Automobile Business Plan

When talking about the automobile sector, the first thought that comes to mind is the cars that help us commute and take us from place to place. In addition to these are the several transport vehicles too such as buses, trucks, rickshaws, etc. All of these form an integral and indispensable part of our lives, without which we would be quite helpless. The automobile  business is a huge market. In fact, the approximate number of motor vehicles produced worldwide in the year 2019 was estimated to be about 92 million. The automobile industry further has various specifications, one of them being the different types of vehicles that can be termed as automobiles- cats, trucks, buses, and other four wheeled vehicles used on roads. 

Considering the number of vehicles and the various specifications and diversifications in the automobile sector, it is a business opportunity worth considering. Also, given the vastness of each sector there is immense scope for aspiring entrepreneurs venturing into this field. 

Advantages of Automobile Business

There are a number of vehicles in each city and town alone and there is a growing demand for new vehicles and automobiles. And all of these automobiles require maintenance, repair, and servicing. Thus, venturing into the automobile business is a beneficial prospect. 

The other benefits of the automobile business include-

• This business is not limited to cities only. Automobiles are used for commuting and transportation all over, including in smaller tier II and III cities, towns and villages. Thus, if you’re wondering how to start automobile spare parts business, there is a lot of scope.
• The business has scope for expansion and diversification. For example, entrepreneurs can start with an agency to sell automobile spare parts or even automobiles as a whole and further provide servicing and maintenance facilities too at their premises, thus becoming a one stop shop for all automobile related concerns. 
• As with every start up and business, the automobile business too offers the entrepreneur with the opportunity to be their own boss, providing them with the flexibility to work at their own time, terms and convenience. 
• Additionally, the automobile business is rewarding and profitable too.

Various Automobile Business Categories

As mentioned previously, the automobile business has several categories, some of these categories that entrepreneurs can choose from to start the business include-

• • Automobile Agents and Franchise Owners 
    •  Here the entrepreneur sells the vehicle itself by being an agent of a particular automobile company or taking up a franchise.
  • Automobile Spare Parts
    • This type of automobile business deals with the wholesale or/and retail of automobile spare parts. It could be specific vehicle spare parts or parts of all kinds of automobiles.
  • Automobile Repairs
    • This type of business deals with the repair of automobiles. It could include regular servicing as well as specific repair jobs. The business can be specific for automobiles of a particular brand or it be generic, for all kinds of vehicles.
  • Car Wash
    • This type of automobile business includes primarily washing services, especially for cars. The service could be for other vehicles too, such as trucks, buses, etc and will require requisite facilities for washing of larger automobiles.
  • Headlight Restoration
    • The business could even be highly specific and only cater to a particular area of automobile repair and servicing, such as headlight restoration services. 
  • Battery Reconditioning
    • Another type of specific automobile business that entrepreneurs can venture into is providing battery reconditioning and restoration services. A battery is extremely vital equipment of every vehicle and a reconditioning and restoration service of the batteries of vehicles can be a rewarding business.
  • Auto Accessories
    • Apart from spares and repairs, another automobile business opportunity is the automobile accessories business. Vehicles need several accessories, such as mud guards, anti-rust coating, seating covers and upholstery, music and stereo system, etc which can be offered as a business service.

These are some of the types of automobile business opportunities that entrepreneurs can explore and venture into while planning to start their own business.

Essentials of Automobile Business Plan

The automobile business, just like every other new enterprise, requires an automobile business plan before actually starting the business.  A business plan is a written document that describes the business in detail, including the exact nature of the business, the goals of the business, how the business will achieve its goals and the time frame within which they will be achieved.

The essentials of every business plan includes the  

• Executive Summary
• Description And Overview
• Market Analysis
• Competitive Analysis
• Management And Operations
• Marketing And Sales
• Financial Summary

Along with these, the details that are must to be included in the automobile business plan are elaborated below.

• Shop Location
  • • The location of the automobile business is important for the business to thrive.
    • Ideal locations for the automobile business should be near industrial regions, or within central business development areas, especially in urban territories.
    • The business must be located such that automobiles visiting the shop for repairs, servicing or for purchasing equipment should be able to do so easily. 
    • Along with accessibility the business premises must be located in a market place or an area where vehicles ply frequently, rather than a quiet by-lanes.
    • The business premises must be easily visible. The entrepreneurs can use signboards and other methods to ensure that the automobile business premise is easily visible, accessible and well-lit too.

• Registration
  • • • Just like for every business, the automobile business plan also requires a registration. It could be registered as a 
        • Sole proprietorship
        • Partnership
        • One Person Company
        • Private or Public Limited Company
        • Limited Liability Partnership
      • The business registration must be decided considering the benefits and limitations of each business entity and their suitability to the business and the entrepreneurs.
      • The registration process for each of the entities is different. Once the entrepreneur decides the entity most suitable to their business, they can apply for the same and mention it in the automobile business plan. 
      • Apart from business entity registration, the business also has to apply for Shop Act registration. Shop Act helps regulate the working conditions of the employees and is mandatory for businesses situated within municipal limits.
      • Other than Shop Act, GST registration is also necessary for the automobile business. 
• Financial Requirements
  • • Financial requirements is the most vital part of an automobile business plan. The capital requirement of the business must be known and considered in detail along with the ways of fulfilling this requirement.
    • The capital is required for
      • Renting a shop for the business requires an upfront payment of a deposit amount along with monthly rentals. Purchasing a shop space requires even more capital investment. 
      • Further, the shop needs to be furnished, with storage, display and space for automobile display or washing depending on the exact type of business.
      • The Shop even needs to be equipped with spare parts, machinery (for washing) and accessories needed for the business.
      • The employee wages and other miscellaneous expenses also need to be considered and listed.
    • After listing all the capital requirements, the next step for entrepreneurs is to decide where the funding will come from to meet these requirements.
    • Loans are the most recommended option. These loans can either be via banks or through non banking financial companies (NBFCs).
    • To make a decision about which option is more suitable can be quite difficult. Entrepreneurs can Download banks or NBFCs for business loan comparison checklist to help make a better and well informed decision. 

• • • Further while applying for a loan, entrepreneurs need to submit a proposal along with the automobile business plan. 
    • Just like the business plan, the loan proposal also needs to be written meticulously as it can make or break the deal. 
    • Automobile business owners can opt for a funding consultation service to make an effective proposal along with finding ways and methods of applying for loans for their new or existing business.

• • • Staying Abreast With New Technology To Beat Competition

Along with ensuring that the location of the automobile business is considered and the legal requirements are fulfilled. And also the capital requirements have been taken care of for the automobile business plan, the entrepreneurs must also ensure ways of staying relevant in the current digital times. 

The business can create a website and even provide their services online, such as

• Online purchase and home delivery of spare parts and accessories
• Booking of services online such as car washing, servicing, repair with home pickup service provided
• At home washing and repair service which can be booked online

Additionally, the business can have a blog elaborating on the various aspects of the automobile industry, such as how to take care of the vehicle at home, how to increase the mileage of the vehicle, basic servicing needed for regular upkeep of the vehicle etc. These methods can add an extra touch to the business, thus making it stand out from the rest and winning favor with the customers.

All of these details and factors will help entrepreneurs kickstart their automobile business plan on the right note and make a successful start. In case of assistance with any other aspects of starting the business, the entrepreneurs can always approach deAsra to assist in making difficult decisions and finding solutions to their problems.