business plan for car parts

Auto Spare Parts Shop Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Automotive Industry » Auto Parts Store

Are you about starting an auto spare parts shop? If YES, here is a complete sample auto spare parts shop business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting an auto spare parts shop. We also took it further by analyzing and drafting a sample auto spare parts shop marketing plan template backed up by actionable guerrilla marketing ideas for auto spare parts shops. So let’s proceed to the business planning section .

For as long as people still use automobile on our roads, the need for auto spare parts will continue to be in high demand. Auto spare parts business is no doubt a profitable business because the replacement of damaged or worn – out auto parts is compulsory if you want your vehicle to continue to be on the road and serve the purpose you bought it for.

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If you are in search for a business to start as an entrepreneur and you know you have a penchant for the automobile industry, then you should consider starting your own auto spare parts sale business.

Even though you don’t need a college degree to establish your own auto spare parts store, but you would need some form of informal training, you might have to work as an apprentice with someone who owns an auto spare parts store. It makes it easier for you to learn the ropes and how to manage your own auto spare parts stores.

It is important to point out that auto spare parts business is one of the businesses that can’t go out of fashion and this is simply because of the role it plays in the auto industry. Depending on the scale you want to start, the startup capital for this type of business can be considered to be moderate.

As a matter of fact, you can start your own auto spare parts store and then grow it big within a short period of time by reinvesting your profits back to the business. Here below is a sample auto spare parts stores business plan template that will help you successfully write yours with little or no stress;

A Sample Auto Spare Parts Shop Business Plan Template

1. industry overview.

The auto parts stores industry includes stores / shops that retail new and used automotive parts and accessories, repair automobiles and install automotive accessories.

Players in this industry can choose to operate a single store in just one location or chains of stores in several locations scattered all across the united states of America. As a matter of fact, auto stores can be found in all parts of the world as long as there are automobiles there.

IBIS World projected that the Auto Parts Stores industry is expected to grow slowly over the five years to 2016. They stated that per capita disposable income and corporate profit boosted the demand for auto parts. Furthermore, favorable car usage trends have led to growth in demand for industry products in the short term.

Nevertheless, advancements in motor vehicle technology have made it increasingly difficult for vehicle owners to repair and maintain vehicles without professional help. Going forward, the revenue generated by operators in the industry is expected to grow at the same pace as the previous period.

As the national level of per capita disposable income continues to rise, some consumers will increase their spending on maintaining and fixing their automobile hence the increase in demand for products and services from the Auto Stores industry

The Auto Parts Stores Industry is indeed a large industry and pretty much active in all the countries of the world. Statistics has it that in the United States of America alone, there are about 43,136 registered and licensed auto spare parts stores scattered all across the United States responsible for directly employing about 376,102 people and the industry rakes in a whooping sum of $56 billion annually.

The industry is projected to grow at 1.9 percent annual growth within 2011 and 2016. It is important to state that Advance Auto Parts, AutoZone Inc., Genuine Parts Company, and O’Reilly Automotive Inc. have the largest chunk of the available market share in the industry.

A close observation of the Auto Parts Stores industry shows that the industry has low barriers to entry. In the United States, the industry is subject to few restrictive regulations, and industry employees typically do not need to be trained formally to be able to carry out their duties.

The truth is that, the start – up capital for opening an auto parts stores especially when it involves establishing a standard auto parts stores with products from various automobile companies. But if you choose to start a spare part store like the average mom and pop business, then you would not have to stress yourself because you will only need minimal start – up capital to launch the business.

The tough part as it relates to start-up costs most likely are the need to establish a supply of auto parts from wholesalers or directly from auto parts manufacturing companies.

This is so because an auto parts business cannot be started without sourcing products for sale. Regardless of low barriers to entry, the competitive nature of the industry make it very difficult for new operators to break even within a short period of time in the industry.

Lastly, the auto spare parts industry is pretty much open for aspiring entrepreneurs to launch their business in the industry. One good thing about auto spare parts stores business is that the business can be opened in any part of the United States and if proper market survey and feasibility studies are conducted, then you can rule out profitability of the business.

2. Executive Summary

Freeway Auto Parts Stores is a standard and registered auto spares parts retail store business that will be located in one of the busiest streets in Charleston – South Carolina.

We have been able to lease a facility that is big enough (a 5 thousand square foot facility) to fit into the design of the kind of standard auto spare parts retail store that we intend launching and the facility is located around the largest residential estate in Charleston – South Carolina.

Freeway Auto Parts Stores will be involved in selling automotive parts and accessories, distributing automotive parts from different manufacturers (brands) from the United States and abroad and repairing automobiles. We are set to services a wide range of clientele in and around Charleston – South Carolina.

We are aware that there are several large and small chains of auto spare parts retail store outlets all around Charleston – South Carolina, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors.

We have an online – service option for our customers, and our outlet is well secured with various payments of options. Freeway Auto Parts Stores will ensure that all her customers are given first class treatment whenever they visit our auto parts retail store.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large the numbers of our customers’ base may grow to.

We will ensure that we get our customers involved in the selection of brands that will be in our store and also when making some business decisions. Freeways Auto Parts Stores will at all-time demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our customers ‘needs precisely and completely whenever they patronize our products. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our customers.

Freeway Auto Parts Stores®, LLC is a family business that is owned by Jerry Herbert Godsons and his immediate family members.

Herbert Godsons has a B.Sc. in Business Administration, with well over 5 years of experience in the Auto Parts Stores industry, working for some of the leading brand in the United States. Although the business is launching out with just one outlet in Charleston – South Carolina, but there is a plan to open other outlets all around major cities in the United States and Canada.

3. Our Products and Services

Freeway Auto Parts Stores is in the auto parts stores industry to service a wide range of clients and of course to make profits, which is why we will ensure we go all the way to make available a wide range of auto parts from top manufacturing brands in the United States and other countries of the world.

We will ensure that we do all that is permitted by the law of the United States to achieve our aim and ambition of starting the business. Our product and services offerings are listed below;

Selling automotive parts and accessories (critical parts (new), critical parts (used), maintenance parts, accessories and performance parts)
Distributing automotive parts
Repairing automobiles and installing automotive accessories

4. Our Mission and Vision Statement

Our vision is to become one of the leading brands in the auto parts stores industry in South Carolina and to establish a one stop auto parts retail store in Charleston – South Carolina and in other key cities in the United States of America and Canada.
Our mission is to establish a world – class auto parts retail store business that will make available a wide range of auto parts from top auto parts manufacturing brands at affordable prices to the residence of Charleston – South Carolina and other key cities in the United States of America and Canada where we intend opening of chains of auto parts retail stores and franchise.

Our Business Structure

Freeway Auto Parts Stores does not intend to start an auto parts retail store business like the usual mom and pop business around the street corner; our intention of starting an auto parts retail store business is to build a standard and one stop auto parts retail store outlet in Charleston – South Carolina.

Although our auto parts retail store business might not be as big as Advance Auto Parts, AutoZone Inc., Genuine Parts Company, and O’Reilly Automotive Inc et al, but will ensure that we put the right structure in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

Chief Executive Officer (Owner)
Store Manager
Human Resources and Admin Manager

Merchandize Manager

Sales and Marketing Manager

Information Technologist

Accountants / Cashiers
Sales Agents / Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

Raises management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives.
Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
Accountable for fixing prices and signing business deals
In charge of providing direction for the busines
Responsible for signing checks and documents on behalf of the company
Appraises the success of the organization
Reports to the board

Admin and HR Manager

Responsible for overseeing the smooth running of HR and administrative tasks for the organization
Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
Informs job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
Explains job positions for recruitment and managing interviewing process
Carrying out staff induction for new team members
In authority of working out, evaluation and assessment of employees
Responsible for arranging travel, meetings and appointments
Supervises the smooth running of the daily office activities.

Store Manager:

In control of managing the daily activities in the store
Guarantees that proper records of auto parts are kept and warehouse does not run out of products
Ensures that the store facility is in tip top shape and goods are properly arranged and easy to locate
Interfaces with third – party suppliers (vendors)
Brings about vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
Helps to guarantee consistent quality of auto parts from different manufacturers are purchased and retailed in good price that will ensure we make good profit
Brings about external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
Model demographic information and analyze the volumes of transactional data generated by customer purchases
Recognizes, arranges, and stretches out to new partners, and business opportunities et al
Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
Accomplishes the organization website goals
Handles ecommerce aspect of the business
Responsible for installing and maintenance of computer software and hardware for the organization
Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
Manages the organization’s CCTV
Handles any other technological and IT related duties.

Accountant / Cashier:

Accountable for preparing financial reports, budgets, and financial statements for the organization
Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
Responsible for financial forecasting and risks analysis.
Performs cash management, general ledger accounting, and financial reporting
Responsible for developing and managing financial systems and policies
Responsible for administering payrolls
Ensures compliance with taxation legislation
Handles all financial transactions for the organization
Serves as internal auditor for the organization

Client Service Executive

Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries (answer customer queries regarding the store and the merchandise)
Find out the customer’s needs, recommend, select and help locate the right merchandise, describe a product’s features and benefits.
In control for cleaning all the goods and the store facility at all times
Ensure that toiletries and supplies don’t run out of stock
Cleans both the interior and exterior of the store facility
Handle any other duty as assigned by the store manager.

6. SWOT Analysis

Our intention of starting just one outlet of our auto parts retail store in Charleston – South Carolina is to test run the business for a period of 2 to 5 years to know if we will invest more money, expand the business and then open other outlets all over major towns in South Carolina and key cities in the United States and Canada.

We are quite aware that there are several auto parts retail stores all over Charleston and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Freeway Auto Parts Stores®, LLC employed the services of an expert HR and Business Analyst with bias in retailing to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Freeway Auto Parts Stores®, LLC;

Our location, the business model we will be operating on both (physical store and online store), varieties of payment options, wide range of auto parts from different manufacturing brands both from the United States and abroad and our excellent customer service culture will definitely count as a strong strength for Freeway Auto Parts Stores®, LLC. So also, our team of highly qualify staff members is also a plus for the business.

A major weakness that may count against us is the fact that we are a new auto parts retail store outlet in Charleston – South Carolina and we don’t have the financial capacity to compete with multi – million dollars’ auto parts retail store outlets like Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co when it comes to retailing at a rock bottom prices for all their auto parts.

Opportunities:

The fact that we are going to be operating our auto parts retail store close to one of the largest residential estates in Charleston – South Carolina provides us with unlimited opportunities to sell our auto parts to a large number of individuals, auto repair, services and maintenance garages and transport companies.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our auto parts store outlets; we are well positioned to take on the opportunities that will come our way.

Just like any other business, one of the major threats that we may face is economic downturn. It is a reality that economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of a new auto parts retail outlet in same location where ours is located. So also, unfavorable government policies may also pose a threat for businesses such as ours.

7. MARKET ANALYSIS

Market Trends

If you are conversant with the Auto Parts Stores Industry, you will quite agree that the changes in disposable income, consumer sentiment, and ever changing trends are major growth drivers for sales in this industry. No doubt, a massive rise in consumer confidence has also contributed in helping the industry experience remarkable growth, but uneven performance in these drivers has led to slightly constrained revenue growth for the industry.

So also, the rising demand for parts manufactured by a third-party manufacturing company, as a result of increasing disposable income and consumer sentiment, will result in revenue growth, but profit margins will stagnate as auto retail stores keep prices low to attract more sales amid growing competition.

Lastly, in recent time, the auto parts retail stores landscape has seen tremendous changes in the last 20 years; it has grown from the smaller outlets to a more organized and far reaching venture. The introduction of franchise and online store makes it easier for a retailer to reach out to a larger market far beyond the areas where his physical auto parts retail store is located.

8. Our Target Market

Perhaps it will be safe to submit that the auto parts retail stores industry has one of the largest ranges of customers; almost every automobile owner would have one reason or the other to purchase automobile parts and accessories.

In view of that, we have positioned our auto parts retail store to service the residence of Charleston – South Carolina and every other location where franchise cum outlets of our auto parts retail stores will be located all over key cities in the United States of America and Canada.

We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us. We are in business to retail a wide range of auto parts to the following groups of people and corporate organizations;

Auto repair, maintenance and servicing garages
Transport companies
Haulage companies

Our competitive advantage

A close study of the auto parts retail stores industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the stiffer competition and we are well prepared to compete favorably with other leading auto parts retail stores in Charleston – South Carolina and throughout the United States and Canada.

Freeway Auto Parts Stores®, LLC is launching a standard one stop auto parts retail store that will indeed become the preferred choice of residence / automobile owners of Charleston – South Carolina and every other location where our outlets will be opened.

Our auto parts retail store is located close to the largest residential estate in Charleston – South Carolina We have enough parking spaces that can accommodate well over 30 cars per time.

One thing is certain; we will ensure that we have a wide range of auto parts from leading auto parts manufacturers available in our store at all times. It will be difficult for customers to visit our auto parts retail store and not see the type of auto parts and accessories they are looking for.

One of our business goals is to make Freeway Auto Parts Stores®, LLC a one stop auto parts retail shop for automobile owners, auto repair, maintenance and servicing garages and transport companies. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups auto parts retail stores) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

Sources of Income

Freeway Auto Parts Stores®, LLC is in business to retail a wide range of auto parts to the residence of Charleston – South Carolina. We are in the auto parts retail stores industry to

10. Sales Forecast

One thing is certain when it comes to auto parts retail stores, if your store is well stocked with various types of auto parts and accessories and your store is centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Charleston – South Carolina and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base.

We have been able to critically examine the auto parts retail stores industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in Charleston – South Carolina.

Below are the sales projections for Freeway Auto Parts Stores®, LLC it is based on the location of our business and other factors as it relates to auto parts retail stores start – ups in the United States;

First Fiscal Year-: $250,000
Second Fiscal Year-: $450,000
Third Fiscal Year-: $750,000

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor retailing same sporting goods brands and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

Marketing Strategy and Sales Strategy

Before choosing a location for Freeway Auto Parts Stores®, LLC we conduct a thorough market survey and feasibility studies in order for us to be able to be able to penetrate the available market and become the preferred choice for residence of Charleston – South Carolina.

We have detailed information and data that we were able to utilize to structure our business to attract the numbers of customers we want to attract per time.

We hired experts who have good understanding of the auto parts retail stores industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Charleston – South Carolina.

In other to continue to be in business and grow, we must continue to sell the auto parts and accessories that are available in our store which is why we will go all out to empower or sales and marketing team to deliver. In summary, Freeway Auto Parts Stores®, LLC will adopt the following sales and marketing approach to win customers over;

Open our auto parts retail store in a grand style with a party for all
Introduce our auto parts retail store by sending introductory letters alongside our brochure to organizations, households, auto repair, maintenance and servicing garages, transport companies and other key stake holders in Charleston – South Carolina
Ensure that we have a wide range of auto parts and accessories from different brands at all times.
Make use of attractive handbills to create awareness and also to give direction to our auto parts retail store
Position our signage / flexi banners at strategic places around Charleston – South Carolina
Position our greeters to welcome and direct potential customers
Create a loyalty plan that will enable us reward our regular customers
Engage on road shows within our neighborhood to create awareness for our auto parts retail store.
List our business and products on yellow pages ads (local directories)
Leverage on the internet to promote our business
Engage in direct marketing and sales
Encourage the use of Word of mouth marketing (referrals)
Join local chambers of commerce and industries to network and market our products

11. Publicity and Advertising Strategy

Despite the fact that our auto parts retail store is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our auto parts retail store.

Freeway Auto Parts Stores®, LLC has a long-term plan of opening outlets in various locations all around South Carolina and key cities in the United States and Canada which is why we will deliberately build our brand to be well accepted in Charleston before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Freeway Auto Parts Stores;

Place adverts on community based newspapers, radio stations and TV stations.
Encourage the use of word of mouth publicity from our loyal customers
Ensure that our we position our banners and billboards in strategic positions all around Charleston – South Carolina
Distribute our fliers and handbills in target areas in and around our neighborhood
Contact corporate organizations, households, landlord associations and auto repair, maintenance and servicing garages by calling them up and informing them of Freeway Auto Parts Stores®, LLC and the products we sell
Advertise our auto parts retail store business in our official website and employ strategies that will help us pull traffic to the site
Brand all our official cars and trucks and ensure that all our staff members and management staff wears our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to auto parts retail stores, it is normal for consumers to go to places (auto parts retail outlets) where they can get auto parts and accessories at cheaper prices which is why big player in the auto parts stores industry like Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co will attract loads of corporate and individual clients.

We know we don’t have the capacity to compete with Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc. and co but we will ensure that the prices and quality of all the auto parts and accessories that are available in our store are competitive with what is obtainable amongst auto parts stores within our level.

Payment Options

The payment policy adopted by Freeway Auto Parts Store is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that Freeway Auto Parts Stores®, LLC will make available to her clients;

Payment via bank transfer
Payment with cash
Payment via credit cards / Point of Sale Machines (POS Machines)
Payment via online bank transfer
Payment via check
Payment via mobile money transfer
Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for the purchase of auto parts and accessories without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our products and services.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting / leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business. The materials and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked.

As for the detailed cost analysis for starting an auto parts retail store business; it might differ in other countries due to the value of their money. These are the key areas where we will spend our start – up capital on;

The total fee for registering the business in the Unites States of America – $750.
Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
Marketing promotion expenses for the grand opening of Freeway Auto Parts Stores®, LLC in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
The cost for hiring business consultant – $2,500.
Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
The cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
The cost for shop remodeling (construction of racks and shelves) – $20,000.
Other start-up expenses including stationery ($500) and phone and utility deposits ( $2,500 ).
Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
The cost for start-up inventory (stocking with a wide range of auto parts and accessories from different manufacturing brands) – $200,000
The cost for counter area equipment – $9,500
The cost for store equipment (cash register, security, ventilation, signage) – $13,750
The cost of purchase and installation of CCTVs: $10,000
The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
The cost of launching a website: $600
The cost for our opening party: $7,000
Miscellaneous: $10,000

We would need an estimate of five hundred thousand dollars ( $500,000 ) to successfully set up our auto parts retail store in Charleston – South Carolina. Please note that this amount includes the salaries of all the staff for the first month of operation.

Generating Funds / Startup Capital for Freeway Auto Parts Stores®, LLC

Freeway Auto Parts Stores®, LLC is a private registered business that is solely owned and financed by Herbert Godsons and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the start – up capital to 3 major sources. These are the areas we intend generating our start – up capital;

Generate part of the start – up capital from personal savings
Source for soft loans from family members and friends
Apply for loan from my Bank

N.B: We have been able to generate about $150,000 ( Personal savings $100,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $350,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Freeway Auto Parts Stores®, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to retail our wide range of quality auto parts and accessories a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Freeway Auto Parts Stores®, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

Business Name Availability Check: Completed
Business Registration: Completed
Opening of Corporate Bank Accounts: Completed
Securing Point of Sales (POS) Machines: Completed
Opening Mobile Money Accounts: Completed
Opening Online Payment Platforms: Completed
Application and Obtaining Tax Payer’s ID: In Progress
Application for business license and permit: Completed
Purchase of Insurance for the Business: Completed
Leasing of facility and remodeling the shop: In Progress
Conducting Feasibility Studies: Completed
Generating capital from family members: Completed
Applications for Loan from the bank: In Progress
Writing of Business Plan: Completed
Drafting of Employee’s Handbook: Completed
Drafting of Contract Documents and other relevant Legal Documents: In Progress
Design of The Company’s Logo: Completed
Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
Recruitment of employees: In Progress
Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
Creating Official Website for the Company: In Progress
Creating Awareness for the business both online and around the community: In Progress
Health and Safety and Fire Safety Arrangement (License): Secured
Opening party / launching party planning: In Progress
Compilation of our list of products that will be available in our store: Completed
Establishing business relationship with vendors – manufacturers and suppliers of auto parts and accessories: In Progress

How to Start a Profitable Auto Parts Business [11 Steps]

By Nick Cotter Updated Feb 05, 2024

Business Steps:

1. perform market analysis., 2. draft a auto parts business plan., 3. develop a auto parts brand., 4. formalize your business registration., 5. acquire necessary licenses and permits for auto parts., 6. open a business bank account and secure funding as needed., 7. set pricing for auto parts services., 8. acquire auto parts equipment and supplies., 9. obtain business insurance for auto parts, if required., 10. begin marketing your auto parts services., 11. expand your auto parts business..

Embarking on an auto parts business venture requires a thorough understanding of the market landscape. This vital step helps in identifying the current trends, customer needs, and competition. Here's how to perform a detailed market analysis:

Analyze the demand for auto parts in your targeted location by researching the number and types of vehicles in use, frequency of parts replacement, and common issues faced by vehicle owners.
Identify your potential customer base, including private car owners, local mechanics, auto repair shops, and fleet operators, to understand their specific needs and preferences.
Study your competition by examining other auto parts businesses in the area. Evaluate their product range, pricing strategies, customer service, and market share to identify gaps and opportunities.
Examine industry trends, such as the rise of electric vehicles, aftermarket modifications, and e-commerce platforms, to anticipate future market shifts and technological advancements.
Assess the availability of suppliers and manufacturers, considering factors such as quality of parts, cost, reliability, and delivery times to ensure a consistent supply chain.
Gather data on pricing strategies to establish competitive yet profitable pricing for your inventory.

Are auto parts businesses profitable?

Auto parts businesses can be profitable depending on a variety of factors, including the size of the business, the type of products and services offered, the local market conditions and competition, and the marketing strategies used. Additionally, efficient management practices, such as cost-control measures, inventory optimization and pricing strategies, are essential to ensure profitability.

Creating a business plan is a crucial step in establishing a successful auto parts business. It serves as a roadmap, outlining your business goals, strategies, and the methods you'll employ to overcome challenges and achieve success. Below is a step-by-step guide to help you draft a comprehensive business plan.

Executive Summary: Begin with a concise overview of your business, its mission, and the products you'll offer. Include your business objectives and a brief description of your target market.
Market Analysis: Research the auto parts industry to identify current trends, customer needs, and the competitive landscape. Define your target market's demographics and buying habits.
Organization and Management: Describe the structure of your business, including ownership, management team, and employee roles. Outline your recruitment and training strategies.
Products and Services: Detail the auto parts and services you plan to offer, their benefits, and how they stand out from competitors.
Marketing and Sales Strategy: Explain how you intend to attract and retain customers. Discuss your pricing, advertising, sales tactics, and distribution channels.
Financial Projections: Provide an estimate of startup costs, projected income, cash flow, and a break-even analysis. Include any funding requirements and potential sources of capital.
Appendix: Attach any additional documents that support your business plan, such as resumes, legal agreements, or detailed market studies.

How does a auto parts business make money?

An auto parts business makes money by selling a variety of car accessories and tools necessary for vehicle repair or improvement. The target audience for this type of business can be any person who is in possession of a vehicle or anyone that may need assistance with auto repairs. Customers can range from individuals who like to tinker on cars to auto mechanics in need of certain parts for jobs. In addition, customers may also include garages and body shops that need to keep up with trends in the automotive industry. For example, a target audience for an air duct cleaning business could be car owners who live in areas prone to dust and other airborne particles that quickly collect in air ducts.

Creating a strong auto parts brand involves distinct positioning and a clear value proposition that resonates with your target market. It's essential to differentiate your brand from competitors and establish a reputation for quality, reliability, and service. Here are some key steps to guide you in developing a robust auto parts brand:

Define your brand identity: Choose a brand name, logo, and slogan that clearly communicate what you stand for and appeal to your target audience.
Understand your customers: Conduct market research to identify the needs and preferences of your potential customers and tailor your branding to meet those expectations.
Highlight your USP: Determine your unique selling proposition (USP) and ensure that it is central to your branding and marketing efforts.
Build a strong online presence: Develop a professional website and engage on social media platforms to connect with customers and build brand recognition.
Quality and consistency: Ensure that every product you offer is of high quality and your branding is consistent across all channels and packaging.
Customer service: Offer exceptional customer service to create a positive brand experience that encourages loyalty and word-of-mouth referrals.

How to come up with a name for your auto parts business?

Brainstorming is a great way to come up with a name for your auto parts business. Start by creating a list of words that represent the type of goods you plan to offer, and then consider combining certain words in creative ways to form your business name. Think of names that are catchy and memorable, which can help people recall it easily and make your business stand out. Additionally, be sure to research potential names to ensure they aren't already in use by another business. With a little bit of thought and creativity, you can come up with an original and memorable name perfect for your auto parts business.

Formalizing your business registration is a critical step in establishing a legitimate auto parts business. It involves legalizing your company with the relevant authorities, which can vary depending on your location. Below, you'll find the key steps you should follow to ensure your business is properly registered and compliant with all necessary regulations.

Choose a business structure (e.g., sole proprietorship, partnership, LLC, corporation) that best suits your needs and obtain the necessary forms from your state's business filing office.
Register your business name with your state government, ensuring it is unique and not already in use. If you plan to operate under a trade name or "Doing Business As" (DBA), file for that as well.
Obtain an Employer Identification Number (EIN) from the IRS for tax purposes, which is necessary even if you don't have employees.
Apply for any specific licenses and permits required for an auto parts business, which might include a resale permit, a business operation license, and environmental permits.
File your business registration documents with your state's secretary of state or business agency along with the appropriate filing fee.
Keep records of your registration confirmations and any identification numbers as these will be crucial for future business activities, including banking and taxation.

Resources to help get you started:

Starting an auto parts business involves various legal considerations, including obtaining the right licenses and permits. These ensure your business operates within the law and meets industry standards. Here’s a guide to help you navigate through this critical step:

Research Local Requirements: Check with your city or county clerk's office for local business license requirements, as they vary by location and the type of products you'll be selling.
Obtain a Business License: Apply for a general business license, which is necessary to legally operate your business in most municipalities.
Specialty Permits: Depending on what auto parts you sell, you may need specific permits, such as those for selling hazardous materials (e.g., batteries, chemicals).
Sales Tax License: Register for a sales tax license to legally collect sales tax on transactions in states where it applies.
Zoning and Land Use Permits: Ensure your business location complies with local zoning laws, which may require additional permits if you're also performing installations or repairs.
Environmental Licenses: You may need environmental licenses or permits if your business involves recycling parts or disposing of automotive fluids.
Employer Identification Number (EIN): Although not a permit or license, obtaining an EIN from the IRS is essential for tax purposes, especially if you plan to hire employees.

What licenses and permits are needed to run a auto parts business?

The exact licenses and permits required to run an auto parts business depend on the location, as requirements vary from state to state. Generally, businesses are required to register with the Secretary of State, obtain an Employer Identification Number (EIN) through the Internal Revenue Service (IRS), obtain a local business license, and for certain types of businesses, obtain a Federal Tax ID. Additionally, many states and cities require additional permits or licenses. For example, some states require companies that work with hazardous materials to obtain specific permits.

Starting an auto parts business requires careful financial management, which begins with opening a business bank account and securing the necessary funding. A dedicated business account will help you manage cash flow, expenses, and revenues effectively. Here's how to proceed:

Choose the right bank: Research banks to find one that offers favorable terms for business accounts, including low fees, convenient services, and good customer support.
Prepare your documents: You'll need your business registration details, EIN (Employer Identification Number), ownership agreements, and possibly a business plan when opening an account.
Explore funding options: Determine how much capital you need and consider various sources such as business loans, lines of credit, investors, or crowdfunding platforms.
Understand the terms: Carefully review the terms and conditions of any funding you pursue, paying close attention to interest rates, repayment schedules, and any potential equity loss.
Build relationships: Establish connections with financial advisors and lenders early on to help navigate financial challenges and opportunities as your business grows.

When setting pricing for auto parts services, it's crucial to strike a balance between being competitive and maintaining a profitable margin. Consider the value you provide, market rates, and your business costs. Here are some guidelines to help you establish your pricing strategy:

Analyze the competition to understand the going rates for similar auto parts and services in your area.
Factor in your costs, including procurement, labor, overhead, and desired profit margin, to ensure sustainability.
Consider offering tiered pricing for different levels of service or product quality to cater to a wider range of customers.
Be transparent with your pricing to build trust with customers; hidden fees can damage your reputation.
Regularly review and adjust your prices based on market changes, supplier costs, and your business performance.
Don't undervalue your services; be confident in the quality you provide and set prices that reflect that value.
Implement strategic discounts or promotions to attract new customers and retain existing ones without undermining your pricing integrity.

What does it cost to start a auto parts business?

Initiating a auto parts business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $95000 for launching such an business. Please note, not all of these costs may be necessary to start up your auto parts business.

Starting an auto parts business requires careful selection of high-quality equipment and supplies to meet the needs of your customers. It's essential to source durable and reliable products that provide value for money. Here are some key steps to consider when acquiring the necessary equipment and supplies:

Research suppliers: Look for reputable manufacturers and wholesalers who offer competitive prices and good customer service. Check reviews and ask for recommendations from other auto parts businesses.
Inventory Management: Invest in a robust inventory management system that can track stock levels, reorder parts, and manage suppliers.
Quality Assurance: Prioritize quality over cost-saving when it comes to parts that are critical for safety or performance. Consider offering warranties or guarantees to instill customer trust.
Bulk Purchasing: Consider buying in bulk to save money, but balance this with the need to manage inventory and cash flow effectively.
Tools and Equipment: Acquire the necessary tools for handling and testing auto parts, such as diagnostic machines, part cleaners, and storage systems.
Shipping and Handling: Set up accounts with reliable shipping companies and invest in materials for safe packaging and dispatching of auto parts.
Legal Compliance: Ensure that all the equipment and supplies meet industry standards and legal regulations to avoid penalties or liability issues.

List of software, tools and supplies needed to start a auto parts business:

Automotive Parts Counter Software: $799 - $3,000
Computer/Laptop: $200 - $1,000
Barcode Scanner: $50 - $250
Point-of-Sale System: $800 - $1,500
Inventory Management System: $600 - $2,200
Retail Accounting Software: $99 - $600
Telephone System: $100 - $500
Safe for Cash/Credit Cards: $100 – 300
Office Supplies & Manuscripts Linked to Transactions (Receipt Paper & Printer): $50 - $300 < li >< b >Workstation/Desk and Chair Setup : $150 – 500

Securing the right insurance is an essential step in protecting your auto parts business from potential risks and liabilities. It provides financial coverage for various unforeseen circumstances that could otherwise have a significant impact on your business operations. Below is a guideline to help you obtain the necessary business insurance:

Assess your risks: Identify the types of risks your business may face, such as property damage, theft, or liability for customer injuries.
Research insurance providers: Look for reputable insurance companies or brokers that specialize in commercial insurance, particularly those with experience in the automotive industry.
Understand policy options: Familiarize yourself with different types of insurance policies, including general liability, property insurance, workers' compensation, and product liability insurance.
Compare quotes: Obtain quotes from multiple insurers to compare coverage options and premiums. Make sure to understand what is and isn't covered under each policy.
Consider additional coverage: Depending on your specific business needs, you may require additional coverage such as business interruption insurance or commercial auto insurance.
Review and purchase: Carefully review policy details and choose the insurance that best suits your business needs. Keep all documentation for future reference.
Stay compliant: Ensure your insurance meets any legal requirements in your area and renew policies as needed to maintain continuous coverage.

Marketing your auto parts services is crucial for attracting customers and establishing a foothold in the competitive automotive market. A well-rounded marketing strategy involves both online and offline methods to reach a broad audience. Here are some effective ways to begin marketing your auto parts business:

Develop a Strong Online Presence: Create a professional website and engage with customers on social media platforms. Use search engine optimization (SEO) to improve your website's visibility in search results.
Offer Promotions: Launch promotions, discounts, and loyalty programs to encourage first-time buyers and reward repeat customers.
Networking: Attend automotive industry events, trade shows, and local car meets to network with potential clients and business partners.
Partnerships: Collaborate with auto repair shops, dealerships, and car clubs to offer exclusive deals and increase referral traffic.
Local Advertising: Utilize local newspapers, radio stations, and billboards to reach potential customers in your area.
Email Marketing: Collect emails from interested visitors and send them newsletters, product updates, and personalized offers.

Once you've established a solid foundation for your auto parts business, it's time to consider expansion to meet the growing needs of your customer base and stay ahead of the competition. Expanding your business requires strategic planning and execution. Here are some key steps to guide you through this exciting phase:

Diversify Your Inventory: Broaden your range of auto parts to cater to a wider variety of vehicles, including both common and niche markets.
Explore Online Sales: Set up an e-commerce platform to reach a larger audience and offer convenience to your customers.
Open Additional Locations: If demand justifies it, consider opening new stores in strategic locations to tap into new markets.
Offer Franchising Opportunities: Franchising can be an effective way to grow your business with reduced direct management responsibilities.
Strengthen B2B Relationships: Forge partnerships with repair shops, dealerships, and fleet operators to secure bulk sales and recurring business.
Enhance Customer Service: Invest in staff training and technology to provide exceptional service, encouraging repeat business and referrals.
Participate in Trade Shows: Attend or exhibit at automotive trade shows to network, learn about industry trends, and promote your business.

Auto Parts Store Business Plan Template (Download)

the business plan for an auto parts store

$ 99 Original price was: $99. $ 79 Current price is: $79.

Fully editable 30+ slides Powerpoint presentation business plan template.

30+ slides already completed
Updated market research (2024)
Suitable for a business loan
75hrs of work put into this document
Fully editable
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Description OF THE BUSINESS PLAN

This ready-made business plan template is designed specifically for auto parts stores, whether you’re opening a brick-and-mortar store, an online auto parts business, or a hybrid model.

It comes pre-written with all the necessary sections, including a comprehensive business overview, operations plan, and updated market research with 2024 data. Simply adjust the areas marked with [brackets] to fine-tune the plan with your specific auto parts store details, making it quick and easy to customize.

Features of the Auto Parts Store Business Plan Template

Pre-Written and Customizable: The business plan is fully written, covering all essential aspects of starting and managing a successful auto parts store. Simply modify the [bracketed sections] to reflect your unique services, target market, and financial goals.

Complete Business Overview: Present a clear and professional business overview, including your mission, vision, target market, and value proposition. This section is pre-written and ready for you to add in your specific auto parts store details.

Operations and Management Plan: Outlines how you will manage daily store operations, including inventory management, supplier relationships, staffing, and customer service. Customize this section to fit the format of your business, whether focusing on retail, wholesale, or online sales.

Updated Market Research (2024 Data): This section provides a comprehensive analysis of the auto parts store industry landscape:

Key Stats : Industry size, growth trends, and relevant data for the auto parts market.
Key Trends : Recent trends such as increased demand for aftermarket parts, online auto parts sales, and eco-friendly components.
Key Competitors : Overview of local competitors and how your store differentiates itself with product offerings, customer service, or pricing strategies.

Strategy Section: This section is fully completed and includes:

Sales & Marketing Plan : A strategy to attract customers, build partnerships with auto shops, and promote your auto parts store.
SWOT Analysis : A detailed look at your auto parts store’s strengths, weaknesses, opportunities, and threats.
Detailed Timeline : A timeline outlining key actions for the first 12 months of operation, ensuring smooth setup and growth.

Financial Projections and Revenue Model: The business plan includes dummy financial projections as an example, helping you understand potential profitability based on typical assumptions.

Please note that the business plan does not come with a detailed financial model. However, you can purchase and download the separate financial model template, which is explained further below on this product page.

How to Use the Auto Parts Store Business Plan Template

Download and Open : Purchase and download the template, then open it in Microsoft Word or Google Docs.
Customize with Your Details : Modify the [bracketed sections] with your specific business information, such as inventory, market research, and financial data.
Complete Financial Tables : Use the example financial projections as a guide or integrate your own numbers with the optional financial model, which can be purchased separately.
Finalize Your Plan : Review and fine-tune the content to create a polished business plan ready for investors or guiding your store’s operations.

What's inside

This template is already completed and include everything you need in a business plan:

Executive summary
Business overview
Market research
SWOT analysis
Competitive landscape
Management team
Sales & marketing plan

The business plan shown here is an example from the Cryotherapy business plan template.

FULLY EDITABLE & EASY TO CUSTOMIZE

Name of the business
Square footage of the facility
Services and prices
Revenue projections

BUSINESS PLAn

30+ slides presentation
Use with Powerpoint or Google Slides

FINANCIAL MODEL

5-year financial model spreadsheet
Use with Excel or Google Sheets

Auto Parts Store Financial Model | Excel Spreadsheet

It is a 30+ slides presentation in Powerpoint format that can be used to raise funds from investors or a bank for your business.

We built this template with everything you need in a business plan so you save time preparing your own.

Download the template and customise it as you please by adding your own business information (name of your business, location, etc.).

The template has 30+ slides that include all you need to raise funds from investors or to obtain a loan from a bank:

Market overview
Sales & marketing plan
Strategy & timeline
Financial plan

All our business plan templates can either be used with Powerpoint or Google Slides, Google Slides being a free version of Powerpoint.

It is a one-time fee. By purchasing this template you can download it to your computer and use it for as long as you need to.

Yes you can! It’s actually recommended to customize the template.

We recommend you to change the photos, add your business information to make it truly yours.

Yes it is. All investors and lenders will require a business plan along with a financial plan in Excel format.

This business plan template also include a financial plan yet please note this is an example. To edit the financial plan (for example to customize your revenue projections), purchase the corresponding financial model template available on this same product page.

The short answer is no. Since these templates are digital products, it is impossible for us to retrieve the template once you have downloaded at least once on your computer.

Note that we offer a free business plan example that can be downloaded before purchase. This allows you to have a look at the structure and the level of information we include in all our business plans.

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That being said, if you are unhappy with your purchase, we will always do our best to make it work for you, either by: offering another template for free, helping you to use and/or customize your plan so that it works for you.

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