Prepared by: Aaron Moffatt Nicole Batty

Table of Contents

1.0 Executive Summary

The services at Revival will be solely based on customer specifications. Beginning with a customer inquiry, the mechanics, sales personnel and body technicians will restore, repair and acquire parts for cars in a variety of conditions. A process plan that utilizes separate bays for each type of mechanical work will improve efficiency and avoid bottle necks.

Specialists in the automotive industry will represent Revival’s biggest expense and the most profitable competitive advantage. Revival will hire employees with knowledge and experience to fill its flat hierarchy by utilizing local, low-cost recruitment methods.

Revival will be promoted based on these employees’ expertise. By positioning itself as an expert on car culture and a quality service Revival will attract car enthusiasts living within Saskatchewan and its neighbouring provinces. Emphasis will be placed on forming close relationships with established car clubs and societies.

The financing of this business will be done through a combination of debt and equity. Profitability is achievable within the first two years of business with a minimum amount of associated risk.

The following plan provides more details on the proposed start-up of an auto restoration centre in Saskatoon.

2.0 Business Overview

2.1 Introduction

2.2 Mission Statement

2.3 Goals and Objectives

Long-term goals have been identified along with a series of more immediate short-term objectives that assist with making the major goals more attainable.

• 
  To promote the classic car culture in Saskatoon
  
  • 
    Attend functions of all substantial Saskatchewan car clubs and societies
    
  • 
    Become a partner with Rawlco for Saskatoon’s next annual show and shine
    
  • 
    Establish a presence at the local SIR racetrack
    
• 
  Establish an image and name synonymous with quality
  
  • 
    Treat every potential client with courtesy and respect
    
  • 
    Review every detail of finished automobiles before their given to customers
    
  • 
    Conduct post-purchase satisfaction inquires
    
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  To become a profitable and sustainable organization
  
  • 
    Break-even within two years
    
  • 
    Generate a large enough customer base to warrant expansion within 5 years
    

3.0 Industry Overview

The automotive industry has suffered many setbacks in the last few years due to bankruptcy and economic instability. The classic car market however has been spared these misfortunes. In fact the value of classic automobiles has risen over the last 30 years [Bur11]. This is due to the nature of the classic car industry. Overtime these cars experience extreme appreciation due to their rarity, brand equity and nostalgic value. In fact the sales of classic cars have generated returns starting at 12% [Bur11]. Looking at these facts it is safe to say that the classic car industry has escaped any major negative effects of the current economic climate. It is predicted that this will continue to be true as the economy remains unstable people are turning to investments in the form of tangible assets such as “art, wine and classic cars” [Bur11]. This does not mean the market is immune to any negative consequences. It is true that the sales at major auctions have increased 11% this year but this is only on certain makes and models [Sco11]. The market has become segmented. Some cars are experiencing substantial increases in value while others are decreasing. Thus the classic automotive industry has remained strong throughout troubled-years but it will remain a safe haven only for the vehicles that still posses high brand equity.

4.0 The Operations Plan

4.1 Work Plan

The main component of the Revival business is restoring automobiles based on customer specifications. The following diagram illustrates how the process begins with a customer inquiry which is relayed to the hunter. The hunter then searches his database for an appropriate selection of vehicles for the customer to choose from. After making a selection the customer can then purchase the vehicle from Revival as is or enter it into the garage for restoration. The restoration process will differ based on each customer’s specifications but the general process will remain consistent. A vehicle will move from bay to bay depending on the work being done on it for the sake of convenience and organization. After completion the vehicle will be stored in one of the three extra bays until the customer takes possession. Other aspects of the business include doing mechanical and auto body repairs as well as ordering parts for customers. Each of these aspects follows the same work plan without step 3, going through the hunter’s database. Figure 4.1 assists in explaining this process.



Customer
Order

Restoration
Supervisor

Storage

Autobody



Interior

Electrical



Transmission



Hunter

Customer

Engine

Figure 4.1 – Work Plan

4.2 Site Plan

The ideal site for Revival has been located within a commercial area of Saskatoon known as Idylwyld drive. It was selected because of the consistent stream of traffic that drives by and for the current building erected on the site. This location was listed on a commercial real estate site as 7700 square feet with a 3300 square foot existing structure. [ICR11]. The current structure on this property was operated by a Kal-Tire chain so minimal building improvements would have to be done for Revival to take over. These improvements include painting the exterior and replacing the current business signs.

Revival will operate out of one building that serves as a shop and office space. The lot will adequately suit Revival’s needs during the initial stages of operation but Figure 4.2 includes the current site plan along with a plan to accommodate future expansion. Revival’s intentions are to purchase another commercial lot across the back alley to serve as the primary paint and storage center. These expansions are planned to occur within five to ten years.

2011 2016

Figure 4.2 – Site Plan

4.3 Floor Plan

The plan for Revival’s facility is to keep much of the existing floor plan currently used by Kal-Tire; its design will provide a smooth flow of work. Out of the eight car bays four will be operational, each one dedicated to a specific area of automotive repair and maintenance. Three of the other four bays will be used to store vehicles whenever needful. The final bay will be used as space for the operation of the necessary machinery.

Revival’s expansion plan includes making three car bays used as storage operational and converting the paint booth into another auto body terminal. This would give Revival eight functional car bays and double their capacity limits. This will be possible by procuring an adjacent lot that will be converted into an upgraded paint booth and an area of outside storage.

Figure 4.3 – 2011 Floor Plan

Figure 4.4 – 2016 Floor Plan

4.4 Average Business Operations

Revival will be open six days a week but will close operations on Sundays and statutory holidays. Business hours will be:

Monday – Saturday 8:00 AM – 5:00 PM

4.5 Supply Analysis

Revival will form a relationship with approximately five separate suppliers located in the United States. These suppliers were selected because they specialize in parts that are necessary for the restoration process. Each of these suppliers offers a 30 day period for payables that will allow Revival to collect their receivables from customers before paying for supplies. Year One Inc will be the primary supplier that Revival deals with. Due to their size and inventory they offer the most convenience when ordering car parts. This means that the supply chain for Revival has minimal amounts of risk associated with it. Any parts that cannot be provided by Year One Inc will be acquired from other large manufacturers all of which have a return policy and a guarantee on their products. If none of the following suppliers have a product the industry has many other options Revival can pursue.

Supplier	Parts Offered
Year One Inc.	GM, Ford and Chrysler parts
Electric Limited Inc.	Electrical supplies
Legendary Auto Interiors Ltd.	Interiors
Mr. G’s Enterprises	Small parts
ABS Competition Enterprises	Specialty Engines

Table 4.1 – Suppliers

4.6 Service Providers

Revival will require a few basic services to be provided. SaskEnergy will provide natural gas while the City of Saskatoon will supply the power, water and sewage. Phone and Internet will be provided from a company such as Sasktel.

A few additional services that require expertise outside of Revival’s purview will also be outsourced. Legal counselling will be provided by Benesh Bitz & Company based out of Saskatoon and accounting services will be from Hergott Duval Stack also located in the city. Insurance will be purchased though the closest SGI accredited branch. Employee benefits will be guaranteed from the Co-operators due to the customizable features they offer.

Occasional repairs will have to be outsourced for the larger pieces of machinery. These services will be provided by the companies that Revival purchased the product from, such as Snap-on or Mac Tools. This is to ensure the work is done correctly and the warranty is not voided.

4.7 Operating Expenses

The following table includes the annual cost of operating for Revival. As Table 4.2 indicates salaries and wages are the highest expense for the organization. Appendix B provides a detailed explanation of all expenses.

Table 4.2 – Operating Expenses

4.8 Capital Budget

This budget is compromised of the necessary start-up costs for Revival. Appendix B provides a detailed summary of all costs.

Table 4.3 – Capital Budget

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