2013

AUTOMOTIVE
ENGINEERING
CENTER

BUSINESS
PLAN

CITY: HARARE
STREET: 132 WORKINGTON
CELL: 0774 315 979.
BRAIN T MAJO MMAE/1[Type text] [Type text] [Type text]
 TABLE OF CONTENTS

i. Executive summary

ii. Enterprise back ground

iii. Business location

iv. SWOT analysis

v. Benefits of the project

vi. Organization members

vii. Feasibility study

viii. Marketing

ix. Financial projections

Executive summary

BRIAN T. MAJO MMAE/1 Page 2

Business name: Automotive Engineering and Supplies Center
Business address: Stand 131 Workington.
Light industrial site
Harare.

Business owner: Brian T. Majo.

Business idea: To provide reliable automotive supplies and

services

Business form: Private limited company

Business Type: Supply of parts and servicing of motor vehicles.
Own contribution: $20 000.00
Loan amount required: $13 000.00
Total project cost: $33 000.00
Details of own contribution: the owner will contribute

Mission statement: to provide quality automotive supplies and services

to the industrial community and general public at
affordable prices and generate income for the
stakeholders.

Project aims: (i) to provide reliable and quality automotive supplies

and services to the industrial community and
general public.
(ii) To maximize the owner’s equity and profit
(iii) To be the leading supplier of motor vehicles parts
and servicing.

Vision: To establish a quality, innovative and customer

focused enterprise.
Legal form of ownership: The business is to be registered as a Private
Company.

GOALS AND OBJECTIVES

• Our goals are for the company to provide the best service to our clients
• To provide unlimited value for customers money

Enterprise background

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Automotive Engineering and Supplies Center is a newly established enterprise
whose main business will be to supply genuine parts and service light motor
vehicles for the general public. The owner of the business is Brian T. Majo. The
enterprise is based at Stand no.131 Workington Road Light industrial site, Harare.
The lack of enough providers of genuine motor vehicle parts especially fuel pumps
and plugs used in many light vehicles in Harare as a whole pioneered the
establishment of the enterprise. The mission statement is, “To provide quality and
reliable services to the industrial community and general public at affordable prices
and generate income for the stakeholders through whose efforts profits are
gathered”. The vision is, “To establish a reliable, innovative and customer focused
enterprise”.

The aims of the plan are derived from the mission and vision of the enterprise which
(aims) are furnished as follows:

(i) To provide quality services

(ii) To be the leading customer driven enterprise by being responsive
to customer’s needs.
(iii) To maximize the owner’s equity and profit

Business location

The business will be located at stand number 131 Workington Road light industrial
site a kilometer and a half from the Harare Central Business District. The area is
conducive for the business location as it is not far away from many potential
customers who surround it and also at the centre of the Harare province to have a
close proximity.

BRIAN T. MAJO MMAE/1 Page 4

Benefits of the Project to the owners

- The owners will enjoy interactions with influential business owners.

- The owners will enjoy vertical social mobility that is the owner’s status will rise
from lower to middle or upper class.
- The owner and his/ her family members can afford better health and educational
services.

Benefits to the economy

- Creation of employment to the unemployed citizens
- Generation of foreign currency for the country
- Increased government revenue (payment of tax)
- Project acts as source of new technology

Project industry
The enterprise will mainly focus on supplying genuine vehicle parts and servicing the
vehicles but will also provide training of customers when new technology is
established.

Organization and Management

Owing to the fact that the business will be an infant firm, the owner shall assume the
responsibilities of the manager and the supervisor as shown on the following
organization chart:
The organizational chart below shows that the project will not employ many
employees at its onset as a way of cutting down cash out flow. However, with
growth, the project will create employment for many. Accordingly, the project will
employ 2 mechanics, a receptionist and 2 salesmen. An outside accountant will be
used to prepare books of the project. The project will strive to meet the following
objectives:
i) To provide quality services
ii) To extend the product line
iii) To maximize the profit and the owner’s equity
iv) To have high staff retention
v) To have high customer retention by practicing good customer care.

The following table shows position, responsibilities, qualifications and salaries of

organizational members.

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Position Responsibilities Qualifications Salary/mont
h

Owner - Policy formulation - Entrepreneurial $1 000.00

- Mobilization of resources skills, Degree
- New project initiation Automotive
- Human resources planning and Engineering.
recruitment
- Opportunity identification

Manager - Policy implementation - Management $800.00

- Allocating resources to Certificate
business units - Class I
- Marketing
- Cash flow management

Supervisor - Staff motivation and task - ND $650.00

allocation Automotive
- Resource allocation to workers engineering
- Solving technical problems at -2 years’
operational level experience

Receptionist - Receiving and making calls - Salesmanship $400.00

salesperson - Advertising & selling products Certificate
- Recording business
transactions

Mechanic - Making servicing of all parts - Class I (NHD) $750.00

- Maintaining tools, equipment - At least 2 years’
and machines experience
- Responding to customers’
needs by providing prescribed
services by customers

Feasibility Study
The owner carried a feasibility study to determine the suppliers, customers,
competitors and distributors. The feasibility study was carried out through the use of
Internet, personal interviews, telephone interviews and questionnaires. The owners

BRIAN T. MAJO MMAE/1 Page 6

also used the press and electronic media to gather information on competition,
supply, customers and distribution channels.

Marketing

The enterprise will use electronic media, printed media and workshops to market its
services.

Target market
The target customers for the project are made up of the upcoming small businesses
that will be willing to take part in the retail of the automotive genuine parts, light
industries and the general public. Harare city has a number of light and heavy
industries surrounding it which in turn their managers would want their vehicle to be
serviced.

Service, products to be offered

The project will offer services in motor vehicle maintenance like the suspension and
braking systems. We will also supply precision measuring equipment.

Competition
There is less competition on this type of business as it is situated very close to the
customers. Most companies get their services in time so the enterprise will be there
to cut traveling costs and time to most of the firms.
Pricing
In terms of pricing, we will charge the manufacturer’s price which is cheaper to the
customers for all our supplies as for the services so that we can survive despite
competition.

Distribution
The enterprise will sell its equipment to final users and also supply to those who will
want to take part in retail.

Promotional strategies
The project is going to advertise in the local press that is the Herald as it will practice
local marketing that is considering the needs of the local firms. More so, the project
will make use of flyers and posters to advertise its services as a way of enhancing its

BRIAN T. MAJO MMAE/1 Page 7

advertising coverage through the local press. The local press and flyers as well as
posters are less expensive compared to TV and National press. As such, for an
infant firm like Automotive Engineering supplies Centre, the chosen media will be
ideal and more suitable. Apart from advertising strategy, the project will also employ
personal selling in an attempt to search for the specific needs of customers. The
owner of the business will be involved in personal selling. The owner has
undertaken entrepreneurship Studies and doses hold B TECH in Automotive
Engineering.

Moreover, sales promotion is also going to be used in conjunction with advertising

and personal selling. In this case, price discounts or reductions will be given to cash
purchasers and also bulk-purchasers.

Public relations and customer care will also be considered seriously in redressing
unexpected customer queries, complaints, suggestions and grievances. Publicity
statements are also going to be given in local press to create awareness of the
existence of the enterprise and its products on the market.

Project requirements
Item Cost/Unit Total

Office furniture x3 $500 $ 1 500

Work suits x 12 $30 $ 360
Tools box × 3 $210 $ 630
mechanics kit x 3 $400 $ 4 000
Opening stock for - $16 310
supplies
Total Project $33 000
Requirement
Less own contribution $20 000

Loan Amount required $11 000

Financial projection
Sales & cost plan to show projected profit at the project’s selling price

Apr May Jun

Sales $5 900.00 $6 100.00 $ 6 800.00
Direct Material $2 000.00 $2 000.00 $ 2 800.00
Cost

Direct
$4 800.00 $ 4 800.00 $ 4 800.00

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Labour
Cost
Gross profit $12 700.00 $12 900.00 $14 400.00
Indirect cost $ 3 000.00 $ 2 500.00 $ 1 000.00
Net Profit $ 9 700.00 $10 400.00 $13 400.00

Cash flow forecast (To be prepared for 12 months – 1 year)

Apr May Jun Jul
Receipts/Cash Inflow:
Capital (own contribution) $11 500 - - -
Bal b/f - $1 376 $3 821 $9 549
Sales $ 5 900 $6 100 $6 000 -
Cash from debtors - $ 500 $1 000
Other income
Bank loan $13 000 - -
TOTAL RECEIPTS (A) $ 1 500 $5 900 $10 900
PAYMENTS/CASH OUTFLOW:
Purchases $2 000 $3 000 $ 2 000
Rent $ 400 $ 400 $ 400
Electricity $ 1 000 $ 1 000 $10 000
Salaries $ 5 100 $ 5 100 $ 5 100
Transport $ 1 000 $ 1 000 $ 1 000
Equipment & Machines $ 2 400 $ - $ 3 000
Loan repayment $ 1 875 $ 1 875 $ 1 875
TOTAL PAYMENTS B $4 268 $ 37 875 $ 21 875
Bal c/d (Net Income) $1 174 $34 542 $ 49 667

PROJECT PROFIT & BALANCE SHEET

Projected Manufacturing, Trading, profit and loss A/C

Apr May Jul

Direct Materials $ 8 000 $3 000 $6 000
Direct Labour $ 4 950 $4 950 $4 950
Sales 14 792 14 000 16 000
Less: Production cost of goods sold:
Opening stock of finished goods -
Add: production cost of finished 2 000 5 000 6 000

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goods 1 169 3 500 5 400
169 500 400
Less closing stock of finished goods 1 000 3 000 5 000
Gross Profit
Less Indirect cost
(Admin/selling/distr.):
Rent 500 500 500
Electricity 1 000 1 000 1 000
Salaries 4 950 4 950 4 950
Transport cost 1 000 1 000 1 000
.
SWOT ANALYSIS
Strength: -The services of experienced personnel providing fundamental experience
in a mechanical environment they are used to
- The availability of an established market
-The demand for quality spares and machinery
Weakness: - Lack of adequate capital to fund all the projects of the business in the
initial stage of the business
-Lack of knowledge on certain aspects that affect the business in the initial stages of
the business
e.g. experience on all the instruments or legislature governing the industry
Opportunities:-introduction by the Government on legislature that promotes the
growth of indigenously owned enterprises
-failure by most competitors to provide customers with quality brands of machinery
and spares
-conducive economic environment that allows existing companies to revamp their
operations
& also at the same time allowing the opening up of new companies
Threats:-high interest rates from financial institutions or lending houses
-competition with competitors who are already operating & have knowledge on the
running of the business.

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