D.A.P. Exports exports automobile parts and auto lubricants to Jamaica, Venezuela, Columbia, and Ecuador. The company combines American-made products with foreign parts, repackaging and labeling them as necessary.

The auto part sales industry in Latin America and the Caribbean is currently worth $100 million. Most of the automobiles in these countries were manufactured in the 1980s, making it difficult to find replacement parts. Auto makers primarily focus on cars produced in the last ten years.

D.A.P. Exports has an extensive network of customer contacts in the region. James Dunn, the owner, has twenty years of experience selling consumer products in Latin America and the Caribbean. He has worked for Axiom Food Products, Klymor Manufacturing, and Dudley Food Products.

During his previous years in the region, James used taxi services and noticed the high demand for auto parts and lubricants. He also discovered the most effective distribution system for these products through local taxi companies.

D.A.P. Exports will partner with the region’s taxi companies to offer wholesale auto parts and lubricants. The taxi companies can use the parts to repair their vehicles or sell them directly to consumers. Additionally, D.A.P. Exports will sell auto parts to stores in the region.

Export Automobile Parts Business Plan Example

D.A.P. Exports has the following objectives:

– Achieve high sales revenues in the first year.

– Establish a customer base of 100 taxi companies in the region.

– Gradually increase sales in the second year.

The mission of D.A.P. Exports is to be the preferred auto parts provider for taxi companies in the region.

D.A.P. Exports exports automobile parts and auto lubricants to various countries, including Jamaica, Venezuela, Columbia, and Ecuador. The company combines American-made products with foreign parts, repackaging and labeling as needed.

The company is organized as a limited liability partnership.

D.A.P. Exports operates from an 8,000 square foot facility in Monroe, Florida, strategically located near South Florida’s transportation hub, ensuring cost control and efficient access to key markets.

The company is owned by James Dunn and a silent partner.

The start-up expenses for D.A.P. Exports mainly involve inventory and repackaging equipment. James Dunn will personally invest in the company, and additional funds will be contributed by the silent partner. Dunn will also secure a long-term loan.

Export Automobile Parts Business Plan Example

Start-up Requirements:

Legal: $10,000

Stationery etc.: $1,000

Brochures: $2,000

Insurance: $2,000

Rent: $2,000

Expensed Equipment: $50,000

Total Start-up Expenses: $67,000

Start-up Assets:

Cash Required: $83,000

Start-up Inventory: $100,000

Other Current Assets: $0

Long-term Assets: $0

Total Assets: $183,000

Total Requirements: $250,000

Start-up Funding:

Start-up Expenses to Fund: $67,000

Start-up Assets to Fund: $183,000

Total Funding Required: $250,000

Assets:

Non-cash Assets from Start-up: $100,000

Cash Requirements from Start-up: $83,000

Additional Cash Raised: $0

Cash Balance on Starting Date: $83,000

Total Assets: $183,000

Liabilities and Capital:

Liabilities:

Current Borrowing: $0

Long-term Liabilities: $100,000

Accounts Payable (Outstanding Bills): $0

Other Current Liabilities (interest-free): $0

Total Liabilities: $100,000

Capital:

Planned Investment:

James Dunn: $50,000

Silent Partner: $100,000

Additional Investment Requirement: $0

Total Planned Investment: $150,000

Loss at Start-up (Start-up Expenses): ($67,000)

Total Capital: $83,000

Total Capital and Liabilities: $183,000

Total Funding: $250,000

Products:

D.A.P. Exports offers the following products:

– Transmission parts

– Engine parts

– Electrical parts

– Engine lubricants

Market Analysis Summary:

The auto part sales industry in Latin America and the Caribbean is valued at $100 million. Most of the automobiles in these countries were manufactured in the 1980s, making it challenging to find replacement parts. Auto makers mainly focus on newer cars, leaving a limited supply of parts for older vehicles. The market is underserved, with few stores and high prices for auto parts. However, D.A.P. Exports aims to tap into this market by targeting taxi companies, in addition to traditional auto part stores. Taxi companies are the largest buyers of auto parts in the region, and D.A.P. Exports has established strong connections with them.

Market Segmentation:

D.A.P. Exports will primarily target the following customers:

– Taxi companies

– Auto part stores

Individuals may also purchase from D.A.P., but stores and taxi services are more attractive customers due to their repeat business, lower price sensitivity, and larger volume per order.

Export Automobile Parts Business Plan Example

Market Analysis:

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

Potential Customers Growth

Taxi Companies 10% 2,000 2,200 2,420 2,662 2,928 10.00%

Auto Part Stores 8% 4,000 4,320 4,666 5,039 5,442 8.00%

Total 8.68% 6,000 6,520 7,086 7,701 8,370 8.68%

4.2 Industry Analysis

Currently, the markets are too small to attract many competitors. The auto parts shops in the region are not expanding to meet the demand for parts for older cars. They are instead focusing on newer cars imported by wealthy individuals.

Utilizing taxi services as a distribution network and primary customers is an excellent strategy to capture market share in a segment currently ignored by bigger players.

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4.3 Target Market Segment Strategy

There are estimated to be over 25,000 vehicles in the region used by taxi services, and that number is growing.

Taxi firms are excellent target customers for D.A.P. Export products. First, they represent the largest buying block in our target countries. Additionally, there is no established channel for them to purchase parts for their cars at this time.

By buying directly from D.A.P. Export, taxi firms can reduce the cost of parts and receive exactly what they need quickly.

Although many taxi drivers work independently or for small companies, the informal network within this group is extensive. There is a lot of downtime in this business, where drivers are waiting for fares. They will chat with friends and colleagues about their cars and work. Word-of-mouth recommendations will benefit us.

4.4 Competition and Buying Patterns

Without much competition, the key to maintaining the customer base is to provide the right parts at a reasonable price, delivered quickly. As D.A.P. Exports meets customer demand in a timely manner, sales will grow. The company will be able to strengthen critical business relationships for when competition does emerge.

Strategy and Implementation Summary

D.A.P. Exports will offer a 15% discount on all purchases of $1,000 or more. We will also have two salespeople based in Latin America and the Caribbean. Our focus will be establishing a strong relationship with the region’s taxi services.

James has established export contacts in Latin America and the Caribbean, making the process of developing an export channel for car parts much easier. In these countries, much business is done through a handshake and word of mouth, rather than formal contracts. His experience and contacts will be invaluable in this environment.

5.1 Competitive Edge

The products D.A.P. is selling are made for older cars. The trend in this country is towards newer cars, so domestic demand for these parts is falling. James will be able to negotiate excellent prices on these products and order in bulk, further increasing his negotiating leverage.

Another competitive edge of D.A.P. Exports is the ability to assemble a product package that exactly fits a customer’s needs. When taxi services buy directly from D.A.P. Exports, they receive the highest quality product at the lowest price. Previously, car owners had to spend time shopping around for parts due to the lack of an organized, established channel. This resulted in their cars being off the road for longer periods, costing them more lost revenue.

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5.2 Sales Forecast

The following is the sales forecast for three years.

Export Automobile Parts Business Plan Example

Export Automobile Parts Business Plan Example

Sales Forecast:

Sales Forecast
Year 1 Year 2 Year 3
Sales
Auto Parts $410,000 $480,000 $550,000
Auto Lubricants $186,000 $230,000 $274,000
Other $0 $0 $0
Total Sales $596,000 $710,000 $824,000
Direct Cost of Sales Year 1 Year 2 Year 3
Auto Parts $200,000 $240,000 $275,000
Auto Lubricants $93,000 $115,000 $137,000
Other $0 $0 $0
Subtotal Direct Cost of Sales $293,000 $355,000 $412,000

5.3 Milestones

The accompanying chart and table provide important program milestones, with dates, managers in charge, and budgets. The milestone schedule emphasizes planning for implementation.

Export Automobile Parts Business Plan Example

Milestones:

Facility Set-up 5/1/2002 5/20/2002 $20,000 James Dunn Marketing
Inventory Set-up 5/1/2002 5/20/2002 $100,000 James Dunn Department
Marketing Campaign 5/1/2002 6/15/2002 $20,000 James Dunn Department
Totals $140,000

5.4 Marketing Strategy

In May and June, regional salespeople will deliver presentations to taxi firms and auto parts stores in the region. D.A.P. Export will offer a 15% discount on all purchases over $1,000.

The key to the marketing strategy is continuous follow-up with customers to anticipate future parts inventory needs.

Management Summary

James Dunn, owner of D.A.P Exports, will manage the business. With twenty years of experience selling consumer products in Latin America and the Caribbean, he has extensive knowledge of the region and culture. He has contacts with people and businesses gained from years of living or working in the country. James has been a salesperson for Axiom Food Products, Klymor Manufacturing, and Dudley Food Products, and traveled to the Caribbean and Latin America at least three times a year.

James has excellent management skills. In his last position, he managed a sales staff of five people, beating the sales quota by more than 10% each year. He successfully motivated each staff member to perform their best

James also has experience running a small business. He and his wife have successfully run a small catering business in their hometown for the past four years. James’ wife will continue to run this business while he focuses on launching D.A.P. Exports.

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6.1 Personnel Plan

D.A.P. Exports’ personnel:

  • James Dunn
  • 4 Facility Staff
  • 2 Sales Staff
Total People Year 1 Year 2 Year 3
James Dunn $36,000 $39,000 $42,000
4 Facility Staff $86,400 $94,000 $102,000
2 Sales Staff $72,000 $80,000 $88,000
Total People 7 7 7
Total Payroll $194,400 $213,000 $232,000

Financial Plan

Here is the financial plan for D.A.P. Exports.

7.1 Break-even Analysis

The monthly break-even point, based on average monthly running costs and estimated variable costs of sales, is shown below.

Export Automobile Parts Business Plan Example

Break-even Analysis
Monthly Revenue Break-even $42,743
Assumptions:
Average Percent Variable Cost 49%
Estimated Monthly Fixed Cost $21,730

7.2 Projected Profit and Loss

The table and charts below show the projected profit and loss for three years.

Export Automobile Parts Business Plan Example

Export Automobile Parts Business Plan Example

Export Automobile Parts Business Plan Example

Export Automobile Parts Business Plan Example

Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales $596,000 $710,000 $824,000

Direct Cost of Sales $293,000 $355,000 $412,000

Other Production Expenses $0 $0 $0

Total Cost of Sales $293,000 $355,000 $412,000

Gross Margin $303,000 $355,000 $412,000

Gross Margin % 50.84% 50.00% 50.00%

Expenses

Payroll $194,400 $213,000 $232,000

Sales and Marketing and Other Expenses $6,000 $10,000 $15,000

Depreciation $0 $0 $0

Leased Equipment $0 $0 $0

Utilities $7,200 $8,000 $9,000

Insurance $0 $0 $0

Rent $24,000 $24,000 $24,000

Payroll Taxes $29,160 $31,950 $34,800

Other $0 $0 $0

Total Operating Expenses $260,760 $286,950 $314,800

Profit Before Interest and Taxes $42,240 $68,050 $97,200

EBITDA $42,240 $68,050 $97,200

Interest Expense $10,000 $10,000 $10,000

Taxes Incurred $9,672 $17,415 $26,160

Net Profit $22,568 $40,635 $61,040

Net Profit/Sales 3.79% 5.72% 7.41%

7.3 Projected Cash Flow

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

Export Automobile Parts Business Plan Example

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $149,000 $177,500 $206,000
Cash from Receivables $324,550 $509,078 $594,578
Subtotal Cash from Operations $473,550 $686,578 $800,578
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 $473,550 $686,578 $800,578
Expenditures
Expenditures from Operations
Cash Spending $194,400 $213,000 $232,000
Bill Payments $265,680 $487,380 $533,881
Subtotal Spent on Operations $460,080 $700,380 $765,881
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 $460,080 $700,380 $765,881
Net Cash Flow $13,470 ($13,802) $34,697
Cash Balance $96,470 $82,668 $117,365

7.4 Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $96,470 $82,668 $117,365
Accounts Receivable $122,450 $145,872 $169,293
Inventory $46,200 $55,976 $64,964
Other Current Assets $0 $0 $0
Total Current Assets $265,120 $284,516 $351,622
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $265,120 $284,516 $351,622
Liabilities and Capital
Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $59,552 $38,313 $44,379
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $59,552 $38,313 $44,379
Long-term Liabilities
$100,000 $100,000 $100,000
Total Liabilities $159,552 $138,313 $144,379
Paid-in Capital $150,000 $150,000 $150,000
Retained Earnings ($67,000) ($44,432) ($3,797)
Earnings $22,568 $40,635 $61,040
Total Capital $105,568 $146,203 $207,243
Total Liabilities and Capital $265,120 $284,516 $351,622
Net Worth $105,568 $146,203 $207,243

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 5013, Motor Vehicles Supplies and New Parts, are shown for comparison.

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Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 19.13% 16.06% 12.20%
Percent of Total Assets
Accounts Receivable 46.19% 51.27% 48.15% 25.10%
Inventory 17.43% 19.67% 18.48% 46.10%
Other Current Assets 0.00% 0.00% 0.00% 15.10%
Total Current Assets 100.00% 100.00% 100.00% 86.30%
Long-term Assets 0.00% 0.00% 0.00% 13.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities
Accounts Payable 22.46% 13.47% 12.62% 46.60%
Long-term Liabilities 37.72% 35.15% 28.44% 11.50%
Total Liabilities 60.18% 48.61% 41.06% 58.10%
Net Worth 39.82% 51.39% 58.94% 41.90%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.84% 50.00% 50.00% 21.70%
Selling, General & Administrative Expenses 47.05% 44.28% 42.59% 13.20%
Advertising Expenses 1.01% 1.41% 1.82% 0.70%
Profit Before Interest and Taxes 7.09% 9.58% 11.80% 1.40%
Main Ratios
Current 4.45 7.43 7.92 1.98
Quick 3.68 5.97 6.46 0.78
Total Debt to Total Assets 60.18% 48.61% 41.06% 58.10%
Pre-tax Return on Net Worth 30.54% 39.71% 42.08% 3.80%
Pre-tax Return on Assets 12.16% 20.40% 24.80% 9.00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 3.79% 5.72% 7.41% n.a
Return on Equity 21.38% 27.79% 29.45% n.a
Activity Ratios
Accounts Receivable Turnover 3.65 3.65 3.65 n.a
Collection Days 56 92 93 n.a
Inventory Turnover 5.31 6.95 6.81 n.a
Accounts Payable Turnover 5.46 12.17 12.17 n.a
Payment Days 28 38 28 n.a
Total Asset Turnover 2.25 2.50 2.34 n.a
Debt Ratios
Debt to Net Worth 1.51 0.95 0.70 n.a
Current Liab. to Liab. 0.37 0.28 0.31
Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
James Dunn $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
4 Facility Staff $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200
2 Sales Staff $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
Total People 7 7 7 7 7 7 7 7 7 7 7 7
Total Payroll $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200
General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

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Pro Forma Cash Flow

Cash Received

– Cash Sales: $0, $0, $7,000, $9,500, $10,500, $13,000, $15,000, $16,000, $18,000, $18,500, $20,500, $21,000

– Cash from Receivables: $0, $0, $0, $700, $21,250, $28,600, $31,750, $39,200, $45,100, $48,200, $54,050, $55,700

Subtotal Cash from Operations: $0, $0, $7,000, $10,200, $31,750, $41,600, $46,750, $55,200, $63,100, $66,700, $74,550, $76,700

Additional Cash Received

– 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: $0, $0, $7,000, $10,200, $31,750, $41,600, $46,750, $55,200, $63,100, $66,700, $74,550, $76,700

Expenditures

Expenditures from Operations

– Cash Spending: $16,200, $16,200, $16,200, $16,200, $16,200, $16,200, $16,200, $16,200, $16,200, $16,200, $16,200, $16,200

– Bill Payments: ($406), ($798), ($266), $3,844, $5,314, $6,231, $16,894, $43,008, $43,641, $50,728, $48,778, $48,711

Subtotal Spent on Operations: $15,794, $15,402, $15,934, $20,044, $21,514, $22,431, $33,094, $59,208, $59,841, $66,928, $64,978, $64,911

Additional Cash Spent

– 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, $

Pro Forma Profit and Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $0 $0 $28,000 $38,000 $42,000 $52,000 $60,000 $64,000 $72,000 $74,000 $82,000 $84,000
Direct Cost of Sales $0 $0 $14,000 $19,000 $21,000 $26,000 $30,000 $32,000 $36,000 $37,000 $36,000 $42,000
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $0 $14,000 $19,000 $21,000 $26,000 $30,000 $32,000 $36,000 $37,000 $36,000 $42,000
Gross Margin $0 $0 $14,000 $19,000 $21,000 $26,000 $30,000 $32,000 $36,000 $37,000 $46,000 $42,000
Gross Margin % 0.00% 0.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 56.10% 50.00%
Expenses
Payroll $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200 $16,200

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