Contents

List of Figures............................................................................................................................................ii
List of Tables.............................................................................................................................................iii
1.1 Executive Summary.............................................................................................................................1
2.1 Business Description............................................................................................................................1
2.1.1 Owners/Partners.......................................................................................................................1
2.1.4 Products and Services...............................................................................................................1
1.2 The Financing..................................................................................................................................1
1.3 Mission Statement............................................................................................................................2
1.4 Management Team..........................................................................................................................2
1.5 Sales Forecasts.................................................................................................................................2
1.6 Expansion Plan................................................................................................................................3
2.0 Company and Financing Summary....................................................................................................4
2.1 Registered Name and Corporate Structure...................................................................................4
2.2 Required Funds...............................................................................................................................4
2.3 Investor Equity................................................................................................................................5
2.4 Management Equity........................................................................................................................5
2.5 Exit Strategy....................................................................................................................................5
3.0 Products and Services.........................................................................................................................6
3.1 Automotive Repair Services............................................................................................................6
4.0 Strategic and Market Analysis...........................................................................................................7
4.1 Economic Outlook...........................................................................................................................7
4.2 Industry Analysis.............................................................................................................................7
4.3 Customer Profile..............................................................................................................................8
4.4 Competitive Analysis.......................................................................................................................8
5.0 Marketing Plan....................................................................................................................................9
5.1 Marketing Objectives......................................................................................................................9
5.2 Marketing Strategies.......................................................................................................................9
5.3 Pricing..............................................................................................................................................9
6.0 Organizational Plan and Personnel Summary................................................................................10
6.1 Corporate Organization................................................................................................................10
6.2 Organizational Budget..................................................................................................................11

i
 6.3 Management Biographies..............................................................................................................11
7.0 Financial Plan....................................................................................................................................12
7.1 Underlying Assumptions...............................................................................................................12
7.2 Sensitivity Analysis........................................................................................................................12
7.3 Source of Funds.............................................................................................................................12
7.4 General Assumptions.................................................................................................................13
7.5 Profit and Loss Statements..............................................................................................................14
7.6 Cash Flow Analysis........................................................................................................................15
7.7 Balance Sheet.................................................................................................................................16
7.8 General Assumptions.....................................................................................................................17

List of Figures
Figure 1.1: Cash flow for the first 3 years.......................................................................................2
Figure 2.1: (a) Projected Startup Cost, (b) Distribution of Funds...................................................4
Figure 6.1: Shop management Structure.......................................................................................10
Figure 6.2: (a) Personnel Plan, (b) Personnel expenses distribution………………………….…11
Figure 7.1: (a) Profoma profit and Loss, (b) Sales, Operating Costs, Profit and forecast.............14

ii
Figure 7.2: (a) Profoma Cash flow analysis, (b) Proforma cash
flow…………………………….13

Figure 7.3: (a) Balance sheet, (b) Profoma Balance......................................................................16

List of Table

Table 7.1: Source of funds distribution.........................................................................................11

Table 7.2: General Assumptions....................................................................................................11

iii
1.1 Executive Summary

The purpose of this business plan is to raise 1,000,000/= for the starting up of an Automotive
Repair Shop while showcasing the expected financials and operations over the first three years.
The Automotive Repair Shop is a Dar es Salaam based Company that will provide automotive
repair services and part sales in its targeted market. The Automotive Repair Shop will be located
at Muhonda St, Kariakoo Market Place in Dar Es Salaam, Tanzania. Automotive Repair Shop
has centralized itself directly in position where most citizens and foreigners visit for their
shopping activities. We believe that this is critical to our initial success and long-term growth.
The Company is expected to start in earlier October 2020.

2.1 Business Description

2.1.1 Owners/Partners
Automotive Repair Shop is organized as a partnership among the two partners of Nelly and
Vance. Nelly will handle all administrative and managerial duties while Vance acts as a silent
partner.

2.1.2 The Business

iv
2.1.4 Products and Services

The Automotive Repair Shop will be engaged in the business of providing automobile repair and
other automotive services to the general public. The Company has the ability to service almost
any domestic or foreign automobile. The Company will generate revenues from both the sale of
mechanic labor and from after-market replacement automobile parts. Once I bring the business to
profitability, I intend to further expand the after-market auto parts revenue center and increase
the sports tuning services, which command higher premiums that standard automotive repair.
The third section of the business plan will further describe the services that will be offered by the
Automotive Repair Shop.

1.2 The Financing

I am seeking to raise 100,000,000/= as a bank loan. The interest rate and loan agreement are to
be discussed during negotiation. This business plan assumes that the business will receive a 10
year loan with a 10% fixed interest rate.

1.3 Mission Statement

The Automotive Repair Shop’s mission is to become the recognized leader in its targeted market
for car and truck repair services.

1.4 Management Team

The Company idea was founded by Jakwes Nguku. Mr. Nguku has more than 3 years of
experience in the automotive repair industry. Through this expertise, he will be able to bring the
operations of the business to profitability within its first year of operations.

1.5 Sales Forecasts

I expect a strong rate of growth at the start of operations. Below are the expected financials over
the next three years, all figures in Tshs.

v
 Figure 1.1: Cash flow for the first 3 years

1.6 Expansion Plan

As time progresses, Management will continually increase the scope of the business by
developing additional services that will increase the profitability of the business. This includes
greater development of after-market tuning and performance enhancing services which generate
a larger margin that standard automotive repair. I will also increase the marketing and
advertising budget of the business to increase the general repair revenues of the business.

vi
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure

Automotive Repair Shop will be registered as a corporation in Dar es Salaam City.

2.2 Required Funds

At this time, the Automotive Repair Shop requires 100,000/= Tshs. of debt funds. Below is a
breakdown of how these funds will be used:

vii
 Figure 2.1: (a) Projected Startup Cost, (b) Distribution of Funds

2.3 Investor Equity

I am now seeking an investment from a third party at this time.

2.4 Management Equity

I, Jakwes Nguku will own 100% of the Automotive Repair Shop.

2.5 Exit Strategy

If the business is very successful, I may seek to sell the business to a third party for a significant
earnings multiple. Most likely, the Company will hire a qualified business broker to sell the
business on behalf of the Automotive Repair Shop. Based on historical numbers, the business
could fetch a sales premium of up to 4 times earnings.

viii
3.0 Products and Services

Below is a description of the automotive services offered by the Automotive Repair Shop.

3.1 Automotive Repair Services

The primary service offered by the Company is the general repair of automobiles for the general
public. The Company will have the ability to service most domestic and foreign automobiles. I
will maintain an extensive shop which can fix any automotive issue. The business generates
income from both the sale of the mechanic’s labor and the sale of after-market parts which may
be needed for the repairs.

ix
  

4.0 Strategic and Market Analysis

4.1 Economic Outlook

This section of the analysis will detail the economic climate, the automotive repair industry, the
customer profile, and the competition that the business will face as it progresses through its
business operations. Currently, the economic market condition in the United Republic of
Tanzania is in recession. This slowdown in the economy has also greatly impacted real estate
sales, which has halted to historical lows. Many economists expect that this recession will
continue until late July, at which point the economy will begin a prolonged recovery period as
the budget of new government will be already announced. However, automotive repair shops
operate with great economic stability as vehicles are necessity and very few people have the
ability to fix their own vehicles beyond very minor repairs. As such, the Automotive Repair
Shop will be able to maintain profitability despite the current economic climate.

x
4.2 Industry Analysis

About 10 Auto Repair companies in Dar es Salaam are involved primarily in auto repair, with
combined annual revenue of 2.5 billion. Only 4 companies have revenue over 200 million,
including Mantrac Tanzania, Scania Tanzania, Tata Company and JCB. Some car repair work is
also provided by Fuel filling stations; new car dealerships; and branches of chain stores, like
Toyota and Mercedes Benz. Demand depends on the number of cars, how much they're driven,
and how complicated they are to fix. The profitability of individual companies depends on
volume, because many costs are fixed. Large companies are more likely to use expensive
diagnostic equipment efficiently and benefit from advertising, but the economies of scale aren't
large. The typical repair shop operates one location and has annual revenue between 250 million
Tshs. and 1 billion Tshs. Companies with higher revenue typically operate more than one
location. Revenue per location is lower for large repair chains, like Toyota, that typically provide
specialized but lower-skilled services like muffler and windshield replacement. About 60 percent
of industry revenue comes from mechanical repair and 40 percent from body shop work. Car
repair shops usually specialize in a particular field of repair because of the specialized
knowledge.

4.3 Customer Profile

For automotive service sales, Management anticipates that the market will be locally based.
Management anticipates that its expected service clientele will be a local, middle to upper middle
income earning male and females between the ages of 25 and 75. As a vast majority of adults in
this country own a vehicle, it is difficult to recognize the average customer of the Automotive
Repair Shop.

4.4 Competitive Analysis

This is one of the sections of the business plan that you must write completely on your own. The
key to writing a strong competitive analysis is that you do your research on the local
competition. Find out who your competitors are by searching online directories and searching in
your local Yellow Pages. If there are a number of competitors in the same industry (meaning that
it is not feasible to describe each one) then showcase the number of businesses that compete with

xi
you, and why your business will provide customers with service/products that are of better
quality or less expensive than your competition.

5.0 Marketing Plan

The Automotive Repair Shop intends to maintain an extensive marketing campaign that will
ensure maximum visibility for the business in its targeted market. Below is an overview of the
marketing strategies and objectives of the Automotive Repair Shop.

5.1 Marketing Objectives

 To develop an online presence by developing a website and placing the Company’s name
and contact information with online directories.
 To implement a local campaign with the Company’s targeted market via the use of flyers,
local newspaper advertisements, and word of mouth.

xii
5.2 Marketing Strategies

I intend to use a number of marketing strategies that will allow the Automotive Repair Shop to
easily target men and women within the target market. These strategies include traditional print
advertisements and ads placed on search engines on the Internet. Below is a description of how
the business intends to market its services to the general public. The Automotive Repair Shop
will also use an internet based strategy. This is very important as many people seeking local
services, such as automotive repair businesses, now the Internet to conduct their preliminary
searches. I will register the Automotive Repair Shop with online portals so that potential
customers can easily reach the business. The Company will maintain a sizable amount of print
and traditional advertising methods within local markets to promote the automotive repair
services that the Company is selling.

5.3 Pricing

In this section, describe the pricing of your services and products. You should provide as much
information as possible about your pricing as possible in this section. However, if you have
hundreds of items, condense your product list categorically. This section of the business plan
should not span more than 1 page.

xiii
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization

Figure 6.1: Shop management Structure

xiv
6.2 Organizational Budget

Figure 6.2: (a) Personnel Plan, (b) Personnel expenses distribution

6.3 Management Biographies

In this section of the business plan, you should write a two to four paragraph biography about
your work experience, your education, and your skill set. For each owner or key employee, you
should provide a brief biography in this section.

xv
7.0 Financial Plan
7.1 Underlying Assumptions

• The Automotive Repair Shop will have an annual revenue growth rate of 16% per year.

• The Owner will acquire 1,000,000 Tshs. of debt funds to develop the business.

• The loan will have a 2 year term with a 8% interest rate.

7.2 Sensitivity Analysis

The business’s revenues are only moderately sensitive to changes in the general economy.
Automotive repair services are an essential service, and many people lack the ability to fix their
cars on their own. As such, Management does not anticipate that negative changes in the overall
economic climate will impact the Company’s ability to generate revenues and maintain
profitability.

7.3 Source of Funds

Table 7.1: Source of funds distribution

xvi
7.4 General Assumptions
Table 7.2: General Assumptions

xvii
7.5 Profit and Loss Statements

Figure 7.1: (a) Profoma profit and Loss, (b) Sales, Operating Costs, Profit and forecast

xviii
7.6 Cash Flow Analysis

Figure 7.2: (a) Profoma Cash flow analysis, (b) Proforma cash flow

xix
7.7 Balance Sheet

Figure 7.3: (a) Balance sheet, (b) Profoma Balance.

xx
7.8 General Assumptions

xxi