4.6.1 Desired image in market
For U-Spec Performance, it needs to make a unique and excellent reputation
by providing a high quality service at reasonable pricing strategy to attract customers
from all income levels from low income earners to high income earners as Parramatta
is considered the centre of Sydney it as access to all people of every income level.
4.6.2 Comparison against competitors’ prices
There is a bit of competition within Sydney for this kind of service. Therefore,
U-Spec Performance will need to lower its prices in comparison to its rivals in order
to attract the customers. This business is fairly new and people are generally more
attracted to already establish companies who have proven success in the past. It needs
its low cost policies in order to attract revenue. This will have to be the case for the
first few years, until the business’s credibility is developed. U-Spec Performance will
need to charge its customers roughly 5% less than its competitors in order for them to
gain revenue.
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4.6.3 Prancing strategy to be used
U-Spec Performance will be using to start of with a combination of Skimming
and Market Penetration pricing as to get an advantage over its competitors.
Market Penetration pricing will be used for general mechanic services such
as general repairs and servicing etc as there are so many workshops/
mechanics offering these services. (refer to Appendix 4e for General Service
Prices)
Skimming pricing will be used for the “performance” repairs and upgrades as
we are only one of a few who do these. There is no prices pre-determined as it
depends on a variety of variable for example type of car, part, brad, amount of
work to be done etc. (refer to Appendix 4e for modification install estimate
prices-BYO parts)
4.6.4 Once Established
U-Spec Performance is planning to use a rage of pricing method which
includes:
Odd pricing- for the parts and accessories to be sold in the shop we will be using odd
pricing as it creates a psychological imprison of low prices.
Discounts (multiple-unit pricing) - offer discounts for buying for then one
service and/or product or example buy a performance part from us and also get
us to install it which inturn will work out cheaper for the customers.
Bundling- offer such deals like “2 for 1” (buy 2 for the price of 1) also for the
services bundle deals for example you get more then one service from us offer
discounts or free extras such as with any major wheel or suspension work get
free alignment and balancing etc.
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4.7 Distribution Strategy
4.7.1 Channels of Distribution
For the shop front we will be using the “Wholesaler to Retailer to Consumer”
approach as we will be getting products direct from the manufacturers/suppliers of the
brands, this way we will be able to offer them at a lower price.
For the mechanic service we will be using the “Manufacture to Consumer”
approach as there is not middle man involved in the transactions.
There are no major products being sold in this business therefore distribution
and logistics are not of a huge concern. The accessories and parts will be delivered to
the business via logistics companies such as Toll every week or when ordered as we
are using Just-in-Time (JIT) and based on customer order as we wont be stocking
much stock on location due to a extensive range to products and that we are not only a
sales shop . For supplies needed for the shop there will be deliveries each week based
on need using JIT. Just-in-Time manufacturing has been chosen as it is a systems
approach to developing and operating a manufacturing system as it aims to eliminate
waste as it requires equipment, resources and labour are made available only in the
amount required and at the time required to do the job. In short, JIT means making
what the market wants, when it wants it (eg. customer orders). JIT has been found to
be so effective that it increases productivity, work performance and product quality,
while saving costs. JIT is also used by Top Secret Imports Blacktown (Appendix 5a)
Initially, we will be focused on providing a convenient location for the
customer. Parking will be provided on site for customers.
4.7.2 Business location:
The business location is ideal in terms of accessibility as Parramatta is in the
“centre of Sydney”. There will be a lot of revenue once the business is established.
However, there are already established mechanics and dealer workshops in
Parramatta, but as the business is mostly catering to a specific group mostly this
should not be a problem.
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Management Plan
5.1 Management Details
This is a small proprietary company owned by the Smith brothers, Bob and
John, both of which are experienced mechanics themselves. As they both have equal
share ratio of 50% each, their responsibilities for the business will be equal. They will
both be directors of the company and manage the daily operations of the business and
on-hand mechanical work at the workshop. They will work full time and be paid a
salary of $48,000 per annum and three extra employees will be hired. There will also
be external part-time staff including a bank, an accountant, a solicitor and an
insurance broker; whose roles will be to help provide aid to certain areas of the
company. The profit and loss will be shared equally between them both.
Name: Mr. Bob Smith
The relevant personal details and qualifications are as followed:
Advanced Diploma of Engineering – Mechanical
10 years modified cars experience
4 years experience as an all-rounder mechanic in Five Star Auto
2 years experience as workshop supervisor in Midas car care centre
Has a genuine passion for performance cars and performance parts
Has slight knowledge in areas of management, finance, and accounting
Has knowledge of OH&S principles and practices
Name: Mr. John Smith
The relevant personal details and qualifications are as followed:
Diploma of Engineering – Mechanical
Certificate IV in Automotive Management
6 years experience as workshop manager in MRT Performance
2 years experience in retail and customer service
Has high problem-solving skills
Has knowledge in areas of management, finance, and accounting
Has knowledge of OH&S principles and practices
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5.2 Professionals Details
There will be two full time mechanics and a part time service receptionist
hired. The mechanics will all be highly trained in all areas of servicing for
automobiles and will be working in the workshops. Whereas, the service receptionist
will focus on the sales of the performance parts and various other duties.
5.2.1 Description of Professionals team
Name: Mr. Brad Taylor
The relevant personal details and qualifications are as follows:
Certificate II in Automotive Vehicle Servicing
2 years experience in retail and customer service
3 years experience as a mechanic
Name: Mr. Jack Thomas
The relevant personal details and qualifications are as follows:
Certificate II in Automotive Mechanical
4 years experience as a mechanic
Has great interest in performance cars
3 years modified cars experience
Name: Mr. Tom Anders
The relevant personal details and qualifications are as follows:
Certificate II in Automotive Mechanical
Certificate II in Automotive Sales
3 years experience in retail and customer service
2 years experience as a mechanic
Has great knowledge of performance parts
5.3 Organisational structure
It has been decided that both owners will be working full time fulfilling their
roles as the managers, as mechanics, and as service receptionists when required.
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Manager/Director(Bob & John)
Mechanics(Brad Taylor)(Jack Thomas)
Service Receptionist(Tom Anders)
There will be three extra employees, two of which are highly skilled and trained
mechanics, and the other is highly knowledgeable on performance parts and will be
the service receptionist.
5.4 Organisation chart
5.5 Job Profiles
The job profiles include both owners, and the three employees. (For wages
rates summary see appendix 5a)
Job description
Position: Director
Duties:
Administration & Management
Accounting & Finance
Management of cash flow
Client liaison
New performance parts research and development
Major vehicle modifications
All dyno-tuning
Remuneration: $48,000 per annum + commission.
Job description
Position: Auto Mechanic
Duties:
Vehicle servicing
All vehicle maintenance
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Performance upgrades
Fault diagnosis
Registrations inspections
Customer service
Remuneration: $32,000 per annum + commission.
Job description
Position: Service Receptionist
Duties:
Customer care/service
Booking in client’s cars
Performance upgrades advice
Performance parts support
Transactions and cash handlings
Data entry
Remuneration: $15 - $17 per hour.
5.6 Staffing Strategies
5.6.1 Recruitment
Employees will be recruited, if required, in the following ways:
Advertising in the newspaper
From private employment agencies
Advertising at educational institution
Advertising at the workshop.
Referral from existing employee and friends
5.6.2 Probation period
New employees will be on probation period. For full time and permanent
employees the probation period will be three months, as they will be evaluated and
tested over a long time to show their skills and abilities. New employees can be
terminated at any time based within the period mention above if they are not
performing up to the required standards.
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5.6.3 Remuneration
Both owners are going to work full time and will receive share profit equally,
and will receive same salary of $48,000. While employees, when recruited their
salaries/wages will be decided based on their work and will be paid at market rate.
5.6.4 Incentive schemes
1% commission based on productivity and on time saved in working on each
servicing job.
Each employee will be given annual holiday pay, and superannuation.
5.6.5 Work environment
The workshop is designed to properly accommodate workers, and they are
required to wear protective clothing. There is proper ventilation to accommodate air
flow inside the workshop as there are fans installed on the roof. There will be a large
area of car space to sit vehicles. There are lunch and rest room facilities provided. The
workshop is cleaned every day to remove any waste or parts that are dangerous to
workers. Chemicals are used to clean the machines to make sure that they function to
their fullest potential.
5.6.6 Training and development
All employees will be required to continuously undertake training and
education in order to maintain the level of skill in the trade which enables them to
perform the service more effectively and more efficiently. Upon hiring, the mechanics
are required to perform various tasks to show their skill and knowledge in auto
mechanic servicing. All employees are also trained for Operational Health & Safety
procedures.
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5.7 Professional Advisers
Occupation Details
Accountant Champions
Level 3, 107 Phillip Street, Parramatta 2150 NSW
Ph: (02) 9635 7700
Bank St George Bank, Parramatta Branch
126 Church Street, Parramatta 2150 NSW
Insurance Broker Security Industry Insurance Brokers
27 Fennel Street, North Parramatta 2151 NSW
Ph: (02) 9630 8212
Solicitor Baldock Stacy & Niven Solicitors
Level 4, 91 George Street, Parramatta 2150 NSW
Ph: (02) 9891 6444
5.7.1 Accountant:
Preparation of the annual reports and tax returns
Provide financial information
Assessment in the fair price of the business
5.7.2 Bank:
Provide account service
Provide loan products
Provide banking of cheques, money orders and cash
5.7.3 Insurance Broker:
Determination of the required insurance for business
Arrangement for the relevant insurance cover
Process of any insurance claims
Analyse any business risks of operation
5.7.4 Solicitors:
Representation in all legal matters and negotiations
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Advice on general legal matters
Preparation of contract and legal documents
5.8 Job Performance
The performance of the employees will be measured every month for both the
existing and new employees. Existing employees will be evaluated on their
performance, and new employees will be evaluated for a permanent position. Poor
performance by existing employees will be given three warnings to improve,
otherwise they will be dismissed.
5.9 Occupational Health and Safety Compliance
Under OH&S legislation, we are obligated to provide the following for our employee
safe premises for work
safe machinery and substances
safe systems of work
information, instruction,
training and supervision
A suitable working
environment and facilities.
These requirements are legally enforceable and carry heavy penalties in failing
to comply with such regulations. To ensure that the business complies with such
regulations, we will adopt codes of practice. Such codes to be adopted include regular
consultations with OH&S officers, risk assessments, preparation of Material Data
Safety Sheets (MSDS), working in confined spaces (AS2865-1995), licensing and
qualification, noise and workplace injury and disease recording.
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Operation Plan
6.1 Business Name
The business will trade under the registered name of “U-Spec Performance
Pty. Ltd.”.
The benefit of using a trading name includes:
Helping the business to project the desired outcomes for customers as ‘U-
Spec’ is an abbreviation for Unique Specifications
It is a easy and catchy business name
It can describe the business activity and it can give the business a professional
and credible appearance.
6.2 Ownership Structure
The business will be operated as a small propriety company by Bob and John
Smith; they will be the main shareholders of the company owning it by 50% each
share ratio. A company structure is chosen because the brother’s personal assets will
be kept separate from the business asset and they will not become personally liable if
the company goes bankrupt. The company will come into legal existence at the date
of its registration. We choose the company structure because it offers legitimate tax
minimising possibilities due to the set tax rate and also because it is a separate legal
entity. A company can, in its own name and rights, own assets and property as well as
enter into contracts.
6.3 Business Location
6.3.1 Location
U- Spec Performance will be located at 69 High Street, Parramatta. This
location is convenient for customers who are required to leave there vehicles
overnight, as it located minutes away from Parramatta station. (Refer to Appendix 6a
for site map)
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6.3.2 Transportation Networks:
Parramatta is located in the centre of Sydney, making it very accessible to
people located all over Sydney. Parramatta is connected with major high ways and
motorways i.e. The M4, M7 and Great western Highway. These networks are vitally
important for the trade of goods and services. Parramatta is surrounded by a number
of car dealerships, making it a convenient location in terms of raising awareness of
our business.
6.3.3 Building and Layout
Lease Terms:
The property will be built for 5 year term with 2*5 year option and it has been leased
at the first annum for $98,800 (1900 per week Avg. rent for Parramatta according to
LJ Hooker Parramatta www.ljhooker.com.au/compare.php?comparetype=Industrial).
Building Contents
Description Strata Factory Unit Total NLA: 415 m2
Building Area: 415 m2
Property Type: Strata Factory Unit
Zoning 4(b) Light Industrial
Uncovered Parking: 12
Total Parking: 12
(search-www.ljhooker.com.au)
(See appendix 6b….for images)
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Layout
- 31 -
Workshop E
ntrance
Service
DeskWaiting Area
Customer parkingSuitable for approximately 12 cars
Engine HoistTool Cabinet
car lifts/ servicing areas
Dyno Machine
Storage Unit for Environmental equipment
Entrance via High Street into fenced off area with gates.
Display of parts and accessories
Staff lounge and kitchen
Second Floor: Office, storage.
Storage Room for delivered parts
6.4 Operational Process
6.4.1 Operating Hours
U-Spec Performance will operate in Parramatta, where we will set up both a
workshop, and retail outlet (see appendix for layout). Operating hours will range from
9am – 6pm, Monday to Friday, and 9am to 2pm on Saturday.
6.4.2 Operating Activities (Products and Services)
U-Spec performance will operate on a “wholesaler to retailer to customer”
basis as well as providing mechanical services. In terms of products we offer a wide
range grouped into categories such as exhaust systems and tips, engine cooling
systems, drive-train accessories, ECU’s, engine upgrades, boost control, down pipes
and turbo & supercharge kits and various gauges. To remain competitive, we also
offer general mechanic services.
Certain vehicle parts may require a modification permit. If any alteration made
to a vehicle requires such a permit, we will have the vehicle inspected by the relevant
authority (see appendix 6c). Any costs associated with this will be passed on to the
customer.
It is expected that once customers purchase the item from us, we will be the
entity which will install the part/s. As a result we will also be providing mechanical
services, with the aim of getting the optimal performance out of your vehicle. We can
do a range of tasks such as dyno tuning, ECU tuning and installation, engine building
and repairs, suspension upgrades, transmission and drive-train upgrades, forced
induction conversions and turbo and supercharge installations.
6.4.3 Customer Purchases System
An online catalogue will be set up on our website, detailing the brands and
parts on offer. Once the customer has identified there needs and wants, they fill out a
request for parts form, detailing the parts and any previous modifications done to the
vehicle. The owners or staff will then review and evaluate the request, determine
whether the job is plausible, and then reply to the customer. If the job is not plausible,
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our mechanics will suggest an alternative. Once the customer agrees with the
purchase, the item will be ordered. Insurance is automatically charged on the item,
unless specified by the customer. Once the part is received, the customer will be
notified to bring their vehicle to our location.
The customer will be charged for the cost of the item (including delivery and
insurance) as well as labour. If necessary, he/she will also be given a separate bill (as
required by ATO Law) for obtaining a vehicle modification permit.
(Refer to appendix 6d for flow chart and appendix 6e sample order form)
6.4.4 Quality Control
To reduce any unnecessary purchase of supplies, we will implement three
main measures. The first measure is restricting access to the computer system via
password protection. The second measure involves payment to suppliers. Any
payments made to suppliers will require multiple signatures on cheques (i.e. the
owners’ signatures’). Where an owner is absent, this authority is delegated to the
receptionist. As the business grows, more internal control measures will be
implemented based on the contingencies faced. The third and final measure is an
identification policy. Customers must provide identification before claiming there
order.
6.4.5 Suppliers
In terms of providing the inventory, we will employ the services of 3 different
suppliers: Automotive Components Limited, TurboWhole-salers.com, and
Performance Wholesale Australia Pty Ltd. All three businesses are located with in
Australia improving delivery time and the distribution channels.
These three wholesalers also provide the range of products we aim to sell in
our retail department. Together they also cover parts for all vehicles (Nissan, Toyota,
and Honda etc.) made within the last 10- 15 years.
For more information on our suppliers refer to appendix 6f
6.4.6 Inventory System
Purchases will be made based on a just-in-time system approach (JIT). There
is no need to purchase inventory in advance, eliminating the need for storage.
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Supplies will be purchased based on the demands from customers. Using JIT will
mean frequent purchases and deliveries. This means that communication both up and
down the supply chain is crucial (Broyles et al 2005).
One method to achieve a good communication system is to create a schedule
for deliveries and ordering. For example the company may only decide to purchase
from suppliers 3 times a week- Monday, Wednesday & Friday. By sticking to this
schedule we can become more responsive to our customer needs. The end result is
better relationship with not only our suppliers, but also with our customer.
Although our main form of inventory management is based on JIT systems,
we at U-Spec Performance will order inventory for display purposes.
6.4.7 Tools and Equipment
For the workshop, there is a number of specialist equipment needed in order to
perform our day to day operations. In addition to the equipment provided under the
environmental regulations, the following will be required but not limited to:
Spill kit for emergencies*
Dyno Machine
Wastewater storage container*
Waste liquid collection
containers*
Oil filter collection container*
Set of hand Tools x2-
(wrenches, screw drivers, etc.)
Engine Hoists (chains and sling
included) x2
Waste tracking system*
Impervious ground mat/ drip
treys*
Spill proof oil trey and fluid
container*
Vehicle Hoist x2
ECU tuning kits
Pressure Gauges and Pumps
Vehicle jacks
Note: Environmental tools are those indicated by a *
All tools and equipment are purchased from different suppliers at varied costs.
Hand tools, jacks, and gauges are purchased from Transquip Direct at a total
estimated price of $2,900. Absorb Environmental Solutions will provide
- 34 -
environmental equipment and storage cabinet for approximately $7,000. Dyno
machine has a value of $29, 950, and will be leased at $669 per month. Vehicle hoists
provided by Lift King Australia holds a maximum of 4.5 tonnes, and cost $3,500
each. Hoists are portable and do not need council approval for use.
6.4.8 Office Equipment and running Cost
The following will be required for IT and Software:
Lenovo POS Bundle - Touch Screen purchased from hotpos.com.au -$2,729
Dell laptop computers(x2) with basic Microsoft access database software-
from dell.com.au $1,700
Desks and Furniture -$1000 from Officeworks
Eftpos Machine (in running costs)
Other office supplies will consist of kitchen items such as food, coffee
machine etc. We have set a budget of $1,000 per month.
Running costs of the business:
Utilities $3,960 Telephone and Internet $387 Other exp (Efpos & Postage) $792 Total General Expenses $5,139
6.4.9 Insurance:
U-Spec Performance will take out insurance cover from Capricorn Mutual
(http://capricornmutual.millstream.com.au/); a subsidiary of Capricorn Society Ltd.
Capricorn Society has been known to provide assistance to automotive businesses
from auto electricians and mechanical workshops.
Insurance will be taken out to provide cover for the building and it contents, personal
accident and illness, and liability insurance (product and public). The insurance cover
will total $1750 per month. Workers compensation figures will be based on the
industrial relations guideline (being 2.787% ) of gross wages.
(www.industrialrelations.nsw.gov.au) (appendix 6g cover options)
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6.5 Legal Requirements & Regulations
Before attaining any of our goals, legal requirements need to be met before the
business commences. These requirements will continue to be met during the course of
the operations. These requirements are as follows:
Registering the business with the NSW Department of Fair Trading
Applying for, and obtaining a tax file number with the Australian Tax Office
Obtain council approval for the site we intend to use for operations.
Waste Permit from the Parramatta Council
Australian Business Number (ABN) and Business Activity Statement (BAS)
Operating Permit from Work Cover NSW
Occupational Health and Safety (OH&S) assessment on the site. Also obtain a
safety permit from the National Occupational Health and Safety Commission.
Public Liability/ professional indemnity/ product liability insurance
Insurance for building and contents
Insurance cover for employees- workers compensation and superannuation.
6.5.1 Occupational Health & Safety Regulations
Refer to section 5.9
6.5.2 Environmental Regulations
Today, more than ever people are looking towards businesses that are
environmentally friendly. Environmental issues raised have forced councils to
develop regulations for businesses. To minimize pollution, the workshop will be
required to carry a number of items (refer to section: tools and equipment).
6.5.3 Other Regulations
We at U-Spec Performance will be providing a specialist service, meaning any
modifications we make must comply with RTA Vehicle Standards Information sheets
(VSI). More specifically, the guidelines we must conform to are as follows:
VSI 02- Restricted engineering Signatories (Sept 2008)
VSI 06- Guidelines for light vehicle modifications (Nov 2007)
VSI 07- Australian Design Rules (Nov 2007) and
VSI 37- Reporting of Vehicle Defects (Nov 2007)
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Financial Plan
7.1 Establishment and Funding
There are several options to finance the initial costs of the business, approximately
$400000, which will be operated as a small proprietary company with the whole or a majority
share of the company owned by Bob and John Smith. The recommended strategy for
financing the business is detailed below along with an alternative option that the business
may consider.
7.1.1 Recommended Strategy:
The owners, Bob and John Smith, should invest at least $200000 in total then finance
the remaining $300000 through debt financing or bank loan. We recommend that you try to
invest as much as possible into the business so that the debt can remain as low as possible
which will reduce interest expenses and financial pressure for the business. We also believe
that a residential property should be used as security since it will generally produce better
terms and rates. We recommend you shop around for the best deal for your business loan
since you may find a better loan deal by negotiating, however we have provided details for a
fully drawn advance loan with Westpac that we feel is suitable for your situation.
Advantages:
Owners do not have to give up equity
Is generally more readily available
Disadvantages:
Interest expenses
May require collateral like residential properties
Details: (further details can be viewed in the appendix 7a)
Institution: Westpac Banking Corporation
Loan Amount $200000
Loan Period: 3 years
Interest Rate: Fixed rate at 8.90% pa
Annual Repayment $78,870.18
7.2 Loan Repayment Schedule
Loan Repayment Schedule Loan principle: $200,000 Annual interest rate: 8.90% Number of years 3 Annual Payments
Year TotalTo
InterestTo
PrincipleYear-End Principle
0 $200,000.001 $78,870.18 $17,800.00 $61,070.18 $138,929.822 $78,870.18 $12,364.75 $66,505.42 $72,424.403 $78,870.18 $6,445.77 $72,424.40 $0.00
7.2.1 Alternative Strategy:
Another option to help finance the initial costs of your business is through equity financing.
This means offering part ownership of the business to other people, which could include your
friends and other members of your family.
Advantages:
Can be convenient and available quickly
Other owners can contribute to help the business
Disadvantages:
Can limit the control you have over your business and profits you receive
Extra pressure on business and yourself since it is not just your own money
Projected Income Statement for U-Spec Performance Pty. Ltd.for the year ended 30 June 2010
July AugustSeptembe
r October November December January February March April May June TotalRevenue Sales Revenue $16,200 $16,200 $16,200 $17,400 $17,400 $17,400 $18,600 $18,600 $18,600 $19,800 $19,800 $19,800 $216,000 Services Revenue $10,800 $10,800 $10,800 $11,600 $11,600 $11,600 $12,400 $12,400 $12,400 $13,200 $13,200 $13,200 $144,000 Total Revenue $27,000 $27,000 $27,000 $29,000 $29,000 $29,000 $31,000 $31,000 $31,000 $33,000 $33,000 $33,000 $360,000 less Costs of Goods Sold $10,800 $10,800 $10,800 $11,600 $11,600 $11,600 $12,400 $12,400 $12,400 $13,200 $13,200 $13,200 $144,000 Gross Profit $16,200 $16,200 $16,200 $17,400 $17,400 $17,400 $18,600 $18,600 $18,600 $19,800 $19,800 $19,800 $216,000
Expenses Operational Expenses Marketing $3,098 $2,017 $2,017 $2,017 $2,017 $2,017 $1,467 $1,467 $1,467 $1,467 $1,467 $1,467 $21,985 Rent $7,600 $9,500 $7,600 $7,600 $9,500 $7,600 $9,500 $7,600 $7,600 $7,600 $9,500 $7,600 $98,800 Wages and Salaries $7,707 $7,707 $7,707 $7,707 $7,707 $7,707 $7,707 $7,707 $7,707 $7,707 $7,707 $7,707 $92,480 Maintenance $370 $370 $370 $370 $370 $370 $370 $370 $370 $370 $370 $370 $4,434 Insurance $1,965 $1,965 $1,965 $1,965 $1,965 $1,965 $1,965 $1,965 $1,965 $1,965 $1,965 $1,965 $23,580 Legal Fees $400 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $400 Depreciation $308 $308 $308 $308 $308 $308 $308 $308 $308 $308 $308 $308 $3,695 Total Operating Expenses $20,482 $20,901 $19,001 $19,001 $20,901 $19,001 $20,351 $18,451 $18,451 $18,451 $20,351 $18,451 $233,794 General Expenses Utilities $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $12,000 Telephone and Internet $129 $129 $129 $129 $129 $129 $129 $129 $129 $129 $129 $129 $1,548 Postage $216 $216 $216 $232 $232 $232 $248 $248 $248 $264 $264 $264 $2,880 Total General Expenses $1,345 $1,345 $1,345 $1,361 $1,361 $1,361 $1,377 $1,377 $1,377 $1,393 $1,393 $1,393 $16,428 Other Expenses Interest Expense $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $17,800 Total Other Expenses $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $1,483 $17,800 Total Expenses $23,310 $23,729 $21,829 $21,845 $23,745 $21,845 $23,211 $21,311 $21,311 $21,327 $23,227 $21,327 $268,022
Net Profit ($7,110) ($7,529) ($5,629) ($4,445) ($6,345) ($4,445) ($4,611) ($2,711) ($2,711) ($1,527) ($3,427) ($1,527) ($52,022)
7.3 Projected Income Statement- Year 2010
Projected Balance Sheet for U-Spec Performance Pty. Ltd.as of 30 June 2010
July AugustSeptembe
r October November December January February March April May JuneAssets Current Assets Cash at Bank $324,820 $312,600 $302,279 $293,143 $282,107 $272,971 $263,669 $256,266 $248,864 $242,646 $234,528 $228,310 Inventory $1,080 $1,080 $1,080 $1,160 $1,160 $1,160 $1,240 $1,240 $1,240 $1,320 $1,320 $1,320 Total Current Assets $325,900 $313,680 $303,359 $294,303 $283,267 $274,131 $264,909 $257,506 $250,104 $243,966 $235,848 $229,630 Noncurrent Assets Garage Equipment Vehicle Hoists $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 less Acc. Dep. (10% pa ) ($58) ($117) ($175) ($233) ($292) ($350) ($408) ($467) ($525) ($583) ($642) ($700) Dyno Machine $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 $29,950 less Acc. Dep. (10% pa ) ($250) ($499) ($749) ($998) ($1,248) ($1,498) ($1,747) ($1,997) ($2,246) ($2,496) ($2,745) ($2,995) Mechanic Tools $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 Office Equipment and Supplies $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Computer and Cash Register System $5,429 $5,429 $5,429 $5,429 $5,429 $5,429 $5,429 $5,429 $5,429 $5,429 $5,429 $5,429 less Acc. Dep. (20% pa ) ($90) ($181) ($271) ($362) ($452) ($543) ($633) ($724) ($814) ($905) ($995) ($1,086) Total Noncurrent Assets $62,981 $62,582 $62,184 $61,785 $61,387 $60,989 $60,590 $60,192 $59,793 $59,395 $58,997 $58,598 Total Assets $388,880 $376,262 $365,543 $356,089 $344,654 $335,119 $325,499 $317,698 $309,898 $303,361 $294,844 $288,228
Liabilities Current Liabilities Accounts Payable $1,080 $1,080 $1,080 $1,160 $1,160 $1,160 $1,240 $1,240 $1,240 $1,320 $1,320 $1,320 Total Current Liabilities $1,080 $1,080 $1,080 $1,160 $1,160 $1,160 $1,240 $1,240 $1,240 $1,320 $1,320 $1,320 Noncurrent Liabilities Loan Payable $194,911 $189,822 $184,732 $179,643 $174,554 $169,465 $164,376 $159,287 $154,197 $149,108 $144,019 $138,930 Total Noncurrent Liabilities $194,911 $189,822 $184,732 $179,643 $174,554 $169,465 $164,376 $159,287 $154,197 $149,108 $144,019 $138,930 Total Liabilities $195,991 $190,902 $185,812 $180,803 $175,714 $170,625 $165,616 $160,527 $155,437 $150,428 $145,339 $140,250
Owner's Equity Bob Smith Equity $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 John Smith Equity $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 Retained Earnings/(Losses) ($7,110) ($14,640) ($20,269) ($24,715) ($31,060) ($35,506) ($40,117) ($42,828) ($45,540) ($47,067) ($50,495) ($52,022) Total Owner's Equity $192,890 $185,360 $179,731 $175,285 $168,940 $164,495 $159,883 $157,172 $154,460 $152,933 $149,505 $147,978Total Liabilities and Owner's Equity $388,880 $376,262 $365,543 $356,089 $344,654 $335,119 $325,499 $317,698 $309,898 $303,361 $294,844 $288,228
7.4 Projected Balance Sheet – Year 2010
7.5 Projected Income Statement –Year 2011
Projected Income Statement for U-Spec Performance Pty. Ltd.For the year ended 30 June 2011
1st 2nd 3rd 4th TotalRevenue Sales Revenue $59,400 $59,400 $66,600 $66,600 $252,000 Services Revenue $39,600 $39,600 $44,400 $44,400 $168,000 Total Revenue $99,000 $99,000 $111,000 $111,000 $420,000 less Costs of Goods Sold $39,600 $39,600 $44,400 $44,400 $168,000 Gross Profit $59,400 $59,400 $66,600 $66,600 $252,000
Expenses Operational Expenses Marketing $4,401 $4,401 $4,401 $4,401 $17,604 Rent $25,935 $25,935 $25,935 $25,935 $103,740 Wages and Salaries $23,120 $23,120 $23,120 $23,120 $92,480 Maintenance $1,109 $1,109 $1,109 $1,109 $4,434 Insurance $3,960 $3,960 $4,440 $4,440 $16,800 Depreciation $924 $924 $924 $924 $3,695 Total Operating Expenses $59,448 $59,448 $59,928 $59,928 $238,753 General Expenses Utilities $3,960 $3,960 $4,440 $4,440 $16,800 Telephone and Internet $387 $387 $387 $387 $1,548 Efpos & Postage $792 $792 $888 $888 $3,360 Total General Expenses $5,139 $5,139 $5,715 $5,715 $21,708 Other Expenses Interest Expense $3,091 $3,091 $3,091 $3,091 $12,365 Total Other Expenses $3,091 $3,091 $3,091 $3,091 $12,365 Total Expenses $67,678 $67,678 $68,734 $68,734 $272,826
Net Profit ($8,278) ($8,278) ($2,134) ($2,134) ($20,826)
7.6 Projected Balance Sheet- Year 2011
Projected Balance Sheet for U-Spec Performance Pty. Ltd.As of 30 June 2011
1st 2nd 3rd 4th
Assets Current Assets Cash at Bank $204,600 $180,890 $163,325 $145,759 Inventory $3,960 $3,960 $4,440 $4,440 Total Current Assets $208,560 $184,850 $167,765 $150,199 Noncurrent Assets Garage Equipment Vehicle Hoists $7,000 $7,000 $7,000 $7,000 less Accumulated Depreciation (10% pa ) ($875) ($1,050) ($1,225) ($1,400) Dyno Machine $29,950 $29,950 $29,950 $29,950 less Accumulated Depreciation (10% pa ) ($3,744) ($4,493) ($5,241) ($5,990) Mechanic Tools $20,000 $20,000 $20,000 $20,000 Office Equipment and Supplies $1,000 $1,000 $1,000 $1,000 Computer and Cash Register System $5,429 $5,429 $5,429 $5,429 less Accumulated Depreciation (20% pa) ($1,357) ($1,629) ($1,900) ($2,172) Total Noncurrent Assets $57,403 $56,208 $55,013 $53,817 Total Assets $265,963 $241,058 $222,777 $204,017
Liabilities Current Liabilities Accounts Payable $3,960 $3,960 $4,440 $4,440 Total Current Liabilities $3,960 $3,960 $4,440 $4,440 Noncurrent Liabilities Loan Payable $122,303 $105,677 $89,051 $72,424 Total Noncurrent Liabilities $122,303 $105,677 $89,051 $72,424 Total Liabilities $126,263 $109,637 $93,491 $76,864
Owner’s Equity Bob Smith Equity $100,000 $100,000 $100,000 $100,000 John Smith Equity $100,000 $100,000 $100,000 $100,000 Retained Earnings/(Losses) ($60,300) ($68,579) ($70,713) ($72,848) Total Owner’s Equity $139,700 $131,421 $129,287 $127,152Total Liabilities and Owner’s Equity $265,963 $241,058 $222,777 $204,017
7.7 Projected Income Statement- Year 2012
Projected Income Statement for U-Spec Performance Pty. Ltd.For the year ended 30 June 2012
2012 2013 2014Revenue Sales Revenue $288,000 $324,000 $360,000 Services Revenue $192,000 $216,000 $240,000 Total Revenue $480,000 $540,000 $600,000 less Costs of Goods Sold $192,000 $216,000 $240,000 Gross Profit $288,000 $324,000 $360,000
Expenses Operational Expenses Marketing $13,665 $13,644 $13,665 Rent $108,927 $114,373 $120,092 Wages and Salaries $124,480 $124,480 $124,480 Maintenance $4,434 $4,434 $4,434 Insurance $23,580 $25,600 $27,000 Depreciation $3,695 $3,695 $3,695 Total Operating Expenses $274,401 $282,226 $290,366 General Expenses Utilities $19,200 $21,600 $24,000 Telephone and Internet $1,548 $1,548 $1,548 Postage $3,840 $4,320 $4,800 Total General Expenses $24,588 $27,468 $30,348 Other Expenses Interest Expense $6,446 $0 $0 Total Other Expenses $6,446 $0 $0 Total Expenses $305,435 $309,694 $320,714
Net Profit ($21,815) $10,306 $36,286
7.8 Projected Balance Sheet- Year 2012
Projected Balance Sheet for U-Spec Performance Pty. Ltd.As of 30 June 2012
2012 2013 2014Assets Current Assets Cash at Bank $60,681 $79,767 $123,834 Inventory $19,200 $21,600 $24,000 Total Current Assets $79,881 $101,367 $147,834 Noncurrent Assets Garage Equipment Vehicle Hoists $7,000 $7,000 $7,000 less Accumalated Depreciation (10% pa ) ($2,100) ($2,800) ($3,500) Dyno Machine $29,950 $29,950 $29,950 less Accumalated Depreciation (10% pa ) ($8,985) ($11,980) ($14,975) Mechanic Tools $20,000 $20,000 $20,000 Office Equipment and Supplies $1,000 $1,000 $1,000 Computer and Cash Register System $5,429 $5,429 $5,429 less Accumalated Depreciation (20% pa) ($3,257) ($4,343) ($5,429) Total Noncurrent Assets $49,037 $44,256 $39,475 Total Assets $128,917 $145,623 $187,309
Liabilities Current Liabilities Accounts Payable $19,200 $21,600 $24,000 Total Current Liabilities $19,200 $21,600 $24,000 Noncurrent Liabilites Loan Payable $0 $0 $0 Total Noncurrent Liabilities $0 $0 $0 Total Liabilities $19,200 $21,600 $24,000
Owner’s Equity Bob Smith Equity $100,000 $100,000 $100,000 John Smith Equity $100,000 $100,000 $100,000 Retained Earning/(Losses) ($90,283) ($75,977) ($36,691) Total Owner’s Equity $109,717 $124,023 $163,309Total Liabilities and Owner’s Equity $128,917 $145,623 $187,309
Projected Cash Flow Statement for U-Spec Performance Pty. Ltd.For the year ended 30 June
2010 2011 2012 2013 2014Cash Flow from Operating Activities Cash Receipts from Customers $360,000 $420,000 $480,000 $540,000 $600,000 Cash Paid to Suppliers ($144,000) ($168,000) ($192,000) ($216,000) ($240,000) Cash Paid to Employees ($92,480) ($92,480) ($124,480) ($124,480) ($124,480) Cash Generated from Operations $123,520 $159,520 $163,520 $199,520 $235,520 Cash Paid for Services ($152,961) ($163,200) ($169,728) ($180,434) ($191,453) Interest Paid ($17,800) ($12,365) ($6,446) $0 $0 Net Cash Used in Operating Activities ($47,241) ($16,045) ($12,654) $19,086 $44,067 Cash Flow from Investing Activities Purchase of Equipment ($63,379) $0 $0 $0 $0 Proceeds from Sale of Equipment $0 $0 $0 $0 $0 Net Cash Used in Investing Activities ($63,379) $0 $0 $0 $0 Cash Flow from Financing Activities Proceeds from Issue of Share Capital $200,000 $0 $0 $0 $0 Proceeds from Long-Term Borrowings $200,000 $0 $0 $0 $0 Repayments of Borrowings ($61,070) ($66,505) ($72,424) $0 $0 Dividends Paid $0 $0 $0 $0 $0 Net Cash Used in Financing Activities $338,930 ($66,505) ($72,424) $0 $0 Net Increase (Decrease) in Cash $228,310 ($82,550) ($85,078) $19,086 $44,067Cash at Beginning of Period $0 $228,310 $145,759 $60,681 $79,767Cash at End of Period $228,310 $145,759 $60,681 $79,767 $123,834
7.9 Projected Cash Flow Statement
Ratio AnalysisU-Spec Performance Pty. Ltd.
Ratio 2010 2011 2012 2013 2014 Liquidity Current Ratio 173.96:1 33.83:1 4.16:1 4.69:1 6.16:1Quick Ratio 172.96:1 32.83:1 3.16:1 3.69:1 5.16:1 Leverage Debt Ratio 0.49:1 0.38:1 0.15:1 0.15:1 0.13:1 Operating Net Sales to Total Assets Ratios 1.25:1 2.06:1 3.72:1 3.71:1 3.20:1 Profitability Net Profit on Sales Ratio -14.45% -4.96% -3.63% 2.65% 6.55%
Net Profit to Assets Ratios -18.05%-
10.21%-
13.52% 9.82% 20.97%
Net Profit to Equity Ratios -35.16%-
16.38%-
15.89% 11.53% 24.06%
Break-Even AnalysisU-Spec Performance Pty. Ltd.
2010 2011 2012 2013 2014 Net Revenue $360,000 $420,000 $480,000 $540,000 $600,000Total Expenses $412,022 $440,826 $497,435 $525,694 $560,714Total Fixed Expenses $156,228 $155,752 $277,961 $279,340 $287,480Total Variable Expenses $163,314 $192,594 $219,474 $246,354 $273,234Contribution Margin (1- [VE / NR]) 0.54635 0.541443 0.542763 0.543789 0.54461 Break-Even Point (FE / CM) $285,949 $287,661 $512,122 $513,693 $527,864
7.10 Ratio Analysis
7.11 Break-Even Analysis
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Appendix
2a Environmental Issues
Pollution from Waste
There have always been issues of particular concern with the storage and disposal of
waste oil, oily wastewater, brake fluid, coolant and other liquids; the disposal of
vehicles parts; and the spillage of oils and other liquids when carrying out general
servicing and repair work. So mechanics must have access to a garbage base to meet
waste tracking and disposal requirements. Some methods to reduce the risk of
pollution include:
A spill kit for emergencies
Wastewater storage container
Waste liquid collection containers
Oil filter collection containers
Waste tracking system
Impervious ground sheet
Drip trays
A properly equipped garage base
Pollution from Emissions
Motor vehicles are to be maintained properly as to ensure they are as efficient as
possible which would minimize emissions. This is so because the emission from
brings severe impacts on both local and global levels. Locally, it causes air pollution,
whereas globally, it is a source of greenhouse gas emission.
2b. Motor Vehicle Repairs Act 1980 (NSW)
s.15 – States that:
On or after the relevant day, no person (other than an exempted person) shall:
a. carry on or advertise that the person carries on or is willing to carry on the business of
a repairer in respect of any repair work unless the person is the holder of a licence in
respect of a class of repair work that includes that repair work; or
b. Carry on the business of a repairer at any place of business unless the person is the
holder of a licence granted in respect of that place of business.
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s.4 – Defines "repair work" as the work of: an automotive electrician, a body maker, a brake
mechanic, a front end specialist, a motor cycle mechanic, a motor mechanic, a painter
tradesman, a panel beater, a transmission specialist, a liquefied petroleum gas mechanic, a
natural gas mechanic, and a prescribed tradesman; but does not include work that is
prescribed as exempt for the purpose of this definition.
s.18 (1) - In order to be able to grant a licence the MVIRC must be satisfied that the applicant
is a "fit and proper person" and has "sufficient material, manpower and financial resources to
carry on the business of a repairer in respect of that class of repair work.
s.19 - Specifies that a licence granted by the MVIRC must:
a. (Repealed)
b. specify the class or classes of repair work in respect of which the licence is granted;
c. specify the place of business in respect of which the licence is granted;
d. specify the name of the person or, in the case of a joint licence the names of the
persons, to whom the licence is granted; and
e. where the licence (including a joint licence) is granted to a corporation, specify the
names of the directors of the corporation.
s.15 (1) - Maximum penalty for a breach is 20 penalty units (currently $2200)
(Source Office of Fair Trading – Review of Motor Vehicle Repairs Act 1980,
http://www.fairtrading.nsw.gov.au/pdfs/About_us/mvrareport.pdf)
2c Regression Model of Sydney Petrol Prices (unleaded)
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(Source http://www.stubbornmule.net/2008/06/sydney-petrol-prices/)
2d Economic Issues- Petrol Prices
Another economical issue that may affect the industry is current and possible taxes on
cars. The current tax on luxury cars is currently 25% and there has been proposed
increase to 33% in the near future. One would assume that this increase will decrease
the sale of luxury cars, including a lot of high performance vehicles which is the main
concern of the business, however experts suggests that most buyers of high
performance vehicles, like Ford Performance Vehicles, are less sensitive to price
increases compared to ordinary car buyers. This means the possible tax increase will
have little or no impact on high performance car sales and therefore our market. There
has also been discussion over the introduction of a congestion tax, which charges
drives for every kilometer they use in congested areas like the city, to decrease the
congestion and pollution in Sydney. Like high petrol prices this proposed tax may
decrease car sales and car usage, which will affect our market.
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4a Interview – Top Secret Imports Blacktown
Gary Shander- owner ManagerForge St, BlacktownPh: 9676 1023www.topsecretimports.com.au/ 1. What type of business do you operate and what are the main products/
service offered as part of operations?
The type of business we offer sales of imported cars from Japan, mostly deal with
sports cars but also some luxury family, commercial and hybrids.
Also we now offer a mechanic service and auto electrician all in one place. We
also offer sales of parts and accessories on order.
2. How did you start of?
We started of pretty much in our back yard for a part time business where we
would import cars and sell them on the trading post and Carsales.com.au etc then
when we sow that there was a demand for this so we started a full proper business,
where we had the grand opening in Dec 2007.
3. How have external forces such and petrol Prices and P-Plate regulations
affected your business as you deal with mostly sports cars.
Surprisingly it has not really affected us as much as we thought, I mean we have
had a few sales drops but we have combated that by the sales of hybrid imports
which are cheap to buy compared to the ones already sold in Australia. Also
it is because most car enthusiasts either have more then one car so they will have
one as a project and one run around car, or young people just want looks and
performance and they will spend money to do so and we offer a lot of non-turbo
cars also which P-plates.
4. As you said earlier for parts and accessories you only sell on order, is that
beneficial?
Yes, it is as there are a wast range of for parts and accessories on offer we would
just be tying up our operating cash flows because we are not only a business that
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sells for parts and accessories so this way also people can order exactly what they
want from type and brand etc.
5. What ways of advertising to you find affective for this type of business?
Well mostly Word of mouth, also we sell on Carsales.com.au and trading post and
we have a website and advertise on car enthusiasts sites and events such as Night
Shirt and also advertise in the High Performance Imports magazine which gets us
quite a few customers. But we have found that word of moth as been really
affective as for example one person bought a $42000 car from us from South
Australia without even looking at it, he only sow the pictures that’s it. It was from
the reputation built up in the forums of car enthusiasts and general people who
have used our business. We also have stickers for customers who have bought our
cars to display on them which I think is very affective .
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4b Interview- MRT Performance
1. What type of business do you operate and what are the main products/ service offered as part of operations?
The business we had chosen is part Retail, part Service Company operating the
automotive industry. Some of the main products sold in its retail department are
categorized as follows: power kits, suspension, transmission, engine and electronics.
In terms of providing a service, the business offers the following, but is not limited to:
Dyno tuning, Engine building and repairs, regular servicing of motor vehicles, vehicle
inspections and wheel alignments.
2. How many employees currently work within the chosen entity?
Every business, whether small or large, needs to make sure the right people and
equipment are available to do the job. Why? So a business can develop the best way
to fill customer orders and at the same, provide some value (Bozath et al 2006).
Currently, the workshop employs 8 workers, each with different qualifications for
different tasks. Titles held include technician (junior and senior), technical director,
manager and general assistant.
3. Has your chosen company incorporated E-Business into its operations?
Our chosen entity has incorporated e-business into its retail department, setting up an
online catalogue for its market. This enables our customers to browse through a
number of categories from ranging from wheels to turbo kits and accessories. Once
they found what their after they place an order in one of three ways – through email,
setting up an online account, or through fax/ post.
Payment can be made via money order/cheque, direct bank deposit into the company
account and credit card. For the full details you can visit our website. Customers are
also automatically charged for insurance, on delivery. However customers can notify
the company if they refuse insurance.
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4. The external environment refers to the forces and institutions outside an organization that potentially can affect the organizations performance. The external environment is divided into 2 components- specific and general. The general environment consists of economic conditions, legal forces, socio-cultural conditions and demographics. Select one of these and explain the effect on your chosen business.
The most recent changes affecting drivers, particularly those with provisional
licenses, have come from legal forces. The NSW Government has implemented
restrictions on a large number of performance vehicles. As a result provisional license
holders are prohibited from driving certain cars.
This has had a minimal impact on our business of choice. The reason for this is the
companies target market. Our chosen entity’s market is more up-market to the P-Plate
market, consisting of those aged between 30- 35 yrs and up. Ten per cent of which use
their vehicle in racing events; the other ninety percent for on road use.
5. What ways of advertising to you find affective for this type of business?
Well mostly Word of moth among the car enthusiasts, also website and advertise on
car enthusiasts sites and magazines but I think the main one would be from the
reputation built the by the car enthusiasts and general people who have used our
business. We also have stickers for customers who have bought our cars to display on
them which I think are very affective.
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4c Advertising Rates Email from Hot4s magazine
Advertising Rates:
HOT 4S:
Monthly Readership: 174,000
Double Page Spread: $2,200 + GST per issue
Full Page: $1,200 + GST per issue
Half Page: $700 + GST per issue
Quarter Page: $400 + GST per issue
Business Card Size: $200 + GST per issue
Web Packages:
Avg Page Impressions per month: 99,000
Monthly Banner costs on Website (unlimited page impressions)
Large island banner: $600 + GST per month
Sky Scraper: $1000 + GST per month
Regards
Mark Cutajar
Senior National Advertising & Marketing Manager
Express Motoring Group Pty Ltd
Phone: (02) 9741 3942
Email: [email protected]
Mobile: 0423 595 65
(Source email from [email protected])
4d Promo sticker design
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4e Service Charges (General Services):
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Service Starting Cost*
Full Car Service (oil change (std), spark plugs (std), coolant
flush (with new coolant))*
$290
Mufflers Service $95
Clutch and Brakes $320
Written Inspection Test $50
Transmission check $100
Carburettors Check $50
Electronic Tune Up (dyno)* $400-800
Safety Service $97.40
Electronic Pink Slip $35
Clutch Repair $550
Service Charges Modifications (Install/Labour Prices-BYO Parts):
Service Starting Cost*
Turbo install- direct bolt on- others (depending on car, type,
alterations needed)
$500
Exhaust-Cat back/turbo back (depending on any alterations
needed)*
$300/$500
Exhaust tip only (depending on car, type, alterations needed)*
Clutch and Brakes $400
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Intercooler (depending on car, type, alterations needed)* $500
Blow off valve (depending type)* $150
Suspension (depending on car and type)* includes alignment
and balance
$250
Electronic Tune Up/dyno (depending on car and mods)* $400-$800
Turbo Timer (depending on car and type)* $150
Boost Controller (depending on car and type)* $250
Injectors (depending on car)* $150
* Prices subject to change
5a RATES SUMMARY
Metal Engineering and Associated Industries (State) Award (039)
State Wage Case 2007 increase to wages and allowances
From the beginning of the first full pay period on or after 11 October 2007
ClassificationsFull Time($ per week)
Part Time($ per hour)
Casual($ per hour)
Casual Holiday Pay ($ per hour)
Level C 14 531.40 13.98 16.09 1.35Level C 13 541.10 14.24 16.38 1.37Level C 12 563.60 14.83 17.06 1.43Level C 11 584.50 15.38 17.69 1.48Level C 10 618.20 16.27 18.71 1.56Level C 9 639.10 16.82 19.35 1.62Level C 8 659.90 17.37 19.98 1.67Level C 7 678.80 17.86 20.55 1.72Level C 6 720.50 18.96 21.81 1.82Level C 5 741.40 19.51 22.44 1.87Level C 4 762.20 20.06 23.07 1.93Level C 3 803.90 21.16 24.33 2.03Level C 2(a) 824.80 21.71 24.97 2.09Level C 2(b) 862.50 22.70 26.11 2.18Level C 1(a) 946.00 24.89 28.63 2.39Level C 1(b) 1071.10 28.19 32.42 2.71
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Some Examples of the Old Task Based classifications compared to the current Skills Based Structure:
C10 - Tradespersons - Fitter, Mechanic (Motor, Marine, Plant, Refrigeration), Turner, Shipwright-boatbuilder, all Smiths, Boilermaker, 1st Class (Machinist, Sheetmetal Worker, Welder, Metal Ceiling Fixer). C11 - Motor Cycle Mechanic. C12 - 2nd Class (Machinist, Sheetmetal Worker, Welder, Metal Ceiling Fixer, Spray Painter,Silk Screen Maker, Storeman, Packer or Dispatcher. C13 - 3rd Class (Machinist, etc), Process Worker, Dry Enamelling Painter (brush or spray)Source (Industrial Relations - http://www.industrialrelations.nsw.gov.au/)
6a Location site Map
- 59 -
(Source www.whereis.com)
6b Site Example
- 60 -
Shop
Office (Source www.Ljhooker.com.au)
6c Modification Permit engineers
- 62 -
Name & Company Address Telephone and FaxBANCROFT, PeterBancroft Engineering
Unit 3, 16/18 Stanley StreetPEAKHURSTNSW 2210
P: (02) 9584 3290F: (02) 9584 0374
CROZIER AnthonyPakmor WasteEquipment Aust. Pty Ltd
35 Walker StreetWINDSORNSW 2155
P: (02) 4577 3099F: (02) 4577 3022
DALTON Ron 5-7 Frank StreetWETHERILL PARKNSW 2164
P: (02) 9725 4905F: (02) 9725 4946
FAKES RobertFakes Engineering
Armidale RoadGLEN INNESNSW 2370
P: (02) 6732 1755F: (02) 6732 1755
GAL AnthonyArlow Engineering
1 Dinah PlaceBALGOWNIENSW 2565
P: (02) 4283 4365F: N/A
GEORGAS WilliamProblem ManagementEngineering
6 Kookaburra RoadHORNSBY HEIGHTSNSW 2077
P: (02) 9482 2808F: (02) 9476 6046
BARRETT KimBelconnen AutomotiveRepair Services Pty Ltd
76 Grimwade StreetMITCHELLACT 2911
P: (02) 6241 4888F: (02) 6241 4365
BARRETT StewartBelconnen AutomotiveRepair Services Pty Ltd
76 Grimwade StreetMITCHELLACT 2911
P: (02) 6241 4888F: (02) 6241 4365
(Source: RTA VSI2, Restricted Engineering Signatories p.3)
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Receive customer Request for Parts
Evaluate the request
CustomerMakes request
Is the job Possible
YesIdentify product from range of suppliers & place an order
Decide on an alternative and contact customer.
Notify customer that the part has arrived
No
Yes
Does the customer agree with the recommendation?
Place an order and make it clear that the company is not liable for any damages to vehicle engine.
No
6d Purchase System flow chart
6e Sample order form
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U-Spec Performance Parts Request Form
Customer Name: Adam Smith
Contact Number: 0421 161 834
Email:
Vehicle: make & model: 1998 Subaru Impreza WRX (MY99)
Previous Modifications (If any)
Part/s Requested:
Note: In this example, the customer is currently driving with cast pistons. If the turbo and injectors are purchased and installed, it will increase the pressure throughout the engine. Increased pressure will mean higher temperatures. Cast pistons have been known to strain, and some cases erode, damaging the engine. In this scenario the owners would contact the customer and recommend forged pistons should be installed prior to running the new turbo. It would also be recommended that the top mount be replaced with a front mount cooler to improve the airflow in the engine.
6f Supplier information
- 65 -
Top mount intercoolerCatback exhaustPod FilterTurbo-smart boost control Suspension upgradesUpgraded gearbox
Fuel injectors High flow Turbo
Turbo Wholesale Distribution (TWD)
Turbo Wholesale Distribution is an online wholesaler of performance parts and
accessories. Currently the store provides parts for most vehicle import shops. It
performance parts cover almost every vehicle, ranging from Acura- VW and
everything in between. Setting up an account with this supplier is done online and
takes 3-5 days.
There product range from boost controllers, blow off valves, performance gauges,
turbo kits and exhaust/muffler systems. By associating our business with TWD we
expect to obtain the following benefits:
Large selection of performance parts and brands.
Order online, check prices, print receipts and more online.
Drop Ship directly to customers location –if necessary.
NO Credit Card Surcharge Fee's.
Volume Based Discount Structure.
All products carry manufacturer warranty.
Automotive Components Ltd (ACL)
ACL was formed in 1922, developing and manufacturing engine parts for
Australia’s newly emerging automotive industry. Today ACL is a combination of 27
companies, acquired over a period of 86 years. It has a strong market share and
‘proven product quality’ and has a sales average of approximately $65 million per
year. U-Spec performance will set up and account with ACL for the following engine
components:
Pistons and Rings
Engine Bearings
Transmission components
Gaskets
- 66 -
Performance Wholesale Australia
Performance Wholesale Australia has over 30 years experience in building racing
engines, and has built up a reputation in supplying performance parts for not only road
vehicles, but also for all forms of motor racing. In 2008 the company has become an
authorized dealer of leading brands in performance components- HKS.
These three wholesalers provide the range of products we aim to sell in our retail
department. Together, they also cover parts for all vehicles (Nissan, Toyota, and
Honda etc.) made within the last 10- 15 years.
6g Common cover options for the motor trade
We cover the typical risks that motor trade business owners face every day and we allow you to choose the cover you need. Some of these cover options include:
Personal injury and property damage – this covers you if someone sues you for personal injury or damage to their property that occurs in connection with your business. For example, you could be sued if someone is injured in your workshop.
Fire, storm and other defined events (including malicious damage) – you are covered for damage to your buildings, contents, customers’ vehicles, machinery and stock in trade.
Liability for rectifying faulty workmanship – this is an extra option that you can take as part of your liability insurance.
Business interruption – you are covered for loss of profits if your business is disrupted by damage to your business property caused by specified events.
- 67 -
Personal accident and illness – this covers you for loss of income as a result of a defined accident or illness. We cover individuals which is useful for sole traders or partnerships that need both partners working.
Professional indemnity – you are covered for breach of professional duty through negligence, error or omission.
7a Product Details for Westpac Business Loan
- 68 -
- 69 -
Source(http://www.infochoice.com.au/Home/BankingSmallBusiness/BusinessLoans/Compare/tabid/
274/Default.aspx?mode=3&field1=Availability&value1=OO&field2=LoanType&value2=fully
%20drawn
%20advance&field3=inview&value3=&field4=extralink&value4=false&pagename=default.aspx&orde
r=descending&sortfield=InstitutionTitle&sorttype=text&state=NSW&value5=Residentially&value6=
&pid=561)
7b Survey Results from MAUS – Business Benchmarking Guide for Automotive-
Motor Mechanics
Source (http://www.ebc.com.au/product/product.asp?loc=4.3.222)
- 70 -
7c Assumptions and Calculations of Pro Forma Financial Statements, Ratio and
Break-Even Analysis
Sales will make up 60% of total revenue and includes parts used in services
Services will make up remaining 40% of total revenue
Business will make $360,000 in the first year (which is below industry average)
and will increase by $60,000 for each upcoming year (which means making
$420,000 for the second year which is slightly above industry average)
Costs of goods will be 40% of total revenue which is approximately industry
average
Marketing costs is made up of website costs, advertising costs and other
promotions as advised in the marketing plan
Rent is recorded as advised in the business profile
Wages and salaries is made up of:
▬ $48,000 for two owners
▬ $32,000 for two mechanics for first two years and then $64,000 for 4
mechanics for following years
▬ $12,480 for one part time receptionist/salesperson
Maintenance is calculated as 12% of the original costs of the Dyno and Lifts
annually
Insurance and Utilities is calculated as 4% of total revenue will is slightly above
industry average
Legal fees include costs to register a company through ASIC
Postage costs amount to 2% of costs of goods sold
Inventory kept on site will only be 10% of actual total of goods sold and will paid
using credit, since the business operates by ordering in stock when requested
Office equipment and supplies would be approximately $1000 and be restocked
by the end of each month to that amount
Variable expenses consists of costs of goods sold, maintenance, utilities and
postage costs
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References
Research & Analysis part
Socio-cultural analysis
V8x. (2007) ‘Australian Bureau of Statistics confirms V8 Supercars and motorsport as Australia's third most attended sport’ V8x maganize Issue 37 :http://www.v8x.com.au/cms/A_108259/article.html
Economical analysis
Garnaut, J. & Baker, B.,2006, ‘Petrol prices hits car sales’, Sydney Morning Herald, http://www.smh.com.au/news/national/petrol-prices-hit-car-sales/2006/05/22/1148150189141.html#
Blackburn, R., 2008, ‘Petrol price fails to dent car sales’, drive.com.au, http://www.drive.com.au/Editorial/ArticleDetail.aspx?ArticleID=54467&vf=16
---, 2008, ‘New car sales surviving petrol prices, rates rises’, ABC news, http://www.abc.net.au/news/stories/2008/04/03/2207188.htm
Brinsden, C., 2008, ‘Petrol prices falling at a snail's pace’, drive.com.au, http://www.drive.com.au/Editorial/ArticleDetail.aspx?ArticleId=56275
---, 2008, ‘Luxury car tax: delay in proposed increase’, Australian Taxation Office, http://www.ato.gov.au/taxprofessionals/content.asp?doc=/content/00144892.htm
Spink, J., 2008, ‘High-performance Falcons outsprint budget tax hike’, drive.com.au, http://www.drive.com.au/Editorial/ArticleDetail.aspx?ArticleId=52519
Dibson, J., 2008, ‘Sydney considers congestion tax’, Brisbane Times, http://www.brisbanetimes.com.au/articles/2008/06/23/1214073184781.html?feed=fairfaxdigitalxml
Technological analysis
Dowling, J., 2008, ‘Power Up’, Sydney Morning Herald, http://www.smh.com.au/news/innovations/power-up/2008/08/19/1218911693359.html
O’Kane, T., 2008, ‘Nissan Considering Fuel Cell Powered High-Performance Sports Car’, The Motor Report,
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http://www.themotorreport.com.au/6781/nissan-considering-fuel-cell-powered-high-performance-sports-car/
Environmental analysis
---, 2008, ‘DECC – Mechanics’, NSW Dep. Of Environment and change,http://www.environment.nsw.gov.au/sustainbus/mobilemechanics.htm
---, 2008, ‘Clean cars for NSW, Environment Protection Authority,http://www.epa.nsw.gov.au
Legal Analysis
---, 1980, Review of Motor Vehicle Repairs Act 1980, Office of Fair Trading –
http://www.fairtrading.nsw.gov.au/pdfs/About_us/mvrareport.pdf
Competitor Analysis
MRT Performancewww.mrtperformance .com.au/
Croydon Racing Developments (CRD)http://www.croydonracingdevelopments.com/
Queen Street Racinghttp://www.queenstsmash.com.au/queenst/
Bel Garagehttp://www.belgarage.com.au/Tony Regoli Performacehttp://www.tonyrigoliperformance.com.au/
Marketing plan
Books:
Hansen, D and Mowen, M, 2006 Cost Management Accounting and Control, 5th Ed., Thomson South-Western, USA
Zimmerer T W, Scarborough N M, 2008 Essentials of Entrepreneurship and Small Business Management, 5th Ed. Parson New Jersey USA.
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Advertising costs with hot4s magazine Cutajar, M 2008, email, 22 September, < [email protected] >
Websites:
Web hosting & serviceshttp://www.mdwebhosting.com.au/searchactivator.html
http://www.mdwebhosting.com.au/businesshosting.html
http://www.mdwebhosting.com.au/myaccount/domainchecker.php
http://theconsole.netregistry.com.au/order/execute/domainSearch
JITBroyles, D. Beirns, J. Franko, J. & Bergman M. (2005) Just-In-Time Inventory
Management Strategy & Lean Manufacturing: Overview of Just-in-TimeInventory Management,
http://www.academicmind.com/unpublishedpapers/business/operationsmanagement/2005-04-000aaf-just-in-time-inventory-management.html
-----(1995) Just Just In Time (JIT) Manufacturing: Curtain university of technology http://www.academicmind.com/unpublishedpapers/business/operationsmanagement/2005-04-000aaf-just-in-time-inventory-management.html
Sticker orders:http://www.stickerart.com.au/
MagazinesHot4s- www.hot4s.com.auFastfours –www.fastfours.com.auHigh Performance Imports- www.highperformanceimports.com.au
Events Night-shift- www.night-shift.com/Auto saloon- www.autosaloon.org/terams
Management Plan
MRT Performance
www.mrtperformance.com.au/
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---, 2004, ‘Motor Mechanics, NSW Office of Industrial Relations,http://www.industrialrelations.nsw.gov.au/workandfamily/payequity/report/
industries/motor%2Bmechanics.html
---, 2007, ‘Awards Information, NSW Office of Industrial Relations,http://www.industrialrelations.nsw.gov.au/awards/controller.jsp?
awardCode=039&view=currentRates
---, 2007, ‘Occupation Information - Light Vehicle Motor Mechanic, My Futurehttp://www.myfuture.edu.au/services/default.asp?
FunctionID=5050&ASCO=421111F
Operations Plan
Modification Permit laws---, 2001, ‘GST and amount for a vehicle modification permit included in price charged to customer for vehicle modifications, Australia Tax Office,http://law.ato.gov.au/atolaw/print.htm?DocID=AID%2FAID2002877%2F00001&PiT=20060426000001&Life=10010101000001-99991231235959
Location and site:www.ljhooker.com.au/parramatta
Search for location and mapswww.whereis.com
Pricing and lease terms for Dyno machinehttp://www.land-and-sea.com/chassis-dyno/chassis-dyno-price.htm
Car Lifts from Lift king Australia- Priceshttp://liftking.ca/index.php?page=pro-king-8-xxl
Required Tools & Costshttp://www.transquip.com.au/categoryview.aspx?ID=185http://www.absorbenviro.com.au/profile.php
Suppliers of partshttp://www.turbowholesale.com/catalog/index.html
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http://www.acl.com.au/http://www.performancewholesale.com.au/ LEGAL REQUIREMENTS:Environmental concerns https://www.dec.nsw.gov.au/resources/mechanics.pdf
---, 2007, ‘oilcode’ ACCChttp://www.accc.gov.au/content/index.phtml/itemId/783104
INSURANCEWorkers compensationwww.industrialrelations.nsw.gov.au
Insurance cover optionshttp://www.nrma.com.au/business-insurance/motor-trade.shtml
Insurancehttp://capricornmutual.millstream.com.au/
OHS
---, 2008, ‘Index of National Standards Codes of Practice and related Guidance Notes, Australian Safety and Compensation Council lhttp://www.ascc.gov.au/ascc/AboutUs/Publications/NationalStandards/IndexofNationalStandardsCodesofPracticeandrelatedGuidanceNotes.htm
RTA Guidelines---, 2008, ‘Occupation Vehicle standards information sheets, RTA NSWhttp://www.rta.nsw.gov.au/registration/downloads/vsi/vsi_dl1.html
JITBroyles, D. Beirns, J. Franko, J. & Bergman M. (2005) Just-In-Time Inventory
Management Strategy & Lean Manufacturing: Overview of Just-in-TimeInventory Management, Retrieved: 10/10/2008 Retrieved from:
http://www.academicmind.com/unpublishedpapers/business/operationsmanagement/2005-04-000aaf-just-in-time-inventory-management.html
Format/Structure of the operations plan was taken from the following sites:http://entrepreneurs.suite101.com/article.cfm/business_plan_operationshttp://sbinfocanada.about.com/cs/businessplans/a/bizplanoperplan.htmRTA, 2008, Vehicle Standards Information 2: Restricted Engineering Signatories, Rev. 5 Published 10/10/2008.Retrieved 15/10/2008. Retrieved from:
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http://www.rta.nsw.gov.au/registration/downloads/vsi/vsi_2_september2008.pdf
Financial Plan
---, 2008, ‘Form-Application for registration as an Australian company, ASIChttp://asic.gov.au/asic/asic.nsf/asic+formsdisplayW?readform&code=201
Equipment orders
http://www.hotpos.com.au/supplies/lenovo-pos-bundle-touch-screen.html
Internet & phone
http://personal.optus.com.au/web/ocaportal.portal?
_nfpb=true&_pageLabel=Template_woRHS&FP=/personal/bundles/
fusion&site=personal
Office Equipment costs
http://www.officeworks.com.au/owbd/b2c/init.do
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