Franchises:
This legal structure will allow me to copy the business idea and use the name of the established company in return for an initial and continual payment. The Franchisee is the person buying into the franchise; I will have to commit my capital and effort to make the business work, while the franchise commits its trading name and experience.
It is very important to the franchise that they chose their franchisee very carefully to make sure that the right person has been chosen, in order to maintain the strong brand image of the company. However I will need to have authorisation to use the companies name before i can officially become part of the franchise.
The main advantage of being a franchise business is that the established name often brings in customers helping me to generate good levels of profit and I can really make use of the support given by the franchise in order to help make the business a success.
Appropriate legal structure for my car wash business venture:
After analysing all the legal structures in depth, I have finally decided that a sole trader structure will be most beneficial to my car wash service. As this is going to be a sole trader business, I will be the only owner who owns and operates the business.
Although I might have to employ one or two employees, but I will be the one who makes all the decisions about running the car wash service.
As a sole trader I will be the only one who benefits financially from success, but must also face the burden of any failures. In the eyes of the law the individual and the business are the same, therefore I will have unlimited liability for any debts that result from running the car wash service, which is a disadvantage.
If for any reason I cannot pay any bills the court can allow my personal assets to be seized by creditors in order to meet outstanding debts, for example my family home or car may be sold. If however insufficient funds are raised then I will be declared bankrupt.
On the other hand there are no formal rules to follow when establishing a sole trader or administrative cost to pay. In addition complete confidentiality will be maintained as; accounts are not published at the end of the year. As a sole trader I will be able to make rapid decisions giving the benefit of total control and in addition I will be able to create close contacts with customers and will be able to get to know employees on a personal basis. The result is the ability to respond quickly to changes in the competitive environment and this may allow survival even when faced with competition from much larger organisations that are able to charge lower prices.
The main benefits which I will face includes, I can make all decisions, I don’t have to report back to anyone leaving me to do what I please with the business, which is often considered a good thing as there will be no chance of conflicts which you may experience in a partnership or any other organisations. In addition all profits made goes straight into my account, as there will be no sharing or distribution of profits between shareholders or investors, as I am the only owner. As I own all the profits I can make the decision whether to re-invest into the business or expand etc.
It is also easy to set up a sole trader business as there is not many legal requirements unless I decide to sell certain products which requires license e.g. Alcohol.
The other downside of a sole trader ownership includes, that there will be limited sources of finance available to start up with, the amount of capital I raise can determine on how far my business goes in the opening stage. The responsibility of the business lies with me, so I must ensure that I keep on top of things as I have unlimited liability and I do not want to lose my personal possessions.
(d)
potential sources of finance explaing how these fit wiuth the legal structure and the aims of the business venture.
In order to be successful and start off all buisnesses need finance. There are many types of finance available which depends on the structure of the business.
Personal capital:
The business can use their personal saving to start off as a sole trader; this is their own personal savings. Your savings are simply the money you have saved up which will be used for the purpose of starting a new business or putting more funds into the business in order for it to expand and grow.
Asking
Retained profit:
This profit is the main source of finance for any business, as it’s a good way to expand as you are using your own money rather than any credit. Therefore there is no money to be paid back or no interest owed, as it’s all your own money from the profit you made.
This can be used by the business, when they convert from a sole trader to a partnership business. All the profit they made, when they were trading as a sole trader can be used for expansion, for example.
Trade credit:
This is a good way as requesting credit from suppliers is a good way of helping cash flow situation, however trade credit is not a method of financing expansion of a company. This method of agreeing trade credit can help the business to pay its creditors some time after the goods are delivered. However to obtain ‘credit’, the businesses will need to build up a good credit history by paying suppliers on time and keeping up Payments on loans and credit cards. The business’s bank will often be approached by companies for references; thereafter a number of months proving credit-worthiness a sole trader or partnerships business is eligible for trade credit. Therefore basically this is time given by other companies to pay bills e.g. gas bill.
Sale of assets:
The businesses can sell their own personal assets or when they convert from a sole trader to a partnership business, they can sell some of the assets that they do not need when they were trading as a sole trader.
Hire purchase/lease:
Hire purchase and leasing is similar, here the business can choose an asset that they need for their business and then agree to make regular payment for a fixed period to a hire purchase company in exchange for the right to use that asset. The repayment amount will not change as it’s a fixed amount, however the assets remains the property of the hire purchase company until the final payment is made and at that point ownership of the asset transfers to you, and you are then free to continue to use or sell the asset.
Bank loan:
The business can borrow money from the bank at an interest rate. However banks are reluctant to lend money to sole traders as sole trader business has unlimited liability.
Bank overdraft:
The business can agree an overdraft limited with the bank, so they can spend a bit more then they have in the bank.
Credit cards:
The businesses could apply for a business credit card, this card works just like a personal credit card. Credit cards are used to pay for items and a statement is sent monthly, including transactions and repayments that have taken place in the previous month.
Borrow money from friend or family:
The businesses can borrow money from a friend or a family member, they could agree an interest rate or as its friends and family they may not charge interest.
Mortgage:
A large loan for an extended period, normally given for the purchase of property.
Potential source of finance available for my car wash venture:
My business venture is a car wash service, which takes the legal structure of a sole trader business, therefore the types of finances available and mostly suited to my business includes:
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Personal Capital – this will be the capital which I have saved in a bank account; this is a good source of finance as it’s all my own money and I will not have to pay any interest on the amount. I can use it for the start up cost when I am setting up the business at the beginning and for expansion and growth in the future. The advantages of using my own savings are that it belongs all to me so I do not have to worry about paying back or owing any interest on it. The disadvantage of this source of finance is that it may be very limited and I may have not saved up the required amount needed to be put back into the business venture in order to help it grow effectively. This capital can be used as a start-up cost.
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Borrow from family and friends – asking family and friends to help out with by business venture, by loaning me some money can be a quick and easy way to gain finances when starting the business in the short term, however I may be able to keep the borrowed money for a long period of time and as long as family and friend have the funds to loan out. The benefit for this type of finance is that, as they are my family and friend, they are more likely to put their trust in me than anyone else and if they have the money available, than they might be able to loan out more than expected. They may also allow me to borrow that amount for a slightly longer period and will not charge any interest or any late payments fees. However the disadvantage includes, that they may not have much amount to loan out and borrowing too much from them could leave them in a bad position, which I will never want.
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Retained profit - This profit is the main source of finance for any business, as it’s a good way to expand as you are using your own money rather than any credit. Therefore there is no money to be paid back or no interest owed, as it’s all your own money from the profit you made. This can be used when i convert from a sole trader to a partnership business in the future, therefore this is a long term or even medium term financial source. All the profit i make, when I trade as a sole trader can be used for expansion, for example.
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Credit cards - i could apply for a business credit card, when the business is established and running, this card works just like a personal credit card. Credit cards are used to pay for items and a statement is sent monthly, including transactions and repayments that have taken place in the previous month. I can apply for this once the business is fully established as banks will need to see if I am making a profit or not.
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Bank overdraft – I can agree an overdraft limited with the bank, so i can spend a bit more then they have in the bank. This can be agreed as soon as I open my business account, this financial source will greatly benefit me as it will allow me to spend a bit more then I already have in my account.
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Trade credit - This is a good way, as requesting credit from suppliers is a good way of helping cash flow situation; however trade credit is not a method of financing expansion of a company. This method of agreeing trade credit can help me to pay creditors, some time after the goods are delivered. However to obtain ‘credit’, i will need to build up a good credit history by paying suppliers on time and keeping up Payments on loans and credit cards.
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Sale of assets – This source of finance will be beneficial for the future when I
Can sell my own personal assets or when i convert from a sole trader to a partnership business, i can sell some of the assets that i do not need when I traded as a sole trader. This source of finance can be beneficial in the medium or the long term.
These above methods of finance will be available to me and will help me set up my business venture.
Task 6
Producing a detailed business plan
Quick Quality
Car Wash
Business Plan
Strictly private & confidential
Quick Quality car wash
High Road
Walthamstow
TH6 8UJ
Tel: 020-65476546
Mob: 07857632123
Email:
Contents page
- Product & service description
- Market analysis summary & Market segmentation
- Target market segmentation strategy
- Service business analysis
- Competition & Buying pattern
- Strategy and Implementation Summary
- Human resources & operational plan
Executive Summary:
The project that will be discussed in this business plan is a car wash service called, ‘Quick Quality car wash,’ which will be located in East London. The main aim of this car wash service will be to satisfy the needs of the local community by providing a quality car wash service at an affordable price. The business will be a sole trader business, owned by Vishal Patel. The service will be located on a busy main road, where it will be easily accessible to the local community and no parking permits, therefore customers can park outside without paying for a fee.
Quick Quality car wash will be providing customers with two services, ‘exterior car washing’ and ‘interior cleaning service,’ by using high quality products and equipments in order to provide a quality service, which will make customers come back to Quick Quality car wash.
According to government statistics disposable income has increased greatly in the last few years, therefore people today have more money to spend on luxury services, rather than carrying out the service by themselves and in addition the number of cars owned by a household has also increased, therefore people are more likely to use a car wash service. Furthermore due to the busy lifestyle, people today do not have time to carry out services like these; therefore they are more likely to go to specialists and save time.
Quick Quality car wash has no true competitors as they are trying to offer a high quality service for a reasonable rate as most car wash service are trying to compete on price alone.
Quick Quality car wash has the ability to provide a high quality service, both in regards to the actual washing as well as customer service. Quick Quality car wash will make sure that when they have to hire employees they hire the best employees and make sure that they are well taken care of which then ensures that they in turn take care of the customers.
Government 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.
I will operate the business as a sole trader business; the experience which I have gained after running five other sole trader businesses, will benefit me greatly when I open this car wash service, as I have over 15 years of experience in managing a sole trader business.
Furthermore I have studied Business studies from GCSE level, so I am aware of the theoretical part of business as well as the practical side. In addition I am also aware of the challenges which I would have to face on a daily basis, as I already own five sole trader businesses, I have a strong reputation within the local community; therefore this strong image will enhance the chances of my new business to be a success.
Furthermore Quick Quality car wash service will always aim to provide customers with a satisfying, friendly and polite service.
The Business:
Quick Quality car wash service, will always offer its customers a high quality and affordable service. Just like any other businesses Quick Quality car wash service will have to face some competition from around the area, but I will ensure that the car wash service offers a unique service by providing an excellent service, ranging from the products it uses to the advice it gives on caring for cars. Quick Quality car wash service will aim to be exclusive.
Quick Quality car wash service is aware of the fact that, a lot of car was service only competes on price and forgets about quality, therefore Quick Quality car wash service will concentrate on quality as well as price.
Company Objectives:
The objectives for Quick Quality car wash service are:
- To be viewed as a premium car wash service in the East London/ Walthamstow area.
- Attract customers from other local boroughs, to maximise profit.
- Expand to two locations after third year of operation.
- Always offer a better service than other local competitors.
- Keep Employees satisfied in order to maintain impeccable customer service.
- Diversify the service offered after two years and also offer MOT and other mechanical service.
Company Mission:
The mission of Quick Quality car wash service is to provide a Quick and a quality service, as Quick Quality car wash, understands the value of time, for its customers.
‘Quick Quality car wash service’
Keys to Success:
Quick Quality car wash service believes that the keys to success include:
- Providing a service that will satisfy customers.
- Hard work & Dedication towards the business from every department.
- The recruitment of experienced employees.
- Constant monitoring by myself to analyse the business situation.
- Always aim to maximise sales by cutting down cost and always think of quality as a main priority.
- Always satisfy the customers.
- Aim to meet business targets.
Company Summary:
As government statistics proves that disposable income has increased, therefore people today have more money to spend on luxury services, this car wash service will aim to satisfy the needs of its customers, by providing a quick and a quality service.
The company will be owned by me as it will be a sole trader business. The start up capital which will be required is £50,000. I will take out £50,000 from my savings.
Product & Service description:
Quick Quality car wash will be providing customers with two services, ‘exterior car washing’ and ‘interior cleaning service,’ by using high quality products and equipments in order to provide a quality service, which will make customers come back to Quick Quality car wash.
In addition I will create a membership scheme, similar to a loyalty card that will keep my customers coming back to my car wash business again and again. This scheme will be like collecting points, where customers collect points every time they use the car wash service and after collecting a certain amount of points, customers can receive a full free car wash service.
In addition I will also be selling accessories, to maximise sales, I will sell accessories such as, Air fresheners, Car clocks, car seat, car rugs, car pillows, car blankets, CD holders, car polish, car patch up paint etc.
The service charge for the car wash will be as follows:
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Only exterior car wash - £5.00 - The car is carefully washed down with good quality shampoo, then using the jet spray the shampoo will be washed off and finally after rubbing it down dry, Quick Quality car wash will polish the car. The wash is completed within 10 minutes.
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Only Interior car wash - £5.00 - Quick Quality car wash will clean the inside of the car with a good quality Hoover designed specially for cars. The inside is also polished with good quality cleaner. The wash is completed within 10 minutes.
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Both Interior & Exterior car was - £9.00 – this includes the exterior and the interior being cleaned, as mentioned above. The wash is completed within 20 minutes.
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Full Special wash - £15.00 – This includes both interior and exterior cleaning and in addition, the exhaust receiving a good clean, with the alloys cleaned in depth and then polished to shine. This wash will take up to 45 minutes.
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Car accessories - various price range, depending on the quality and type of products.
Market analysis summary:
After analysing secondary research it can be concluded that, in general the market for cash wash services is growing, as according to government statistics on the BBC website disposable income is increasing in East London, therefore people today have more money to spend on luxury services such as car wash. In addition the number of cars owned by a single household is also increasing; therefore people are more likely to use a car wash service.
Furthermore due to the busy lifestyle today, people have less time for washing cars; therefore they are more likely to use a car wash service.
The car wash will be based in Walthamstow area in East London, 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 neighbourhood earn over £19,000 annually. Many people in the neighbourhood and the surrounding neighbourhood own 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 seven miles of the proposed location for Quick Quality car wash.
Market Segmentation:
Quick Quality car wash 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 the type of service the owner will want.
Customers of Quick Quality car wash Service includes:
Quick Quality car wash will target car owners, car dealership organisations and local businesses. The local people of East London have a realistic level of disposable income and most people own a car and they would want their car to look good. Apart from that Quick Quality car wash service will also target:
New car owners:
Owners of new 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 car wash. The goal with these customers is to promote regular use of the wash service. The aim is to inform these customers that Quick Quality car wash will keep their car looking as good as it did the day they purchased it.
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.
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, by a car wash service.
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 occasionally, 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 these type of owners are more likely to have an interior and exterior wash.
Dealerships:
There are five new and used car dealerships within seven miles of the proposed location of Quick Quality car wash. These dealerships often use outside car wash services to wash their vehicles before they are put up for sale. In addition, there are fifteen other car dealerships within a nine mile radius of Quick Quality car wash.
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. We will be able to offer them car wash discounts if they become members of our car wash service scheme.
Market Analysis (Pie)
The Pie chart below shows the customers of Quick Quality car wash divided into the types of cars they own. From the pie chart it can be concluded that lifetime owners will be loyal customers to the business, followed by older luxury owners and then new car owners and sports car owner. However according to our research and as shown on the pie chart we will have hardly any new and used car dealership customers.
The table on the previous page shows the growth of customers around the Walthamstow area, the table shows that there has been a massive 15% growth in luxury car owners and sports car owners.
Target Market segment strategy:
The strategy behind Quick Quality car wash target segmentation is to attract customers who will be repeat users and will frequently visit 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, Quick Quality car wash will target people who will tend not to be restricted to these busy times, these includes:
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Business owners (new car owners) tend to be very busy people, but are often able to make their own hours.
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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.
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Dealerships will need cars detailed and washed regardless of the time of the day and week. This will supply a constant flow of traffic.
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Businesses will need their fleet cars washed during the week during regular business hours.
Service business analysis:
The hand car washing business in Walthamstow may have to face 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 in petrol stations, are competition for Quick Quality car wash. However, these two alternatives aim to meet the needs of the price-conscious individuals who are choosing the service simply so they do not have to clean the car themselves. Quick Quality car wash on the other hand, targets the quality-conscious individuals who value their car enough to spend £6-£10 per week to make it look good.
Market Needs
Quick Quality car wash will provide the market with an exclusive quality car wash service, which will always be timed related as Quick Quality car wash service understands the value of time for its customers. Quick Quality car wash will provide the local market with a high quality service with the use of quality products, good local advice for customers, car accessories priced at a reasonable and affordable price but mainly a friendly and a polite service, by using quality products.
Competition & Buying pattern:
There is one other hand car wash shop nearby Walthamstow, 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, which will greatly be beneficial to Quick Quality car wash.
The customers who Quick Quality car wash 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 Quick Quality car wash targets, will be more cost conscious, so prices will be approximately 30% less for these customers to promote volume usage, during the start up of the business, so that we can establish ourselves in the market.
Strategy and Implementation Summary:
The key differentiator for Quick Quality car wash is my personal connections within the Walthamstow and surrounding neighbourhood as I have been in sole trader business for over 15 years. 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. Quick Quality car wash, therefore, will depend on word-of-mouth advertising for the immediate community.
Competitive Edge
Quick Quality car wash’s competitive edge will be my personal experience for running 5 local businesses in the local area for over 15 years, which as a result are all very successful As mentioned I have a key interest in cars and have been in a sole trader business for over 15 years, and has an excellent reputation and countless of both business and personal contacts.
In addition, I will develop a plan when I employee employees 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. Furthermore Quick Quality car wash’s competitive edge will also be its quality service it provides with an affordable price.
Sales Strategy
The sales strategy will be based on individuality as Quick Quality car wash will make Consumers will feel important. Furthermore the employees of Quick Quality car wash will be trained to understand customer service and will always provide excellent service, which will result in consumer loyalty.
Management Summary
Quick Quality car wash aims to be recognised for the exclusive service it provides to its customers in the local area. As this business is a sole trader business , I am the only one who will be responsible for decision making in the business, I will use my experience of over 15 years to help make the business a success. In addition I will always welcome feedbacks and contribution from employees, who could also help make the business a success.
Primary Research Analysis
In order to gather primary research I conducted a survey by interviewing a total of 20 people from Walthamstow at a local petrol station. To conduct the research I carried used a random sampling method to gather my results.
After carrying out the research and analysing the research I can conclude that, out of a total of twenty people, twelve people own at least one car, whilst a total of six people own at least two cars. Therefore from this you can see that there is a market out their for a car wash as a lot of people owns car.
In addition the results also showed that a total of nine people out of twenty washes their car once a week, while four people washes their car once a month, finally followed by seven people washing their car twice a month. From this you can see that cars are regularly washed, so there will be customers coming to my car wash.
Furthermore out of twenty people eight people said that they consider price the most important feature while choosing a car wash service to go to, followed by a total of seven people who considers quality as a major issue, followed by the last five who rates location as an important factor. From this Quick Quality car wash cal learn that people today consider price and quality the most important factor when choosing a car wash service, therefore I will mostly concentrate on price and quality.
By analysing the pricing questions, it can be concluded that a total of twenty people out of twenty said they are willing to pay £5 for just an exterior car wash, £5 for just an interior car wash and up to £10 for a full car wash which includes both interior and exterior. When the pricing decisions are made, Quick Quality car wash must consider these prices, as if the services are priced too high then Quick Quality car wash service will get no customers and if the prices are priced very low then Quick Quality car wash service will not be able to break even, therefore the prices must be carefully chosen.
In addition a total of eleven people out of twenty said they consider cost as the most important aspect of a car wash service, followed by eight people who considers quality as an important aspect, while only one person stated friendly service is important. From this results gathered it can be seen that price is very important to customers, followed by quality, therefore Quick Quality car wash will aim to provide a good quality service with affordable price.
Furthermore twenty people out of twenty stated they would consider paying a little extra for an exclusive car wash service which uses exclusive good quality products. From this information gathered, it can be seen that people today value quality greatly and they don’t mind paying a little extra if they will receive exclusive service. Therefore Quick Quality car wash service will always aim to provide an exclusive satisfying service to their customers.
Finally a total of twenty people out of twenty stated that they would consider travelling a bit further to use a brilliant quality car wash service which provides an exclusive service in every form, including quality wash at affordable price to excellent advice. From this you can conclude that, people today have high disposable income to spend on luxury quality service and people do look for quality service and therefore Quick Quality car wash will always give customers quality service.
(The questionnaires and results on graph can be seen in the marketing strategy section)
Secondary Research Analysis
I reserached the BBC website to gather secondary data, the data I gathered includes:
- So much money is in fact spent on car modifications or accessories in the UK today that the industry is now worth a cool £320m a year, according to the scene's bible, Max Power magazine. That £320m includes everything from in-car CD players and speakers, to replacement alloy wheels, car body-kits, expensive paint-jobs, and dare I say it, the old classic - furry dice to hang from your rear view mirror.
- One of the biggest beneficiaries of the booming car accessories industry has been Halfords, which earlier this year floated on the London Stock Exchange and enjoys an annual turnover in excess of £500m.
- "There is a growing enthusiast segment for products such as alloy wheels, body kits, and performance styling etc, with the primary customer audience being aged between 18 - 34," says a Halfords spokeswoman.
- "The younger, primarily male customers have increasing disposable income, the car park is getting older - i.e. more older cars in circulation - so there are a greater range of cars available to enhance."
- But with one Welshman recently being reported to have spent more than £16,000 modifying his £3,000 Vauxhall Corsa, why exactly do car modification addicts do it? --- Paul Symons, a 20-year-old student and Ford Fiesta owner, from car modification hotspot Weston-super-Mare in Somerset, says it is all about wanting to portray a certain image.
- Yet far from older people being immune to a bit of car customisation, it appears that middle aged men are equally susceptible, buying everything from speed camera detection systems, to satellite navigation systems, or chipping their engine management systems to give extra power.
- Nigel Wonnacott, spokesman at the Society of Motor Manufacturers and Traders, says the car accessories industry allows people to better express themselves through their cars. "More and more people are certainly choosing to add their own touches to their cars," he said. "The thing to remember is that while for many people a car is simply a way to get from A to B, for others it becomes an expression of the kind of person they are.
Financial planning
The financial plan outlined on the next few pages shows the financial information for Quick Quality car wash service. The business will start with £30,000 of my own stake at the beginning of the year, with £20,000 borrowed as a loan from family; I will not have to pay any interest on that amount. Therefore I will have a total of £50,000 capital to start up.
However after a couple of years down the line I hope to diversify the services I offer and extend the service range to MOT service and a car maintenance service, hopefully this will increase the profit level in the future, however this all depends on how much profit is made when the business first starts to operate, before I think about diversifying.
Break even analysis:
The Fixed costs per month for Quick Quality car wash service will approximately be just about £3,900, and the break even monthly units will be 1065 units per month.
Calculating the average selling price for Quick Quality car wash service.
Exterior wash = £5.00
Interior wash = £5.00
Exterior + Interior wash = £9.00
Full Special wash = £15.00
Total = £34.00
Average selling price = £34.00 = £8.50
4
Calculating the monthly average sales for Quick Quality car wash
Week 1 = 250 customers
Week 2 = 250 customers
Week 3 = 250 customers
Week 4 = 250 customers
Total customers per month = 1000
Customer calculation based on seasons, as car wash businesses are greatly affected by seasons:
Spring average = 1,000
Summer average = 2,500
Autumn average = 250
Winter average = 250 (total = 4000)
Monthly average = 4000 = 1000
4
Average selling price by sales =
£8.50 x 1000 = £8,500
Fixed costs
Fixed costs are those business costs that are not directly related to the level of production or output. In other words, even if my business has a zero output or high output, the level of fixed costs will remain broadly the same. In the long term fixed costs can alter - perhaps as a result of investment in production capacity (e.g. adding a new extension on the premises.
Rent £1,200
Salary £2,000
Advertising £200
Utility bills £500
Total £3,900
Variable cost
Variable costs are those costs which vary directly with the level of output. They represent payment output-related inputs such as raw materials, direct labour, fuel and revenue-related costs such as commission.
Car wash shampoo = £40.00 per 50 wash
Car wash shampoo per wash = £0.80 (per wash)
Cars polish £40 per 10 polishes.
Cars polish per unit = £4 (per car polished)
Washing sponge price = £1 per sponge & 2 sponges will be used to wash a car and the sponges will last to wash 50 cars.
£2/50 = £0.04 per unit
Total variable cost for washing one single car is = £4.84
Break even
Break-even analysis is very important for my business to calculate, this is a technique widely used by production management and management accountants. It is based on categorising production costs between those which are "variable" (costs that change when the production output changes) and those that are "fixed" (costs not directly related to the volume of production).
Total variable and fixed costs are compared with sales revenue in order to determine the level of sales volume, sales value or production at which the business makes neither a profit nor a loss (the "break-even point").
Break even = 3,900 = 1065 is the break even point
8.50 - £4.84
This shows that Quick Quality car wash must sell a monthly unit breakdown of 1065 in order to break even, however its just not car wash service which is been offered, Quick Quality car wash will also be selling car accessorise, so that will help to generate income as well.
Estimated monthly fixed cost is £3,900 and variable cost for washing one single car is £4.84.
Projected Profit and Loss
The table below shows Profit and Loss, with the income and expenses monthly for the first year.
(Total Sales Revenue = average selling price x qty sold)
Total sales revenue = £8.50x 1000 = £8,500
The profit and loss statement will help me see how much profit or loss Quick Quality car wash will make.
Cash flow forecasts:
Can be seen on attached sheet
Human resource plans
Quick Quality car wash is a business which is greatly affected by weather, for example during winter not many people take their cars for a wash, whilst comparing to the summer time when lot more people are more likely to take their car for a wash, therefore I will employ staff according to the season. I will be more likely to employ staff on temporary contracts, especially for the busy summer period.
As I am the sole trader owner, I will be working full time at the business, I will employ one other specialist’s permanent staff and the rest will depend on the season. However I will be willing to employ more staff if the business starts to pick up quickly, as one of my main aim is to provide an efficient service and therefore I would not want customers to wait in long queues.
Operational plans
Quick Quality car wash is located in East London in the Walthamstow area, the opening hours are from, 8am – 8pm. Nevertheless during the summer period I might extend the opening hours to about 9:30 pm as the days are longer in summer and in addition summer time is a busy period for car wash businesses. However in busy winter period I might close early, to be cost effective, as when its snowing there will be no point in keeping the business open as I will not get any customers, therefore the opening times will depend on the season.
Quick Quality car wash will open from 8am – 8pm by me; I am the sole trader owner, so it will be my responsibility to open the business and close it in the evening. As I will be employing one full time employee, he will also start at 8am – 8pm with one hour break for lunch and two fifteen minutes break during the day.
The employee and I will be wearing protective clothing, which will show that Quick Quality car wash is a professional business that is aware of health & safety regulations.
The service which will be offered is as follows:
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Only exterior car wash - £5.00 - The car is carefully washed down with good quality shampoo, then using the jet spray the shampoo will be washed off and finally after rubbing it down dry, Quick Quality car wash will polish the car. The wash is completed within 10 minutes.
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Only Interior car wash - £5.00 - Quick Quality car wash will clean the inside of the car with a good quality Hoover designed specially for cars. The inside is also polished with good quality cleaner. The wash is completed within 10 minutes.
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Both Interior & Exterior car was - £9.00 – this includes the exterior and the interior being cleaned, as mentioned above. The wash is completed within 20 minutes.
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Full Special wash - £15.00 – This includes both interior and exterior cleaning and in addition, the exhaust receiving a good clean, with the alloys cleaned in depth and then polished to shine. This wash will take up to 45 minutes.
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Car accessories - various price range, depending on the quality and type of products.
The business closes at 8am, after the business is closed the employee and I will both stay behind for 10 minutes to tidy the work place up for next morning. All plugs and electrical equipments will be double checked to make sure everything is switched off, for health & safety.
Part (c)
Marketing Strategy for Quick Quality car wash
Marketing strategy is a process that can allow Quick Quality car wash to concentrate its resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.
Marketing strategy is most effective when it is an integral component of corporate strategy, defining how Quick Quality car wash will engage customers, prospects and the competition in the market arena for success.
Without a strong marketing strategy, a marketing plan has no foundation. Marketing strategies serve as the fundamental underpinning of marketing plans designed to reach objectives. It is important that these objectives have measurable results in order for Quick Quality car wash to be a success.
A good marketing strategy should integrate an organization's marketing goals, policies, and action sequences (tactics) into a cohesive whole. The objective of a marketing strategy is to provide a foundation from which a tactical plan is developed.
Marketing strategies are partially derived from broader , corporate missions, and corporate goals. They should flow from Quick Quality car wash’s mission statement. In addition they are also influenced by a range of .
Furthermore Marketing strategy is the advance route for Quick Quality car wash to market its products/ services, which forms the basis for developing a marketing plan. In addition Marketing plays a key role in the success of Quick Quality car wash.
Quick Quality car wash’s mission is to provide a Quick and a quality service, as Quick Quality car wash, understands the value of time, for its customers. Furthermore the business will always aim to understand its customers in order to provide a satisfying service to its customers and in order to retain customers.
Marketing objectives:
- To be viewed as a premium car wash service in the East London/ Walthamstow area who provides a quality service at an affordable price.
- Attract customers from other local boroughs, to maximise profit.
- Always offer a better service than other local competitors.
- To be well known in the borough and the neighbouring borough, within 1 year of trading.
Quick Quality car wash will implement on a niche market strategy the service which I will provide is directly aimed at people in Walthamstow who own a car and to people in the neighbouring borough who are willing to travel a bit to receive an exclusive car ash service.
In order to attract customers and make profit I will target a specific group of people, rather than aiming my service to everyone in East London. I will segment my potential consumers to only attract customers more effectively. The marketing strategy segmentation of customers will help me to identify my target audience so I can directly advertise to them and this will help my business to develop brand equity, increase customer awareness of my business, and build customer loyalty.
Quick Quality car wash will target car owners, car dealership organisations and local businesses. The local people of East London have a realistic level of disposable income and most people own a car and they would want their car to look good. Apart from that Quick Quality car wash service will also target:
New car owners:
Owners of new 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 car wash. The goal with these customers is to promote regular use of the wash service. The aim is to inform these customers that Quick Quality car wash will keep their car looking as good as it did the day they purchased it.
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.
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, by a car wash service.
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 occasionally, 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 these types of owners are more likely to have an interior and exterior wash.
Dealerships:
There are five new and used car dealerships within seven miles of the proposed location of Quick Quality car wash. These dealerships often use outside car wash services to wash their vehicles before they are put up for sale. In addition, there are fifteen other car dealerships within a nine mile radius of Quick Quality car wash.
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. We will be able to offer them car wash discounts if they become members of our car wash service scheme.
Way in which Quick Quality car wash will achieve their objectives:
The objectives for Quick Quality car wash service are:
- Attract customers from other local boroughs, to maximise profit.
- Expand to two locations after third year of operation.
- Always offer a better service than other local competitors.
- Keep Employees satisfied in order to maintain impeccable customer service.
- Diversify the service offered after two years and also offer MOT and other mechanical service.
One of Quick Quality car wash service’s objective is to be viewed as a premium car wash service in the East London/ Walthamstow area. In order to achieve this objective I will aim to create awareness of the company, in order to create awareness I will need to advertise the company to tell customers that Quick Quality car wash service exist. Furthermore in order for customer to view Quick Quality car wash as a premium service, I will need to provide an excellent and friendly service all the time.
Quick Quality car wash will communicate with potential consumers by putting up posters about the company in the local area, advertising in the local newspapers such as the Ilford recorder, as my service is aimed at the local people I will benefit from advertising in the local papers and not national papers such as the Daily mail. I also hope for word of mouth from my consumers, therefore I will always provide a satisfying service so consumers will recommend me to their friends and family. I will always communicate the message that we offer exclusive quality service at an affordable price.
I will also aim to communicate my message by putting leaflets in people’s letter boxes in the local area. This can be an advantage as people can read through the leaflet in their own time. Furthermore I will also put leaflets on people’s cars, there are lots of car parks in the local area so I will put a leaflet on their car window, which will be direct advertising, this will benefit me as I will be targeting people directly who owns cars and who will actually be interested in the service I provided.
I will also give out my leaflets to local garages where people come in regularly, so while they wait for their car service to be carried, they can look at the leaflets as when people have mechanical service done to their cars, they will need a car wash service afterwards to clean their car and Quick Quality car wash will provide an excellent service.
Marketing mix
Product:
Quick Quality car wash will be providing customers with two services, ‘exterior car washing’ and ‘interior cleaning service,’ by using high quality products and equipments in order to provide a quality service, which will make customers come back to Quick Quality car wash.
In addition I will create a membership scheme, similar to a loyalty card that will keep my customers coming back to my car wash business again and again. This scheme will be like collecting points, where customers collect points every time they use the car wash service and after collecting a certain amount of points, customers can receive a full free car wash service.
In addition I will also be selling accessories, to maximise sales, I will sell accessories such as, Air fresheners, Car clocks, car seat, car rugs, car pillows, car blankets, CD holders, car polish, car patch up paint etc.
The service charge for the car wash will be as follows:
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Only exterior car wash - £5.00 - The car is carefully washed down with good quality shampoo, then using the jet spray the shampoo will be washed off and finally after rubbing it down dry, Quick Quality car wash will polish the car. The wash is completed within 10 minutes.
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Only Interior car wash - £5.00 - Quick Quality car wash will clean the inside of the car with a good quality Hoover designed specially for cars. The inside is also polished with good quality cleaner. The wash is completed within 10 minutes.
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Both Interior & Exterior car was - £9.00 – this includes the exterior and the interior being cleaned, as mentioned above. The wash is completed within 20 minutes.
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Full Special wash - £15.00 – This includes both interior and exterior cleaning and in addition, the exhaust receiving a good clean, with the alloys cleaned in depth and then polished to shine. This wash will take up to 45 minutes.
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Car accessories - various price range, depending on the quality and type of products.
Price:
The service charge for the car wash will be as follows:
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Only exterior car wash - £5.00 - The car is carefully washed down with good quality shampoo, then using the jet spray the shampoo will be washed off and finally after rubbing it down dry, Quick Quality car wash will polish the car. The wash is completed within 10 minutes.
-
Only Interior car wash - £5.00 - Quick Quality car wash will clean the inside of the car with a good quality Hoover designed specially for cars. The inside is also polished with good quality cleaner. The wash is completed within 10 minutes.
-
Both Interior & Exterior car was - £9.00 – this includes the exterior and the interior being cleaned, as mentioned above. The wash is completed within 20 minutes.
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Full Special wash - £15.00 – This includes both interior and exterior cleaning and in addition, the exhaust receiving a good clean, with the alloys cleaned in depth and then polished to shine. This wash will take up to 45 minutes.
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Car accessories - various price range, depending on the quality and type of products.
Place:
Quick Quality car wash service will be based in East London area in Walthamstow.
Promotion:
Quick Quality car wash will use quite a few methods for advertising and promoting the service in the local community, these strategies are mentioned at the beginning of the plan. .
Swot analysis:
SWOT Analysis is a powerful technique for understanding your Strengths and Weaknesses, and for looking at the Opportunities and Threats which Quick Quality car wash faces.
Ansoff matrix:
For a variety of reasons, there are times when Quick Quality car wash would want to or need to expand or change their field or market. In business, Quick Quality car wash may need to achieve economies of scale, make more money profit, or even gain recognition in the local area.
Having decided that Quick Quality car wash wants to grow the business, I will have hundreds of ideas about things i could do for my business; this means new products, new markets, new channels, or new marketing campaigns. Using a strategic approach, such as the Ansoff Model, will help me to evaluate my options and choose the one that suits my situation the best, and gives me the best return on the potentially considerable investment that I may need to make in the future.
Product life cycle
The above chart shows verification of the number of cars/vans owned in the London borough of Waltham Forest, it is very important to analyse this piece of information as Quick Quality car wash will be located in this borough, this table helps me see that most people in the borough own at least one car, which will be greatly beneficial to me. This source of information was obtained from:
Competitor analysis of Quick Quality car wash:
I analysed the local borough of Walthamstow in order to find out who the main competitors of Quick Quality car wash will be, after my research through the internet and visiting the actual sites, I gathered that the main competitors of Quick Quality car wash are:
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- which provides excellent quality service, however the price of its services is very high so not many people are able to afford the service.
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- is another service, this service has a strong brand name which is trusted well by its customers, however this service also charges a very high price.
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– this service charges a reasonable price, however the service offered by its staff is not very friendly and not professional enough.
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– this service also charges a low price, but the business image is not very strong as it has a very casual approach.
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– the advantage of this business is that it offers competitive pricing, however the service offered is very slow.
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– The employees of this service are very professional and offers great advice, but the service charges a very high price.
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– This service provides a very high quality service, but the opening hours of the service are very short.
Primary Research
In order to gather primary research I conducted a survey by interviewing a total of 20 people from Walthamstow at a local petrol station. To conduct the research I carried used a random sampling method to gather my results.
The questionnaire which I designed for my survey can be seen below:
How many cars do you own?
1 2 3 over 4
How often do you wash your car?
Never once a week o once a month twice a month
Do you use a car wash service?
Yes No
What do you look for in a car wash?
Low price quality of service location any other
How much are you willing to pay for just an exterior car wash?
£5 £10 up to £15 over £15
How much are you willing to pay for just an interior wash?
£5 £10 up to £15 over £15
How much are you willing to pay for a full car wash, including exterior and interior?
Up to £10 £10-£15 £15-£20 over £20
What is the most important aspect of a car wash service?
Cost quality friendly service anything else
Would you consider paying a little extra for an exclusive car wash which uses exclusive good quality products?
Yes No
Would you consider travelling a bit further to use a brilliant quality car wash service which provides a brilliant service in every for including quality wash at affordable price and excellent advice?
Yes No
Questionnaire Results:
How many cars do you own?
By analysing the graph above I can conclude that, out of a total of twenty people, twelve people own at least one car, whilst a total of six people own at least two cars. Therefore from this you can see that there is a market out their for a car wash as a lot of people owns car.
How often do you wash your car?
By analysing the above results it can be seen that a total of nine people out of twenty washes their car once a week, while four people washes their car once a month, finally followed by seven people washing their car twice a month. From this you can see that cars are regularly washed, so there will be customers coming to my car wash.
Do you use a car wash service?
The above results shows that, out of twenty people, seventeen people said they use a car wash service, so from this I can see that I will get customers.
What do you look for in a car wash?
Furthermore out of twenty people, eight people said that they consider price the most important feature while choosing a car wash service to go to, followed by a total of seven people who considers quality as a major issue, followed by the last five who rates location as an important factor. From this Quick Quality car wash cal learn that people today consider price and quality the most important factor when choosing a car wash service, therefore I will mostly concentrate on price and quality.
How much are you willing to pay for just an exterior car wash?
By analysing this question it can be concluded that a total of twenty people out of twenty said they are willing to pay £5 for just an exterior car, from this result it can be seen that people are priced focus, therefore it will be very important to charge a price which customers can afford and on the other hand I will need to break even.
How much are you willing to pay for just an interior wash?
By analysing this question it can be concluded that a total of twenty people out of twenty said they are willing to pay £5 for just an interior wash, again it can be concluded that, people are priced focus, therefore it will be very important to charge a price which customers can afford and on the other hand I will need to break even.
How much are you willing to pay for a full car wash, including exterior and interior?
By analysing this question it can be concluded that a total of twenty people out of twenty said they are willing to pay up to £10 for a full car wash, from this it can again be seen that people today still focus on price and people want the best deal possible, therefore when I make my pricing decision, it must be carefully made.
What is the most important aspect of a car wash service?
In addition a total of eleven people out of twenty said they consider cost as the most important aspect of a car wash service, followed by eight people who consider quality as an important aspect, while only one person stated friendly service is important. From this results gathered it can be seen that price is very important to customers, followed by quality, therefore Quick Quality car wash will aim to provide a good quality service with affordable price.
Would you consider paying a little extra for an exclusive car wash which uses exclusive good quality products?
Furthermore twenty people out of twenty stated they would consider paying a little extra for an exclusive car wash service which uses exclusive good quality products. From this information gathered, it can be seen that people today value quality greatly and they don’t mind paying a little extra if they will receive exclusive service. Therefore Quick Quality car wash service will always aim to provide an exclusive satisfying service to their customers.
Would you consider travelling a bit further to use a brilliant quality car wash service which provides a brilliant service in every for including quality wash at affordable price and excellent advice?
Finally a total of twenty people out of twenty stated that they would consider travelling a bit further to use a brilliant quality car wash service which provides an exclusive service in every form, including quality wash at affordable price to excellent advice. From this you can conclude that, people today have high disposable income to spend on luxury quality service and people do look for quality service and therefore Quick Quality car wash will always give customers quality service.
Secondary Research gathered
I researched the BBC website to gather secondary data, the data I gathered includes:
- So much money is in fact spent on car modifications or accessories in the UK today that the industry is now worth a cool £320m a year, according to the scene's bible, Max Power magazine. That £320m includes everything from in-car CD players and speakers, to replacement alloy wheels, car body-kits, expensive paint-jobs, and dare I say it, the old classic - furry dice to hang from your rear view mirror.
- One of the biggest beneficiaries of the booming car accessories industry has been Halfords, which earlier this year floated on the London Stock Exchange and enjoys an annual turnover in excess of £500m.
- "There is a growing enthusiast segment for products such as alloy wheels, body kits, and performance styling etc, with the primary customer audience being aged between 18 - 34," says a Halfords spokeswoman.
- "The younger, primarily male customers have increasing disposable income, the car park is getting older - i.e. more older cars in circulation - so there are a greater range of cars available to enhance."
- But with one Welshman recently being reported to have spent more than £16,000 modifying his £3,000 Vauxhall Corsa, why exactly do car modification addicts do it? --- Paul Symons, a 20-year-old student and Ford Fiesta owner, from car modification hotspot Weston-super-Mare in Somerset, says it is all about wanting to portray a certain image.
- Yet far from older people being immune to a bit of car customisation, it appears that middle aged men are equally susceptible, buying everything from speed camera detection systems, to satellite navigation systems, or chipping their engine management systems to give extra power.
- Nigel Wonnacott, spokesman at the Society of Motor Manufacturers and Traders, says the car accessories industry allows people to better express themselves through their cars. "More and more people are certainly choosing to add their own touches to their cars," he said. "The thing to remember is that while for many people a car is simply a way to get from A to B, for others it becomes an expression of the kind of person they are.
Part (d)
Business plan analysis
Why a car wash business was chosen?
I decided to open a car wash business after receiving a positive response from my marketing research, where people in the local borough were willing to use my car wash service. After researching the local East London area and government statistics, I can conclude that, disposable income has increased greatly in the last few years, therefore people today have more money to spend on luxury services, rather than carrying out the service by themselves and in addition the number of cars owned by a household has also increased, therefore people are more likely to use a car wash service.
Furthermore due to the busy lifestyle, people today do not have time to carry out services like these; therefore they are more likely to go to specialists and save time.
However the main reason for opening a car wash business is that after conducting primary research I gathered that, out of a total of twenty people, twelve people own at least one car, whilst a total of six people own at least two cars. Therefore from this you can see that there is a market out there for a car wash as a lot of people owns car.
After analysing secondary research it can be concluded that, in general the market for cash wash services is growing, as according to government statistics on the BBC website disposable income is increasing in East London, therefore people today have more money to spend on luxury services such as car wash. In addition the number of cars owned by a single household is also increasing; therefore people are more likely to use a car wash service.
The car wash will be based in Walthamstow area in East London, 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 neighbourhood earn over £19,000 annually. Many people in the neighbourhood and the surrounding neighbourhood own 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 seven miles of the proposed location for Quick Quality car wash.
The mission of Quick Quality car wash service is to provide a Quick and a quality service, as Quick Quality car wash, understands the value of time, for its customers.
‘Quick Quality car wash service’
The strategy behind Quick Quality car wash target segmentation is to attract customers who will be repeat users and will frequently visit 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, Quick Quality car wash will target people who will tend not to be restricted to these busy times, these includes:
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Business owners (new car owners) tend to be very busy people, but are often able to make their own hours.
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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.
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Dealerships will need cars detailed and washed regardless of the time of the day and week. This will supply a constant flow of traffic.
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Businesses will need their fleet cars washed during the week during regular business hours.
In addition primary research also showed that a total of nine people out of twenty washed their car once a week, while four people washed their car once a month, finally followed by seven people washing their car twice a month. From this you can see that cars are regularly washed, so there will be customers coming to my car wash.
Finally a total of twenty people out of twenty stated that they would consider travelling a bit further to use a brilliant quality car wash service which provides an exclusive service in every form, including quality wash at affordable price to excellent advice.
From this you can conclude that, people today have high disposable income to spend on luxury quality service and people do look for quality service and therefore Quick Quality car wash will always give customers quality service.
Furthermore my research also showed that individual people were willing to pay up to £10 for a full car wash which really encouraged me to open a car wash business.
On the other hand secondary research also encouraged me to open a car wash business as the research showed from BBC website that, "The younger, primarily male customers have increasing disposable income, - i.e. more older cars in circulation - so there are a greater range of cars available to enhance and keep clean."
Furthermore primary research also showed regular use of car wash service in the local area, which will in effect lead to an increase in the number of potential customers for my new business venture.
Therefore opening a car wash business will benefit me greatly and I will be able to exploit from this growing market and I will become successful if I provide an efficient service by making effective management decisions. By analysing all the information gathered I had to come up with a strategy to be unique, when compared to my competitors. I want my business to be unique and provide a strong customer service, so I can retain all my customers.
Quick Quality car wash service competes on quality and not like their competitors who only compete on price and the quality of those competitors car wash service is not satisfactory. Furthermore I also gathered from my research that some people in the local community were not willing to use the car wash because of long waiting time, therefore, Quick Quality car wash service will not let their customers wait more than 6 minutes before they are been served. Therefore I will always aim to offer a high quality satisfying affordable service. In addition Quick Quality car wash service will always try and save their customers time, by completing the service quickly and will provide a strong quality service.
For that reason by providing a convenient, quality and an affordable service to the members of the public my service will be unique when compared to competitors.
The legal structure which is chosen for Quick Quality car wash is of a sole trader, as this is going to be a sole trader business, I will be the only owner who owns and operates the business. Although I might have to employ one or two employees, but I will be the one who makes all the decisions about running the car wash service.
As a sole trader I will be the only one who benefits financially from success, but must also face the burden of any failures. ‘In the eyes of the law the individual and the business are the same,’ therefore I will have unlimited liability for any debts that result from running the car wash service, which is a disadvantage.
If for any reason I cannot pay any bills the court can allow my personal assets to be seized by creditors in order to meet outstanding debts, for example my family home or car may be sold. If however insufficient funds are raised then I will be declared bankrupt.
On the other hand there are no formal rules to follow when establishing a sole trader or administrative cost to pay. In addition complete confidentiality will be maintained as; accounts are not published at the end of the year. As a sole trader I will be able to make rapid decisions giving the benefit of total control and in addition I will be able to create close contacts with customers and will be able to get to know employees on a personal basis. The result is the ability to respond quickly to changes in the competitive environment and this may allow survival even when faced with competition from much larger organisations that are able to charge lower prices.
The main benefits which I will face includes, I can make all decisions, I don’t have to report back to anyone leaving me to do what I please with the business, which is often considered a good thing as there will be no chance of conflicts which you may experience in a partnership or any other organisations.
In addition all profits made goes straight into my account, as there will be no sharing or distribution of profits between shareholders or investors, as I am the only owner. As I own all the profits I can make the decision whether to re-invest into the business or expand etc.
The other downside of a sole trader ownership includes, that there will be limited sources of finance available to start up with, the amount of capital I raise can determine on how far my business goes in the opening stage. The responsibility of the business lies with me, so I must ensure that I keep on top of things as I have unlimited liability and I do not want to lose my personal possessions.
I decided to locate my business in the area of East London as my research proved that, this area will bring many benefits to the market side of the business as, the population of the area is quite high and due to that the level of car owned by the members of public is high. In addition the number of cars owned by the members of public is also increasing in the local area, furthermore the disposable income is also rising, therefore the members of the public has more money to spend on luxury services such as a car wash business.
The location of the business is the most important issue, so therefore the business will be located in a busy main road, where it would attract many customers passing by.
In addition to make my car wash service a success I will always aim to satisfy the customer by providing an excellent service by using good quality products, as according to government research, disposable income has increased and people today are willing to pay high price for good quality service.
Therefore the convenient location of my business will help generate a lot f profit for my business. Furthermore research also shows that the average income is £19,000 which makes people spend more on luxury services. In addition car owners in East London takes a lot of pride in keeping their cars nice and clean, therefore locating my business in East London will benefit my business as I will have a peace of mind that the local community takes pride in their cars and will regularly use my car wash service.
In addition there are five new and used car dealerships within seven miles of the proposed location of Quick Quality car wash. These dealerships often use outside car wash services to wash their vehicles before they are put up for sale. In addition, there are fifteen other car dealerships within a nine mile radius of Quick Quality car wash, so from this research it can be seen that my business has great potential.
After analysing my cash flow forecast I can conclude the car wash business is a seasonal business, therefore i my might only just break even in the winter months as not many people are willing to bring their car for a wash when the weather is very cold. However in the summer periods, I will make a lot more than expected as my research proves that people like to clean and wash their cars when the weather is warm. Therefore during summer time my business will make a lot more profit. In addition
I will also be selling car accessories and my research proves that young people tend to kit their cars up more during the summer periods, so the sales for car accessories will also increase. After analysing my research and the cash flow information, I can conclude that the best season to start my business is in spring time, as spring leads to summer, therefore I can set my business up in the Spring time and by Summer time I would be fully set and people will be aware of my business. By starting the business in summer time would guarantee some profit as research shows that people are more willing to use a car wash service in the summer months, therefore this would ensure that I will at least break even.
Quick Quality car wash is a business which is greatly affected by weather, for example during winter not many people take their cars for a wash, whilst comparing to the summer time when lot more people are more likely to take their car for a wash, therefore I will employ staff according to the season. I will be more likely to employ staff on temporary contracts, especially for the busy summer period.
As I am the sole trader owner, I will be working full time at the business, I will employ one other specialist’s permanent staff and the rest will depend on the season. However I will be willing to employ more staff if the business starts to pick up quickly, as one of my main aim is to provide an efficient service and therefore I would not want customers to wait in long queues.
The car wash service which will be offered and the prices which will be charged are as follows:
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Only exterior car wash - £5.00 - The car is carefully washed down with good quality shampoo, then using the jet spray the shampoo will be washed off and finally after rubbing it down dry, Quick Quality car wash will polish the car. The wash is completed within 10 minutes.
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Only Interior car wash - £5.00 - Quick Quality car wash will clean the inside of the car with a good quality Hoover designed specially for cars. The inside is also polished with good quality cleaner. The wash is completed within 10 minutes.
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Both Interior & Exterior car was - £9.00 – this includes the exterior and the interior being cleaned, as mentioned above. The wash is completed within 20 minutes.
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Full Special wash - £15.00 – This includes both interior and exterior cleaning and in addition, the exhaust receiving a good clean, with the alloys cleaned in depth and then polished to shine. This wash will take up to 45 minutes.
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Car accessories - various price range, depending on the quality and type of products.
The hand car washing business in Walthamstow may have to face 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 in petrol stations, are competition for Quick Quality car wash. However, these two alternatives aim to meet the needs of the price-conscious individuals who are choosing the service simply so they do not have to clean the car themselves. Quick Quality car wash on the other hand, targets the quality-conscious individuals who value their car enough to spend £6-£10 per week to make it look good.
Quick Quality car wash’s competitive edge will be my personal experience for running 5 local businesses in the local area for over 15 years, which as a result are all very successful As mentioned I have a key interest in cars and have been in a sole trader business for over 15 years, and has an excellent reputation and countless of both business and personal contacts.
In addition, I will develop a plan when I employee employees 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. Furthermore Quick Quality car wash’s competitive edge will also be its quality service it provides with an affordable price.
