At least 18 percent of the global population own at least one vehicle. That translates to over 1.4 billion vehicles in the world. That is a staggering number of vehicles and the figure keeps growing. Vehicles constitute several electrical and mechanical aspects. That is why they are always likely to malfunction or get worn out over time. The average vehicle has approximately 30 000 parts. If we are to look at substantially big parts or components, that is roughly 1800 parts. Vehicle ownership has been on the rise and will continue to be; even multiple vehicle ownership. The other notable dynamic is that vehicle owners are generally now keeping their vehicles for longer. As such that increases the likelihood of them needing auto spare parts at some point. That clearly shows you there is money to be made in starting an auto spare parts store business. Despite whatever the state of the economy might be in, the demand for auto spare parts will always be high. This article will outline how to start the auto spare parts store business, and the auto spare parts business plan – PDF, Word and Excel.
The Need To Gather Comprehensive Up-To-Date Data
Market research for auto spare parts business is basically 3-tier i.e. market identification, product research, and consumer research. You can conduct market research by conducting surveys, observations, interviews, and desk research. Desk research involves gathering and analysing information from print and electronic media. The reason why you must conduct market research for motor spares business is to figure out whether or not a market exists. Then if it does you would want to comprehensively know all its characteristics.
Several Variables To Consider
There are numerous different types of vehicles, brands, and makes. The most populated segment is light motor vehicles. However, that might not hold true everywhere. Thus you have to zone in on your intended target market and know its characteristics. All these are examples of variables that call upon you to conduct market research. What are the most sought after auto spare parts and for which types of vehicles?
Figuring Out The Roll Out Plan
You also have to gather enough information to know how to roll out your auto spare parts store business. Do you have to operate from a physical outlet? Should that physical outlet exclusively just focus on auto spare parts? Do you have to marry the auto spare parts element with an already existing business e.g. a fuel station, a garage, or workshop?
Maybe it could be best to consider franchising. How about rolling out the motor spares business exclusively using an online store approach? You have to know where you will score as many customers as possible. Making a decision out of all those options can only be accurate if your market research is thorough.
Make sure you have a comprehensive auto spare parts business plan
The failure to plan is the beginning of business failure. The auto parts business plan must be clear and succinct enough to give your potential partners, clients and investors an overview of what your objectives are. At the same time, it must be detailed enough to explain your business well. Your motor spares business plan should have financial statements which show that your business is viable and profitable.
Location And Premises for an Auto Parts Store
Your choice of location is of critical importance with respect to customer inflows. An appropriate location must take into account places where there are good road networks and high vehicle traffic. Your choice must also be done after being absolutely sure that your target area has people with substantial income levels. It would also be wise to scout your intended location and see whether or not there are other players active in the same trade. Once you get comprehensive details on that it’ll help you setup shop in a way that wards off competition.
As can be noticed from some central business districts, such stores can be located in streets lined up with auto spare parts shops. That can be strategic in that you get easily located due to people’s knowledge of the street. However, considering that you’ll be close to your competitors you’ll have to be very competitive. Deciding to locate yourself as a standalone shop can be expedient but do your homework to ensure customer inflows will be easy to mobilize. In general, the best location is in a central business district, shopping centres, or near places or residential areas that have high vehicle populations. The store must be sufficiently spacious with spare parts stacked neatly on clearly labelled rakes or sections. There must also be ample and secure parking space with even a loading bay where applicable. The auto spare parts store business plan should cater for the costs of purchasing or leasing the premises.
Your auto spare parts store business cannot operate in a vacuum. There are competitors and you must study them closely. What are their business offerings? What is the nature of their customers and where are they from? Generally how are they running their auto spare parts store businesses? You are looking at all these and more to find out loopholes or gaps. The auto spare parts store business is extremely competitive. Your success can only be borne out of having superior differentiators. It will take conducting an in-depth competitive analysis to figure them out. The auto spare parts store business is highly segmented. Most players are not diligent enough in studying and finding out the finer details of their intended target markets. Take time to dig into that and you will discover how to set apart your auto spare parts store business.
Permits/Licenses, Insurance & Business Bank Account
Your business entity i.e. your auto spare parts business must be registered first and foremost. If you are going to be operating using a physical auto spares store, a store license will be needed. The requirements vary depending on your specific location. Mostly you can seek guidance on that from the local authorities of your respective location. There may be special permits or licenses that may be required depending on the nature of your services. It is possible that you might be dealing with auto spare parts, substances, machinery, or processes that require special licensing.
It could also be that some of your personnel may be required to be licensed for their respective trades. You have to see to it that you are not found wanting by operating without proper permits or licensing. Insurance is a no-brainer in running an auto spare parts business. There is an array of possible risks which need to be covered by insurance. As always it is smart to separate yourself from your business in terms of financial management. That is why you must open a business bank account solely for your auto spare parts store business. The costs of insurances and licenses must be included in your motor spares business plan.
Auto Spare Parts Products
Your product range will be hugely based on your targeted market. There auto spare parts market is huge and there several niches which your auto parts business can target. Your motor spares parts can specialize with selling auto parts for only one vehicle make eg Mercedes-Benz, Audi etc. Specialisation can also be according to product lines, eg gearboxes, suspension parts, engines, cooling systems, braking system, tyres etc. Focus can also be made to sell quick replacement auto spare parts eg brake pads, brake shoes, high pressure pumps, filters etc. Other auto spare parts stores act like one-stop stores which sell a variety of products without specialising in anything.
The types of auto spare parts products you can sell are many and diverse. Some of them are bumpers, radiators, filters, batteries, plugs, fenders, ball joints, shock absorbers, body parts, bearings, plugs, lamps and lights (i.e. headlamps, corner lamps, tail lights and so on), sensors, rims, grills, lubricants, amongst others. It’s important to source your stock from reputable suppliers and at favourable prices so as to subsequently price them competitively at a profit. Your auto parts store business plan should obviously cater for the costs of purchasing the products which your store will be selling. You can source your auto spare parts from local and international suppliers.
For the auto spare parts store business this is best done using a digital solution. There is countless inventory management software you can purchase or be licensed to use. The ideal one should allow you to manage inventory, manage orders, manage bills, manage customer accounts, and more. This should all be doable from a centralized system that provides accurate real-time data.
Staff And Management
This will be depend on the size or scale of your auto parts business operations. At the minimum you need cashiers and store attendants. I can’t overemphasise the importance of having staff that’s well acquainted with auto spare parts and the technical details thereof. Hiring either qualified personnel with the necessary expertise or employees wielding a comprehensive background regarding vehicle repairs and maintenance will be strategic. The staff must also be passionate about engaging with customers, and be good at offering quality customer service and care. Size of management also depends on the size of the business, for small auto spare store businesses, this can just be the business owner. The salaries of all the staff should be budgeted for in the auto spare parts business plan.
Market for Auto Spare Parts Store Business
The market for auto spare parts products is huge due to the high number of cars. The customer base for auto spare parts products include transport companies, organisations, individuals, mechanics and auto repair companies, companies, insurance companies, garages, panel beating and spray painting companies etc. You have to build a loyal customer base so as to get repeat customers. This can be achieved by offering high quality products at competitive prices. Good customer service is also key to winning the heart of customers. Due to the competition from other players, your auto spare parts business should carry out advertising campaigns to make more people aware of its existence. Your auto spare parts store business plan should include a proper marketing strategy to help you boost sales.
First Things First – Press Release & Official Launch
When starting an auto spare parts store you must do a proper press release. A press release is one of the most tried and tested means to market your business. Marry that with doing a notable official launch of the store.
Digital Marketing Must Be Central
The core of your marketing initiatives, moving on, should be premised on digital marketing. Put up active social media accounts for the auto spare parts store business. One of the trending ways nowadays is to conduct online contests on social media. Your contests must incorporate the use of hashtags and rewarding the highest engagements.
Involving social media influencers can enhance the efficacy of your digital marketing efforts. Though of course you can and must still place ads in print and other electronic media. For example, you can place ads to be aired on radio or TV. Hand out fliers or put up banners, posters, or billboards.
Participation In Strategic Events & Initiatives
Additionally, you must always be on the lookout for strategic events to attend. These can be trade shows, car shows, racing events, expos, and the like. Participate in community development programs to increase visibility of your auto spare parts store business.
Pre-Written Auto Spare Parts Store Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements
For an in-depth analysis of the auto spare parts store business, we encourage you to purchase our well-researched and comprehensive auto spare parts store business plan. We introduced the business plans after discovering that many were venturing into the auto parts business without enough knowledge and understanding of how to run the business, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.
The StartupBiz Global auto spare parts business plan will make it easier for you to launch and run your auto spares business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the auto parts business.
Uses of the Auto Spare Parts Business Plan (PDF, Word And Excel)
The auto spares store business plan can be used for many purposes including:
- Raising capital from investors/friends/relatives
- Applying for a bank loan
- Start-up guide to launch your auto parts store business
- As an auto spare parts store business proposal
- Assessing profitability of the motor spares business
- Finding a business partner
- Assessing the initial start-up costs so that you know how much to save
- Manual for current business owners to help in business and strategy formulation
Contents of the Auto Spare Parts Business Plan (PDF, Word And Excel)
The auto parts business plan include, but not limited to:
- Marketing Strategy
- Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
- Industry Analysis
- Market Analysis
- Risk Analysis
- SWOT & PEST Analysis
- Operational Requirements
- Operational Strategy
- Why some people in the auto spare parts store business fail, so that you can avoid their mistakes
- Ways to raise capital to start your auto spare parts store business
The auto spare parts business plan package consists of 4 files
- Auto Spare Parts Store Business Plan – PDF file (Comprehensive Version – 68 Pages)
- Auto Spare Parts Store Business Plan – Editable Word File (Comprehensive Version – 68 Pages)
- Auto Spare Parts Store Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 42 pages)
- Auto Spares Parts Store Business Plan Automated Financial Statements – (Editable Excel File)
The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the percentage markup, salaries etc, and all the other financial statements will automatically adjust to reflect the change.
Click below to download the Contents Page of the Auto Spare Parts Business Plan (PDF)
Get the Auto Spare Parts Store Business Plan (PDF, Word And Excel)
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