Business Plan for an entreprenaur
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A Business Plan for Precision Auto Detailing
Chad Frank and Kyle Carson, both in their 20s, worked for one of the largest package delivery services in the world, but their jobs on the package-sorting line were just that-jobs. Chad and Kyle wanted more from their work than their current jobs could offer. That's what led them to buy a local auto detailing business, Precision Auto Detailing. They could work their regular shifts at the delivery service from 6 p.m. to 10 p.m. and could devote the early part of the day to running their own company. The partners invested just $6,000 in the detailing business, which bought them some tools and equipment (most of it rather old), a lease on a building in a high-traffic location, and a small base of established customers, some of whom were local car dealers.
Chad and Kyle kept both of the part-time employees the previous owner had hired and began making sales calls on other car dealers in the area to try to earn their business. Precision Auto Detailing offered pick-up and delivery of the cars they cleaned, and Kyle or Chad always inspected the cars before they were returned to their owners. Their strategy was to provide top quality service and convenience at a fair price. Precision's prices ranged from $100 for the basic detail job to $250 for the top-of-the-line specialty cleaning, which resembled an auto restoration job.
Within eight months, Precision's sales were growing rapidly due largely to the personal selling efforts of its new owners and to the quality of the work the company provided its customers. Chad and Kyle knew they needed to purchase some new detailing equipment, and after several customer inquiries, they were considering buying the equipment to offer a spray-on truck bed liner service. The bed-liner equipment would cost about $30,000 initially, but retail prices to customers for the service would start at $350 and go up, depending upon the size of the truck and the options selected. The business has been profitable since Chad and Kyle bought it, and the partners have been plowing almost all of the profits back into the company. Their retained earnings are just not yet enough to sustain the rapid growth the company is experiencing.
At a family gathering one day, Kyle talked with you about the business. "We need some money to finance our growth," Kyle said. "But we don't know where to go for it, or what we need to do to get it. We thought about going to a bank and requesting a loan, but we've never done anything like that before."
"Sounds like you need a business plan," you reply "No bank will make a loan to a small business without a solid business plan."
"A business plan?" asked Kyle. "What goes into a business plan for a company like ours? What would a banker want to see?"
"It's time to sing Happy Birthday." you say, "I'll send you an email with all the details."
Explain why Kyle and Chad need a business plan.
Prepare an outline of the elements you would recommend these two young entrepreneurs include in their business plan.
What do bankers, other lenders, or investors want to see in a business plan?
What advice would you offer Kyle and Chad when they are ready to present their business plan to a banker?
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Solution Summary
This explains the steps to formulate a business plan
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INTRODUCTION TO CASE
Chad Frank and Kyle Carson, both in their 20s, worked for one of the largest package delivery services in the world, work their regular shifts at the delivery service from 6 p.m. to 10 p.m. and could devote the early part of the day to running their own company.
Within eight months, Precision's sales were growing rapidly due largely to the personal selling efforts of its new owners and to the quality of the work the company provided its customers. The business has been profitable since Chad and Kyle bought it, and the partners have been plowing almost all of the profits back into the company. Their retained earnings are just not yet enough to sustain the rapid growth the company is experiencing.
Explain why Kyle and Chad need a business plan.
A business plan is a summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavor and implement activities necessary and sufficient for the venture to succeed. It is a written explanation of the company's business model.
Business plans are used internally for management and planning and are also used to convince outsiders such as banks or venture capitalists to invest money into a venture. We prepare a workable business plan to
 Determine where the company needs to go
 Forewarn of possible roadblocks along the way
 Formulate responses to contingencies
 Keep the business on track to reach its planned goals
Prepare an outline of the elements you would recommend these two young entrepreneurs include in their business plan.
Content of a business plan
A business plan can be seen as a collection of sub-plans including a marketing plan, financial plan, production plan, and human resource plan.
The business plan has many forms. There is however a format that is typical:
* Executive summary
o explains the basic business model
o gives rationale for the strategy
* Background
o gives short history of company (unless it is a new company)
o provides background details such as:
Age of company
Number of ...
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