EMI-WAY AUTO SALES

PROPOSAL FOR USED AUTO SALES

Executive Summary
There is a need in Bangalore for a large selection of quality used cars, and Emi-way Auto Sales will sell
these top-quality used vehicles at a competitive price. The team will be consisting of people who have
experience in new and used auto sales. We will try to develop our excellent working relationship with
local dealers and auctions to bring the savings to the customer.
We will be successful because we will offer something different; a pleasant car buying experience. We
will create a purchasing environment that will cater to the customer's needs. We will be selling a
professional service and an experience in car buying that will bring customers back again, as well as
referring friends and family.

Objectives
1. 100% customer satisfaction, measured through repeat customers, referrals and surveys.
2. To achieve and surpass the industry average profit margin within the first two-years.
3. To achieve a respectable net profit by year two.

Mission
Emi-way Auto Sales will be providing a unique car buying experience to the customers
in Bangalore. One that focuses on customer satisfaction first. We understand that vehicle
purchasing is a necessary, but sometimes unpleasant experience. Our goal will be to provide the
customer with an enjoyable, honest service by satisfying individual customers practical
transportation needs with a quality product.
Keys to Success
To succeed in this business, we must:

• Put together a team of experienced professionals.

• Secure an excellent high-traffic location.
• Establish a network of suppliers, to buy and sell products that are of the highest reliability
and quality, at a competitive price.
• Ensure customer satisfaction by encouraging the two most important values, honor and
integrity.
• Create high morale by rewarding employee success with monetary compensation.

Start-up Summary
Almost 90% of start-up costs will go to assets. Start-up costs will be financed through a
combination of owner's investment, short-term loans (VA business loan), and long-term
borrowing.

Product Description
Emi-way Auto Sales will sell all types of used vehicles, from sports cars to RVs. We will cater to
each customer individually, to satisfy their own practical needs. We will buy only the best used
vehicles at or below wholesale in order to bring the savings to the customers. Each vehicle will
be thoroughly inspected by an ASE mechanic with great experience in the industry. We will also
offer an auto finding service to customers. If we do not have the vehicle they want in stock, we
will find one for them.

Competitive Comparison
Emi-way Auto Sales will have several advantages over its leading competitor:

1. Quality inventory, backed by an excellent warranty, for a competitive price.

2. A very thorough inspection process to avoid selling any low-quality products.
3. A highly-experienced sales staff with a mission to serve the customers by making the
necessary purchase of a vehicle an enjoyable experience with unmatched customer
satisfaction
Market Segmentation
Our market segmentation will consist of four basic segments; students, retired, families, and
singles.

Students will include high school and college age students who need a safe and economical car.
This group is concerned with price, flashy looks, and being cool.

The retired group will focus on practicality. Cost may be less important than quality and
features.

Families will focus on safe, practical vehicles. Something that will last for years, can fetch
groceries, carry the kids, and perform long trips. Many will be on a budget, and price may be
a big factor.

The last group is the singles. They are similar to the students in that they want flashy cool cars
but may be a working professional who can afford to pay more for a higher-quality vehicle.

The Market Analysis pie chart shows an average increase of 10% in potential customers. Many
of these groups will want to trade up for a newer or more expensive vehicle later. This will create
an ever-increasing market for used car buyers.
Strategy and Implementation Summary
Our location will be a very important competitive edge. We are in one of the most developed
cities of the county, people from all over the country come here and they need to buy vehicles
also for their daily commute.

The other competitive edge we will be focusing on is the buying experience and reputation as a
local leader in customer satisfaction. This advantage is important to us because we rely on word
of mouth to generate additional customers. Integrity is our difference.

Management Summary
Emi-way will start with four initial employees. The owner will manage over all operations and
the sales manager will manage all buying and selling of inventory. A records clerk and lot
attendant will also be hired initially.

Once the gross margin and cash flow will support it, we will hire an additional salesman and lot
attendants (tentatively four to six months).

Personnel Plan
Year 1 Year 2 Year 3
Production Personnel
Owner/Manager 42,0000 50,0000 60,0000
Other 0 0 0
Subtotal 42,0000 50,0000 60,0000
Sales and Marketing Personnel
Sales Manager 30,5000 35,0000 40,0000
Other 0 0 0
Subtotal 30,5000 35,0000 40,0000
General and Administrative
Personnel
Secretary/Records Admin 24,3000 26,5000 29,0000
Lot Attendant 14,5500 15,5000 16,5000
Other 0 0 0
Subtotal 38,8500 42,0000 45,5000
Other Personnel
Accountant 2,0000 2,0000 2,0000
Other 0 0 0
Subtotal 2,0000 2,0000 2,0000
Total People 0 0 0
Total Payroll 113,3500 129,0000 147,5000
Important Assumptions
We will accept credit cards and trade-ins of any value. Credit cards will have a negative affect on
cash flow in that we may not be paid for several days. Trade-ins will also impact cash flow in
that they are an asset and have no real value until sold. We will have to limit the number of credit
transactions, and only take in quality trades at a wholesale price to facilitate turning a quick
profit. The personnel burden is very low because benefits are not paid to part-timers. And the
short-term interest rate is extraordinarily low because of current market rates.

We also assume conservative earnings from selling loans and extended warranties will be made.

The other assumption is that current market conditions will remain for the next two to three
years. Low rates will have a positive impact on sales and lending for the short term.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 7.00% 7.00% 7.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

Key Financial Indicators

The following chart shows that inventory turnover speeds up as sales increase. This correlation is
important when evaluating past inventory control techniques.