Business plan help

[Superman]

How did yall go about writing your business plan? What did you include? Found a sample plan online but dont know if this is a good example of what I should create.

 

http://www.bplans.com/auto_repair_shop_business_plan/financial_plan_fc.php#7.1_Break-even_Analysis

 

It doesnt exactly look right. For example it shows year 1 sales of $178,800 and direct cost of sales being 10% of that at $17,880. Direct cost of sales would be parts cost wouldn't it? Granted whoever wrote this probly doesnt understand the auto repair business so that is understandable that it wouldnt look right.

 

What I was thinking is parts cost would be about 45% of labor. Does that sound right for making my business plan

 

Then under expenses it shows Deppreciation, EBITDA (whatever that is), interest expense, and taxes incurred

 

What I have is

Payroll

mortgage/rent

utilities

Ondemand/identifix

insurance

payroll taxes

equipment payment

advertising

uniforms

safety kleen

 

I have my breakeven about $155k in gross profit(after parts bill), or about $3000/wk. May be a little low, I am probably leaving something out.

 

I realize a business plan is more than just a sales and expenses projection, so any advice is appreciated.

Edited July 30, 2013 by Superman

[ATLAuto]

It all depends on your purpose for making the plan and who its audience is. If it's just for yourself, you can really put in anything you want. It would just be a plan to convince yourself that you've covered everything and say, "Yeah, this'll work for sure. I'm convinced."

 

If the plan is for the bank in order to get a loan, you need to be a lot more specific. The bank will want the first two years of finances broken down month-by-month, and then the third year summarized. Banks will also look not only at your business plan but how wisely you have been leading your life up until that point. They will look at your credit score, your current mortgage payment, car payment, child support payment, last five years of W4's for income, wife's income, etc etc etc. You want your business plan to be rock solid, but you also want your life to be rock solid leading up to this point.

 

The business plan that you found online is solid ... it looks like it covers all the bases that the bank will be asking about. When you present it to them, I have found that they are not going to go into all the nitty-gritty details of everything. Rather, they are going to use it and just start asking you random questions about the business. Their goal being to find out, "Has this guy done his homework? Has he asked himself the tough questions? Is he financially prudent and wise with his business?" Therefore, come prepared to answer just about anything, and you should be alright.

 

Shoot me PM if you need any specific advice. I've just been through all this myself ... got a ton of documents that may help. LLC forms, Operating Agreements, Business License checksheets, etc etc etc.

[Superman]

Thanks for the response. I wasnt sure if this was a good model or not. From doing a little more searching, Direct Cost of Sales would be the cost of parts. In that model they show parts to be 10% of the total sales figure. That just isnt going to work. So how would I figure the cost of parts for a business plan?

 

Say I project 150,000 in labor how would I figure the parts?

[nmikmik]

I think I have seeing Joe saying that in general it is considered a good practice to have profits broken down 50/50 between labor and parts.

So, figure what is your actual cost of labor and estimate the parts cost to be the same or the percentage in relation of your 150k to your actual labor profit and mimic that to parts.

I suspect it's very subjective on the type of shop you have and all bunch of other criteria, but in general it could be ok. Veterans here may be able to give you their rough numbers to help you picture it.

[Sean]

I am using a program called live plan to write my business plan. They have a lot of example business plans that you can see and utilize, you can actually import parts of the example directly into your template. The nice thing is liveplan walks you through everything and it's intuitive, much more so than sitting down and trying to do it in microsoft word.

Here is the website check it out:http://www.liveplan.com/

 

Also a note on break even analysis, it took me a while to figure out how to do this but the best I have found is to calculate gross profit percentage and then use that as follows:

• Gross profit margin percentage = Gross Profit/ Gross Sales (GM = GP/ GS)
• Break-even sales revenue = total fixed costs/gross profit margin percentage. (BR = FC/GM)

Hope this helps.

Edited August 22, 2013 by Sean

[phynny]

I know for us it's darned near a 50/50 with parts and labor

[Jeff]

I was always taught that a target number was 80/100 part to labor. Every 80 in parts should get 100 in labor sales. I can never seem to hit that...my parts are always higher. I will say I have stopped discounting jobs and giving away time! Always felt sorry for folks...aint no one feelin sorry for me tho when I cant pay my bills!