Title:
Business Proposal
Mr. Wash

Course:
Introduction to Management Information System

Date:
30 May 2012

Table of Contents
Page No. * EXECUTIVE SUMMARY………………………………………. 3-4 Unique Features of Service Objectives * MARKET/MARKETING…………………………………..…… 5-6 Market Segment Sought Benefits of Service to the Market Segment Summary of Advertising and Pricing Policies Sales Projections

* MANAGEMENT…………………………………………………. 6-7 Backgrounds Responsibilities

* TECHNOLOGICAL…………………………………………….. 7-8 * FINANCIAL DATA……………………………………………... 9-11 Financial Projections Capital Needed Current Financial Position Start-up Cost

* BACKGROUND AND PURPOSE............................................... 12-13 History Description of Products/Services Unique Aspects of our Strategy

Table of Contents (Cont.)

* SPECIFIC OBJECTIVES……………………………………….13-17 Revenues/Sales Profitability Market Standing Product/Service Quality Management Development Specific Market Location Trends Characteristics Buying Habits of Customers

* COMPETITION ANALYSIS…………………………………… 17-21 Direct Competition Auto-care Car Wash Services/ Advantages & Disadvantages Spotless Car Wash Services/ Advantages & Disadvantages Typical Car Wash Services/ Advantages & Disadvantages Indirect competition Pricing Advantage over Competitors Performance

* SUMMARY OF UNIQUE FEATURES AND BENEFITS…….22 * OVERALL STRATEGIC DIRECTION………………………. 23 * REFERENCES…………………………………………………... 23

EXECUTIVE SUMMARY

Mr. Wash is to be a full-service car wash facility comprised of the following features: a one hundred-twenty foot, fully automatic tunnel; four high pressure hand self-service bays; and six vacuum stations complete with fragrance and carpet shampoo dispensing machines. In an effort to optimize our position as premium car care specialists, we will offer our customers the opportunity to purchase quality car care products in our reception area. The full service operation will offer three basic wash packages: a $7.99 Basic wash, a $9.50 Deluxe wash and a $12.50 Super wash.
All full-service wash packages will include an interior cleaning service, which consists of carpet vacuuming, window and dash cleaning, and a preservation treatment. Our coin-operated, self-service bays will cost $1.50 per 4 minute cycle. Additionally, all customers will have access to vacuum islands which will cost $.50 per 4.5 minute cycle. Fragrance and shampoo dispensing machines will also be offered, and will range in price from $1.00 to $2.50 per cycle.
Unique Features of Service
Our market area is characterized by wide ethnic and economic diversity. To capitalize on these demographic factors and concentrate on the unique demands each group asks of the market, our facility will incorporate both a full-service tunnel operation for those who wish to allow our service team to clean their car and a self-service facility for those who wish to take a more active role in their car's maintenance. This type of car wash operation will be one of only three such facilities in the area. Additionally, we plan to provide an automatic dryer for each self-service bay, which will increase customer satisfaction by eliminating the need to hand dry their cars after washing. Automatic dryers are a new and effective market innovation which currently exists in only one other car wash operation in our region.
Objectives
After many months of in-depth analysis of our specific market area, national statistics on the car wash industry, and detailed evaluation of nine car wash operations in the area, we expect to generate sales revenues of $667,508 in the first year of operation. We believe our initial customer base will substantially increase as the community becomes aware of our existence, our reputation for excellent service, and our active involvement in community affairs. We then expect our growth to mirror the community's projected market growth, which is approximately 3.5 percent to 5 percent per year. Because there are no other car wash operations within a four mile radius of our site location, we feel confident our predicted growth will, at minimum, follow industry trends. Therefore, we expect to have a 100 percent market share of our target market for at least the short term.
MARKET/MARKETING
Market Segment Sought
We are extremely fortunate our service is not limited to a specific segment or group of the market. In fact, Mr. Wash sole limiting factor is the small segment of its specific market which is without an automobile. In our market area alone, there are approximately 400,000 automobiles, or .8 automobiles per person.
Benefits of Service to the Market Segment
We will provide the only full service facility within our market area. Additionally, our water reclamation system will provide an environmentally safe means for our customers to clean their automobiles. This differs from residential car washing, where untreated wash water fills storm drains and ultimately empties into our waterways.
Summary of Advertising and Pricing Policies
Our Basic, full-service tunnel wash will cost $7.99. It will entail a full exterior vehicle wash, as well as an interior service to include vacuuming, window cleaning, and dashboard cleaning. Our Deluxe Wash will cost $9.50 and will include all the Basic Wash services as well as an undercarriage wash, a rust inhibitor, and a wheel brightener. The Super Wash will cost $12.50 and will include all Deluxe Wash services as well as a polishing wax and a wax sealant.
We have investigated all available advertising mediums. After in-depth consultations with a myriad of car wash operators in the area, we have decided to utilize the advantages of a variety of mediums. Initially, we will utilize cable television and local radio stations, in conjunction with newspaper advertisements, to announce our Grand Opening. We will also use direct mail coupons to increase consumer awareness of our existence. Additionally, we will work cross promotions with businesses in the area as a means to tap the client base they have established. Already, several existing businesses have expressed a desire to come on board.
Sales Projections
We expect to wash 63,700 cars in the full-service operation and 29,440 cars in the self-service operation during Mr. Wash first year of business.
MANAGEMENT
Backgrounds
The principal owners will be the full-time managers. Both individuals have served in the United States Army as commissioned officers since graduation from college 12 and 10 years ago, respectively. They have vast experience in the management of finances, personnel, and equipment. While in the Army, both individuals successfully completed two years of company command, which closely parallels the running of a small business; it requires the managing of all associated personnel, budgetary, and operational situations. In addition, one manager is currently working as the assistant manager for a local car wash. His experience has provided invaluable insight into the operational aspects of managing and maintaining a car wash.
Responsibilities
One manager will focus on daily operations, including employee hiring, building maintenance, property maintenance, and equipment maintenance. The other manager will focus on marketing, advertising, and community relations, as well as all fiscal matters, including employee pay and benefits, taxes, payables, and receivables. Other members of the management team will provide support to the owners with regard to their specific areas of expertise.
TECHNOLOGY
Technology will be an opportunity for the business in terms of enhancing the efficiency and effectiveness of our daily office operations. Mr. Wash will make use of computerized financial administration, accounting solutions and management information systems. We will offer a card scanning system where your customers will be able to load credit on their wash card, to be scanned at the entrance of our automatic tunnel. With the advent of internet technology as well as information systems, the business will benefit greatly from online based marketing and electronic commerce. The business will set up a business website where the brand equity of the business will be accentuated. From our website customers will be able to make online appointments to have their cars cleaned and detailed by one of our team of car care specialist. Marketing literature and information will be provided on the website in order to attract potential customers for the business. Personalized email accounts that match the registered domain name of the website will be created and these will facilitate electronic communication between Mr. Wash and its customers as well as other business stakeholders.
The availability of advanced car washing equipment will be an opportunity to the business. Machinery and equipment contributes to the efficiency and effectiveness of the operations of businesses.
Improvements in research and development through technology shall be an opportunity again for the business to grow. The business can get access to the latest developments in car washing and keep abreast of the latest trends as well as gain insight that could possibly outlook better value being added to the business as a whole.

FINANCIAL DATA
Financial Projections: Year l Year 2 Year 3
Revenues $667,508 $746,518 $885,771
Net Income $163,144 $180,405 $208,765
Assets $789,389 $872,906 $1,010,126
Liabilities $581,644 $480,288 $378,932
Net Worth $207,745 $392,618 $631,194
Capital Needed
The capital needed to underwrite this proposal will be utilized to renovate the existing tunnel structure, construct four self service bays and one equipment room, install computers and networking infrastructure and institute site improvements, including landscaping, asphalt repair, night light installation, and installing signs. Additionally, the capital would be used to purchase both full-service and self-service equipment, a water reclamation system, administrative equipment and supplies, the chemical inventory, and to provide operating capital to maintain the operation through its first four months.

Current Financial Position
In developing our projected financial statements, projected revenues and expenses were calculated, both fixed and variable, by using statistical reference data provided by the industry's national association, the International Car Wash Association (ICA). We coupled the information received from ICA with regionally specific data provided by regional car wash operators and government agencies. In constructing our financial pro forma statements in this manner, we hope to portray as accurately as possible the revenues and expenses we can expect to see. Any errors should be to the high side of expenses and to the low side of revenues; all projections are extremely conservative.
For example, to calculate our projected revenue, we used the industry's capture ratio of the percent of traffic count in any given 24 hour period which a business could expect to utilize its facilities. We then multiplied that figure by the cost of our projected revenue per car, $9. The ICA states that a car wash owner can expect to capture .6 of 1% to 1.5 of 1% of the traffic count on the road on which the car wash is situated. According to government officials, the traffic count passing in front of our site is 55,823 cars a day. Armed with the statistical data needed to project the revenue figures, we examined various car wash operations in the county to gain an appreciation for the validity of the capture ratio. Our investigation showed that, in this region, the capture ratio was an accurate gauge on which to project the business a car wash operation can expect based upon its location.
The car wash industry is cyclical in nature, with the highest point of revenue occurring during the winter months and the low revenue point occurring during the summer months. Our revenue projections reflect that trend. Conservatively, over the course of the first business year, we predicted that, on the average, we will capture .39% of the 50,000 cars that travels pass our location daily. Keep in mind, our projected capture ratio is .21% less than the industry's worst case capture ratio.
To calculate fixed and variable expenses, we used ICA's national statistical information as a guide and spoke with local car wash operators in order to achieve actual monthly expense figures. We then compared these sources of information and developed our own expense analysis ratios. Our fixed expense figures are based upon actual figures gathered from local operators and our variable expenses are based upon a combination of industrial statistical averages and local operator figures. The only expense not strictly in keeping with both national and local operator figures is our advertising expense. We have decided that it is extremely important for us to make our target market realize our presence from day one, so we decided to budget 7.5% of our gross revenue to advertising versus the 4.5% of gross revenue recommended by the ICA.
Start-up Cost
We calculated our total start-up costs to be $683,000. This figure includes $135,000 for operating capital and a contingency fund.
BACKGROUND AND PURPOSE
History
Mr. Wash concept was born from the frustration we experienced when trying to find a car wash in the vicinity of our homes. Our frustrations lead us to investigate the possibility of building a car wash facility. Twenty months of exhaustive research revealed three facts that propelled us forward in our pursuit to build a car wash. First, there is an enormous demand for a car wash in the area. Second, there are no car wash competitors in the area. Third, we were able to negotiate a lease for property ideally suited for a car wash; the traffic count, a key element in predicting a car wash's success, is twice the national average.
Description of Products/Services
Mr. Wash is designed to be a complete car care facility. The operation is comprised of two complementary systems: a full-service system for those customers who wish to allow our service team to clean their car and a self-service facility for those who wish to take a more active role in their car's maintenance. Both systems will be outfitted with the most technologically advanced equipment available, thereby providing our customers with the best service possible. Mr. Wash unique operational concept of combining a full-service tunnel operation with a self-service operation provides our customers with service flexibility unmatched by any other car wash facility within a twenty mile radius. Additionally, within our market area, which is determined by the industry to be a 3.5 mile radius from our site location, we have very little competition.
Unique Aspects of our Strategy
We plan to market our car wash utilizing four primary mediums: Discount coupon mailings to selected ZIP Codes, radio and cable television spots, and cross promotions with local area merchants which will allow us to tap into their firmly established customer bases. Additionally, we will approach apartment and condominium management offices, asking them to include promotional coupons in their monthly newsletters.
SPECIFIC OBJECTIVES
Revenues/Sales
Our first year's objective is to realize a gross profit of $667,508 based upon an expected service volume of 113,748 vehicles. The full-service tunnel operation will account for 85 percent of revenue on 56 percent of the sales. The self-service operation will account for approximately 12 percent of the revenue on 26 percent of the sales. The vacuum operation will account for approximately 3 percent of the revenue on 18 percent of the sales.
Profitability
Based on one year's revenue of $667,508 and one year's fixed, variable, and depreciation expenses of $504,364, we expect a net profit, before income taxes and interest payment, of $163,144. This computes to a 24 percent return on a $683,000 investment. Market Standing
There are no car wash facilities within our target market area, which is defined as a 3.5 mile radius from the location. The closest car wash facility to our proposed location is 4.5 miles away. Therefore, we will have very little competition within our target market area.
Product/Service Quality
Providing our customers the very best possible service is our primary objective. We will achieve this by equipping our full and self service facilities with the finest equipment available, customers will have access to free Wi-Fi service in our state of the art lounge area also equipped with multiply flat screen TV’s, supporting our already superior technological foundation with the region's best service to cost price package, and by insisting upon a highly trained and motivated service staff.
Management Development
Our objective is to cultivate our managers from within the organization. This practice is essential to ensuring that our business philosophy and management style remain consistent. Additionally, by adhering to this objective, we possess a means in which to reward employees who continually perform in an outstanding manner.
Specific Market Location
The location is the most important aspect in predicting a car wash's success. Ideally, a car wash should be situated on a thoroughfare which possesses a heavy volume of traffic, often referred to as "traffic count." The wash location should have readily accessible ingress and egress routes. The target market's population should be at least 30,000 people. A majority of the target market should reside in apartments, townhouses, and or condominiums.
Our location is easily accessible from two major roads. The population within a three mile radius of our location is 206,909. According to the 1990 survey, our target market is expected to grow at a rate of approximately 3.5 percent per year. Industry studies state a car wash will capture .06 percent to 1.5 percent of the daily traffic which passes its location; thus, the higher the traffic count the better the business's chance of success. Industry studies also reveal the average car wash location's daily traffic count is 24,000 cars. According to the 1990 survey, the daily traffic count in front of the proposed location is 50,000. This translates to between 300 and 750 cars washed per day. It is projected the traffic count in front of the proposed location will grow at an approximate rate of 5 percent per year. This projection bodes exceptionally well for Mr. Wash.
Trends
A recent demographic study predicts a slow, but steady, increase in our target area's population over the next 10 years. Additionally, this study predicts the number of cars registered in our target area will also show a slow, but steady, increase over the next ten years.
Characteristics
Our target market is the most densely populated area in the city and is comprised of a diverse mixture of ethnic and economic groups. This diverse economic and ethnic make-up supports our view that there is a strong demand in our market area for a complete car wash facility that possesses both full service and self service facilities. Industry surveys reveal that young people between the ages of 18-25 (11% of the target market), blue collar workers of all ages, and those with little disposable income will patronize a self-service facility. Individuals over 25 (72% of the target market), white collar workers, and those with disposal incomes will patronize full-service facilities.
Buying Habits of Customers
In talking with hundreds of people in our target area over the past eighteen months, we have determined there is an enormous need for a car wash facility in this area. Currently, there is not a car wash facility within a 4.5 mile radius of the proposed location, and our proposal has received enormous support from both civic and government groups in our target market.
COMPETITION ANALYSIS
The business will face both direct and indirect competition, these are as analyzed below:
Direct Competition
The business will face direct competition from nearby car wash businesses as well as other well established competitors.
The competitive advantages of Mr. Wash will position it in such a way that it derives a lucrative market share. The strategic location of Mr. Wash is a plus to the business. The business will be situated next to a filling station that is in close proximity to a busy mall. In addition, there is no competition within a 20 Kilometer radius. The business can expect a steady flow of motor vehicles that need to be washed.
Auto-care Car Wash Services
Advantages
* Has been in existence for over 3 years * The business provides hand wash services. Some customers prefer their motor vehicles to be hand washed as they believe that automated car washes ‘fade’ their vehicles faster * Accepts both cash and visa debit cards providing extra convenience in terms of payment for clients
Disadvantages
* Hand washing is usually time consuming and this affects customers that are in a hurry * The business is not strategically located; there are no attractions such as shopping malls, gyms or other facilities that add value to the clients while they have their vehicles washed

Spotless Car Wash Services
Advantages
* Makes use of automated machines. Automated machines are efficient and effective. They give a professional picture to most customers. Most customers are keen about automated services as they are faster, simple and arguably better than hand washing car services * Accepts both cash and visa debit cards providing extra convenience in terms of payment for clients * Great branding * Has an online presence providing customers with prices, promotions and other information about the car wash business
Disadvantages
* Targets the high end market, therefore its prices are relatively high. This can be seen as a disadvantage for low to middle income customers * Some customers simply prefer ‘hand wash’ services

Typical Car Wash Services
Advantages
* Affordable pricing * Provides discounted prices to students once in a while * Has ample parking * Has a nearby cafeteria providing extra convenience for clients
Disadvantages
* Poor branding * Poor customer service * Untrained staff * Lack of focus, targets everyone
Indirect competition
Indirect competition will emanate from alternative sources that customers can get their cars cleaned. Some clients prefer to clean their vehicles at home this will form part of the indirect competition that Mr. Wash will face. Indirect competition will also emanate from charitable fundraisers, large well established car service businesses, ‘Do it yourself’ car wash services and other similar entities. Mushrooming informal car wash businesses will also pose indirect competition for the business.
Pricing Advantage over Competitors
To arrive at our price listing for each car wash package, we carefully examined fifteen car wash facilities in the state. We analyzed each facility's wash packages and then compared the price of the package to its service contents to make a qualitative determination on the quality of service provided versus the cost of the service. Unfortunately, what we discovered was that, in most cases, the service provided did not warrant the higher price charged to the customer. The customer was not receiving any significant increase in the service received. Therefore, we carefully constructed our wash packages to ensure that our customers received the best possible service for the price charged.
Performance
Our research repeatedly indicated that the wash's performance is directly proportional to the type and make of equipment used. Therefore, in keeping with our business objective of providing the highest quality service possible, we've decided to purchase the most technologically advanced conveyor and self-service equipment available. This technologically advanced equipment will provide us with a qualitative edge over all the car wash facilities within a 20 mile radius of our location.

SUMMARY OF UNIQUE FEATURES AND BENEFITS
An extremely important feature of our business is its location. Without the proper location, the chances of succeeding are drastically reduced, although not impossible. It is interesting to note that, for the last five years, a regional car wash corporation with eight locations in the tri-state area has actively pursued the property owner to sell so they could establish a car wash on it. For personal reasons, the land owner refused to sell. Such a successful company would not have so vigorously pursued the site if they did not feel the land had enormous potential. We share their enthusiasm.
Our operation will incorporate the newest and most technologically advanced wash equipment in the industry. This will enable us to provide our customers with the best possible service at the best possible price. It will also allow us to ensure that the environmental concerns of the community are respected and acted upon. Additionally, we believe the strongest point in our business is our management team. Both owners possess vast knowledge, gained from operational, budgetary, and personnel experience, from which to direct the business and provide for outstanding customer service.

OVERALL STRATEGIC DIRECTION
We are determined to establish a business known for its high quality service at a reasonable price. We see ourselves playing an important part in community activities. We will provide employment opportunities for area residents, as well as a much needed service to the community which protects and conserves our finite water resources.
REFERENCES
http://www.bplans.com/car_wash_self-service_business_plan/executive_summary_fc.cfm http://www.streetdirectory.com/travel_guide/193881/entrepreneurship/creating_a_car_wash_business_plan.html http://www.carwash.org/Pages/default.aspx
http://www.wisegeek.com/how-do-i-start-a-car-wash-business.htm