Quantcast
Jump to content


Business plan help


Recommended Posts

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 by Superman
Link to comment
Share on other sites

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.

  • Like 1
Link to comment
Share on other sites

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?

Link to comment
Share on other sites

  • 3 weeks later...

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.

Link to comment
Share on other sites

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 by Sean
Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Available Subscriptions

  • Have you checked out Joe's Latest Blog?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
  • Similar Topics

    • By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • By carmcapriotto
      Thanks to our partners, NAPA TRACS and Promotive
      Did you know that NAPA TRACS has onsite training plus six days a week support?
      It all starts when a local representative meets with you to learn about your business and how you run it.  After all, it's your shop, so it's your choice.
      Let us prove to you that Tracs is the single best shop management system in the business.  Find NAPA TRACS on the Web at NAPATRACS.com
      It’s time to hire a superstar for your business; what a grind you have in front of you. Great news, you don’t have to go it alone. Introducing Promotive, a full-service staffing solution for your shop. Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit www.gopromotive.com.
      Paar Melis and Associates – Accountants Specializing in Automotive Repair
      Visit us Online: www.paarmelis.com
      Email Hunt: [email protected]
      Get a copy of my Book: Download Here
      Aftermarket Radio Network
      Click to go to the Podcast on Remarkable Results Radio
    • By carmcapriotto
      Thanks to our Partners, NAPA TRACS, AutoFix Auto Shop Coaching, and Today's Class Join a discussion with multi-shop operators Dwayne Myers and Rick Levitan, as well as CPA Hunt Demarest, on the intricacies of purchasing a business. They cover the necessity of due diligence, understanding financials, and the emotional aspects of negotiation. The panel shares personal experiences, highlighting the importance of realistic financial projections, environmental assessments, and the role of goodwill in valuations. They advise on building strong banking relationships, scrutinizing financial statements, and respecting sellers' emotional ties, emphasizing patience and strategy for successful acquisitions in the automotive industry. Hunt Demarest, CPA, Paar Mellis and Associates, Business by the Numbers Podcast Dwayne Myers, Dynamic Automotive, 6 locations, Maryland. Dwayne’s previous episodes HERE. Rick Levitan, Managing Director, Auto Stream Car Care, MD. Show Notes
      Real Estate Strategies with Rick Levitan [AW 170]: https://remarkableresults.biz/remarkable-results-radio-podcast/aw170/ The challenges of obtaining accurate financials (00:02:03) Discussion on the challenges of obtaining accurate financials when buying a business. The importance of common sense in business acquisitions (00:06:30) The panel discusses the importance of using common sense and avoiding emotional attachment when considering a business acquisition. Legal and financial considerations in business acquisitions (00:08:24) The panel discusses legal and financial considerations, including the importance of asset purchase, non-compete agreements, and the quality of real estate. Financing Considerations (00:18:13) Discussion on the critical role of financing in business acquisitions and the advantages of using banks or owner financing. Bank Relationships (00:19:09) Importance of building a relationship with a bank and leveraging the bank's confidence in the buyer's ability to expand. Financial Statement Analysis (00:20:27) Importance of thoroughly analyzing financial statements, including understanding expenses and discretionary non-recurring expenses. Negotiating the Deal (00:22:24) Strategies for negotiating the price and terms of the acquisition, including considering the concerns of the seller and assessing the facility's assets. On-Site Q&A (00:23:31) The checklist and tactics for conducting a site visit to assess a potential acquisition, including evaluating equipment, employees, and the owner's future plans. Pro Forma and Business Plan (00:25:23) The necessity of creating a pro forma and business plan for the bank, including the importance of conservative projections and understanding the return on investment. Challenges of Multi-Shop Expansion (00:30:34) Discussion on the challenges and missteps often encountered by individuals expanding into multi-shop operations, emphasizing the need for patience and learning from experiences. Gas Station Red Flags (00:32:41) The importance of environmental assessments. Emotional Aspects of Buying (00:34:08) The emotional nature of buying a business. Goodwill and Equipment Allocation (00:38:49) Discussion on goodwill, equipment, and the allocation of the purchase price in a business acquisition, including tax implications. Understanding Multiples in Business Valuation (00:39:32) Explaining the concept of multiples in business valuation and the factors that influence the multiplier, such as location, equipment, and reputation. Negotiating Purchase Price (00:42:23) Negotiating the purchase price based on business valuation and real estate factors. Final Thoughts on Business Acquisition (00:44:03) The importance of staying positive and finding creative solutions during negotiations, leaving deals on good terms, and expressing appreciation for the insights shared. Thanks to our Partner, NAPA TRACS NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/ Thanks to our Partner, Auto-Fix Auto Shop Coaching Proven Auto Shop Coaching with Results. Over 61 Million in ROI with an Average ROI of 9x. Find Coach Chris Cotton at AutoFix Auto Shop Coaching on the Web at https://autoshopcoaching.com/ Thanks to our Partner, Today's Class Optimize training with Today's Class: In just 5 minutes daily, boost knowledge retention and improve team performance. Find Today's Class on the web at https://www.todaysclass.com/ Connect with the Podcast: -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 -Subscribe on YouTube: https://www.youtube.com/carmcapriotto -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on X (Twitter): https://twitter.com/RResultsBiz -Visit the Website: https://remarkableresults.biz/ -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections                                  
      Click to go to the Podcast on Remarkable Results Radio
    • By nptrb

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • Water Proof And Self Adhesive
    • By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.



  • Our Sponsors



×
×
  • Create New...