Car Wash Business Model free essay sample

SCHOOL OF HOSPITALITY, TOURISM CULINARY ART DIPLOMA IN INTERNATIONAL HOTEL TOURISM MANAGEMENT FINANCIAL MANAGEMENT I BC 008 GROUP ASSIGNMENT TAN HANN LUN 54311 CIA SIN YIN 54015 SAIM SHIN YEE 53845 LAW JIA HUI 53962 LEOW SIEW MUN 53569 HENG LUAN SIANG 54283 DATE OF SUBMISSION 25TH OCTOBER 2010 LECTURER MR ROMZEE ACKNOWLEDGEMENT First and foremost, we as a team would like to thank Mr Romzee, who is our Financial Management I subject’s lecturer. We have been given the chance to brainstorm on an idea to start a business and produce a complete business plan. Despite of the obstacles and difficulties we faced throughout the planning stage, we are very grateful and thankful as this project had really make us to think with creativity and innovatively in order to create a totally new and convincing business plan. In the beginning, we had a good kick start. Our ideas flown in like a river stream and we had spent some time to determine the best idea. In between, our team had undergone some vigorous discussions and arguments as we argued on the pros and cons of our ideas regarding the preparation of business plan and the feasibility of the business in reality. Finally, we made up our mind to select the idea of starting a car wash business. In between the progress of completing the research, our team faced some fierce arguments on the method of calculation, control system and management system. Nevertheless, we were able to sort everything out and continue with our progress. Lastly, we were grateful and thankful that we were able to finish the assignment according to the schedule. Content 1. Introduction 1. 1 Name and address of business 1. 2 Name and address of principal (owners) 1. 3 Nature of business 1. 4 Statement of financing needed 2. Executive Summary 3. Industry Analysis 3. Future outlook and trends 3. 2 Analysis of competitors 3. 3 Market segmentation 4. Description of business 4. 1 Product 4. 2 Service 4. 3 Size of business 4. 4 Office equipment and personnel 4. 5 Background of entrepreneurs 5. Production Plan 5. 1 Physical plant 5. 2 Machinery and equipment 5. 3 Names of suppliers of raw materials 6. Operational Plan 6. 1 Descri ption of company’s operation 6. 2 Flow of orders for goods and services 6. 3 Technology utilization 7. Marketing Plan 7. 1 Pricing 7. 2 Distribution 7. 3 Promotion 7. 4 Product forecasts 7. 5 Controls 8. Organizational Plan 8. 1 Form of ownership 8. 2 Management team background . 3 Roles and responsibilities of members of organization 9. Assessment of Risk 9. 1 Evaluate weaknesses of business 9. 2 Contingency plans 10. Financial Plan 10. 1 Assumptions 10. 2 Budgeted Cash Flows (5 years) 10. 3 Budgeted Income Statement (5 years) 10. 4 Budgeted Balance Sheet (5 years) 10. 5 Break-even Analysis 10. 6 Sources and application of funds 11. Conclusion 12. Appendix 13. References 1. Introduction 1. 1 Name and Address of Business The name proposed for the business is BlitzWash Car Wash. The address of the business is 6, Jalan Segambut Selatan, 51200 Kuala Lumpur. 1. 2 Name and Address of Principal There will be six shareholders in this business who are: * Tan Hann Lun PT 239, Kg Budi, Jln Tawang, Tmn Mesira 16150 Bachok, Kelantan. * Cia Sin Yin PK 14, Parit Pulai Serom, 84410 Muar Johor. * Law Jia Hui No 2, Jalan Sg long 7/11, Bandar Sg long batu 10 1/11 43000, Kajang Selangor. * Leow Siew Mun 33, Jalan SS 2/51 47300 Petaling Jaya Selangor. * Saim Shin Yee 24, Taman Maju Sungai Klau, 27630 Raub, Pahang. * Heng Luan Siang No. 41 Bukit Permata Jalan Persiaran, Taman Sri Gombak Batu Caves 68100 Selangor 1. 3 Nature of Business The BlitzWash Car Wash is a new business which involves in the car wash industry. BlitzWash will provide car wash service in variety forms such as external car wash, inner cleaning, and polishing. In addition, we will also provide customers with a wide selection of car related accessories such as air freshener, car wax, car shampoo and anti slip map. The warehouse is consisting of 11,000 square feet land area and 7,500 square feet of built up area. The capacity of the warehouse is able to fit approximately 6 cars each turnover. 1. 4 Statement of Financing Needed Start Up Costs| Budgeted (RM)| Accountancy Service| 550. 00| Advertising and Promotion for Opening| 2,988. 00| Cash| 50,000. 00| Remodelling and Rebuilt| 4,200. 00| Insurance| 386. 20| Operating Equipment| 17,783. 00| Installation of Equipment| 2,000. 00| Office Equipments and Supplies| 10,119. 15| License and Legal Costs| 100. 00| Pantry Equipments and Supplies| 1,672. 00| Rental Deposits| 30,000. 00| Salaries| 11,637. 00| Starting Inventory| 45,110. 90| Signboard| 720. 00| Unanticipated Expenses| 30,000. 00| Total Expected Costs| 207,300. 29| Suggested Operating Capital To Break Even| 207,300. 29| 2. Executive Summary Company: BlitzWash Professional Car Wash 6, Jalan Segambut Selatan, 51200, Kuala Lumpur. Business Type: Car Wash Company Summary: BlitzWash is formed to own and operate a car wash service centre consisting of six service bays and one automatic bay. The business will be located on Jalan Segambut Selatan in Segambut Pusat, Kuala Lumpur, Malaysia. BlitzWash will develop a well equipped, attractive, low maintenance, customer friendly car wash facility. The car wash will service the local community in an effort to develop a loyal base of repeat customers as well as draw new customers from the surrounding communities and attract the areas growing local and commuter traffic. Management Tan Hann Lun, Shareholder, Manager Tan Hann Lun will be responsible for operational and financial management, sales, marketing and promotion. He comes from a family business background. He brings extensive knowledge and experience in the field of banking, finance, sales and marketing. Law Jia Hui, Sahreholder, Assistant Manager Law Jia Hui will be responsible for human resources management and financial management. She has a strong a base as a HR manager in one of the famous firm in Kuala Lumpur. As a result, she brings extensive knowledge and experience in the areas of project/program management, contract administration, and labour management. Market: The Company’s target market will consist of primarily individual customers. The population demographics consist of a mix of newer single-family homes and townhouse developments, older residential areas, scattered mobile home parks and apartment dwelling as well as other commercial shops. BlitzWash will also target local businesses and will attract customers from surrounding communities and commuter traffic. Product and Services: The Company will provide state-of-the-art, reliable, customer friendly products and services, including a six-selection wash packages, and several accessory product and food/drink. For the customers convenience, the automatic bay will provide a complete, detailed exterior wash. Competition: The Company has no direct competitors from the same category in the area. However, there are three hand car wash service centres which are install in petrol station. They will provide the competitive market in terms of price. Uniqueness: Several factors will make the BlitzWash car wash unique. The company will offer a modern, easily accessible, high quality car wash facility featuring a variety of income producing services, including vacuums, fragrance machines, and carpet shampooers. Management will actively promote the companys service through local advertisements, cross-couponing with local merchants, direct mail promotions and promotional giveaways. Summary of Financial Projections | 2011| 2012| 2013| 2014| 2015| Sales | | | | | | Operating Expenses| | | | | | Total Assets| | | | | | Pre Profit| | | | | | 3. Industry Analysis 3. 1 Future Outlook and Trends The car wash of the future will be very similar to those of today. They will still be located near busy intersections and fuel stations, and will offer a variety of vehicle cleaning services for a reasonable price. The major difference between the car wash of today and that of the future will be the presence of fewer individual car wash owners in the business. The competitive nature of the future market will push out business owners who fail to properly market their wash. Those that succeed will find what works within the future market and replicate it. In the next ten to twenty years the primary competitor will be the car wash franchise. Across Malaysia there will be nationally recognized car washes that all offer the same menu of services at nearly the same price. When a consumer drives up to a car wash of the future they will expect the same quality of service as the car wash on the other side of the country. Entrepreneurs will still own the car washes of the future, but the business model will stress consistency and uniformity. A consumer can visit a car wash for the very first time and already have a preset expectation in their mind of what washes are available, the quality of the wash, and approximately how much money will be deducted from their personal wash account for that particular car wash chain. In the future, cash will no longer be the mainstream form of payment. Harnessing the power of the Internet and advanced communications technology, all of these franchise businesses will be tied together within one large payment network. Customers will hold unprecedented control over their account settings. Saving receipts and passing out tokens will recede into the past because Fleet Managers will now run their own activity reports and manage their account balance Online from anywhere in the world. Purchasing and managing car washes will be just as secure as online banking. Successful car washes of the future will rise to the top, not only because the owners knew how to better clean a car, or provided the very best service. The car washes of the future will offer a standard menu of options and consistent level of service that a customer can count on at each and every wash around the world. 3. 2 Competition and Business Trends There  are three other hand car wash shops in Segambut Pusat. They have been in the industry for approximately two to three years and are trying to compete with automatic car washes by offering low prices. Their operation stations are installed within petrol station. However, they are not targeting the customers who seek quality cleaning. The customers who BlitzWash is targeting have their cars washed based on the quality of the job. They do not mind spending a little more each week to have their car washed and waxed  in order to keep the paint work in excellent shape. The businesses that BlitzWash targets will be more cost conscious, so the prices will be approximately 15% less for these customers to promote volume usage. 3. 3 Market Segmentation BlitzWash segments its customers by type of car ownership. We believe that the type of car that a person owns says volumes about their driving, and, therefore their car washing and detailing requirements. New car owners: Owners of newer cars are most likely to use a hand car washing service. These owners take great pride in their cars and will bring them often to the wash and detail service. The goal with these customers is to promote regular use of the wash and detail service. The aim is to inform these customers that BlitzWash will keep their car looking as good as it did the day they drove it off the lot. Older luxury car owners: These people have either owned their high-end luxury cars for several years or are unable to afford the expense of a new luxury car but want the feel of relaxed driving. Both of these groups want to keep their cars in the best shape possible. Those who have bought second-hand cars will often spend many hours in their cars and will place high importance on keeping their cars looking good. These owners will bring their cars in for regular washes and occasional details. Sports car owners: These people are often younger or middle-aged men and will regard  the look of their car as important. They will also pride themselves on the look of their car and will have their car hand washed (at least) weekly. These drivers will have an  occasional detail, but will keep their cars so clean the  detail will not be necessary very often. Lifetime owners: Many of these people have owned their cars for more than five or six years, and  are more likely to be women. They are attached to their cars as friends and though it may be more sensible for them to purchase a new car, they will bring their car in for a wash occasionally, just when the car is dirty. They like their cars to look presentable, and want to keep it in good shape but are not tied up in the look of their car. For this reason, they will not have a detail carried out on their car unless they are selling it. Local businesses: Some local businesses have fleets of cars and small vans that must be kept clean to maintain their company image. These businesses will be  looking for a cost effective, efficient car washing service to perform this service, and will prefer to use a car wash service during the week rather than during weekends, like the general public. Market Analysis| | Year 1| Year 2| Year 3| Year 4| Year 5| | Potential Customers| Growth| | | | | | CAGR| New Car Owners| 15% | 12,500 | 14,375 | 16,531 | 19,011 | 21,863 | 15. 00% | Older Luxury Car Owners| 10% | 7,200 | 7,920 | 8,712 | 9,583 | 10,541 | 10. 00% | Sports Car Owners| 15% | 6,500 | 7,475 | 8,596 | 9,885 | 11,368 | 15. 00% | Lifetime Owners| 10% | 17,000 | 18,700 | 20,570 | 22,627 | 24,890 | 10. 00% | Lo cal Businesses| 7% | 9 | 10 | 11 | 12 | 13 | 9. 63% | Total| 12. 28% | 43,209 | 48,480 | 54,420 | 61,118 | 68,675 | 12. 28% | 4. Description of Business 4. 1 Products Our main products are the car wash packages offered to our customers. The packages are categorized as below: Individual Consumers (i) Express This service is only inclusive of the washing of exterior part of a car. The process will take the time of approximately 8 minutes. A car will go through the tunnel mode washing machine where water spraying and foaming will cover the car. Dirt is easily been removed. The detergents used are environmental friendly. (ii) Interior Service This service is inclusive of the cleaning of interior part of a car. The process will take approximately 10 minutes. A car will be thoroughly vacuumed, carpet washing, leather polishing and install with a hanging scent paper. (iii) Full Wash Service This service is inclusive of both the washing of exterior and the cleaning of the interior part of a car. The combination of both the service is with the car being manually washed and the interior being completely cleaned by going through the same process as in interior service. (iv) Waxing This service will include the express wash as waxing can only be done after a proper car wash in order to achieve the best result of waxing. The waxing of a car prevents the paint from fading, protects it against chemicals and gives you car shiny look. (v) Polishing This service of polishing is by using polisher to make exterior and interior part of a car to look shiny and smooth. The car will have a brand new look as it sparkle on the road. (vi) Full Treatment This service is inclusive of the full wash service where the exterior and interior are clean with high quality and environmentally friendly detergents. In addition, the car will also be waxed and polished. A selected flavour of car paper scented will be installed in the car with free of charge. Organizational Consumers (i) Monthly Contract In this contract, we will have an agreement with selected organization in order to ensure our normal weekday sales do not tumble vigorously when compared to our weekend sales. Therefore, the agreement with the organization will help to balance up the average sales in a month. For the terms and conditions, the organization will need to fulfil in terms of volume of cars send for our car wash. For example, the minimum volume needed to fulfil by the organization is 60 cars. We also indicated that the cars are allowed to be sent only on weekdays. To package the contract and make it more attractive, we will provide the organization with 5% commission of total sales obtained from the organization and the commissions will be paid in the next month. The contract will only valid for the month which the contract being legally signed. Hence, by applying this system, our monthly sales will not severely affected by the seasonal patterns. (ii) Quarter Yearly Contract In this contract, the system works similarly to the monthly contract. The difference is the time period has been extended from a month to 4 months. The organization will be given a new minimum volume of cars which is 250 cars in 4 months time. In addition, the percentage of commissions will also increase to 10% of total sales obtained from the organization. Payment of commissions will be done monthly. The contract will only valid for the 4 months which are legally indicated in the contract. Thus, with this contract, the stability of our sales will increasingly strengthen. Car Care Products| Geft1 Wash ; Shine Car Shampoo 1 Liter| Geft1 Liquid Wax 500ml| Geft1 Metallic Crystal Wax 500ml| Geft1 Windshield Wiper Fluid 435ml| Geft1 Leather Care 500ml| Geft1 Auto UV Protectant 320ml| Geft1 Radiator Coolant 500ml| Geft1 Tyre Shine ; Gloss 320ml| Geft1 Wet Look Shine 500ml| Geft1 Engine Shine 2 in 1 500ml| | Car Care Accessories| Little Wagon Glass Squeege| Metallic Sunshade| size S| size M| size L| Side Pocket (Acebell)| Non Slip Mat 2pcs (Low Audio and Video)| Little Wagon Non Slip Mat| Car Seat Tray (Acebell)| Visor CD Holder (Low Audio and Video)| Side Drink Holder TomCat | Hanger| Seat Cushion (DB Enterprise)| Seat Mat (DB Enterprise)| Lumbar Support (DB Enterprise)| Total| Car Air| ATTRACT| flavor Lemon| flavor Ocean| flavor Osmanthus| flavor CK-II| Cuppad Paper Scent Cup-15 | Total| Beverage| Coca-Cola 325ml| Coca-Cola 500ml| Vanilla Coke 325ml| Vanilla Coke 500ml| 100 Plus 325ml| 100 Plus 500ml| 100 Plus Lime 325ml| 100 Plus Lime 500ml| Sprite 325ml| Seasons Soya 325ml| Seasons Chrysanthemum 325ml| Seasons Cincau 325ml| Seasons Ice Lemon Tea 325ml| F;N Orange 325ml| F;N Strawberry 325ml| F;N Ice Cream Soda 325ml| F;N Grape 325ml| F;N Zapple 325ml| Aquarius 600ml| Aquarius 1. 5 Liter| In addition to the diversification of products in our shop, we have included the sale of care related accessories. Items are listed as below: Side Pocket (Acebell)| Non Slip Mat 2pcs (Low Audio and Video)| Little Wagon Non Slip Mat| Car Seat Tray (Acebell)| Visor CD Holder (Low Audio and Video)| Side Drink Holder TomCat | Hanger| Seat Cushion (DB Enterprise)| Seat Mat (DB Enterprise)| Lumbar Support (DB Enterprise)| | Car Air| ATTRACT| flavor Lemon| flavor Ocean| flavor Osmanthus| flavor CK-II| | | Beverage| Coca-Cola 325ml| Coca-Cola 500ml| Vanilla Coke 325ml| Vanilla Coke 500ml| 100 Plus 325ml| 100 Plus 500ml| 100 Plus Lime 325ml| 100 Plus Lime 500ml| Sprite 325ml| Seasons Soya 325ml| Seasons Chrysanthemum 325ml| Seasons Cincau 325ml| Seasons Ice Lemon Tea 325ml| F;N Orange 325ml| F;N Strawberry 325ml| F;N Ice Cream Soda 325ml| F;N Grape 325ml| F;N Zapple 325ml| Aquarius 600ml| Aquarius 1. 5 Liter| 4. 2 Service The service concept that has been applied into our business is a fast, efficient, professional yet affordable car wash services. In current fast moving society, we will have to anticipate the flows of customers to be swift. With this concept, we would like to create the ambience of modernity accompanied with the advance technology and high quality detergents to ensure the utmost satisfaction of our customers when they used our services with the minimal time consumption. The time consumption differs from package to package as the services included in the packages are different. The time consumption for each packages are as tabled below. Packages| Weekdays| Weekends| Express| 8 minutes| 5 minutes| Interior| 10 minutes| 8 minutes| Full Wash Service| 15 minutes| 12 minutes| Waxing| 12 minutes| 10 minutes| Polishing| 10 minutes| 7 minutes| Full Treatment| 30 minutes| 25 minutes| In this competitive world, we will have to follow the path of our customers as we are market oriented operation. Therefore, we will provide our guests with the Wi-Fi service in our shop. We believe that by providing Wi-Fi service, we could exceed the guests’ expectations as now they will be able to access into Internet and continue their works especially our customers who are involved in the business world such as executives. In order to ensure their comfort in their waiting time, we will provide benches and tea table sets for them. In a nutshell, with the extra services provided to our customers, we are convinced that we will be able to meet our customers’ satisfaction. 4. 3 Size of Business This business will be invested with a capital of RM300, 000. The business will have 11 employees with a manager, an assistant manager, two administration clerk, two sales representatives and five washing staff. Averagely we will have total sales of about RM50, 000 per month and the operating expenses of about RM100, 000 per month inclusive of inventories of stocks. We are estimating to expand our business with additional RM200, 000 capitals from SME loan. The fund will be allocated to the diversification of the business as a new warehouse will be acquired to expand the operation size. Hence, we are looking forward to become the pioneer of the car wash industry in Segambut. . 4 Office Equipment and Pantry Equipment In our office, we will be equipped with the items as followed: Items| Qty| MOSES Swivel Chair| 2| VERNER Swivel Chair| 1| SNILLE Swivel Chair| 4| KARLSTAD Corner Sofa| 1| BESTA Shelf Unit| 2| MICKE Desk| 3| SHARP FO-P610 Fax Machine| 1| HP LaserJet Pro M1132 MFP Printer| 2| Sharp Cash Register XE-A102| 1| Acer Desktop Set Veriton X27 5-254X With V193HQ LCD| 3| York Cooling King Essential 1. 5HP| 1| Letter Tray| 3| Rubbish Bin| 3| In our pantry, we will be equipped with the items as followed: Items| Qty| NORDEN Bench| 2| LG Microwave Oven MS-2347GR| 1| Midea Water Dispenser Promotion with Water| 1| Laver Table and 4 Chairs| 2| 5. Production Plan 5. 1 Physical Plant Figure 1. 1 Floor Plan of Warehouse Figure 1. 2 Floor Plan of Pantry Figure 1. 3 Floor Plan of Office Figure 1. 4 Floor Plan of Rest Room 5. 2 Machinery and Equipment The machinery and equipment in our operation are listed as below: Machinery| Qty| Gantry Car Wash Machine QLX-10| 1| Wisen High Pressure Water Spray| 2| Beta Max High Speed Vacuum| 2| Benma High Pressure Foam Spray| 2| Benma High Pressure Water Spray| 2| Car Polisher NE-326B 6 inches 96351660| 2| Display Chiller 2 Door| 1| Billy Series Bookcase | 2| Steel Floor Fan Swing| 5| Warner Chemical MSG. CompanyInsta Finish Car Glow Shampoo 1 gallon| Insta Finish Carpet Clean 1 gallon| Insta Finish Super Foam 1 gallon| Insta Finish Fabric Spot Cleaner 1 gallon| Insta Finish Buff N Shine 1 gallon| Carnauba Cream Wax 1 gallon| Body Shop Spray Wax 1 gallon| Insta Finish Drying Agent 5 gallon| Insta Finish Foaming Prep Shampoo 5 gallon| GF One Chemical Sdn. Bhd Geft1 Wash ; Shine Car Shampoo 1 Liter| Geft1 Liquid Wax 500ml| Geft1 Metallic Crystal Wax 500ml| Geft1 Windshield Wiper Fluid 435ml| Geft1 Leather Care 500ml| Geft1 Auto UV Protectant 320ml| Geft1 Radiator Coolant 500ml| | Geft1 Wet Look Shine 500ml| Geft1 Engine Shine 2 in 1 500ml| | Conceptwin Centre Sdn BhdLittle Wagon Glass Squeege| Little Wagon Non Slip Mat Little Wagon Hanger Tom Cat Side Drink Holder| 5. 3 Name of Suppliers of Raw Materials Geft1 Radiator Coolant 500ml| Geft1 Tyre Shine ; Gloss 320ml| Geft1 Wet Look Shine 500ml| Geft1 Engine Shine 2 in 1 500ml| Conceptwin Centre Sdn BhdLittle Wagon Glass Squeege| Little Wagon Non Slip Mat Little Wagon Hanger Tom Cat Side Drink Holder| Acebell (M) Sdn BhdMatellic Sunshade * size S| * size M| * size L| Side Pocket | Seat Tray Car seat tray| Low Audio and Video Sdn. Bhd| Non Slip Mat 2pcs | Visor CD Holder | DB EnterpriseSeat Cushion | Seat Mat | Lumbar Support BeveragesF;N Beverage Marketing Sdn. Bhd| 6. Operational Plan 6. 1 Description of Company’s Operation BlitzWash Car Wash is a process-focussed as well as product-focussed operation whereby we focus on the washing process in minimising the time consumption yet not deteriorating the quality of our service products. With a warehouse of 7, 500 square feet, we have expanded the warehouse into 10, 000 square feet through renovation, as to maximise our space for machinery and higher carrying capacity. Besides that, our location is strategically located in Segambut Pusat where we are surrounded by car service centres and car dealerships. Thus, we believe we have huge potential business opportunity in this location. For car wash operation, customers who have selected the express package will be directed into the tunnel mode car wash machine by our staff that will be controlling the traffic flow at the entrance. As their cars are exiting the tunnel, there are direction signs to acknowledge them of the traffic flow towards the main exit of our shop. Along their path to exit, they will pass by the cash counter where they will make their payment for our service. In addition, for customers who have selected other packages, they will be directed to the designated parking lots for further service process. We have provided a rest room for the customers who will need to wait for the cars to be serviced. There is Wi-Fi service provided in our shop for customers. To add in extra revenue for our business, we do also have beverage sales where drinks are being sold to mainly customers who have seek for our car wash services. In BlitzWash Car Wash, every Monday is an off day for the business. For the operation hours, in weekdays, our car wash be in operation starting from 10 a. m. to 8 p. m. while for weekends, we are operating starting from 8 a. m. to 9 p. m. We do also apply the policy of working on holidays where double payment will be given to our washing staff but not management staff. However, there are holidays which we are close for operation such as Labour Day. In short, we are fully equipped with sufficient machinery and equipments with devoted employees to cater for the huge car wash industry in Segambut. 6. 2 Flow of Orders for Goods and Services Basically, we will make an order for goods monthly. In every month, the last week will be the closing week for our shop where an inventory check will be performed by our administration clerk. Once the remaining stocks have been keyed in into the computer system, appropriate purchase orders will be produced. Our detergents and car care products are ordered through online whereas our beverage stocks are ordered through sales representative and phone calls. The receiving of goods will be monitored by administration clerk as the logistic transportation arrived. We will only receive goods on weekdays. 6. Technology Utilization In terms of technology, we have brought in advance technology into our business operation. For car wash service, we have the Gantry Car Wash Machine QLX-10 which can operate for long hours swiftly and efficiently. This tunnel mode machine consume a time period of five to eight minutes per car for every single wash. While for manual car wash services, we have high qu ality and efficient water spray machines, foam spray machines, and polishers. For daily monetary sales, we have the cash register installed at our counter for recording every sale transactions occurred in our shop. This Sharp Cash Register XE-A102 has widely spaced keys lessen the chances of hitting the wrong key and its small footprint means it takes up the minimum counter space without sacrificing functionality. The 9-digit LED display is incorporated to clearly show the user price, total, change, and time. Four departments have been pre-programmed at the factory to minimise setup time. Two of them are preset for vatable items and two are preset for non-vatable items. Besides that, by simply turning the key to the Flash mode and pressing one key the store manager can get a quick look at the days sales. The Flash report can quickly display sales totals by department or for the whole store as well as the cash in drawer amount. A memory-equipped calculator function for whole number calculations can be activated with the mode switch. Therefore, we will be able to accurately monitor the daily sales of products in each category in order to calculate the contribution of revenue gained from each category. For administration, we have two set of Acer Desktop Set Veriton X275-254X with V193HQ LCD in our office for the documentation of every activity in our business. The Veriton X275 delivers key technologies and efficient utilities to meet our business and multitasking needs. The professional-looking black tool-less chassis is perfect for any corporate setting, while powerful components and robust management features ensure business success. The X275 features Veriton ControlCenter, a fast-access panel that comprises handy utilities for optimizing energy settings, instantly loading frequently used applications at startup, transferring data and personal settings to another PC seamlessly, and protecting your data from threats. Whats more, Acer Security Suite ensures document security and corporate privacy, while Acer Client Manager simplifies MIS and company network operation for remote management of common IT tasks. The system in the computer will assist us in monitoring the flows of our business in all aspects such as sales, operational costs, human resources, and inventory. Moreover, we also have two sets of HP LaserJet Pro M1132 MFP Printer which they have the functions of printing, scanning and copying. The printer is able to print as fast as 8. 5 seconds per paper with a duty cycle of up to 8000 pages per month. We have a SHARP FO-P610 Facsimile Fax Machine to help us in the sending of documents such as purchase orders to our suppliers. This transmission time needed for this fax machine is approximately 15 seconds. In summary, with all these technologies being utilized in our business operation, we believe that this will assist us in a smoother and more systematic monitoring of our business operations. 7. Marketing Plan 7. 1 Pricing Price is the amount charged for a product by the provider to customer. This is the most flexible element of marketing mix yet this is also the element which will cause us the most troubles. In the process of price setting, we have included several factors which affect our pricing decisions. Firstly, our marketing objective has been set as current profit maximization which means we will try to make as much profit as we can. Besides that, we are applying the concept of cost based pricing as well where we emphasise on covering on our costs. Along the process, we have undergone a product-bundling pricing stage among our shareholders. This process is to find the maximum price a customer will pay for a product in our shop. The final pricing are shown in the tables below. Due to the price elasticity of demand, we are bound to have promotional pricing. We follow the seasonal pattern of the weather as weather is the biggest environmental factor which will directly affect our sales. For our promotion, we have created discounted prices on our car wash packages during our promotional period in order to increase the demand for car wash services. For Car Wash Packages Products| Unit Costs(RM)| Unit Price (RM)| Profit Percentage (%)| Express| 2. 436| 12. 00| 79. 70| Interior| 5. 106| 16. 00| 68. 08| Full Wash Service| 9. 166| 25. 00| 63. 34| Waxing| 13. 392| 30. 00| 55. 36| Polishing| 5. 41| 20. 00| 70. 79| Full Treatment | 25. 963| 50. 00| 48. 07| Cost Details of Car Wash Packages Products| Details| Express| Foaming Prep (100ml) – RM1. 205Drying Agent (100ml) – RM1. 205Water (0. 013 m3) – RM0. 026| Interior| Carpet Clean (100ml) – RM1. 889Fabric Spot Cleaner (100ml) – RM3. 191Water (0. 013 m3) – RM0. 026| Full Wash S ervice| Carpet Clean (100ml) – RM1. 889Super Foam (100ml) – RM2. 171Fabric Spot Cleaner (100ml) – RM3. 191Glow Shampoo (100ml) – RM1. 889Water (0. 013 m3) – RM0. 026| Waxing| Foaming Prep (100ml) – RM1. 205Drying Agent (100ml) – RM1. 205Cream Wax (150ml) – RM6. 27Spray Wax (150ml) – RM4. 86Water (0. 013 m3) – RM0. 026| Polishing| Buff N Shine (150ml) – RM5. 841| Full Treatment| Glow Shampoo (100ml) – RM1. 889Carpet Clean (100ml) – RM1. 889Super Foam (100ml) – RM2. 171Fabric Spot Cleaner (100ml) – RM3. 191Buff N Shine (150ml) – RM5. 841Cream Wax (150ml) – RM6. 27Spray Wax (150ml) – RM4. 686Water (0. 013 m3) – RM0. 026| Calculation of Car Wash Packages Cost Drying Agent 1 bottle = 5 gallons = 18927. 05 ml 18927. 05ml / 100ml = 189. 27 ? 189 cars 1 bottle = RM227. 70 RM227. 70 / 189 = RM1. 205 100ml usage for a car ? RM1. 205 per car Foaming Prep 1 bottle = 5 gallons = 18927. 05 ml 18927. 5ml / 100ml = 189. 27 ? 189 cars 1 bottle = RM227. 70 RM227. 70 / 189 = RM1. 205 100ml usage for a car ? RM1. 205 per car Glow Shampoo 1 bottle = 1 gallon = 3785. 41 ml 3785. 41ml / 100ml = 37. 85 ? 38 cars 1 bottle = RM71. 775 RM71. 775 / 38 = RM1. 889 100ml usage for a car ? RM1. 889 per car Carpet Clean 1 bottle = 1 gallon = 3785. 41 ml 3785. 41ml / 100ml = 37. 85 ? 38 cars 1 bottle = RM71. 775 RM71. 775 / 38 = RM1. 889 100ml usage for a car ? RM1. 889 per car Super Foam 1 bottle = 1 gallon = 3785. 41 ml 3785. 41ml / 100ml = 37. 85 ? 38 cars 1 bottle = RM82. 50 RM82. 0 / 38 = RM2. 171 100ml usage for a car ? RM2. 171 per car Fabric Spot Cleaner 1 bottle = 1 gallon = 3785. 41 ml 3785. 41ml / 100ml = 37. 85 ? 38 cars 1 bottle = RM121. 275 RM121. 275 / 38 = RM3. 191 100ml usage for a car ? RM3. 191 per car Buff N Shine 1 bottle = 1 gallon = 3785. 41 ml 3785. 41ml / 150ml = 25. 23 ? 38 cars 1 bottle = RM146. 025 RM146. 025 / 25 = RM5. 841 150ml usag e for a car ? RM3. 843 per car Cream Wax 1 bottle = 1 gallon = 3785. 41 ml 3785. 41ml / 150ml = 25. 23 ? 25 cars 1 bottle = RM156. 75 RM156. 75 / 25 = RM6. 27 150ml usage for a car ? RM6. 7 per car Spray Wax 1 bottle = 1 gallon = 3785. 41 ml 3785. 41ml / 100ml = 25. 23 ? 25 cars 1 bottle = RM117. 15 RM117. 15 / 25 = RM4. 686 150ml usage for a car ? RM4. 686 per car Water 0. 013 m3 usage for a car 0. 013m3 x RM2. 07 = RM0. 026 Water tariff = RM2. 07/m3 For Car Care Products, Car Care Accessories and Car Air Products| Unit Cost(RM)| Unit Price(RM)| Profit Percentage (%)| Geft1 Wash Shine Car Shampoo 1 Liter| 6. 175| 9. 50| 35. 00| Geft1 Liquid Wax 500ml| 9. 54| 13. 50| 29. 33| Geft1 Metallic Crystal Wax 500ml| 10. 43| 15. 90| 34. 40| Geft1 Windshield Wiper Fluid 435ml| 4. 875| 6. 0| 25. 00| Geft1 Leather Care 500ml| 10. 43| 14. 90| 30. 00| Geft1 Auto UV Protectant 320ml| 7. 35| 10. 50| 30. 00| Geft1 Radiator Coolant 500ml| 3. 185| 4. 90| 35. 00| Geft1 Tyre Shine Gloss 320ml| 5. 10| 8. 50| 40. 00| Geft1 Wet Look Shine 500ml| 9. 45| 18. 90| 50. 00| Geft1 Engine Shine 2 in 1 500ml| 7. 475| 11. 50| 32. 65| Little Wagon Glass Squeege| 7. 425| 9. 90| 25. 00| Metallic SunshadeSize SSize MSize L| 5. 538. 2811. 13| 7. 9011. 9015. 90| 30. 0030. 4230. 00| Side Pocket (Acebell)| 8. 385| 12. 90| 35. 00| Non Slip Mat 2pcs (Low Audio and Video)| 1. 96| 2. 80| 30. 00| Little Wagon Non Slip Mat| 1. 3| 1. 90| 30. 00| Car Seat Tray (Acebell)| 15. 33| 21. 90| 30. 00| Visor CD Holder (Low Audio and Video)| 3. 44| 4. 30| 20. 00| Side Drink Holder TomCat | 6. 23| 8. 90| 30. 00| Hanger| 3. 99| 5. 70| 30. 00| Seat Cushion (DB Enterprise)| 38. 43| 54. 90| 30. 00| Seat Mat (DB Enterprise)| 16. 835| 25. 90| 35. 00| Lumbar Support (DB Enterprise)| 23. 34| 38. 90| 40. 00| ATTRACTflavor Lemonflavor Oceanflavor Osmanthusflavor CK-II| 1. 111. 111. 111. 11| 25. 0025. 0025. 0025. 00| 95. 5695. 5695. 5695. 56| For Beverages Products| Unit Cost(RM)| Unit Price(RM)| Profit Percentage(%)| Coca-Cola 325ml| 1. 167| 1. 0| 22. 20| Coca-Cola 500ml| 1. 583| 2. 00| 20. 85| Vanilla Coke 325ml| 1. 167| 1. 50| 22. 20| Vanilla Coke 500ml| 1. 583| 2. 00| 20. 85| 100 Plus 325ml| 1. 167| 1. 50| 22. 20| 100 Plus 500ml| 1. 583| 2. 00| 20. 85| 100 Plus Lime 325ml| 1. 167| 1. 50| 22. 20| 100 Plus Lime 500ml| 1. 583| 2. 00| 20. 85| Sprite 325ml| 1. 167| 1. 50| 22. 20| Seasons Soya 325ml| 1. 083| 1. 50| 27. 80| Seasons Chrysanthemum 325ml| 1. 083| 1. 50| 27. 80| Seasons Cincau 325ml| 1. 083| 1. 50| 27. 80| Seasons Ice Lemon Tea 325ml| 1. 083| 1. 50| 27. 80| FN Orange 325ml| 1. 416| 1. 50| 5. 60| FN Strawberry 325ml| 1. 416| 1. 0| 5. 60| FN Ice Cream Soda 325ml| 1. 416| 1. 50| 5. 60| FN Grape 325ml| 1. 416| 1. 50| 5. 60| FN Zapple 325ml| 1. 416| 1. 50| 5. 60| Aquarius 600ml| 0. 50| 1. 00| 50. 00| Aquarius 1. 5 Liter| 1. 00| 2. 00| 50. 00| 7. 2 Distribution Distribution is the process of making a product or service available for use or consumption by customers. In our business operations, we do ha ve distribution channels where a set of independent organizations as intermediaries being involve in the process. The use of intermediaries results from their greater efficiency in making goods available to targeted markets. The chart below is showing the distribution channel functions. Information Promotion Contact Matching Negotiation Physical Gathering and distributing marketing research about the environment Developing and spreading persuasive communications about an offer Finding and communicating with prospective buyers Shaping and fitting the offer to the buyer’s need Agreeing on price and terms of the offer so ownership or possesion can be transfered Distribution: transporting and storing goods Financing Acquiring and using funds to cover the costs of channel work Distribution Key Function Channel Risk Taking Assuming financial risks such as the inability to sell inventory at full margin Furthermore, the Internet is quickly becoming an effective distribution channel. The internet never closes and it allows companies to tangibilize their products and services. It reaches broad geographic areas which will help in market development. Other than that, the internet allows interaction with customers and saves labor cost. In our business operations, we have several organizational buyers which actually also served as our intermediaries to obtain more customers. We are targeting intermediaries from four sectors which are tabled as below. Therefore, with these 4 sectors as our major intermediaries, we believe that these distribution channels will help us to obtain larger market share. 7. 3 Promotion In our business operation, promotion is indeed an important element to boost our sales. For our opening, we will be holding the opening ceremony with invited lion dance and free buffet. Through this, we are hoping to get free publicity in the local news coverage. However, we will only apply promotion activity on the months which we predicted to be low in sales such as April which is in the rainy season. To attract more customers during low season, we will set up a discounted price packages for the promotion period. This information will be disseminated through the distribution of flyers in the local newspaper. We are not focusing much on the promotional events as we believe that normal daily sales and contract sales are sufficient to ensure no loss occurred in our yearly sales. In addition, we believe that during festival seasons, they will contribute to more sales in our business. In short, we do have promotional activities but we do not emphasizing on it. 7. Product Forecasts For our business in five years, we will have no changes in providing our service as in our car wash packages, car care products and beverages. We believe that our planning of these items is sufficiently able to cater to the market demand. Although modern world requires creativity to strive for highest profit in business, we believe that with these products, we are able to gain our Return of Investment (ROI) i n these five year planning periods. Moreover, in the car wash industry, the demand is increasing gradually with the increasing statistic of new car sales. People will need to wash their cars as to prolong their cars’ lifetime and always keep in good image. In this dynamic and fast moving decade, car wash service which is fast, efficient and value added will the first choice for them. In brief, we strongly believe that our packages will be in strong demand as we cater for all categories of car wash service with worthy price charged. 7. 5 Controls Controls will be divided into several aspects which will be elaborated in below: Establishing Standards: In order to control stocks, there will be three types of standards to establish which are quality, quality and standard costs. Quality standard is the degree of excellence of raw materials, finished products and work force. Quantity standard is the measurement of weight, count or volume used to make comparisons and judgments. Standard cost is the calculation of cost of goods and services identified, approved and accepted by management. Record and Report: Manager can extract information about the business operations, cash flows and stocks flow from records and report. However, reports can be very general and sometimes even bias. Manager need to be objective, focus on the issues involved and not rely on reports totally to make decisions. Specific reports would be more useful. Information in reports helps the manager to monitor the effectiveness of staff and processes. Prepare and Follow Budgets: Budgets are financial plans prepared for the future period and they are standards set to help control sales and cost. Actual costs and sales are compared with the budgets to make judgment on effectiveness of operations, employees’ actions and other relevant issues. 8. Organizational Plan 8. 1 Form of Ownership The form of ownership for our business is partnership. A capital of RM300, 000 has been invested into the business. The shares of the capital have been hold by six shareholders which are Tan Hann Lun, Law Jia Hui, Cia Sin Yin, Heng Luan Siang, Saim Shin Yee and Leow Siew Mun. The contribution of RM 300, 000 are divided by percentage to six shareholders which are Tan Hann Lun RM 96, 000 (32%), Law Jia Hui RM78, 000 (26%), Heng Luan Siang RM33, 000 (11%), Leow Siew Mun RM 33, 000 (11%), Saim Shin Yee RM30, 000 (10%) and Cia Sin Yin RM30, 000 (10%). The profit sharing of the business will be referring to the percentage of the capital share held by each shareholder whereas every shareholder is entitled for a 5% interest per annum on theirs capitals share. . 2 Management Team Background Manager: Tan Hann Lun (32% of capital share). He was from the business’s background and he was the main shareholder of the car wash business. Assistant Manager: Law Jia Hui (26% of capital share). She had experience in human resource management and financial management. Sales Representative: Heng Luan Siang (11% of capital share). He had wide social network. He is skillful in communication skills which is an essential element as a sales person. Sales Representative: Leow Siew Mun (11% of capital share). He had large connections as he had a few years’ experiences as a sales person. Administration Clerk: Cia Sin Yin (10% of capital share). She had experience in accountancy and administrative process. Administration Clerk: Saim Shin Yee (10% of capital share). She has experience in accountancy and administrative process. 8. 3 Roles and Responsibilties of Members of Organization Manager: The manager will monitor the whole business operations and govern all the staff under him. He will also have to monitor the cash flow of the business to prevent any abuse on business fund. All major decisions affecting the business will have to obtain consent from the manager. Assistant Manager: The assistant manager will assist the manager in ensuring the smooth flow of business operation. She will also control the cash counter in order to reprimand any shortage of cash at the end of the operation day. All administrative and financing is under her supervision as well. Sales Representative: The sales representative will hold the responsibility of looking for new intermediaries to increase the contribution of contract sales. They also need to ensure the stability of the relationships with our intermediaries by providing the best service. Administration Clerk: The job description for administration clerk is to organize and prepare all the documents needed for business operation such as printing invoices, sales report and stock report. 9. Assessment of Risk 9. 1 Evaluate Weaknesses of Business Location: Our location is located in the centre of industrial area. Therefore, the location is not strategically suitable to attract individual customers. Target Market: We have low potential opportunity for market development as we are surrounded by mostly commercial shops where we could not expand into the residential customers market. Price: Our pricing is slightly higher than the other car wash operators in the radius of 10km where we could differentiate ourselves from the competitors through product differentiation yet we also put ourselves into the condition of losing sales to our competitors as their prices are cheaper than us. Promotion: The nature of our business does not suit the promotional activities as there are not many promotions could be done other than discounting the prices. 9. 2 Contingency Plan For contingency plan, we have come out with plans to counter the emergency cases. If we suffer from the lack of cash liquidity, we will apply for loans to increase the amount of capital or the cash in hands. With loans from bank being approved, we could continue our business. If we suffer from losses, we could minimize our losses by letting other party to acquire our business. We could also change the business into other business such as car care products distributor. 10. Financial Plan 10. 1 Assumptions Our assumptions for sales forecasting are mainly depends on the weather forecast and festive seasons. Refer to appendix for weather forecast and festive seasons that we targeted for year 2011. For every following years, the figures will increased by 2%. Car Wash Sales (2011) Maximum Capacity| Volume of Cars| Weekdays | 100 cars| Weekends| 200 cars| Weekdays (work 10 hours, an hour break time) * Car wash machine – 8 minutes per car 60/8 = 7 cars per hour 7 cars x 9 hours = 63 cars per day * Manual wash – 15 minutes per car 60/15 = 4 cars per hour 4 cars x 9 hours = 36 cars per day Maximum capacity in weekdays = 63 cars (Machine) + 36 cars (Manual) = 99 cars, so we round out to 100 cars per day. Weekend (work 13 hours, an hour break time) * Car wash machine – 5 minutes per car 0/5 = 12 cars per hour 12 cars x 12 hours = 144 cars per day * Manual wash – 12 minutes per car 60/12 = 5 cars per hour 5 cars x 12 hours = 60 cars Maximum capacity in weekend = 144 cars (Machine) + 60 (Manual) = 204 cars, however we put 200 cars as maximum capacity in weekend. Distribution of packages 1. External (RM12) – 60% 2. Internal (RM16) – 3% 3. Full wa sh (RM25) 29% 4. Wax (RM30) – 2% 5. Polish (RM20) – 4% 6. Full Treatment (RM50) – 2% Contract distribution 1. Bridal 60? 2. Car Service centre 80? 3. Travel agency 100? 4. Car Dealer 20? Operation Day (Monday off) (work 27days) 1. Weekday – 19 days 2. Weekend – 8 days Sales Target – 80 % of the occupancy 80% of occupancy sales 1. Weekday – 1520 cars per month 2. Weekend – 1280 cars per month Weekday for contract Contract Contribution| Minimum number of car send per month| Service provided | Sales of contract($$)| Bridal| 60| Full Treatment| RM3000| Car Service Centre| 80| Full wash| RM2000| Travel Agency| 100| Full wash| RM2500| Car Dealer| 20| Full Treatment| RM1000| | | | Total : RM8500| Weekday Sales Prices of packages| Distribution of package| No. of car| Sales per day| Sales per month| RM12| 60%| 768| RM477. 47| RM9072| RM16| 3%| 28| RM32| RM608| RM25| 29%| 365| RM480. 26| RM9125| RM30| 2%| 25| RM39. 47| RM750| RM20| 4%| 50| RM52. 63| RM1000| Rm50| 2%| 25| RM65. 79| RM1250| | Contract| 260| RM447. 37| RM8500| | | | Total: RM1594. 99| Total: RM30305| Weekend sales Prices of Packages| Distribution of Package| No. of car| Sales per day| Sales per month| RM12| 60%| 768| RM1152| RM 9216| RM16| 3%| 38| RM 76| RM 608| RM25| 29%| 371| RM 1159. 38| RM 9275| RM30| 2%| 26| RM 97. 5| RM 780| RM20| 4%| 51| RM 127. 5| RM 1020| Rm50| 2%| 26| RM 162. 5| RM 1300| | | | Total: RM2774. 88| Total: RM22199| Car wash sales in year 2011 Month| Feb| Mac| Apr| May| June| July| Aug| Sept| Oct| Nov| Dec| Target sales| 85%| 63%| 70%| 70%| 78%| 83%| 90%| 86%| 71%| 76%| 81%| Car Care Products Setting quantity of the car product sales by going ups and downs around 3% to 5% every single month. The figure setting by looking 10% of the total quantity on the first month and maintain the sales until end of the years. We setting the figure based on the quantity not total sales. We do maintain the quantity of the car product to reach the average selling. Beverages Soft Drinks 325ml – RM1. 5 per can 500ml- RM2 per bottle 1 carton – 24 cans / bottles Sales (can 325ml)Sales (bottle 500ml) 4 carton x 24 cans = 96 cans3 carton x 24 bottles = 72 cans 96 cans x RM1. 5 = RM14472 bottles x RM2 = RM144 Mineral water 600ml- RM1 per bottle 1. 5L – RM2 per bottle 1 boxes 24 bottles Sales (bottle 500ml)Sales (bottle 1. 5L) 5 boxes x 24 bottles = 120 bottles5 boxes x 24 bottles = 120 bottles 120 bottles x RM1 = RM120120 bottles x RM2 = RM240 Assumption of Beverage cost Soft drinks (325ml 500ml) 325ml – coca cola, coca cola vanilla, 100 plus, 100plus lime,sprite Cost / (cartonx24cans) = cost per can 28/24 = RM1. 167 per can 500ml- coca cola, coca cola vanilla, 100 plus, 100plus lime Cost / (cartonx24bottle) = cost per bottle 38/24 = RM1. 583 per bottle 325ml- Season’s soya, chrysanthemum, cincau, Ice lemon tea Cost / (cartonx24cans) = cost per can 26/24 = RM1. 083 per can 325ml – FN orange, strawberry, ice cream soda, grape, zapple Cost / (cartonx24cans) = cost per can 34/24 = RM1. 417 per can Mineral Water Aquarius 600ml 12/24 = RM0. 50 per bottle 1. 5 Littler 12/12 – RM1 per bottle Salary We do follow the labor law in Malaysia. EPF and Socso will be given after the staff confirmation by the organization. The period will be 3 months started from the first working day. The salary was following the survey in the industries. After the confirmation that will be allowance given based on the position. e. g. Admin clerk * Salary RM1000 * Allowance RM200 * EPF 100011%=RM110 * Socso RM4. 75 RM1000-RM110-RM4. 74+RM200=RM1085. 26 Electricity and Water The consumption of electricity and water will depends on the car wash sales of the month concerned. Electric Tariff = RM0. 397 per kWh Water Tariff = RM2. 07 per m3 10. 2 Budgeted Cash Flows (5 years) Refer to appendix 10. 3 Budgeted Income Statement (5 years) Refer to appendix 10. 4 Budgeted Balance Sheet (5 years) Refer to appendix 10. 5 Break-even Analysis Based on our calculation in the year 2011, Total sales = RM763, 789. 60 Total Variable cost = RM235, 613. 01 Total Fixed Cost = RM188, 440. 75 Contribution = RM528, 176. 59 C/S Ratio = 0. 692 Therefore, the BEP of sales is = RM188, 440. 75 x 1/0. 692 = RM272, 313. 22 10. 6 Sources and Application of Funds Name| Amount of Invest| Shares Hold| Tan Hann Lun| RM 96, 000| 32%| Law Jia Hui| RM 78, 000| 26%| Heng Luan Siang| RM 33, 000| 11%| Leow Siew Mun| RM 33, 000| 11%| Saim Shin Yee| RM 30, 000| 10%| Cia Sin Yin| RM 30, 000| 20%| Total| RM 300,000| 100%| The sources for the capital fund are self-financed by the shareholders themselves. This capital fund will be fully being invested into the business. Funding for equipments, stocks, and renovations will be allocated from the fund. 10. Conclusion In conclusion, our business plan is a feasible plan and worth for investment. With all the supportive data, we conclude that car wash business is indeed a profit-earner business. 11. Appendix Sample Shareholder Agreement AGREEMENT made and entered into as of the ________ day of ____________, 2XXX , by and among John Doe, residing at [specify address] (hereinafter Doe), and Mark Smith, residing at [specify address] (hereinafter Smith), and XYZ, Inc. the Corporation). W I T N E S S E T H:WHEREAS, all of the issued shares and outstanding stock of the Corporation are owned in the following percentages: Doe 50% Smith 50% WHEREAS, the Shareholders hereto deem it to be in the best interest of the Corporation to act together concerning the management of the Corporation as well as to make provision for the contingency of the death or disability of any Shareholder and to set forth the manner and method by which a Shareholder may sell his stock during his lifetime. NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS; FIRST: MANAGEMENT AND OPERATION OF THE CORPORATION A. 1. Directors and Officers. For the duration and term of this Agreement, the Shareholders will elect and continue in office as Directors of the Corporation the following: Smith Doe The Officers of the Corporation shall be: Smith President; Treasurer Doe Vice President; Secretary B. Voting. All decisions within the ordinary course of business shall be made by the unanimous consent of both the President and the Vice President, who shall have equal say in the management of the ordinary course of business of the Corporation. In addition, for the purposes of selling, terminating, liquidating, entering loans or changing the basic purposes of the Corporation, the quorum and voting requirements shall be 100 percent of all shareholders and/or directors. Simultaneously herewith the Certificate of Incorporation is being amended to provide for the terms of this section. C. Checks. All cash, checks and instruments for the payment of monies are to be deposited in the Corporations bank account. All checks drawn upon such account are to be signed jointly by the President and Vice President and/or their nominees. D. Salaries. The President and Vice President agree to draw equal salaries, as voted upon by the Board of Directors of the Corporation. E. Employment. The President and Vice President agree to work full-time and exclusively for the Corporation. Neither party shall be permitted to own an interest in, operate, join, control, participate in directly or indirectly, or be connected as an officer, employee, agent, independent contractor, partner, stockholder or principal of or in any corporation, partnership, firm, association, person or other entity soliciting orders for, selling, distributing or otherwise marketing products, goods, equipment and/or services which directly or indirectly compete with the business of the Corporation, without the express written consent of the other, which consent shall not be unreasonably withheld. Both parties shall provide such services to the operation of the Corporation and Corporate business as shall be deemed proper and necessary, including keeping each other informed of all letters, accounts, writings and other information which shall come to their attention concerning the business of the Corporation. Both parties shall keep or cause to be kept full records of each transaction of the Corporation and shall maintain such records at the principal office of the Corporation at [specify address], or at the principal office of the Corporations accountant. Said records shall be open for inspection and examination by each of them, or their duly authorized representative, at all reasonable times. Notwithstanding the foregoing, each of the Executive officers above named agree to be employed by the Corporation and the Corporation agrees to employ them under the following terms and conditions: 1. The employment of each such Officer shall continue so long as he is a Shareholder of the Corporation. 2. Each Executive Officer devotes all of his working time, energy and attention solely and exclusively to the business of the Corporation, and none of his working time to any other firm or business without the written consent of the other. 3. In the event any Executive Officer terminates his employment with the Corporation or it is determined by arbitration as hereinafter provided that such Officer has breached the terms of his employment hereunder, by committing acts constituting just cause to terminate such employment as determined by the arbitrators, or by failing to render exclusive time and attention to the business of the Corporation, or by participating, either directly or indirectly, in another business competitive with the business of the Corporation, then either of any such occurrences shall be deemed an offer to sell all of the shares that such Officer owns in the Corporation at the price, terms and conditions set forth in this Agreement. F. Disability. In the event either Shareholder is unable to perform the normal duties of his employment due to physical or mental disability, then the following shall apply: 4. During the first three hundred sixty five (365) consecutive days of such disability the Corporation shall pay to the disabled Shareholder such weekly salary and compensation as was then being paid to the disabled Shareholder prior to the onset of disability. 5. After three hundred sixty five (365) consecutive days of disability, no further compensation or salary shall be paid to the disabled Shareholder. 6. After three hundred sixty five (365) days of such disability, the Corporation and the remaining shareholder shall, at any time thereafter and prior to the resumption of the normal duties of employment have the right to purchase all shares of stock of the disabled Shareholder as if the disabled Shareholder offered to sell all of his shares in the Corporation at the same price, terms and conditions set forth in the Article of this Agreement entitled Lifetime Sale of Shares. . There shall be deducted from any salary paid to a disabled Shareholder all payments received by the disabled Shareholder from any private or public disability insurance, the premiums of which were paid for by the Corporation. G. Indemnity. In the event any Shareholder is held personally liable for any liability of the Corporation, then the other Shareholder shall inde mnify him against fifty percent (50%) of any such personal liability. H. Death Of A Shareholder. In the event of the death of a Shareholder, the legal representative of his Estate shall be required to sell all of decedents shares of stock of the Corporation and he shall be deemed to have offered all of said shares to the Corporation and surviving Shareholder. 8. Acceptance. The Corporation shall be deemed to have accepted the offer to purchase as many shares as it may legally purchase. In the event the Corporation is unable to legally purchase all of such shares, the surviving Shareholder shall purchase those shares which the Corporation cannot legally purchase. 9. Closing. Closing shall be held at the office of the attorney for the Corporation, [specify attorney], on a date and time to be mutually agreed upon but no later than ten (10) days after either the determination of the purchase price or appointment of a legal representative for the decedents estate, whichever is later. The article of this Agreement entitled Manner Of Payment, sets forth the documents and papers to be executed and/or delivered at closing. 10. Purchase Price. The purchase price of a deceased Shareholders stock shall be determined by the Shareholders in writing every six (6) months. If no such written determination has been agreed upon within six (6) months from date of death, then the price shall be fixed at the gross commission income received by the Corporation during the preceding full fiscal year. 11. The Corporation may obtain life insurance policies on the lives of each of the Shareholders. In the event such life insurance policies are so obtained, then the Corporation shall collect the proceeds thereof, hold same as trustee and turn same immediately over to the legal representative of the deceased Shareholder as payment on account for decedents share of stock. In the event said insurance proceeds exceed the amount of the purchase price as hereinabove provided, then the legal representative of the decedent shall retain the amount of said proceeds as payment in full for decedents stock. In the event the purchase price of decedents stock as hereinabove provided exceeds the proceeds of insurance, then the balance of the purchase price shall be paid pursuant to the article of this Agreement entitled Deferred Payment. The amount of the insurance collected by the Corporation on decedents life shall in all events constitute the minimum purchase price to be paid by the Corporation for the shares of the decedent. 12. If one of the two (2) Shareholders should die, and if the remaining Shareholder should die within ninety (90) days after the death of the first Shareholder, then, notwithstanding any agreement to the contrary, neither the Corporation nor the Estate of the second deceased Shareholder shall be obligated to purchase, nor shall the Estate of the first deceased Shareholder be obligated to sell the stock held by said Estate. In such event, the proceeds of the life insurance on the lives of both Shareholders shall be delivered to the Corporation and shall belong exclusively to the Corporation, which shall be immediately liquidated and dissolved, and the proceeds of liquidation, after payment in full of the liabilities of the Corporation shall be paid to the Estates of the deceased Shareholders, proportionately to the stock interest of the deceased Shareholders in the Corporation. 13. In the event the Corporation is not legally able to purchase all or part of said shares and the surviving Shareholder fails or refuses to purchase all or the balance of such shares as hereinabove provided, and such failure or refusal continues for a period of ten (10) days after written notice by the personal representative of the deceased Shareholder to the Corporation and surviving Shareholder, the parties do hereby agree that the Corporation shall and will be liquidated and dissolved forthwith and all salaries of all Officers and Directors shall immediately cease. The Corporation shall pay to the Estate of the decedent from the first proceeds of liquidation (after deducting or paying all liabilities of the Corporation), a sum equal to the purchase price for decedents shares (as hereinafter provided), less a sum equal to all insurance proceeds received by such Estate from life insurance policies owned by the Corporation. I. Lifetime Sale Of Shares. No Shareholder of the Corporation shall sell, transfer, pledge, hypothecate or assign or in any way dispose of all or any part of his stock except by sale to the Corporation or the other Shareholder as hereinafter provided. All of the stock certificates of the Corporation shall contain an endorsement that they are subject to the terms and provisions of this Agreement which shall state the following: The transferability of the stock represented by this Certificate is restricted by an Agreement filed with the Corporation among the parties hereto, bearing date the ________ day of _____________, 199 , a copy of which Agreement may be examined at the office of the Corporation. 14. Offer. In the event a Shareholder desires to dispose of his stock in the Corporation, he shall offer by certified mail, return receipt requested, all of his shares to the Corporation and the other Shareholder at the purchase price set forth herein. The Corporation shall have the first option to purchase as many of the shares as it can legally purchase. If the Corporation cannot legally purchase all of the stock or fails to indicate acceptance of the offer by certified mail, return receipt requested, within twenty (20) days from the receipt of the offer, then the remaining Shareholder shall have the option to purchase all or the remaining balance of said shares. The remaining Shareholder if he desires to purchase the stock as offered, shall indicate his acceptance by certified mail, return receipt requested, to the seller and to the other Shareholder, within thirty (30) days after the receipt of the original offer. The purchase price shall be the smaller of: (a) the agreed upon valu