Modern Car Wash

Service House No-

New
Four Finfinnee
Entrance Shagar
City

1. Introduction

Addis Car Wash Service will be providing car wash service for Auto mobiles,
Minibuses, and land cruisers of Addis Ababa City only. This business will include
exterior car wash and interior cleaning services.

The business is a partnership type which is established by eight partners. All are
contributed different amount of capital for investment.

Detail of the Co-Owners

S/No Name of Partner Address

1 Tadele Dandena 0911079579
2
3
4
5
6
7
8

The initial total investment required to launch the business is a total of Birr
5,204,613.00(five million two hundred four thousand six hundred thirteen) local
currency of this 2,081,845.00 or 40% will be obtained through debt financing which is
going to be paid off over 20 years and the remaining Birr 3,122,768.00 or 60% will be
obtained from contribution of the co-owners. The debt will cover machinery, office
equipment & supplies costs.

This report is confidential and is the property of the co-owners listed above. It is
intended only for use by the person to whom it is transmitted and any reproduction or
divulgence of any of its contents without the prior written consent of the company is
prohibited.
2. Executive Summary
Addis Car Wash Service is a company which is going to be commenced for giving a
car wash service for home cars, Minibuses and Land Cruisers. The Main types of
services to be given are exterior car wash and interior cleaning services. For the time
being the project is designed to give the service for Addis Ababa city residents only.
Our projected venture will be located around Four entrance Finfinnee city customarily
called “Shagar cities” area. The reason why the proposed cite is chosen for the
investment is that there are many private and governmental organizations around, it is a
way to other regional states and it is also a living area in which a number of
automobiles, minibuses, company cars, and employee services are moving in and out.

To launch the business the initial total investment requirement to undertake the business
is a total of Birr 5,204,613.00(five million two hundred four thousand six hundred
thirteen) local currency, of this 2,081,845.00 or 40% is obtained through debt financing
which will be paid off over 20 years and the remaining amount of Birr 3,122, 768.00 or
60% obtained from contribution from co-owners’ capital. The debt will cover
machinery, office equipment & supplies costs. Our business is positioning itself as the
premier car wash serving the Addis Ababa automobiles especially around Shagar cities
area and we have forecasted a 20% market share. Following the increasing number of
automobiles launching a car wash Service with efficiency and good service will be a
promising business which results in a good profit. The business will generate a very
high margin and a modest net margin after year one and comfortable margin after year
three. By year three the business will have developed a respectable yearly net profit.
The revenue source of the project will be from sales of the car wash and cleaning
service and rent of additional rooms.

This project is designed to fill the gap created by the unequal demand and supply of
the car wash service in the city. Even though there exist many numbers of
automobiles in the hands of individuals, business men & organizations there is no
enough and quality service given by car wash stations.
It has a mission of providing top-quality washing service with the emphasis on gaining
loyal and repeat customers as "friends" of the business. Our venture will be working for
twelve hours per day and the whole week, Monday to Sunday, with its full capacity.

The major competitors of our projected business are those who give the car wash
service in the gas stations and those youngsters who raise money for their living by
cleaning cars around running waters. However, those competitors are not in a good
standard and take much time, one & half to two hours per car wash, and aim to meet the
needs of the price-conscious individuals who are choosing the service simply so they do
not have to clean their car themselves. Addis Car Wash Service on the other hand
targets the quality-conscious individuals who value their car to make it look good and
the time-conscious individuals who have given value to their time.

When we look at the car wash service in Finfinnee city, they are given as an auxiliary to
their main business to gas stations despite the fact that all stations don’t constitute the
service. Because of that reason a station can only serve a maximum of six cars a day
per a washing hole and almost all of the stations have not more than two washing
holes which doesn’t fulfill the demand. Our business aims to fill the gap by giving the
car wash service as an independent (Specialized) Service which will have sixteen
washing holes serving 80 cars per day with a fair price.

Modern Car Wash Service segments its market customers by the type of car ownership
believing that the type of car that a person owns says volumes about the driving, and,
therefore the car washing and cleaning requirements. We segment our customers as new
car owners, older luxury car owners’, lifetime owners, Dealerships and local businesses
in addition to Minibuses and Land cruisers.

We planned to lease 800 m2 lands and construct the building which encompasses five
washing holes, an office and customers waiting room, plus two rooms for rent
having a purpose of Cafe and oil & lubricant sales as per each sub city. For office
use purpose the expensed equipment includes office chairs & tables, guest chairs,
computer, cash register and safe box. For the high quality and timely effective
service well, experienced workers will be employed with a fair salary as compared to
the expected job they will be doing. A Manager, a total of fifteen workers for
washing & cleaning cars, one employee who act as a cashier & receptionist, a
janitor and two security guards are needed as professionals & supporting staffs for
each sub city.

Our projected business will be differentiated from others in a way that the car washing
service will be given as a specialized business to give quality service to customers. As
one or two workers are assigned to wash a car in other businesses it will lead
customers to wait for long period to get the service and pay more money which is not
fair with the service rendered.

When we start our business there will be five washing holes in which three employees
are assigned to each hole to wash and clean a car within one hour in addition to the
spotless and quality service given to customers on each sub city. So, any customer who
comes to our station will get the service required without waiting for long so that they
can consume their time effectively.
3. Company History
As stated in the executive summary the business will give quality car wash service to
the consumers located at the targeted area. This idea is generated from one of our
members; actually, we have several business ideas which can be undertaken easily but
the reason why we select this idea is because it is unusual to our country. In fact, this
business plan is common in western countries.

Accordingly, our company vision, Mission, long term goals and objectives are stated
below.

3.1 Visions: -
The vision of the venture to expand its activities through our country in order to achieve
the following vital goals:

I) Create job opportunities for the working group

II) Make vital contributions to our country by paying tax.

3.2 Mission: -
The mission of the enterprise in the business environment is to give better satisfaction to
our customers by providing a standard service and by giving the service to targeted
customer in an efficient way.

3.3 Goals: -
The major goal of our business in the long term is to improve the quality of service
providing in order to satisfy the demands of our customers & attract new customers to be
users of our service.

3.4 Objective: -
The primary objective of this business plan is to successfully provide quality service
with reasonable price to pay.
4. Industry Analysis
Analyzing the industry of car washing business is a little bit difficult in the case of
our country since there is no specialized car washing service. When current situations of
the country are observed, there is a rapid growth in emergence of car assemblies, no of
imported automobiles, no of investors, road construction, and as a whole there is a
change in the nod of higher class and middle- c l a s s society groups to whom an
automobile becomes a necessity rather than luxury as former times. Since the number
of residents and business areas owning an automobile are increasing from time to time,
the business will have a bright future as the nod of one or more new car wash business
is determined there will be more specialized car wash businesses in the city.

4.1 Competitors
The major competitors of our projected business are those who give the car wash
service in the gas stations as an auxiliary to the main business which is selling of
petroleum and related products and those youngsters who raise money for their living
by cleaning cars around running waters. However, those competitors are not in a good
standard and take much time, one & half to two hours per car wash, and aim to meet the
needs of the price-conscious individuals who are choosing the service simply so they do
not have to clean their car themselves. Modern Car Wash Service on the other hand
targets the quality-conscious individuals who value their car to make it look good and
the time-conscious individuals who have given value to their time.

4.2 Market Segmentation

Modern Car Wash Service segments its customers by the type of car ownership.
We believe that the type of car that a person owns says volumes about their driving,
and, therefore their car washing and cleaning requirements.
4.2.1 New Car Owners

Owners of newer cars are most likely to use a hand car washing service. These
owners take great pride in their cars and will bring them often to the wash and clean
service. The goal with these customers is to promote regular use of the wash and
clean service. The aim is to inform these customers that Addis Car Wash Service
will keep their car looking as good as it did the day, they drove it off the lot.

4.2.2 Older luxury car owners

These people have either owned their high-end luxury cars for several years or are
unable to afford the expense of a new luxury car but want the feel of relaxed driving.
Both of these groups want to keep their cars in the best shape possible. Those who have
bought second-hand cars will often spend many hours in their cars and will place
high importance on keeping their cars looking good. These owners will bring their cars
in for regular washes and to be cleaned.

4.2.3 Lifetime owners

Many of these people have owned their cars for more than five or six years, and
are more likely to be women. They are attached to their cars as friends and though it
may be more sensible for them to purchase a new car, they will bring their car in for a
wash occasionally, just when the car is dirty. They like their cars to look presentable,
and want to keep it in good shape but are not tied up in the look of their car.

4.2.4 Dealerships

Currently the number of car dealers who import new cars from abroad and those
who used to sell used second hand cars is rising. These dealerships often use outside
car wash services to clean their vehicles before they are put up for sale.

4.2.5 Local businesses

Local businesses have company cars and small vans that must be kept clean to
maintain their company image.
These businesses will be looking for a cost effective, efficient car washing service to
perform this service, and will prefer to use a car wash service during the week rather
than during weekends, like the general public.

The strategy behind the company’s target market segmentation is to attract customers
who will be repeat users and will frequent the business in the typically quiet times for a
car wash business. It will not be difficult to attract customers during the summer months
and on the weekends, the weekdays however, especially in the winter, people will not
think about having their cars washed. For this reason, Modern Car Wash will target
people who will tend not to be restricted to these busy times.

The main targets of our projected business plan are personal Automobiles, Minibuses,
and Land cruisers. As previously mentioned, car washing service in Finfinnee city
is given as a dependent one to gas stations despite the fact that all stations don’t
constitute the service. Because of that reason a station can only serve a maximum of six
cars a day per a washing hole and almost all of the stations have not more than two
washing holes which doesn’t fulfill the demand. Our business aims to fill the gap by
giving the car wash service as an independent (Specialized) Service which will have
five washing holes serving fifty cars per day.

Since the required job in the car wash service business is not yet done thoroughly,
we decided to invest our capital into the car wash service business and then generate
revenue from the services given by the project. As the number of service stations
and automobiles is not comparable, it opens a good opportunity for us to enter in to
the sector to be successful as we planned since we will be involving in a valuable
business which creates unique and quality services in meeting customers’
satisfaction to bring real benefit to the surrounding community.
5. Description of the venture

5.1 Service Type

Modern Car Wash Service will be providing customers with exterior car wash service
and interior cleaning. It has a mission of providing top-quality washing service and will
work to keep employees satisfied in order to maintain impeccable (faultless) customer
service with the emphasis on gaining loyal and repeat customers as "friends" of the
business. Our venture will be working for twelve hours per day and the whole week,
Monday to Sunday, with its full capacity.

5.2 Location

Our Business will be located at Finfinnee Entrance, and customarily called “Four
Shagar cities” area. The reason why the proposed cite is chosen for the investment is
that there are many private and governmental organizations around, it is a way to other
regional states and it is also a living area in which a number of automobiles, minibuses,
company cars, and employee services are moving in and out. There is high demand
but very few cars washing service is given in that area. That is a good opportunity
to launch our business around there. Moreover, the lease price to acquire land for
building our site is cheaper than other areas. We planned to lease 800 m2 land and
construct the building which encompasses five washing holes (will be laid on the area
of land 131.25 m2), an office and customers waiting room, plus two rooms for rent
having a purpose of Cafe and oil & lubricant sales (will be laid on the area of land
144 m2) on each sub city.

5.3 Equipment’s
For office use purpose the expensed equipment includes office chairs & tables,
guest chairs, computer, cash register and safe box.
Capital expenditure of the project

No. Description Local Costs Foreign Tota

Costs l
1. Land 1,215,840.00 1,215,840.00
Building 825,750.00 825,750.00
Machinery 2,500,000.00 2,500,000.00
Office furniture 3,100.00 3,100.00
Computer 12,000.00 12,000.00
Cash Register 8,000.00 8,000.00
Safe box 2,500.00 2,500.00
Sub Total 2,067,190.00 2,500,000.00 4,567,190.00
2 Initial working capital 637,423.00 637,423.00
Total 2,704,613.0 2,500,000.0 5,204,613.00
0 0

5.4 Employees
For the high quality and timely efficient service well, experienced workers will be
employed with a fair salary as compared to the expected job they will be doing. A
Manager, a total of fifteen workers for washing & cleaning cars, one employee who
act as a cashier & receptionist, a janitor and two security guards are needed as
professionals & supporting staffs on each four-sub city.

Summary of Employees Salary for one sub city

No. Description No. Monthly salary Total annual

per person salary
1 Manager 1 2,500.00 30,000.00
2 Car washers 15 450.00 81,000.00
3 Cashier & Receptionist 1 800.00 9,600.00
4 Janitor 1 200.00 2,400.00
5 Security Guards 2 350.00 8,400.00
Total 131,400.00
Modern Car Wash Service will be owned by eight co-owners who are from diverse back
grounds and experiences. Currently all of us are taking Management courses in a
Degree Program which will enable us to run our business effectively. We have planned
to enter in to this business because the car washing service is not yet given in full
capacity which left a big gap to be satisfied and even didn’t be counted as a separate
business in our city at all. While more has to be done in the area it is going to be a
good profit-making business. It will be legally registered as a “Partner Ship” business
which will generate revenue for the government in the form of income tax despite the
fact that it creates employment opportunity.

6. Service Plan
The major machineries and equipment’s for a washing business are those machines
which lift up the car with its all accessories, High-power water pumps, Generator
which is used in times when the power is off, washing towels and powder soaps.
The machine which is used for lifting up the cars (Large Crick) to make them ready
to be washed and the high-power water pumps will be imported from abroad.

7. Marketing Plan
The existing supply of the service in the town is not satisfactory. The situation has
called for participation of the partners to establish the above-mentioned project. The
target markets are the potential users of the service who are categorized in the middle-
and high-class society groups. Presently, the average price charged to wash a personal
automobile, Minibus and Land Cruiser is Br 100.00, 110.00 and 120.00
correspondingly. It is our plan to serve with a maximum potential and efficiency and to
reduce the time for washing a car to one hour & will charge to wash a personal
automobile, Minibus and Land Cruiser Br 115.00,
125.00 and 140.00 respectively.

Since it is a new venture, we will be using price reduction for a month in addition to
word-of-mouth advertising and using brochures and posters. Our business is
positioning itself as the premier car wash serving the four Finfinnee entrance
automobiles especially Shagar cities area. We have forecasted a 20% market share. The
business will generate a very high margin and a modest net margin after year one and
comfortable margin after year three. By year three the business will have developed a
respectable yearly net profit. The revenue source of the project will be from sales of the
car wash and cleaning service and rent of additional rooms.

8. Organizational Plan
The planned project is going to have a partnership form of ownership. All the legal
requirements starting from registration will be conducted before the business starts to
run. All the eight partners have our background of being Accountants, Purchasers,
Business men, Soccer Players, and so on. According to our experience side by side to
the Management stuff we all will take part of the job to be done like paper works,
accounting works and customer attractions.

9. Assessment of Risk
As we have tried to mention earlier the automotive industry is growing than before in
our country. Many people are having cars and following the increase in number of
residents of Addis Ababa city from time to time, there is a need to increase
transportation vehicles like minibuses. When we watch out the number of tourists
attracted to Ethiopia is also growing which may cause an increase in need of Land
cruisers. As long as there are a number of vehicles in the town, there will be a high
demand of car washing and cleaning service in line with having a need to keep their
cars clean.

Since the switching costs in the car washing industry is low, we will be aware and
work hard to develop and keep repeat customers. In order to avoid the loss of
customers to other competitors we would put a great deal of emphasis on creating a
system that is both fast and efficient which will keep costs in terms of time spent per car
to a minimum.
10. Financial Plan

10.1 Investment Cost of the project

The total invested cost of the proposed project is estimated to be Birr 5,204,613.00 of
Local Currency.

10.2 Source of fund

The project source of finance is based on owner’s equity, 40% of the total
investment, and loan, 60% of the total investment.

The amount of funding is given below

Source % Amount
0 Owner equity 60 3,122,768.0

1 % 0
0 Loan 40 2,081,845.0

2 % 0
Total 5,204,613.0

List of shares per owner

N Amount
o name %
of
. share
1 Tadele Dandena
2
3
4
5
6
7
8
Total owner
equity 3,122,768.00 100
share
 10.3 Projected Financial Statement

PROJECTED INCOME STATEMENT

MODERN CAR WASH
Projected Income Statement

Description Y1 Y2 Y3
REVENUE
1,176,000.0 1,449,000.0
Income from sales service 0 1,260,000 0
Income from shop Rent 36,000.00 39,600.00 45,540.00
1,212,000.0 1,299,600.0 1,494,540.0
Total revenue 0 0 0
EXPENSE
Payroll 131,400.00 144,540.00 158,994.00
Deprecation expense 280,850.00 280,850.00 280,850.00
Utilities 41,400.00 45,540.00 50,094.00
Insurance 15,000.00 15,000.00 15,000.00
Supplies 550,000.00 577,500.00 635,250.00
1,018,650.0 1,063,430.0 1,140,188.0
Total operation expense 0 0 0
Gross Income 193,350.00 236,170.00 354,352.00
Interest expense (86,600.00) (86,600.00) (69,280.42)
Income before I/Tax 106,750.00 149,570.00 285,071.58
Income tax (30%) 32,025.00 44,871.00 85,521.47
Net profits 74,725.00 104,699.00 199,550.11
Net profit/Sales 6% 8% 13%
10.3.1 Projected Balance Sheet

MODERN CAR
WASH PROJECTED
BALANCE SHEET

Assets Y1 Y2 Y3
C/A
Cash 150,373.40 269,409.55 232,912.44
A/R 10,500.00 23,058.00 37,800.00
Supplies 50,000.00 30,000.00 20,000.00
T.C. A 327,693.40 515,790.55 603,096.03
Long-term Asset
Building 825,750.00 825,750.00 825,750.00
Acc.Dep 30,850.00 61,700.00 92,550.00
2,500,000.0 2,500,000.0 2,500,000.0
Machineries 0 0 0
Acc.Dep 250,000 500,000.00 750,000.00
Office equipment 25,600 25,600.00 25,600.00
Acc.Dep 7,533 15,066.00 22,599.00
1,215,840.0 1,215,840.0 1,215,840.0
Land leased 0 0 0
4,278,807.0 3,990,424.0 3,702,014.0
T.L.T Asset 0 0 0
4,606.500.0 4,506,214.5 4,305,137.0
Total Assets 4 5 3
Liab & Capital
C/L
A/P 48,633.00 202,739.45 202,739.45
Long-term liab.
Bank loan 866,005.26 692,804.21 519,603.16
Lease payable 924,038.40 875,404.80 526,771.20
1,838,676.6 1,770,948.4 1,249,113.8
Total Liab. 6 6 1
2,693,097.8 2,630,567.0 2,856,473.1
Paid in Cap. 3 0 1
Retained Earning 74,725.00 104,699.00 199,550.11
2,767,822.8 2,735,266.0 3,056,023.2
Total Capital 3 0 2
Total Liab. and
Cap. 4,606,499.49 4,506,214.46 4,305,137.03
 10.4 Projected Cash Flow

MODERN CAR WASH

POROJRCTED CASH
FLOW

CASH FLOW Y1 Y2 Y3
Cash from operations
1,180,500.0 1,257,558.0
Cash sales 0 0 1,435,572.00
Cash from receivable 31,500.00 42,042.00 58,968.00
1,212,000.0 1,299,600.0
Subtotal cash from operation 0 0 1,494,540.00
Expenditure from operation
Cash spending 737,800.00 782,580.00 859,338.00
Lab. pay 48,633.60 202,739.45 202,739.45
Cash balance 425,566.40 314,280.55 432,462.55
Lease 20% paid 243,168.00 0.00 0.00
Tax Paid 32,025.00 44,871.00 199,550.11
Net cash 150,373.40 269,409.55 232,912.44
11. Annex
Reference

• Addis Ababa Municipality

• Addis Ababa Transport Authority

• Gas Station

• Internet
 Table of Content
Page
1. Introduction...........................................................................................................1
2. Executive Summary........................................................................................2
3. Company History...........................................................................................5
3.1 Vision..................................................................................................5
3.2 Mission...........................................................................................5
3.3 Goals...................................................................................................5
3.4 Objective.............................................................................................5
4. Industry Analysis............................................................................................6
4.1 Competitors........................................................................................6
4.2 Market Segmentation..........................................................................6
4.2.1 New Car Owners..........................................................................7
4.2.2 Older luxury car owners...............................................................7
4.2.3 Lifetime owners............................................................................7
4.2.4 Dealerships...................................................................................7
4.2.5 Local businesses...........................................................................7
5. Description of the venture....................................................................................9
5.1 Service Type.......................................................................................9
5.2 Location..............................................................................................9
5.3 Equipment’s........................................................................................9
5.4 Employees......................................................................................10
6. Service Plan.....................................................................................................11
7. Marketing Plan................................................................................................11
8. Organizational Plan...............................................................................................12
9. Assessment of Risk....................................................................................12
10. Financial Plan.....................................................................................................13
10.1 Investment Cost of the project...........................................................13
10.2 Source of fund....................................................................................13
10.3 Projected Financial Statement.................................................................14
10.3.1 Projected Income Statement.............................................................14
10.3.2 Projected Balance Sheet...............................................................15
10.4 Projected Cash Flow..........................................................................16
11. Annex.......................................................................................................17