February 2006

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Table of Contents
1.0 Executive Summary...........................................................
..................................................................1 1.1 Mission.
................................................................................
.......................................................1 1.2 Objectives ........
................................................................................
...........................................2 1.3 Keys to Success ...............
................................................................................
.........................2 2.0 Company Summary..................................
................................................................................
...........2 2.1 Company History................................................
........................................................................2 3.0 Pr
oducts and Services.............................................................
...........................................................4 4.0 Market Analysis
Summary........................................................................
..........................................5 4.1 Market Segmentation ............
................................................................................
....................5 4.2 Target Market Segment Strategy........................
.....................................................................6 4.3 Servi
ce Business Analysis............................................................
............................................7 4.3.1 Competition and Buying Patte
rns ............................................................................
.............7 5.0 Strategy and Implementation Summary .........................
...................................................................7 5.1 Competi
tive Edge ......................................................................
................................................7 5.2 Marketing Strategy........
................................................................................
.............................7 5.3 Sales Strategy...............................
................................................................................
.............8 5.3.1 Sales Forecast.............................................
...........................................................................8 5.4
Milestones.....................................................................
..............................................................9 6.0 Web Plan Sum
mary ...........................................................................
...............................................11 6.1 Website Marketing Strategy
................................................................................
...................12 6.2 Development Requirements .............................
......................................................................13 6.2.1 T
echnical Specifications.........................................................
.............................................14 7.0 Management Summary .........
................................................................................
...........................14 7.1 Personnel Plan................................
................................................................................
.........15 8.0 Financial Plan .................................................
................................................................................
...16 8.1 Break-even Analysis...................................................
.............................................................17 8.2 Projected Pr
ofit and Loss ..................................................................
.....................................18 8.3 Projected Cash Flow.................
................................................................................
..............21 8.4 Projected Balance Sheet ...................................
.....................................................................24 8.5 Busi
ness Ratios ....................................................................
...................................................24 8.6 Financial Risks and Co
ntingencies-2...................................................................
.................26
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Mad Keen Motors
1.0 Executive Summary
Mad Keen Motors is a family-owned business loc ated in Bac kwater Downs, a subur
b of London. It has been under the ownership of the Keen family for 35 years and
has grown from a single mec hanical repair shop to five loc ations that deal wi
th body and mechanical repairs, vehicle storage and towing, washing and valeting
and used car sales. This plan is an internal document, outlining the effects on
the company of adding a website. The Mad Keen Motors website will ac t as an ad
ditional customer service element for all our garages, offering basic advice on
car maintenance, information about our services, staff, and loc ation, and regul
ar disc ount offers for website visitors on featured repairs and maintenance. Ou
r current phone-based and fac e-to-fac e customer service is excellent, but requ
ires that potential customers make ac tive contac t with the company to learn ab
out us. Most of our new business comes from referrals from current satisfied cus
tomers. We hope to make the referral proc ess easier, by encouraging existing cu
stomers to point out our website to their friends, colleagues, neighbours and fa
mily members, building familiarity with our company long before they need emerge
ncy car care or consider buying another car. The "advice" section will be crucia
l in establishing customers' trust in our expertise, as will our affiliation wit
h nationallysyndicated car experts. By helping loc al customers help themselves,
Mad Keen hopes to build trust and relationships with existing and potential cus
tomers.
1.1 Mission
Mad Keen Motors provides excellent automotive care and service to all of our cus
tomers, whether they need to buy a used car, contrac t major body work or get a
simple wash and wax.
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1.2 Objectives
The objec tives of the Mad Keen Motors website are: 1. To drive traffic from the
website to the garage. 2. To expand the community of Mad Keen Motors customers.
3. To provide customers with a substantial list of questions and answers regard
ing typical car repairs. 4. To allow convenient bookings for service and repairs
.
1.3 Keys to Success
The keys to success for the company's website will be: 1. Compiling an extensive
and thorough listing of questions and answers that will encourage customers to
return to the site whenever they have a problem with their cars. 2. Providing ad
ditional expert advice for answers that customers don't find in the base list of
questions in a timely and thorough manner. 3. Offering Web-based promotions tha
t will encourage customers to book cars into the garage through the website. 4.
Communicating the site's existence to the businesses and residents within the lo
c al area. 5. Getting existing customers to rec ommend the website to others.
2.0 Company Summary
Mad Keen Motors is a family-owned business loc ated in Bac kwater Downs, a subur
b of London. It has been under the ownership of the Keen family for 35 years and
has grown from a single mec hanical repair shop to five loc ations that deal wi
th body and mechanical repairs, vehicle storage and towing, washing and valeting
and used car sales.
2.1 Company History
Mad Keen Motors has done very well. Annual net profits have exceeded £30,000 for t
he last two years. We dec reased the marketing budget last year, which led to a
small dec line in sales. By directing the missing amount (and a bit more) toward
s the creation of a website, we hope to increase overall sales and net profits.
The table shows only last year's performance.
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Table: Past Performance
Past Performance Sales Gross Margin Gross Margin % Operating Expenses Stock Turn
over Balance Sheet FY 2003 Current Assets Cash Stock Other Current Assets Total
Current Assets Fixed Assets Capital Assets Accumulated Depreciation Total Fixed
Assets Total Assets Current Liabilities Accounts Payable Current Borrowing Other
Current Liabilities (interest free) Total Current Liabilities Fixed Liabilities
Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Tota
l Capital and Liabilities Other Inputs Payment Days FY 2004 FY 2005 FY 2003 £0 £0 0.
00% £0 0.00 FY 2004 £0 £0 0.00% £0 0.00 FY 2005 £798,000 £767,853 96.22% £695,820 5.01
£0 £0 £0 £0
£0 £0 £0 £0
£203,488 £12,040 £70,000 £285,528
£0 £0 £0 £0
£0 £0 £0 £0
£1,250,000 £15,000 £1,235,000 £1,520,528
£0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
£0 £0 £0 £0 £0 £0 £0 £0 £0 £0 £0
£20,000 £0 £0 £20,000 £750,000 £770,000 £400,000 £314,488 £36,040 £750,528 £1,520,528
0
0
30
3.0 Products and Services
Mad Keen Motors offers body and mec hanical repairs, vehicle storage and towing,
washing and valeting and used car sales.
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4.0 Market Analysis Summary
Mad Keen will target the following market segments with its website: 1. 2. 3. 4.
5. New car owners Older luxury car owners Sports car owners Lifetime owners Buy
ers
4.1 Market Segmentation
Mad Keen Motors 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 therefo
re their garage requirements. 1. New car owners: owners of newer cars are likely
not to use the company's garage repair service. If they do have problems with t
heir car, they will return to the dealer where they bought it. These owners, tho
ugh, will take great pride in their cars and will bring them often to the wash a
nd valet service. The goal with these customers is to promote regular use of the
wash and valet service. Eventually, as their warranty runs out, the goal will b
e to sell them on the efficiency, excellent service and price competitiveness of
Mad Keen Motors' repair services. 2. Older luxury car owners: people who have e
ither owned their high-end luxury cars for some years, or are unable to afford t
he expense of a brand 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 ha
ve bought second-hand cars will often spend many hours in their cars and will pl
ac e much importance on reliability. These owners will bring their cars in for r
egular services and oc casional valets. 3. Sports car owners: people who are you
nger, or middle-aged men, and will regard performance as important. They will al
so pride themselves on the look of their car and if involved in a minor sc rape
will have the body repaired very quickly, since looks are also important. These
people will have regular service and tune-ups on their cars. 4. Lifetime owners:
many of these people have owned their cars for more than five or six years. The
y are more likely to be women. They are attac hed to their cars as friends and t
hough it may be more sensible for them to purchase a new car, they will continue
to have repairs done on their "old faithful." 5. Buyers: the site will provide
links to information on new and used car prices and include tips on what to look
for when buying a car.
Table: Market Analysis
Market Analysis 2005 Potential Customers New Car Owners Sports Car Owner Older l
uxury car owner Lifetime Owners Used Car Buyers Total Growth 2% 5% 10% 2% 12% 5.
40% 52,000 25,000 30,000 80,000 40,000 227,000 2006 53,040 26,250 33,000 81,600
44,800 238,690 2007 54,101 27,563 36,300 83,232 50,176 251,372 2008 55,183 28,94
1 39,930 84,897 56,197 265,148 2009 56,287 30,388 43,923 86,595 62,941 280,134 C
AGR 2.00% 5.00% 10.00% 2.00% 12.00% 5.40%
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4.2 Target Market Segment Strategy
Aside from the washing and valet services, we are currently targeting owners of
older cars or cars in need of much maintenance, since that will provide us the g
reatest revenue.
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4.3 Service Business Analysis
The garage repair business as a whole is fragmented. There are a few major deale
rships in eac h area, with a larger number of small garage repair shops, like Ma
d Keen Motors. Dealers target customers who buy new and used cars from them. Sma
ll garages rely on word of mouth and get most new customers bec ause of emergenc
y car care needs.
4.3.1 Competition and Buying Patterns
Word of mouth is important in the car repair business, since people are very war
y of garages, due to their lac k of knowledge of cars and engines. Mad Keen Moto
rs leads the loc al competition in regards to word of mouth, having been in busi
ness for over three dec ades under the same ownership. Competition from dealersh
ips is bec oming stiffer. Car design is bec oming more and more specialized, as
car manufacturers aim to encourage owners of their vehicles to have services car
ried out at their franchised dealerships. However, small garages like Mad Keen h
ave a price advantage over dealership, usually charging 50-70% less per hour for
repair work.
5.0 Strategy and Implementation Summary
The marketing budget for this website is limited, so we will be relying on grass
roots and viral marketing to spread the word about the site. In addition, the na
rrow geographical foc us of the business does not necessitate large sc ale adver
tising and marketing support. We will foc us on communicating with neighbours, n
earby businesses, and existing customers to get the word out about the new websi
te.
5.1 Competitive Edge
The website's competitive edge is that it: 1. Provides a loc al service for Bac
kwater Downs car owners and wannabe car owners; 2. Has the benefit of over 60 ye
ars of automobile repair experience to draw from; 3. Provides an additional mode
of communication for customers. In addition, the website itself will be a compe
titive edge for the company as a whole, opening up new methods of communicating
with our customers and potential customers, and making bookings and customer ser
vice faster and more convenient.
5.2 Marketing Strategy
Each of the car-owning groups identified in the Market Segmentation will be targ
eted, with different portions of the website directed at their unique needs. Our
marketing strategy for the website itself involves mailing fliers to all existi
ng customers in our database, as well as to nearby neighbours and businesses. Th
e fliers will include a special savings code - by going to the website and enter
ing the code on the mailer, they ac cess a 10% off coupon they can use on their
next visit.
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5.3 Sales Strategy
Mad Keen c loses the sale by always putting our best fac e forward. Employees ar
e thoroughly trained in c ustomer service, the fac ilities are attrac tive and c
lean, and estimates for repair work are prepared promptly. A customer who is not
suffering an immediate emergency will "shop around" until he finds a shop that
feels trustworthy - it is our job to earn that trust in every encounter and cont
rac t.
5.3.1 Sales Forecast
"Standard revenues" represents projec tions of existing revenue streams over the
next three years. The second line shows projec tions for additional sales and c
osts directly related to the new website, either from increased visibility or on
line coupons. By the end of the 2006, we expec t almost 2.5% of monthly sales to
be directly trac eable to the website, rising to 4% by the end of 2008.
Table: Sales Forecast
Sales Forecast FY 2006 Sales Revenue from all Standard Streams Increased Sales t
hrough website Other Total Sales Direct Cost of Sales Direct Costs Other Subtota
l Direct Cost of Sales £804,000 £18,360 £0 £822,360 FY 2006 £32,894 £0 £32,894 FY 2007 £820
3,000 £0 £843,080 FY 2007 £33,723 £0 £33,723 FY 2008 £836,482 £35,000 £0 £871,482 FY 2008 £
,859
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5.4 Milestones
The following milestones illustrate the timeline for the development and impleme
ntation of our website.
Table: Milestones
Milestones Milestone Draft layout to owners Website Content Developed Initial UI
Completed Back End Developed Design Approved Graphics & Logos Completed BETA Co
mplete User Testing Necessary Changes Site Launch Totals Start Date 01/02/2006 0
1/02/2006 10/02/2006 01/03/2006 16/03/2006 20/03/2006 20/03/2006 01/04/2006 07/0
4/2006 12/04/2006 End Date 10/02/2006 01/03/2006 01/03/2006 15/03/2006 20/03/200
6 30/03/2006 30/03/2006 07/04/2006 11/04/2006 12/04/2006 Budget £250 £0 £500 £700 £0 £0 £50
0 £200 £0 £2,350 Manager Adrian Mark/Barry Adrian Adrian Mark/Barry Elisabeth Adrian A
drian Adrian Adrian Department Consultant Owners Consultant Consultant Owners Ad
min Consultant Consultant Consultant Consultant
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6.0 Web Plan Summary
The key champion for the development of the website is the co-owner of Mad Keen
Motors, Mark Keen. He will be responsible for managing the development of the si
te and will work closely with Adrian Monkey on the design and creation. He will
also be responsible for implementing the promotions that will be run at least mo
nthly on the site and will maintain the "Ask the Mechanic" section on the site.
Most of the site development will be carried out by the consultant, Adrian Monke
y. He will initially be paid a pre-arranged fee as he completes eac h stage of d
evelopment. Later he will be paid a monthly retainer to maintain the site. Barry
Keen will work with Mark to develop the content section of the site dealing wit
h typical car problems and tips on maintaining your vehicle during the different
seasons. Website Demographics Strategy The website will foc us on the the first
three segments, since the last segment of lifetime owners are less likely to be
connec ted to the Internet. It will also target people in the loc al area who a
im to move into any of these categories (buyers), by providing information on ho
w to buy a used car, and links to sites that contain new car reviews and pricing
information. Traffic Forecast The following traffic forec ast has been c reated
after researching other small loc al service websites, and based on the size of
the potential market with Internet presence in the Bac kwater Downs area. It is
a conservative estimate of monthly page views and unique user sessions. Feb Uni
que Users Page Views Total 100 500 Mar 175 800 Apr 250 1250 May 450 2200 Jun 600
2900 Jul 400 2000 Aug 400 2000 Sep 600 2900 Oct 600 2900 Nov 500 2400 Dec 400 2
000 Jan 600 2900
600
975
1500
2650
3500
2400
2400
3500
3500
2900
2400
3500
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6.1 Website Marketing Strategy
The website will have two main goals: 1. To provide potential and existing custo
mers with information about their cars through the provision of a typical proble
ms area, plus an Ask the Mechanic Question and Answer section, where they can ha
ve specific questions about their cars answered. 2. To ease the service experien
ce and improve customer service through online booking database section that wil
l allow them to review their cars service and repair rec ords. Key sections of t
he website will be: • • • • Question and Answer section. Ask the Mechanic section. Buyer
s guide--how to look for a new car. Links to information on car reviews--new and
used.
Strategic Internet Alliances Mad Keen Motors will rely on its alliance with Web
consultant Adrian Monkey to ensure that the site is maintained and regularly upd
ated. Business Model The aim of this site is not to earn direc t sales, but to i
ncrease customer satisfac tion rates, and therefore increase retention levels by
10%. In addition, the goal will be to encourage other customers in the Bac kwat
er Downs area to choose Mad Keen Motors over other service and repair fac ilitie
s. The overall goal of the site in terms of increased sales is 7-10% over the ne
xt year. Site Positioning For sports car owners who value the importance of thei
r car's performance Mad Keen Motors website will give them tips on how to keep t
heir car in tip-top running condition, with things that they can do themselves,
as well as solutions that their loc al garage can provide. Unlike the loc al qui
ck stop garages, it will provide part of the full-service solution for sports ca
r owners. Unlike dealerships, prices will be competitive. For older luxury car o
wners who value personal service, Mad Keen Motors website will provide another w
ay for them to interac t with the garage and provide excellent customer service.
Unlike dealerships websites, it will not simply foc us on new cars, it will pro
vide them valuable information on their make and model of older luxury car as we
ll as a full database of information on their car that they will be able to ac c
ess at any time. For buyers who require an abundance of information when making
a purchase, Mad Keen Motors website will provide an extensive list of online res
ources, so will ac t as a starting point for their search for information eac h
time they ac cess the Web. Unlike other online sites it will also give customers
information about what to look for in a used car, that may save them the time a
nd money of a mec hanics inspec tion.
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6.2 Development Requirements
Website Outline The site will be designed with the following technology: ColdFus
ion, SQL and HTML. Home Page: explains the website's relation to the company, wi
th visible links to the other sections of the site. Section 1 - Q&A: begins with
search. Visible links will go off to the subsections below. • Ask the Mechanic: s
imple form that sends directly to the head mechanic. • Q&A Browse: users will be a
ble to browse through other customer's Q&A sessions. Section 2 - Booking • Page 1:
first page will display available dates, customer clicks on preferred available
time, and proc eeds to the next page. • Page 2: customer fills out name, phone nu
mber, and car problem. • Page 3: confirmation page for customer to print off as a
reminder. • User Car Information: first page has two links: "Buying a car" and "Se
lling a car." • Buying a car: first half of page with summary information, bottom
half contains links to helpful sites. • Selling a car: first half of page with sum
mary information, bottom half contains links to helpful sites.
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6.2.1 Technical Specifications
Front End Bec ause most people in the UK currently ac cess the Web from their ho
mes at 56.6k or less, the user interfac e will be a simple as possible, though s
till looking professional. Graphics will be kept to a minimum in order to keep d
ownload times short. Though pictures of cars for sale will take up room, thumbna
il views with access to larger views will be used. Information will be organized
in buckets listed on front of eac h page so navigation will be as simple as pos
sible for users. The Objectives of the User Interfac e will be: 1. To allow easy
and fast navigation for the users. 2. To create interest so that people will us
e and return to the site. 3. Display a lot of content information in a simple a
manner as possible. 4. To encourage user interac tion, i.e. bookings online and
questions to the mec hanics. Back End The bac k end of the site will be very sim
ple, since it is really an information only website. There will be a number of a
reas where a visitor can send an email to request an answer to an expert questio
n, to get information about a used car for sale or to book in their car for serv
ice. Visitors will be able to interac t with the site in two ways: 1. Send an em
ail requesting an appointment to have their car cleaned, valeted or repaired. 2.
To ask questions about problems they may be having with their car, for example
"I had new brake pads fitted on my car approximately eight moths ago and they ha
ve started squeaking. Is it possible that they are worn out already?" We will be
hiring a Web engineer, Adrian Monkey, to build the website, so he will build th
is functionality into the site. We will rely on Adrian to give us rec ommendatio
ns for the database we will use to support the site. Resource Requirements Mad K
een Motors will hire the services of a consultant, Adrian Monkey, to build the w
ebsite. Both the bac k end and the front end will be outsourced. The contents of
the Website will be developed by the company owners, who between them have over
60 years of automobile repair experience, and the secretary who has excellent w
riting skills. Future Development Future development will be assessed after the
website has been launched and user tested. It is hoped that the site will be pop
ular enough to include an area for online repair bookings.
7.0 Management Summary
Mad Keen Motors is a family business, in which eac h employed family member over
sees the area of operations best suited to his or her talents. • Mark Keen is in c
harge of marketing and advertising, and non-mec hanic employee training and per
sonnel issues. Mark will oversee the company's new website • Barry Keen is head me
c hanic, and supervises all the mec hanics working for Mad Keen Motors. • Elisabet
h Keen oversees the financial aspec ts of the business, including billing, ac co
unting, and taxes. In weekly meetings, these managers follow up on planned goals
and deadlines and plan for the ongoing operations of the business. Page 14
Mad Keen Motors
7.1 Personnel Plan
Mad Keen employees ten full-time mec hanics, as well as eight other full-time wo
rkers who serve as rec eptionists, car wash and valet attendants, and salespeopl
e.
Table: Personnel
Personnel Plan Mark Keen, Co-Owner Barry Keen, Co-Owner Mechanics Other Staff El
isabeth Keen, Admin Total People Total Payroll FY 2006 £24,000 £18,000 £240,000 £102,000
£18,000 17 £402,000 FY 2007 £20,000 £20,000 £242,000 £103,000 £20,000 17 £405,000 FY 2008
£20,000 £243,000 £104,000 £20,000 19 £407,000
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8.0 Financial Plan
Website Expenses and Costs: We expec t to spend £6,200 over the next year on devel
oping and then maintaining the website, with regular updates. We project another
£6,200 will be needed for the same areas over the following two years. In additio
n, we will have a slightly lower price/c ost spread for website-related sales, o
nce online coupons and other disc ounts are included. These have been fac tored
in to the cost of sales. We will trac k this amount with a special record for "w
ebsite coupons" in our sales and customer database. Website Revenues: We anticip
ate an additional £18,360 of sales in the next year direc tly related to the devel
opment of the website. This is based on reports from other loc ally foc used ser
vice businesses which implemented websites to enhance visibility and promote sal
es through online disc ounts.
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8.1 Break-even Analysis
The following table and chart show our break-even analysis with the website in p
lac e.
Table: Break-even Analysis
Break-even Analysis Monthly Revenue Break-even Assumptions: Average Percent Vari
able Cost Estimated Monthly Fixed Cost £40,547
4% £38,925
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8.2 Projected Profit and Loss
This table outlines additions to the standard operating expenses for developing
and maintaining the website. Detailed monthly numbers can be found in the append
ix.
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Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total
Cost of Sales Gross Margin Gross Margin % FY 2006 £822,360 £32,894 £0 £32,894 £789,466 96.
00% FY 2007 £843,080 £33,723 £0 £33,723 £809,357 96.00% FY 2008 £871,482 £34,859 £0 £34,859
96.00%
Expenses Payroll Other Expense Account Name Depreciation Standard Operating Expe
nses Website Infrastructure Website Development Website Maintenance Expensed Equ
ipment Payroll Taxes (National Insurance, etc.) Other Total Operating Expenses P
rofit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profi
t Net Profit/Sales
£402,000 £0 £4,800 £0 £0 £0 £0 £0 £60,300 £0 £467,100 £322,366 £327,166 £73,700 £74,600 £17
£405,000 £0 £4,800 £190,000 £0 £0 £1,500 £2,000 £60,750 £0 £470,550 £338,807 £343,607 £71,4
2.20%
£407,000 £0 £4,800 £196,000 £0 £0 £1,500 £1,200 £61,050 £0 £472,850 £363,772 £368,572 £69,0
3.68%
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8.3 Projected Cash Flow
Mad Keen Motors is in a strong c ash position right now, and can afford the rela
tively small expenses to start up the website. The following table and chart sho
w our projected cash flow and cash balance.
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Table: Cash Flow
Pro Forma Cash Flow FY 2006 Cash Received Cash from Operations Cash Sales Subtot
al Cash from Operations Additional Cash Received VAT Received (Output Tax) VAT R
epayments New Current Borrowing New Other Liabilities (interest-free) New Fixed
Liabilities Sales of Other Current Assets Sales of Fixed Assets New Investment R
eceived Subtotal Cash Received Expenditures Expenditures from Operations Cash Sp
ending Bill Payments Subtotal Spent on Operations Additional Cash Spent VAT Paid
Out (Input Tax) VAT Payments Principal Repayment of Current Borrowing Other Lia
bilities Principal Repayment Fixed Liabilities Principal Repayment Purchase Othe
r Current Assets Purchase Fixed Assets Dividends Subtotal Cash Spent Net Cash Fl
ow Cash Balance FY 2007 FY 2008
£822,360 £822,360
£843,080 £843,080
£871,482 £871,482
£143,913 £0 £0 £0 £0 £0 £0 £0 £966,273 FY 2006
£147,539 £0 £0 £0 £0 £0 £0 £0 £990,619 FY 2007
£152,509 £0 £0 £0 £0 £0 £0 £0 £1,023,991 FY 2008
£402,000 £232,757 £634,757
£405,000 £245,377 £650,377
£407,000 £252,838 £659,838
£13,175 £98,254 £0 £0 £24,000 £0 £0 £0 £770,186 £196,087 £399,575
£15,026 £164,996 £0 £0 £24,000 £0 £0 £0 £854,400 £136,219 £535,794
£15,274 £137,235 £0 £0 £24,000 £0 £0 £0 £836,348 £187,643 £723,438
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8.4 Projected Balance Sheet
Our Net Worth will continue to grow as we pay off the mortgage for the two newes
t Mad Keen Motors loc ations.
Table: Balance Sheet
Pro Forma Balance Sheet FY 2006 Assets Current Assets Cash Stock Other Current A
ssets Total Current Assets Fixed Assets Fixed Assets Accumulated Depreciation To
tal Fixed Assets Total Assets Liabilities and Capital Current Liabilities Accoun
ts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilit
ies Fixed Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnin
gs Total Capital Total Liabilities and Capital Net Worth £19,446 £0 £130,738 £150,183 £726
,000 £876,183 £400,000 £350,528 £174,066 £924,594 £1,800,777 £826,340 £20,233 £0 £263,250 £
000 £985,483 £400,000 £524,594 £187,185 £1,111,779 £2,097,262 £848,528 £20,830 £0 £400,485
,000 £1,099,316 £400,000 £711,779 £206,341 £1,318,119 £2,417,435 £917,634 FY 2007 FY 2008
£399,575 £2,748 £70,000 £472,323
£535,794 £2,817 £70,000 £608,611
£723,438 £2,912 £70,000 £796,350
£1,250,000 £19,800 £1,230,200 £1,702,523 FY 2006
£1,250,000 £24,600 £1,225,400 £1,834,011 FY 2007
£1,250,000 £29,400 £1,220,600 £2,016,950 FY 2008
8.5 Business Ratios
The following table outlines some of the more important ratios from the General
Automotive Repair Shop industry. The final column, Industry Profile, details spe
cific ratios based on the industry.
Page 24
Mad Keen Motors
Table: Ratios
Ratio Analysis Sales Growth Percent of Total Assets Stock Other Current Assets T
otal Current Assets Fixed Assets Total Assets Current Liabilities Fixed Liabilit
ies Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, Gen
eral & Administrative Expenses Advertising Expenses Profit Before Interest and T
axes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net
Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equ
ity Activity Ratios Stock Turnover Accounts Payable Turnover Payment Days Total
Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ra
tios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Cur
rent Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout FY 2006 3.05% F
Y 2007 2.52% FY 2008 3.37% Industry Profile 5.37%
0.16% 4.11% 27.74% 72.26% 100.00% 8.82% 42.64% 51.46% 48.54%
0.15% 3.82% 33.18% 66.82% 100.00% 15.46% 38.28% 53.73% 46.27%
0.14% 3.47% 39.48% 60.52% 100.00% 20.89% 33.62% 54.50% 45.50%
8.50% 24.67% 45.07% 54.93% 100.00% 22.43% 26.48% 48.91% 51.09%
100.00% 96.00% 74.83% 0.00% 39.20%
100.00% 96.00% 73.80% 0.00% 40.19%
100.00% 96.00% 72.32% 0.00% 41.74%
100.00% 100.00% 71.18% 1.75% 2.37%
3.14 3.13 51.46% 30.09% 14.61% FY 2006 21.17% 21.06%
2.15 2.14 53.73% 31.51% 14.58% FY 2007 22.20% 22.06%
1.89 1.88 54.50% 32.12% 14.61% FY 2008 23.68% 22.49%
1.48 0.91 54.67% 3.63% 8.00%
n.a n.a
8.86 11.94 30 0.48
12.12 12.17 29 0.46
12.17 12.17 30 0.43
n.a n.a n.a n.a
1.06 0.17
1.16 0.29
1.20 0.38
n.a n.a
£322,140 4.37
£325,128 4.75
£375,034 5.27
n.a n.a
2.07 9% 3.13 1.00 0.00
2.18 15% 2.14 0.99 0.00
2.31 21% 1.88 0.95 0.00
n.a n.a n.a n.a n.a
Page 25
Mad Keen Motors
8.6 Financial Risks and Contingencies-2
Risks and Assumptions The key risk with this website for Mad Keen Motors is that
people will get information on their cars from other plac es. Since it is not t
ypical for small garages to have this much c ontent on their sites, Bac kwater D
owns loc als may not think to search for car and garage information on the Web.
As cars and components bec ome more specialized and car owners may tend to trust
dealerships more, they will be less likely to use their loc al garage. This is
a risk to the business as a whole, though we hope that the website will help to
reduce Mad Keen Motors' exposure to this risk. If the site is not supported prop
erly and people do not get quick answers to their questions, they may assume tha
t service from the garage itself is lac king too. Therefore, emails must be answ
ered promptly, the site must be updated regularly and the garage workers should
also be aware of information and features on the website, and be educated about
it when they speak to customers. Contingency Plan Since there will be minimal in
tegration between the website and Mad Keen Motors' c ore business, a contingency
plan is not a huge concern. If use of the site falls well below forec asted lev
els and it proves not to be cost effective to continue the site in its current f
ormat, the site will be changed to essentially a business card site, where peopl
e can get information about the garage, loc ation, hours, ownership information,
etc.
Page 26
Appendix
Table: Sales Forecast
Sales Forecast Feb Sales Revenue from all Standard Streams Increased Sales throu
gh website Other Total Sales Direct Cost of Sales Direct Costs Other Subtotal Di
rect Cost of Sales VAT Rate 17.50% 17.50% 17.50% £67,000 £660 £0 £67,660 Feb £2,706 £0 £2,7
Mar £67,000 £1,000 £0 £68,000 Mar £2,720 £0 £2,720 Apr £67,000 £1,400 £0 £68,400 Apr £2,736
000 £1,700 £0 £68,700 May £2,748 £0 £2,748 Jun £67,000 £1,350 £0 £68,350 Jun £2,734 £0 £2,7
50 £0 £68,350 Jul £2,734 £0 £2,734 Aug £67,000 £1,350 £0 £68,350 Aug £2,734 £0 £2,734 Sep £
700 Sep £2,748 £0 £2,748 Oct £67,000 £2,050 £0 £69,050 Oct £2,762 £0 £2,762 Nov £67,000 £2,
v £2,776 £0 £2,776 Dec £67,000 £1,700 £0 £68,700 Dec £2,748 £0 £2,748 Jan £67,000 £1,700 £0
£0 £2,748
VAT Rate 17.50% 17.50%
Page 1
Appendix
Table: Personnel
Personnel Plan Feb Mark Keen, Co-Owner Barry Keen, Co-Owner Mechanics Other Staf
f Elisabeth Keen, Admin Total People Total Payroll 0% 0% 0% 0% 0% £2,000 £1,500 £20,00
0 £8,500 £1,500 17 £33,500 Mar £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Apr £2,000 £1
,500 £1,500 17 £33,500 May £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Jun £2,000 £1,500
00 £1,500 17 £33,500 Jul £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Aug £2,000 £1,500 £
£1,500 17 £33,500 Sep £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Oct £2,000 £1,500 £20
500 17 £33,500 Nov £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500 Dec £2,000 £1,500 £20,000
0 17 £33,500 Jan £2,000 £1,500 £20,000 £8,500 £1,500 17 £33,500
Page 2
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total
Cost of Sales Gross Margin Gross Margin % VAT Rate 17.50% Feb £67,660 £2,706 £0 £2,706 £64
,954 96.00% Mar £68,000 £2,720 £0 £2,720 £65,280 96.00% Apr £68,400 £2,736 £0 £2,736 £65,66
May £68,700 £2,748 £0 £2,748 £65,952 96.00% Jun £68,350 £2,734 £0 £2,734 £65,616 96.00% Jul
34 £0 £2,734 £65,616 96.00% Aug £68,350 £2,734 £0 £2,734 £65,616 96.00% Sep £68,700 £2,748
52 96.00% Oct £69,050 £2,762 £0 £2,762 £66,288 96.00% Nov £69,400 £2,776 £0 £2,776 £66,624
c £68,700 £2,748 £0 £2,748 £65,952 96.00% Jan £68,700 £2,748 £0 £2,748 £65,952 96.00%
Expenses Payroll Other Expense Account Name Depreciation Standard Operating Expe
nses Website Infrastructure Website Development Website Maintenance Expensed Equ
ipment Payroll Taxes (National Insurance, etc.) Other Total Operating Expenses P
rofit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profi
t Net Profit/Sales
VAT Rate £33,500 17.50% 15.00% 0.00% 17.50% 17.50% 17.50% 15.00% 17.50% VAT Rate £0 £4
00 £15,000 £0 £600 £0 £2,000 £5,025 £0 £38,925 £26,029 £26,429 £6,233 £5,939 £13,857 20.48%
0 £0 £600 £0 £0 £5,025 £0 £38,925 £26,355 £26,755 £6,217 £6,041 £14,097 20.73% £33,500 £0 £
5 £0 £38,925 £26,739 £27,139 £6,200 £6,162 £14,377 21.02% £33,500 £0 £400 £15,000 £350 £0 £
7,027 £27,427 £6,183 £6,253 £14,591 21.24% £33,500 £0 £400 £15,000 £350 £0 £150 £0 £5,025 £
91 £6,167 £6,157 £14,367 21.02% £33,500 £0 £400 £15,000 £350 £0 £150 £0 £5,025 £0 £38,925 £
162 £14,379 21.04% £33,500 £0 £400 £15,000 £0 £0 £150 £0 £5,025 £0 £38,925 £26,691 £27,091
1.05% £33,500 £0 £400 £15,000 £0 £0 £150 £0 £5,025 £0 £38,925 £27,027 £27,427 £6,117 £6,273
£0 £400 £15,000 £0 £0 £150 £0 £5,025 £0 £38,925 £27,363 £27,763 £6,100 £6,379 £14,884 21.5
£0 £150 £0 £5,025 £0 £38,925 £27,699 £28,099 £6,083 £6,485 £15,131 21.80% £33,500 £0 £400
£38,925 £27,027 £27,427 £6,067 £6,288 £14,672 21.36% £33,500 £0 £400 £15,000 £0 £0 £150 £0
7 £27,427 £6,050 £6,293 £14,684 21.37%
Page 3
Appendix
Table: Cash Flow
Pro Forma Cash Flow Feb Cash Received Cash from Operations Cash Sales Subtotal C
ash from Operations Additional Cash Received VAT Received (Output Tax) VAT Repay
ments New Current Borrowing New Other Liabilities (interest-free) New Fixed Liab
ilities Sales of Other Current Assets Sales of Fix ed Assets New Investment Rece
ived Subtotal Cash Received Expenditures Expenditures from Operations Cash Spend
ing Bill Payments Subtotal Spent on Operations Additional Cash Spent VAT Paid Ou
t (Input Tax) VAT Payments Principal Repayment of Current Borrowing Other Liabil
ities Principal Repayment Fix ed Liabilities Principal Repayment Purchase Other
Current Assets Purchase Fix ed Assets Dividends Subtotal Cash Spent Net Cash Flo
w Cash Balance 17.50% 17.50% VAT Rate £754 £0 £0 £0 £2,000 £0 £0 £0 £56,827 £22,674 £226,16
0 £0 £0 £0 £53,454 £26,446 £252,608 £754 £0 £0 £0 £2,000 £0 £0 £0 £53,540 £26,830 £279,438
429 (£6,707) £272,731 £1,230 £0 £0 £0 £2,000 £0 £0 £0 £55,843 £24,469 £297,199 £1,232 £0 £0
£320,709 £1,232 £32,446 £0 £0 £2,000 £0 £0 £0 £89,249 (£8,938) £311,772 £1,237 £0 £0 £0 £2
693 £1,240 £0 £0 £0 £2,000 £0 £0 £0 £56,920 £24,214 £359,907 £1,242 £32,359 £0 £0 £2,000 £0
,230 £0 £0 £0 £2,000 £0 £0 £0 £57,103 £23,619 £375,688 £1,235 £0 £0 £0 £2,000 £0 £0 £0 £56,
3 £54,073 £33,500 £17,200 £50,700 £33,500 £17,287 £50,787 £33,500 £17,443 £50,943 £33,500 £
3,500 £20,069 £53,569 £33,500 £20,071 £53,571 £33,500 £20,064 £53,564 £33,500 £20,180 £53,6
283 £53,783 £33,500 £20,374 £53,874 £33,500 £20,100 £53,600 17.50% 17.50% VAT Rate £11,841
£0 £79,501 Feb £11,900 £0 £0 £0 £0 £0 £0 £0 £79,900 Mar £11,970 £0 £0 £0 £0 £0 £0 £0 £80,3
£11,961 £0 £0 £0 £0 £0 £0 £0 £80,311 Jun £11,961 £0 £0 £0 £0 £0 £0 £0 £80,311 Jul £11,961
£0 £0 £80,723 Sep £12,084 £0 £0 £0 £0 £0 £0 £0 £81,134 Oct £12,145 £0 £0 £0 £0 £0 £0 £0 £8
c £12,023 £0 £0 £0 £0 £0 £0 £0 £80,723 Jan Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
£67,660 £67,660
£68,000 £68,000
£68,400 £68,400
£68,700 £68,700
£68,350 £68,350
£68,350 £68,350
£68,350 £68,350
£68,700 £68,700
£69,050 £69,050
£69,400 £69,400
£68,700 £68,700
£68,700 £68,700
Page 4
Appendix
Table: Balance Sheet
Pro Forma Balance Sheet Feb Assets Current Assets Cash Stock Other Current Asset
s Total Current Assets Fix ed Assets Fix ed Assets Accumulated Depreciation Tota
l Fixed Assets Total Assets Liabilities and Capital Current Liabilities Accounts
Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilitie
s Fix ed Liabilities Total Liabilities Paid-in Capital Retained Earnings Earning
s Total Capital Total Liabilities and Capital Net Worth £20,000 £0 £0 £20,000 £750,000 £770
000 £400,000 £314,488 £36,040 £750,528 £1,520,528 £750,528 £16,624 £0 £11,087 £27,710 £748,
00,000 £350,528 £13,857 £764,385 £1,540,095 £764,385 £16,707 £0 £22,233 £38,940 £746,000 £7
00 £350,528 £27,954 £778,482 £1,563,422 £778,482 £16,807 £0 £33,449 £50,256 £744,000 £794,2
0,528 £42,331 £792,859 £1,587,115 £792,859 £18,444 £0 £44,435 £62,879 £742,000 £804,879 £40
8 £56,921 £807,449 £1,612,328 £774,000 £19,400 £0 £55,166 £74,566 £740,000 £814,566 £400,00
288 £821,816 £1,636,383 £788,367 £19,402 £0 £65,895 £85,298 £738,000 £823,298 £400,000 £350
36,195 £1,659,493 £802,746 £19,391 £0 £76,624 £96,015 £736,000 £832,015 £400,000 £350,528 £
585 £1,682,601 £784,690 £19,504 £0 £87,410 £106,914 £734,000 £840,914 £400,000 £350,528 £11
3 £1,706,137 £799,327 £19,604 £0 £98,254 £117,858 £732,000 £849,858 £400,000 £350,528 £129,
,729,965 £814,211 £19,704 £0 £109,157 £128,861 £730,000 £858,861 £400,000 £350,528 £144,710
754,098 £796,984 £19,430 £0 £119,950 £139,380 £728,000 £867,380 £400,000 £350,528 £159,382
77,290 £811,656 £19,446 £0 £130,738 £150,183 £726,000 £876,183 £400,000 £350,528 £174,066 £
0,777 £826,340 £203,488 £12,040 £70,000 £285,528 £226,162 £9,334 £70,000 £305,495 £252,608
0 £329,222 £279,438 £3,878 £70,000 £353,315 £272,731 £2,748 £70,000 £345,479 £297,199 £2,73
933 £320,709 £2,734 £70,000 £393,443 £311,772 £2,734 £70,000 £384,506 £335,693 £2,748 £70,0
9,907 £2,762 £70,000 £432,669 £352,068 £2,776 £70,000 £424,844 £375,688 £2,748 £70,000 £448
£2,748 £70,000 £472,323 Starting Balances Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
£1,250,000 £15,000 £1,235,000 £1,520,528
£1,250,000 £15,400 £1,234,600 £1,540,095 Feb
£1,250,000 £15,800 £1,234,200 £1,563,422 Mar
£1,250,000 £16,200 £1,233,800 £1,587,115 Apr
£1,250,000 £16,600 £1,233,400 £1,578,879 May
£1,250,000 £17,000 £1,233,000 £1,602,933 Jun
£1,250,000 £17,400 £1,232,600 £1,626,043 Jul
£1,250,000 £17,800 £1,232,200 £1,616,706 Aug
£1,250,000 £18,200 £1,231,800 £1,640,241 Sep
£1,250,000 £18,600 £1,231,400 £1,664,069 Oct
£1,250,000 £19,000 £1,231,000 £1,655,844 Nov
£1,250,000 £19,400 £1,230,600 £1,679,036 Dec
£1,250,000 £19,800 £1,230,200 £1,702,523 Jan
Page 5