Amalgamated Enterprises, Corporation
Presents: The Shine Car Wash
Amalgamated Enterprises, Corporation Presents:
The Shine Car Wash Business Plan
Denise Mellene
University Of Phoenix – Las Vegas
This document contains confidential and
proprietary information belonging exclusively to Amalgamated Enterprises, Corporation.
It is not to be copied or duplicated in any way without the expressed and
written consent of Amalgamated Enterprises, Corporation.
Denise Mellene
Chief Executive Officer
P.O. Box 70261
Las Vegas, NV 89170
(555) 555-5555
Plan 1 of 10
December, 1999
This is a business plan. It does not
imply an offering of Securities.
Executive Summary
Vision
The “Shine” car
wash will be the cleanest and technologically advanced two-bay freestanding car
wash, with remote (video) security monitoring, in the projected service area.
In our first full year of operation, we intend to establish “Shine” as a
premium self-service exterior, interior auto care facility. “Shine” must be
able to create and maintain financial balance by charging a fair market value
for services, which exceed customer expectations in quality and service.
Mission
“Shine” will
offer technologically advanced, frictionless, touch free, exterior, and
interior automotive care.
Company Overview
The legal name
of The Shine Car Wash is Denise Mellene, d.b.a. Amalgamated Enterprises,
Corporation. The legal form of the business is a C-Corporation. The business
location of Shine Car Wash is at 4860 Topaz, the closest major arterial is
Tropicana Avenue, which is 2000’ south of the facility.
Management
The management
team consists of our President Denise Mellene, with over 15 years of marketing
experience, and Chairman of the Board William Pitzer, who has 18 years of
successful car wash propriety. Outside management support includes Leland B.
Kerr, Corporate Attorney, and Jacque Carlo, Accountant.
Product Strategy
The “Shine” car
wash will offer not only the cleanest and technologically advanced car wash,
with remote (video) equipment security, and monitoring. It will also offer our
customers peace of mind; by freeing them from worrying about scratching and
damage associated with brush or cloth type car washes. This will fulfill the
community’s need for a high quality premium; touch free in-bay automatic, car
wash service.
Market Analysis
The population
demographics within a 3-mile radius of the facility is 163,479 people, as
indicated in the Nevada Commission on Economic Development “1999 Las Vegas
Perspective,” derived from the United States Census Bureau, and other market
surveys performed by the Center for Business and Economic Research. Our market
research has determined that the car wash consumer resides in multi family
housing units. Based upon the Geographic Information Systems (GIS) map derived
from the Clark County Assessors, Land Use databases and the Center for Business
and Economic Research database within the three mile radius of the survey
center location of 4860 Topaz, there are 36,673 dwellings, zoned R3 or greater.
The Nevada Commission on Economic Development “1999 Las Vegas Perspective”
indicates that in the four zip codes within the three-mile radius of the
service area there are 75,283 occupied multi family housing units. This
reflects that 67.5% of the dwellings within the study area are multi family
housing units.
Marketing Plan
“Shine’s”
marketing strategy is to aggressively support and promote that we are the
cleanest; the most technologically advanced touch free and frictionless car
wash in the valley. The key element in attracting and keeping customers is
offering a high level of service and a quality product. The perception and
ability of the car wash to produce a wash that is damage-free to vehicles is
extremely important to the success of an operation.
Advertising and Promotions
Our advertising
and promotional strategy is to position “Shine” as the cleanest,
technologically advanced, frictionless car wash in the valley. The following
methods will be utilized to drive our message to our customers. The grand
opening of “Shine” car wash will be executed upon completion of cleaning and
landscaping the facility. A mass mailer will be sent to the targeted market
population, within a three-mile radius of the “Shine” location. This mailer
will be divided up into zip codes and launched in two-week increments. During
the first thirty days, a representative from Amalgamated Enterprises
Corporation will be on location during daylight hours to meet and greet
customers and assist with any question and concerns. After the initial
promotional period, a representative will still be at the facility daily for a
four-hour minimum. Keeping the “Shine” facility clean and in excellent
operating condition is essential to the success of this business venture. In
addition to the grand opening mailer, all fleet operators within a five-mile
radius will be identified and contacted to promote package discounts for fleet
use above five vehicles.
Financial Plan
The financial
plan assumptions for the “Shine” car wash facility have been projected under
the worst-case scenario. The industry standard sales forecasts are based upon a
capture rate of 8-14% of the average daily traffic count. We estimated 76% of
the average daily traffic count, with the sales capture rate at 8% providing
potential monthly sales of 7,410 washes. At
$5.00 per unit sold, our gross revenues would be $9,740- $17,045 per month for
auto wash services. This business
has all the ingredients necessary to be developed into a successful
self-service and in-bay automatic car wash.
Exit/Payback Strategy
The increase in
profits generated by “Shine” as projected in the following business plan will
allow us to have the funds to retire the private investor loan in five years.
Concurrently paying the bank loan, which will be retired at the end of fifteen
years. Upon talking with a representative at “Bankwest of Nevada” at the Sahara
branch location, she said that it was the standard business practices of their
bank to finance 75% of the amount needed for the business venture, at a rate of
1-2% above the prime index, an estimated 10%. A private investor will fund the
additional 25% of the monies at an estimated 14% interest rate.
Table of Contents
Executive
Summary 2
Introduction 11
Product 12
Market 13
Competition 14
Marketing 15
Operations 16
Organization
and Management 18
Reference 21
Appendix 22
Figure
1 Market Study Area 3-mile Radius...................................................................................... 12
Figure 2 Aerial photo of
car wash parcel.......................................................................................... 16
Table
1 Competition within the Study Area...................................................................................... 15
The “Shine” car wash will be the cleanest
and technologically advanced car wash, with remote (video) security monitoring.
In our first full year of operation, we intend to establish “Shine” as a
premium class exterior, interior auto care facility. “Shine” must be able to
create and maintain financial balance, charging a fair market value for
services, exceeding customer expectation in quality and service.
“Shine” car wash will provide the
cleanest and technologically advanced, high quality touch free, exterior, and
interior automotive care. Using products that enhance the appearance of the
vehicle, increasing the resale value of the automobile.
The “Shine” car wash will offer the
cleanest and technologically advanced system, with remote equipment security,
and monitoring. This business is offering a state of the art, high technology
computer monitored system that will stand out against the old generation brush
or cloth type car washes. “Shine” will offer customers peace of mind, free from
scratching and damage associated with brush or cloth type car washes. “Shine”
will not only provide an in-bay automatic touch free system, but also provide a
self-serve wash facility. Fulfilling a community need for a high quality
premium service, touch free in-bay automatic and self-service car wash.
Of the car washes operating today, 13% are less
than 10 years old and of those 7% are less than 5 years old. As vehicle prices
and maintenance cost continue to rise, car owners are realizing they need to keep their vehicle longer and pay
more attention to the upkeep of the vehicle. Also with the increase in vehicle
costs, owners have taken a great deal of pride in their vehicles. Due to all of the
factors, the public has been quick to recognize and accept the value of high
quality car wash services.
The market has grown considerably in the
last two years locally. In 1997, according to the United States Census Bureau
of county business patterns, there were 37 car washes in Clark County. Today
that number has nearly doubled to 61 verifiable and completed facilities in the
Las Vegas Metropolitan area with 7 additional facilities pending construction
at the time of this report.
The Las Vegas Valley from north to south
Sheep Mountain to the Henderson cut off mountain is 27 miles and from west to
east the Red Rock Mountains to Rail Road pass is 27 miles. The approximate
total area of the Las Vegas Valley is 729 square miles. The urban Las Vegas
Valley is 27 miles from north to south and west to east at Sunrise Mountain is
18 miles. The approximate total area of the Las Vegas Metropolitan area is 486
square miles. The Las Vegas Metropolitan area is 38 percent saturated with car
washes, the growth potential is excellent, with the capability of handling an
additional 101 car washes in the Greater Las Vegas Valley. The following is a
breakdown of the types of car washes in the Las Vegas valley and the potential
remaining market share. There are 43 self-service, 7 drive through in-bay
automatics, and 11 full-service automatic car washes.
The site location of the new “Shine”
facility is located at 4860 Topaz. The current facility is under renovation,
with modifications to convert two self-serve bays into in-bay automatics.
The market size is a 3-mile radius from
the location of the facility. The corporate clientele can be targeted within a
5-mile radius of the facility. Our market research has determined that the car
wash consumer resides in multi family housing units.
Figure 1 Market Study
Area 3-mile Radius
The population demographics within a
3-mile radius of the facility is 163,479 people, as indicated in the Nevada
Commission on Economic Development “1999 Las Vegas Perspective”, derived from
the United States Census Bureau, and other market surveys performed by the
Center for Business and Economic Research. Our market research has determined
that the car wash consumer resides in multi family housing units. Based upon
the Geographic Information Systems (GIS) map derived from the Clark County
Assessors, Land Use databases and the Center for Business and Economic Research
database within the three mile radius of the survey center location of 4860
Topaz, there are 36,673 dwelling zoned R3 or greater. In reviewing the Nevada
Commission on Economic Development “1999 Las Vegas Perspective” indicates that
the four zip codes within the three mile radius of the service area have 75,283
occupied multi family housing units. This reflects that 67.5% of the dwellings
within the study area are multi family housing units.
The Las Vegas climate lends itself to
this type of business. The annual
rainfall average is .58 inches per year. The temperature in the Las Vegas
Valley ranges from an average low of 48 degrees to the average high 92
degrees. The surrounding neighborhood
of the site location also lends itself to our client demographics. The
neighborhood influences include McDonalds, Apartments, Arby’s, Kentucky Fried
Chicken, Wendy’s, and a county park. Based upon the information compiled, this
site has a good market potential. This location should have all the ingredients
necessary to be developed into a successful self-service and in-bay automatic
car wash.
The total population within the study area is 163,479 people. The drive by market, the average daily traffic count as reported in the 1997 Nevada Department of Transportation report consists of 51,500 cars per day at Tropicana Avenue and McCleod, and 55,300 cars per day at Tropicana Avenue and Eastern translating into a 106,800 potential customer volume. The Nevada Department of Transportation anticipated a 4.5% traffic increase annual due to population growth. The traffic count numbers at a 4.5% growth rate consecutively from 1997 – 2000 translates into 121,876 potential customer volume. To be conservative we utilized an 8% capture rate of the potential customer volume. 21,876 * .08 = 7,410 customer volume count per month. Using an industry formula (appendixes) for a conservative estimate of .76 percent of the daily traffic count for projected monthly business would estimate our customer volume at 1948-3409 automobiles washed per month. At $5.00 per unit sold, our gross revenues would be $9,740- $17,045 per month for auto wash services.
1.
3295 Desert
Inn Rd, this facility has six self-service bays and a smog check station.
2.
1315 E.
Tropicana is a self-serve 10 bay facility.
3.
2718 E.
Tropicana is a Terrible Herbst full service wash catering to a different
clientele than the self-serve and in-bay automatic. Even though this location
is virtually on the back door of the self-serve wash, it is not considered
direct competition.
4.
3550
Cambridge, this facility has six self-service bays.
5.
4405
Boulder Highway is a single tunnel full-service wash located inside the Boulder
Station Casino. This car wash, though located inside the three-mile radius, is
not direct competition, as the “pass by” traffic would not be aware of the car
wash until entering the parking garage of the casino.
7.
2275 E.
Sunset is a self-service 7 bay wash plus 1 in-bay automatic. It is direct
competition. However, the physical barrier of the landscaping, particularly
McCarren International Airport, reduces the direct impact of this facility on
our business.
8.
2353 Warm Springs
Rd. is a full service wash. The physical barrier of the landscaping
particularly McCarren International Airport reduces the direct impact of this
facility on our business.
Table
1 Competition within
the Study Area
Marketing
The grand opening of “Shine” car wash will be executed upon completion
of cleaning and landscaping the facility. A mass mailer will be sent to the
target market population, within a three-mile radius of the “Shine” location.
This mailer will be divided up into zip codes and launched in two-week
increments. Each mailer will contain a vending card with the address
information on it, and a cash value redeemable towards a car wash. During the
first thirty days, a representative from Amalgamated Enterprises, Corporation
will be on location during daylight hours to meet and greet customers and
assist with any question and concerns. After the initial promotional period, a
representative will still be at the facility daily for a four-hour minimum.
Keeping the “Shine” facility clean and in excellent operating condition is
essential to the success of this business venture. In addition to the grand
opening mailer, all fleet operators within a five-mile radius will be
identified and contacted to promote package discounts for fleet use above five
vehicles.
The
warranty policy will be a 24-hour rain guarantee. If it rains within 24 hours
of your vehicle’s being washed, we will provide you another wash the following
day free.
Operations
The site location is 4860 Topaz, 2000’
north of Tropicana Avenue, aerial view in Figure1.
Figure
2 Aerial photo of
car wash parcel.
The building from Tropicana Avenue sits behind McDonald’s
restaurant. The buildings and grounds need to be maintained on an ongoing
basis. All exterior walls will be power cleaned to remove all dirt and buildup,
once every six months. The landscaping will be maintained on a biweekly basis.
The landscape will be desert based landscaping with green plant accents.
The current building is a 6 bay self-serve
wash. After the building conversion prior to sale, it will contain four
self-serve bays and two in-bay automatics. The facilities equipment list
includes the following: eight vacuums, four power clean wash bays, four brushes,
four wash wands, two in-bay automatic washes, two glass front vending machines
vending interior cleaning products.
Suppliers
The in-bay automatic supplier is the
Powerrain Company. Powerrain will provide the equipment, chemicals, and vending
supplies for the “Shine” car wash. Armor-all will provide the interior vending
products.
A remote monitoring systems will be used
to provide real time immediate oversight of the operation via modem to the
office 24 hours a day. This system will immediately notify Amalgamated
Enterprises Corporation of equipment status, number of cars washed and the
amount of money or coupons collected. The system will be capable of re-styling
the equipment setup, and turn the equipment on or off. This system also provides
reports that can facilitate optimum maintenance and operation. Combined with a
modem connected to a security (video) monitoring system, it will provide
24-hour observation monitoring of the facility. In addition to being monitored,
the facility will be well lit. This provides a safe environment for customers
and creates a deterrent against vandalism and other potential crimes.
The staffing of “Shine” will consist of
the President of Amalgamated Enterprises, Corporation. The president will be
responsible for ensuring the day-to-day operation of the car wash, including
cleaning the facility.
Organization and Management
The legal name of The Shine Car Wash is
Denise Mellene, d.b.a. Amalgamated Enterprises, Corporation. The legal form of
the business is a C-Corporation. Our management team consists of people whose
backgrounds consist of over 15 years of marketing, and over 20 years of
successful car wash propriety. The management team consists of Denise Mellene,
President, and William Pitzer, Chairman of the Board. Outside management
support includes Leland B. Kerr, Corporate Attorney, and Jacque Carlo,
Accountant.
Denise
Mellene has special qualifications including over fifteen years of professional
experience holding a variety of responsible positions in communications.
Experienced in public contact roles, able to cultivate and maintain
relationships with a wide variety of individuals, extensive oral and written
communication skills. Ms. Mellene is a professional with a Masters degree in
business administration. She is creative, innovative and prepared to adapt a
variety of talents towards new challenges.
William Pitzer is a multi-millionaire and an entrepreneur that has over twenty years of experience in successful business endeavors, including a car wash.
Financial Plan
The financial plan assumptions for the
“Shine” car wash facility have been projected under the worst case scenario.
The industry standard sales forecasts are based upon a capture rate of 8-14% of
the average daily traffic count. We estimated 76% of the average daily traffic
count, with the sales capture rate at 8% providing potential monthly sales of
7,410 washes. Taking into consideration the seasonality of the car wash
business, even in Las Vegas the capture rate was modified again, the winter
month’s project a 35% of the 8% capture rate as indicated in the chart below.
|
Year |
2000 |
2001 |
2002 |
2003 |
2004 |
|
Projected Traffic Count (1) |
121,876 |
127,360 |
133,092 |
139,081 |
145,339 |
|
Potential Customer Base (2) |
92,626 |
96,794 |
101,150 |
105,701 |
110,458 |
|
Sales at 8% Capture(3) |
7,410 |
7,744 |
8,092 |
8,456 |
8,837 |
|
(1) Projected from 1997 Traffic Count at 4.5% growth
rate/year; Average growth rate during this period was 5%. |
|
|
|||
|
(2) Calculated from the Projected Traffic Count and
Potential Sales |
|
|
|
||
|
(3) Calculated from the Potential Customer Base and
Capture Rate; Typical capture rate for this type of business is 8-14%. |
|
|
|
||
|
Sales
Category |
Unit
Price |
Material
Cost |
Utility
Cost |
Net
Profit |
%
Util |
|
Standard Wash |
$5.00 |
$0.60 |
$0.55 |
$3.85 |
60% |
|
Upgraded Wash |
$6.00 |
$0.62 |
$0.55 |
$4.83 |
35% |
|
Extended Dry |
$6.50 |
$0.65 |
$0.55 |
$5.30 |
5% |
|
(1) Apportions the Captured Sales to each Sales
Category. |
|
|
|
|
|
|
|
|
|
|
||
|
Variable |
% |
|
|
||
|
Traffic Potential |
76% |
|
|
||
|
Capture Rate |
8% |
|
|
||
|
|
|
|
|
||
|
Seasonal Wash |
%
of Volume |
|
|
||
|
Winter |
35% |
Dec-Feb |
|
||
|
Spring |
80% |
Mar-May |
|
||
|
Summer |
100% |
Jun-Aug |
|
||
|
Fall |
80% |
Sep-Nov |
|
||
(1)
Modifies the Captured Sales by the expected seasonal usage of the
facility.
The sales forecast numbers do not include any
increased sales from advertising, only an increase in sales in relation to the
increase in the average daily traffic counts. The average growth rate from 1997
– 2000 was .5; we projected a conservative growth rate of 4.5%. Even at the
worst-case scenario this is a financially sound business investment.
Exit/Payback Strategy
The increase in profits generated by
“Shine” as projected in the following business plan will allow us to have the
funds to retire the private investor loan in five years, and concurrently
paying the bank loan, which will be retired at the end of fifteen years. Upon
talking with a representative at “Bankwest of Nevada” at the Sahara branch
location, she said that it was the standard business practices of their bank to
finance 75% of the amount needed for the business venture, equal to $486,323.80
at a rate of 1-2% above the prime index, an estimated 10%. A private investor
will fund the additional 25% of the monies, equal to $160,614.74 at an
estimated 14% interest rate.
Bibliography
Self Service Car
Wash News, Volume 24-No. 2, Winter 97-98
The International
Car Wash Association (ICA) “1995 Study of Consumer Car Washing Attitudes and
Habits”
Professional
Carwashing and Detailing 1999 Self Serve Statistical Survey February 1999
Entities:
Nevada
Development Authority, 1999 Las Vegas Perspective
The
Las Vegas City Zoning Department, Parcel Land Use
The
Clark County Planning Department, Parcel Land Use
The
Clark County Demographics Department, Apartment Occupancy
The
Clark County Assessors Office, Business Licenses and Land Use
The
Clark County Fire Department, Geographic Information
Interviews:
WR Zuraff –
Local Car wash owner/operator
William Pitzer –
Chairman of the Board of Amalgamated Enterprises, Corporation
Bob Clements – Board member of the International Carwash
Association
Bob
Potts – University Nevada of Las Vegas, Center for Business and Economic
Research
Internet
Appendixes
Figure 1: Map
of Las Vegas Land Usage……………………………….…. i
Figure 2:
Photograph of the Powerrain in-bay automatic………………….. ii
Figure 3:
Photograph of the Powerrain dryer system………………………ii
Formula 1:
Industry standard for determining customer volume..…………iii
Financials…………………………………………………………………..iv
Map of Las Vegas
Figure: 1 Land Use and Car Wash Locations
Powerrain 1500 In-Bay Automatic
Figure 2
Powerrain Dryer System
Figure 3
Formula 1
Customer
Volume Formula:
Traffic
count from cross streets: 51,500/day + 55,300/day = 106,800 * .76% = 81,168 *
30 (days open per month) = 2,435,040 potential customer volume. These are 1997
Nevada Department of Transportation figures with an estimated growth rate at
4.5 % annually due to population growth. To consider the current population
growth rate. The traffic count numbers at a 4.5% growth rate consecutively from
1997 – 2000, translate into 121,876 potential customer volume. To be
conservative we utilized an 8% capture rate of the potential customer volume.
21,876 * .08 % = 7,410 customer volume count per month.