Sample Business Plans -> Auto Parts Store
"Auto Parts Store" Business Plan:1.0 Executive Summary Business Ideas applicable for this business plan:
Wheels and Tires Hotel This business plan was originally published |
5.0 Strategy and Implementation SummaryOur strategy is based on serving the niche of entry-level racers well. This area is full of small race teams that can't get products or services from the major vendors who focus only on professional race teams. Also:
5.1 Marketing StrategyThe retail marketing strategy of Southeast Racing Parts centers on creating a corporate identity that clearly defines our market niche in terms that benefit our customer. Other specific strategies that will be used follow:
All marketing decisions with regard to specific media choices, frequency, size, and expenditures will be conducted on an on-going basis with careful considerations of returns generated. 5.1.1 Pricing StrategyOur customers are especially sensitive to value. We must ensure that our price and service are perceived to be a good value to the racers. However, in the nearly thirty years of experience that we have accumulated in the racing industry, one message rings true: someone can always beat you on price. Therefore, our pricing strategy is to be competitive within the various product categories, but not to rely on the selling price to overshadow the other advantages of doing business with our company. We will sell ourselves on the basis of a diverse line of quality products, that are readily available, reasonably priced, and backed up by our extraordinary customer service. The products will be checked prior to shipment and all promised shipping dates will be met. We will strive for a gross profit margin of 30%, increasing that to 33% by year four. 5.1.2 Promotion StrategyOur most important vehicle for sales promotion will be our catalog, which is discussed in part 3.3 of this plan. 5.1.3 Distribution StrategyOur customers will buy our products at our location. However, we anticipate a significant amount of mail order sales in order to meet or exceed our Sales Forecast. We will receive orders by mail, phone, or fax, process them immediately, and ship the goods via United Parcel Service. In the event we are out of an item or we don't stock it, many of our vendors have offered drop shipping as a service to us. This will allow us to keep our service at a high level, yet let us keep our inventory levels in check. In the future, electronic commerce with a secure website will be thoroughly investigated for feasibility. 5.2 Sales StrategyBecause Southeast Racing Parts is a new entity, we understand that we will have to prove our company's worth to racers in order to earn their respect and business. Most importantly, we need to sell our company, not necessarily the products. We will need to push our service and support capabilities. 5.2.1 Sales ForecastThe following table and related charts show our present sales forecast. We are projecting sales to grow at the rate of 30% for the next three years. Our seasonality, as shown in the chart, is a factor in the racing industry. We will tend to sell much better in the period January through June, while sales trail off in late summer and fall. Management feels these forecasts are highly attainable. Sales by Year
5.2.2 Sales Forecast DetailsWhen Performance Racing Industry completed its annual survey, the resulting figure for total number of racers was 385,000. Within the survey they also found that 150,000 of those were oval track racers. The survey also showed $1.5 billion in annual retail sales for all segments, with 48% of that total ($720 million) derived from the oval track segment. By dividing that number ($720 million) by the number of oval track racers (150,000), the average annual retail purchases of oval track racers equals $4,800. From our past experience, we believe that each customer we have would spend on average 25% of that figure ($1,200) with our company. Finally, by dividing our first year sales forecast ($350,000) by $1,200 (average annual customer purchases), it shows that we will need 292 customers to support the sales forecast numbers. We believe, by and large, that these are realistic and attainable numbers.5.3 Strategic AlliancesWe have the ability to build strong strategic alliances with many of our suppliers, some of which are listed below. (omitted to protect confidentiality). (omitted to protect confidentiality). (omitted to protect confidentiality). (omitted to protect confidentiality). (omitted to protect confidentiality). (omitted to protect confidentiality). (omitted to protect confidentiality). (omitted to protect confidentiality). (omitted to protect confidentiality). (omitted to protect confidentiality). (omitted to protect confidentiality). (omitted to protect confidentiality). The following two local warehouses will help us immensely in keeping our own inventory levels in check, while still giving our customers fast service: (omitted to protect confidentiality). (omitted to protect confidentiality). Approached properly, these vendors and many others will assist Southeast Racing Parts in becoming a force in the marketplace. |
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