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Business Plan: Sunshine Portable Car Wash Company

HomeEssaysBusiness and EconomicsBusiness Plan: Sunshine Portable Car Wash Company
10.01.2020
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Executive Summary

Sunshine Portable Car Wash Company will serve the residents of Al Manara, Al Barsha, Meadows, and Arabian Ranches. The company will be run by Mr. Al Rashid and Mr. Al Muhammad who have partnered together. The two are experienced in the management of the car wash business. Mr. Al Rashid will concentrate on brand recognition to ensure quicker market penetration, while Mr. Al Muhammad will be the general manager of the business. The purpose of this business plan is to raise 277,000 AED for the development of a portable car wash, while it also shows the expected financial performance and operations over the next three years of business. The business will be started after a survey on the basis that there has been no service such as the one outlined and planned as a venture in Abu Dhabi. Mr. Al Rashid has forecasted a 20% market share as the business is expected to generate a gross margin and a net margin after one year. The company will be operating for customers calling and needing car cleaning when they are in their homes; in case the customers will require services such as car tinting and polishing of the cars using ceramic coatings, they will also be provided right at home. The office is located in an easily accessible place where the clients can visit for any verification that concerns the business. Sunshine Portable Car Wash intends to maintain an outstanding marketing forum that will ensure maximum operation of the business in Abu Dhabi. The use of the Internet will also be incorporated so as to ensure that the social network users are effectively being reached by the information. The business will be registered online so the clients will be able to easily find it. The cost of polishing and tinting of the cars will be 300 AED only, which is the price that is lower than what the ordinary car wash offers. Secondly, the cost of the car wash with the polishing of the car without tinting will be 150 AED only.

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Business Plan of The Portable Car Wash Company

1.0 BUSINESS DESCRIPTION

Sunshine Portable Car Wash is a new company that will provide high-quality car washing and polishing services to its clients. The business will be offering car washing and polishing services to residents of Abu Dhabi and its vicinity. The business will be started after a long market survey of the customer needs in regard to having their cars cleaned faster without the need for them to search for the polishing services in the city. The business will be beneficial to clients with busy schedules regarding their responsibilities back at work and home, and thus they will only need to make a call to the office, and the service team will be sent to their place of location.

Business Idea

The business idea for this project is to develop a new concept and be the first to implement it. Through observation and experience, the owners of this business saw that there was a problem with car washing. The car washing facilities were very limited, and there was a gap in this industry that required urgent problem-solving techniques. This idea incubation generated a mobile car wash service. This kind of service is non-existent and is considered a new application. Therefore, a mobile car wash that could offer services to car owners at their doorsteps became a hook to start Sunshine car wash and polishing company. The feature of this car wash and polishing company includes owning a van that will transport car washing and polishing machines. Each van will have two employees, a driver and his assistant. The owners of the business will be responsible for taking orders, pricing, and receiving payments as well as managing the entire business activities. The benefit of a mobile car wash has been highlighted further in this paper. The benefits include saving time for the UAE customers who spend a lot more time in queues to wait for their turn to wash a car. In terms of investment, being the first kind of product in the UAE, this business promises good profitability.

Schematic business plan and processes

Business Idea – Idea Incubation – Idea Application – Risk analysis – Financial Plan – Market analysis – Evaluation report and way forward

1.1 The business targets and location

Sunshine car wash and polishing company target customers who will want their cars to be polished in their homes within Al Manara, Al Barsha, Meadows, and Arabian Ranches as illustrated on the map below. This means that the clients will only need to call the company when in need of having their cars cleaned. The Sunshine Company will seek to establish a business relationship with both high and average income customers who simply suggest targeting the general public who owns cars. The company will be operating for customers calling and needing car cleaning when they are in their homes; in case the customers will require services such as car tinting and polishing of the cars using ceramic coatings, the service will be provided right at home. The service will require that the clients pay for either of our several activities that will be done in the car.

1.3 The sales forecasts

Mr. Al-Rashid has forecasted a 20% market share as the business is expected to generate a gross margin and a net margin after one year with an assumption of increased margin profit after year three. So, by the end of the third year, the business will have developed an effective net profit as illustrated in the table below.

Sales, AEDGross margin, AEDNet profit, AED
Year 120,00019,0005,000
Year 250,00048,0009,000
Year 3100,00090,00015,000

1.4 Start-up influences of the business

The market for this service was evaluated and identified regarding a survey that was done as a result of making an observation that most of the customers get angry while queuing at various stations waiting for their cars to be cleaned. There has been no service such as the venture outlined. Mr. Al Rashid and Mr. Al Muhammad have both recognized that there is a high demand for these services as well as a shortage in supply. According to the customers, they want their cars to be polished very fast so that they can handle other activities. Therefore, Sunshine portable car polishers have set the possibility of meeting the client’s service needs in an effective way by saving them time and petrol that other car polishing companies do not provide.

1.5 Unique Selling Point (USP)

Mobile car wash and polishing are new services in the UAE requiring marketing strategies to avail the product to the target customer. Therefore, as a new product and service, the unique selling point (USP) will be one of the first strategies that will be used to introduce the product to the market (Kippenberger, 2000), and the USP slogan for this business will be coined from its smart objectives. The slogan will sound as follows: Overcome the challenges of finding a carwash, the friendly mobile car wash is a dial away. The justification for using this slogan in various advertisements is that new businesses benefit more from USP than old products; therefore, this mobile car wash business requires a unique USP.

1.6 Business SMART objectives

The primary objectives of Sunshine portable car polishers are:

1To offer commercial portable car polishing and ceramic tinting services to residents around Abu Dhabi.

2. To maintain a high gross profit margin.

3. To maintain a steadily growing net profit margin.

4. To expand to other locations after the third year of operation.

1.7 The company mission statement

Sunshine car washing and polishing company mission statement is to become a leader in providing effective car cleaning and polishing services to the general public the offer that saves them both time and money.

1.8 Company address

The clients will call to the office that has been leased. Sunshine car wash and the polishing company are located at Al Manara Avenue. The address is as follows:

Al Rashid/ Mr. Al Muhammad Accessories and Portable Polishing,

Industrial Area 10, Al Manara

Landmark: Behind the Petrol Station

P.O. Box: 6046, Al Manara

Tel: +971 6 5553717

Fax: +971 6 555329

1.9 Form of legal business ownership

Sunshine Portable Car Wash Company is a partnership business of two owners. The two owners take a general partnership where they have unlimited liability and responsibility for their business. Even though there will be freedom of investment and activities, there will be legal documents indicating the responsibilities and shares of the two partners. The advantages of a partnership are that the business will have ease of organization as well as skills being shared. This business will benefit from using the strengths of each partner because of the quest for success and brand building. Decision-making between two people is easier than among a group of people; therefore, the business is expected to run smoothly. In this business, the two partners will have equal liabilities for business debts and financing; they will share profit equally, and that means that each partner will be responsible for the action of another to keep and maintain business.

1.10 The company’s capital and financing

Both partners have raised money from the savings since business is a registered partnership. Several cars are required so as to start with the four localities listed above. The cost of one car is 15,000 AED, and in each location will require three cars. Therefore, 21 cars will be needed so that each of the cars will be used by four workers. Service providers have been inquired on the cost of car painting and logo placement on the car, and the providers are willing to charge 1,000 AED. Wet dry pressure equipment that will go hand in hand with the four vehicles is also required, and the cost of one pressure sprayer is 4,000 AED. The four workers will be paid 1,500 AED, making a total monthly salary of 180,000 AED. Some expenses, such as petrol expenses, car maintenance, and sprayer equipment maintenance, are also expected to be incurred and amount to 20,000 AED.

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The initial cost of starting the business is 567,000 AED, and only 290,000 AED were managed to be raised. Therefore, there is a deficit of 277, 000 AED. In this regard, a loan from the bank is planned to be requested to facilitate the start of the business. The bank has requested the submission of the business plan for them to verify the business. The money is required so that to purchase the cars and other facilities necessary to run the business. It also has to be assured that all the workers will get their salary at the end of the month.

1.11 The popularization of the company services

Before the business commences the outlined activities, there is an intention to start making potential clients who live in Abu Dhabi and its vicinity to be aware of the upcoming portable car wash and polishing company. Moreover, there is an aim to advertise the service through the use of posters and small cards that will be circulated by the employees around the four residential areas. They will do this using motorbikes, which will be a door-to-door sale of the services. The business cards to be used to make the clients aware of the service are illustrated in the appendices.

1.12 Expansion Plan

We expect to expand the business after three years of operation, which will be done through the implementation of our service to the target clients by maintaining quality services.

1.13 Legal Requirements

The owners of the business expect to acquire a business permit from the municipality of Abu Dhabi. The license will require 1,000 AED each month, and we will pay the sum for the first three months, which will be 3,000 AED. We are also expected to adhere to the air and water pollution codes. The codes are to be found in the municipality at the offices of the Water Resources and Wastewater Disposal Department. The landlord of the building in which our office is located has placed few restrictions on us because our business is mobile.

2.0 EXTERNAL ENVIRONMENT ANALYSIS

2.1 PEST Analysis

Political, economic, social, and technological factors, abbreviated as PEST, are the main elements and critical factors to consider when starting a business and entering a new market. These four factors aim to document the environment where the business will be located and will help the company develop appropriate success strategies. Therefore, effective PEST analysis aims to prepare the company to deal with challenges in the industry.

Political Environment

The car wash and polishing industry in Abu Dhabi is influential. In this industry, the authority wants to ensure that the license and support only the eco-friendly businesses. The reason why the authority has an interest in the car wash industry is that the need to wash every car can generate significant income to the government budget, yet the same government regards this business as appropriate for small entrepreneurs. Large businesses with traditional car wash locations would want to keep the monopoly of washing cars; therefore, the political environment indicates that the industry is a rough road.

Economic Factor

The population in the UAE, where this business will be located, is rich. The country’s nominal GDP is $440.181 billion, thus ranking this country 28th globally. The UAE economy has grown by approximately 231 times since 1971, suggesting that the country’s economy continues to grow and car consumption will raise as well.

Social Factor

The UAE is one of the rich Gulf Nations. Almost every citizen of these countries is driving a car. People who can afford cars using them as necessary assets will want them clean all the time. The UAE citizens as well as visitors have significant disposable income and have no problems hiring portable services like those of mobile car wash.

Technological Factor

The car industry has benefited greatly from technology, and even car washing services are currently enjoying car cleaning and polishing technologies. Therefore, this business may experience tough competition from rivals because such competitors may be using high technology car cleaning. In this industry, car cleaning technology is expected to improve.

2.2 SWOT

The following table showcases a matrix for the company’s current SWOT:

StrengthWeakness
· Enjoy branding because the business is unique in the industry

· Develop first loyal clients

· Very weak resources regarding human resources and capital assets.

· The business has not completed developing long-term strategies even if already in operation.

OpportunitiesThreat
· Business model has potential for growth

· There is room to introduce complementary services/products

· Another business may arise because this business has demonstrated that there is a gap in the mobile car wash.

2.3 Competitor Analysis

The competitors for Sunshine mobile car washing and polishing company are traditional car washing sites because there are no mobile car washing services. These businesses, called static car washing facilities, have the following strengths and weaknesses:

StrengthWeaknesses
· They came into the market earlier because they are traditional car washing businesses

· Have fixed assets, hence the low business cost

· Have royal clients

· Have no debt associated with a startup business

· Have knowledge of the industry

· Have a comparative advantage

· Lack of innovation

· Do not satisfy clients

· Lack of sales strategies because of the nature of services

· Do not have complimentary services such as car polishing.

2.4 Risk Response Plan

Risk response plan, also called risk register, for this business is substantially developed although there is room to include details. The identified risks include financial constraints. Even though this service has already acquired the needed assets to continue offering services, there is little reserve cash for miscellaneous costs that are common with new businesses. This business is yet to develop a risk-avoidance strategy. In this business, a third party will be outsourced to create risk avoidance while ensuring response transfer and acquiring a risk management investment to insure the business.

3.0 MARKET STRATEGIES

3.1 Market Segmentation

Market segmentation describes the characteristic of the chosen market. The market choice for this business has already been developed. The product, location, and target consumers have already been identified. Through observation and experience, entrepreneurs have already identified the market and are working toward delivering a practical business. The office is located at an easily accessible place where the client can visit for any verification that concerns the business. The portability of the business makes our services highly competitive in regard to the ordinary car wash businesses. This is because our clients will be freed from problems associated with queuing while waiting for their cars to be polished. Additionally, the car wash business has grown in the UAE with very few investors making the business portable, which is why we want our business to be the first portable business in Abu Dhabi.

3.1 Market Mix

The marketing mix includes developing a marketing choice, identifying consumers, and improving the product and services. Sunshine company has already identified the market mix as explained below to enter and thrive in the market.

3.2 Products and Services

The company will be operating for customers calling us when they are in their homes so that we will go and clean their cars, and in case the customers will require services such as car tinting and polishing of the cars using ceramic coatings, we will also do the service right at home. Unlike the available fixed car wash facilities that make an individual wait for a long time at the station, our portability in offering the service will make sure that all the client’s cars are washed from inside with the service being completed in a span of 15 minutes. Our service will require that the clients pay for either of our several activities that will be done in the car.

This will give the company the flexibility that it requires to meet successfully the needs of all the clients at different localities. By being physically at the customers’ doorsteps, the company ensures that the clients save time and petrol that would have been spent waiting for traffic. The company has effective machines that will be used to ensure faster cleaning of the cars, which also contributes to saving time for both the client and us.

3.3 Marketing Plan

Sunshine portable car wash intends to maintain an outstanding marketing forum that will ensure maximum operation of the business in Abu Dhabi. We have identified some marketing objectives that include the following:

· Implement local connection with the client via the use of social media networks which include Twitter, Snap Chat, Instagram, and Facebook.

· Establish relationships with service providers and clients.

· Develop online presence through a website and placing the company’s name and other details within online directories.

3.4 Marketing Strategies

Mr. Al-Rashid intends to use the traditional methods of advertisement to market the business. The use of the Internet will also be incorporated so as to ensure that the social network users are effectively being reached by the information. The business will be registered online for the clients to search for us. The business also intends to own its website; moreover, the company will maintain a sizeable amount of traditional advertisements within the local markets so as to promote the business and details of the business.

3.5 Pricing

First, the cost of polishing and tinting of the cars will constitute 300 AED only, which is a price that is lower than what the ordinary car wash facilities charge. Secondly, the cost of the car wash with the polishing of the car without tinting will be 150 AED only. We expect our customers to agree with our prices as we are not charging the cost of us having to come to their homes. There will be no bargaining, and payments will be performed through cash on delivery. The customers who will frequently require our services will occasionally have 10% discounts. Whenever a customer calls us, we will always be fast to arrive at the agreed time so that we do not waste our client’s time.

4.0. FINANCIAL PLANNING

4.1 Invest Equity

Mr. Al-Rashid and Mr. Al Muhammad own the business of the car wash in the ratio of 50:50

4.2 Required Funds

We as the owners of the business are seeking the amount of 277,000 AED from a third party as of now. The table below shows a number of projected startup costs.

Initial payments and deposit20,000 AED
Working capital40,000 AED
Service improvements20,000 AED
Security deposits60,000 AED
Opening supplies50,000 AED
Company vehicles57,000 AED
Marketing budget20,000 AED
Miscellaneous and unforeseen costs10,000 AED
Total startup costs290,000 AED

4.3 Management Equity

The partnership is expected to continue after the budgeting of the three years. Therefore, if the business continues to make a profit, the hiring of more staff will take place.

5.0 ORGANIZATIONAL STRUCTURE AND HUMAN RESOURCES

Organizational structure describes activities for task allocation within the business. The two owners will take responsibility for the President of the company and Vice President respectively. In the beginning, the company will employ three permanent drivers and develop plans to hire contractual drivers. The company will also hire contractual employees who will be doing the cleaning services because the work of the President and the Vice President will be to delegate the duties. The following chart summarizes how responsibilities will be shared within the organization.

The organizational structure of Sunshine Portable Car Wash Company

  • President and Vice President
  • Cleaning Supervisor
  • Polishing Supervisor
  • Employees

5.1 Background Details of Business Proposers

1) Mr. Al Rashid

Al Rashid is experienced in car cleaning services and polishing of the cars using ceramic coats so as to protect the vehicles. Mr. Al Rashid was previously employed with Al Ghouta auto wash station. At his previous job, he was a supervisor and was responsible for ensuring that the client’s cars were properly cleaned. He will be of benefit to the new venture due to his experience; Moreover, he will assist in organizing the workers so as to ensure that they orderly attend to the clients’ calls whenever we are called.

2) Mr. Al Muhammad

Mr. Al Muhammad was previously employed with Al Jabri car service center, acting as an Operation Manager ensuring that all the clients got quality services from the company. Therefore, he will be of benefit to the company by providing the managerial knowledge in operating the whole company. He will ensure that all the company’s operations run effectively. He will be the core manager of the company; we expect that the presence of the two will highly influence the running of the Sunshine car wash and polishing company.

a) Job Description of the President

The President of the company will be responsible for planning, organizing, developing, and implementing the organization’s functions. He leads the development of the company’s plan. He evaluates and advises other managers as well as employees on a wide range of activities. Being the owner of the company, the President is entitled to 50% of the shareholder’s assets in addition to an annual remuneration of 500,000 AED.

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b) Job Description of the Vice President

The Vice President reports directly to the President of the company. He has supervisory responsibility for the functional and operational departments of the company. He provides strategic decision-making that directly affects the organization. He optimizes the operations of the company. As the co-owner of the organization, the Vice President is entitled to 50% of the company’s shares and an annual remuneration of 450,000 AED.

Conclusion and Next Step

Sunshine Portable Car Wash and car polishing services are a viable business worth investing in. The business plan demonstrates that Sunshine requires financial investors and suppliers, thus promising to have an impact on the economy of the country through financial circulation, procuring raw material and offering quality employment. Also, the business aims to save people’s time that they spend waiting for a car wash.

The next step with this business is to approach investors. Investors may not be those entities lending money but those willing to collaborate, share liability, and develop a strong financial base required for competitive strategies. While the owners of this business can sufficiently start and run the business and begin making a profit, they will develop business proposals to use for acquiring investors who will be willing to inject capital into the business.

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