Car Wash Business Plan

Plan Outline
Car Wash Business Plan

Soapy Rides Car Wash
1.0 Executive Summary Objectives Mission 2.0 Company Summary 3.0 Services 4.0 Market Analysis Summary 5.0 Strategy and Implementation Summary 6.0 Management Summary 7.0 Financial Plan Appendix
Executive Summary Soapy Rides is a prominent hand car wash serving the East Meadow, Long Island, NY community. Soapy Rides will be run by Mark Deshpande, of the prominent Deshpande family. The Deshpande family has been serving the Long Island area with a car repair business and property development /management for over 30 years. Mark will be leveraging the incredible good will and brand recognition of the Deshpande family name to quickly gain market penetration. The Business Soapy Rides will be providing customers with three services: exterior car washing, , interior cleaning, and detailing. Soapy Rides has no true competitors that are trying to offer a high quality service for a reasonable rate. Most are trying to compete on price alone. Soapy Rides' ability to provide a high quality service, both in regards to the actual washing as well as customer service is all based on their ability to find the best employees. Hiring the best employees is cost effective because it decreases HR costs associated with turnover and other employee costs. Hiring the best employees and making sure that they are well taken care of ensures that they in turn take care of the customers. Study after study proves that a happy employee is far more likely to provide the highest level of customer service compared to an employee who is not happy and feels that they are being taken advantage of. The Customers Soapy Rides will target three main groups of customers: individual car owner and leasers, car dealerships, and local businesses. The surrounding area is quite affluent, 40% of the residents earn over $70,000 a year. Consequently, they have nice cars and want them to look nice. There are five different car dealerships within a three-mile radius which will require car washing services for the various fleets. Lastly, there are many different local businesses that have company cars and that require clean appearances. Management The strength of Mark's experience and his family's name equity and assistance is Soapy Rides' competitive edge as well as a significant asset. Mark has been involved in the family's car repair business for the last ten years. He has worked his way through the organization and has been the manager for the last five years overseeing operations of $1.2 million annually. Before the family venture, Mark received his MBA from Cornell University. With 30 years invested in the community, the Deshpande family name has generated significant value as a fair, active member of the community. Lastly, Soapy Rides will be able to leverage several of the Deshpande's for their business expertise.
Soapy Rides is positioning itself as the premier hand car wash serving the Long Island area. Mark has forecasted a 20% market share. The business will generate a very high gross margin and a modest net margin after year one and comfortable margin after year three. By year three the business will have developed a respectable yearly net profit.
Executive Summary Soapy Rides is a prominent hand car wash serving the East Meadow, Long Island, NY community. Soapy Rides will be run by Mark Deshpande, of the prominent Deshpande family. The Deshpande family has been serving the Long Island area with a car repair business and property development /management for over 30 years. Mark will be leveraging the incredible good will and brand recognition of the Deshpande family name to quickly gain market penetration. The Business Soapy Rides will be providing customers with three services: exterior car washing, , interior cleaning, and detailing. Soapy Rides has no true competitors that are trying to offer a high quality service for a reasonable rate. Most are trying to compete on price alone. Soapy Rides' ability to provide a high quality service, both in regards to the actual washing as well as customer service is all based on their ability to find the best employees. Hiring the best employees is cost effective because it decreases HR costs associated with turnover and other employee costs. Hiring the best employees and making sure that they are well taken care of ensures that they in turn take care of the customers. Study after study proves that a happy employee is far more likely to provide the highest level of customer service compared to an employee who is not happy and feels that they are being taken advantage of. The Customers Soapy Rides will target three main groups of customers: individual car owner and leasers, car dealerships, and local businesses. The surrounding area is quite affluent, 40% of the residents earn over $70,000 a year. Consequently, they have nice cars and want them to look nice. There are five different car dealerships within a three-mile radius which will require car washing services for the various fleets. Lastly, there are many different local businesses that have company cars and that require clean appearances. Management The strength of Mark's experience and his family's name equity and assistance is Soapy Rides' competitive edge as well as a significant asset. Mark has been involved in the family's car repair business for the last ten years. He has worked his way through the organization and has been the manager for the last five years overseeing operations of $1.2 million annually. Before the family venture, Mark received his MBA from Cornell University. With 30 years invested in the community, the Deshpande family name has generated significant value as a fair, active member of the community. Lastly, Soapy Rides will be able to leverage several of the Deshpande's for their business expertise. Soapy Rides is positioning itself as the premier hand car wash serving the Long Island area. Mark has forecasted a 20% market share. The business will generate a very high gross margin and a modest net margin after year one and comfortable margin after year three. By year three the business will have developed a respectable yearly net profit.
1.1 Objectives
The objectives for Soapy Rides Car Wash and Detail Service are: 1. 2. 3. 4. To be viewed as a premium car wash and detail service in East Meadow. Maintain a very high gross profit margin. Maintain a modest, steadily growing net profit margin. Expand to two locations after third year of operation.
1.2 Mission
The mission of Soapy Ride is to provide top-quality washing and detail service for luxury car owners in East Meadow, NY. Soapy Rides will work to keep employees satisfied in order to maintain impeccable customer service.
Company Summary The company is solely owned by Mark Deshpande and will be funded by an initial personal investment. Soapy Rides is New York State registered C corporation.
2.1 Company Ownership

The company will be solely owned by Mark Deshpande. Mark has been in the car industry all his life, having grown up in the family car repair business. He came across the location in East Meadow purely by accident and he felt it would be a perfect location for a car wash service.
2.2 Start-up Summary

The start-up expenses for Soapy Rides will be financed by Mark Deshpande, from the profits he made in selling his part of the family car repair business. The property on Hempstead Road will be leased in April 2001 for a minimum of three years, with the option to extend the lease for another three years after that. Mark is working with the family lawyer to set up incorporation and to discuss lease issues before the business is launched. He is working with a local graphic designer to develop a logo, letterhead, and company
brochures. Although Mark has been in the car repair business, he has not been in the wash and detailing business, which is a very different service (quick turnaround per car is incredibly important). For this reason he is working with an acquaintance to set up the system that will ensure efficient service even during peak usage. Rent on the location has been negotiated and will be $1,200 per month. In addition, insurance for the business will be approximately $200 per month and will be paid by direct debit on a monthly basis. Expensed equipment includes three high-power water pumps, two industrial vacuum cleaners, two computer terminals, and one cash register. All of the equipment will be depreciated over three years. The location was previously used as a quick stop automobile service shop, so it is set up to move vehicles quickly through the premises, but does not have all the necessary systems in place to host a car wash and detail facility. The services of a contracting company will be sought to convert the use of the facility and to improve the customer waiting room facilities.
Start-up Requirements
Start-up Expenses
Legal
$500
Stationery etc.
$400
Brochures
$450
Consultants
$0
Insurance
$200
Rent
$1,200
Research and Development
$300
Expensed Equipment
$4,100
Signs
$700
Building Materials
$1,200
Building Labor
$1,000
Total Start-up Expenses
$10,050
Start-up Assets
Cash Required
$8,700
Start-up Inventory
$250
Other Current Assets
$1,000
Long-term Assets
$10,000
Total Assets
$19,950
Total Requirements
$30,000
Start-up Funding
Start-up Expenses to Fund
$10,050
Start-up Assets to Fund
$19,950
Total Funding Required
$30,000
Assets
Non-cash Assets from Start-up
$11,250
Cash Requirements from Start-up
$8,700
Additional Cash Raised
$0
Cash Balance on Starting Date
$8,700
Total Assets
$19,950
Liabilities and Capital
Liabilities
Current Borrowing
$0
Long-term Liabilities
$0
Accounts Payable (Outstanding Bills)
$0
Other Current Liabilities (interest-free)
$0
Total Liabilities
$0
Capital
Planned Investment
Investor 1
$30,000
Investor 2
$0
Other
$0
Additional Investment Requirement
$0
Total Planned Investment
$30,000
Loss at Start-up (Start-up Expenses)
($10,050)
Total Capital
$19,950
Total Capital and Liabilities
$19,950
Total Funding
$30,000
Services Soapy Rides will provide three services to its customers:
Car washing (exterior) Car cleaning (interior) Car detailing
Market Analysis Summary The car wash will be based in East Meadow, New York. This area has a number of benefits in terms of the market that it will provide for the business. Over 40% of households in the immediate neighborhood earn over $70,000 annually. Many people in the neighborhood own and/or lease new cars and place great value on their cars and how they look. There are a large number of car dealerships in the area--five within three miles of the proposed location for Soapy Rides.
4.1 Market Segmentation

Soapy Rides segments its customers by type of car ownership. We believe that the type of car that a person owns says volumes about their driving, and, therefore their car washing and detailing requirements. 1. New car owners: Owners of newer cars are most likely to use a hand car washing service. These owners take great pride in their cars and will bring them often to the wash and detail service. The goal with these customers is to promote regular use of the wash and detail service. The aim is to inform these customers that Soapy Rides will keep their car looking as good as it did the day they drove it off the lot. Older luxury car owners: These people have either owned their high-end luxury cars for several years or are unable to afford the expense of a new luxury car but want the feel of relaxed driving. Both of these groups want to keep their cars in the best shape possible. Those who have bought second-hand cars will often spend many hours in their cars and will place high importance on keeping their cars looking good. These owners will bring their cars in for regular washes and occasional details. Sports car owners: These people are often younger or middle-aged men and will regard the look of their car as important. They will also pride themselves on the look of their car and will have their car hand washed (at least) weekly. These drivers will have an occasional detail, but will keep their cars so clean the detail will not be necessary very often. Lifetime owners: Many of these people have owned their cars for more than five or six years, and are more likely to be women. They are attached to their cars as friends and though it may be more sensible for them to purchase a new car, they will bring their car in for a wash occassionally, just when the car is dirty. They like their cars to look presentable, and want to keep it in good shape but are not tied up in the look of their car. For this reason, they will not have a detail carried out on their car unless they are selling it. Dealerships: There are five new and used car dealerships within three miles of the proposed location of Soapy Rides. These dealerships often use outside car wash services to detail their vehicles before they are put up for sale. In addition, there are fifteen other car dealerships within a seven mile radius of Soapy Rides. Local businesses: Some local businesses have fleets of cars and small vans that must be kept clean to maintain their company image. These businesses will be looking for a cost effective, efficient car washing service to perform this service, and will prefer to use a car wash service during the week rather than during weekends, like the general public.
2.
3.
4.
5.
6.
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Market Analysis
Year 1
Year 2
Year 3
Year 4
Year 5
Potential Customers
Growth
CAGR
New Car Owners
10%
7,200
7,920
8,712
9,583
10,541
10.00%
Older Luxury Car Owners
15%
12,500
14,375
16,531
19,011
21,863
15.00%
Sports Car Owners
15%
6,500
7,475
8,596
9,885
11,368
15.00%
Lifetime Owners
10%
17,000
18,700
20,570
22,627
24,890
10.00%
New and Used Car
7%
10
11
12
13
9.63%
Dealerships
Total
12.28%
43,209
48,480
54,420
61,118
68,675
12.28%
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4.2 Target Market Segment Strategy

The strategy behind Soapy Rides target segmentation is to attract customers who will be repeat users and will frequent the business in the typically quiet times for a car wash business. It will not be difficult to attract customers during the summer months and on the weekends, the weekdays however, especially in the winter, people will not think about having their cars washed. For this reason, Soapy Rides will target people who will tend not to be restricted to these busy times.
Business owners (new car owners) tend to be very busy people, but are often able to make their own hours. Retired people (older luxury car owners) are not restricted by typical work schedules so will be able to frequent the car wash during the week. Dealerships will need cars detailed and washed regardless of the time of the day and week. This will supply a constant flow of traffic. Businesses will need their fleet cars washed during the week during regular business hours.
4.3 Service Business Analysis

The hand car washing business in East Meadow consists of many small competitors. Everything from local children raising money for their youth group on a Saturday by cleaning cars, to the automatic car wash machines, are competition for Soapy Rides. However, these two alternatives aim to meet the needs of the priceconscious individuals who are choosing the service simply so they do not have to clean the car themselves. Soapy Rides on the other hand, targets the quality-conscious individuals who value their car enough to spend $10-$15 per week to make it look good.
4.3.1 Competition and Buying Patterns

There is one other hand car wash shop in East Meadow. It is quite new and is trying to compete with automatic car washes by offering low prices. However, it is not targeting the customers who seek quality cleaning. The customers who Soapy Rides is targeting have their cars washed based on the quality of the job. They do not mind spending a little more each week to have their car washed and waxed in order to keep the paint work in excellent shape. The businesses that Soapy Rides targets will be more cost conscious, so prices will be approximately 30% less for these customers to promote volume usage.
Strategy and Implementation Summary The key differentiator for Soapy Rides Car Wash is Mark Deshpande and his business and personal connections within the East Meadow neighborhood. For this reason, the sales and marketing focus will be on a one-to-one basis, with the emphasis on gaining loyal and repeat customers as "friends" of the business. Soapy Rides, therefore, will depend on word-of-mouth advertising for the immediate community.
5.1 Competitive Edge

Soapy Rides' competitive edge will be Mark Deshpande and the quality of the family name in the East Meadow area. As mentioned, the family has been in the car business for over 30 years, and has an excellent reputation and a myriad of both business and personal contacts. In addition, Mark has put a great deal of emphasis on creating a system that is both fast and efficient, which will keep costs, in terms of time spent per car, to a minimum.
5.2 Sales Strategy

Sales strategy is on a one-to-one basis. All customers will feel they are a valued friend of Soapy Rides, and that all employees care about the care and upkeep of each vehicle. We must be aware that there are low switching costs in the car washing industry, so we have to work hard to develop and keep repeat customers.
5.2.1 Sales Forecast

The following chart forecasts sales based upon the Market Segmentation Strategy. Sales are seasonal in this industry, tending to be higher in the warmer summer months, and to drop off in the winter. However, we will aim to flatten sales across the sales cycle by targeting segments that will want to keep their cars clean and looking good year round.
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Sales Forecast
Year 1
Year 2
Year 3
Unit Sales
Full Wash
1,760
2,288
2,974
Exterior Wash
2,050
2,665
3,465
Interior Clean
770
1,001
1,301
End User Detail
129
193
290
Business Fleet Washes
615
923
1,384
Car Dealership Details
494
642
963
Total Unit Sales
5,818
7,712
10,376
Unit Prices
Year 1
Year 2
Year 3
Full Wash
$15.00
$15.00
$15.00
Exterior Wash
$9.00
$10.00
$12.00
Interior Clean
$8.00
$9.00
$9.00
End User Detail
$140.00
$145.00
$150.00
$10.00
$10.00
$10.00
$70.00
$75.00
$80.00
Sales
Full Wash
$26,400
$34,320
$44,616
Exterior Wash
$18,450
$26,650
$41,574
Interior Clean
$6,160
$9,009
$11,712
End User Detail
$18,060
$27,985
$43,425
$6,150
$9,225
$13,838
$34,580
$48,150
$77,040
Total Sales
$109,800
$155,339
$232,204
Direct Unit Costs
Year 1
Year 2
Year 3
Full Wash
$0.70
$0.80
$0.90
Exterior Wash
$0.40
$0.45
$0.50
Interior Clean
$0.30
$0.35
$0.40
End User Detail
$3.00
$3.50
$4.00
$0.70
$0.75
$0.80
$3.00
$3.50
$4.00
Direct Cost of Sales
Full Wash
$1,232
$1,830
$2,677
Exterior Wash
$820
$1,199
$1,732
Interior Clean
$231
$350
$521
End User Detail
$387
$676
$1,158
$431
$692
$1,107
$1,482
$2,247
$3,852
Subtotal Direct Cost of Sales
$4,583
$6,994
$11,047

5.3 Milestones
The following table outlines the important milestones in the planning and implementation of Soapy Rides.
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Milestones
Milestone
Start Date
End Date
Budget
Manager
Department
Complete Business Plan
2/1/2001
5/1/2001
$0
ABC
Department
Sign Rental Contract
3/20/2001
3/20/2001
$475
Mark
Owner
Convert Premises
4/1/2001
4/30/2001
$0
Contractors
Contractors
Hire Car Wash Staff
4/20/2001
4/20/2001
$200
Mark
Owner
Hire Admin Staff
4/20/2001
4/20/2001
$200
Mark
Owner
Open for Business
5/1/2001
5/1/2001
$0
Staff
Staff
Distribute Flyers
4/28/2001
5/5/2001
$75
Friends
Friends
Press Release
4/29/2001
4/29/2001
$25
Mark
Owner
Follow-up on Press Release
4/30/2001
4/30/2001
$0
Mark
Owner
Totals
$975
Management Summary Mark Deshpande is the sole owner and manager of Soapy Rides. In addition, he will be helped (on an unofficial basis) by his father, Barry Deshpande. Barry has over 30 years experience as an entrepreneur, both in the car business and in property development and management. Mark will also have the assistance of John Shine, the family accountant, in creating a long-term strategic vision for the company. John is a family friend and has worked with the Deshpande family for 23 years. He has worked with hundreds of small- and medium-sized businesses during his career.
6.1 Personnel Plan

Since car washing is a seasonal business, with business increasing in the warm summer months, and being busier on the weekends than during the week, Soapy Rides will rely on both temporary and part-time help. The company will hire one full-time car wash/detail specialist and one full-time car wash specialist when it opens for business. Although it will rely on temporary and part-time help, quality will not be compromised, since all washers and detailers will receive thorough training. The company will also hire an administrative assistant who will assist Mark with paperwork and act as a receptionist.
Personnel Plan
Year 1
Year 2
Year 3
Owner
$18,000
$30,000
$40,000
Car Washers
$30,240
$43,312
$51,174
Admin/Sales
$13,440
$15,000
$22,000
Total People
Total Payroll
$61,680
$88,312
$113,174
Financial Plan The following plan outlines the financial development of Soapy Rides. The business will be initially financed by a personal investment by Mark Deshpande and will finance growth through cash flow. This will mean that the company will grow more slowly than it could, but it will ensure that Mark retains control over the direction of the company. In year three, it is hoped that the company will be able to open a second location. It is envisioned that an outside loan or equity funding will be sought at that time.
7.1 Important Assumptions

The financial projections for Soapy Rides are based on the following assumptions. These assumptions are thought to be quite conservative, as are the financial forecasts.
General Assumptions
Year 1
Year 2
Year 3
Plan Month
Current Interest Rate
10.00%
10.00%
10.00%
Long-term Interest Rate
10.00%
10.00%
10.00%
Tax Rate
25.42%
25.00%
25.42%
Other

7.2 Break-even Analysis

The table and chart below show the monthly break-even analysis calculations for Soapy Rides.
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Break-even Analysis
Monthly Units Break-even
423
Monthly Revenue Break-even
$7,974
Assumptions:
Average Per-Unit Revenue
$18.87
Average Per-Unit Variable Cost
$0.79
Estimated Monthly Fixed Cost
$7,641
7.3 Projected Profit and Loss

The following Profit and Loss table illustrates income and expenses monthly for the first year, and annually for the next two years.
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Pro Forma Profit and Loss
Year 1
Year 2
Year 3
Sales
$109,800
$155,339
$232,204
$4,583
$6,994
$11,047
Other
$0
$0
$0
Total Cost of Sales
$4,583
$6,994
$11,047
Gross Margin
$105,218
$148,345
$221,157
Gross Margin %
95.83%
95.50%
95.24%
Expenses
Payroll
$61,680
$88,312
$113,174
Sales and Marketing and Other Expenses
$2,600
$1,550
$1,700
Depreciation
$2,070
$2,070
$2,070
Leased Equipment
$0
$0
$0
Utilities
$3,325
$3,500
$3,750
Insurance
$1,800
$1,800
$1,800
Rent
$4,800
$5,500
$6,000
Payroll Taxes
$15,420
$22,078
$28,294
Other
$0
$0
$0
Total Operating Expenses
$91,695
$124,810
$156,788
Profit Before Interest and Taxes
$13,523
$23,535
$64,370
EBITDA
$15,592
$25,605
$66,440
Interest Expense
$0
$0
$0
Taxes Incurred
$3,204
$5,884
$16,361
Net Profit
$10,318
$17,651
$48,009
Net Profit/Sales
9.40%
11.36%
20.68%
7.4 Projected Cash Flow

The following Cash Flow table illustrates that if Soapy Rides meets projected sales, it will have positive cash flow after half a year of operations.
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Pro Forma Cash Flow
Year 1
Year 2
Year 3
Cash Received
Cash from Operations
Cash Sales
$93,330
$132,038
$197,374
Cash from Receivables
$13,097
$21,902
$32,470
Subtotal Cash from Operations
$106,427
$153,940
$229,843
Additional Cash Received
Sales Tax, VAT, HST/GST Received
$0
$0
$0
New Current Borrowing
$0
$0
$0
New Other Liabilities (interest-free)
$0
$0
$0
New Long-term Liabilities
$0
$0
$0
Sales of Other Current Assets
$0
$0
$0
Sales of Long-term Assets
$0
$0
$0
New Investment Received
$0
$0
$0
Subtotal Cash Received
$106,427
$153,940
$229,843
Expenditures
Year 1
Year 2
Year 3
Expenditures from Operations
Cash Spending
$61,680
$88,312
$113,174
Bill Payments
$33,052
$46,837
$67,743
Subtotal Spent on Operations
$94,732
$135,149
$180,917
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
$0
$0
$0
Principal Repayment of Current Borrowing
$0
$0
$0
Other Liabilities Principal Repayment
$0
$0
$0
Long-term Liabilities Principal Repayment
$0
$0
$0
Purchase Other Current Assets
$0
$0
$0
Purchase Long-term Assets
$0
$0
$0
Dividends
$0
$0
$0
Subtotal Cash Spent
$94,732
$135,149
$180,917
Net Cash Flow
$11,695
$18,791
$48,927
Cash Balance
$20,395
$39,186
$88,112
7.5 Projected Balance Sheet

Soapy Rides' balance sheet illustrates a healthy financial position for this new company. The monthly estimates are included in the appendix.
Pro Forma Balance Sheet
Year 1
Year 2
Year 3
Assets
Current Assets
Cash
$20,395
$39,186
$88,112
Accounts Receivable
$3,373
$4,772
$7,133
Inventory
$668
$1,019
$1,609
$1,000
$1,000
$1,000
Total Current Assets
$25,435
$45,976
$97,854
Long-term Assets
Long-term Assets
$10,000
$10,000
$10,000
Accumulated Depreciation
$2,070
$4,140
$6,210
Total Long-term Assets
$7,930
$5,860
$3,790
Total Assets
$33,365
$51,836
$101,644
Year 1
Year 2
Year 3
Current Liabilities
Accounts Payable
$3,097
$3,917
$5,716
Current Borrowing
$0
$0
$0
Other Current Liabilities
$0
$0
$0
Subtotal Current Liabilities
$3,097
$3,917
$5,716
$0
$0
$0
Total Liabilities
$3,097
$3,917
$5,716
Paid-in Capital
$30,000
$30,000
$30,000
Retained Earnings
($10,050)
$268
$17,919
Earnings
$10,318
$17,651
$48,009
Total Capital
$30,268
$47,919
$95,929
Total Liabilities and Capital
$33,365
$51,836
$101,644
Net Worth
$30,268
$47,919
$95,929

7.6 Business Ratios

The following table contains important ratios for the car wash industry, as determined by the Standard Industry Classification (SIC) code, 7542.
Ratio Analysis
Year 1
Year 2
Year 3
Industry Profile
Sales Growth
0.00%
41.47%
49.48%
3.00%
Percent of Total Assets
Accounts Receivable
10.11%
9.21%
7.02%
8.70%
Inventory
2.00%
1.97%
1.58%
9.50%
3.00%
1.93%
0.98%
26.40%
76.23%
88.69%
96.27%
44.60%
Long-term Assets
23.77%
11.31%
3.73%
55.40%
Total Assets
100.00%
100.00%
100.00%
100.00%
Current Liabilities
9.28%
7.56%
5.62%
29.30%
0.00%
0.00%
0.00%
27.80%
Total Liabilities
9.28%
7.56%
5.62%
57.10%
Net Worth
90.72%
92.44%
94.38%
42.90%
Percent of Sales
Sales
100.00%
100.00%
100.00%
100.00%
Gross Margin
95.83%
95.50%
95.24%
0.00%
Selling, General & Administrative Expenses
86.59%
84.13%
74.45%
68.20%
Advertising Expenses
0.91%
0.74%
0.56%
1.50%
12.32%
15.15%
27.72%
2.70%
Main Ratios
Current
8.21
11.74
17.12
1.53
Quick
8.00
11.48
16.84
0.88
Total Debt to Total Assets
9.28%
7.56%
5.62%
57.10%
Pre-tax Return on Net Worth
44.68%
49.11%
67.10%
3.40%
Pre-tax Return on Assets
40.53%
45.40%
63.33%
8.00%
Additional Ratios
Year 1
Year 2
Year 3
Net Profit Margin
9.40%
11.36%
20.68%
n.a
Return on Equity
34.09%
36.83%
50.05%
n.a
Activity Ratios
Accounts Receivable Turnover
4.88
4.88
4.88
n.a
Collection Days
57
64
62
n.a
Inventory Turnover
5.45
8.30
8.41
n.a
Accounts Payable Turnover
11.67
12.17
12.17
n.a
Payment Days
27
27
25
n.a
Total Asset Turnover
3.29
3.00
2.28
n.a
Debt Ratios
Debt to Net Worth
0.10
0.08
0.06
n.a
Current Liab. to Liab.
1.00
1.00
1.00
n.a
Liquidity Ratios
Net Working Capital
$22,338
$42,059
$92,139
n.a
Interest Coverage
0.00
0.00
0.00
n.a
Additional Ratios
Assets to Sales
0.30
0.33
0.44
n.a
Current Debt/Total Assets
9%
8%
6%
n.a
Acid Test
6.91
10.26
15.59
n.a
Sales/Net Worth
3.63
3.24
2.42
n.a
Dividend Payout
0.00
0.00
0.00
n.a
Appendix
Sales Forecast
Month 1
Month 2 Month 3
Month 4 Month 5
Month 6 Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Unit Sales
Full Wash
0%
90
130
170
190
190
185
135
135
120
120
140
155
Exterior Wash
0%
90
130
185
220
230
220
180
170
150
150
160
165
Interior Clean
0%
40
50
50
55
60
65
70
80
80
85
75
60
End User Detail
0%
10
12
12
14
11
14
15
17
0%
25
40
55
60
60
55
55
55
55
50
50
55
0%
15
17
20
26
32
40
56
45
56
60
60
67
Total Unit Sales
263
372
487
561
584
577
510
494
472
479
500
519
Unit Prices
Month 1
Month 2 Month 3
Month 4 Month 5
Month 6 Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Full Wash
$15.00
$15.00
$15.00
$15.00
$15.00
$15.00
$15.00
$15.00
$15.00
$15.00
$15.00
$15.00
Exterior Wash
$9.00
$9.00
$9.00
$9.00
$9.00
$9.00
$9.00
$9.00
$9.00
$9.00
$9.00
$9.00
Interior Clean
$8.00
$8.00
$8.00
$8.00
$8.00
$8.00
$8.00
$8.00
$8.00
$8.00
$8.00
$8.00
End User Detail
$140.00
$140.00
$140.00
$140.00
$140.00
$140.00
$140.00
$140.00
$140.00
$140.00
$140.00
$140.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$10.00
$70.00
$70.00
$70.00
$70.00
$70.00
$70.00
$70.00
$70.00
$70.00
$70.00
$70.00
$70.00
Sales
Full Wash
$1,350
$1,950
$2,550
$2,850
$2,850
$2,775
$2,025
$2,025
$1,800
$1,800
$2,100
$2,325
Exterior Wash
$810
$1,170
$1,665
$1,980
$2,070
$1,980
$1,620
$1,530
$1,350
$1,350
$1,440
$1,485
Interior Clean
$320
$400
$400
$440
$480
$520
$560
$640
$640
$680
$600
$480
End User Detail
$420
$700
$980
$1,400
$1,680
$1,680
$1,960
$1,260
$1,540
$1,960
$2,100
$2,380
$250
$400
$550
$600
$600
$550
$550
$550
$550
$500
$500
$550
$1,050
$1,190
$1,400
$1,820
$2,240
$2,800
$3,920
$3,150
$3,920
$4,200
$4,200
$4,690
Total Sales
$4,200
$5,810
$7,545
$9,090
$9,920
$10,305
$10,635
$9,155
$9,800
$10,490
$10,940
$11,910
Direct Unit Costs
Month 1
Month 2 Month 3
Month 4 Month 5
Month 6 Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Full Wash
0.00%
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
Exterior Wash
0.00%
$0.40
$0.40
$0.40
$0.40
$0.40
$0.40
$0.40
$0.40
$0.40
$0.40
$0.40
$0.40
Interior Clean
0.00%
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
$0.30
End User Detail
0.00%
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
0.00%
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
$0.70
0.00%
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
$3.00
Full Wash
$63
$91
$119
$133
$133
$130
$95
$95
$84
$84
$98
$109
Exterior Wash
$36
$52
$74
$88
$92
$88
$72
$68
$60
$60
$64
$66
Interior Clean
$12
$15
$15
$17
$18
$20
$21
$24
$24
$26
$23
$18
End User Detail
$9
$15
$21
$30
$36
$36
$42
$27
$33
$42
$45
$51
$18
$28
$39
$42
$42
$39
$39
$39
$39
$35
$35
$39
$45
$51
$60
$78
$96
$120
$168
$135
$168
$180
$180
$201
Subtotal Direct Cost of Sales
$183
$252
$328
$388
$417
$432
$436
$387
$408
$427
$445
$483

Personnel Plan
Month Month Month Month Month Month Month Month Month Month Month Month 1 2 3 4 5 6 7 8 9 10 11 12
Owner
0% $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Car Washers
0% $2,240 $2,240 $3,360 $3,360 $3,360 $2,240 $2,240 $2,240 $2,240 $2,240 $2,240 $2,240
Admin/Sales
0% $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120
Total People
Total Payroll
$4,860 $4,860 $5,980 $5,980 $5,980 $4,860 $4,860 $4,860 $4,860 $4,860 $4,860 $4,860
General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
Month 10
Month Month 11 12
Plan Month
10
11
12
Current Interest Rate
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00% 10.00%
Long-term Interest Rate
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00% 10.00%
Tax Rate
30.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00% 25.00%
Other
Pro Forma Profit and Loss
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9 Month 10 Month 11
Month 12
Sales
$4,200
$5,810
$7,545
$9,090
$9,920
$10,305
$10,635
$9,155
$9,800
$10,490
$10,940 $11,910
$183
$252
$328
$388
$417
$432
$436
$387
$408
$427
$445
$483
Other
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total Cost of Sales
$183
$252
$328
$388
$417
$432
$436
$387
$408
$427
$445
$483
Gross Margin
$4,018
$5,558
$7,218
$8,703
$9,503
$9,874
$10,199
$8,768
$9,393
$10,064
$10,496 $11,427
Gross Margin %
95.65%
95.66%
95.66%
95.74%
95.80%
95.81%
95.90%
95.77%
95.84%
95.93%
95.94% 95.94%
Expenses
Payroll
$4,860
$4,860
$5,980
$5,980
$5,980
$4,860
$4,860
$4,860
$4,860
$4,860
$4,860
$4,860
Sales and Marketing and Other Expenses
$500
$300
$300
$300
$300
$100
$100
$100
$300
$100
$100
$100
Depreciation
$172
$172
$172
$172
$172
$172
$172
$172
$172
$172
$172
$172
Leased Equipment
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Utilities
$250
$275
$300
$300
$300
$275
$275
$275
$275
$275
$250
$275
Insurance
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
Rent
$400
$400
$400
$400
$400
$400
$400
$400
$400
$400
$400
$400
Payroll Taxes
25%
$1,215
$1,215
$1,495
$1,495
$1,495
$1,215
$1,215
$1,215
$1,215
$1,215
$1,215
$1,215
Other
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total Operating Expenses
$7,547
$7,372
$8,797
$8,797
$8,797
$7,172
$7,172
$7,172
$7,372
$7,172
$7,147
$7,172
($3,530)
($1,814)
($1,580)
($95)
$706
$2,701
$3,027
$1,596
$2,020
$2,891
$3,348
$4,255
EBITDA
($3,358)
($1,642)
($1,407)
$78
$878
$2,874
$3,199
$1,768
$2,193
$3,064
$3,521
$4,427
Interest Expense
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Taxes Incurred
($1,059)
($454)
($395)
($24)
$176
$675
$757
$399
$505
$723
$837
$1,064
Net Profit
($2,471)
($1,361)
($1,185)
($71)
$529
$2,026
$2,270
$1,197
$1,515
$2,168
$2,511
$3,191
Net Profit/Sales
-58.83%
-23.42%
-15.71%
-0.78%
5.33%
19.66%
21.34%
13.07%
15.46%
20.67%
22.95% 26.79%
Pro Forma Cash Flow
Month 10
Month 11
Month 12
Cash Received
Cash from Operations
Cash Sales
$3,570
$4,939
$6,413
$7,727
$8,432
$8,759
$9,040
$7,782
$8,330
$8,917
$9,299
$10,124
Cash from Receivables
$0
$21
$638
$880
$1,139
$1,368
$1,490
$1,547
$1,588
$1,376
$1,473
$1,576
Subtotal Cash from Operations
$3,570
$4,960
$7,051
$8,607
$9,571
$10,127
$10,530
$9,329
$9,918
$10,293
$10,772
$11,699
Additional Cash Received
Sales Tax, VAT, HST/GST Received
0.00%
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
New Current Borrowing
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
New Other Liabilities (interestfree)
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
New Long-term Liabilities
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Sales of Other Current Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Sales of Long-term Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
New Investment Received
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Subtotal Cash Received
$3,570
$4,960
$7,051
$8,607
$9,571
$10,127
$10,530
$9,329
$9,918
$10,293
$10,772
$11,699
Expenditures
Month 10
Month 11
Month 12
Expenditures from Operations
Cash Spending
$4,860
$4,860
$5,980
$5,980
$5,980
$4,860
$4,860
$4,860
$4,860
$4,860
$4,860
$4,860
Bill Payments
$82
$2,437
$1,898
$2,296
$3,595
$2,855
$3,785
$2,885
$2,582
$3,812
$2,899
$3,927
Subtotal Spent on Operations
$4,942
$7,297
$7,878
$8,276
$9,575
$7,715
$8,645
$7,745
$7,442
$8,672
$7,759
$8,787
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Principal Repayment of Current Borrowing
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Other Liabilities Principal Repayment
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Long-term Liabilities Principal Repayment
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Purchase Other Current Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Purchase Long-term Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Dividends
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Subtotal Cash Spent
$4,942
$7,297
$7,878
$8,276
$9,575
$7,715
$8,645
$7,745
$7,442
$8,672
$7,759
$8,787
Net Cash Flow
($1,372) ($2,338)
($827)
$331
($3)
$2,412
$1,885
$1,584
$2,475
$1,621
$3,013
$2,912
Cash Balance
$7,328
$4,991
$4,163
$4,494
$4,491
$6,904
$8,789
$10,373
$12,849
$14,469
$17,483
$20,395

Pro Forma Balance Sheet
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Assets
Starting Balances
Current Assets
Cash
$8,700
$7,328
$4,991
$4,163
$4,494
$4,491
$6,904
$8,789
$10,373
$12,849
$14,469
$17,483
$20,395
Accounts Receivable
$0
$630
$1,481
$1,974
$2,458
$2,806
$2,984
$3,089
$2,915
$2,797
$2,994
$3,162
$3,373
Inventory
$250
$1,068
$816
$488
$1,101
$684
$1,252
$816
$429
$1,022
$595
$1,151
$668
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$9,950
$10,026
$8,287
$7,626
$9,052
$8,981
$12,140
$13,694
$14,717
$17,668
$19,059
$22,795
$25,435
Long-term Assets
Long-term Assets
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
$10,000
Accumulated Depreciation
$0
$172
$345
$517
$690
$862
$1,035
$1,207
$1,380
$1,552
$1,725
$1,897
$2,070
Total Long-term Assets
$10,000
$9,828
$9,655
$9,483
$9,310
$9,138
$8,965
$8,793
$8,620
$8,448
$8,275
$8,103
$7,930
Total Assets
$19,950
$19,853
$17,942
$17,108
$18,362
$18,118
$21,105
$22,487
$23,338
$26,115
$27,334
$30,898
$33,365
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Current Liabilities
Accounts Payable
$0
$2,374
$1,823
$2,175
$3,501
$2,727
$3,688
$2,800
$2,454
$3,717
$2,767
$3,820
$3,097
Current Borrowing
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Other Current Liabilities
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Subtotal Current Liabilities
$0
$2,374
$1,823
$2,175
$3,501
$2,727
$3,688
$2,800
$2,454
$3,717
$2,767
$3,820
$3,097
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total Liabilities
$0
$2,374
$1,823
$2,175
$3,501
$2,727
$3,688
$2,800
$2,454
$3,717
$2,767
$3,820
$3,097
Paid-in Capital
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
$30,000
Retained Earnings
($10,050)
($10,050)
($10,050)
($10,050)
($10,050)
($10,050)
($10,050)
($10,050)
($10,050)
($10,050)
($10,050)
($10,050)
($10,050)
Earnings
$0
($2,471)
($3,832)
($5,017)
($5,088)
($4,559)
($2,533)
($263)
$933
$2,448
$4,617
$7,128
$10,318
Total Capital
$19,950
$17,479
$16,118
$14,933
$14,862
$15,391
$17,417
$19,687
$20,883
$22,398
$24,567
$27,078
$30,268
Total Liabilities and Capital
$19,950
$19,853
$17,942
$17,108
$18,362
$18,118
$21,105
$22,487
$23,338
$26,115
$27,334
$30,898
$33,365
Net Worth
$19,950
$17,479
$16,118
$14,933
$14,862
$15,391
$17,417
$19,687
$20,883
$22,398
$24,567
$27,078
$30,268

Car Wash Business Plan

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Car Wash Business Plan

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Plan Outline

Car Wash Business Plan

2.1 Company Ownership

2.2 Start-up Summary

Research and Development

Total Start-up Expenses

Other Current Assets

Start-up Expenses to Fund

Start-up Assets to Fund

Total Funding Required

Non-cash Assets from Start-up

Cash Requirements from Start-up

Additional Cash Raised

Cash Balance on Starting Date

Liabilities and Capital

Accounts Payable (Outstanding Bills)

Other Current Liabilities (interest-free)

Additional Investment Requirement

Total Planned Investment

Loss at Start-up (Start-up Expenses)

Total Capital and Liabilities

Services Soapy Rides will provide three services to its customers:

Car washing (exterior) Car cleaning (interior) Car detailing

4.1 Market Segmentation

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New Car Owners

Older Luxury Car Owners

Sports Car Owners

New and Used Car

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4.2 Target Market Segment Strategy

4.3 Service Business Analysis

4.3.1 Competition and Buying Patterns

5.1 Competitive Edge

5.2 Sales Strategy

5.2.1 Sales Forecast

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End User Detail

Business Fleet Washes

Car Dealership Details

Total Unit Sales

End User Detail

Business Fleet Washes

Car Dealership Details

End User Detail

Business Fleet Washes

Car Dealership Details

Direct Unit Costs

End User Detail

Business Fleet Washes

Car Dealership Details

Direct Cost of Sales

End User Detail

Business Fleet Washes

Car Dealership Details

Subtotal Direct Cost of Sales

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