1. A brief investment memorandum. The proposed work considers a plan for creating a parking garage with a vehicle maintenance complex for OOO Avtotrade, for which the need for such a project is particularly strong. During the operation of the car, there are often serious problems with the place of its stationary parking and storage. To store the car under the open sky is inexpedient for reasons of corrosion deterioration of the body and deterioration of the technical condition of its units, which reduces the number of freight traffic in the winter.
In these conditions, the most optimal solution to the problem is the construction of a specialized parking lot and a garage on the territory of Autotrade LLC
The project involves the construction of 50 garages, the construction and equipment of a building for the maintenance of vehicles, as well as the allocation of part of the allocated territory (total area of 2 hectares) under a parking lot for 150 cars. The return of the invested funds is planned to be realized through the sale of a part of the garages, as well as the receipt of rent for garages and parking places and from the services of a car maintenance station.
2. Description of business, product or service
The mission of the enterprise proposed for investment is the creation in Magnitogorsk of a high-tech enterprise for the servicing of motorists, which is distinguished by inexpensive prices and excellent quality of the services provided, which will allow the automobile service of the city to be brought to a new qualitative level.
The purpose of the enterprise is the construction, equipment, organization of the production process of vehicle maintenance, as full-featured as possible, combining the possibilities of a car-care center with the possibilities of renting spaces for parking the car. Short-term objectives of the company is to win a sufficient market segment and to form a firm image of the company.
Implementing the proposed mission of the enterprise will be quite difficult, therefore, the strategic direction of its development is the focus on the development of the entire range of services, competent marketing policy, rapid formation of the company’s image, that is, there is a serious competitive struggle for the consumer.
The strategic analysis of this project shows that the company proposed for investment has prospects for development in the implementation of the following strategy for its development:
- as soon as possible to enter the market of services and its development,
- use of the possibility of applying the price for services is lower than the prices of competitors,
- application of competent marketing policy, constant monitoring of the market situation,
- application of high-tech equipment, introduction of know-how,
- the application of labor of highly skilled workers, effective personnel policy, the creation of employees’ interest in the success of the enterprise,
- «Tuning» production to the interests of consumers, constant feedback,
- flexibility of production, the possibility of expanding the range of services offered
Adhering to the developed strategy, the given enterprise for realization of services of a car-care center can achieve success, that is within 1 year to return borrowed funds, and also create preconditions for development of manufacture, creation of firm image of the company and employment of a steady segment of the market of motor transport services in a city.
3. Description of the market
General characteristics of the state of affairs in the field of car-care center in Magnitogorsk.
Balanced and dynamic development of the regional economy, providing comfortable and comfortable living conditions for the city’s population can not be imagined without the creation and normal functioning of the service sector.
Among the most general principles of development of the service sector in the city are the following:
- Accounting for the socio-economic specifics of the region, the prospects for its economic and demographic potential, since this largely determines the growth rates of the non-production sphere in the region.
- The study of the main trends in the change in demand for the type of services in question and the identification of the main factors that influence it.
- Examining the existing material and production base to meet the demand for services and identifying opportunities for its expansion through investment.
- Search for sources of financial resources for the implementation of the planned development strategy; coordination of the purpose and available cash.
- Analysis of specific investment projects for the creation, expansion and reconstruction of non-production facilities.
The first step in the development of the city’s autoservice network is the analysis of its economic condition. The solution of these problems can contribute to the increase of business activity due to the revival of trade and transport routes, the increase in the volume of transported goods, the growth in the number of the operating fleet. The complex development of car service can be an impulse, which in future will be the beginning of the way for the region, which leads him out of the depressive state.
Thus, the development of car service should be organically linked with the overall complex program for the development of the city as a whole. Experience in the development of such programs indicates that their main focus is usually the development of small business and ensuring employment of the population.
The solution of these problems can to a great extent be solved by creating a network of relatively small service centers; at the same time, the strategy of forming an autoservice economy should be an integral part of subprograms for the development of small business and employment of the population. Thus, the development of an auto service can successfully carry out important socio-economic functions, providing new jobs and increasing employment in the region.
Prospects for the development of the autoservice economy are based on a scientifically grounded assessment of the prospects for the development of the transport network, which are tied to the general economic tasks of the city development as a whole.
In the general structure of paid services for the population for the analyzed period, and especially in the last period, household services are quite intensively developing, including car-care services. During 4 years the tendency of increase in their volume in comparison with the previous periods is traced.
Analyzing the above data, we can conclude that in the structure of paid services to the population the largest share is passenger transport services – 41%, household services – 20%, communications – 9%.
Through the channels of sales, the volume of paid services to the population is distributed as follows:
| Indicators | 2006 in% to the volume | 2007 as% of 2006 | 2008in% of the volume | 2009in% to 2008 | 2009in% to volume | 2009in% to 2004 |
| 1 | 2 | 3 | 4 | 5 | 6th | 7th |
| The volume of paid services in total.inv .: | 100 | 99.5 | 100 | 98.2 | 100 | 75.5 |
| Enterprises. of them: | 71.8 | 93.0 | 69.8 | 98.5 | 69.6 | 82.3 |
| Large. averages | 45.9 | 80.2 | 42.6 | 99.0 | 42.3 | 80.5 |
| Small | 12.1 | 99.7 | 11.8 | 84.1 | 13.8 | 83.9 |
| Individuals | 28.2 | 103.3 | 30.2 | 97.5 | 30.4 | 35.2 |
The largest share in the structure of paid services is occupied by services of a domestic nature.
Thus, the analysis of the above statistics shows that in recent years, the city has seen a significant growth and development of consumer services to the population, including services for the repair and maintenance of automotive equipment.
4. Sales and marketing
Analysis of the service and its positioning strategy
The offered service of the company is complex and represents a set of services for maintenance (engine diagnostics, aggregate repair, painting, installation of electrical equipment, vulcanization and tire fitting, correction of camber, replacement of oils), maintenance and protection of the territory and maintenance of garages.
Complexity of the provided service provides its functional completeness for almost any consumer. The distinctive quality of this service is also its high technological and quality level, determined by the quality of equipment and high qualifications of personnel.
High consumer properties of the service in question are also determined by the effective organization of the production process, production management.
Preservation and expansion of the content of these functional properties of the service makes it possible to form its stable positive image and to ensure a highly competitive position of the company in the market of automotive service.
The same purpose will be promoted also by application of the flexible system of discounts, and also the warranty obligations applied on various kinds of repair of cars.
To organize the work of the service center you need to supply various components:
- technological equipment;
- components for repair;
- Petroleum products, paint and varnish materials.
The supplier of equipment for our company is the company «Hunter Engineering» which is the world leader in the field of production of equipment for car-care centers. It produces the stands for adjustment of the wheel alignment angles, balancing stands, tire changers, lifts and stands for checking the brake system, taking into account the latest advances in science and technology. Hunter equipment is approved and used by vehicle manufacturers, tires, and their official representatives around the world.
In addition, contracts for the supply of equipment from the Moscow firm «EUROSIV», including two-post lifts «ROTARY SPOA35» and «ROTARY SPA30EM» and a scissor lift «NUSSBAUM UNILIFT 3500A», as well as a paint and drying chamber «BLOWTHERM WORLD 7000», are possible.
The delivery of auto parts is expected from the Moscow company «Shina plus», which deals with the retail and wholesale sale of tires, wheel disks, batteries and auto parts. A distinctive feature of the supplier is a large selection of both domestic and imported products, affordable prices and professional service. In addition, car parts for Korean cars are supposed to be purchased from the Moscow company CANYON, specialized in this type of product and offering optimal purchase prices.
Competitors
Considering the company’s competitive environment, it should be noted that in the city there is a fairly large number of enterprises that sell services to car owners. Given the mobility of the subject of services, the location of these enterprises does not play a decisive role in the choice of such an enterprise. Therefore, to increase the competitive position of our company can only high quality of services, modern equipment for diagnosis and repair, affordable prices for services of the service center and for renting garages and parking.
To assess the project’s competitiveness, it should also be noted that the implementation of the entire range of services announced and its combination with garages and parking was not realized in Magnitogorsk by any enterprise yet. In this sense, the service center offers a new integrated service, which allows you to count on the successful occupation of this market segment, provided the marketing, marketing, marketing and management policies of the firm are correctly implemented.
Price policy of the firm
The price policy is understood as general goals that the enterprise intends to achieve by setting prices for its services, which is regarded as one of the most essential elements of a marketing complex. The price level should be minimal enough to provide the company with the planned profit, the competitiveness of the entire range of services, the achievement of short-term and long-term goals, the main one being the mastery of the main market share of the services of the city’s auto service center.
Thus, an active pricing policy is proposed, consisting in a price breakthrough strategy, i.e. the application of the price level is slightly below the level of the prices of competitors and getting a larger mass of profit due to the increase in sales and the captured market share. At the same time, the price does not need to be low in absolute value – it should be relatively high quality of provided services. At the same time, we assume that the competitor’s price level will not be significantly reduced, since the production capacities of these enterprises will not allow a significant increase in the volume of services provided.
Promotion of sales and advertising activities
The main method of attracting customers of our service is, of course, along with its optimal price and quality, the competent organization of the service, which includes:
- provision of service guarantees for at least 6 months. from the date of the service,
- provision of the possibility, in case of need, of delivering an automobile to the repair site,
- application of a flexible system of discounts for consumers who constantly use the services of our firm,
- the possibility of providing services under direct contracts with transport enterprises,
- maximum provision of necessary repair periods for the customer,
- systematic evaluation of the quality of the service through questionnaires (perhaps, «Review Books» and other forms of «feedback» with consumers of services),
- ensuring continuous improvement of means and methods of customer service,
- wide advertising activities.
The last point is to distribute advertising and non-promotional articles in the local press, highlighting the level and quality of services and guarantees produced by the company, the production of 4-5 advertising boards located along the route Magnitogorsk-Chelyabinsk, advertisements in transport. Particular attention is paid to carefully thought-out text of the appeal to consumers, suitable design, attracting attention and emphasizing the business qualities and advantages of our company.
An important role for attracting the attention of consumers is also played by personal contacts with consumers. Perhaps this measure will be no less effective than advertising.
The number of funds spent on the promotion of the service (advertising activities) should be adjusted monthly based on the comparison of the number of consumers attracted by each of the above methods.
5. Production plan
Carrying out of repair and maintenance service of cars in the conditions of the modern automobile enterprise is connected with performance of a wide complex of various works. In addition to basic work, such as disassembly, washing and cleaning, defecting and sorting, restoration and replacement of parts and assemblies, assembly, testing and painting, auxiliary work is also performed (transportation, storage, technical control, provision of energy and materials, protection, etc).
The technological process of vehicle maintenance is a combination of technological operations performed in a rational sequence, the set of which is determined both by the technical condition of the car, and by the desire and capabilities of the customer.
As a rule, the first stage is car washing, cleaning of its main units and assemblies and subsequent diagnostics. It is supposed to use various methods of diagnosing – from purely visual, the use of special mobile devices and stands, to computer diagnostics (including suspension geometry, engines, descent-camber).
The use of automation equipment is also planned during the washing phase – the service center is equipped with an automatic car wash for CWP 6000 cars with a capacity of 8-12 cars per hour, complete with a large number of devices, including a system for cleaning and recycling water.
The main lifting and inspection equipment and structures include survey ditches, trestles and elevators, and to the auxiliary – jacks, garage tilts, etc. The repair site is equipped with a specialized post for the replacement of lubricants in car aggregates and refueling with its cooling liquid and air. In the process of replacement, the fuel from Mobil is used, the cost of which corresponds to the official price lists of this company for dealers and authorized service stations.
When replacing units and assembling cars, various means of mechanizing assembly work are used to facilitate labor and increase productivity. Assembly should be made on special stands or devices that ensure a stable position of the assembled product or its assembly unit.
To eliminate mechanical damage to parts (cracks, spills, holes, etc.), it is planned to use welding operations, and to apply coatings on the surface of parts to compensate for their wear – surfacing.
In the complex of services rendered by the specialists of the service center, it is also proposed to include preparation for the painting and painting of metal surfaces of cars with the use of special technological equipment for the spraying of paint and varnish materials.
For the organization of an effective system of accounting, warehousing, acquisition of work materials and spare parts, the method of compiling a diagnostic map and a car repair card is used, which ensures the accounting of parts and work performed.
Payment for services is used for the convenience of customers both cash and non-cash, where the cost of repairs is slightly lower. The approximate cost of the norm-hour for domestic cars is 290 rubles, for cars of foreign production – 625 rubles. There is a flexible system of discounts for private and corporate clients.
6. Organizational structure
LLC «Avtotrade» carries out transportation of goods, maintenance, repair and storage of cars, as well as supply of materials and spare parts.
At present Avtotrade LLC includes a repair shop (CKR), it is equipped with modern specialized transport. The fleet of cars is constantly updated.
Currently, the fleet consists of 40 cars. The staff of the staff is 70 people, including the administration.
The organizational and legal form of the enterprise is a limited liability company. Founders are individuals. The start date of the project is 1.06.2010. after the conclusion of the contract for the lease of a land plot of 2 hectares in the southern part of the city of Magnitogorsk. The planning interval is 12 months. The project currency is rubles. The required amount of project financing is 16,750 thousand rubles. Of these, 80% are borrowed funds of credit institutions, and 20% – the own funds of the founders.
The founders of the project believe that the creation of a parking garage with a complex of vehicle maintenance will greatly improve the situation with the timely delivery of goods, the provision of a large residential area with a parking space, repair and service of cars.
The concept of growth is based on three ideas:
- Progressive commercial idea;
- Promisingly productive idea;
- Production idea.
The developers hope that justification of these ideas in the proposed project will provide Autotrade LLC with investor confidence and attraction of necessary capital.
The planned number of the company’s personnel is 19 people. The composition of staff, as well as planned labor costs are reflected in the table.
Staffing
| Qualification | Position | Number of | Salary | Total |
| Administrative staff | ||||
| CEO | 1 | 27000 | 27000 | |
| Commercial Director | 1 | 20000 | 20000 | |
| Chief mechanical engineer | 1 | 15,000 | 15,000 | |
| Chief Accountant | 1 | 18,000 | 18,000 | |
| Production personnel | ||||
| Auto Mechanic | Diagnostics mechanic | 2 | 12,000 | 24000 |
| Auto Mechanic | Mechanic of the site of vulcanization | 2 | 12,000 | 24000 |
| Auto Mechanic | Locksmith Repair Section | 2 | 12,000 | 24000 |
| Technician | Coloring station technician | 2 | 10000 | 20000 |
| Technician | Technician of car wash | 2 | 10000 | 20000 |
| Technician | Storekeeper | 1 | 11000 | 11000 |
| Service staff | ||||
| – | Watchman | 3 | 5000 | 15,000 |
| – | Area Cleaner | 2 | 4000 | 8000 |
| TOTAL | 20 | 202000 | ||
Thus, the monthly cost of labor is 202,000 rubles.
Particular attention is expected to be given to the selection of personnel, which should be carried out if possible from men aged 35-45 with experience in this industry of not less than 5 years, having an education of at least an average special, since the installation and development of new equipment is supposed to be carried out by the personnel of the firm . Important are also the qualities of employees, such as the ability to learn and creativity, the ability to psychological adaptation in the team, sociability, etc., since the human factor is sufficiently strong in ensuring the competitiveness of the firm.
7. Financial plan
Based on the number of installed equipment, workplaces, the number of leased garages and paid parking, as well as the average level of prices for services, determined on the basis of the analysis of competitors’ prices, the planned production plan and the volume of cash receipts are determined at the next level.
Incomes of the enterprise, rub. in months.
| Name | Price | amount | Amount | |
| 1. | Realization of garages | 800,000 | 4 | 320000 |
| 2. | Rent of garages | 2000 | 40 | 80000 |
| 3. | Parking fee | 1000 | 150 | 150000 |
| 4. | Car wash services | 200 | 210 | 42000 |
| 5. | Car interior cleaning | 120 | 210 | 25200 |
| 6. | Engine diagnostics | 800 | 50 | 40000 |
| 7. | Adjusting the gully-camber | 400 | 50 | 20000 |
| 8. | Mounting. balancing | 300 | 90 | 27000 |
| 9. | Installation of electrical equipment. alarm system | 300 | 20 | 6000 |
| 10. | Oil change | 100 | 90 | 9000 |
| eleven. | Aggregate repair. avg. val. | 2000 | 50 | 100,000 |
| TOTAL | 819200 |
Total, the company’s total revenue for the year is planned at 820000 × 12 = 9,840 thousand rubles
Calculation of costs.
Initial expenses for preparation of production, rubles.
| Name | Amount | |
| 1. | Design and estimate documentation | 100,000 |
| 2. | Obtaining permits for construction | 50000 |
| 3. | Land lease | 8000000 |
| 4. | Construction of a paid parking lot | 500,000 |
| 5. | The development of the site for the construction of the second stage | 375000 |
| 6. | Leadership in the preparation of production | 25000 |
| 7. | Development and delivery of the project. | 50000 |
| TOTAL | 9100000 |
Constant costs, rub. per month
| Name | Amount | |
| 1. | Repayment of bank loans | 200,000 |
| 3. | Remuneration of employees | 202000 |
| 4. | Deductions from c / n | 52520 |
| 5. | Communal payments | 7500 |
| 6. | Depreciation deductions | 37500 |
| TOTAL: | 499520 |
Variable costs
| Name | Amount | |
| 1. | Fuels and lubricants | 75,000 |
| 2. | Consumables | 37500 |
| 3. | Fare | 7500 |
| 4. | Information services of third-party organizations | 5000 |
| 5. | Rent of machinery from utility services | 5000 |
| 6. | Unexpected expenses | 5000 |
| TOTAL | 135,000 |
Expenses during the year will be approximately 7.620.000 rubles
8. Risk factors
Analysis of the company’s activities
| Capabilities 1. Forming a firm image of the company 2. Gradual reduction of the price level 3. Application of new forms of service |
Threats 1. The limited market capacity 2. Possible depressive changes in the region 3. Entering the market for new competitors |
|
| Strengths: 1. High quality of services 2.Highly qualified staff 3. The complexity of the service 4. Strong marketing policy |
SIV 1 and 2 2 and 2 2 and 3 |
SIOUX 1 and 1 2 and 1 4 and 1 4 and 3 |
| Weak sides: 1. The presence of a large number of competitors 2. Big costs 3.Necessity of conquering an already occupied market |
SLW 1 and 1 1 and 2 1 and 3 2 and 3 3 and 1 3 and 2 3 and 3 |
SLU 1. Reduced prices for services 2. Glamorous advertising and marketing policy 3. Introduction of new types of services |
