entrepreureship.doc

7/28/2019 entrepreureship.doc

1/27

1. Executive Summary

The Auto Shine Express car wash is a dynamic start up. Unlike other car wash companies

Auto shine express offers high quality automatic car wash service. It is an answer to

customers demand for an automatic car wash which would help them to save their time.

In last 10 years, the population of cars has increased many fold. In todays context most cars

are driven by the owners themselves and would any day prefer to have a quick car wash,

rather than leaving the car the whole day at service station. Dhaka is a good market for a car

wash business since it has almost 250 rain free days. The concept of an automatic car wash is

an innovative one of its kind. It provides a new experience to the customers. It is different

from the other car washes which is completely manual in nature.

It is being started as a partnership company. The Auto shine express is planning to start its

operation primarily in Airport road. Once it is establishes it would expand its functioning to

other parts of the Dhaka. Since its the first one of its kind it has a wide market to capture.

The competitors for the company are the traditional car washes which offer full service.

The Auto shine Express mainly targets middle class, upper middle class and upper class

people having cars who need a quick service. The initial capital of 7000,000 lakh was raised

as internal capital and through loans. The company will start functioning after 90 days of

obtaining the finance.


2/27

2. Business concept:

2.1 What is automatic car wash (Description of the service)

Automatic car wash is the modern way in which the cars are not washed by hands. In this

new technology the cars are washed by a sophisticated high impact pressure jet wash

technology.

2.1.2 Reason for going in this Business?

To start with a new business, is always asking the entrepreneur to deeply ponder over all the

dimensions of profit and loss (Profit being the first priority). The canvass of business, its

magnitude depends upon the scale of investment that is i.e. the capital investment, nature of

business, suitability and off courses countless other areas. Priority with an entrepreneur willalways be to have his investment back through the selected business with the reasonable

margin of profit.

A car wash enterprise is a profitable idea, and having thought over it with all my human

capacity, I have decided to go for an automatic car wash. I fully understand, the project

requires energy and energizer.


3/27

2.2.1 Mission

Auto Shine Express is dedicated to providing its customers the ultimate car care experience.

Focusing all of its energy and resources on customer satisfaction and value, while providing

owners and employees an excellent reward.

2.2.2 Vision

To become so value oriented towards customers so that every vehicle should pass through our

bay. To be pioneer in car wash domain.

2.2.3 Goals

Not to have a single dissatisfied customer.

Expand to two more location after three years.

Create a steadily growing net profit margin.

Control of waste

Maintenance of equipments.

Financial management

Pe el e e t


4/27

3. Product or service

3.1 Design of service

Auto shine express seeks to fulfill the following benefits that are important to the customers:

Exemplary customer service: The target customers have money and are used to having

excellent customer service. They will not regularly use SR unless they receive excellent

service.

High quality washes: The target market values a higher quality washes for their upper-end

cars.

Convenience: The hours of operation, as well as the time needed to provide the service must

be convenient and fast respectively, to gain market share.

A successful car wash business, then, will have to choose its niche market carefully,demonstrate its skill and cost-effectiveness, and build a loyal customer base. Once the basic

ingredients of success are proved, the business could consider expanding on-site or into

another area.

3 2 Technical profile


5/27


6/27

4. Market research and analysis


7/27

This place is also near to Gulshan, Banani, Baridhara, Uttara, Mohakhali etc areas. We all

know that the people living in these areas are almost all rich and have a standard lifestyle. So,

they can afford and they will be willing to get our service for their private car.

4.1 Market size:

All the people who have a private car and all the bus and trucks are our target market. As we

are the only provider of this service in our country, we can have a monopoly market here. We

are expecting to have approximately 8000-9000 taka revenue per day from our washing plant.

4.2 Target customer:

We are targeting all the people who have a car to be our customer. Like, the private car

owners are our customers. All the private cars in Dhaka city are our expected targets. We will

try to get all of them. Again, we do not only serve the private cars. We have the capacity of

washing the buses and trucks. All the buses and trucks are also our target customers. Theycan wash their car from us within a few minutes. So there will be no waste of time for the

clients.

Demographic Segmentation

Demographic segmentation includes:


8/27

c) Occupation

Similarly we can divide our market on the basis of occupation as well. Based on

occupation, these people are likely to use our services:

Executives

Professionals/Businessmen

Luxury car owners

College and University students

Others

All these segments are the potential customers of our venture.

d) Income

All those people, whose income is greater than 30,000, are likely to be served by us.

Psychographic Segmentation

Psycho graphically, we can divide our market on the basis of:


9/27

5.1 Marketing Strategy

5.1.1 Product or service

As our venture is a service venture so it doesnt have any tangible product. But we can add

these things into our product category:

Brand Name:

The Auto Shine Express Car Wash

Allowances

We shall issue membership cards and deliver discounts on those cards.

A free car wash for every 4 washes in a month.

Quality service

We will provide the best quality as compared to manual car wash system and so will

k l l t b ki ti th t t h i b tt th th


10/27

We will advertise on newspapers.

We will send leaflets to the transport companies, so that they could be interested in our

service.

We will advertise on the billboards.

5.1.3 Sales and credit terms:

No credit is given by the Auto Shine Express Car Wash co. After washing the car, the

customer will check the car for his/ her satisfaction. If there is any problem or objection then

that will be solved. And finally the payment will be done before the delivery of the car.

Though we do not give any concession, but there is an option. That is like a company agrees

to wash their 20 buses 1 times in a month, and then there will be a 10% discount, and

individual car owners get 1 wash free for 4 wash in a month. Also some facilities will begiven to the regular customers.

5.1.4 SWOT analysis:

Strength:

It l t t d f l t h l


11/27

As it is a technology-based age, this process might become more popular.

In this new technological time people might find the hand washing system obsolete very

soon and realize the automatic car wash only solution.

Threat:

People might not take this new change very soon and they might prefer to go to the handwash system.

It might be very costly to make people aware of this new opportunity.

Many new companies might find it profitable and enter into the business.

5.2 Points of Difference

The main features that differentiate Auto Shine express from other competitors are:

1. The quality of service given with highly equipped machines.

2 Q lit i t i i l i


12/27

Location is a very important factor for establishing a new company. The location must be

convenient and appropriate. Once the locality is selected, 2 - 3 lands will be looked for,

where Car Wash may be started.

6.1.2 Land Selection:

Land selection is a critical part of the planning Evaluation should be done on the basis of

shape and space, frontage, topography, street characteristics etc.

6.1.3 Basis of evaluation of the land:

Evaluation should be done on each piece of land according to following ideal criterion.

- Shape and space Rectangular

Enough space for Customer Car parking and anyfuture projects if desired.

- Frontage No physical obstructions like electric or telephone

poles, guy wires, etc.

Easy turning of car into the land, which out much

guiding hassles

T h

L l d d (if b t d)


13/27

6.2 Description of premises and facilities:

The premise will be owned by the Auto Shine Express car washing company. It will take

certain amount of money to by the premise. The land will buy by the company name. That is

Auto Shine Express itself will be the owner of that land. The land is well secured by a

boundary wall surrounding the project area. The project area will be fully computerized

security system that is all the security system is totally automated. There are two buildings

and a coupon issue counter in the project area. In the first one the official work will do. The

second one is the worksite. The actual car washing will do over there. There will be also acafeteria and customer waiting room in the project area. There could stand maximum 7 cars

at a time in the parking area including a car which might be in the washing system.

6.3 Operational process

The process of the service will be very simple. The cars will enter into the machine, and

water will be sprayed. After that the machine will wash the car with necessary washingsolutions and detergents. Then the car will be washed again by water. Finally the car will be

dried by hot air and the car will come out, neat and clean.

6.3.1 Automatic high-pressure car wash:

The Auto Shine Express car washing co has a fully automatic system. It has a three step

hi Th fi t i hi h h hi h h tti h i l t


14/27

This is special spray arch, equipped with low discharge, wide coverage nozzles. The pre wash

arch sprays water initially over the vehicle to soak the hard mud stains, salt deposits, bird

drippings etc.

6.3 Soap system:

Soap system sprays soap and chemical formulation over the car surface. Soap spraying assists

the high-pressure washing and enhances the cleaning value.


15/27

6.5 Wheel and rocker panel wash system:

Special high-pressure nozzles located at wheel level remove darts from hard to clean areas

near the wheels. Special plunger pump, which enhances the pressure to knock off dirt from

wheel and rocker panel areas.

6.6 Wax systems:


16/27

7. Organizational Plan

7.1 Ownership

The Auto Shine Express car washing co would be structure with the articles of partnership.

All the directors would have equal shares. The features of the companys ownership are the

following:

Industry would be created with the article of partnership

The talent of the partners helps the business to grow

The business and contracts of the partners have flexibility

More capital in the industry

Helps to develop cooperation and natural trust

There will be unlimited liability on each partner

Danger of disagreement is there

-- Divided authority

7.2 Organizational Structure


17/27

Each Partner contributes Tk. 10, 00,000 into the Business.

According to the Partnership deed all the members have unlimited liabilities.

All the Members are Principal and Agents of each other.

No member can withdraw or Transfer his/her share without the consent of other

Members.

No Partner can start the same business for three years.

Managing Director (Ruzina Akhter):

Due to his good leadership skills and academic abilities, all the members have

chosen him as the MD of the firm. He is good in Management and handling of all

business operations.

Operational Manager (Fahima Akhter)

He is a skillful Person and will check the operation of the car wash. He will be

responsible for the Repair & Maintenance of the Machinery & all other Assets. He

knows much about cars and other Machinery and also knows how to look after

these.


18/27

The four founders of the Auto Shine Express car washing Company will be the main

authority of the company. All of them are the member of board of directors and Ms. Ruzina

Akhter will be the Managing Director of the company.

7.3.1 Executive Team

There are three partners who control the overall operation of the business. Each one of the

owners has their own functions in the operations of the business. The managers have dividedthe duties to maintain the business, which will include employee hiring, building, property

and equipment maintenance, marketing activities, advertising and other promotion activities.

7.3.2 Title and Responsibilities:

The agreement of our company will indicate the employees title, responsibilities, and line ofreport. If these could change, the agreement should say how this would be implemented, and

what the outer limits are: or such other work suitable for a senior executive as the board of

directors may request. Understandings regarding Board of Director participation should also

be spelled out.

7.3.3 Compensation and Incentives:


19/27

equivalent of the prenuptial the employment agreement. Employment agreements take

many forms from sign and return offer letters to fully comprehensive contracts. What

these agreements should accomplish to one extent or another is to allow the parties to

begin and end the employment with a clear understanding of their rights and responsibilities.

Set forth below are three types of terms employment agreements might include:

Those setting forth the expectations of the parties regarding the employment, e.g., job duties

and compensation; those intended to protect the companys interests; and those dealing with

terminations, with and without cause.

Getting It Right at the Outset An employment agreement should reflect accurately the

understandings of the parties upon which the employment relationship is based. Clarification

of open or uncertain issues is in the early stages.

7.4 Legal Structure:

The Auto Shine Express car washing company will establish under the company law (1994)which will fully owned by the four members of the board of directors. They are the only

shareholder and beneficiary of the company. No share will offer to the share market as it will

be a private limited company.

No full time legal advisor will be appointed. They will hire when it is necessary. Like, in the

beginning a legal firm will be hired to complete the formalities to establish the company.


20/27

Implementation plan:

Completion of business plan

Fulfilling legal and deposit formalities

Set up infrastructure

Hire car wash staffs

Hire administration staff

Open business

Promotional works

Follow up

7.6 Evaluation and Control

Continuous evaluation is necessary for sustaining and developing the business. There must be

evaluation and control system for all major functions of business like: Revenue and unit

sales, Expenses, Customer feedback and other major self and competitive activities. The

market is ever changing, since there is a large market to capture a lot of competition may

arise in the market. A continuous evaluation of competitors must be conducted. As

technologies develop day by day the business must be updated accordingly. The future of the

b i i l d d l i d l


21/27

Description Amount

TK.

Machinery 4,000,000

Installation Charges 400,000

Office Supplies 5,000

Operating Supplies 60,000

Prepaid Insurance 45,600

Advertising 120,000

Land (Security) 1,000,000

Furniture 25,000

Computer 35,000

Legal Fee (Registration) 5,000

Offices Building 700,000

Cash Required 604,400

T l C 7 000 000


22/27


23/27

As well be making losses for the first few years of our operations, so the bank has

cushioned us that well start to pay the debt after 3 years.

8.2 Break-even Analysis

Its a point where a firm or a venture neither incurs a loss nor a profit. We calculated

the amount of cars that well be washing in order to break even as follows:

We calculate the fixed cost which amounted to 207000.

Our average selling price per car wash is 300 (average sales price) and the

variable cost per car is 165.

By using the formula of B.E, we got the number of cars (at break-even) as

follows:


24/27

So, in order to break even, we should wash 1534 cars in a month. Any one additional

car wash will result in a profit. If we multiply these units (cars) with our average

selling price per car wash (i.e.300), well get sales volume at break-even that amounts

613,200. In other words we can define our break-even point as when this much

(613200) worth of sales are done, our venture will be in break-even point.


25/27

8.3 Income Statement

This statement will tell us about the profit and losses that our venture will incur during its operations.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 1 Year 2 Year 3

Sales

Cars Per Day 25 30 35 40 42 45 50 55 60 65 70 75 17760 21600 24000

Sales Per Month300,000 360,000 420,000 480,000 504,000 540,000 600,000

660,00

0 720,000 780,000 840,000 900,000 = 7,104,000 14,400,000 17,280,000

Operating Expenses:

Salaries 52,000 52,000 52,000 52,000 52,000 52,000 52,000 52,000 52,000 52,000 52,000 52,000 = 624,000 708,000 708,000

Office Supplies 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 = 60,000 72,000 90,000

Operating Supplies 60,000 72,000 84,000 96,000 100,800 108,000 120,000

132,00

0 144,000 156,000 168,000 180,000 = 1,420,800 1,620,000 1,680,000

Rent 150,000 150,000 150,000 150,000 150,000 150,000 150,000

150,00

0 150,000 150,000 150,000 150,000 = 1,800,000 1,800,000 1,800,000

Advertising 120,000 120,000 100,000 90,000 90,000 75,000 60,000 60,000 50,000 40,000 35,000 35,000 = 875,000 700,000 650,000

Utilities 56,250 67,500 78,750 90,000 94,500 101,250 112,500

123,75

0 135,000 146,250 157,500 168,750 = 1,332,000 1,620,000 1,800,000

Interest 48,000 57,600 67,200 76,800 80,640 86,400 96,000

105,60

0 115,200 124,800 134,400 144,000 = 1,136,640 2,304,000 2,764,800 Depreciation 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 = 200,004 200,004 200,004

Insurance Premium 3,800 3,800 3,800 3,800 3,800 3,800 3,800 3,800 3,800 3,800 3,800 3,800 = 45,600 45,600 45,600

Total Expenses 511,717 544,567 557,417 580,267 593,407 598,117 615,967

648,81

7 671,667 694,517 722,367 755,217 = 7,494,044 9,024,004 9,692,804

Gross Profit (211,717) (184,567) (137,417) (100,267) (89,407) (58,117) (15,967) 11,183 48,333 85,483 117,633 144,783 = -390,044 5,375,996 7,587,196

Less: Income Tax = 1,128,959 1,593,311

Net Profit (211,717) (184,567) (137,417) (100,267) (89,407) (58,117) (15,967) 11,183 48,333 85,483 117,633 144,783 =(390,044) 4,247,037 5,993,885

Net Profit Margin

(0.7057)

(0.5127)

(0.3272)

(0.2089)

(0.1774)

(0.1076)

(0.0266) 0.0169 0.0671 0.1096 0.1400 0.1609 -1.571536962 0.2949 0.3469

NPM in %

(70.5723)

(51.2686)

(32.7183)

(20.8890)

(17.7395)

(10.7624)

(2.6612) 1.6944 6.7129 10.9594 14.0039 16.0870 = 29% 35%

Average Increase 19.3037 18.5503 11.8294 3.1495 6.9771 8.1012 4.3556 5.0185 4.2464 3.0446 2.0831 = 29.49% 5.19%

* The Machinery has an estimated Useful life of 20 years and the venture depreciates it by Straight Line Method.

** The Company will be paying General Sales Taxes according to Govt. Rules and Regulation which is 16%

*** The Company will pay No Tax until it is in Profit

25 | P a g e


26/27

As in the breakeven analysis we determined that when we will serve 1534 cars and our sales will be tk. 613, 600 monthly so we will be at Breakeven and

from income statement it is clear that our break-even will be in August.

8.4 Cash Flow Statement

A statement of cash flow tells about the cash receipts and disbursements (cash inflows and outflows). The statement of cash flow of our venture is as follows. Every 2% of

our sales will be comprised of receivables, so well not be recording them in this statement as mentioned that it only deals in cash inflow and outflows.

26 | P a g e

Receipts: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 1 Year 2 Year 3

Sales 294,000 352,800 411,600 470,400 493,920 529,200 588,000 646,800 705,600 764,400 823,200 882,000 7,104,000 14,400,00017,280,00

0

Disbursements:

Machinery 4,000,000 0 0 0 0 0 0 0 0 0 0 0 4,000,000 0 0

Salaries 52,000 52,000 52,000 52,000 52,000 52,000 52,000 52,000 52,000 52,000 52,000 52,000 = 624,000 708,000708,00

0

Office Supplies 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 = 60,000 72,00090,00

0

Operating Supplies 60,000 72,000 84,000 96,000 100,800 108,000 120,000 132,000 144,000 156,000 168,000 180,000 = 1,420,800 1,620,0001,680,00

0

Rent 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 = 1,800,000 1,800,000

1,800,00

0

Advertising 120,000 120,000 100,000 90,000 90,000 75,000 60,000 60,000 50,000 40,000 35,000 35,000 = 875,000 700,000650,00

0

Utilities 56,250 67,500 78,750 90,000 94,500 101,250 112,500 123,750 135,000 146,250 157,500 168,750 = 1,332,000 1,620,0001,800,00

0

GST 48,000 57,600 67,200 76,800 80,640 86,400 96,000 105,600 115,200 124,800 134,400 144,000 = 1,136,640 2,304,0002,764,80

0

Insurance Premium 3,800 3,800 3,800 3,800 3,800 3,800 3,800 3,800 3,800 3,800 3,800 3,800 = 45,600 45,600

45,60

0

Installation Charge 400,000 0 0 0 0 0 0 0 0 0 0 0 = 400,000 0 0

Land (Security) 1,000,000 0 0 0 0 0 0 0 0 0 0 0 = 1,000,000 0 0

Furniture 25,000 0 0 0 0 0 0 0 0 0 0 0 = 25,000 0 0

Computers 35,000 0 0 0 0 0 0 0 0 0 0 0 = 35,000 0 0

Legal Fee 5,000 0 0 0 0 0 0 0 0 0 0 0 = 5,000 0 0

Office Building 700,000 0 0 0 0 0 0 0 0 0 0 0 = 700,000 0 0TotalDisbursements: 6,660,050 527,900 540,750 563,600 576,740 581,450 599,300 632,150 655,000 677,850 705,700 738,550 = 13,459,040 8,869,600

9,538,400

Cash Flow

(6,366,050

)

(175,100

)

(129,150

)

(93,200

)

(82,820

)

(52,250

)

(11,300

) 14,650 50,600 86,550 117,500 143,450 =

(6,355,040

) 5,530,400

7,741,60

0

Beginning Balance 7,000,000 633,950 458,850 329,700 236,500 153,680 101,430 90,130 104,780 155,380 241,930 359,430 = 7,000,000 644,9606,175,36

0

Ending Balance 633,950 458,850 329,700 236,500 153,680 101,430 90,130 104,780 155,380 241,930 359,430 502,880 = 644,960 6,175,36013,916,96

0


27/27

As our breakeven is in august so we will be having positive cash flows in August as well.

27 | P a g e

entrepreureship.doc

Documents