SFAD

SFAD REPORT  

PRESENTED TO: SIR FAISAL DEDIPRESENTED BY:    SHAHARYAR SYED

    SHAHARYAR NASIM            JATIN

VINOD

TOPIC: BUSINESS PLAN AND INVESEMENT

BUSINESS PLAN

Your convenience – our responsibility

BRIEF INTRODUCTION

• Car-Ease,  a  new  company  that  will  provide  high  quality  technical  and mechanical assistance and emergency services to its clients. Our main focus will be to help people whose car broke down midway to their destination or in a middle of nowhere, and they need timely assistance. In this scenario, we will respond to the needs of the victims of that emergency situation.• Car Ease workforce has core competency to work on and fix all makes and models  of  domestic  and  foreign  vehicles.  With  all  employees  focused  on superior  customer  service  and  dedicated  work,  quick  response  and turnaround  is  always  the  standard  at  Car  Ease. Moreover  our  car  experts strive  to  be  accurate  and  honest with  customers  in  terms  of  quoting  cost estimates,  repair  completion  time  estimates  and  delivering  what  we promise.

CAR EASE

Vision“Our vision is to be the first choice of our customers for vehicle assistance. To earn trust and fulfill the needs of our customers through our expertise at the best price and make the customer’s life easier.” Mission“Our mission is to become a reliable and trustable source of emergency vehicle assistance to the people in Pakistan by providing them our mechanical and technical expertise.”

Standard procedure followed by our employees is:• Step 1: Call is received by customer care officer from individual.• Step 2: Required information is locked in.• Step 3: Tow truck, mechanic and car will be sent from respective location. • Step 4: Car expert will examine the car and find the problem.• Step 5a: If the problem can be resolved on spot car expert will fix it, otherwise car will be towed to mechanic.• Step 5b: The individual will be dropped at the desired location.• Step 6: The car will be repaired and owner will be informed.• Step 7: Car will be delivered at customer door step.• Step 8: Customer will be billed and cash will be collected.

The Total Market

Type of vehicle 4MFY15 4MFY14 YoY

Passenger cars 34,634 32,980 5.0%

INDU 12,645 9,375 34.9%

PSMC 15,334 15,581 -1.6%

Heavy Cars 6,622 8,024 -17.5%

Others 33 - N/A

LCV & Jeeps 9,916 9,816 1.0%

Trucks & Busses 1,241 764 62.4%

Tractors 13,556 8,392 61.5%

Total 59,347 52,952 14.2%

The above table shows that the automobile industry is growing. Which mean that our number of clients is also increasing. Our main target is the passenger cars and LCVs

Consumer Insight

• A survey conducted in order to identify the potential of this business has given quite a few significant points, which leads us to be optimistic about the business prospects. The sample size used was 100 and sample was taken from DHA and Clifton, which we want to target. The summary of the survey results is:• 72% of the people call their friends or family when their car breaks down.  • 60% would like to avail EVAC services if possible.• People want help within 15 minutes after their cars break down.• Female response was more positive as compared to male responses.• Majority of the people who are willing to get this service are owners of Upper and Upper-Middle class.

73%

16%

6%5%

call when car break down

Friends and FamilyMechanicSelfOther

60%

12%

28%

Availing the ServiceYesNeutralNo

Market Segmentation

GeographicWhen referring to the geographic segmentation of Car-Ease, our main target is the areas of DHA and Clifton. These are the areas where convenience is more highly sought. DemographicCar-Ease demographic includes both male and female, mostly middle aged people. We target people of upper and upper-middle class. PsychographicOur target segment would be middle aged people, mostly working women who seek convenience in emergency situations. The aspect of safety, trust and responsibility is apparent in this segment and is a requirement we seek to fulfill. Target MarketThe primary target market is the middle aged people, mostly working women.SEC: A+, A and B ClassArea: Residents of DHA and Clifton 

SWOT Analysis

Strengths• Performance advantage from MoU signed with mechanical workshops• Skilled mechanics: our teams comprise of well qualified technicians mechanics & who will not only diagnose the problem but will do their best to resolve it right there.• A superior service: we provide fastest delivery of service, update them through car-ease management system and ask to fill the feedback form and welcome any opinion or suggestion from our customers.• Web and Mobile application: this will allows us to easily book our customer query and track there location in real time, with just a click of a button.

WEAKNESS

• Lack of patent protection: with low patent protection due to low legal protection in Pakistan our services can be copied and can be used by competitors.• Lack of knowledge about the service: this refers to our new entry into the market as people are not really aware of on the go emergency services • Lack of capability to cover larger area: because of the limited resources we cannot move into all the areas of Karachi at the initial stage we are covering only few places of city.

OPPORTUNITIES

• An unfilled customer need: people demand ease and convenience in their life because of busy schedules. There is a need for such services which are unmet in Pakistan.• A growing segment need: Females especially do not know how to fix small issues when their car break they need to seek help from mechanics so the trends are increasing for on the go emergency services.• Expand into different segments: there is an opportunity to enter new cities outside the Karachi because this is the problem of masses.

THREATS

• New entrants in future because of the attractiveness of industry• Local mechanics: they can directly affect our sales as people have strong understanding and trust with their mechanics.• Automobile companies setting up their own roadside services.

Financial Plan Year 1 Year 2 Year 3

Revenue            3,742,500             4,116,750             4,610,760 

Cost of sales         (1,450,400)         (1,566,432)         (1,691,747)

Gross Profit            2,292,100             2,550,318             2,919,013 General Administrative and Seling expenses        

Utilities Expenses               152,400                164,592                177,759 

Salary expenses            1,200,000             1,296,000             1,399,680 

Rental expense building               336,000                362,880                391,910 

Depreciation expense               154,900                154,900                154,900 

Total General and Admin expenses              1,843,300             1,978,372             2,124,250 

Operating Income / EBIT                 448,800                571,946                794,764 

Interest expense on long term debt (16%)                  72,491                   48,491                   24,491 

EBT                 376,309                523,455                770,273 

Tax (34% corporate tax)               127,945                177,975                261,893 

Net PROFIT/ (LOSS) after tax                 248,364                345,480                508,380 

Operating Cashflow        

Net Income / (Loss)               248,364                345,480                508,380 

Add Depreciation               154,900                154,900                154,900 

OCF                 403,264                500,380                663,280 

Income Statement

Costing

Business Justifcation

Risk free rate 8%

Inflation 8%

Pre operating expenses 125,000

Cash at bank                200,000 

advance rent                336,000 

Machinery             1,490,000 

Furniture and Fixtures                112,000 

tools and accessories                  29,000 

Total capital expenditures             2,292,000 

working Capital                900,000 

Total Project Cost                   3,192,000 

Project's Capital Weightage Amount

Total Debt 60%                      1,915,200 

Total Equity 40%                      1,276,800 

Total 100%                      3,192,000 

Project's Economics

NPV                      232,384 

IRR 16%

Year 0 Year 1 Year 2 Year 3

Operating Activities

Net Profit                          -               248,364               345,480               508,380 

Add: Depreciation expense                          -               154,900               154,900               154,900 

Cash provided by operations                          -               403,264               500,380               663,280  Financiang Activities

Long term Project Loan          1,915,200 

Interest Payment of LT                          -                 72,491                 48,491                  24,491 

Repayment of Long term Project Loan                          -               600,000               600,000               600,000 

Owner's equity          1,276,800                        -   

Cash provided by / (used for) financing activities          3,192,000          (672,491)           (648,491)            (624,491) Investing activities

Prepaid rent              336,000             336,000               336,000               336,000 

Preoperating costs              125,000                        -                            -                             -   

Furniture and fixtures              112,000                        -                            -                             -   

Machinery          1,490,000 

Cash provided by / (used for) investing activities          2,063,000             336,000               336,000               336,000 

Net Cash flow          1,129,000               66,773               187,890             (297,211)

Cash flow at the beginning of period              200,000         1,329,000           1,395,773            1,583,663 

Cash flow at the end of period          1,129,000               66,773               187,890             (297,211)

Cash from other sources                          -   

Adjusted Cash flow at year end          1,329,000         1,395,773           1,583,663            1,286,452 

Cash Flow

Year 1 Year 1 Year 2

Assets       Current Assets       

Cash at Bank         1,395,773       1,054,900       1,286,452 

Prepaid rent          336,000          336,000          336,000 

Current Assets          1,731,773       1,390,900       1,622,452      

Fixed Assets       

Furniture and Fixtures           112,000          100,800            90,720 

Less: depriciation             (11,200)         (10,080)           (9,072)

Net Book Value (Furniture and Fittings)          100,800            90,720            81,648 

Machinery       1,490,000       1,341,000       1,206,900 

Less: depriciation           (149,000)       (134,100)       (120,690)

Net Book Value (Machinery)         1,341,000       1,206,900       1,086,210 

Total Fixed Assets         1,441,800       1,297,620       1,167,858 

Total Assets        3,173,573       2,688,520       2,790,310        

Liabilities and shareholder's equity       

Total Current Liabilities          436,139          453,970          992,860 

Net Income          248,364          345,480          508,380 

Owner's equity        1,276,800       1,276,800       1,276,800 

Long term Liabilities        1,212,270          612,270            12,270        

Total capital and liabilities        3,173,573       2,688,520       2,790,310 

Balance Sheet

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