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Executive Summary


  • Executive Summary

    • The need for a full service automotive center with competent and trusting mechanics is always there. Chuck Liepshur and Rich Rudy have built, and are still accumulating, a clientele that has followed them from location to location through promotions and careers. These clients are loyal and will continue to follow LR Automotive, when we move to our new location.

      With advertising in local newspapers, mailers and handbills, business should increase by a margin of 10% annually. People are always looking for an honest auto repair facility which is committed to customer service, reliability and promptness. By being fully committed to our clients, our customer base will increase and will provide a stable ground for our business to grow.

      Our company will be offering two products: the first being automotive service which will generate a gross profit margin of 60% on average. This will include bumper-to-bumper service on cars and light trucks, i.e. brakes, computer diagnosis, suspension, exhaust and electrical. The sale of tires will provide a 20% profit margin, but will also help us sell service such as front-end parts and front-end alignments as needed. The only time our services will be performed is when and if they are needed or they are recommended on the O.E. manufacturer’s maintenance schedule. Service should provide 90% of the total sales with tire sales making up the remaining 10%.

      The parts and products we will use will also help in our appeal to customers. We will use top of the line, name brand parts such as Auto-X, Reman, and Xilco. Customers always look for a well-known brand name when deciding where to take their vehicle.

      Counterfeit parts will never be used at LR Automotive.

      Last, but not least, warranties also help when customers are deciding where to get their work done. Our warranties will meet or exceed industry standards.

      Our target customers are the owners of auto and light trucks. This area of service is always growing. Automobiles are being kept an average of 3-5 years and each vehicle requires servicing an average of 2.7 times per year.

      As new vehicle prices increase, consumers are inclined to maintain and service their vehicles for longer periods of time. As a result of this trend, the service business will continue to grow.

      Our competition will consist of auto dealerships, larger tire and service chains and gas stations with service departments. These are very successful because they are well-known and offer a wide variety of services. The weakness of these companies will be our advantage. These weaknesses include the need to keep the cars several days to finish work. LR Automotive will make every effort to finish jobs the same day. Also, dealerships tend to distance themselves from their clients, refusing to take the time to educate the customer about their problems. Our employees will take the time to point out our customers’ vehicle problems and discuss all the possible solutions explaining the advantages and disadvantages of each. We are also going to treat our customers as we would like to be treated, spending time with each one so they know they’re not just a number to our business. Follow-up calls to ensure satisfaction will also be made after we have completed the work.

       

      Our customers will be made up of our existing clientele, along with a new customer base which we will gain through advertising. Through our satisfied customers, word will spread that LR is the automotive repair shop that customers can trust, which will increase our customer base. These customers will remain satisfied because they will be happy with our service, prices and the atmosphere we provide.


The Company


  • Parts & Labor

    • We will use only quality parts, which will be readily available in our stock or via our local parts supplier. When we service autos, we will never take short cuts and will never substitute quality in order to obtain a lower price. Our parts warranties will reflect those of the manufacturer.


  • Warranties

    • Our labor warranties will be as follows:

      ·         Brakes - Standard brake job -1 year or 12,000 miles - Brake overhaul - 2 years or 24,000 miles

      ·         Shocks - 1 year or 12,000 miles

      ·         Struts - 3 years or 36,000 miles

      ·         Suspension parts - 1 year or 12,000 miles

      ·         Belts - 1 year or 12,000 miles

      ·         Exhaust - 1 year or 12,000 miles

      ·         Alternator/Starter - 6 months or 6,000 miles

      ·         Alignment - 6 months or 6,000 miles

      ·         Water pump -1 year or 12,000 miles

       

      ·         All other warranties - 90 days or 4,000 miles


  • Community Activity

    • We plan on being a visible part of the community in which we are based. We will join community groups and participate in local activities in order to understand community needs. As a result of our visibility, we will get to know the local patrons and that will help LR’s business to grow within the community.


  • Organization

    • We plan on working on 6 cars per day when LR first opens. Our labor force will include two certified technicians and one salesperson. Every employee in our establishment will be knowledgeable in the auto service area. As our business grows and becomes more profitable, we will add trained personnel to ensure the best service available.


  • Company Philosophy

    • 1.     To provide an atmosphere where the consumer feels confident about his/her purchase(s) and relationships with LR’s service employees.

      2.     Being honest and sincere with the clientele.

      3.     Being community oriented.

      4.     To create a place where customers feel good about recommending LR to friends or relatives for their auto concerns.

      5.     To provide a comfortable living for ourselves and our employees.

      6.     To provide a healthy work environment where our employees enjoy coming to work each day.

      7.     To provide benefits for ourselves, our employees and families (i.e. 401K plans, health and dental plans).

      8.     Our goal is to keep our employees long term by treating them as we would wish to be treated ourselves.




Management & Organization


  • Job Descriptions

    • Co-President

      Objective

      To ensure survival and growth of LR Automotive Service and control the operation.

       


    • Functions

      1.     Act as a team leader, making sure that LR team stays on track.

      2.     Establish and implement company policy, performance standards, policy and procedures.

      3.     Establish and implement employee controls - feedback based on performance standards, indicators, goals, etc.

      4.     Financial planning and controls

      1.     Paying invoices

      2.     Banking

      3.     Accounting systems

      4.     Sales and expenses

      5.     Assets and liabilities

      5.     Buying and inventory control

      6.     Advertising and promotion

      7.     Reconcile statements

      8.     Planning (long and short range)

       


    • 9.     Answer customer complaints

      10.     Maintain:

      1.     The spark to imagine

      2.     The daring to innovate

      3.     The discipline to plan

      4.     The skill to do

      5.     The will to achieve

      6.     The commitment to be responsible

      7.     The leadership to motivate

      11.     Scheduling, merchandise store, maintain paper flow, housekeeping and equipment maintenance.

      12.     Parts room and warehouse organization.

       

      13.     Business development, fleet accounts and national accounts.


    • Salesperson

      Objective

      Take care of customers that come in the door, and relieve Co-Presidents of detail work.

      Functions

      1.     Completing work orders and calling customers when job is done.

      2.     All other paper work, i.e. filing work orders daily, inventory management, mailing invoices, PIPT’s filing emissions certificates, getting invoice numbers on parts bills and clear pending documents.

      3.     Housekeeping - keeping counters clean, displays and vending machines dusted, customer waiting area clean daily, empty waste baskets, rest room detail.

      4.     Supplies - invoices, sales slips, cash receipts, paper towels, keep sufficient change in cash drawer.

      5.     Special assignments as directed by Co-Presidents.

       

      6.     Keep all display materials current, window signs, ad boards, manufacturer rebates and promotions.


    • Mechanic

      Objective

      Meet or exceed assigned daily objective. Maximize productivity per hour worked. Get quality work done in the shortest amount of time possible.

      Function

      1.     Get quality work done, fast.

      2.     Safety check all cars worked on.

      3.     Add-on sales, direct contact with customer, both face to face and on the phone.

      4.     Housekeeping.

      5.     Equipment maintenance.

       

      6.     Assist in organizing warehouse and parts room.


Financial Data & Projections


  • Start-up Cost

    • Office Equipment

       

      Alarm Equipment

      $700.00

      Cash Register

      $500.00

      Coffee Machine

      $50.00

      Deposit for Oxygen Tank

      $200.00

      Fax Machine

      $300.00

      Fire Extinguishers

      $260.00

      Incorporation

      $1,000.00

      Initial Supplies

      $1,000.00

      Office Furniture

      $500.00

      Phone Lines (installation)

      $206.00

      Phone System (4 lines)

      $1,500.00

      Safe

      $850.00

      Showroom Furniture

      $1,000.00

      Signage

      $500.00

      Sub-total

      $8,566.00


    • Shop Equipment

       

      2 Post Lift

      $3,672.00

      4 Post Lift

      $9,200.00

      Air Compressor

      $1,500.00

      Alignment Machine

      $5,000.00

      Anti-freeze Drum Cradle

      $30.80

      Arbor Press

      $500.00

      Battery Charger

      $231.00

      Bearing Packer

      $2,300.00

      Catch Pan

      $10.00

      Drain Pan

      $21.00

      Exhaust Analyzer

      $3,000.00

      Exhaust Hoses

      $156.00

      Lab Scope

      $500.00

      Lift Installation Labor

      $750.00

      Mitchel On-Demand

      $4,154.00


    • Oil Dispensor

      $69.00

      Parts Washer

      $306.00

      R12 Air Conditioning Machine

      $2,800.00

      R134 Air Conditioning Machine

      $2,800.00

      Rolling Lift

      $4,000.00

      Strut Compressor

      $575.00

      Tall Jack Stand

      $100.00

      Tire Balancer

      $1,500.00

      Tire Machine

      $2,500.00

      Tire Spreader

      $50.00

      Tire Tank

      $34.00

      Trans Jack

      $400.00

      Volt Amp Tester

      $1,000.00

      Waste Oil Tank

      $100.00

      Welding Tank

      $125.00

      Sub-total

      $47,415.30

      Total Start-Up Cost

      $55,981.30


  • Operating Expenses

    •  

      Weekly

      Monthly

      Yearly

      Miscellaneous Service Expenses

           

      Dumpster

      $11.52

      $50.00

      $599.96

      EPA Compliance Fee

      $3.50

      $15.19

      $182.28

      Floor Dry

      $1.20

      $5.21

      $62.50

      Floor Soap

      $4.10

      $17.79

      $213.53

      Hand Soap

      $10.50

      $45.57

      $546.84

      Shop Towels

      $16.50

      $71.61

      $859.32

      Tire Removal

      $11.52

      $50.00

      $599.96

      Uniforms

      $18.00

      $78.12

      $937.44

      Waste Anti-freeze Removal

      $3.16

      $13.71

      $164.57

      Waste Oil Filters Removal

      $6.33

      $27.47

      $329.67

      Waste Oil Removal

      $10.36

      $44.96

      $539.55

      Welding Supplies & Services

      $19.44

      $84.37

      $1,012.44

      Sub-total

      $116.13

      $504.00

      $6,048.05


  • Flow Table

    • Sales Projection and Cash Flow

      First 12 Months

      Nov

      Dec

      Jan

      Feb

      Mar

      Apr

      No. of Days

      25

      25

      26

      25

      26

      26

      Balance

      1,000

      657

      314

      601

      258

      545

      Sales

      26,250

      26,250

      27,300

      26,250

      27,300

      27,300

      Inventory Expenses

      10,500

      10,500

      10,920

      10,500

      10,920

      10,920

      Gross Profit

      15,750

      15,750

      16,380

      15,750

      16,380

      16,380

      Operating Expenses

      16,093

      16,093

      16,093

      16,093

      16,093

      16,093

      Net Profit/(Loss)

      −343

      −343

      287

      −343

      287

      287

      Balance

      357

      314

      601

      258

      545

      832


    • Office Expenses

           

      Accountant

      $34.56

      $149.99

      $1,799.88

      Advertising

      $69.00

      $299.46

      $3,593.52

      Alarm Service

      $5.76

      $25.00

      $299.98

      Bad Debt

      $23.04

      $99.99

      $1,199.92

      Bank Loan

      $345.62

      $1,500.00

      $18,000.00

      Miscellaneous Expense (supplies)

      $250.00

      $1,085.00

      $13,020.00

      Property Rental

      $345.62

      $1,499.99

      $17,999.89

      Telephone

      $57.60

      $249.98

      $2,999.81

      Utilities (light/heat/water)

      $64.50

      $279.93

      $3,359.16

      Sub-total

      $1,196.70

      $5,189.35

      $62,272.17

      Salaries Expenses

           

      Chuck Liepshur

      $672.00

      $2,916.48

      $34,997.76

      Rich Rudy

      $672.00

      $2,916.48

      $34,997.76

      Abe Sitze

      $576.00

      $2,499.84

      $29,998.08

      Sub-total

      $1,920.00

      $8,332.80

      $99,993.60


    • Insurance

           

      Health

      $207.37

      $900.00

      $10,800.00

      Liability/Comprehensive

      $93.00

      $403.62

      $4,843.44

      Sub-total

      $300.37

      $1,303.62

      $15,643.44

      Taxes

           

      FICA (7.65)

      $147.00

      $637.98

      $7,655.76

      MESC

      $29.00

      $125.86

      $1,510.00

      Sub-total

      $176.00

      $763.84

      $9,166.08

      Total

      $3,708.20

      $16,093.61

      $193,123.34


    • Second 12 Months

                 

      No. of Days

      25

      25

      26

      24

      26

      26

      Balance

      1,924

      3,156

      4,388

      5,508

      5,243

      6,363

      Sales

      28,875

      28,875

      30,030

      27,720

      30,030

      30,030

      Inventory Expenses

      11,550

      11,550

      12,012

      11,088

      12,012

      12,012

      Gross Profit

      17,325

      17,325

      18,018

      16,632

      18,018

      18,018

      Operating Expenses

      16,093

      16,093

      16,898

      16,898

      16,898

      16,898

      Net Profit/(Loss)

      1,232

      1,232

      1,120

      −266

      1,120

      1,120

      Balance

      3,156

      4,388

      5,508

      5,243

      6,363

      7,483

                   

       


    • Third 12 Months

                 

      No. of Days

      25

      26

      26

      24

      26

      26

      Balance

      13,513

      13,983

      15,215

      16,447

      16,155

      17,388

      Sales

      31,763

      33,033

      33,033

      30,492

      33,033

      33,033

      Inventory Expenses

      12,705

      13,213

      13,213

      12,197

      13,213

      13,213

      Gross Profit

      19,058

      19,820

      19,820

      18,295

      19,820

      19,820

      Operating Expenses

      18,587

      18,587

      18,587

      18,587

      18,587

      18,587

      Net Profit/(Loss)

      470

      1,232

      1232

      −292

      1232

      1232

      Balance

      13,983

      15,215

      16,447

      16,155

      17,388

      18,620



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