Entrepreneurship – Auto Spare Parts Business Plan

Presented to Dr. /Ahmed Fouad

Team:

Ahmed Mohamed Samy Ahmed

Mahmoud Hafez

Essam Gamal

Ahmed Mokhtar

Ziyad Maher

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Table of Contents
Executive Summary.............................................................................................................4
Objectives......................................................................................................................4
Vision & Mission.................................................................................................................5
ASP Company Services.......................................................................................................6
Phase 1..............................................................................................................................6
Maintenance tracker and spare parts online store.........................................................6
Phase 2..............................................................................................................................6
Nearest service center appointment..............................................................................6
Phase 3..............................................................................................................................7
Door to door services, fix your cars in your own garages............................................7
Phase 4..............................................................................................................................7
ASP service center for car maintenance activities........................................................7
Form of Business Owner ship - Our Business Structure.....................................................8
Roles and Responsibilities..............................................................................................11
SWOT Analysis.................................................................................................................14
PEST Analysis...................................................................................................................15
Porter’s Five Forces analysis.............................................................................................16
Market Surveys & Interviews:...........................................................................................17
Survey Analysis..............................................................................................................18
Information Collection & Interviews:............................................................................22
MARKET ANALYSIS......................................................................................................23
 Market Trends.........................................................................................................23
 Target Market.........................................................................................................23
 Competitive Advantage..........................................................................................23
SALES AND MARKETING STRATEGY.......................................................................24
 Sources of Income..................................................................................................24
 Sales Forecast.........................................................................................................24
 Marketing Strategy and Sales Strategy...................................................................24

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 Startup Budget.............................................................................................................26
Sustainability and Expansion Strategy...........................................................................26
Appendix............................................................................................................................27

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Executive Summary

Auto Spare Parts (ASP) is an online website and mobile application will be used to track
car maintenance activities and recommend to the customer the required spare parts in the
next scheduled maintenance and sell these car spare parts at reasonable prices. ASP will
offer unprecedented customer attention. ASP will become the premier destination for
selling auto spare parts.

ASP will be participating in an exciting, growing market. Car spare parts have growth in
Egypt market in the last decade. A survey indicates that Egypt’s licensed vehicles
reached 50% of total populations.

ASP is founded on the idea “Don’t worry about your car” and maintaining satisfied
customers is essential to the financial health of the organization. Gaining the unsatisfied
customers is the first mission of our company. With this in mind, ASP will be working
hard and produce impressive services that will exceed customer's expectations. To gain
and maintain customers, to build up close and stable relationships with customers, and to
expand the market, ASP is going to offer auto spare parts products and monitoring the car
maintenance activity to customers through online website and application.

Products, Services, and Delivery

ASP will be offering an online store for car spare parts products as well as offering a
tracking application for cars maintenance activities along with a recommendation for best
prices and notification for next required spare parts. All of the popular name brands will
be offered in addition to an array of generic label parts.

ASP is an exciting opportunity that combines a customer-centric organization with an

explosive industry. Even for those who are not true participants, it is now "cool" to have
your car maintenance tracker available. An investment in ASP is a high growth,
reasonable risk opportunity.

Objectives

1. To make ASP the number one destination for the online purchase of car spare
parts supplies in Egypt.
2. To sell a substantial amount of product the first year.
3. To maintain a solid growth rate per year for the first five years.

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Vision & Mission

Vision

Our vision is to become one of the leading online car accessories and auto spare parts
stores in Egypt.

Mission

Our mission is to establish a genuine car accessories and auto spare parts online store
business that will make available a wide range of car accessories and auto spare parts
from top manufacturing brands at affordable prices.

ASP Company is dedicated to providing auto spare parts products that combine quality
performance with value pricing. We wish to establish a successful partnership with our
customers, our employees, and our sellers that respect the interests and goals of each
party.

Firstly, ASP will offer high-quality auto repair services with all kinds of auto parts.
Secondly, ASP will set up an impressive online website and mobile application system.
Lastly, ASP will build strong relationships with the sellers and customers.

Success will ultimately be measured by our customers choosing us because of their belief
in our ability to meet or exceed their expectations of price, service, and selection.

Keys to Success

- Be an active member of the auto community.

- Work with our customers on a personal level, as opposed to the "Don’t worry
about your car" slogan.
- Relationships with sellers, customers, and workshops.
- Online service which answers customers' questions, track car maintenance
whenever they have a problem with their cars and make them be able to order
auto spare parts online.
- Rapid delivery of major auto parts.
- Superior customer service and systematic operation.
- More advanced technology and more technical employees.

Objectives
1. To make ASP the number one destination for the purchase of auto spares parts in
Cairo and Alexandria.
2. To achieve an initial gross profit margin, increasing that by at least 1% per year
until reaching our final target.

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3. To sell a substantial amount of product the first year.
4. To maintain a solid growth rate per year for the first five years.

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ASP Company Services

ASP service mind map is shown below:

Phase 1

Maintenance tracker and spare parts online store

ASP Company will launch an e-commerce website to resell auto spare parts products to a
car owner.

The e-commerce business will be based on deals from different sellers to sell their
inventory on our website and pay a markup percentage per product type.

ASP will provide a car maintenance tracker for all the required car maintenance and also
provide reminder and notification for customer about their next car maintenance activity
and the expected payment amounts.

ASP allows their customers make appointment online. Lastly, our customers will be able
to check out the record of their automobiles online.

Phase 2

Nearest service center appointment

ASP will provide the nearest service center to the customer location and make an
appointment for them.

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Phase 3

Door to door services, fix your cars in your own garages

ASP will have a door to door service for premium customers to fix or implement simple
car maintenance activity onsite

Phase 4

ASP service center for car maintenance activities

ASP will start a new business unit to manage its own service garage to implement the car
maintenance to the customers.

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 High-level software requirements specifications (SRS) for CAR SPARE PARTS
mobile application and website.

 Application Features

1- The application/website will support (English /Arabic)

2- Application walkthrough that can be skipped
3- Text pronunciation if supported

 Main Features
4- Home
 News.
 Tips.
 Promotions
 Contact us
5- E-services
 Spare Parts
o Search
 Look up
 Text search
o Compare
o Discounts
 Maintenance tracking
o History
o Recommendations
 Expected payment
6- E-payments
 Credit Card.
 Cash on delivery
7- Contact us
 Contact us
 Feedback

8- Media Center
 Tips
 News
9- Notifications
10- Settings:
 Notifications settings
 App language
 App rate
 App share
 User Profile
 About

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Feature name: Home Feature #: 2
As a user I need to explore the home screen
 Some functions available only to logged-in users
 The following will be available in E-services part
o The latest 5 news about automotive industry in Egypt
 For each headline (headline – date-time – images)
 Visual differentiation for breakthroughs
 Ability to enter each headline details by clicking
 Ability to move to news page
o The latest 5 tips
 For each tip (headline – date-time – images)
 Ability to enter each tip details by clicking
 Ability to move to tips page
o Promotions
 Ability to see current deals.
 Ability to enter to a specific deal
o Contact us
 Contact ASP team via email or phone.
 Default app language is the current mobile language.

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Feature name: E-services Feature #: 2
As a user, I need to buy spare parts from internet and to be delivered to a specific place.
 Available to all users “log-in is not required”
 The following will be presented on the home screen
o Spare parts
 Look up for a specific part using registered cars in the user profile.
 Ability to see other best deals.
 Normal search via text or drop down lists.
 Ability to compare between similar items from different sellers.
 Explore deals.
o Maintenance tracker
 Exploring maintenance history (available only to logged-in users)
 Analyzing cars’ profile and provide maintenance recommendation
and expected cost.
o Promotions
 Ability to see current deals.
 Ability to enter to a specific deal
o Contact us
 Contact ASP team via email or phone.
 Default app language is the current mobile language.

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Business Structure (Form of Business Owner ship)

ASP intention is to build a high quality standard car accessories and auto spare parts
online store which sell Genuine Parts to our customers.

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.
In fact, a 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 six years.

In view of that, we have decided to hire qualified and competent hands to occupy the
following positions;

 Chief Executive Officer.

 Information Technologist Manager.
 Sales & Marketing Manager.
 Human Resources and Admin Manager
 Seller Manager.
 Accountant Manager
 Customer Services Agent

Roles and Responsibilities

Chief Executive Officer – CEO:

 Creating, communicating and implementing the organization’s vision, mission,

and overall direction (communicating values, strategies and objectives)
 Sign business deals, sign checks, and documents on behalf of the company
 Provide direction for the business
 Evaluates the success of the organization

Information Technologist Manager

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  Handle (administration and management) the organization e-commerce website
and mobile application services.
 Website and Mobile application bug fix.
 Manage logistics and supply chain software, Web servers, e-commerce software
and payment gateways integration
 Handles all technological and IT related duties

Accountant Manager

 Prepare financial reports, budget and financial statements.

 Financial forecasting and risks analysis
 Cash management and general ledger accounting.
 Develop and manage financial systems.
 Administer payrolls.
 Compliance with taxation legislation.
 Internal auditor for the organization.

Admin and HR Manager

 HR and administrative tasks.

 Maintain seller/suppliers stocks
 Evaluating new products.
 Update job knowledge by participating in educational opportunities and
maintaining personal networks.
 Recruitment and management of interview process
 Carrying out staff induction for new team members
 Responsible for training, evaluation, and assessment of employees
 Responsible for arranging travel, meetings, and appointments
 Oversees the smooth running of the daily business activities

Seller Manager

 Interfaces with third – party suppliers (sellers)

 Manage vendor relations, market visits, and the ongoing education and
development of the organizations’ buying teams
 Helps to ensure consistent quality of car spare parts products from different
manufacturers are sold at good and reasonable price.
 Responsible for notifying seller about orders.
 Responsible for managing the daily activities of the online store
 Ensures that proper records of car accessories and auto spare parts are kept and
the seller warehouse does not run out of products
 Controls car accessories and auto spare parts distribution and supply chain
inventory
 Supervises the workforce in the car accessories and auto spare parts sales floor

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Sales and Marketing Manager

 Manages external research and coordinates all the internal sources of information
to retain the organizations’ best customers and attract new ones
 Models demographic information and analyzes the volume of transactional data
generated by customer purchases
 Identify, prioritize and reach out to new partners and business opportunities
 Identifies development opportunities; 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 communicates with clients.
 Develop, execute and evaluate new plans for expanding increase sales.
 Document all customer contact and information.
 Represent the company in strategic meetings
 Help increase sales and growth for the company

Client Service Agent

 Ensures that all contacts with clients (e-mail, SMS or phone) provide 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 organization’s products,
promotional campaigns etc. to ensure accurate and helpful information is supplied
to customers when they make inquiries (answer customer queries regarding the
store and the merchandise)

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INDUSTRY ANALYSIS

SWOT Analysis

SWOT analysis is conducted for our business to be able to position our business to
maximize our strength, leverage on the opportunities that will be available to us, mitigate
our risks.

 Strength:
- Online store (our business will operate online store).
- Varieties of payment options.
- A wide range of car accessories and auto spare parts from different
manufacturing brands and for different vehicles.
- Our excellent customer service culture.
- Highly qualified staff.

 Weakness:
- A major weakness that may count against us is the fact that we are a new
car accessories and spare parts online store in Egypt

 Opportunities:
- The fact that we are going to be operating our car accessories and auto
spare parts in an online store provides us with unlimited opportunities to
sell our car accessories and auto spare parts to a large number of
individuals and corporate organizations.
- We know what our potential clients will be looking for when they visit our
online car accessories and auto spare parts store, we are well positioned to
take on the opportunities that will come our way.

 Threats:
- Economic downturn. It is a fact that economic downturn affects
purchasing power.
- Starting off new car accessories and auto spare part online store.
- Unfavorable government policies may also pose a threat to businesses.

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PEST Analysis

 Political:
- The government started to take a new action to avoid any fake products
especially vehicles spare parts to enter the market which supports us to
improve our product in the market.

 Economic:
- After currency devaluation from Nov 3 2016, the inflation increase by
almost 35% and hence affect in the economy overall by negative affect but
we expect that the current depression will be end or decrease by the
beginning of 2018

 Socio-Cultural:
- The rapid environment in our society and the young age population
majority has an impact on the importance and quality of easy and fast
service.

 Technological:
- Almost population are using smart mobile and spend almost time to
explore a different site which affects positively by increasing mobile
software application users.

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Porter’s Five Forces analysis

 Rivalry among existing competitors:

- ASP is the first kind of software provides original vehicles spare parts in
Egypt which provides us no competitors at the beginning of the
application.

 Power of Buyer:
- We will provide feedback on our software to fill by the buyer, to avoid
any negative feedback from buyers which sustain us in survival.

 Power of Suppliers:
- We will start to make many deals with a lot of suppliers to avoid any and
eliminate this aspect of power

 New entrants:
- We will not face this risk at least at the launching of our software but in
the long term we will be able to protect our business to transfer to the
phase 2

 Threat of substitutes:

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- We almost are the new creative ideas which difficult to substitute over the
short term

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Market Surveys & Interviews
This marketing research is intended to provide the following data for the new service
ASP new application Mobile. It gives information on:

1- The segment has potential to use our new service

2- The demographic of this segment related to age and Gender
3- If the segment use to buy online
4- If the segment started to use online data in their cat maintenance
5- The main destination for our segment to fix their car and the distance
6- The preferred way of payment” cash or credit” of our segment
7- The way of keeping schedule for their car maintenance

Tools

 The tool which we used in our marketing research is google forms and interviews
through both Facebook and WhatsApp groups by asking open ended question to
get direct feedback.

Unit

We prepared 19 open ended question to get response against all of them from the
segment

Size

We get response from 36 participants from WhatsApp and Facebook

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Survey Analysis

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Information Collection & Interviews:
After our survey done we get the following results as shown a above in graphs,

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 Most of our segment will be from 25 to 45 which represent more the 90%
 More than 60% from our survey willing to buy spare parts on line
 Most of the prefer to make care maintenance in the mechanic shop rather than
Agency
 Most of our survey prefer to ask more than shop for the price and on the same
time pay cash on delivery
 More than 80% want to record maintenance schedule for their car and on the
other hand want to know the closet car shop on line through our application which
provide us with competitive edge

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MARKET ANALYSIS

 Market Trends

Experts projected that in 2017, the demand for new automobiles increase and original
equipment manufacturers supply more components to industry operators.

The introduction of online store makes it easier for car accessories and auto spare parts
retailer to reach out to a larger market far beyond the areas where his physical store is
located.

 Target Market

The target market can’t be restricted to just a group of people, but all those who own cars
(male and female above 18 years).

In view of that, we have positioned our car accessories and auto spare parts store to be
online service to all car owners. We have conducted our market research and feasibility
studies.

 Competitive Advantage

In fact, we are going to play a partner role to resell car spare parts online from the
reseller and we are going to differentiate ourselves by being highly creative, customer
centric and proactive so we can survive in this industry.

Firstly, competitors do not have superior customer service and systematic operation.
Secondly, none of these competitors have a computerized system and a high quality
online service. Thirdly, none of these competitors have the technical superiority as ours.

We will ensure that we have a wide range of car accessories and auto spare parts from
leading resellers to be available in our online store. Our excellent customer service
culture, online store, maintenance tracker and various payment options will serve as a
competitive advantage for us.

Lastly, our employees will be well taken care of by giving a good working conditions and
commissions to freelance sales agents that we will recruit from time to time. 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

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SALES AND MARKETING STRATEGY

 Sources of Income

ASP Company is in both business to business and business to the customer by reselling a
wide range of car accessories and auto spare parts.

Our main source of income will be a markup fees and deals from the sellers to sell their
stock product on our website.

Another source of income will the advertising banners on the website and mobile
application, also from the advertising on Apple store and google store as per our mobile
application number of downloads.

 Sales Forecast

We will make sure the seller store is well stocked so that we will always attract
customer’s sales and that will surely translate to increase in revenue generation for the
business.

Below are the sales projections for ASP online Stores. It is based on the received
feedback from number sellers and depends mainly on the amount of marketing
promotions as it relates to startup car accessories and auto spare parts online stores:

o First Fiscal Year (cost of sales) -: 250,000 LE

o Second Fiscal Year(cost of sales)-: 450,000 LE

Please note that the above projection might vary depending on the marketing
promotions.

 Marketing Strategy and Sales Strategy

We conducted a thorough market survey and feasibility studies in order for us to be able
to penetrate the available market and become the preferred choice for customers. We
have detailed information and data that we were able to utilize to structure our business to
attract the number of customers we want to attract per time.

In summary, ASP Company will adopt the following sales and marketing approach to
win customers over:

 Ensure that we have many deals from different sellers for the same brand and that
we have a wide range of car accessories and auto spare parts from different brands
at all times.

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  Position banners at strategic places.
 Sending emails and SMS campaigns alongside our brochure to car owners, auto
repair, maintenance and servicing garages and transport companies.
 Create a loyalty plan that will enable us reward our regular customers.
 Engage on roadshows to create awareness for our car accessories and auto spare
parts online store.
 Leverage on the internet to promote our store
 Encourage the use of word of mouth marketing (referrals)

Advertising Strategy

Our publicity and advertising strategy is not only for winning customers over but to
effectively communicate our brand. Here are the platforms we intend leveraging on to
promote and advertise ASP Company online Store:

 Place adverts on community based newspapers, radio and TV stations

 Encourage the use of word of mouth publicity from our loyal customers
 Leverage on the internet and social media platforms like; YouTube, Instagram,
Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote
our business
 Distribute our fliers and handbills in target areas.
 Contact car owners, auto repair, maintenance and servicing garages by calling
them up and informing them of ASP online Store and the products we sell.

Pricing Strategy

Pricing is one of the key factors that gives leverage to car accessories and auto spare part
online store, it is normal for consumers to go to places (car accessories and auto spare
parts retail outlets) where they can get car accessories and auto spare parts at cheaper
price so we are going to seek best deals with big players in the car accessories and auto
spare parts stores industry to resell at best price.

We will ensure that the prices and quality of all the car accessories and auto spare parts
that are available in our store are competitive with what is obtainable amongst car
accessories and auto spare parts stores within our level.

 Payment Options

Different customers prefer different payment options as it suits them.

o Payment with cash on delivery.

o Payment via credit cards. (Deal with National Bank of Egypt with
integration fees 1000$)

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Startup Budget

These are the key areas where we will spend our start-up capital on:

- The cost for payment of rent for 12 months (5000 LE per month) – 40,000 LE.
- The cost for the purchase of office furniture and gadgets (Computers, Printers,
Telephone, TVs, Sound System, tables and chairs et al): 100,000 LE.
- The cost for website and mobile application development – 200,000 LE.
- The cost of launching a website: 5000 LE.
- The total fee for registering the business in Egypt – 5000 LE.
- Legal expenses for obtaining licenses and permits as well as accounting services
(Payment gateway software) – 25000 LE.
- Marketing promotion expenses (100K LE) and as well as flyer printing (500,000
flyers at 0.03 per copy) – 125,000 LE.
- Operational cost for the first 3 months (salaries of employees, payments of bills et
al) – 75,000 LE.

We would need an estimate of 570,000 LE to successfully set up our standard car

accessories and auto spare parts online store.

Generating Funds Capital

ASP Company is a private registered business that is LLC. Owned and financed by Five
Friends.

These are the areas we intend generating our start – up capital;

 Personal savings
 Soft loans from family members and friends
 Apply for loan from Bank

Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers, the capacity and
competence of the employees, investment strategy, and the business structure.

One of our major goals of starting ASP Company 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.

Finally, the 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 helping us build the business
of our dreams.

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Appendix

Sales Forecast Plan

Item Unit Year 1 Year 2
Annual Target Volume (Number of sold product) # of Sales 250,000 450,000
Average Customer Payments EGP 200 500.00
Total expected Sales EGP 50,000,000 225,000,000
Profit Margin (Average Markup fees) % 5.00% 5.00%
Total cash in flow from sales activities EGP 2,500,000 11,250,000
Cash in flow from Marketing campaigns EGP 0 100,000
Total accumulated cash in flows EGP 2,500,000 11,350,000

Budget Forecast Plan

Item Unit Year 1 Year 2
Annual Rent expenses EGP 40,000 100,000
Office furniture and gadgets EGP 100,000 200,000
Website and Mobile Application development and support EGP 200,000 400,000
Operational cost (salaries of employees 4 employees,
EGP 300,000 500,000
payments of bills) with average monthly salaries 5000 EGP
Yearly Website domain and related development
EGP 5,000 50,000
enhancement
E-Marketing Yearly expenses EGP 150,000 500,000
Sales staff salaries bounces (5 % From their annual related
EGP 312,500 562,500
accounts profit generation)
Payment gateway software and integration with National
EGP 1,270,000 2,270,000
Bank of Egypt (1000$ + 1% per transaction)
Cost of establishing a new company (LLC)
Beta2a darebia, segel togare, ro5set mozawlet elmehna, EGP 5,000 5,000
lawyer cost
Running legal service EGP 20,000 20,000
Total expenses for First year EGP 2,402,500 4,607,500
Income for first year before Tax EGP 97,500 6,742,500
Net income after tax (20%) EGP 78,000 5,731,125

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