Electronics Repair Business Plan

Abbey Electronic Services is a full-service electronic repair business in the Cherry Grove section of Montclair. The business is located in the Cherry Grove Shopping Center and has repair agreements with Harry’s Electronics and Olson’s Appliance Superstore. Abbey Electronic Services also provides authorized warranty service for selected manufacturers.

Aside from business clients, Abbey’s will offer electronic repairs to the general public, whether with or without warranty service. The residential community in Cherry Grove will be a strong customer base for the business.

Richard Abbey, the owner of Abbey Electronic Services, has 25 years of experience in consumer electronics repair and is a well-respected electronics instructor at the community college.

Abbey Electronic Services will have a staff of two electronics technicians in addition to Richard.

Mission

Abbey Electronic Services aims to provide high-quality electrical repair services with a focus on convenience and rapid service. The company utilizes computerized monitoring of all parts inventory to ensure that critical parts are always in stock. Additionally, Abbey Electronic Services has strong relationships with regional vendors for rapid parts delivery.

Keys to Success

Abbey Electronic Services’ keys to success include exceptional, expedient, and convenient electrical repair services, building a strong professional relationship with customers, and rapid order and delivery of electrical part items.

Company Summary

Abbey Electronic Services is a startup business managed by Richard Abbey. The business will capitalize on the growing need for reliable and convenient electrical repair services in the Cherry Grove area. Most of the funding for the business will come from a ten-year SBA loan.

Start-up Summary

Richard Abbey will invest personal funds, and the remaining financing will come from a ten-year Small Business Administration (SBA) loan.

Services

Abbey Electronic Services offers repair services for various electronic products, including washer/dryer, refrigerators, cooking ranges, televisions, DVD players/VCRs, and camcorders.

Market Analysis Summary

Abbey Electronic Services focuses on meeting the demand of the local resident customer base and service agreements with Harry’s Electronics and Olson’s Appliance Superstore. The company estimates that 60% of its revenues will come from these business customers. The remaining 40% will come from local walk-in traffic. The company aims to serve the local customer base as the core of its business.

Target Market Segment Strategy

Abbey Electronic Services positions itself as the local focus for electronic repairs in the Cherry Grove area. The area has experienced significant residential growth and currently has no established electronic repair service.

Strategy and Implementation Summary

Abbey Electronic Services aims to succeed by offering high-quality and convenient electronic repair service. The business understands that quality workmanship is key to customer satisfaction and referrals.

Competitive Edge

The competitive advantage of Abbey Electronic Services is its people. Richard Abbey, the owner, and the technicians have extensive experience in the electronic repair field and prioritize customer satisfaction.

Sales Forecast

Abbey Electronic Services projects sales of $235,000 in Year 1, $252,000 in Year 2, and $275,000 in Year 3.

Management Summary

Abbey Electronic Services has hired technicians John Williamson and Jim Logan to join the team. Both technicians have a history of exceptional workmanship and strong customer relations.

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Personnel Plan

The staff consists of Richard Abbey, John Williamson, and Jim Logan. Each technician is certified to perform repairs on specific products.

Financial Plan

The financial plan includes a break-even analysis and projected sales forecast.

Electronics Repair Business Plan Example

Break-even Analysis:

Monthly Revenue Break-even: $17,777

Assumptions:

– Average Percent Variable Cost: 4%

– Estimated Monthly Fixed Cost: $17,002

7.2 Projected Profit and Loss:

The table and chart below depict projected profit and loss for three years.

Electronics Repair Business Plan Example

Electronics Repair Business Plan Example

Electronics Repair Business Plan Example

Electronics Repair Business Plan Example

Pro Forma Profit and Loss:

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $235,000 $252,000 $275,000
Direct Cost of Sales $10,250 $11,700 $12,800
Other Production Expenses $0 $0 $0
Total Cost of Sales $10,250 $11,700 $12,800
Gross Margin $224,750 $240,300 $262,200
Gross Margin % 95.64% 95.36% 95.35%
Expenses
Payroll $144,000 $156,000 $174,000
Sales and Marketing and Other Expenses $7,400 $5,400 $5,400
Depreciation $2,220 $2,220 $2,220
Leased Equipment $14,400 $14,400 $14,400
Utilities $2,400 $2,400 $2,400
Insurance $0 $0 $0
Rent $12,000 $12,000 $12,000
Payroll Taxes $21,600 $23,400 $26,100
Other $0 $0 $0
Total Operating Expenses $204,020 $215,820 $236,520
Profit Before Interest and Taxes $20,730 $24,480 $25,680
EBITDA $22,950 $26,700 $27,900
Interest Expense $10,000 $10,000 $10,000
Taxes Incurred $3,219 $4,344 $4,704
Net Profit $7,511 $10,136 $10,976
Net Profit/Sales 3.20% 4.02% 3.99%

Projected Cash Flow:

The table and chart show the projected cash flow for three years.

Electronics Repair Business Plan Example

Pro Forma Cash Flow

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $235,000 $252,000 $275,000
Subtotal Cash from Operations $235,000 $252,000 $275,000
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $235,000 $252,000 $275,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $144,000 $156,000 $174,000
Bill Payments $74,582 $83,456 $87,462
Subtotal Spent on Operations $218,582 $239,456 $261,462
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $218,582 $239,456 $261,462
Net Cash Flow $16,418 $12,544 $13,538
Cash Balance $25,618 $38,162 $51,700

7.4 Projected Balance Sheet

The table shows the projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Cash $25,618 $38,162 $51,700
Other Current Assets $0 $0 $0
Total Current Assets $25,618 $38,162 $51,700
Long-term Assets
Long-term Assets $100,000 $100,000 $100,000
Accumulated Depreciation $2,220 $4,440 $6,660
Total Long-term Assets $97,780 $95,560 $93,340
Total Assets $123,398 $133,722 $145,040
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $6,687 $6,875 $7,217
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $6,687 $6,875 $7,217
Long-term Liabilities $100,000 $100,000 $100,000
Total Liabilities $106,687 $106,875 $107,217
Paid-in Capital $50,000 $50,000 $50,000
Retained Earnings ($40,800) ($33,289) ($23,153)
Earnings $7,511 $10,136 $10,976
Total Capital $16,711 $26,847 $37,823
Total Liabilities and Capital $123,398 $133,722 $145,040
Net Worth $16,711 $26,847 $37,823
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7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7622, Radio and Television Repair, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 7.23% 9.13% 6.10%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 27.50%
Total Current Assets 20.76% 28.54% 35.65% 76.90%
Long-term Assets 79.24% 71.46% 64.35% 23.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 5.42% 5.14% 4.98% 36.90%
Long-term Liabilities 81.04% 74.78% 68.95% 15.80%
Total Liabilities 86.46% 79.92% 73.92% 52.70%
Net Worth 13.54% 20.08% 26.08% 47.30%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 95.64% 95.36% 95.35% 0.00%
Selling, General & Administrative Expenses 92.44% 91.33% 92.26% 83.50%
Advertising Expenses 0.85% 0.00% 0.00% 0.50%
Profit Before Interest and Taxes 8.82%

General Assumptions:

– Month 1 to Month 12

– Current Interest Rate: 10.00%

– Long-term Interest Rate: 10.00%

– Tax Rate: 30.00%

– Other: 0

Pro Forma Profit and Loss:

– Month 1 to Month 12

– Sales: $13,000 to $20,000

– Direct Cost of Sales: $500 to $1,100

– Other Production Expenses: $0

– Total Cost of Sales: $500 to $1,100

– Gross Margin: $12,500 to $19,000

– Gross Margin %: 96.15% to 95.00%

– Expenses

– Payroll: $12,000

– Sales and Marketing and Other Expenses: $800 to $500

– Depreciation: $185

– Leased Equipment: $1,200

– Utilities: $200

– Insurance: $0

– Rent: $1,000

– Payroll Taxes: 15%, $1,800

– Other: $0

– Total Operating Expenses: $17,185 to $16,885

– Profit Before Interest and Taxes: ($4,685) to $2,115

– EBITDA: ($4,500) to $2,300

– Interest Expense: $833

– Taxes Incurred: ($1,655) to $384

– Net Profit: ($3,863) to $897

– Net Profit/Sales: -29.71% to 4.49%

Pro Forma Cash Flow

Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Sales $13,000 $16,000 $19,000 $20,000 $21,000 $22,000 $20,000 $20,000 $22,000 $21,000 $21,000 $20,000
Subtotal Cash from Operations $13,000 $16,000 $19,000 $20,000 $21,000 $22,000 $20,000 $20,000 $22,000 $21,000 $21,000 $20,000
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $13,000 $16,000 $19,000 $20,000 $21,000 $22,000 $20,000 $20,000 $22,000 $21,000 $21,000 $20,000
Cash Spending $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
Bill Payments $156 $4,710 $5,684 $6,735 $7,091 $7,053 $7,327 $6,883 $6,899 $7,360 $7,341 $7,343 $12,000
Subtotal Spent on Operations $12,156 $16,710 $17,684 $18,735 $19,091 $19,053 $19,327 $18,883 $18,899 $19,360 $19,341 $19,343
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $12,156 $16,710 $17,684 $18,735 $19,091 $19,053 $19,327 $18,883 $18,899 $19,360 $19,341 $19,343 $12,000
Net Cash Flow $844 ($710) $1,316 $1,265 $1,909 $2,947 $673 $1,117 $3,101 $1,640 $1,659 $657
Cash Balance $10,044 $9,334 $10,650 $11,915 $13,824 $16,771 $17,444 $18,561 $21,662 $23,302 $24,961 $25,618
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Pro Forma Balance Sheet

Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances
Current Assets
Cash $9,200 $10,044 $9,334 $10,650 $11,915 $13,824 $16,771 $17,444 $18,561 $21,662 $23,302 $24,961 $25,618
Other Current Assets $0
Total Current Assets $9,200 $10,044 $9,334 $10,650 $11,915 $13,824 $16,771 $17,444 $18,561 $21,662 $23,302 $24,961 $25,618
Long-term Assets
Long-term Assets $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
Accumulated Depreciation $0 $185 $370 $555 $740 $925 $1,110 $1,295 $1,480 $1,665 $1,850 $2,035 $2,220
Total Long-term Assets $100,000 $99,815 $99,630 $99,445 $99,260

Business Plan Outline

– Executive Summary

– Company Summary

– Services

– Market Analysis Summary

– Strategy and Implementation Summary

– Management Summary

– Financial Plan

– Appendix

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