CAL HOOKS of prime time auto at Invstor.com

CAL HOOKS

Longwood, FL (USA)

Role(s):

Startup

Founder/Owner/Principal

prime time auto

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Location: Longwood

Industry: Other

Year Founded: 2008

Number Employees: 1-10 people

Description: Strategic & Tactical Business Plan For Tropical Auto Sales 1109 North Avenue Winter Park, Florida 32789 Phone: (Phone # removed)E-mail: (URL removed) MASTER OUTLINE 1.0 Cover Page 2.0 Confidentiality Agreement 3.0 Executive Summary 3.1 Objectives 3.2 Mission 3.3 Keys to Success 4.0 Company Summary 4.1 Company Ownership 4.2 Company History 4.3 Start-up Summary 4.4 Company Locations and Premises 5.0 Products Description 5.1 Service Description 5.2 Competitive Comparison 5.3 Sales Literature 5.4 Sourcing and Fulfillment 5.5 Technology 5.6 Future Products and Future Services 6.0 Market Analysis Summary 6.1 Market Segmentation 6.2 Target Market and Segment Strategy 6.2.1 Market Needs 6.2.2 Market Trends 6.2.3 Market Growth 6.3 Industry Analysis or Service Business Analysis 6.3.1 Business Participants or Industry Participants 6.3.2 Distributing Products or Distributing Services 6.3.3 Competition and Buying Patterns 6.3.4 Main Competitors 7.0 Strategy and Implementation Summary 7.1 Strategy Pyramids 7.2 Value Proposition 7.3 Competitive Edge 7.4 Marketing Strategy 7.4.1 Positioning Statement 7.4.2 Pricing Strategy 7.4.3 Promotion Strategy 7.4.4 Distribution Strategy 7.4.5 Marketing Programs 7.5 Sales Strategy 7.5.1 Explain Sales Forecast 7.5.2 Sales Programs 7.6 Strategic Alliances 7.7 Explained Milestones 8.0 Management Summary 8.1 Organizational Structure 8.2 Management Team 8.3 Management Team Gaps 8.4 Personnel Plan 9.0 Financial Plan 9.1 Important Assumptions 9.2 Key Financial Indicators 9.3 Explanation of Break-even Analysis 9.4 Explanation of Projected Profit and Loss 9.5 Explanation of Projected Cash Flow 9.6 Explanation of Projected Balance Sheet 9.7 Explanation of Business Ratios 9.8 Explanation of Long-term Plan 10.0 Web Plan Summary 10.1 Web Marketing Strategy 10.2 Development Requirements 2.0 CONFIDENTIALITY AGREEMENT This agreement is to acknowledge that the information provided by Tropical Auto Sales in this business plan is unique to this business and confidential; therefore, anyone reading this plan agrees not to disclose any of the information in this business plan without the express written permission of Tropical Auto Sales It is also acknowledged by the reader of this business plan that the information furnished in this business plan, other than information that is in the public domain, may cause serious harm or damage to Tropical Auto Sales and will be kept in the strictest confidence. Upon request, this document is to be immediately returned to Tropical Auto Sales. Signature ____________________ Name (typed or printed) ________________________ Date ___________________________ This is the business plan for Tropical Auto Sales. The presentation of this business plan does not imply an offering of securities. 3.0 EXECUTIVE SUMMARY There is an opportunity in Winter Park, Florida to open and operate a successful pre-owned Buy Here Pay Here automobile dealership. Current estimates suggest that 20 to 30 percent of North America's consumers do not meet conventional bank credit requirement. Based on about 20 million new vehicles sales and approximately 30 million used vehicle sales annually in North America, this means over 9 million units are purchased by non-bank or sub-prime customers. With the slumping economy and current lending restrictions, Cal Hooks recognizes the ideal timing to open and operate a new company named Tropical Auto Sales. Cal brings with him over 30 years of successful automotive management, including managing the #1 ranking Suzuki Dealership in the Nation for Volume Achievements 1996-2006. Tropical Auto Sales offers an exceptional investment opportunity with BHPH businesses offering huge returns. Buy here, pay here dealerships are seven or eight times more profitable than new car franchise businesses. Most new car franchise dealers seek 2 percent of revenues to the bottom line, where BHPH dealers take seven to eight times that to the bottom line, approximately 15 to 16 percent based on revenue. Tropical Auto Sales will penetrate the Central Florida market in the business of selling high-quality, reliable, and safe certified pre-owned vehicles at highly competitive prices with alternative financing options available. The Tropical Auto Sales will launch with an aggressive marketing and promotions campaign through local media outlets, as well as geographically targeted search engine optimization [PPC]. Tropical Auto Sales will also offer an unrivaled, courteous and knowledgeable sales staff of well trained personnel dedicated to providing incomparable customer service and financing. Tropical Auto Sales will serve its area of business working to make its lines more productive while at the same time controlling expenses. The money required getting the company organized has been provided by the founder. To make this company a reality there will be an amount needed of $300,000.00, which will come as a loan. The $300,000.00 is the complete amount needed to open and operate this business. The money will be allocated to take care of all the requirements, including $5,000.00 for building improvements; $10,000.00 for furnishings, equipment and office equipment; $80,000.00 for inventory; and $205,000.00 for operating capital and reserves. Cal Hooks may also seek a relationship with a private investor(s) to fund the initial operations of Tropical Auto Sales, with the selling of a portion of Tropical Auto Sales preferred stock to a private investor(s). The financial projections [section 7.5.1] outline the estimated returns on the private investor’s contributions. The costs of organizing the company, software development, marketing research, contract arrangements, and computer and office equipment have been financed through capital contributions by the founders. The additional costs of website construction, as well as other operating costs will be covered through capital contributed by the founders and private investor(s) interested in buying preferred stock. An investment of $300,000.00 will secure profit sharing and/or a 10% ownership stake of Tropical Auto Sales. This business plan will show the components that make up and accomplish this exciting business venture. Tropical Auto Sales will coordinate worker productivity with increasing market demand to ensure continued company growth and development. Its approach emphasizes the individual participation of every employee and member of this organization and the total process of building the company to acquire an ever-increasing market share. By guiding and helping employees with knowledge and awareness, it will build a solid foundation for achieving its most ambitious goals. Tropical Auto Sales realizes that this is an ideal time to establish its business in this expanding industry and move forward in a steady progression over the next five years. Some of the highlights of its strategy are here briefly summarized: ü Tropical Auto Sales has talent and experience that is superior for the marketplace. ü Profitability is assured by its preparation of knowing what the market requirements are presently and what the market requirements are to be in the next several years. ü With its strategy and budget in place, sales are expected to multiply rapidly and the company expects to move in on the leaders in the industry. 3.1 OBJECTIVES Tropical Auto Sales has definite objectives in order to fulfill its desire to participate and achieve an ever-growing market share of the exciting industry that it is entering. What follows is a brief summary of the key objectives of Tropical Auto Sales: 1. Further penetrate the Central Florida market in the business of selling high-quality, reliable, and safe vehicles at highly competitive prices with a variety of financing options available 2. Develop employee capabilities to ensure a strong foundation for participation in a rapidly growing company 3. Embrace better underwriting practices 4. Enforce more diligent collections 5. Require the use of payment-protection devices on all cars sold 6. Adopt more effective marketing tools 7. Increase sales and revenue at a rate no less than 10% per year 3.2 MISSION STATEMENT Tropical Auto Sales will strive to excel in the business of selling high-quality, reliable, and safe vehicles at highly competitive prices with a variety of financing options available. What makes Tropical Auto Sales unique is that we offer credit challenged people a stepping stone to rebuilding good credit. 3.3 KEYS TO SUCCESS Tropical Auto Sales is confident of the following attributes that it demonstrates as keys to its success: · Purchase inventory at the right price · Implement ways to reduce transportation costs for new inventory · Reduce overhead like rent and utilities · Reduce wasted time from staff (call guests, service accounts, etc.) · Find ways to reduce marketing costs without negatively impacting business opportunities · Get better at weeding out the wrong kind of buyer · Improve collections and get abandoned or repossessed units back quickly, and on the lot again right away · Expertise to diligently monitor cash flow · Diligence to keep collections current · Ability to secure capital for high-risk buyers · Tolerance for buyers’ tendency to skip payments · Diligent effort to regularly lower overall cost · Recruitment of experienced and talented personnel · Ability to effectively market the Tropical Auto Sales name · Development of strategic alliances with key influential figures · Use of viral marketing techniques to maximize Tropical Auto Sales exposure 4.0 COMPANY SUMMARY Tropical Auto Sales will begin its operation in February 2009. The inspiration for the company was the realization that there is a need for a company that can provide an automotive dealership with courteous and knowledgeable personnel who demonstrate honesty and integrity. The company will be headquartered in the city of Winter Park in the state of Florida. 4.1 COMPANY OWNERSHIP Tropical Auto Sales is set up as an S Corporation. The ownership is held by Cal Hooks, who holds 100%. Any and all questions relative to ownership should be directed to Tropical Auto Sales. 4.2 COMPANY HISTORY Tropical Auto Sales is proud of the accomplishments of the people that have made up this company. Tropical Auto Sales is particularly proud of the fact that the founder of the company’s expertise and extensive experience of over 30 years in the industry. The company is also particularly proud of the fact that we are locally owned and operated with many years of experience in the industry and a proven track record of success. 4.3 START-UP SUMMARY The basic organization of Tropical Auto Sales is due to the dedication of the founder of the company. The money required getting the company organized has been provided by the founder. To make this company a reality there will be an amount needed of $300,000.00, which will come as a loan. The $300,000.00 is the complete amount needed to open and operate this business. The money will be allocated to take care of all the requirements, including $5,000.00 for building improvements; $10,000.00 for furnishings, equipment and office equipment; $80,000.00 for inventory; and $205,000.00 for operating capital and reserves. Cal Hooks may also seek a relationship with a private investor(s) to fund the initial operations of Tropical Auto Sales, with the selling of a portion of Tropical Auto Sales preferred stock to a private investor(s). The financial projections [section 7.5.1] outline the estimated returns on the private investor’s contributions. The costs of organizing the company, software development, marketing research, contract arrangements, and computer and office equipment have been financed through capital contributions by the founders. The additional costs of website construction, as well as other operating costs will be covered through capital contributed by the founders and private investor(s) interested in buying preferred stock. An investment of $300,000.00 will secure profit sharing and/or a 10% ownership stake of Tropical Auto Sales. 4.4 COMPANY LOCATIONS AND PREMISES Tropical Auto Sales will maintain its headquarters where its management staff will be located in the city of Winter Park in the state of Florida. At no time will management allow a situation to exist where the company is supporting locations or premises that are not absolutely essential to the most effective operation of the company. Demographics for Orange County, Florida - According to the United States Census Bureau, there were 896,344 people, 336,286 households, and 220,267 families residing in the county. The population density was 988 people per square mile (381/km²). There were 361,349 housing units at an average density of 398 per square mile (154/km²). The racial makeup of the county was 68.59% White, 18.17% Black or African American, 0.34% Native American, 3.35% Asian, 0.09% Pacific Islander, 6.01% from other races, and 3.43% from two or more races. There were 336,286 households out of which 32.40% had children under the age of 18 living with them, 47.00% were married couples living together, 13.70% had a female householder with no husband present, and 34.50% were non-families. 24.20% of all households were made up of individuals and 6.50% had someone living alone who was 65 years of age or older. The average household size was 2.61 and the average family size was 3.14. In the county the population was spread out with 25.30% under the age of 18, 10.90% from 18 to 24, 33.80% from 25 to 44, 20.00% from 45 to 64, and 10.00% who were 65 years of age or older. The median age was 33 years. For every 100 females there were 98.00 males. For every 100 females age 18 and over, there were 95.70 males. The median income for a household in the county was $41,311.00, and the median income for a family was $47,159.00. Males had a median income of $32,053.00 versus $25,402.00 for females. The per capita income for the county was $20,916.00. About 8.80% of families and 12.10% of the population were below the poverty line, including 16.30% of those under age 18 and 9.30% of those ages 65 or over. County population in July 2007: 1,066,113 (97% urban, 3% rural) Median resident age: 33.3 years Florida median age: 38.7 years Males: 443,716 (49.5%) Females: 452,628 (50.5%) Average household size: Orange County: 2.6 people Florida: 2.5 people Estimated median household income in 2007: $51,101.00 This county: $51,101.00 Florida: $47,804.00 5.0 PRODUCT DESCRIPTION Tropical Auto Sales is proud of its main product line and the features and benefits that make up its attractiveness to this ever-growing market. The main features and benefits of its core products to its customers include that the company is capitalizing on a growing market of used car sales commonly called buy here pay here in order to get affordable transportation to consumers with credit issues. Tropical Auto Sales is committed to delivering exceptional pre-owned (CarFax history screened) domestic and foreign automobiles (Acura, Ford, Chevrolet, GMC, Chrysler, Lexus, Volvo, BMW, Porsche, Mercedes-Benz, Audi, Land Rover, Jaguar, Cadillac, etc.), as well as fuel efficient vehicles (Honda, Toyota, Kia, Hyundai, Volkswagen, etc.) to meet today’s growing fuel efficiency market demands. Tropical Auto Sales will have strict requirements for all vehicles, setting mileage limitations of no more than 100,000-125,000 miles, vehicles not more than 10-12 years old, and terms less then 30-months. Some of the strengths and capabilities of its core products as it pertains to shelf life, durability and availability include that Tropical Auto Sales offers clients an opportunity to protect their vehicles with extended warranties as well as gap insurance. 5.1 SERVICE DESCRIPTION Tropical Auto Sales is proud of its main service line and the features and benefits that make up its attractiveness to this ever-growing market. The main features and benefits of its main service to its customers include will employ an ASE certified mechanic to assure that the customers are getting the best deal for their dollars. Some of the strengths and capabilities of its main service as it pertains to potential market, ease of administration and availability include that our stock will be thoroughly inspected by a certified mechanic and screened through multiple sources to assure the best used cars are sold on the Tropical Auto Sales lot. 5.2 COMPETITIVE COMPARISON Tropical Auto Sales has done extensive research and investigation of all of the aspects of the competitiveness of the existing market in which it will be participating. Tropical Auto Sales management team is fully aware of the major competitors who include: · Car & Quest, Inc. · Payless Car Sales · Auto Wholesale Direct Tropical Auto Sales recognizes these major competitors as a prime focus because they have been evaluated using criteria of price and value given. This company specifically knows that the advantages that it has over its competition include that Tropical Auto Sales provides a variety of flexible financing options designed to assist those who may not qualify for a loan through conventional means. This study of its competition has given the company a mastery of the effects of regulatory agencies, business share, pricing strategies, as well as strengths and weaknesses of the management teams who head up the companies that make up the competition. 5.3 SALES LITERATURE Tropical Auto Sales is prepared to highlight all of the most important benefits and features in a packet of sales literature. This information will present a compelling point of view as well as a detailed explanation why the consumer should exchange their hard earned dollars for the company’s essential products and services. The sales literature will be complete in every way and will answer the questions of who, what, why, when and where of what the company is presenting. 5.4 SOURCING AND FULFILLMENT Tropical Auto Sales is totally prepared in the preparation for ease and completion of fulfillment requirements. All aspects of fulfillment have been considered, evaluated and highlighted for the purpose of assuring both customers and pertinent employees that fulfillment will never be a major concern. 5.5 TECHNOLOGY Tropical Auto Sales has positioned itself in a way to take full advantage of all the technology available for its particular industry. Management has determined that when necessary that state of the art software and appropriate hardware will be implemented to assist all employees in gaining maximum productivity. In particular, the company will be utilizing accounting procedures both off-line and online to monitor weekly, monthly, quarterly and annual results of all aspects of operations. 5.6 FUTURE PRODUCTS AND FUTURE SERVICES Tropical Auto Sales is currently using its experience and talent to position itself in future markets with the appropriate future products and future services. Its current product and service lines, which include used car sales, warranty sales, and automotive detailing, are sufficient in today’s demanding market and will fare very well in future years as well. In addition to this, the company is developing enhancements as well as creating new products and services to keep its position in the marketplace ever expanding. 6.0 MARKET ANALYSIS SUMMARY Tropical Auto Sales has done an exhaustive study of the state of its industry. This industry is one of the most exciting industries in the United States. It presents an ever increasing market, a very healthy bottom line, and excellent opportunities for growth. The BHPH market is about $80 billion and growing. Current estimates suggest that 20 to 30 percent of North America's consumers do not meet conventional bank credit requirement. Based on about 20 million new vehicles sales and approximately 30 million used vehicle sales annually in North America, this means over 9 million units are purchased by non-bank or sub-prime customers. As consumer bankruptcies, mobility among the workforce, divorce and layoffs increase with prime lenders tightening credit criteria, the sub-prime market is expanding. In itself, the BHPH market represents approximately 6,000 auto dealers in the US, accounting for about 3 million used car transactions per year. The Central Florida area market demands a company that can provide reliable transportation to people with credit challenges, specifically those who cannot obtain financing through conventional lending institutions or franchise dealerships. Tropical Auto Sales has all this to offer and its management team will keep its finger on the pulse of market demands. This industry is filling the needs of the consumer with credit issues as franchise dealers for major automobile distributors are selling fewer vehicles to these consumers. This is why Tropical Auto Sales fits perfectly for meeting the demands of its industry. 6.1 MARKET SEGMENTATION Tropical Auto Sales is very much aware of the importance of market analysis as it pertains to market segmentation. At the current time management feels that in relationship to market segmentation the market for Tropical Auto Sales is very large and growing. The reason for this conclusion in reference to market segmentation is after careful study of its current and potential customer base. The company strongly feels that the market requires a used car lot with honest and trustworthy personnel that provide affordable, clean and reliable vehicles. By offering a comprehensive selection of high-quality vehicles at discount prices featuring a variety of financing option for those with less than perfect credit, Tropical Auto Sales should be able to capture its market. 6.2 TARGET MARKET AND SEGMENT STRATEGY Tropical Auto Sales aims to understand each and every reason why a consumer buys a particular product or service. In its total analysis there is a study of everything that affects a person’s behavior, their cultural background, their economic status, their educational background, as well as any and all factors that relate to their behavior. Tropical Auto Sales also considers that people overcome and change certain aspects of their background and as a result develop a different behavior. The company not only seeks to become experts on why customers buy but also what makes them buy now. The average BHPH consumer has been turned down for an auto loan five to eight times, on average. Buyers are predominately male, aged 25 to 40, who have worked at their current job for 9 to 12 months, most of them are renters, and their average gross monthly income is $2,000.00. The majority of these individuals have credit scores in the mid to upper 400s. Tropical Auto Sales strives to target that segment of the market that is in the ideal position to need its service, afford its service, and be in a position to act on buying its service immediately. This company is always able to determine these results from such sources as existing customers, suppliers, bankers, trade groups, chamber of commerce, and industry trade journals. 6.2.1 MARKET NEEDS Tropical Auto Sales evaluates its market primarily from the standpoint of what the needs are of the individual consumer. This can be very complex. This company understands and appreciates what a particular product does. This can be a very varied thing. Tropical Auto Sales knows that the needs of its consumers in relationship to what it offers are primarily because it provides many years of experience in the industry with a proven track record of success. Tropical Auto Sales understands that to master this area its management team needs to constantly be tapping into those sources of information that reveal the true motivations of the consumer. 6.2.2 MARKET TRENDS Tropical Auto Sales is very confident and excited about the timing of the business in its industry. It is the company’s position that this is the ideal time to be on the move in this ever growing market. Evaluating different factors and events that make up a particular pattern in identifying all aspects of that pattern secure them in an enviable position of providing what is needed in the marketplace at this particular time. The company is always watching the big picture and continues to monitor any pattern or trend on a daily basis. 6.2.3 MARKET GROWTH Tropical Auto Sales recognizes that it is participating in a very large industry with a great growth rate. Its projected growth will be set at a rate greater than the industry average. Tropical Auto Sales implementation of its business strategy will lend itself to fast paced development and dominance of a significant market share. The company has determined the growth of its market on the basis of an ever-increasing customer base, and dollar volume base as well. 6.3 INDUSTRY & BUSINESS ANALYSIS (PRODUCTS & SERVICES) Tropical Auto Sales knows that in the final analysis it can only do well if overall sales are there and expenses are capped at a reasonable level. Its particular position in this industry is that the other companies do some of the things correctly but not as many as it feels that it can do to become a market leader. For example, it has found that some of the other companies have higher prices, inferior personnel, and do not offer any type of financing options for consumers with poor credit. Tropical Auto Sales on the other hand, operates in an advantageously different manner as outlined by offering reasonable prices, exceptional personnel, and a variety of financing options designed to assist those customers who may not qualify for a loan through conventional means. 6.3.1 INDUSTRY & BUSINESS PARTICIPANTS Industry and business participants include such companies as Car & Quest, Inc., Payless Car Sales, and Auto Wholesale Direct. The primary weaknesses are that some of these other companies have higher prices, inferior personnel, and do not offer any type of financing options for consumers with poor credit. Tropical Auto Sales on the other hand, operates in an advantageously different manner as outlined by offering reasonable prices, exceptional personnel, and a variety of financing options designed to assist those customers who may not qualify for a loan through conventional means. This is how Tropical Auto Sales distinguishes itself. 6.3.2 DISTRIBUTING A PRODUCT & SERVICE Because of the nature of this business the company has learned that the best places to locate its car lots are on busy streets in high traffic areas. This is because there are many advantages to distributing its products in this way. Those advantages include the fact that the company will generate more revenue. 6.3.3 COMPETITION AND BUYING PATTERNS Tropical Auto Sales is excited about its position in relationship to its competition. The company has discovered some innovative ways of acquiring all the components that make up its product line. The need for a low-based cost that transcends to a lower net cost prior to sale and therefore transcends into a greater profit is what keeps Tropical Auto Sales on the cutting edge of continuously competing on a favorable basis. Such things as inventory control, source of components, fast turnover, production schedules, all contribute to a healthy aspect of competing with other companies. 6.3.4 MAIN COMPETITORS Tropical Auto Sales recognizes the following main competitors that affect its industry. Tropical Auto Sales has chosen them because of their level of participation, stability, and marketing. The main competitors include: · Car & Quest, Inc. · Payless Car Sales · Auto Wholesale Direct 7.0 STRATEGY AND IMPLEMENTATION Tropical Auto Sales centers its strategy on the premise that the company resonates with the consumer because it offers a comprehensive selection of high-quality vehicles at discount prices, including cars, trucks and SUVs. Always keeping that in mind, it has its management constantly focus on productivity being high and of course expenses remaining very modest. Tropical Auto Sales is diligent in dissecting every aspect of this business to make each component productive and contributive to the goal of a highly profitable relationship with its customers. 7.1 STRATEGY PYRAMID Tropical Auto Sales knows that it’s wise to understand the framework from initial goal back to the essential implementation. The purpose of the pyramid here is to place at the very top an individual emphasis that is the focus of a strategy for the company, such as introduction of a new product line. Picture if you will, the next level down the individual actions or tactics necessary to implement the emphasis or strategy. Finally, at the bottom of its pyramid are the individual programs necessary to support any and all actions that contribute to achieving the emphasis or goal. Tropical Auto Sales wants to highlight that it is not only adhering to its understanding of the strategy pyramid, but that it also monitors everything in the process which leads to a logical whole plan. 7.2 VALUE PROPOSITION Tropical Auto Sales adheres to value-based marketing in its conceptual outlook. The value-based benefits of the company that it strives for consumers to acknowledge include that it provides an automotive dealership with courteous and knowledgeable personnel who demonstrate honesty and integrity. In this way Tropical Auto Sales is very sensitive to the communication of what it is proposing to its customers as well as living up to the promise behind what it does. The company demonstrates that it backs up what it does with a 100% customer satisfaction attitude. 7.3 COMPETITIVE EDGE Tropical Auto Sales is decisive about staying ahead of its competition. The company knows that this is an everyday every hour re-evaluation of what is going on in its marketplace. Its current key advantages in relationship to competitive edge include that it offers extra clean, affordable cars that are available with extended warranties and are subject to a comprehensive inspection by an ASE certified mechanic. 7.4 MARKETING STRATEGY Tropical Auto Sales is aware of all of the different choices in relationship to marketing strategy. Because of its research and recommendations from management it has chosen to market what it does through online Internet exposure through search engine optimization, the distribution of fliers, extensive mailings, and by word of mouth. The main marketing source of this dealership is the Car & Truck Buyers Guide. The guide covers all of Orange County with an average of 265 calls per month coming from this source. Tropical Auto Sales will also list vehicles online with eBay for as little as $50.00 to $100.00 per listing, as well as add streaming videos of each vehicle. It has chosen this strategy because costs are minimal, effectiveness is extremely high and branding recognition is enhanced. 7.4.1 POSITIONING STATEMENT Tropical Auto Sales takes the position that its primary focus of what it does in the marketplace is to provide high-quality reliable vehicles at discount prices with a professional staff that demonstrates honesty and integrity. This is how Tropical Auto Sales distinguishes itself in the marketplace. 7.4.2 PRICING STRATEGY Tropical Auto Sales has after careful consideration, decided to align its pricing at a lower level in comparison to its competition. This fits in perfectly with where the company sees itself positioned in the total marketplace and communication with its customer base as far as getting appropriate value and still maintaining sufficient motivation for high volume. 7.4.3 PROMOTION STRATEGY The management of Tropical Auto Sales believes very strongly in press releases to significantly get the word out of the value of what it does. This will always be a focus of its promotion efforts. However, though this is a crucial part, this is only one part of its promotion strategy. On a consistent basis the company will be promoting what it does through online Internet exposure through search engine optimization, the distribution of fliers, extensive mailings, and by word of mouth. This along with all the individual selling efforts of its staff demonstrates a dynamic way for it to build the penetration of what it does in the marketplace. 7.4.4 DISTRIBUTION STRATEGY Tropical Auto Sales focuses on all three aspects of distribution concerns, that is, coverage, control and costs. These aspects can all be complex. Tropical Auto Sales is certain that it has made the wisest decision in relationship to its coverage and control and cost for its distribution strategy. The coverage and control that it’s striving for is achieved by its various marketing programs. Its cost structure is geared to enhance its distribution based upon its positioning in the marketplace. 7.4.5 MARKETING PROGRAMS Tropical Auto Sales knows that in reference to its marketing programs it needs to tell an excellent story. Its story is compelling, detailed and highlights many of its capabilities. The company knows that its consumers hear its voice loud and clear through every aspect of the company, staff, reputation, and quality control. Tropical Auto Sales strives to be indispensable to the consumer. Its marketing programs work to identify this company, highlight competitive advantages, show appreciation for customer feedback, take advantage of marketing resources, and demonstrate that the company is knowledgeable, energetic, and enthusiastic. 7.5 SALES STRATEGY As stated earlier, Tropical Auto Sales is currently focusing its sales strategy on the implementation of marketing programs, which include online Internet exposure through search engine optimization, the distribution of fliers, extensive mailings, and by word of mouth. 7.5.1 SALES FORECAST Tropical Auto Sales has developed a method for not only developing its sales forecast but also the ability to stand behind the numbers. The company has determined that based on its distribution resources, competitive advantages and sound financial analysis, that it expects to do the following sales over the year 2009: $720,000.00; the next year 2010: $800,000.00; and over the following year 2011: $900,000.00. This company knows full well that in order to make its business plan happen, everything has to make sense. At Tropical Auto Sales, the company is grounded in reality in making reasonable assumptions that it feels very confident it can accomplish. Its strategies are state of the art, clear, and precise. PROJECTED SALES GROWTH EXPECTED 7.5.2 SALES PROGRAMS Tropical Auto Sales has sales programs that assure that its revenue forecasts are realized completely and on schedule. The persons on its dedicated management team directly responsible for sales performance are Cal Hooks and Ricky Lopez. To make this real the company has set deadlines with amounts as well as budget restrictions for a highly profitable sales program. With its comprehensive marketing program and competitive positioning, Tropical Auto Sales is confident in concrete terms to see its sales milestones and deadlines become realities. 7.6 STRATEGIC ALLIANCES Tropical Auto Sales is constantly working to build a network of key individuals and companies that work as alliances to accomplish its major strategies. The company management is strongly encouraged to develop relationships with any and all individuals that may have a favorable relationship with any of its working teams. These alliances are to strengthen and broaden the foundation of the company and the assurance that its market share and profitability will continually increase. 7.7 EXPLAINED MILESTONES Tropical Auto Sales is very pleased with the accomplishments of the company and the participants of the company. The company is very proud of its loyal wonderful staff and the staff’s dedication to reach all forecasts and milestones on which the staff sets its course. The goals for the next six months include securing the financing required to be up and running. The goals for the next year include acquiring a solid customer base. The goals for the next three years include selling at least 12 to 15 cars per month and establishing trust within the community. 8.0 MANAGEMENT SUMMARY Management is the core and nucleus of any organization. It’s not just personnel and individuals’ resumes but so much more that encompasses vision, talent, harmony, beliefs, and commitment. Tropical Auto Sales is led by Cal Hooks and Ricky Lopez; the key players of the management team provide all the talent necessary to complete every aspect of this business plan. 8.1 ORGANIZATIONAL STRUCTURE Tropical Auto Sales knows how important the organizational structure is to the success of a company. Each position with this company has a detailed job description as well as a defined relationship to the whole. At the very head of the company is Cal Hooks. That position holds the title of President. The other key executive and his position is Ricky Lopez, Manager. From other management positions to department heads, to first line implementation staffs, the structure of the organization is detailed and complete. Authority is properly positioned to achieve maximum effectiveness of each organizational structure. 8.2 MANAGEMENT TEAM What follow are the top two positions of Tropical Auto Sales, their names and a brief description of their duties and responsibilities as it pertains to the successful management and development of this company’s goals. Cal Hooks, President /Owner – Cal brings with him over 30 years of successful automotive management, including managing the #1 ranking Suzuki Dealership in the Nation for Volume Achievements 1996-2006. Ricky Lopez, Sales Manager – Cliff brings with him over 25 years in the automotive industry. 8.3 MANAGEMENT TEAM GAPS Tropical Auto Sales recognizes that in any growing company often times management personnel have to wear more than one hat. As a result often times a gap or gaps may exist until the company is developed enough to have a specific person for every task required. Tropical Auto Sales currently has everything covered and feels very confident that each task is assigned to a very competent member of its management team. The company will always be sensitive to this issue and prevent any weakness by having and planning a contingency program that overlaps job responsibilities. 8.4 PERSONNEL PLAN Tropical Auto Sales defines its total work force to protect the success of its business plan. All aspects of the business have been sufficiently analyzed to determine each and every position required to run a fully functioning operation that can complete all of the strategies and programs to be undertaken. 9.0 FINANCIAL PLAN Tropical Auto Sales has developed its financial plan with the awareness that cash and the bottom line are key components of any successful company. Revenues for the company will come from charges and fees generated from the sales of used vehicles, auto detailing and warranties. The opportunity to increase revenues is being fully taken advantage of as outlined in its overall marketing strategy. To assure that bottom line adequately follows increases in revenue every cure possible is being taken to control all areas of expenses and overhead. The basis of its financial plan is solid growth, increase in revenues, and controlled expenses. 9.1 IMPORTANT ASSUMPTIONS Tropical Auto Sales makes every effort not to assume any aspect of its operation other than having hard factual data to back up any forecast. The entire management team is constantly reminded to base all programs on highly researched statistical information with the slightest possible margin of variation. One of the reasons that the leadership of Tropical Auto Sales chose the industry that it is in was to minimize as many variables in the business community as possible. 9.2 KEY FINANCIAL INDICATORS Tropical Auto Sales recognizes that the most important financial indicators are cash and bottom line. This company will be constantly monitoring the flow of revenue to the company as well as the expense requirements that deplete the company of its cash. Tropical Auto Sales will always try to improve the ratio of revenue and expenses to generate a healthier bottom line in addition to a more healthy cash base. 9.3 EXPLANATION OF BREAK-EVEN ANALYSIS The break-even analysis for this company calculates at what point the company becomes profitable, and also at what point the company will be operating at a loss. The analysis takes into consideration forecasted revenues as well as regular running fixed costs and average per unit sales price also known as per unit revenue. For simplicity the average per unit sales price is adjusted to $1 and the regular running fixed cost are represented as a percentage of that dollar. The purpose of this analysis is to maintain insight on financial realities. This information is vital for all kinds of things, from deciding how to price products or service to figuring whether a marketing program is worth the investment. The break even point for this company occurs when gross sales in any given month = $26,800.00. Formula: (Gross Profit $360,000.00 / Gross Sales $720,000.00) = 50%. Total Expenses $160,800.00 / 50% as a decimal .5 = $321,600.00 / 12 = $26,800.00 (Break even amount monthly). 9.4 EXPLAINED PROJECTED PROFIT AND LOSS Tropical Auto Sales’ sales are forecasted to be increasing on a regular basis. Gross margin is also expected to increase on a regular basis. Breaking down the profit and loss projections and monitoring them on a regular basis is essential to the foundation of the company. 9.5 EXPLAINED PROJECTED CASH FLOW As stated earlier, Tropical Auto Sales will focus its attention on bottom line and cash. Its projected cash flow is very positive. With forecasted increasing revenues and controls on overhead and expenses it will look to see an increasing bottom line as well as increasing cash. 9.6 EXPLAINED PROJECTED BALANCE SHEET The projected balance sheet for Tropical Auto Sales highlights total assets, total liabilities, as well as capital. With projected cash flow already established the company balance sheet exemplifies a company whose revenues are increasing as well as its bottom line in cash. The leadership of this company offers its financials as proof positive of the workings of this business plan. 9.7 BUSINESS RATIOS Equipped with income figures, a balance sheet, and a cash flow statement the company can present a complete financial picture of Tropical Auto Sales. To clarify and spotlight its financials it presents the following ratios and illustrates an accurate picture with all things having been considered. The first ratio is the current ratio = current assets $2,500.00 divided by current liabilities $0.00. The CURRENT RATIO is to be determined. The second ratio is the quick ratio = (cash $2,500.00 + investments $0.00 + receivables $0.00) divided by current liabilities $0.00. The QUICK RATIO is to be determined. The net profit margin = net profit $199,200.00 divided by gross revenue on sales $720,000.00. The NET PROFIT MARGIN RATIO is 27.66%. The return on investment = net profit $199,200.00 divided by total assets $2,500.00. The RETURN ON INVESTMENT RATIO or ROI is 7,968%. 9.8 EXPLAINED LONG-TERM PLANS Tropical Auto Sales believes that its long-term prospects for a very successful company are excellent. The industry chosen and the strong foundation of the company lend itself to nothing but positive results in the long-term future. With a market sensitive management team and excellent systems in place to monitor competitive shifts or changes Tropical Auto Sales is ideally positioned to continue its successful plan on through the next decade. 10.0 WEB PLAN SUMMARY Tropical Auto Sales observes the increasing importance of the Internet in all that the worldwide web encompasses. This company not only is a participant in the worldwide web but also with its management team will continually strive to have a competitive edge by a significant presence and plans for exposure on the worldwide web. Because of the ever-increasing sophistication of the American Consumer and the ever-increasing participation on the Internet by the American Consumer, Tropical Auto Sales will apply all of its resources to be the industry leader in utilization of the Internet and its commerce. 10.1 WEB MARKETING STRATEGY Tropical Auto Sales recognizes that there are many parts to a company success and its involvement in the Internet. The first part is a fully functioning presentable web site that resonates with the consumer and the personnel of the company. To that end, the management team has assigned the evolving development and maintenance of the web site for Tropical Auto Sales. The second part is a concerted program of search engine optimization to assure that penetration of the marketplace is vast and consistent. Association of company identity and web site presence shall be an integral part of all company promotional activities and materials. The third part is to utilize the company web site in all aspects of sales processing and customer service. The fourth part is to utilize all capabilities on the worldwide web for company banking, training, and procedures. In the future as video conferencing and other technologies become commonplace and developed for the worldwide web, the company shall be among the first to participate. 10.2 DEVELOPMENT REQUIREMENTS Tropical Auto Sales sees that the expertise of someone involved with the worldwide web is very specific. The management team is committed to providing ongoing training for those members of the company directly associated with the development of its website, the implementation of search engine optimization, and the adaptability for customer service and other procedures utilizing the world-wide web. In addition to ongoing training, the company will commit an appropriate amount of company resources sensitive to revenues generated by the web site presence. In addition, as it relates to productivity personnel will have access to computer capabilities that tie in the web presence with all of its internal company workings. The development of these programs will be the direct responsibility of an assigned person from its management team. Balance SheetTropical Auto Sales Category 2009 2010 2011 Assets Current Assets: Cash $2,500.00 $200,000.00 $300,000.00 Accounts Receivable $0.00 $15,000.00 $20,000.00 Inventories $0.00 $50,000.00 $80,000.00 Prepaid Items $0.00 $0.00 $0.00 Investment Portfolio $0.00 $0.00 $0.00 Other $0.00 $0.00 $0.00 Total Current Assets: $2,500.00 $265,000.00 $400,000.00 Fixed Assets: Land $0.00 $0.00 $0.00 Buildings $0.00 $0.00 $0.00 Equipment $0.00 $5,000.00 $5,000.00 Machinery $0.00 $0.00 $0.00 Other $0.00 $0.00 $0.00 Total Fixed Assets: $0.00 $5,000.00 $5,000.00 Intangibles Goodwill $0.00 $0.00 $0.00 Copyrights $0.00 $0.00 $0.00 Patents $0.00 $0.00 $0.00 Total Intangibles $0.00 $0.00 $0.00 Total Current, Fixed and Intangible Assets $2,500.00 $270,000.00 $405,000.00 Liabilities Current Liabilities: Accounts Payable $0.00 $0.00 $0.00 Accrued Expenses Payable $0.00 $0.00 $0.00 Other $0.00 $0.00 $0.00 Total Current Liabilities $0.00 $0.00 $0.00 Long Term Liabilities: Notes Payable $0.00 $288,270.00 $275,693.00 Balloon Payments Due $0.00 $0.00 $0.00 Other $0.00 $0.00 $0.00 Total Long Term Liabilities $0.00 $288,270.00 $275,693.00 Total Current and Long Term Liabilities $0.00 $288,270.00 $275,693.00 Net Worth = Assets- Liabilities $2,500.00 ($18,270.00) $129,307.00 Profit & Loss StatementTropical Auto Sales Category 2009 2010 2011 Revenue Gross Sales $720,000.00 $800,000.00 $900,000.00 Less Charge Backs, Returns & Negative Adjustments $0.00 $0.00 $0.00 Net Sales $720,000.00 $800,000 .00 $800,000.00 Less Cost Of Sales (Costs outside what listed below.) $360,000.00 $400,000.00 $450,000.00 Gross Profit $360,000.00 $400,000.00 $450,000.00 Operating Expenses Sales Expenses: Salaries and Wages $0.00 $0.00 $0.00 Commissions $90,000.00 $100,000.00 $112,500.00 Payroll Taxes $10,800.00 $12,000.00 $13,500.00 Advertising $18,000.00 $20,000.00 $25,000.00 Other $0.00 $0.00 $0.00 Total Sales Expenses $100,800.00 $132,000.00 $151,000.00 Administrative & General Expenses: Salaries and Wages $0.00 $0.00 $0.00 Bonuses $0.00 $0.00 $0.00 Employee Benefits $0.00 $0.00 $0.00 Payroll Taxes $0.00 $0.00 $0.00 Insurance $4,800.00 $4,800.00 $4,800.00 Rent $36,000.00 $36,000.00 $36,000.00 Office Supplies $2,400.00 $3,000.00 $3,600.00 Telephone $3,600.00 $3,600.00 $3,600.00 Utilities $4,800.00 $4,800.00 $4,800.00 Licenses, Membership Costs and Dues $1,200.00 $1,200.00 $1,200.00 Legal & Accounting $3,600.00 $3,600.00 $3,600.00 Debt Service [Loan Repayment 15 years @ 7%] $32,352.00 $32,352.00 $32,352.00 Automobile and Travel Expenses $1,200.00 $1,200.00 $1,200.00 Entertainment $2,400.00 $2,400.00 $2,400.00 Total Administrative & General Expenses $60,000.00 $60,600.00 $61,200.00 Total Operating Expenses [Excluding Loan] $160,800.00 $192,600.00 $212,200.00 Profits Or (Losses) Operating Profit or (Loss) $199,200.00 $207,400.00 $238,000.00 Adj. For Any Other Income (Interest Income, etc.) $0.00 $0.00 $0.00 Net Income or (Loss) Before Taxes $199,200.00 $207,400.00 $238,000.00 Income Taxes $0.00 $0.00 $0.00 Net Income or (Loss) After Taxes $199,200.00 $207,400.00 $238,000.00