ESSENTIAL AUTO RELATED BUSINESS - SIMPLE TO OPERATE

HIGH CASH-FLOW, C.O.D. BUSINESS WITH QUALITY INVENTORY

2023/2024 net profit forecast estimate to be $280,000 - $290,000

This outlet processes approximately 2,000 transactions each month with 30 percent of those transactions from repeat customers.

Customers are made up of a wide cross-section of the southwest community including mechanics, domestic DYI mechanics, car dealers, sports car and 4WD enthusiasts, and car detailers. They are drawn from a wide geographic area, since this is the only outlet of this franchise south of the metropolitan area.

This successful business is an independently owned auto parts and accessories retailer, operating under the well-known national franchise brand, which commenced operations some 40 years ago. This structure provides the locally owned outlet with the backup of a national brand, bringing with it strong buying power and corporate marketing.

The store is the only outlet south of the metropolitan area, so its customer catchment takes in the whole southwest region of WA. With over 5,500 households in the immediate catchment area alone, and owning over 10,000 vehicles, the potential market is huge and, despite its profitability, this business has barely tapped it.

Customers are made up of a wide cross-section of the southwest community including mechanics, domestic DYI mechanics, car dealers, sports car and 4WD enthusiasts, and car detailers. They are drawn from a wide geographic area, since this is the only one of this franchise south of the metropolitan area.

This outlet processes approximately 2,000 transactions each month with 30 percent of those transactions from repeat customers.

Australia’s automotive servicing, maintenance and parts and accessories retail sectors are all growing steadily, as around 90,000 new registrations occur each month and, at the same time, people retain ownership for longer.

A recent major change in legislation is leading to an increase in the number of vehicles serviced by independent workshops, as it requires vehicle manufacturers to make all data – some of which was previously accessible only by dealers – freely available online.

This in turn enables motorists to shop around for the repairer that offers the best price, service and convenience; and that repairer will invariably source aftermarket parts – unlike the dealerships that use OEM parts which cost more.

The business is very much systems oriented, with the experienced staff are able to run the business with input from the owner.

The computer system is fully automated; each cash sale docket shows the margin from each sale and automatically adjusts the stock levels of those goods. As stock levels require replacement, the system will automatically generate an order for those goods.

Because 95 percent of sales are for cash there is limited requirements for debtor control, unlike many other businesses. It also means strong cash flow is one of strengths of the business.

It is unlikely that a new owner wouldn’t require an overdraft or drawdown finance facility give the stability of the cash flow and profits.

 

---