business plan for automobile parts

How to Start a Profitable Auto Parts Business [11 Steps]

Business steps:, 1. perform market analysis..

Embarking on an auto parts business venture requires a thorough understanding of the market landscape. This vital step helps in identifying the current trends, customer needs, and competition. Here's how to perform a detailed market analysis:

Are auto parts businesses profitable?

2. draft a auto parts business plan..

Creating a business plan is a crucial step in establishing a successful auto parts business. It serves as a roadmap, outlining your business goals, strategies, and the methods you'll employ to overcome challenges and achieve success. Below is a step-by-step guide to help you draft a comprehensive business plan.

How does a auto parts business make money?

3. develop a auto parts brand., how to come up with a name for your auto parts business.

Brainstorming is a great way to come up with a name for your auto parts business. Start by creating a list of words that represent the type of goods you plan to offer, and then consider combining certain words in creative ways to form your business name. Think of names that are catchy and memorable, which can help people recall it easily and make your business stand out. Additionally, be sure to research potential names to ensure they aren't already in use by another business. With a little bit of thought and creativity, you can come up with an original and memorable name perfect for your auto parts business.

4. Formalize your business registration.

Resources to help get you started:, 5. acquire necessary licenses and permits for auto parts., what licenses and permits are needed to run a auto parts business.

The exact licenses and permits required to run an auto parts business depend on the location, as requirements vary from state to state. Generally, businesses are required to register with the Secretary of State, obtain an Employer Identification Number (EIN) through the Internal Revenue Service (IRS), obtain a local business license, and for certain types of businesses, obtain a Federal Tax ID. Additionally, many states and cities require additional permits or licenses. For example, some states require companies that work with hazardous materials to obtain specific permits.

6. Open a business bank account and secure funding as needed.

Starting an auto parts business requires careful financial management, which begins with opening a business bank account and securing the necessary funding. A dedicated business account will help you manage cash flow, expenses, and revenues effectively. Here's how to proceed:

7. Set pricing for auto parts services.

When setting pricing for auto parts services, it's crucial to strike a balance between being competitive and maintaining a profitable margin. Consider the value you provide, market rates, and your business costs. Here are some guidelines to help you establish your pricing strategy:

What does it cost to start a auto parts business?

8. acquire auto parts equipment and supplies., list of software, tools and supplies needed to start a auto parts business:, 9. obtain business insurance for auto parts, if required., 10. begin marketing your auto parts services., 11. expand your auto parts business..

Starting Auto Spare Parts Store Business Plan (PDF)

Starting an auto spare parts store business presents an exciting and profitable venture in today’s dynamic market. As the automotive industry continues to flourish, the demand for quality spare parts has skyrocketed, creating a lucrative opportunity for entrepreneurs. This business not only promises substantial profit margins but also offers a steady stream of revenue, thanks to the ever-growing number of vehicles on the road. With cars becoming a necessity for many, the need for maintenance and replacement parts becomes inevitable, positioning auto spare parts stores as a pivotal component of the automotive ecosystem. The allure of this business lies in its resilience and the constant demand. Unlike other industries that might experience seasonal fluctuations, the auto spare parts sector remains relatively stable, driven by the continuous need for vehicle repairs and maintenance. This stability is a significant draw for business owners looking for a dependable and profitable venture.

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.

Market Research

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.

Competitive Analysis

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.

Inventory Management

Effective inventory management is pivotal for the success of an auto spare parts store, as it ensures the right parts are available when needed without overstocking or facing shortages. First and foremost, understanding market demand is crucial; you should analyze which auto parts are most needed based on local vehicle types and seasonal trends. Implementing a reliable inventory system, such as real-time tracking software, is essential for monitoring stock levels, forecasting future demands, and identifying sales trends. This system should be complemented by regular inventory audits to verify physical stock against system records, thereby preventing discrepancies and theft. Organizing inventory into easily accessible categories based on part type, vehicle make, or sale frequency is also vital for efficient operation and customer satisfaction. It’s equally important to establish strong supplier relationships for a consistent supply chain, which can also aid in negotiating better prices and terms.

Adopting advanced inventory practices like Just-in-Time (JIT) inventory can further optimize stock levels, minimizing the cost of holding large quantities of inventory. This approach, coupled with offering special orders for less common parts, helps in managing space efficiently and reducing the risk of unsellable stock. Investment in employee training is essential, ensuring that staff members are proficient in using inventory systems and understand the importance of accurate stock keeping. Embracing technological advancements, such as barcode scanners, RFID tags, and cloud-based inventory systems, can significantly streamline inventory processes and improve overall efficiency. Constant monitoring and adjustment of inventory management strategies are imperative to align with evolving market trends, customer needs, and business growth.

Budgeting and Financial Planning

Budgeting and financial planning are integral components when embarking on the journey of starting an auto spare parts store business. To ensure the long-term success of your venture, it is imperative to carefully consider various financial aspects. First and foremost, assess your initial investment requirements, encompassing expenses like leasing or purchasing a suitable retail space, store setup, inventory acquisition, and legal fees. Crafting a comprehensive budget that delineates your startup costs is essential in understanding your financial footing from the outset.

Once your business is up and running, meticulous management of ongoing operating expenses is paramount. This includes accounting for monthly expenditures like rent or mortgage payments, utilities, employee salaries, and marketing costs. Simultaneously, managing your inventory efficiently is critical in this line of business. Implementing robust inventory tracking systems and setting reorder points will help you strike the right balance between having enough stock to meet customer demands without overstocking or risking shortages of essential parts. A well-thought-out pricing strategy, based on factors such as cost of goods, competition, and perceived value, should be developed and regularly reviewed to maintain competitiveness and profit margins.

Moreover, financial forecasting plays a pivotal role in your business’s success. Begin by creating a sales forecast, supported by market research and historical data, enabling you to set realistic revenue goals. To complement this, financial projections spanning the initial years of operation, including income statements, cash flow statements, and balance sheets, should be developed. These projections not only provide insights into your business’s financial health but also facilitate the identification of potential cash flow issues. Additionally, incorporating contingency planning and exploring various financing options, while remaining cautious about overburdening the business with debt, are essential steps. Collaborate with a tax advisor to ensure you are compliant with tax obligations and make the most of industry-specific deductions or credits. Regular financial reviews, comparing performance against your budget and projections, will help refine your strategies and ensure the continued prosperity of your auto spare parts store business.

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

In the world of auto spare parts retail, recognizing and comprehending your potential customers is an essential aspect of building a thriving business. Consider automotive enthusiasts and do-it-yourself mechanics. These individuals are on the lookout for high-quality parts, accessories, and tools to maintain or enhance their vehicles. Your store’s success can hinge on providing a comprehensive range of products and expert advice tailored to their needs. Professional mechanics and auto repair shops represent another lucrative customer segment. They require a consistent and dependable source of spare parts for their daily operations. By offering competitive pricing, timely delivery, and exceptional customer service, you can establish lasting relationships with this critical demographic. Fleet managers, overseeing businesses with vehicle fleets like delivery services or taxi companies, present an opportunity for bulk purchasing options and tailored service agreements.

Additionally, don’t overlook the potential of car dealerships in need of spare parts for vehicle maintenance and repair. Forge partnerships with local dealerships by offering attractive pricing and efficient order processing. In the digital age, a significant portion of customers prefer online shopping. To capture this market segment, it’s crucial to create a user-friendly e-commerce website with easy navigation, secure payment processing, and efficient shipping options. Vintage car enthusiasts are another specialized group, often seeking rare and hard-to-find parts for their beloved classics. Providing expertise in sourcing and stocking unique components can win the loyalty of this passionate customer base.

Local car owners seeking parts for routine maintenance or minor repairs represent a valuable demographic within your community. Building a strong local presence through advertising and word-of-mouth can effectively reach and engage this group. Off-road and specialty vehicle owners, including motorcycle enthusiasts, require specialized parts and accessories. Tailor your offerings and knowledge base to cater to the distinct needs of these niche areas. For a consistent stream of business, consider pursuing contracts or partnerships with government agencies, municipalities, and public transportation services, as they frequently require spare parts for their vehicle fleets. Businesses in the agricultural and industrial sectors rely on vehicles and machinery that demand spare parts. Targeting these sectors with relevant products and specialized services can unlock additional revenue streams.

Marketing Plan

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.

Keys To Profitability

Unlocking profitability for your auto spare parts store demands a multifaceted approach. Efficient inventory management takes the top spot. Striking the right balance between having enough high-demand parts to meet customer needs and avoiding overstocking is crucial. Implementing an inventory tracking system will optimize stock levels, ensuring you neither tie up excessive capital nor risk stockouts. Competitive pricing is another pivotal factor. Study your competitors’ pricing strategies and find the equilibrium that allows you to remain competitive while preserving healthy profit margins. Regularly reviewing and adjusting your pricing according to market fluctuations is essential for sustained profitability. Exceptional customer service can make or break your business. Establish strong customer relationships by offering expert advice, timely assistance, and a seamless shopping experience. Happy customers are more likely to return, bolstering your profitability over time.

Nurturing solid supplier relationships can enhance profitability by leading to favorable terms, discounts, and credit arrangements. Maintaining strong connections with your suppliers can result in better pricing and preferential treatment. Effective marketing efforts, encompassing both online and offline channels, should not be overlooked, as they can significantly increase your store’s visibility and drive sales. Managing operating costs effectively is paramount, with regular reviews to identify areas for cost reduction while maintaining quality and service standards. Expanding your product range beyond spare parts, offering related products or services, can diversify revenue streams. Continuous improvement is a constant endeavor, with feedback from customers and employees serving as valuable inputs. Stay abreast of industry trends and leverage technology to remain competitive and profitable. Monitoring your financial performance closely through regular reviews of financial statements, cash flow, and profit margins is essential to identify trends and proactively address any issues. Investing in employee training and motivation is crucial, ensuring knowledgeable staff who provide excellent customer service and remain motivated and productive.

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)

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Get the Auto Spare Parts Store Business Plan (PDF, Word And Excel)

Click Buy Now  below to purchase using Paypal, Credit Card, or Debit Card. After you have purchased, you will immediately see the download link for the business plan package on the screen. You will also immediately get an email with the business plan download link. The Pre-written business plan package (PDF, Word, and Excel) costs $30 only!

If you want to purchase multiple business plans at once then click here: Business Plans Store.

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.

We wish you the best in your auto spare parts store business! Check out our collection of business plans  , and more business ideas .

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Executive Summary of an Auto Parts Store: Template & Example

• May 29, 2024
• Business Plan , Executive Summary

An auto parts store business plan needs a straightforward executive summary . This part of your plan is the first thing investors and partners see, and it should clearly outline what your store is all about. It’s where you explain what makes your auto parts store different and worth investing in.

We recommend using a two-slide PowerPoint format for this summary. The first slide should cover the basics of your business and the market you’re entering. Here, you detail your store’s products, location, and what sets you apart from others. The second slide focuses on your management team and your financial plans, highlighting the people behind the business and how you expect the store to grow financially.

This simple, two-slide approach ensures that your executive summary is easy to follow and covers all the essential points about your auto parts store business.

Auto Parts Store Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Auto Parts Store Executive Summary: Page 1

Business Overview  

When detailing the business overview in your executive summary, it’s crucial to provide clear and concise information. This includes the name of your store, its location, and an overview of daily operations.

These details not only introduce your business but also set the stage for its unique qualities. Indeed, a unique selling proposition (USP) is what sets your store apart from the competition. Whether it’s your focus on high-quality replacement parts, performance enhancements, or automotive innovations, your USP should be a focal point of your executive summary. It’s what captures the interest of your audience and showcases the unique value your business brings to the market.

Example: For instance, “Precision Auto Parts,” located in downtown Springfield, operates from a 3,000 sq. ft. space on Main Street. It offers a wide range of products including engine components, car accessories, tools, and maintenance supplies. Their USP is the unique combination of high-quality replacement parts and performance enhancements, ensuring both reliability and innovation for vehicle owners and professionals.

Market Overview  

Understanding and presenting the market size , growth trends, and industry dynamics are integral parts of the market analysis . This section should highlight the potential of the U.S. auto parts store industry, backed by relevant data like market value and growth rates. Discussing industry trends, such as the increasing demand for reliable and high-quality auto parts, provides insight into the evolving landscape and where your store fits within it.

Equally important is the competitive landscape. Your executive summary should identify key competitors and explain how your store positions itself in this environment. Whether you focus on premium brands, exceptional customer service, or a curated selection of auto parts, this is your opportunity to showcase how your store is poised to stand out in a crowded market.

Example: Consider Precision Auto Parts in the U.S. auto parts store industry, valued at $206 billion with a 4.1% annual growth rate. While competing with local specialized shops and national chains in Springfield, Precision Auto Parts differentiates itself by offering premium brands such as Bosch, Mopar, Ford Genuine Parts, and Continental, catering to both casual consumers and professional mechanics.

Auto Parts Store Executive Summary: Page 2 

Management Team  

The management team’s background and expertise are significant assets to your business. In your executive summary, highlight the key qualifications and experiences of your team members.

This might include your co-founder’s extensive experience in the automotive industry or your head buyer’s expertise in sourcing high-quality auto parts. Demonstrating the team’s expertise not only builds credibility but also assures potential investors and partners of your store’s capability to succeed.

Example: At Precision Auto Parts, co-founders Jane Doe and John Smith lead the team. Jane, with a background in automotive engineering, provides strategic leadership, oversees product selection, and ensures the store offers cutting-edge products and parts that meet customer needs. John, with a background in finance and accounting, manages the company’s finances, including budgeting, financial reporting, and inventory management, ensuring financial stability and growth opportunities for the store.

Financial Plan  

The financial plan overview should succinctly summarize your financial goals and projections, including revenue targets and profit margins, to provide a clear picture of your store’s financial trajectory.

Example: Precision Auto Parts aims for $4.5 million in annual revenue by 2028, targeting a 10% EBITDA margin. The financial strategy includes initial investments in high-quality store design and inventory, with sales growth driven by effective marketing and community engagement. We project steady growth, positioning Precision Auto Parts as a leading auto parts retailer in the local market.

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How to Start Automobile Spare Parts Business – Ultimate Guide

• December 2, 2023
• by Next What Business Research Team

If you want to start a retail business in the automobile industry, you can consider starting an automobile spare parts business. This automobile-related business is highly profitable. In this article, we intend to explore an auto spare parts business project plan for your reference.

Every auto spare part requires frequent change during the entire lifespan of the vehicle. And only this single reason makes the automobile spare parts industry so lucrative and evergreen. The U.S., Canada, Germany, the UK, Russia, China, India, South Korea, Japan, Indonesia, Thailand, Brazil, Mexico, Argentina, and South Africa are the major automotive aftermarket globally.

There are several ways you can start a business depending on your investment capacity. However, never try to start this business part-time. This type of retail business demands constant dedication and effort to be successful.

10 Steps to Start an Auto Spare Parts Business

1. choose a business idea.

There are four ways you can start an automobile spare parts business. Below are the following:

a) Automobile Spare Parts Retail Store

This is one of the most profitable and traditional ways of starting this business. In this model, you will need to acquire retail space in a good location. And you will sell the spare parts from that retail counter to your customers.

b) Automobile Spare Parts Store with Workshop

This is another profitable opportunity for entrepreneurs. An auto spare parts retail store with a workshop allows customers to buy the parts and fix them. However, it is a cash-intensive business. With substantial capital investment and strategic planning, you can initiate this type of store.

c) Automobile Spare Parts Online Shop

If you don’t want to operate a brick-and-mortar establishment, then you can consider starting an online store. Additionally, you can run and operate this business model from home. You can open an auto spare parts online shop with low startup capital investment. To know how to set up an online store,

d) Automobile Spare Parts Franchise

If you don’t have any prior experience in the automobile industry, then it is better to start the business as a franchise partner. Even, you can consider spare parts distribution and dealerships also.

2. Conduct Market Research

First of all, you must conduct a market feasibility study to get first-hand information about the market condition and opportunities. It will also help you to understand potential competition from the other operators. It enables you to know how to develop winning strategies that will help you get a break within a few months of starting the business.

Additionally, you can identify the most popular spare parts brands in the local market. Additionally, you will need to identify the different models of bikes and cars that have a high population density in the city.

3. Create  a Business Plan

Crafting a specific business plan is a must for starting this business. Apart from creating a blueprint, the business plan helps to identify the goal and the ways of achieving that goal. Additionally, it helps to secure startup capital from investors or banks.

Develop both a business and marketing plan. Your business plan must consist of information about exactly how you are going to run the business. Additionally, mention the specialty areas if any, and how you will open and maintain your business. Where you will get your car parts, and how you will price them to earn a profit.

Your marketing plan should contain information about your target audience and local competition as well as how you intend to draw in your target audience. You can craft the plan yourself otherwise, you can take the help of professional plan writers or business plan software.

4. Location and Space

After getting the plan properly, you must secure a retail location according to your business model. Choose a location that is easily accessible to your target customers and suppliers. Also, set up a spacious and organized warehouse to store and manage your spare parts inventory.

5. Licensing & Registration

Check the registration and licensing issues of your state. Get the licenses for opening the store, selling spare parts, and have the right insurance. In India, apply for MSME Udyog Aadhaar Registration online. In addition to that, you must apply for the license under the Shops & Establishments Act.

It is always advisable to talk with a local small business consultant for the upcoming tax and compliance liabilities. Presently, GST Registration is a must to start a commercial business in India.

6. Cost and Investment

After getting the knowledge and finalizing the business model, you must calculate the requirement of startup capital. Generally, you have to consider the rent of the retail space, store setup costs, and purchasing the spare parts from the wholesaler or manufacturing companies.

Additionally, you must calculate and keep finance for operating expenses. It will help you in calculating the breakeven and expected ROI of your business.

Read:   Best Personal Loan Apps

7. Procure the Spare Parts

After finalizing the store, you will need to procure the spare parts that you want to sell from your store. Identifying the parts you need and where to find them depends largely on your business plan. According to your plan, talk to the companies and deal with the best quote with MOQ (minimum order quantity). It is advisable to have multiple suppliers to mitigate risks and ensure a steady supply of spare parts.

8. Inventory Management

Implement a robust system for cataloguing and tracking your spare parts inventory. Ensure strict quality control measures to guarantee the authenticity and reliability of your products.

9. Setup the Store

You must set up the store properly. An outdoor sign is a must. Additionally, check the electrification, counter space, and shelves properly. You can consult with an interior designer to have the right floor plan. However, you must use every inch of space properly to get the optimum benefits of it.

10. Hire Employees

Hire the right manpower. In any startup business, initial employees play an important role in achieving initial success. Check, whether you need a licensed mechanic or not. Additionally, if you want to open the store with a workshop then consider keeping an automobile engineer too. There are several free job posting sites that you can explore for headhunting.

Finally, it is time to promote your business . In the initial days, it needs tremendous promotion and advertising. Additionally, the success of this type of niche business highly depends on B2B networking. You must contact other businesses in the industry. As an example, automobile workshops buy spare parts in bulk frequently. You can offer a special discount for them.

Consider selling online. In today’s digital era, you can’t ignore internet audiences. You can sell auto spare parts from online marketplaces or your online store.

Frequently Asked Questions

How much does it cost to start a car spare parts business.

Starting a car spare parts business involves various costs, ranging from inventory to legal and operational expenses. The exact amount can vary based on several factors. It includes location, the scale of your business, and the types of spare parts you plan to sell.

The wider the range of spare parts, the higher the initial investment. Estimate costs based on the types and quantity of parts you plan to stock. If you aim to stock well-known and high-quality brands, be prepared for higher procurement costs. On average, the cost of starting a small car auto spare parts business will be in the range of Rs 10 Lacs to Rs. 25 lakhs, excluding the space rent cost.

Is the auto parts store business profitable?

The profitability of an auto parts store business can be significant, given the consistent demand for automotive components. Some of the factors that influence the degree of profitability are as follows:

• Market Demand
• Product Range
• Competitive Pricing
• Location and Accessibility
• Supplier Relationships
• Operational Efficiency
• Competition
• Economic Factors
• Technological Changes

While there are hurdles, the auto parts store business has significant profit potential, especially with good tactics in place. Entrepreneurs who are ready to invest in customer happiness, keep pricing competitive, and react to industry changes have a good chance of running a lucrative auto parts store.

How do I choose the right suppliers for my spare parts business?

Prioritize suppliers with a reputation for delivering genuine and high-quality spare parts. Negotiate pricing and terms that align with your business strategy.

How can I ensure the authenticity of the spare parts I sell?

Source spare parts directly from authorized distributors or the original manufacturers. Implement rigorous quality checks to ensure the authenticity of each part in your inventory.

• Sample Business Plans

Auto Repair Shop Business Plan

Not everyone has the talent and technique to repair and restore cars, and if you have those skills, you might have thought of starting an auto repair business.

After all, most people prefer the autonomy having a business offers. But with autonomy comes responsibility. And to fulfill that you’ll need an auto repair business plan.

If you are planning to start a new auto or car repair shop, the first thing you will need is a business plan. Use our sample auto repair shop business plan  created using upmetrics business plan software to start writing your business plan in no time.

Before you start writing your business plan for your new auto repairing shop, spend as much time as you can reading through some examples of  services-related business plans.

Industry Overview

In 2021, 162000 establishments had a combined annual revenue of $115 billion in the US auto repair industry.

The growth has mainly come from the increasing number of cars on the road. Also, the growing mileage consumption has played a huge role.

Opening up a car repair shop requires you to pay for construction costs, labor, and equipment.

As the auto repair business is a profitable one it attracts a lot of competition, and to stay ahead of it you’ll need skills and a proper business plan.

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Things to Consider Before Writing an Auto Repair Business Plan

Select what area of repairs you’ll work on.

Auto repairs shops take up a variety of jobs like repairing and painting car bodies, transforming old vehicles, or doing tire and mechanical repairs.

So, it is necessary to decide what you want to do before getting started. Specialization helps you get more expertise in the area and makes you more reliable for the job to customers.

Pick a suitable location

An accessible location is a must for an auto repair business. Your location would also rely on the niche you’ll be working on. Tire repair services are usually on the road to make them accessible for emergencies.

While transformation services are mostly opened inside the city for easier pickup and drop.

Hire an efficient team

An auto repair business’s success relies heavily on the quality of services you provide. That helps you retain customers and get more. Hence, it is important to have a team that can provide quality services to your customers.

Apart from that, it is also important to have a team with good technical and soft skills to understand your customer’s problems better.

Formulate marketing strategies

Marketing your business is essential to attract customers and building your brand’s identity. Hence, it is important to have a marketing strategy for all the platforms your target audience uses to find repair services.

Chalking out Your Business Plan

A business plan helps you leverage the best of your resources, and get the maximum out of your efforts.

A business plan also comes in handy if you need funding or loans for your business, as investors and banks prefer to see a business plan before they give the money.

Reading sample business plans will give you a good idea of what you’re aiming for. It will also show you the different sections that entrepreneurs include and the language they use to write about themselves and their business plans.

We have created this sample auto repair shop business plan template for you to get a good idea about how a perfect auto repair shop business plan should look like and what details you will need to include in your stunning business plan.

Auto Repair Shop Business Plan Outline

This is the standard auto repair shop business plan outline which will cover all important sections that you should include in your business plan.

• Keys to Success
• Mission Statement
• Vision Statement
• 3 Year profit forecast
• Business Structure
• Startup cost
• Products and Services
• Market Trends
• Target Market
• Market Segmentation
• SWOT Analysis
• Sales Strategy
• Local Publications
• Community Events/Organizations
• Commuter Advertising
• Customer Loyalty Programs
• Direct Mail
• Pricing Strategy
• Important Assumptions
• Brake-even Analysis
• Profit Yearly
• Gross Margin Yearly
• Projected Cash Flow
• Projected Balance Sheet
• Business Ratios

The Quickest Way to turn a Business Idea into a Business Plan

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Download a sample auto repair shop business plan

Need help writing your business plan from scratch? Here you go;  download our free auto repair shop business plan pdf  to start.

It’s a modern business plan template specifically designed for your auto repair shop business. Use the example business plan as a guide for writing your own.

After  getting started with Upmetrics , you can copy this sample auto repair shop business plan template into your business plan and modify the required information and download your auto repair shop business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

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About the Author

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Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Start an Auto Parts Business Successfully

If you have a love for automobiles and entrepreneurship, then starting an auto parts business can be a lucrative venture.

The auto parts industry presents numerous opportunities for growth and profitability, whether you want to establish a physical store or an online shop. However, like any business endeavor, starting an auto parts business requires careful planning and preparation.

From identifying your target audience to sourcing top-quality products and creating a robust brand image, there are several essential steps that you must undertake to set up your business for success.

This extensive manual will walk you through the complete process of starting an auto parts enterprise from the beginning. Our guide will address all areas of business planning, conducting market analysis, maintaining inventory, and developing marketing tactics.

Let’s get started without further delay!

Main Types of The Auto Parts Business

The auto parts industry is vast and encompasses various types of businesses that cater to different market segments. Here are the main types of auto parts businesses:

• Retail stores: Retail stores sell auto parts and accessories directly to consumers. They can be large chains or independent shops, and they typically carry a broad range of products for various vehicle makes and models.
• Wholesale distributors: Wholesale distributors buy auto parts in bulk from manufacturers and sell them to retail stores, repair shops, and other businesses at a discounted price.
• Online retailers: Auto parts and accessories can be bought online from retailers who run e-commerce car parts websites . They can either offer in-store pickup or direct shipping of the goods to the buyer.
• Repair shops: Repair shops offer services such as maintenance, repairs, and installations for vehicles, and they typically sell auto parts to their customers as well.
• Junkyards: Junkyards acquire and sell used automotive components and dismantle cars for their parts. They are a great place to find discontinued or difficult-to-find parts.
• Dropshipping : Auto part dropshipping is a business model that allows entrepreneurs to seamlessly connect with suppliers and offer a wide range of automotive components to customers worldwide without the need for inventory management or order fulfillment

Every category of auto parts enterprise presents its own set of opportunities and difficulties. Familiarizing yourself with these distinctions can aid in selecting the business model that best aligns with your abilities, assets, and objectives.

7 Steps to Start an Auto Parts Business Successfully

1. conduct market research.

Conducting market research is an essential step in starting an auto parts business. Below is a separation of how to conduct market research for new and used auto parts:

For new auto parts:

• Identify your target market: Determine who your potential customers are, their demographics, and their buying behavior. You can gather this information by conducting surveys, focus groups, or using market research reports.
• Research the demand for auto parts: Look at industry reports and analyze trends in the automotive industry to determine the demand for auto parts. This can help you identify popular makes and models of vehicles that require parts.
• Analyze your competition: Identify your competitors, their strengths and weaknesses, and their pricing strategies. This will help you develop a competitive pricing strategy and find gaps in the market that you can fill.
• Determine the pricing strategy: Research the prices of similar auto parts and determine the price range that is acceptable to customers. Consider factors such as production costs, shipping fees, and overhead expenses.

For used auto parts:

• Research the market: Look at the local market to determine the demand for used auto parts. Researching online listings, visiting salvage yards and junkyards, and attending local auctions are some actions you should follow.
• Determine the quality of parts: Determine the quality of the used auto parts you plan to sell. This will help you set prices that are competitive while still ensuring profitability.

By gathering and analyzing this information, you can make informed decisions about your business and increase your chances of success.

2. Focus on a specific niche

Specializing in a particular niche is a highly effective approach to starting both a new and a used auto parts business. Rather than offering a broad range of products to a wide customer base, focusing on a specific category of auto parts can help you establish yourself as an expert in that niche.

By doing so, you can differentiate yourself from competitors and meet the unique needs and preferences of your target market.

Focusing on a certain niche has various advantages. Firstly, it helps differentiate you from the competition and establishes a unique selling proposition that can attract customers seeking specific products or services not offered by your competitors.

It also allows for targeted marketing and messaging, enabling you to reach your ideal customers more effectively. Finally, it can allow for higher profit margins.

This is because customers seeking specific products or services are often willing to pay a premium.

When selecting a niche for your auto parts business, consider various factors, including customer demand, competition, and profitability. Common niches in the industry include performance parts, vehicle-specific accessories, and rare or vintage parts.

3. Register your business

Another crucial step in starting any auto parts business is to register it.

This process formalizes your business structure and establishes your legal and financial identity, requiring you to register with various government agencies such as state or local authorities, the Internal Revenue Service (IRS), or the Department of Labor.

There are several explanations why registering your firm is essential.

• It ensures compliance with relevant laws and regulations, avoiding legal problems and financial penalties.
• It enhances your credibility with potential customers, vendors, and partners, proving your business is legitimate and operating legally.
• It improves access to financing, with registered businesses viewed as more stable and trustworthy. A separate legal body, such as an LLC or Corporation, can be registered to safeguard your personal assets from company debts and legal liabilities.

Registration requirements vary based on your location and business structure. However, common steps include selecting a business name, obtaining a Tax Identification Number (TIN), etc.

Consulting a business attorney or CPA can guide you through the registration process and ensure legal compliance. By registering your business, you establish a solid legal and financial foundation, positioning your auto parts business for long-term success.

4. Develop a business plan

Developing a comprehensive business plan is an essential step in starting any business. It enables you to clarify your vision, set achievable goals, and identify potential challenges and opportunities.

This is a breakdown of how to develop an effective business plan for both new and used auto parts businesses:

• Product offering: Detail your product offering, including the types of auto parts you plan to sell, and the suppliers you plan to work with.
• Marketing and sales strategy: Outline your marketing and sales strategy, including how you plan to reach your target audience, pricing strategy, and promotional activities.
• Operations plan: Detail the day-to-day operations of your business, including your supply chain, inventory management, and staffing needs.
• Market analysis: In order to understand your target market, competition, and trends in the used auto parts industry.
• Quality control: Develop a plan for ensuring the quality of the used auto parts you sell, including inspection and testing procedures.
• Financial plan: Develop a financial plan that includes your startup costs, projected revenue and expenses, and cash flow projections.

Developing a business plan requires extensive research, analysis, and strategic thinking. While it can be time-consuming, it is a necessary investment in your auto parts business’s success.

A well-crafted business plan can aid in obtaining financing, attracting investors, and guiding your decision-making.

5. Set up your business operations

Setting up your business operations is a paramount step in starting an auto parts business. It involves establishing the necessary infrastructure and processes to ensure that your business runs smoothly and efficiently.

An analysis of how to set up your business processes for new and used auto parts separately is provided below:

• Determine your location: Choose a location that is easily accessible to customers and suppliers, and that has adequate space for your inventory and operations.
• Set up your inventory management system: Implement an inventory management system that allows you to track your stock levels, monitor sales trends, and order new parts when necessary.
• Set up your sales channels: Establish your sales channels, including your website, online marketplaces, and physical store if applicable.
• Establish your supply chain: Work with suppliers to establish a reliable supply chain for your used auto parts. This may involve sourcing parts from salvage yards, auctions, and other sources. This may involve negotiating prices, setting up delivery schedules, and developing relationships with multiple suppliers.
• Set up your quality control system: Develop a system for inspecting and testing the used auto parts you sell to ensure they meet your quality standards.
• Hire staff: Hire staff with experience in the auto parts industry who can provide expert advice and support to your customers.

6. Using the right marketing strategy

To achieve success in the auto parts industry, utilizing the right marketing strategy is critical. This involves effectively promoting your products and services to potential customers and establishing a strong brand presence in the market.

The following is a description of efficient marketing techniques to utilise in both new and secondhand auto parts businesses:

• Create a website: Develop a professional website that showcases your product offerings, pricing, and shipping policies. Your website should be user-friendly, informative, and optimized for search engines.
• Use social media: Create business pages on social media platforms such as Facebook, Instagram, and Twitter to promote your products and interact with potential customers. Share images and videos of your products, post customer reviews and testimonials, and engage with your followers.
• Use pay-per-click advertising: Consider using pay-per-click advertising platforms such as Google Ads to reach potential customers who are searching for auto parts online. Use relevant keywords and targeting options to ensure that your ads are seen by the right audience.
• Use online marketplaces: There are many online marketplaces to sell auto parts such as eBay, Craigslist, and Amazon to reach a wide audience of potential customers. Leverage these platforms, and use high-quality images and detailed descriptions to showcase the condition and features of your products.
• Partner with local auto repair shops: Build relationships with local auto repair shops and mechanics who may need your used auto parts for their repair work. Offer them special discounts and incentives to encourage them to use your products.
• Attend trade shows and events: Attend industry trade shows and events to showcase your products, network with potential customers and suppliers, and keep up-to-date with industry trends and developments.

7. Launch your business

The final step to launch your auto parts business involves preparing, executing, and monitoring your operations.

To kick things off with a bang, host a grand opening event to generate excitement and draw in potential customers. Use promotions and incentives to get people through the door.

Next, dive into marketing with gusto. Leverage online ads, social media campaigns, and email marketing to spread the word and attract customers.

Make sure every part of your business is launch-ready. Stock up on inventory, train your staff, and ensure all your systems and technology are working smoothly.

From day one, focus on delivering excellent customer service. Aim to create a positive and memorable experience, and encourage feedback to keep improving your services.

After the launch, keep a close eye on how your business is doing. Track sales, gather customer feedback, and stay on top of market trends.

Use this information to refine your strategy and make adjustments as needed. Regular tweaks can help your auto parts business thrive in a competitive market.

Is it profitable to sell auto parts?

Selling auto parts can be highly profitable, driven by consistent demand for vehicle maintenance and repairs. The profitability depends on factors like market competition, sourcing efficiency, and inventory management. Businesses that offer quality products, competitive pricing, and excellent customer service can achieve substantial margins and growth.

What is a good profit margin for auto parts?

A good profit margin for auto parts typically ranges from 20% to 30%. This margin can vary based on the type of part, market conditions, and business model. High-demand, specialized, or hard-to-find parts may command higher margins, while common parts sold in competitive markets might yield lower margins.

How to set up a spare parts shop?

To set up a spare parts shop, choose a strategic location, conduct market research, and secure necessary permits. Source reliable suppliers, stock a variety of high-demand parts, and establish an inventory system. Create a business plan, set competitive pricing, and invest in marketing. Offer excellent customer service and hire knowledgeable staff to ensure success.

Zoe Lee Zoe Lee

Zoe is a highly skilled Marketing Manager and a key team member at Tigren. With extensive experience in digital marketing, brand strategy, and campaign management, Zoe is passionate about driving growth and engagement for businesses in today's fast-paced, digital landscape.

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How to Start a Used Auto Parts Business

Last Updated: April 1, 2024 Approved

This article was co-authored by Jay Goninen . Jay Goninen is an Automotive Expert and the Co-Founder and President of WrenchWay. Jay started working in his family's repair shop when he was nine and has been deeply passionate about the industry since then. He has experience as a technician and is currently a Board Member for both the Diesel Technology Program at Madison Area Technical College and the Community Alliance for the Skilled Trades. wikiHow marks an article as reader-approved once it receives enough positive feedback. In this case, several readers have written to tell us that this article was helpful to them, earning it our reader-approved status. This article has been viewed 250,434 times.

Starting a used auto parts business can be an excellent way to make money and prevent older car parts ending up in landfills. In addition to helping the environment, you can assist people who cannot afford brand-new car parts to keep their cars in working condition.

Planning for Your Used Auto Parts Business

• Do an internet search, look in the local phone book, and pay close attention to advertisements on local television to identify similar businesses in your area.
• Account for the size and population of your city and compare that to the geographic location of existing used auto parts businesses.
• Used auto parts businesses are more likely to thrive in lower income areas, as wealthier segments of the society generally don't buy used auto parts as often.

• Your specialty areas may be in imports, exports, motors, or bodywork. Do some research to determine what area can work for your business.
• A used auto parts business can be particularly lucrative if you provide rare or hard to find parts for more obscure vehicles. [1] X Research source
• In your business plan, be sure to account for all costs and expenditures related to the business, project realistic sales goals, design a plan to reach new customers, identify potential demographic segments of the community who will utilize your services, and plan for the growth potential of your business. Be sure outline where and how you expect to generate the necessary capital to get your business off the ground and to ensure that you can expand when needed. [2] X Research source

• Most states require a license for businesses that buy, restore, recycle, and resell used car parts.

• You will need a location that is big enough to house and properly catalog a variety of used parts for all the makes and models of cars you cater to. [5] X Research source
• Hire employees. If you are looking to open a used auto parts business, chances are that you have at least rudimentary knowledge about cars and how they work. However, you will likely need a licensed mechanic in your business to help refurbish old parts and identify parts that have potential resale value. Posting an add in local newspapers or on job search websites can help you find potential candidates for employment.

• Identifying the parts you need and where to find them depends largely on your business plan. Your business may choose to focus on providing parts for rare vehicles not in production anymore, as these will be in high demand among a small segment of the population. Alternatively, you may choose to specialize in providing parts for very common vehicles in an effort to expand your potential sales base.
• Try finding these parts in junkyards, from cars sold at salvage auctions, or contact insurance agencies to try to purchase "scrapped" cars from them at a discounted price.
• As a used auto parts business owner, you will need to educate yourself on the mechanics of how a car operates in order to find the right parts. Also, be prepared to test the parts you find to know if they are still operational or can be refurbished to become operational again.

Running Your Used Auto Parts Business

• Insurance companies may be willing to sell you parts of a vehicle to recoup some of their money, especially when selling the entire vehicle is not a practical option.

• Offer to take the old parts from your customers who purchase their used parts from you. You may be able to salvage car parts, refurbish them for a low cost, and place them back on your shelf.
• You could also consider offering a discount to customers who bring “trade-in” parts to your business.
• Consider selling online. When you deal with very specific parts for specific vehicles, you may find that no one in your immediate area will need the parts you are offering. As a result, it is wise to consider listing your inventory online to reach a much wider customer base. If you do choose to sell parts online, you need to account for the cost of packaging, shipping and handling in your prices and business model.

• Paying employees and staff (if necessary) [6] X Research source
• Paying rent or mortgage on your business' property [7] X Research source
• Paying bills, like electric, water, and gas, that are necessary to your business' operations [8] X Research source
• Paying property taxes and insurance [9] X Research source
• Advertising costs [10] X Research source

Expert Q&A

You Might Also Like

Expert Interview

Thanks for reading our article! If you’d like to learn more about starting an auto business, check out our in-depth interview with Jay Goninen .

• ↑ http://www.entrepreneur.com/businessideas/automotive-used-parts
• ↑ https://www.findlaw.com/smallbusiness/starting-a-business/tips-for-a-successful-small-business.html
• ↑ https://www.tdlr.texas.gov/parts/aprfaq.htm#employee
• ↑ https://www.entrepreneur.com/businessideas/automotive-used-parts
• ↑ https://www.bizfilings.com/toolkit/sbg/startup/financing/figuring-costs-of-running-new-business.aspx

About This Article

To start a used auto parts business, develop a thorough business plan that outlines your budget, inventory, marketing strategies, and the areas you plan to specialize in. Choose a good location for your business and obtain any licenses, permits, and insurance required by law to sell to the public. Then, find a few good suppliers, stock your shelves with merchandise, and get the word out about your store to attract customers! For tips on monitoring your inventory, read on! Did this summary help you? Yes No

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Auto Sales & Parts Business Plans

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Buying or fixing a vehicle can be incredibly expensive. And often times if you go cheaper, the quality and service can be lacking. There’s got to be a better way to sell automobiles and parts right? Well why not open an auto business to make that happen?

Not sure where to start? Download one of our Auto Sales and Parts Sample Plans for an outline of everything you need in your business plan.

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Massive fire destroys commercial building that housed auto parts business in Riverside

RIVERSIDE, Calif. (KABC) -- A massive fire broke out late Friday at a commercial building that housed a truck parts and accessories business in Riverside, destroying the structure.

The blaze was reported about 11:15 p.m. at Gilmore's, a small business near the intersection of Fifth and Commerce streets.

"The building is heavily involved with fire, and fire crews are in a defensive operation, with the priority of minimizing damage to any surrounding buildings," the Riverside Fire Department said in an update published at 1:30 a.m. Saturday.

As of 4 a.m., flames were still burning but the fire was under control, a Fire Department spokesperson told ABC7. Crews were expected to remain at the scene for at least six more hours, possibly throughout the day.

One firefighter was taken to a hospital in stable condition after suffering heat exhaustion, and was expected to be released within hours, officials said.

The cause of the fire was under investigation.

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Auto Parts Export Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Automotive Industry » Auto Parts Store

Do you want to start an auto parts export business? If YES, here is a detailed sample auto parts export business plan template & FREE feasibility report.

As long as people still use automobile on our roads, auto spare parts will continue to be in demand. Auto spare parts export business is indeed a profitable business because the replacement of damaged or worn out auto parts is compulsory if you want your vehicle to continue to be on the road and serve the purpose you bought it for.

If you are looking for a business to start as an entrepreneur and you know you have an interest in the automobile industry, then you should consider starting your own auto spare parts export business.

Suggested for You

• Auto Spare Parts Shop Business Plan [Sample Template]
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• 10 Best Car Accessories Products You Can Sell Online
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• How to Start an Aftermarket Auto Parts Business

Although you don’t need a college degree to establish your own auto spare parts export business, but you would need some form of informal training.

A Sample Auto Parts Export Business Plan Template

1. industry overview.

The auto parts wholesaling industry comprises operators that export and sell automotive parts wholesale to automobile manufacturers, automotive parts retailers and auto service providers. Sales of new tires and tubes are not included.

IBISWorld projected that revenue for the Auto Parts Wholesaling industry is expected to have grown over the five years to 2019. Over the past five years, original equipment manufacturers have built and improved key partnerships with wholesalers to meet growing consumer spending and evolving consumer preferences.

Furthermore, as auto parts retailers increased sales and consumers sought auto repair services and parts replacements, wholesalers encountered rising demand for products. Overall, industry revenue is expected to have risen at an annualized rate of 1.4 percent to $195.3 billion over the five years to 2019.

This figure includes an anticipated 1.9 percent increase in 2019 alone, as demand from car and automobile manufacturers for new and innovative products continues. The Auto Parts Wholesaling industry is indeed a large industry and pretty much active in all the countries of the world.

Statistics has it that in the united states of America alone, there are about 23,275 registered and licensed auto spare parts stores scattered all across the United States responsible for directly employing about 238,426 people and the industry rakes in a whooping sum of $198 billion annually.

The industry is projected to grow at 0.8 percent annual growth within 2015 and 2022. It is important to state that this industry has no major players with a market share of greater than 5 percent. A close observation of the Auto Parts Wholesaling industry shows that the industry has low barriers to entry.

In the United States, the industry is subject to few restrictive regulations, and industry employees typically do not need to be trained formally to be able to carry out their duties.

The truth is that, the startup capital for opening an auto parts exporting business especially when it involves establishing a standard auto parts store with products from various automobile companies is on the high side.

The tough part as it relates to start-up costs most likely are the need to establish a supply of auto parts from wholesalers or directly from auto parts manufacturing companies. This is because an auto parts exporting business cannot be started without sourcing products for sale.

Regardless of low barriers to entry, the competitive nature of the industry makes it very difficult for new operators to break even within a short period of time in the industry.

Lastly, the auto spare parts wholesaling industry is pretty much open for aspiring entrepreneurs to launch their business in the industry. One good thing about the business is that it can be opened in any part of the United States and still have customers all across Africa and South America.

2. Executive Summary

Chris Moore® Auto Parts Exporting Company, LLC is a registered auto spare parts export business that will be located in in East Rutherford – New Jersey.

We have been able to lease a warehouse facility that is big enough (a 5 thousand square foot facility) to fit into the kind of standard auto spare parts export business that we intend launching and the facility is located around the largest residential estate in East Rutherford – New Jersey.

Chris Moore® Auto Parts Exporting Company, LLC will be involved in exporting automotive parts and accessories, distributing automotive parts from different manufacturers (brands) from the United States and to other countries abroad.

We are aware that there are several auto spare parts export businesses all around the United States and Canada, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors.

We have an online – service option for our customers, and our shipping partners are highly efficient. Chris Moore® Auto Parts Exporting Company, LLC will ensure that all our customers are given first class treatment whenever they contact us.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large the number of our customer base may grow to. We will ensure that we get our customers involved in the selection of brands that want us to export and also when making some business decisions.

Chris Moore® Auto Parts Exporting Company, LLC will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize our products.

Chris Moore® Auto Parts Exporting Company, LLC is owned by Chris Moore and his immediate family members. Chris Moore has a B.Sc. in Business Administration, with well over 5 years’ experience in the Auto Parts Wholesaling industry, working for some of the leading brands in the United States.

3. Our Products and Services

Chris Moore® Auto Parts Exporting Company, LLC is in the Auto Parts Wholesaling industry to service a wide range of clients and of course to make profits, which is why we will ensure we make available a wide range of auto parts from top manufacturing brands in the United States and other countries of the world.

Our product and services offerings are listed below;

• Exporting automotive parts and accessories (critical parts (new), critical parts (used), maintenance parts, accessories and performance parts)

4. Our Mission and Vision Statement

• Our vision is not just to become one of the leading brands in the Auto Parts Wholesaling industry in New Jersey, we want to also build a one stop auto spare part manufacturing company.
• Our mission is to establish a world – class auto parts export business that will export a wide range of auto parts from top auto parts manufacturing brands to dealers all across South America and Africa with Nigeria as a prime focus .

Our Business Structure

At Chris Moore® Auto Parts Exporting Company, LLC, our intention is to build a standard auto parts export company in East Rutherford – New Jersey.

Although our auto parts export business might not be as big as Advance Auto Parts, AutoZone Inc., Genuine Parts Company, and O’Reilly Automotive Inc et al, but will ensure that we put the right structure in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Warehouse Manager
• Human Resources and Admin Manager

Merchandize Manager

Sales and Marketing Manager

Information Technologist

• Accountants/Cashiers
• Sales Agents/Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Reports to the board

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Defining job positions for recruitment and managing interviewing process
• Carrying out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversee the smooth running of the daily office activities.

Warehouse Manager:

• Responsible for managing the daily activities in the warehouse
• Ensures that proper records of auto parts are kept and warehouse does not run out of products
• Ensure that the warehouse facility is in tip top shape and goods are properly arranged and easy to locate
• Interfaces with third – party suppliers (vendors)
• Control auto parts distribution and supply chain inventory
• Supervise the workforce in the sales floor.
• Manage vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Help to ensure consistent quality of auto parts from different manufacturers are purchased and exported in good price that will ensure we make good profit
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Manage external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Model demographic information and analyze the volumes of transactional data generated by customer purchases
• Identify, prioritize, and reach out to new partners, and business opportunities et al
• Liaise with shipping and logistic companies to facility seamless and prompt export of auto parts as ordered by clients .
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Document all customer contact and information
• Represent the company in strategic meetings
• Help increase sales and growth for the company
• Manage the organization website
• Handles ecommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manage logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
• Manage the organization’s CCTV
• Handles any other technological and IT related duties.

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries (answer customer queries regarding the store and the merchandise)
• Find out the customer’s needs, recommend, select and help locate the right merchandise, describe a product’s features and benefits.
• make suggestions and encourage purchase of products
• Provide information about warranties, manufacturing specifications, care and maintenance of merchandise and delivery options

6. SWOT Analysis

Our intention of starting in East Rutherford – New Jersey and exporting auto parts to just a handful of countries is to test run the business for a period of 2 to 5 years to know if we will invest more money, expand the business and then export to several countries all across the South America and Africa.

We are quite aware that there are several auto parts export companies all over the United States of America, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.

Chris Moore® Auto Parts Exporting Company, LLC employed the services of an expert HR and Business Analyst with bias in retailing to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.

This is the summary of the SWOT analysis that was conducted for Chris Moore® Auto Parts Exporting Company, LLC;

Our location, the business model we will be operating on both (physical and online store platform that people can order spare parts from), varieties of payment options, wide range of auto parts from different manufacturing brands both from the United States and abroad and our excellent shipping and customer service culture will definitely count as a strong strength for Chris Moore® Auto Parts Exporting Company, LLC.

A major weakness that may count against us is the fact that we are a new auto parts export company in East Rutherford – New Jersey and we don’t have the financial capacity to compete with multi – million dollars’ auto parts export companies like Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co when it comes to exporting and retailing at a rock bottom prices.

• Opportunities:

The fact that we are going to be partnering with some of the leading auto parts dealers in Nigeria and Brazil provides us with unlimited opportunities to sell our auto parts to a large number of individuals, auto part stores and of course auto repair, service and maintenance garages and transport companies.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for and we are well positioned to take on the opportunities that will come our way.

Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power. Another threat that may likely confront us is instability in the freight forwarding / shipping industry. So also, unfavorable government policies may also pose a threat for businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

If you are conversant with the Auto Parts Wholesaling industry, you will quite agree that the changes in disposable income, consumer sentiment, and ever – changing trends are major growth drivers for sales in this industry. No doubt, a massive rise in consumer confidence has also contributed in helping the industry experience remarkable growth, but uneven performance in these drivers has led to slightly constrained revenue growth for the industry.

So also, the rising demand for parts manufactured by a third-party manufacturing company, as a result of increasing disposable income and consumer sentiment, will result in revenue growth, but profit margins will stagnate as auto retail stores keep prices low to attract more sales amid growing competition.

As part of marketing strategies, auto parts export companies engage in massive clearance sales and discount sales to attract customers. It is a strategy that helps them welcome new customers and also reinforce the loyalty of old ones.

8. Our Target Market

Perhaps it will be safe to submit that the auto parts wholesaling industry has one of the largest range of customers; almost every automobile owner have one reason or the other to purchase automobile parts and accessories. We are in business to export a wide range of auto parts to the following groups of people and businesses;

• Auto parts dealers and stores in Africa and South America
• Car owners in Africa and South America
• Auto repair, maintenance and servicing garages in Africa and South America
• Transport companies in Africa and South America
• Haulage companies in Africa and South America

Our competitive advantage

A close study of the auto parts wholesaling industry reveals that the market has become much more intensely competitive over the last decade.

As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry. We are aware of the stiff competition and we are prepared to compete favorably with other leading auto parts export companies in East Rutherford – New Jersey and throughout the United States.

Chris Moore® Auto Parts Exporting Company, LLC is launching a standard auto parts export company that will indeed become the preferred choice of dealers in Africa and South America. Our auto parts export company is located close to the largest auto parts manufacturing company in East Rutherford – New Jersey.

One thing is certain; we will ensure that we have a wide range of auto parts from leading auto parts manufacturers available in our warehouse at all times. It will be difficult for customers to visit our auto parts store and not see the type of auto parts and accessories they are looking for.

One of our business goals is to make Chris Moore® Auto Parts Exporting Company, LLC a one stop auto parts export company for auto parts dealers, automobile owners, auto repair, maintenance and servicing garages and transport companies in South America and Africa.

Our excellent customer service culture, online store, various payment options and highly reliable shipping platform will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Chris Moore® Auto Parts Exporting Company, LLC is in business to export a wide range of auto parts to South America and Africa. We are in the industry to maximize profits and we are going to go ensure that we achieve our business goals and objectives.

In essence, Chris Moore® Auto Parts Exporting Company, LLC will generate income by offering the following products and services;

10. Sales Forecast

One thing is certain when it comes to auto parts export companies, if your warehouse is stocked with various types of auto parts and accessories and you have affordable and reliable shipping arrangement, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in South America and Africa and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six months of operation and grow the business and our clientele base.

We have been able to examine the auto parts export market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Chris Moore® Auto Parts Exporting Company, LLC it is based on the location of our business and other factors as it relates to auto parts export companies startups in the United States;

• First Fiscal Year (FY1): $950,000
• Second Fiscal Year (FY2): $1.8 million
• Third Fiscal Year (FY3): $3.5 million

N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any sudden changes in the United States’ exporting policies as it relates to countries in South America and Africa. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Chris Moore® Auto Parts Exporting Company, LLC to start exporting auto parts, we conducted a thorough market survey and feasibility studies in order for us to be able to be able to penetrate the available market and become the preferred choice for auto part dealers.

We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want.

We hired experts who have good understanding of the auto parts export markets to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Africa and South America.

In summary, Chris Moore® Auto Parts Exporting Company, LLC will adopt the following sales and marketing approach to win customers over;

• Introduce our auto parts export company by sending introductory letters alongside our brochure to organizations, auto parts dealers, households, auto repair, maintenance and servicing garages, transport companies and other key stake holders all across South America and Africa
• Ensure that we have a wide range of auto parts and accessories from different brands at all times.
• Make use of attractive hand bills to create awareness and also to give direction to our auto parts export company
• Position our signage / flexi banners at strategic places around East Rutherford – New Jersey
• Create a loyalty plan that will enable us reward our regular customers
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)
• Join local chambers of commerce and industries to network and market our products

11. Publicity and Advertising Strategy

Despite the fact that our auto parts export company is well located, we will still go ahead to intensify publicity for the business. Chris Moore® Auto Parts Exporting Company, LLC has a long-term plan of exporting auto parts all across the world which is why we will deliberately build our brand.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Chris Moore® Auto Parts Exporting Company, LLC;

• Place adverts on community – based newspapers, radio and TV stations.
• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
• Ensure that our we position our banners and billboards in strategic positions all around East Rutherford – New Jersey
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Advertise our auto parts export business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and trucks and ensure that all our staff wear our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to auto parts export companies, it is normal for consumers to go to places where they can get auto parts and accessories at cheaper prices which is why big players in the industry like Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co will attract loads of corporate and individual clients.

We know we don’t have the capacity to compete with Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co but we will ensure that the prices and quality of all the auto parts and accessories that are available in our store are competitive with what is obtainable amongst auto parts stores within our level.

• Payment Options

The payment policy adopted by Chris Moore® Auto Parts Exporting Company, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Chris Moore® Auto Parts Exporting Company, LLC will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our clients make payment for the purchase of auto parts and accessories without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

These are the key areas where we will spend our startup capital on;

• The total fee for registering the business in the Unites States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
• Marketing promotion expenses for the grand opening of Chris Moore® Auto Parts Exporting Company, LLC in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring business consultant – $2,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for a warehouse for 12 months at $1.76 per square feet in the total amount of $205,600.
• The cost for warehouse remodeling (construction of racks and shelves) – $100,000.
• Other start-up expenses including stationery ($500) and phone and utility deposits ($12,500).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for start-up inventory (stocking with a wide range of auto parts and accessories from different manufacturing brands) – $500,000
• The cost for counter area equipment – $9,500
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs: $10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
• The cost of launching a website: $600
• Miscellaneous: $10,000

We would need an estimate of seven hundred and fifty thousand dollars ($750,000) to successfully set up our auto parts export company in East Rutherford – New Jersey.

Generating Funds/Startup Capital for Chris Moore® Auto Parts Exporting Company, LLC

Chris Moore® Auto Parts Exporting Company, LLC is a private registered business that is solely owned and financed by Chris Moore and his immediate family members. They do not intend to welcome any external business partners which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $250,000 (Personal savings $200,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

Part of the plans we have in place to sustain Chris Moore® Auto Parts Exporting Company, LLC is to ensure that we continue to make available a wide range of auto parts, deliver quality services, improvise on how to do things faster and cheaper when it comes to shipping and logistics.

We are not going to relent in providing conducive environment for our workers and also the required trainings that will help them deliver excellent services at all times.

From our findings, another factor that kills new businesses is financial leakages. In order to plug financial leakages, the management of Chris Moore® Auto Parts Exporting Company, LLC adopt the use of payment machine and accounting software to run the business.

We are quite aware that our customers are key component to the growth and survival of our business hence we are going to continuously engage them to give us ideas on how to serve them better and the products they want to see in our store.

We will not waste time in adopting new technology, best practices and diversifying our services; expand our product and service offerings once the need arises.

Chris Moore® Auto Parts Exporting Company, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more.

We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the warehouse facility: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Compilation of our list of products that will be available in our warehouse and online store: Completed
• Establishing business relationship with vendors – manufacturers and suppliers of auto parts and accessories: In Progress

Money blog: UK could take a giant leap towards an interest rate cut this week

Welcome to the Money blog, your place for personal finance and consumer news and tips. Leave a comment with your thoughts below - or submit a Money Problem or consumer dispute, remembering to leave a contact number or email.

Tuesday 16 July 2024 21:29, UK

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Ask a question or make a comment

By James Sillars , business reporter

A long-awaited rate cut is seen as more likely if crucial data due on Wednesday and Thursday comes in as economists expect.

First up is the inflation data for June.

A Reuters news agency poll of economists is predicting the headline figure will ease to 1.9% from 2% the previous month.

Any reduction would mean the pace of price increases falls below the Bank of England's 2% target rate.

The Bank will be looking particularly for a reduction in the rate of inflation for services.

Just 24 hours later comes the employment data for the three months to May.

That is tipped to show a slowdown in basic wage growth from 6% to 5.7%.

In advance of the incoming figures, financial markets see a 50/50 chance of an interest rate cut at the Bank's next meeting on 1 August.

It really is a tight call.

Any slowdown in services inflation and wage growth could combine to tip the balance on the Monetary Policy Committee (MPC).

Just two of the nine members backed a cut from 5.25% to 5% last month.

The others wanted more data, arguing that the easing of inflation back towards the target rate must be "sustainable".

Some commentators have suggested that the Bank would have cut borrowing costs in June but for the general election – wanting to be seen to be independent of government.

We already know that at least one member, Jonathan Haskel, will probably vote against a cut and back an eighth consecutive hold.

He said in a speech last week that too many inflationary pressures remained.

Rate cut champion on the MPC, Swati Dhingra, argues that it is time for the Bank to act because households have endured such a tough time, and it is no longer necessary to keep borrowing costs so high.

The number of people claiming non-dom tax status climbed around 7.4% before recent proposals to scrap it.

In the tax year ending April 2023, 74,000 people were registered as non-doms - up from about 68,900 in the previous 12 months, according to  provisional figures  published by HMRC. 

The status is very beneficial to some of the country's wealthiest people. 

Under the current programme, those eligible do not pay taxes on their overseas earnings for as long as 15 years.

They can initially claim the status without any extra charges, but eventually face annual costs of as much as £60,000 if they continue to reside in the UK.

For years, the Labour Party vowed to scrap non-dom status, saying it could raise more than £3bn a year, while the Conservatives have, over recent decades, kept the tax break in law. 

Under the previous government, there had finally been plans in place to abolish the scheme. 

Jeremy Hunt, the former chancellor, said it would be replaced with a "modern, fairer and simpler residence system".

But the Labour Party has proposed to go further than the Conservatives' proposals by eliminating inheritance tax breaks on assets that non-doms hold in overseas trusts.

Santander has launched a one-year fixed rate buy-to-let mortgage product - the first of the big five lenders to do so.

The 75% loan to value (LTV) rate is available at 5.37% with a £1,749 fee.

Graham Sellar, head of intermediary channel at Santander UK, said he was pleased to introduce the rate which offers "more flexibility than a traditional longer fixed rate".

"We know that the volatile rates this year have made it a tricky market for both customers - and brokers supporting them - with a remortgage or new borrowing," he said.

In addition, Santander has reduced rates across its existing buy to-let and residential fixed and tracker rate mortgage ranges by up to 0.14%.

Southwark Council will be building 100 new affordable homes in Bermondsey, London, specifically for key workers - including health and social care staff and teachers - it has announced. 

The new housing model will provide the homes at capped rents, in what the council called a "first for the borough". 

All key worker homes will be short-let tenancies in perpetuity (as opposed to a shared ownership model).

The tenancies will be offered on a rolling basis with rents capped at London Living Rent levels, as set by the mayor of London, with rates pegged at one-third of local average incomes.

Counsellor Helen Dennis, cabinet member for new homes and sustainable development, said: "Key workers are the backbone of our city, but now it's harder than ever to find affordable housing within easy reach of work for many teachers, social care staff and healthcare workers, to name a few."

We've all been there. Hours spent on hold, dealing with unhelpful call handlers, having your issue moved from team to team only for the problem to remain unsolved.

Now, a survey conducted by Which? has revealed the worst broadband and energy firms for customer service.

Virgin Media, Scottish Power and British Gas (who have all hit back, below) all scored poorly in the survey, which looked at several aspects of customer service including:

•  How long it took to get in touch with someone who could help;
• The variety of contact options;
• How seriously the customer service representative took the issue;
• How well the issue was resolved.

"It is never okay for firms to provide sub-standard customer service, but in essential sectors providing vital services millions rely on every day such as energy and broadband, it is completely unacceptable," said Rocio Concha, director of policy and advocacy at Which?.

The online survey, in May, was conducted by Yonder on behalf of Which?, with 4,101 nationally representative adults aged 18+ taking part. A boost sample of an additional 916 adults were surveyed to achieve at least 50+ per provider reported on. 

Which? applied a NET Satisfaction score to indicate the overall satisfaction level. The scale ranges from -100 to +100.

Virgin Media received dismal scores across the board - scoring just +18 for how long it took to get in touch with someone who could help and +38 for both how well customers' issues were dealt with and how well queries were resolved. 

Scottish Power and British Gas remained the worst performing energy firms - receiving +34 and +43 respectively for overall customer service.

Which? says it has written to Virgin Media, Scottish Power and British Gas about their poor performance in their research.

Rights of reply

A British Gas spokesperson said: "The survey is not representative - out of 4101 respondents it included less than 500 of our customers and is based on data that is up to a year old."

They said they had invested £50m in customer operations since the start of the energy crisis - including hiring 700 more UK-based contact centre staff, introducing longer call centre opening times and providing additional training. 

A spokesperson for ScottishPower said: "We service 2.9 million customers a year across a range of channels, including phone, chat, email and online. 97% of customer emails were responded to within two days and our average speed of answering phone enquiries is under 107 seconds. 

"These figures, published as part of a much larger and more robust study by Citizens Advice, are more representative than the 217 customers (0.007% of our customer base) surveyed by Which?"

A Virgin Media spokesperson said: "We are making real changes across our business to deliver customer service improvements and we're already seeing tangible results that wouldn't be reflected in this old survey from Which? that, incidentally, represents less than 0.01% of our customer base."

The UK has entered a new bronze age.

Sales of fake tan have risen by 16% compared with last year amid miserable weather.

Britons may have been unable to work on their tan outside, but it hasn't stopped them heading to the shops.

June saw the fastest rise in monthly supermarket footfall so far this year, with people making 2% more trips to the shops this period than they did one year ago.

The self-tan market is valued at £582.2m in the UK, which is expected to grow to £746.3m by 2027, according to beauty product manufactures THG Labs.

It has the second-biggest global market for self-tan, with its popularity growing as a bigger variety of products tailored to different skin tones and preferences emerged.

Health concerns about UV exposure have also triggered the rise in popularity of self-tan products, especially among younger consumers.

"Gen-Z are much more aware of skin cancer and general sun damage," says George Driver, a beauty editor at Elle UK.

"Wearing an SPF on the face has become a part of a daily skincare routine. No one wants a natural tan."

By  James Sillars , business news reporter 

News this morning that four more wastewater companies in England and Wales are under investigation by regulator Ofwat has hit the share price of the two London Stock Exchange listed firms identified. 

Provider for the North West of England, United Utilities, saw its stock value fall more than 1.7%, as did Severn Trent, the Midlands and Wales provider and owner of the third company named - Hafren Dyfrdwy. 

The final firm, Dŵr Cymru Welsh Water, is not for profit. 

Publisher Bloomsbury released more than just financial data ahead of its AGM today. 

Its bestsellers of the past four months were unsurprisingly the Harry Potter series, titles from Sarah J Maas, Cixin Liu's The Three Body Problem, Tom Kerridge Cooks Britain, Johann Hari's Magic Pill, Stuart Turton's The Last Murder At The End Of The World, and Hugh Fearnley-Whittingstall's How To Eat 30 Plants A Week. 

Sterling still goes far in buying dollars with £1 equal to $1.2965. Similarly the pound is high against the euro, compared with the vast majority of the last two years with £1 buying €1.1881.

Oil is slightly cheaper than earlier this month with a barrel of Brent crude oil priced $84.15.

Amazon Prime Day is upon us once again, but leading consumer champions are warning shoppers about its potential pitfalls.

An exclusive sale event that's only open to Amazon Prime members, this year's Prime Day takes place today and tomorrow.

Starting from midnight (last night), new deals drop regularly throughout the 48-hour sale, and some can often beat Black Friday for value.

Amazon says it will offer its "lowest prices of the year" on products from Barbie, L'Oreal and Shark, while it'll also have deals from brands like Samsung, Bose, Oral-B, Sony, Fitbit and Ghd.

Some of its biggest discounts will be on Amazon's own devices, such as Ring cameras and doorbells and Echo smart speaker devices.

How to get involved

If you aren't already a Prime member, you might be able to sign up for a free trial, and then cancel it before you get charged.

To do this, you should cancel within 30 days, or you'll be switched automatically onto a regular membership, which is £8.99 a month.

The trial gets you access to Prime Video, Amazon Music, Amazon Photos and more.

If you're a student, you can get six months for free. You'll need to prove your course enrolment by providing Amazon with your university email address.

To cancel your membership before the trial expires, you'll need to visit the Amazon Prime membership page, choose "Manage membership"and select "End membership".

Be wary of customer reviews

It's always good practice to read customer reviews before purchasing anything online, to look for answers to any queries you might have about a product.

But consumers should be cautious and look out for fake reviews.

A 2023 investigation by consumer group Which? showed that one in 10 Amazon customers could have been offered an incentive in exchange for a five-star review of an Amazon product.

This is done to manipulate reviews and star ratings.

Which? lists some ways for you to spot a fake review, including:

• Look at the reviewer's profile to see if their history makes sense. Are they buying things they seem to want or need, or might they have another incentive?;
• Check the dates of reviews. If several positive reviews all appeared on the same date, it could be a coordinated campaign;
• Read the reviews properly - some will include little detail about the actual product, which could be a telltale sign of a fraudulent review.

Don't assume you've got the best price

Consumer finance information and discussion website Money Saving Expert is reminding customers that the best price isn't always guaranteed on Amazon Prime Day.

They recommend using price comparison tools such as Google Shopping or Price Spy to find the cheapest online price on that day. However, always bear in mind that some shopbots can leave out or favour certain retailers.

As Amazon's prices go up and down regularly, you can also use a free price tracker like CamelCamelCamel to chart an item's Amazon price history before you commit to a purchase.

You should also keep an eye on Amazon Warehouse, which is the part of the website that sells returned or mildly damaged items.

Combine purchases with other deals for 'free' credit

Every so often, Amazon offers "free" credit to use against selected orders. It usually involves having to do a specific action, such as buying through its app or making a spend to earn credit.

Amazon is offering 15,000 of its customers £15 off a £30+ spend via its app – but you can't have used the app before. Check this Amazon link to see if you can get it.

There's another offer for £15 off £30+ purchases if you're an existing Prime member, and you upload your first photo to the Amazon Photos app.

You need to upload at least one photo to qualify for the £15 credit. Amazon says within four days you'll receive an email confirming it's been added to your account. Visit this  Amazon  link to find out if you're eligible. 

You can also earn £5 off a £20+ purchase when you play a podcast via Amazon Music. 

You'll need to stream a complete episode of a podcast via Amazon Music by 11.59pm on 28 July. Once that's done, your £5 credit will be emailed to you within seven days, and you'll have a further 30 days to use it. To check if you're eligible, visit this link .

How to return damaged items 

Finally, if you've bought a product on Amazon Prime Day and it arrives damaged, the retailer is fully responsible.

Under the Consumer Rights Acts, your purchase needs to be of satisfactory quality (not faulty or damaged), fit for purpose and as described. 

If your Prime Day product doesn't meet one of these requirements, the retailer (not the manufacturer) is in breach.

Amazon will refund the cost of sending an item back if it was sold or dispatched by Amazon. 

If the item you purchased isn't eligible for a free return, and you're using a pre-paid return label, Amazon will deduct the cost of the return from your refund.

Just 18% of companies in the UK are led by women, and while data suggests female entrepreneurs are on the rise, men still receive more funding and are entrusted with higher average loans to get them started.

In the concluding interview of an eight-part series, Money blog reporter  Jess Sharp  speaks to women who are bossing it in their respective fields - hearing stories, struggles and advice for those who want to follow in their footsteps by starting a business.

This week she has spoken to Denise Gosney, the founder and owner of theatre school company Razzamataz...

If you think appearing on Dragons' Den means Denise was handed success in business on a plate, you'd be very wrong.

The 51-year-old's first memories are of sharing an "airing cupboard bedroom" as a child - and it was this childhood that instilled in her the ethos that if you want something, the answer is to work harder.

She grew up in a little town near Glasgow in a two-bedroom council flat with her mum, dad and three siblings. 

"Money was very, very, very tight," Denise said. "I don't remember having a TV or a wardrobe.

"We always laugh that my first bedroom until I was 10 was an airing cupboard and an airing cupboard that I shared with my sibling.

"We didn't have a lot of money but it was a very happy childhood." 

Denise said that back then she was quite shy.

"I didn't enjoy school, I was bullied and I felt out of place. I just lived for dance and for performing arts. It gave me so much confidence and transformed my self belief and self-esteem," she said. 

Years later and working as a dancer for Butlins, she took £200 and set up Razzamataz to bring the same opportunities to other children across the country. 

Getting started 

She was 27 at the time and already had a successful career as a dancer, performing on cruise ships around the world, in pantomimes, and on the West End. 

She wrote some posters and put an ad in the newspaper to get going.

"I didn't really know anything about business but honestly it didn't cost me much. Maybe I spent a couple of hundred pounds starting the business, so that's not bad," she said. 

In the beginning, she would travel to a different location in Scotland every evening to host a class, but when she started "running out of days in the week" she looked at a franchising ethically.

In 2006, six years after getting started she was able to sell "Derby and then Glasgow and Edinburgh." 

Buying back shares from a Dragon 

Some of you might recognise Denise for her appearance on season four of Dragons' Den, where she secured a £50,000 investment from Duncan Bannatyne for a 25% stake in her business. 

Initially, she auditioned for the show with an idea for a performing arts game but when the producers heard about Razzamataz, they asked if she was willing to present that as an investment opportunity instead. 

Duncan stuck around for quite a long time, with Denise eventually buying his shares back from him seven years later - since then she has owned 100% of Razzamataz. 

"I would always email Duncan directly and he would always reply even though he must be a super busy guy," she said. 

"I wouldn't say he got heavily involved in the day to day running of the business... I would say it was the PR that brought value more than anything else." 

"Honestly, the PR from that programme is worth its weight in gold," she added. 

The day after the show aired, Denise got a phone call from TUI inviting her and Duncan to their office. 

The meeting ended with her winning a 10-year contract to deliver performing arts classes across all their sites over the summer holidays.

Since then, she has worked with huge brands including Warner Brothers, Mattel and Disney. 

Miscarriages, IVF and 'the worst year of my life' 

In the same year that she appeared on Dragons' Den, Denise had two miscarriages and fell pregnant with her first son, Callum. 

She actually discovered she was expecting as soon as she got back home from filming the show. 

"We always laugh now that he has been on Dragons' Den because he was in my belly," she said. 

Business was booming, Denise was franchising across the country and working with big brands, but her life became "really stressful" when she decided to try IVF and ICSI. 

"I actually had a year break at that point because it is incredibly stressful having IVF and ICSI," she said. 

After losing two more babies, she eventually fell pregnant with her second son, Lewis. 

"Sometimes I look back and I don't know how I did it," she said. 

"Obviously, I had the support of my husband and I've always been a grafter. I just thrive on working and I think it was a distraction when I was grieving." 

In 2017, disaster struck again when her youngest fell ill and was diagnosed with type one diabetes.

"Type one diabetes is a lifelong illness and there is no cure at the moment so Lewis requires 24/7 care. He has a one to one at school and we have to monitor his blood glucose during the night - it's quite a dangerous things to have," she added. 

Six months later, her eldest was rushed to hospital after a cyst ruptured in his spleen. Now 17, Callum has undergone a total of six surgeries. 

"It was probably one of the worst years of my life," Denise said. 

During this difficult time, she thought about giving up running Razzamataz, but it was providing for her children that spurred her on. 

"My mum couldn't even afford a pint of milk sometimes and I just didn't want to go back to that. I wanted to give my children a bit more if I could and I knew that I had to keep working. It was just going into survival mode," she said. 

Bouncing back from 'worst decision' of her life 

Denise said the "biggest mistake" she ever made was trying to set up a hair and beauty salon as a separate business while Razzamataz was steadily growing. 

"I just thought because I liked getting my hair done and my nails done, why don't I set up a business doing that," she said. 

"I knew absolutely nothing about it. 

"It was the worst decision of my life because it actually bought us close to bankruptcy and we probably lost about £100,000 on that business." 

She explained she "didn't know enough about the industry" and hadn't done research.

Now, Denise has a company worth £1.5m with plans to expand to Dubai in the next year.

Denise's advice  

Part of Denise's advice is just "work every hour God sends" and love what you do. 

But practically, she advises keeping your overheads as low as you can in the early days of your business. 

"Put a plan together for what those overheads are going to be but keep it quite basic and just research, research, research," she said. 

Referring to her failed hair and beauty business, she said that a company that's set up without passion will not succeed.

"It failed because I thought it was going to be easy... it is not easy to run a business. You have to have a lot of passion," she said. 

"I've seen people go into business and they start getting quite bitter, counting up how many hours they've worked and how much money they've earned." 

She warned that you'll work "the hardest you have ever worked in your life for nothing" at first - but it will all pay off eventually. 

"You have to be patient. If you expect your business to make you a return and make you money overnight, then don't do it, don't run a business," she said. 

"Nobody gave me anything on a plate. I had absolutely nothing when I started out."

You can catch up on all the pieces in the series below...

Tesco is targeting customers from Waitrose and Marks & Spencer with plans to boost sales of its upmarket Finest own label range by £1bn.

Ken Murphy, the supermarket's CEO, said he was "very conscious" of the importance of a premium offering.

Sales of Finest items reached £2bn in the year to February 2023. But Mr Murphy is now targeting a 50% increase. 

"We genuinely believe that our intrinsic [food] qualities are every bit as good as anything you would get at Sainsbury's and increasingly out of Waitrose," he told the Financial Times .

"[With] M&S we probably still have a bit of work to do."

Premium supermarket shopping is fiercely competitive at the moment - rising 12% in the year to 9 June, according to data group Kantar - despite surging food bills.

Waitrose last month relaunched its premium own label No.1 and says it "sets a new benchmark for quality". M&S's food division, which emphasises welfare in its product range, recently posted soaring annual sales.

Elsewhere, Asda revealed its new Exceptional range in May and Sainsbury's has added to its premium offering. At the discount end of the market, Lidl has had success with its Delux range. 

In his FT interview, Mr Murphy rejected the idea premium products could simply be standard products repackaged.

He said they were concocting new products at a development centre in Welwyn Garden City.

Jamie Robinson, Tesco's executive chef, who used to work for Michelin-starred chef Marco Pierre White, said: "This is restaurant-quality now."

He said there had been "a massive step change in our product culture, from an innovation point of view".

Tesco has a 27.7% share of the UK grocery food market with sales of more than £60bn - and the Finest range is just over 3% of that.

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