Environmental Engines Toyota Honda GM is a car dealership that focuses on energy efficient, environmentally friendly vehicles. Led by Jack Anderson, mechanical engineer and environmental expert, along with Jim Handy, public relations consultant, and Frank Lee Good, environmental and corporate attorney, our goal is to become the top player in the auto sales industry. We invite everyone to join us on this exciting journey.
Our target audience includes early adopters who see themselves as "energy pioneers," the younger generation, and environmentalists. These groups have high growth potential, especially the younger generation. We have an advantage in specializing in zero emissions vehicles and have partnered with all major auto manufacturers. Our dealership stands out as the best alternative to fossil fuel burning transportation systems. As visibility of our vehicles increases, sales among environmentalists and the younger generation will rise by 50% each month.
To finance our overhead costs, we will initially reinvest profits into the business. This includes purchasing inventory, expanding our photovoltaic recharging station and mechanic’s garage, and repaying initial investments. Inventory will be stocked in advance to fill our showroom and provide zero emissions vehicles for our staff. By word-of-mouth, their savings from driving a zero emissions vehicle will attract more customers and contribute to future growth at a 50% rate.
Our projected financials demonstrate the promising nature of this opportunity. With expected monthly sales growth of 50%, starting from a small base, we anticipate a healthy gross margin in the first year, rising in the second, and ultimately achieving strong net profits in years two and three.
Not only will our success lead to a cleaner environment, but it also positions us for potential market dominance. The profits generated can be reinvested in research and development, allowing Environmental Engines Toyota Honda GM to become a patent holding company and clearing house in the secondary market.
In conclusion, our car dealership is dedicated to providing energy efficient, environmentally friendly vehicles. We believe in the potential of this market and invite everyone to be a part of our journey.
The keys to success for Environmental Engines Toyota Honda GM are marketing, product quality, and management.
The objectives for Environmental Engines Toyota Honda GM during the first three years of operation include: creating a car dealership with a respectable gross margin in environmentally-friendlier automobiles, developing a discerning and informed consumer base in new automobile buyers throughout the surrounding metropolis, achieving 1,000 unit sales of environmentally-friendlier automobiles in year one, and stabilizing the fuel efficient automobile market by increasing the market share by 15% after three years.
The mission of Environmental Engines Toyota Honda GM is to provide early adopters and the younger generation within the Ann Arbor community with environmentally-friendlier automobile choices and to convert traditional new automobile buyers into conscientious consumers who are aware of external as well as internal costs associated with automobile transportation.
Environmental Engines Toyota Honda GM is an automobile dealership based in the Ann Arbor area, founded as a consumer-oriented and environmentally-friendly dealership. They differentiate themselves from less environmentally-concerned dealerships through consumer education.
Environmental Engines Toyota Honda GM’s start-up costs will include dealership construction, all equipment needed for the office, legal costs, consulting costs, website creation, and advertising. The inventory will be the largest chunk of start-up expenses, consisting of 10 hybrid and zero-emissions automobiles from Honda, Toyota, and GM. Construction costs will include a show room, three offices, fully-stocked mechanic’s garage, photovoltaic cells, car wash, and automobile lot. Office equipment will include three computers, a fax machine, copier, four cellular phones, office supplies, additional land line, a DSL connection, and office furniture. Advertising will be done through an interactive B-2-B website, the Yellow Pages, local newspapers, and direct marketing to local government, consumer-protection, and environmental organizations.
Start-up Expenses:
– Construction: $320,000
– Mechanic’s Equipment: $1,500
– Photovoltaic Cells: $125,000
– Legal: $500
– Stationery etc.: $100
– Brochures: $1,000
– Consultants: $1,000
– Insurance: $1,200
– Real Estate Purchase: $120,000
– Research and Development: $1,000
– Website creation: $1,500
– Office Equipment: $500
– DSL Installation: $150
– Advertising: $180,000
– Franchise Royalties: $60,000
– Total Start-up Expenses: $813,450
Start-up Assets:
– Cash Required: $3,610,050
– Start-up Inventory: $125,000
– Other Current Assets: $189,500
– Long-term Assets: $440,000
– Total Assets: $4,364,550
Total Requirements: $5,178,000
Company Ownership:
Environmental Engines Toyota Honda GM is a privately-held Michigan corporation. Jack Anderson, the founder, is the majority owner. Several members of the board of directors also hold minority stock positions. Two of these are also vendors of outside services: Jim Handy, a public relations consultant, and Frank Lee Good, an environmental and corporate attorney.
Products and Services:
Environmental Engines Toyota Honda GM believes that driving our zero emissions vehicles and hybrid automobiles will be the best way to get early-adopters, the younger generation, and environmentalists involved with cleaner transportation. Our showcase vehicle is the Toyota Prius, a four-door car that runs on both gasoline and electric power. It is known for its quiet operation and excellent mileage in stop-and-go city driving.
Market Analysis Summary:
Environmental Engines Toyota Honda GM’s customers can be divided into three groups: early-adopters, the younger generation, and cost-conscious new automobile buyers.
– Early-adopters: These customers are interested in being automobile pioneers and are typically automobile enthusiasts, engineers, hobbyists, mechanics, and scientists. They can be reached through advertising in relevant magazines and favorable consumer protection reports.
– The younger generation: This group is concerned about the environment and the effects of carbon-based fuel systems. They are likely to purchase zero emission automobiles for their future.
– Environmentalists: These customers prioritize environmental benefits and support zero emissions transportation systems. They can be reached through direct marketing campaigns to local conservation groups, outdoors athletic clubs, and environmentally-sensitive political parties.
Market Segmentation:
– Early-adopters: These customers are over 28 years old, have mechanical education or higher education, a mechanical or professional occupation earning over $50,000, and live in Ann Arbor or Detroit.
– The younger generation: These customers are urban youths between the ages of 14 and 27, athletically or academically active, come from upper-middle to upper-class homes, and need individual transportation.
– Environmentalists: These customers are over 21 years old, have higher education, a professional occupation earning over $50,000, and tend to buy organic and eco-friendly products. They can be reached through direct marketing to local conservation groups, outdoors athletic clubs, and environmentally-sensitive political parties.
Market Analysis:
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Early-adopters 15% 625 719 827 951 1,094 15.02%
The younger generation 100% 365 730 1,460 2,920 5,840 100.00%
Environmentalists 50% 100 150 225 338 507 50.06%
Total 61.64% 1,090 1,599 2,512 4,209 7,441 61.64%
4.2 Target Market Segment Strategy
Environmental Engines Toyota Honda GM will target early-adopters for four reasons:
1. Early-adopters seek out risks in purchasing alternative fuel automobiles for the status of being pioneers.
2. Favorable reviews by early-adopters lend credibility to zero-emissions vehicles as environmentally-friendly and economically preferable.
3. Advertising in magazines for automobile enthusiasts, engineers, hobbyists, mechanics, and scientists, and good ratings in consumer protection reports will access these customers.
4. The younger generation will be attracted to zero-emissions vehicles once they see early-adopters driving them.
Environmental Engines Toyota Honda GM will target the younger generation for three reasons:
1. The younger generation is not vested in perpetuating fossil-fuel-based transportation and economic systems and requires less marketing.
2. Converting the younger generation to non-fossil-fuel dependent transportation will achieve the company’s mission of a zero-emission transportation system.
3. Investing in the younger generation ensures exponential sales growth in the future.
Environmental Engines Toyota Honda GM will target environmentalists for two reasons:
1. Environmentalists accept the risks in purchasing alternative fuel automobiles for environmental benefits and future rewards.
2. Direct marketing to local conservation groups, outdoors athletic clubs, and environmentally-sensitive political parties will access these customers.
4.3 Service Business Analysis
The automobile industry is diversified into many sub-groups with high concentrations of capital. Services depend on word-of-mouth recommendations and product image. Zero-emission vehicle competitors are franchised and supportive of Environmental Engines Toyota Honda GM.
4.3.1 Competition and Buying Patterns
Customers choose vehicles based on self-image. Visibility, delivery, reliability, and features are critical. Materials must come from reliable sources to avoid fluctuations in wholesale and retail values. Customers choose based on brand name image and word-of-mouth, considering vehicle performance, image, and environmental impact.
Strategy and Implementation Summary
Environmental Engines Toyota Honda GM specializes in zero emissions vehicles and has franchised with all competing manufacturers. The company will grow with a small team of executives, salespersons, and one mechanic. Media strategy includes direct marketing and advertising in magazines. Sales prospects will be finalized in-person, through mail-order, over the phone, and online. Increased visibility will lead to a 50% monthly increase in sales among environmentalists and the younger generation.
5.1 Sales Strategy
The sales strategy focuses on serving customer needs and promoting the "energy pioneer" image, individual transportation, reducing dependence on fossil fuels, and minimizing the automobile’s impact on the environment. Sales prospects will be finalized through various channels, and salespeople will receive a two percent commission. They will be trained in web-based publishing and database management. Prices, delivery, and conditions of sale are negotiable within profitability limits.
5.1.1 Sales Forecast
Sales will start small among early-adopters and gradually increase as visibility grows among environmentalists and the younger generation. The industry is in its start-up stage, and sales will not reach saturation in the foreseeable future. The company will focus on the environmental benefits and rewards of zero emissions transportation systems if gasoline prices do not rise.
Sales Forecast
Toyota Prius $5,937,075 $7,124,490 $8,549,388
Toyota RAV4 $2,770,635 $3,324,762 $3,989,715
Honda $989,513 $1,187,415 $1,424,898
GM $0 $0 $0
Mechanic Labor $395,805 $474,966 $569,959
Total Sales $10,093,028 $12,111,634 $14,533,960
Direct Cost of Sales
Toyota Prius $4,749,660 $4,987,143 $5,984,572
Toyota RAV4 $2,216,508 $2,327,334 $2,792,800
Honda $791,610 $831,191 $997,429
GM $0 $0 $0
Mechanic Labor $316,644 $332,476 $398,971
Subtotal Direct Cost of Sales $8,074,422 $8,478,144 $10,173,772
5.2 Milestones
Environmental Engines Toyota Honda GM set 12 realistic milestones
for itself within the first year. Achievement of each of these
organizational and marketing milestones will build momentum
within the organization. The culmination of our first year in
the sale of 1,000 vehicles will feedback into our
mission statement and reaffirm the purpose and success
of Environmental Engines Toyota Honda GM.
Milestones
Milestone Start Date End Date Budget Manager Department
First Thousand Vehicles 1/1/2003 1/1/2004 $0 Jack Anderson Management
Sold
First Marketing Campaign 1/1/2003 1/15/2003 $1,000 Jim Handy Marketing
Publishing Website 1/15/2003 2/15/2003 $1,000 Jim Handy Web
Receive First Internet 2/15/2003 3/15/2003 $0 Sales Staff Web
Sale
Develop Employee Policies 1/1/2003 1/15/2003 $0 Frank Lee Good Legal
Service First Customer’s 1/1/2003 1/15/2003 $0 Mechanic Staff Mechanic
Vehicle
Refuel First Customer’s 1/1/2003 1/15/2003 $0 Jack Anderson Photovoltaics
Vehicle
First Consumer Protection 1/1/2003 3/15/2003 $0 Jack Anderson Management
Review
Second Marketing Campaign 2/15/2003 3/15/2003 $1,000 Jim Handy Marketing
Hire Sales and Mechanic 1/1/2003 1/15/2003 $0 Board of Directors Board of Directors
Totals $3,000
5.3 Marketing Strategy
Environmental Engines Toyota Honda GM’s media strategy
will focus on direct marketing to local conservation groups,
outdoors athletic clubs, and environmentally-sensitive political
parties, as well as advertising in magazines marketed to
automobile enthusiasts, engineers, hobbyists, mechanics and
scientists, and through good ratings in consumer protection reports.
Impact will grow from three executives (Jack Anderson, Jim Handy,
and Frank Lee Good) plus a small group of three sales persons
and one mechanic, all of who will bring their professional
expertise and avocational contacts to Environmental Engines Toyota
Honda GM and provide a solid foundation of connections for
future marketing ventures.
5.4 Competitive Edge
Environmental Engines Toyota Honda GM holds a competitive edge
by specializing in zero emissions vehicles and has franchised
with every auto manufacturer that could offer any competition.
Environmental Engines Toyota Honda GM will stand out as
the preferable alternative to fossil fuel burning transportation
systems. As visibility of our vehicles increases, sales among
environmentalists and the younger generation will increase by
50% each month thereafter. As word spreads, this rate of increase
will maintain steady for at least ten years amongst our target
market in the younger generation who will continue to grow and
develop over time.
Furthermore, our vehicles will readily attract new investment
because we introduce the concept of sustainability to individual
transportation systems by bringing fuel efficiency, economy of size,
and environmentally friendlier alternatives to the market.
As the central distribution point of environmentally friendlier
engines, Environmental Engines Toyota Honda GM will bring unparalleled
know-how and will also aim to serve as a clearing house for product
innovations and design patents.
Web Plan Summary
Environmental Engines Toyota Honda GM will host a site on
the World Wide Web to serve as an educational tool, offering
a menu of custom vehicle options to potential walk-in and
telephone customers and as a B-2-B ordering site for a few
very reliable purchasers, such as large corporations and
municipalities.
The menu of custom vehicle options will require as little
bandwidth as possible while providing as much photographic
and text detail as possible to the potential customer. These
potential customers will be the early-adopters who will
encounter the exciting prospect of being an energy-pioneer,
the younger generation surfing for the next cool look, and
the environmentalist in search of alternative transportation
options.
The B-2-B site will be accessible through an account number
and will allow large corporations and municipalities with
large bandwidth capacity to design large orders of vehicles
to facilitate customized mass production orders to be forwarded
on to Toyota, Honda and GM. Our B-2-B site can pivot off
of the success of Toyota’s, Honda’s and GM’s online ordering.
6.1 Website Marketing Strategy
Environmental Engines Toyota Honda GM will host a site
on the World Wide Web to serve as an educational tool,
offering a menu of custom vehicle options to potential
walk-in and telephone customers and as a B-2-B ordering
site for a few very reliable purchasers, such as large
corporations and municipalities.
6.2 Development Requirements
The menu of custom vehicle options will require as little
bandwidth as possible while providing as much photographic
and text detail as possible to the potential customer.
The B-2-B site will be accessible through an account number
and will allow large corporations and municipalities with
large bandwidth capacity to design large orders of vehicles
to facilitate customized mass production orders to be forwarded
on to Toyota, Honda and GM.
Management Summary
The founders and executive board of Environmental Engines
Toyota Honda GM include such industry leaders as Jack Anderson,
Jim Handy, and Frank Lee Good.
Jack Anderson, the majority owner, is renowned in both
scientific and environmentalist communities throughout
the nation. Jack Anderson earned two degrees from the
University of Michigan, the first in mechanical engineering,
the second in business. Though Jack Anderson excelled
academically, his sites were set even higher as president
of the University of Michigan Mountaineering Club. Through
his contacts in the mountaineering club Jack Anderson
also developed an interest in consumer protection and
environmentalism and served the Environmentalists For
Future Occupationally Responsible Technicians (EFFORT)
as treasurer. Through Jack’s activism in EFFORT, he met
Jim Handy and Frank Lee Good.
After college, Jack managed an Internet-based custom-ordering
automobile-hobbyist distribution company where he increased
overall product sales by over 50% in three years. During
this time, Jack also developed correspondence with columnists
at the New York Times, the Scientific American, and Consumer
Reports. In order to keep Jack as manager, the company
offered Jack a 10% interest in the company’s stock, motivating
Jack to increase the company’s value by 100% in the next
five years. Throughout Jack’s eight years of managerial
and ownership experience in auto sales, Jack has learned
the finer points in eclectic car sales and marketing as
well as the technical side of automobile engineering.
Jim Handy, public relations consultant, and Frank Lee Good,
environmental and corporate attorney, can lend their professional
services to the success of Environmental Engines Toyota Honda GM
and are also vendors of outside services through which they
may also lend clients and contacts for marketing purposes.
7.1 Personnel Plan
Jack Anderson will act as manager for the first three years
for a minimal salary of $36,000 in exchange for his commitment
of energy and know-how.
The executive staff will be compensated for their services
by a return of profits on their investment.
Three sales staff will work the sales floor for the first
year compensated solely by commissions earned on a 5% pay scale.
Two mechanics, specializing in alternative energy vehicles,
will be paid $3,200 monthly. The mechanics’ salaries will
steadily increase every year by 5% to reflect the increased
human capital acquired by the mechanics’ maintenance experience
with our vehicles and our photovoltaic cells.
The maintenance and secretarial staff will take care of
administrative matters and sales room decorum.
Personnel Plan
Jack Anderson $36,000 $36,000 $36,000
Frank Lee Good $0 $0 $0
Jim Handy $0 $0 $0
Sales Person 1 $12,480 $13,104 $13,759
Sales Person 2 $12,480 $13,104 $13,759
Sales Person 3 $12,480 $13,104 $13,759
Sales Person 4 $0 $12,480 $13,104
Sales Person 5 $0 $0 $12,480
Sales Person 6 $0 $0 $12,480
Mechanic 1 $38,400 $40,320 $42,336
Maintenance $12,480 $13,104 $13,759
Secretary $12,480 $13,104 $13,759
Mechanic 2 $38,400 $40,320 $42,336
Total Payroll $175,200 $194,640 $227,532
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