BDP Express Car Service Centre

7/30/2019 BDP Express Car Service Centre

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BUSINESS DEVELOPMENT PLAN

e-Express car service center

SUBMITTED TO:

Mr. Ashish Tiwari

Mr. Bishal Shrestha

Mr. Pradeep Rajopadhadya

SUBMITTED BY:

Sunita Bista

MBA, Term IV

August 16, 2010


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TABLE OF CONTENTS:

Contents

Executive summary 4

CHAPTER 1: INTRODUCTION 7

1.1 Background ............................................................................................................................... 7

1.2 Mission ...................................................................................................................................... 7

1.3 Objective ................................................................................................................................... 7

1.4 Critical Success Factor .............................................................................................................. 8

1.4.1 Distinct services 8

1.5 Company Values ....................................................................................................................... 8

1.6 Registration ............................................................................................................................... 8

1.7 Companys profile .................................................................................................................... 9

1.8 Product/ Service ........................................................................................................................ 9

1.9 ORGANIZATION STRUCTURE: ......................................................................................... 10

CHAPTER 2: MARKET ANALYSIS 11

2.1 MARKET FEASIBILITY: ..................................................................................................... 11

2.1.1 Market research and Analysis: 11

2.2 Marketing Objectives: ............................................................................................................. 11

2.3 Market Segmentation: ............................................................................................................. 11

2.4 Target Marketing .................................................................................................................... 12

2.5 Positioning .............................................................................................................................. 13

2.6 Marketing Mix ........................................................................................................................ 13

2.7 Market Trends and growth ...................................................................................................... 14

2.8 Main Competitors ................................................................................................................... 15

2.9 Marketing Strategy.................................................................................................................. 15


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2.10 Marketing Budget: ................................................................................................................ 15

2.11 Forecast: ................................................................................................................................ 16

CHAPTER 3: ENVIRONMENTAL ANALYSIS 20

3.1 SWOT ANALYSIS: ............................................................................................................... 20

3.2 PEST ANALYSIS: ................................................................................................................. 21

CHAPTER 4: OPERATION PLAN 22

4.1 Moment of truth ...................................................................................................................... 22

4.2 Quality..................................................................................................................................... 22

4.3 Process and capacity design .................................................................................................... 23

4.4 Location strategy:.................................................................................................................... 23

4.4.1 Selecting the site 23

4.4.2 Items considered for selecting the site: 23

4.5 Layout strategy: ...................................................................................................................... 23

4.6 HR PERSONNEL: ...................................................................Error! Bookmark not defined.

4.7 JOB DESCRIPTION: ............................................................................................................. 26

4.8 Inventory management: .......................................................................................................... 27

CHAPTER 5: FINANCIAL ANALYSIS 28

Pre-operating expenses ................................................................................................................. 28

Projected Income Statement for 5 Years ...................................................................................... 30

CHAPTER 6 34

6.1 Critical risks and contingencies .............................................................................................. 34

6.2 Exit strategy: ........................................................................................................................... 34

APPENDIX: 35


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Lists of Tables:

Table no.1: Price 14

Table no.2: Car registration figure 14

Table no.3 : Marketing budget 15

Table no.4 : marketing expenses 16Table no.5 : Fixed expenses 16

Table no. 6: Sales of 1st quarter 17

Table no. 7: Sales of 2nd quarter 18

Table no. 8: Sales of 3rd quarter 18

Table no. 9: Sales of 4th quarter 19

Table 10: 5 Years Sales projection 19

Table no. 11: staffs and salary 26

Table no.12: Pre- operating expenses 28

Table no.13: initial investment 29

Table no. 14: operating expenses 29

Table no 15: Income statement 30

Table no. 16: Statement of retained earnings 31

Table no. 17: projected cash flow 31

Table no. 18: Projected balance sheet 32

Table no. 19: Break even analysis 33

List of figures:

Figure no. 1: Organization chart 10

Figure no. 2: Layout design 25


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Executive summary

e-Express car service center is a car service center located at Dhobi Khola which provides

various services like car washing, car cleaning, repair and maintenance of Diesel type vehicle,

Denting and painting and accidental repair. The distinct service it will be providing is onlinebooking facility through the use of technology. Since the market trend for automobiles has been

increasing, the market for modern service center seems promising.

Out of 50,000 vehicles in Kathmandu, our aim is targeting only 1000 vehicles. The authorized

service center of respective vehicles and local service center are major competitors. But we

believes that if we will be able to provide qualitative service like accidental repair, pick up and

drop facility, online booking facility to avoid returning of customer due to mismatch of schedule.

These will be our key success factor and competitive strategy.

Market feasibility analysis consists of survey of 300 people who owns car from mitra park, omnursing home, Medicare, Bhatbhateni and nearby area. 85% of people show positive response for

the improved car service center at dhobi Khola, Kalopul that is accessible to them and also with

online booking facility. Market has been segmented, targeted and positioned. Price has been

charged as per market rate with promotion basically on newspaper. Price has different markup

for different services like washing, denting and painting etc.

The sale for the first year is expected to be Rs 13,526,250. The sale is expected to increase every

year by 10%

Operation plan includes the moment of truth which is most important in service industry and

how it will provide qualitative service in terms of determinants like reliability, responsiveness,

courtesy, communication and tangibility. Location has been chosen in such a way that it faces

the main road with no traffic delays and legal restriction and room for expansion. Layout consists

of area for service managers room, customer care office, warehouse etc.

Capacity of the service center is not more than 20 vehicles in a day.

We can see in the income statement for the five years that the increase in the service revenue, the

expenses have also increased due to the inflation or due to the expansion but the Net Profit has

increased from Rs 549196.5 to Rs.1877266.5 by the end of 5 years. From this, we have analyzed

that the project seems to be profitable with respect to the amount of profit it will be giving in theperiod of five years. From this pro-forma cash budget, we can see that there is surplus cash at the

end of the every year so this gives the satisfactory result.

There are various internal and external risk associated with every business like labor conflict,

water and electricity shortages, political instability and economic slowdown.


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From the operation plan, marketing analysis and financial analysis we can see that this service

center has a good chance of success in the business. But there is tough competition in the market

and we also have to think about exit strategy- either lease or sell.


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CHAPTER 1: INTRODUCTION

1.1 Background

Today, the road of Kathmandu is busied with about 93,266 public vehicles registered on

Department of Transport management reflects that the purchaser of cars are increasing day byday. Similarly, the market for the car service center seems promising. The auto industry today is

a buyers market and the general economic slowdown makes it vital for industry participants to

stay ahead of demand trends.

To exploit this opportunity a new service center is going to established recently at Basundhara(Bank of Dhobi khola) named as e-Express Auto Service Center (e-ESC). As the industry

grows and transforms, it is imperative that the service aspect evolves correspondingly. Given the

evolution in vehicle technology, product range and quality in the Nepali market, the skillsrequired to service vehicles have also changed. Todays vehicles require sophisticated tools and

equipment for problem diagnosis and correction, which can be handled only by trained

technicians. Given an extremely competitive market scenario where product features and pricingare increasingly in capable of differentiating, Service depth and quality surfaces as a key

differentiator and an effective tool to retain customers. Servicing of modern vehicles requires

quite a different set of skills and technology as compared to the past and e-ESC tactfully bridges

the gap between the industrys requirements and supply in the market.

Today, customers, across product segments, are more aware and demanding. At the same time,

the variety of choices available has made them more prone to switching loyalties if not

completely satisfied. As a result, service providers today are keenly focused on improving notonly the technical aspect of servicing, but also the softer aspects of customer management.

Continuous improvements are made in improving service quality, vehicle turnaround times and

customer satisfaction. This underscores the need for consistently upgrading the technical and softskills of service manpower.

1.2 Mission

The mission of e-express car service center (e-ESC) is to provide top quality after sales service

and develop our own competitive advantage in the industry. e-ESC will also support the its sales

team to boost up the per year sales figure of our car.

1.3 Objective

To act as solution for those who hold their luxury cars by providing quality service interms of reliability, better communication and courtesies.

To develop brand awareness and acceptance of the customer by converting them morecommitted towards the authorized service station.


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1.4 Critical Success Factor

In view of the scenario discussed above, e-Express Auto Service Center identified key success

factors for auto servicing:

Ensuring availability of adequate numbers of skilled manpower, across different locations

and different levels. Skills include not only technical skills but also business management

skills (for senior management) and customer man. Continuous improvement in productivity and quality, to reduce turnaround times,

improve capacity utilization, reduce costs and increase customer satisfaction.

Focus on softer aspects of customer management system pioneering the online Job cardmanagement system and individual login account to individual vehicle with entire history

of the car.

Semi automated service (washing) facility, computerized diagnosis system, Pneumatic

tools and repairing system, highly modern and latest tools and equipment and the mostimportant 24 hour power backup and water facility.

Availability of spare parts at the most affordable price despite of being using genuineDelphi (Japanese) make at the category.

Though there are many service center, as name suggests this service center provides online

service that can be considered as its competitive advantage.

1.4.1 Distinct services

For customer convenience, our service center provide full fledge web based onlinebooking system where every individual vehicle has entire history record of their vehicle

and service detail .The customer can have access to this record by clicking VIEWHISTORY and can make their service schedule through online booking. As per the nature

of the complain registered by customer the car service center approves date. If required, it

provide pick up and drop facility. This service center gives preferences to the booked

vehicle and services their vehicle as quick as possible. It also gives post service follow upcall if customers are not satisfied.

1.5 Company Values

Any Company will be guided by the values. Its decisions, actions and the service it provideshelps to demonstrate these values. Putting values into practice creates long-term benefits for

customers, employees, and the communities.

Customer satisfaction is the prime motto that will be achieved through affordability, qualityand on-time delivery.

Company will regard every employee as essential team members with fair and equitabletreatment.

1.6 Registration

In order to register this company under the name of e-Express car service center Some of the

legal formalities are done which are as follows:


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An application form is submitted along with the Rs 5 stamp at the office of the registrarwhich is situated at Tripureshwor. Besides this citizenship certificate of the Partners and the

company register stamp is provided to the office of the registrar.

Once the company is registered the next steps is to take PAN number that is Permanentaccount number from in land revenue Department which situated at Lazimpath. For this

necessary documents are: Application form. Copy of the citizenship certificate of thePartners, Copy of the company/firm registration certificate, two passport size photo of thePartners, Hand drawn sketch of the business location.

1.7 Companys profile

e-Express car service center basically focuses on providing servicing facility to the customer.

The main aim of company is to provide qualitative service in terms of reliability, affordability,accessibility and better communication. These can be achieved only when there is effective

diagnosis of problem in customers vehicles and then cater them accordingly and as soon as

possible. So, for this experienced mechanics and technicians has been selected and hired.

Similarly, through a small survey, we have found that many people want their car to be serviced

in particularly 3-5 months for general purpose like car washing and others. Mostly, they do notget their car serviced when they want due to mismatch of schedule. So, our company will be

providing online booking system where customer can register themselves with username and

password. Once they enter into booking page , they can type the specific date at which they wanttheir car to served and the software will respond whether time is available on that particular day

or not. In this way, the customer also do not have to return without servicing car that saves their

valuable time and the company will be able to respond them promptly.

1.8 Product/ Service

Basically, car service center is service oriented industry. We will be focusing on following prime

services as:

Car washing (exterior with diesel spray).

Car cleaning (interior with wax and formula).

Car detailing and History record of the maintenance schedule of each and every vehicle

visiting the service centre online

Repair and Maintenance of EFI and Diesel Type vehicle.

Denting and Painting for any types of color.

Accidental Repair (Major and minor). Customer Care Service (with tele- marketing and post follow-up for the work

satisfaction).

24 hour Mobile service availability for customers.

Online booking service for booking dates at which customer wants their cars to be

serviced for general purpose.


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1.9 ORGANIZATION STRUCTURE:

The basic organization structure of the company will be:

The top most level is managing director(Sunita Bista)

Figure no. 1: Organization chart


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CHAPTER 2: MARKET ANALYSIS

2.1 MARKET FEASIBILITY:

2.1.1 Market research and Analysis:

In order to understand the need of the customer, a small survey was conducted within thefollowing areas:

Housing areas: Mitra Park Housing and Naxal(behind Police headquarter) housing

Hospital areas:Om Nursing Home and Medicare doctors( who own cars but are busy)

Department stores area: Bhatbhateni Department store, Blue bird department store

The research objective was to find out what sorts of car service they need. Nearly, 300customers are surveyed from these locations and about 85% of wants such a service center that

provides quick service and also prefer online booking facility too. Because most of the car

owners are professionals who are busy. Car, being a luxurious item, people want special carewith quick service.

Research also shows that many car owners who visit the workshops for general purpose like car

washing has to return due to lack of time of service provider or due to mismatchment of properschedule. So, about 85% of customers showed positive response for online booking facility that

will save their valuable time.

So, through market feasibility analysis, the service center at Dhobikhola, Kalopul is viable.

2.2 Marketing Objectives:

First year marketing objective:

During first year of operation, the company aims to target 1000 vehicles out of

approximately 50,000 vehicles registered (Department of Transportation) because ifcustomer gets satisfied with our service they may come from various places and generally

customer visit each quarter i.e. 2 to 3 time for general servicing like washing, cleaning

etc.

Second year marketing objective:

To develop brand awareness and acceptance of the customer by converting them more

committed towards the authorized service station.

2.3 Market Segmentation:

Geographic

The immediate geographic target is the city of Katmandu.


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A 15 km radius is in need of the services; however, 87% of the business will be from aseven km radius. The total targeted population is just over 1000 vehicles.

Demographic

Male: Female- 63%: 37%. The reason for this discrepancy in the male to female ratio isgenerally explained by the fact that men typically care more about their automobiles.

Men are more likely to spend money on their cars with accessories and are more likely tobuy a car as a reward for some accomplishment as a treat for them. Women tend to view

cars more so as an object of utility. Using this line of reasoning, women are more likely

to use the automatic car wash as they are less concerned about preserving their "precious"

car.40% of the households have an income exceeding Rs 4, 00,000 per annum.

63% of the target population has a proper education degree, they are aware about

authorized service station for their cars.

Behavioral facts:

62-65% of the target customers have possessed their cars with the help of bank loans.Individual and family image is personified by the type and condition of the automobile

that they have.

2.4 Target Marketing

Our service Centre segments its customers by type of car ownership. Normally, it is believed that

the type of car that a person owns says volumes about their driving, and, therefore their car

washing and detailing requirements.

New car owners: Owners of newer cars are most likely to use an authorized servicestation. These owners take great pride in their cars and will bring them often to the wash

and detail service. The goal with these customers is to promote regular use of the washand detail service. The aim is to inform these customers that our Service Centre will keep

their car looking as good as it did the day they drove it off the lot.

Older luxury car owners: These people have either owned their high-end luxury cars for

several years or are unable to afford the expense of a new luxury car but want the feel of

relaxed driving. Both of these groups want to keep their cars in the best shape possible.Those who have bought second-hand cars will often spend many hours in their cars and

will place high importance on keeping their cars looking good. These owners will bring

their cars in for regular washes and occasional maintenance. Sports car owners: These people are often younger or middle-aged men and will regard

the look of their car as important. They will also pride themselves on the look of their car

and will have their car hand washed (at least) weekly. These drivers will have an

occasional detail, but will keep their cars so clean the detail will not be necessary veryoften.

Lifetime owners: Many of these people have owned their cars for more than five or sixyears, and are more likely to be executive. They are attached to their cars as friends and


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though it may be more sensible for them to purchase a new car, they will bring their car infor 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, they will not have a detail carried out on their car unless they are selling it.

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 costeffective, efficient car washing service to perform this service, and will prefer to use a car

wash service during the week rather than during weekends, like the general public.

2.5 Positioning

Our Service Centre seeks to position themselves as the premier auto service provider inthe Katmandu area. This positioning will be achieved by leveraging their competitive

edge; servicing has been providing by almost all auto service centers but our prime focus

is on how to provide efficient and quick service.

So, better positioning strategy will be our online facilities that are new concept. Onlinebooking facilities will attract the customers in the sense that every customers want quickservice and if they get chance to view their historical data entry by themselves they will

get chance to know that what services has been done with their vehicle till now at the

same time online booking for servicing can be done that becomes easy for them and alsominimizes the chance of not getting servicing when they sent their cars or usually visit by

themselves. So, this is our prime positioning strategy and this will help to retain our

customers.

We are also providing online placement of the car which our customers want to sell on our

companys website and thus reduces their tension of selling their car by themselves.

2.6 Marketing Mix

Product

Basically, our product is auto service center. Providing good quality after sales service of cars to

customers is our prime motto.

Promotion and marketing

Express car e-service center will use several methods of promotion starting with Free CheckupCamp to retrieve the database and actual position of our customers. After this ECS will be more

focus on direct marketing through customer care service (tele-marketing/service reminder). At

initial stage, advertisement can be best way to increase awareness among customers about ourproduct. Advertisement on newspaper like kantipur to attract large customers will cost Rs 1 lakh

Free check up camp also consists of costs. But basically lubricants supplier or other will act as

sponsor. So, the company cost will be 50,000 to 60,000.

Pricing


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Pricing of our facility will be competitive among the competitors authorized service station butmaking our customer feel the worth what they have paid for.

Basically, our pricing is as per the market rate.

ITEMS Rate

Service 400 /vehicleRepair & Maintenance 1,350 /average/ vehicle

Dent & Paint 10,000/ average/ vehicle

Lubricants 1,400 /average/ vehicle

Spare Parts 3,200 /average/ vehicle

Local Parts 2,500 /average/ vehicle

Table no.1: Price

Place/location

Location shall not be the issue for our customer as it is located at the central Kathmanduwhatsoever for the customer away and busy ECS is also providing pick up and drop facility.

2.7 Market Trends and growth

As per the Department of Transportation, the automotive sector has phenomenal growth.

Car registration figure up to 2008\09

Serial number Year CAR/ JEEP/ VAN

1 2000/01 5152

2 2001/02 4374

3 2002/03 2906

4 2003/04 7079

5 2004/05 4781

6 2005/06 6531

7 2006/07 8400

8 2007/08 9553

9 2008/09 10,200

Table no.2: Car registration figure


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Total vehicle registered in Kathmandu upto now is 93,600 vehicles .Approximately 50,000cars\jeep\van will visit car service center rest may be government vehicles that usually have their

own service center. Out of 50,000 vehicles that go for servicing, only 1000 vehicles is our target

market.

From the above data, market trend is growing. The need of car service center also gets emerged.

2.8 Main Competitors

The main competitors for our service center are authorized service centre of all the brandsexisting in Kathmandu. Apart from this local service station of nearby area located at 5 km

radius of e-Express car service center.

2.9 Marketing Strategy

e-Express car service center will target servicing of car/ van/ jeep. In the initial years, only 1000

vehicles will be served. Our prime focus on the first three years is to provide better and quickservice to them and to retain those customers rather than increasing the number of customers.

Because every vehicle needs servicing of 3-4 times in the year. So, retaining those target

customers will be valuable. After that, there is a great chance of promoting car service center

through word of mouth from customers and that will probably increase our target number ofcustomers.

2.10 Marketing Budget:

Website design( for online booking) 300000

Advertisement in Kantipur 100000*3 TIMES= 300000

Free check up camps 100000

Tele- marketing and service reminder 30,000

Commission and other marketing activities 200000

Others (Chanda,offering from political parties) 20000

Total 950000

Table no.3: Marketing budget


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Annual marketing expenses

Marketing

Expenses

Year 1 Year 2 Year 3 Year 4 Year 5

950000 760000 650000 500000 500000

Table no.4 : marketing expenses

Analysis

The marketing expenses has been decreasing as year passes because in car service center

targeting certain year passes because in car service center targeting certain customers andretaining them is enough through qualitative service. Once, they are satisfied they will come again

and again. So, no need of aggressive marketing.

2.11 Forecast:

Projected expenses for the year 2067

FIXED EXPENSES

SALARY 1,96,150

SECURITY GUARD 22,600

FOOD 25,000

FUEL 15,000WATER 2,200

RENT 25,000

ELECTRICITY 10,000

INTERNET 2,400

COMMUNICATION 4,000

PRINTING & STATIONARY 1,500

OVERTIME 15,000

MISCLENIOUS 3,000

TOTAL 321850

Table no.5 : Fixed expenses


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REVENUE MARGIN

SERVICING 90%

REPAIR & MAINT 85%

DENT & PAINT 33%

LUBRICANTS 22%

SPARE PARTS 18%

LOCAL PART 30%

Remaining % is for variable cost like for cleaning we need towels, pick up facility in case of

emergency, managing inventory which is done less frequently.

Usually, research done in various car service agency shows that people come for service usually

quarterly basis i.e. four times in the year. So, projected sales in each quarter have been shown as:

Projected Sales of first Quarter 067/068

ITEMS No of Vehicle/day

Working

Day Rate Revenue/Month

Service 6 25 400 60,000

Repair & Maintenance 3 25 1,350 101,250

Dent & Paint 0.5 30 10,000 150,000

Lubricants 4 25 1,400 140,000

Spare Parts 5 25 3,200 400,000

Local Parts 2 25 2,500 125,000

976,250

Table no. 6: Sales of 1st quarter


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Projected Sales of Second Quarter 067/068

ITEMS

No of

Vehicle/day

Working


Service 6 25 400 60,000


Dent & Paint 0.5 30 10,000 150,000

Lubricants 4 25 1,500 150,000

Spare Parts 5 25 3,200 400,000

Local Parts 2 25 2,500 125,000

1,020,000

Table no. 7: Sales of 2nd quarter

Projected Sales of Third Quarter 067/068

ITEMS No of Vehicle/day

Working


Service 7 25 450 78,750


Dent & Paint 0.5 30 12,000 180,000

Lubricants 4 25 1,500 150,000

Spare Parts 5 25 3,500 437,500

Local Parts 2 25 3,000 150,000

1,146,250

Table no. 8: Sales of 3rd quarter


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Projected Sales of fourth quarter 067/068

ITEMSNo ofVehicle/day

WorkingDay Rate Revenue/Month

Service 7 25 450 78,750

Repair & Maintenance 5 25 1500 187,500

Dent & Paint 0.5 30 12500 187,500

Lubricants 5 25 1500 187,500

Spare Parts 5 25 4000 500,000

Local Parts 3 25 3000 225,000

1,366,250

Table no. 9: Sales of 4th quarter

Projected Sales for 5 Years

Year Item Sales

1Projected sales revenuefor 1st year 13,526,250

2

Projected sales revenue

for 2nd year

14,878,875

3


for 3rd year

16,366,763

4


for 4th

year

18,003,439

5


for 5th year

19,803,783

Table 10: 5 Years Sales projection


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CHAPTER 3: ENVIRONMENTAL ANALYSIS

3.1 SWOT ANALYSIS:

SWOT analysis is necessary in each and every business.

Strengths:

Online service- most latest and modern service

Service infrastructure adequate workshops at the right

locations, with proper machinery, tools and other facilities

Availability of spare parts for all the models.

Availability of skilled work force.

Weakness:

The need to have fairly constant volume of business to

support the business.

Opportunity:

Easy to grasp customer through online service.

The number of registered vehicles is in increasing trendevery year. So, there is high chance of success of this

business.

Threats:

Future\ potential competition from a franchised firm

A slump in the economy, reducing discretionary spending.


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3.2 PEST ANALYSIS:

Political Environment: Unstable political system in our country hampers every new

business. Due to political instability it may hamper the business to certain aspect because

of bandhs and strikes. So people may not be able to come to the service center and at the

same time, mechanics, technicians also may not be able to come to the service center for

servicing due to which car servicing may not been done promptly that may hamper

business.

Economic Environment: Economic situation of country also matters. If there occurs

slump in an economy, then spending pattern of consumers may decrease for luxurious

item like car that directly hits this business.

Socio-Cultural Environment: Culture, customs and norms of society affect any

business. There will be no social- cultural impact on the society. There has been change

in the cultural aspect of the people and owning cars has become a matter of social

prestige. Thus, demand of more cars means the increase in need of car servicing. So due

which it will be profitable for this kind of car servicing center.

Technological Environment: New technology can be comparative advantage for

business like car service center. Due to advance technology we can be able to use modern

facilities like online booking system. These technologies will help to gain competitive

edge in this competitive world.

Legal Environment: There is no legal restriction for opening car service center.

Thus, after environmental analysis and SWOT analysis the car service centre with online feature

seems feasible in business market.


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CHAPTER 4: OPERATION PLAN

4.1 Moment of truth

It occurs when there is interaction between customers and service provider. For any car service

center, when customer comes for repairing their cars their problem should be correctly diagnosed

and troubleshoot accordingly.

First interaction occurs when customer visit to service center with various car problems, they

should be greeted properly. If the customer gets dissatisfied at this very first step their chances ofrevisiting is less.

Second interaction occurs when customer explains their problem to the mechanics or service

provider. At that time, conscious listening to the problem is necessary for effective diagnosis.

Effective diagnosis of problem and addressing it properly is quite important. This is the most

important step where service center can differentiate them.

4.2 Quality

Our auto service center focuses in providing qualitative service to our valuable customers in

terms of:

Reliability: our service will be reliable in sense that customers will get same kind of

service consistently.

Responsiveness: Our Company responds to the customer and their problem as soon aspossible. If they face problem in any roads of the Kathmandu, we try our best to provide

service if they call us.

Competence: Our competence level is good since we are hiring mechanics that are good

at their work and has experience in related field.

Access: Since our company is situated in DhobiKhola, the place is easily accessible and

customer can contact through online booking facility and through telephone.

Courtesy: Being service industry, we are courteous to our customer since they arevaluable to us. Our employees from receptionist, mechanics to managers they respect

customers and are polite to them.

Communication: our service industry tries to inform our customers about the servicesthey had done so far to their cars through historic data and at the same time can do online

booking to get service too.

Tangible: The service will be tangible due to its physical existence in the Dhobikhola.


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4.3 Process and capacity design

Use of technology in service:

Using technology in service industry gives additional advantage. The company website provides

the data entry which customers can log in to see the services they had done with their car so far

and at the same time they can do online booking if they want car servicing. Similarly, if ourcustomers want to sell their cars then they can contact to us and we will place the cars on the

online from where buyers can see and if they like, they can buy it. This use of technology acts asadded benefits to us.

Capacity:

According to the space and manpower availability, our company will have capacity of servicing

not more than 20 vehicles per day.

4.4 Location strategy:

4.4.1 Selecting the site

Since the site location has a large influence on the success of the garage, careful consideration

must be given to the selection of site location.

4.4.2 Items considered for selecting the site:

Preferably, It should face a main road (or be close to a main road)

It should be on a level ground.

Preferably, It should be a location where there are no traffic delays, etc.

It should be a location with room for expansion.

It should be a location where public facilities can be used.

It should be a location without legal restrictions.

Preferably, these items are required for appropriate site location for car service center. Butfinding all these characteristics in a single location is very difficult. However, majority of these

characteristics are found on the site that I have selected which is DholiKhola. Shape of the site

is also very important. Basically rectangular and square shape of the site is best. The site whichI have selected is of rectangular type.

4.5 Layout strategy:

Our workshop layout consists of following areas:

Service managers office


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Customer waiting room

Reception room

Watchmans room

Parts office

Parts warehouse

Inspection and General Service bay(s): The general service bay serves the garage s

principle role. Bay is just like ramp. The service bays, related passageways, tool benches, etc.

must be given careful consideration for space layout.

Inspection bay(s) is the place where incoming vehicle checks, after-servicing Checks, etc. are

conducted. There are two types, differing according to inspection methods. In one, mainly

visual method is used. In the latter, oil leaks, tigness of parts, and wear and loss of variousparts are checked for by means of a pit, so the area is the same as the general service bay. One-fifth of the general service bay should be of this type. They can be used for both general

service and lubrication.

Lubrication bay(s): This is the place where grease-jobs, engine and gear oil exchanges, etc.

are conducted. In this connection storage space for various oils and greases is necessary nearthe vehicles. Considering the nature of the operations, installation of a pit or large -size lift is

desirable. The bay size is the same as the general bay. However, it is necessary to install

storage areas for oils and greases very near.

Engine repair shop: This is where engine overhauls and corresponding repairs like cleaning

are conducted.Electric service shop : This is where overhaul and repair of various single units (excepting theengine) such as the transmission, transfer, differential, steering gear box, brake valve, etc. are

conducted.

Tool room: This is where common tools, large-size common tools, special tools, measuringdevices, etc. are stored. One person will be in charge of the tool room. He should keep a record

of all tools issued to the mechanics and should order new tools to replace those

that wear out.

Air compressor room: It is a room which consists of air compressor with water separator.

It is used for different pneumatic purpose in workshop.

Generator room: It is a room that consists of generator that is used as a power backup.

Service parking area: Itis the place where vehicles that enter the service center will be kept.Stock yard: It is warehouse for the spare parts.

Layout partition is shown on annex with cost of approximately 10,000 .


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The actual layout design will be:

Figure no. 2: Layout design


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4.6 HR PERSONNEL:

Total numbers of staffs with their salary are:Position Number of staffs Expected salary

Service Manager 1 45,000

Engineer 1 20,000

Supervisor 1 8500

Senior technician 1 14,000

Technician 1 9000

Junior technician 1 7000

Helper 8 5,000* 8= 40,000

Customer care officer 1 5500

Receptionist 1 5000

Account department officer 1 9500

Administrative officer 1 7500

Spare Parts Officer 1 9500

Spare Parts Executive 1 6000

Office Boy/girl 1 4650

Driver 1 5000

Total 22 1,96,150

Table no. 11: staffs and salary

4.7 JOB DESCRIPTION:

Service manager: The service manager evaluates the overall department performance.

He/she has to report to the managing director.

Engineer: Engineer deals with day to day operation of the workshop.

Supervisor: Supervisor receives each and every incoming car to the workshop and

identifies the problem and reports it to technical department. Finally, he/ she have to

ensure whether the work has been completed or not.

Technician: Technician basically deals with identifying problem of the car that comes

to workshop which is the most important job. Technician can be junior and senior

technician. Junior technician has to report to senior technician.

Helper: Helper are usually more in number i.e. 8 helpers. They have to assist

technician in rectifying the identified problem by technician.


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Customer care officer: Customer care officer receives the customer, greets the

customer and courteously responds to the customer. The first moment of truth occurs

here. So, the job of officer is to receive customer and responds quickly and promptly.

Receptionist: Basically, receptionist deals with receiving customer phones and

responding queries of customers.

Account department officer: Account department officer deals with financial plan and

making financial statements like income statement, balance sheet.

Administrator: Administrator deals with handling administrative aspects like salary,rent, electricity, water, communication etc.

Spare part officer: Spare parts officer plans the ordering of the parts necessary orrequired in workshop. He/she has to report to spare part executive.

Spare part executive: Spare part executive deals with handling and maintenance ofspare parts.

Office boy/girl: Office boy/ girls job is cleaning tables of the respective senior,bringing water and other necessary item to them as per the order of seniors.

Driver: Drivers are permanently hired by workshop for providing pick up and dropfacility to customers as well as helping his seniors to reach to particular destination as

demanded by them.

4.8 Inventory management:

Inventory should be managed properly in such a way that neither it will be left idle inwarehouse nor it will be shortage in the market. Basically, inventory is categorized in three

parts on the basis of their use as:

1. Fast moving inventory: This category include those inventories which are used onregular pattern like lubricants, engine oil filter, air filter etc.

2. Medium moving inventory: This category includes those inventories which are used

frequently or in short interval but not on regular pattern like brake pad, clutch pad etc.3. Slow moving inventory: This category includes those inventories which are not used

even frequently like interior parts of engine etc.Local dealers, Indian dealers or other foreign dealers can be used for this purpose.


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CHAPTER 5: FINANCIAL ANALYSIS

Pre-operating expenses

Table no.12: Pre- operating expenses

FIXED CAPITAL REQUIRED (INITIAL INVESTMENT)

Title Amount

Feasibility 5000

Registration 10000

Transportation 3000

Telephone Line 10000

Total 28,000

Particulars Amount (Rs)

Office Building, Shade and Truss 30,00,000

Tools and Equipment 20,00,000

Electric wire and setup 4,75,000

Tools and Equipment installation cost 3,00,000

Office equipment 1,65,000

Computer 1,50,000

Furniture and fixture 1,78,000

Vehicles/Bikes 1,84,000

Generator 7,00,000

Miscellaneous 4,00,000

Total 75,52,000

Working capital 10,000

Total capital requirement 7562000


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Table no.13: initial investment

OPERATING\ ADMINISTRATIVE EXPENSES

DETAILS Year 1Year2 Year 3 Year4 Year5

SALARY 1,96,15021,57,65 23,73,42 261076 287184

SECURITY GUARD 22,60023,730 24,917 26,163 28,779

FOOD 25,000

26,250 27,563 28,941 30,388

FUEL 15,00015,750 16,538 17,365 18,233

WATER 2,2002,310 2,426 2,547 2,674

RENT 25,00025,000 27500 27500 30,250

ELECTRICITY 10,00010,000 10,000 10,000 10,000

INTERNET 2,4002,400 3,000 3,000 3,000

COMMUNICATION 4,0004,000 4,000 5,000 5,000

PRINTING &

STATIONARY 1,500

15,00 15,00 2,000 2,000

OVERTIME 15,00016,000 17,000 18,000 19,000

MISCLENIOUS 3,000

4,000 5,000 6,000 7,000

SALARY(13TH

MONTH) 1,96,150

21,57,65 237342 26,1076 287184

Total

(per year) 41,04,550

43,76,225 47,58,774 51,52,180 56,08,680

Table no. 14: operating expenses

Salary has been increased by 10%. Food and fuel has been increased by 5%. Rent, overtime,

communication and printing stationary has been done small increment which is quiet natural in

these objects.


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Profit and Loss Account

Projected Income Statement for 5 Years

Table no 15: Income statement

Analysis: The above income statement shows that the profit has been increased fromRs.549196.5 to Rs. 944451.75 at second year and finally to Rs. 1877266.5 at the fifth year.

Particulars Year-1 Year-2 Year-3 Year-4 Year-5

Sales 13,526,250 14,878,875 16,366,763 18,003,439 19,803,783

less: Variable costs(appx

55% of sales) 7,439,438 8,183,381 9,001,720 9,901,891 10,892,081

Depreciation (10% of assets

and machine tools) 300,000 300,000 300,000 300,000 300,000

Administration expenses 4,104,550

4,376,225 4,758,774 5,152,180 5,608,680

marketing expenses

950,000 760,000 650,000 600,000 500,000

EBT 732,262 1,259,269 1,656,269 2,049,368 2,503,022

less:

Tax@25% 183065.5 314817.25 414067.25 512342 625755.5

EAT 549196.5 944451.75 1242201.75 1537026 1,877266.5


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Statement of retained earnings:

Year 1 Year 2 Year 3 Year 4 Year 5

BeginningBalance 0 549196.5 1493648.25 2,735850 4272876

Add Net profit 549196.5 944451.75 1242201.75 1537026 1,877266.5

Ending

Balance 549196.5 1493648.25 2735850 4272876 6150142.5

Table no. 16: Statement of retained earnings

Projected cash flow for 5 years

Particulars Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

A ReceiptBeginning

Balance 0 10000 784197 1653649 2820851 428287

Equity 75,62,000

Bank loan 0

Sales Revenue 13,526,250 14,878,875 16,366,763 18,003,439 19,803,7

Total Receipt 75,62,000 13,536,250 15,663,072 18020412 20824290 240866

B Disbursement

Fixed Assets 75,52,000

Operating

Expenses 41,04,550

43,76,225 47,58,774 51,52,180 56,08,6

Marketing

Expenses 0

950000 760000 650000 500000 5000

tax Paid 0 158,066 289,817 389,067 487,342 600,7

Total

Disbursement 75,52,000 5,212,616 5,426,042 5797841 6139522 67094

Surplus/Deficit

(A-B) 10,000 8,323,634 10,237,030 12,222,571 14,684,768 17,377,2

Table no. 17: projected cash flowAnalysis: From this pro-forma cash budget, we can see that there is surplus cash at the end of the

every year .


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Projected balance sheet for 5 years:

Assets Year 1 Year 2 Year 3 Year 4 Year 5

Current assets:

Bank 3329453.6 4094812 4889028.4 5873907.2 6950890.5

Cash 4994180.4 6142218 7333542.6 8810860.8 10426334.4

Total Current assets 8,323,634 10,237,030 12,222,571 14,684,768 17,377,224

Fixed assets 75,52,000 75,52,000 75,52,000 75,52,000 75,52,000

Less Depreciation 300,000 300,000 300,000 300,000 300,000

Net Fixed Assets 7,252,000 7,252,000 7,252,000 7,252,000 7,252,000

Total Assets 15575634 17489030 19474571 21936768 24629224

Liabilities and Equity Year 1 Year 2 Year 3 Year 4 Year 5

Accounts payable 7464437.5 8433381.75 9176721 10101892 10917081.5

Equity 7,562,000 7,562,000 7,562,000 7,562,000 7,562,000

Retained Earnings 549196.5 1493648.25 2735850 4272876 6150142.5

Total Liabilities and Equity 15575634 17489030 19474571 21936768 24629224

Table no. 18: Projected balance sheet

Analysis:

Here, 40% of surplus amount of cash flow is kept in bank while remaining is held on cash to buyinventory whenever required. Similarly, accounts payable has been increased because we have

no any other form of stock and thus since sales are also increasing each year accounts payable

has been increased accordingly.


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BREAK EVEN ANALYSIS

Year 1ST

2ND

3RD

Total Revenue 13,526,250 14,878,875 16,366,763

Less: Variable expense7,439,438 7,811,409 8,201,980

Contribution Margin 60,86,812 7067466 8164783

Contribution margin ratio 0.340 0.340 0.340

Fixedcost(operatingexpenses) 41,04,550

43,76,225 47,58,774

Break Even (Sales in Rs.) 1,20,72,205 1,28,71,250 1,39,96,394

Per Month Sales for BEP 10,06,017 10,72,604 11,66,366

Daily Sales For BEP 35,533 35,753 38,878

Table no. 19: Break even analysis

Analysis: From above BEP analysis, it can be seen that the car service center requires daily sales

revenue of 35,533 for at least to break even at first year and 35,753 and 38,878 for at least to

break even in second and third year respectively.


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CHAPTER 6

6.1 Critical risks and contingencies

Each and every business is associated with risk. There exists internal risk as well as external risk.

1)

Internal risks:

Service center are usually labor intensive. Labor intensive may create problem

regarding salary and others.

Service center needs huge water. During dry season, shortage of water may createproblem. Water has to be bought which means additional costs.

Load shedding is usually a problem in Nepal. So, the service that needs electricity

will be delayed. The center has to bear additional cost for generator.

Consistent quality servicing is necessary. Once the car service center loses faith of

customer due to inconsistent quality, then the reputation gets worsen.

2) External risks:

There may be risk from the political instability due to which it will hamper thebusiness operation.

The economic slowdown hampers this business as well. In case liquidity chrunch

occurs, people may not get auto loan and thus car service center business will behampered.

6.2 Exit strategy:

Competition in the market forces this car service center to think of alternative plans as it will

not be able to attract the customers. So, exit strategy has to be planned for such worse situation.

In this condition we can give it as lease to other authorized service center or we might as well

sell the overall service center to others that helps to minimize our loss.


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APPENDIX:

CONSTRUCTION EQUIPMENTS REQUIRED:

S.N. Description Capacity Qty.

Water Boring (with filter) 2 inch pipe 1

Electric Line (NEA)

3 Phase (above

10KVA)

Electric line wiring

Water Tank (Plastic) for Kithcen) 1000 ltr 2

Water Plumbing

Air Compressor line for R/M and Dent Paint (Plumbing)

Construction

Shed (Truss and Almunium Sheet)Floor (PCC)

Office Construction

Partition

Require Office Furniture and Fixtures

S.No. Item Qty Remarks1 EPABX with telephone set 1 22,000

2 Telephone line 3 54000 with 1 direct line

3 Fax Machine 1 14000

4 Telephone set 10 5000

5 Internet Line 1 16500

6 Computer 5 175000

7 Laser Printer 2 30000

8 Working Table set 12 72000 (with chair)

9 Chairs 10 15000

10 Sofa set (with table) 2 30000 Customer lounge

11 Steel Drawer 3 2100012 Wooden or Steel rack 6 30000

13 Locker for Technician 1 10000

14 Bicycle 1 4000

15 Motorcycle 2 180000

16 Kitchen Goods 70000

748,500


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Require Tools and Equipments for New Service Center

1. Facility Support

S.N. Item Capacity Qty.

Air Compressor10 HP, 35 c.f.m with air

cooled after cooler1

Fire Extinguisher 1

First Aid Cabinet 1

2. Lifting Equipment


2 Post vehicle lift 2Floor jacks 1.5 ton 3

Safety stands 10

Engine lift 1

Engine stand 1

3. Servicing


Hydraulic lift 2

Pressure gun 2

Water pump 1

4. General Service


Workbench with vise 1

Bench grinder 1

Hand drill-electric 1

Drill bit set 1

Hydraulic press 1

Fender cover 10

Seat Protector 10

Air blow gun 2

Vaccum Cleaner 1

5. Measuring andTesting


Vernier Calipers 200 mm 1

Dial indicator with stand 1

Torque wrench set 0.5-3.5, 3-14 kg-m 1

Compression gauge 20 kg/cm2 1

Oil pressure gauge 1


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Fuel pressure gauge 1

Fuel consumption testor 1

Industrial thermometer 1

Test light 2

Diode tester 2

6. Electrical and EngineTune-up


Computerized Diagnostic tool 1

Battery Hydrometer 1

Battery charger 1

Digital Multimeter 1

Spark plug gap gauge 2

Timing light 1

Injector cleaner 1

7. Lube and Wash

S.N. Item Capacity Qty.Oil funnel 1

Waste oil tank 1

Grease gun 1

Oil funnel 4

Parts cleaning tank 2

Pressure washer 1

8. Engine Overhaul


Piston ring expander 1

Piston ring compressor 19. Brakes/Tires


Digital Tire Pressure gauge 1

Wheel alignment equipment 1

Tire Tread gauge 1

Wheel balancer 1

Tire changer 1

10. Air conditioning

equipment


A/C Leak Detector 1A/C Recycling Equipment 1

11. Technician Hand

Tools

S.N. Description Capacity Qty.

Socket - 8-32mm : (32 nos.)set 4

Rachet Handle Reversible 4


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Spinner handle 4

Speeder handle 4

Extension Bar - 5" & 10" 4

Universal joint 4

Adapter Female/Male 4

Hexagon Wrench 4 setOffset ring spanners - 12 nos. 4 set

Open End spanners - 12 nos. 4 set

Combination Wrench - 12 nos. 4 set

Adjustable Wrench - 12" 4 set

Pipe Wrench - 12" 4 set

Vice Grip Wrench - 10" 4 set

Combination Plier - 8" 4 set

Long nose plier - 6" 4 set

Cutting plier 4 set

Spark plug socket 4 set

All purpose scissors 4 setSnap ring plier 4 set

Wire cutter 4 set

Screw Driver-flathead/phillipshead. 15 pc

Ball peen hammer - 500 gms 4 set

Wooden hammer 4 set

Plastic hammer 4 set

Rubber hammer 4 set

Chisel and punch - 200 mm 4 set

Thickness gauge 4 set

Tool Box 4 set

Tyre Hatta 2 pc

LAYOUT /DECORATION

S.No. Description Size Qty Rate A

1 Sofas 3 seater 1 2 Sofas 2 seater 2 12800/each 2

3 Sofa side tables 21"x21" 2

4 Pilar designs 4 6544/each 2

5 Centre display table 3'x3' 1

6 Reception table 5'x30"x42" 1 3

7 Low ht cabinet 5'x15"x30" 1


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8 Gypsum, veneer design 7'x8'8" 1 3

9 New glass / flush doors 7'x3' 5 14529/each 7

10 Partition with veneer panels on wooden frame 18'9"x8'8" 1 9

11 Partition with veneer and glass panels on 12'x8'8" 1 8

wooden frame 11'9"x8'8" 1 8

12 Gypsum partition with vaneer panels on both sides 11'2"x8'8" 1 7

13 Executive table 6'x30"x30" 1 2

14 Low ht cabinet 12'x15"x30" 1 3

15Ceiling with false 6"x6" veneer beams (above waiting

area only)13'x6"x6" 6 5

16Ceiling with panels in directors room and confernce

room10'x12" 12 5

17 Laminated flooring 857sft 116/sft 9

18 Pinewood skirting 202sft

19 Blinds (director and conference room only) 173sft 2

Total 8

Vat 13% 1

Grand Total 10

Documents

BDP Express Car Service Centre