SMEDA Auto Repair & Service Workshop

Pre-Feasibility Study
AUTO REPAIR & SERVICE WORKSHOP
Small and Medium Enterprise Development Authority

Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
Waheed Trade Complex, 1 Floor , 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore
Tel: (042) 111-111-456, Fax: (042) 5896619, 5899756
st
helpdesk@smeda.org.pk
REGIONAL OFFICE
PUNJAB
Waheed Trade Complex,
1st Floor, 36-Commercial Zone,
Phase III, Sector XX,
Khayaban-e-Iqbal, DHA Lahore.
Tel: (042) 111-111-456
Fax: (042) 5896619, 5899756
helpdesk@smeda.org.pk
REGIONAL OFFICE
SINDH
REGIONAL OFFICE
NWFP
REGIONAL OFFICE
BALOCHISTAN
5TH Floor, Bahria

Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 5610572
helpdesk-khi@smeda.org.pk
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 9213046-47
Fax: (091) 286908
helpdesk-pew@smeda.org.pk
Bungalow No. 15-A

Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 831623, 831702
Fax: (081) 831922
helpdesk-qta@smeda.org.pk
September, 2004
Auto Repair & Service Workshop
DISCLAIMER
The purpose and scope of this information memorandum is to introduce the subject matter
and provide a general idea and information on the said area. All the material included in
this document is based on data/information gathered from various sources and is based on
certain assumptions. Although, due care and diligence has been taken to compile this
document, the contained information may vary due to any change in any of the concerned
factors, and the actual results may differ substantially from the presented information.
SMEDA does not assume any liability for any financial or other loss resulting from this
memorandum in consequence of undertaking this activity. Therefore, the content of this
memorandum should not be relied upon for making any decision, investment or otherwise.
The prospective user of this memorandum is encouraged to carry out his/her own due
diligence and gather any information he/she considers necessary for making an informed
decision.
The content of the information memorandum does not bind SMEDA in any legal or other
form.
DOCUMENT CONTROL
Document No.
PREF-4
Revision
Prepared by
SMEDA-Sindh
Approved by
Provincial Chief - Sindh
Issue Date
September, 2004
Issued by
Library Officer
PREF-4/September, 2004/Rev1
PROJECT PROFILE
Purpose of the Documents
1. 1
This document is developed to provide the entrepreneur with potential investment

opportunity in setting up and operating a Auto Repair & Service Workshop offering
various services. This pre-feasibility gives insight into various aspects of a Workshop setup
including both technical and general information for each particular service offered. The
document is designed to provide all relevant details to facilitate the entrepreneur in making
the correct decision providing various technological as well as business alternatives. The
document also allows flexibility in change of various parameters to suit the customized
needs of the entrepreneur.
Project Brief
1. 2
The Auto Repair market has a lot of competition, almost all offer repair and service
features. Very few have fully stocked parts owing to the problem of tied up capital in case
of non-utilization of these parts. However, quick availability of parts supports the service
and repair departments by allowing them to turnaround jobs at a faster rate than the
competition. Wheel alignment and balancing facilities are also provided by many large
scale workshops along with their primary services.
The proposed pre-feasibility addresses the unmet need of having a quality auto repair
workshop that provides:
(i)
(ii)
(iii)
(iv)
1. 3
Quick and quality repair & maintenance services;

Wheel Alignment and Balancing Facilities
High Pressure Cleaning Services; and
Easy access to new and used retail parts to meet the demands of the customer.
Opportunity Rationale
The Auto Repair & Service Workshop business is a viable business provided that it is
operated with a good business acumen that involves having a thorough knowledge and
experience of the repair and service operations and also managing the jobs with the right
type of skilled manpower. When these factors combine with good customer relationship
management and effective business development skills, the business is expected to give
considerable profits which are expected to grow over the years.
1.3.1
Market Entry Timing
The Pakistani automobile industry has registered a considerable growth over the past
couple of years. It was further estimated that the car industry experienced a growth rate of
51.4% during July 02 to April 031 signifying an increasing demand for cars which is
expected to continue in the future (albeit at a lesser rate).
Furthermore, increasing competition between leasing companies have caused the lease
rates to decline considerably which have made car an affordable commodity for a majority
of the middle-income class which constitutes a considerable segment of the population of
Pakistan. These factors coupled together reflect on the growing need for quality repair and
service facilities.
Unlike many countries, the Pakistani car industry is unique in the sense that once the car
comes on the road it is expected to run for an indefinite period requiring major repair and
maintenance services throughout its operational life. Moreover there is a considerable
demand for wheel alignment and wheel balancing services, which is required by almost
every car, whether new or old. The roughness of the roads and continuous friction causes a
continuous disruption to the alignment and balancing of the wheels which require adjusting
at least once every two weeks for proper upkeep and maintenance.
Conclusively it can be said that there exists an ample demand for quality repair and service
workshops in Pakistan and also that the existing scenario provides conducive opportunities
for entry into this business venture.
1. 4
Key Success Factors/Practical Tips for Success
The three main critical success factors that affect the decision to invest in the proposed
business setup are:
i) Hands on Experience
Having a thorough knowledge and hands on experience of all the relevant technical
details is a must for entry into this business. Relevant work experience is the most
important pre-requisite because it has a direct impact on the successful
management of the business.
ii) Marketing Skill
Another critical factor is that the entrepreneur must have effective PR & marketing
skills. These marketing skills should enable the entrepreneur to carryout business
development activities to target his potential customers and also to maintain his
existing client base.
Auto Industry in Pakistan, A research Publication by Capital One Securities, February 2004
iii) Technical Skill

The third critical factor relates mostly to technical skills required especially for
operating computerized Wheel Alignment & Balancing machines and high pressure
cleaning equipment. The machine operators should be properly trained in order to
completely inspect steering and suspension systems, take computer measurements,
make factory adjustments to restore alignment specifications. In case of unskilled
workers handling these equipment, there will be loss of time, equipment and most
important of all unsatisfactory service leading to customer dissatisfaction.
1. 5
Proposed Business Legal Status
Although the legal status of business tends to play an important role in any setup, the
proposed Auto Repair & Service Workshop is assumed to operate on a sole proprietorship
basis which may extend to partnership in case of addition of new services that might add
significant business to the existing setup.
1. 6
Project Investment
This section will provide the total cost of the project.

ITEM
COST (RS.)
Construction Office / Store
675,000
Construction Service Stations
850,000
Masonry Work
120,000
Mechanical Repairs Equipment
90,000
Denting Equipment
100,000
Painting Equipment
30,000
Wheel Alignment Machine
1,000,000
Wheel Balancing Machine
650,000
High Pressure Cleaning Equipment
550,000
Piston Pump
250,000
Spare Parts Purchases
125,000
Lubricant Purchases
25,000
ITEM
COST (RS.)
Advance Rent & Deposit
900,000
Working Capital
552,000
Pre Operating Costs
50,000
Office Furniture & Equipment
80,000
Total Cost
6,047,000
Proposed Product Mix
1. 7
A typical Auto Repair Workshop is assumed to provide the following four major services:
(i)
(ii)
(iii)
(iv)
Mechanical, and
Denting & Painting
Wheel Alignment & Balancing
High Pressure Cleaning
The following table presents an overview of the proposed main services to be offered
under the first two major categories identified above:
1. 7. 1
MECHANICAL
DENTING & PAINTING
Maintenance Services
Cosmetic Repair
Major Repairs
Accidental Repair
Body Restoration Services
Mechanical Repairs
It is assumed that cars coming into the workshop soliciting mechanical repairs would
subscribe to the following main services:
(i)
Maintenance Services which mostly constitute running repairs / services like

Gear oil / Engine Oil / Break Oil change, Oil Filter change, spark plugs / point
repair, lubricant replenishment / replacement, tuning, break shoe repairs, minor
suspension repairs etc. These maintenance services are usually characterized by
their very little job turnaround time and are usually disposed of within a half a
days work.
(ii)
Major Repairs mainly related to repair and replacement services that require
comparatively greater job turnaround time and include activities like engine
overhaul (3 weeks), gearbox repair & replacement, steering box repair &
replacement, suspension replacement (3 5 days) etc.
1.7.2 Denting & Painting Services
The main denting and painting services provided to the customers would be as follows:
(i)
Cosmetic Repairs which are also known as touching services where minor
body defacements (like scratches, dents, paint shrouding etc.) are repaired.
(ii)
Accidental Repairs which constitute chassis, mudguard, bumper, bonnet

repairs / replacement services etc. Most of the cars coming for denting &
painting services come under this category.
(iii)
Body Restoration Services which include complete restoration of vehicle body

for example restoration of decayed body, completely destroyed accidental body
restoration etc.
1.7.3 Wheel Alignment & Balancing

(i)
Wheel Alignment which consists of adjusting the angles of the wheels so that
they are perpendicular to the ground and parallel to each other. The purpose of
these adjustments is to maximize tires life and ensure a vehicle that tracks
straight and true when driving along a straight and level road.
(ii)
Wheel Balancing refers to the proper distribution of weight around a revolving

tire and wheel assembly. Poor wheel balance can have a marked impact on both
the car and safety. Proper wheel balance ensures that the wheels, while
spinning, do not have a heavy spot that can cause vibration and premature wear
of tires, struts, shocks and other steering and suspension components. When
combined with proper wheel alignment, balanced wheels ensure smooth and
enjoyable driving.
1.7.4 High Pressure Cleaning

High Pressure Cleaning mainly involves the cleaning of the outer body of the car through
high pressure water spray which contains a car body detergent and then a little wax to
smoothen the car paint.
1.7.5 Sublet Services

Sublet services are those ancillary services that are outsourced to other specialized
workshops / personnel that are not a part of the service mix offered by the Auto Repair
workshop. These sublet services include items like Air Conditioner Repair & Coolant
Replenishment, Machine Shop Items, Radiator Repairs, Silencer Repairs, Road Spring
Repairs, Upholstery Items (seats, bumpers, plastic repairs etc.), Wheel Alignment /
Balancing, Axle End / Tire Rod Repair & replacement etc.
These sublet services usually form a part of the total job order of the Auto Repair
Workshop and are usually a portion of the lump sum amount charged to the customer by
the Auto Repair Workshop.
Recommended Project Parameters
1. 8
Capacity
867 Cars / Month
Human Resource
5 (Management)
20 (Technical Staff)
Equipment
Local / Eurpoean /
Chinese
Location
High Income
Locality
Financial Summary
Project Cost
IRR
NPV
Payback Period
6,047,000
33%
Rs. 4,099,801
3 Years & 5 months
Cost of Capital
(WACC)
17.5%
Proposed Location
1. 9
The Auto Workshop business is very much dependent on the location of its setup. Auto
Workshops located on main roads or prime locations usually depend on walk-in customers
while those that are based on off-road locations have their business coming in from
contacts, referrals and companies. The main factors to consider for deciding on the location
are:
Anticipated Source of Business:

If the Auto Workshop owner has contacts and a good referral network he can setup
up the workshop in an off road locality which would cost him much lower than
locating himself on the main road. On the other hand if the entrepreneur wants to
bank his business on walk in customers then he needs to be on main roads to
provide easy access to the walk in customers but will have to comparatively pay a
higher rent. This becomes more critical for wheel alignment & balancing and high
pressure cleaning services.
Accessibility of Sublet Services

As discussed earlier, most of the workshops do not offer all the services hence
some services are outsourced to other specialized workshops / personnel. Quick
and easy accessibility to these services would minimize job turnaround time thus
the location needs to be in close proximity to these service providers.
Existing Competition
Concentration of similar types of workshops can give difficult competition, which
increases if the competitors are well established and famous for their service.
Therefore it is advisable to choose such locations only when the owner is expected
to have considerable amount contacts and referrals.
Quick Accessibility to Parts Market

Maintaining a spare parts inventory is crucial for reducing the job turnaround time.
However many auto workshops prefer to be located within close proximity to the
spare parts markets to ensure ready availability of desired spare parts. Therefore
less money is tied up in maintaining an adequate spare parts inventory.
1. 10
Key Success Factors/Practical Tips for Success
The main objective for an Auto Repair Workshop is to offer a hassle free quality repair and
service operations that eliminate waiting on part of the customer and help to offer value
added services to the customer who need their cars fixed right away. The following factors
need a continuous focus for making the proposed setup a successful business venture:
Growing and Maintaining a Referral Network of Customers

The main factor is to attract and maintain a loyal customer base through a
customer-oriented focus on business rather than concentrating on volume and
losing out old customers. All the workers at the workshop need to be trained and
held responsible for providing superior service and developing long lasting trust
bond with the customers. This is very important in this industry, where trust and
honesty reflect on the image of repair and service facilities. This would help in
maintaining a consistent revenue base, to ensure stability of business on the longrun.
Expedient and Convenient Auto Repair & Service Facilities

This business is very unique in the sense that switching costs are almost negligible
for the customer hence the main effort required is to maintain and enhance
customer loyalty by providing quick and quality services. Otherwise, the customer
would not take time to move to other workshops.
Skilled & Experienced Manpower

The knowledge and experience of the entrepreneur is not sufficient to run the
business smoothly. Provision of quality repair and service facilities solicits skilled
and experienced workmen which are an integral component of this business. It is
important that the manpower hired should have the required technical capability
and customer relationship management skills. Unless the entrepreneur is not skilled
and does not possess the required know-how he would not be able to properly hire
and manage the manpower.
Auto Parts Inventory

An adequate auto parts inventory based on prior experience and business volume
needs to be maintained in order to give quick service and prevent any
inconvenience caused to the customer. Moreover, quick accessibility to used / new
auto parts is another important factor that enables to provide hassle-free service to
the customers. However, the entrepreneur needs to carefully manage the auto parts
inventory to ensure that minimal working capital is tied up. Some workshops
usually keep auto parts for the most common car brands while parts of less
common / unpopular brand are usually made available on call basis.
Specialized Skills
Some Auto Workshops become famous due to their expertise in particular area /
field or brand. These workshops develop their expertise over a period of years and
become famous for specialized areas like Denting & Painting, Axle Repair &
Maintenance etc. Some workshops are known experts for specific car brands like
Suzuki, Toyota etc. These specialized skills draw the attention of car owners of
particular brands or those who are facing specific problems, hence consistent
quality needs to be maintained to develop such skills. Another specific issue that
relates to specialized skills is the proper use of alignment and balancing equipment
such that the customer is properly satisfied. This can be achieved only when the
workers operating these machines are properly trained and knowledgeable about
the processes.
PROCESS FLOW
The Auto Workshop that provides mechanical and denting & painting services follows a
basic process flow as follows:
2. 1
Mechanical Services:
CAR
JOB ORDER
TIME / COST
ESTIMATE
DELIVERY TO
CUSTOMER
REPAIR /
REPLACEMENT
TEST TRIAL
The above diagram illustrates the basic process flow for mechanical repairs. The customer
comes in with the mechanical problem wherein a job card is prepared based on the
problems faced by the customer. The foreman then checks the car to check for any
additional problems. The customer is then provided with time and cost estimates
depending on the whether the parts need to be repaired or replaced. On agreement of the
customer the job is allocated by the foreman. It is necessary to test run the car before it is
finally delivered to the client.
2. 2
Denting & Painting:
CAR
JOB ORDER
PAINTING
DRYING
RUBBING
FINISHING
TIME / COST
ESTIMATE
BODY FILLING
ON PATCHES
PART
REPLACEMENT
(IF ANY)
DENTING /
RESHAPING
BODY
PREPARATION
FOR PAINT
FINAL
DELIVERY TO
CUSTOMER
The above diagram illustrates the basic process flow for denting and painting. After the
estimation of time and cost the car is given to the Head Denter who reshapes the car back
into form and hands it over to the painter. Initially the reshaped body is prepared for
painting by applying coating and then patches are filled which are then smoothened by
rubbing. The body is then painted and left for drying after which finishing touches and
waxing is done to ensure proper shine. In case of accidents, irreparable parts are replaced
before making the final delivery to the customer. However subletting activities can also
take place during this process on need basis.
Wheel Alignment Procedure
2. 3
With the development of computerized alignment machines the wheel alignment process
has been very much simplified. However there are two types of wheel alignments that are
widely practiced:
Two Wheel Alignment:

The term Two Wheel Alignment is a process where both front wheels are aligned
to provide the best Toe in, Caster and Camber settings to provide the best all
around handling and tire wear under normal driving conditions.
Four Wheel Alignment:

The term Four Wheel Alignment is a process where both front and rear wheels are
aligned. In a typical Four Wheel Alignment, the rear wheels are checked for toe and
tracking.
In a typical situation the Rear wheel "Toe" is adjusted by adding or removing small shims
between the rear wheel hub and the rear axle. Tracking is checked with the computerized
software and the rear axle is checked to make sure that it "tracks" properly behind the front
wheels. On a Four Wheel Alignment, the adjustments are first made to true up the rear
alignment, then the front is adjusted. Therefore a full Four Wheel Alignment will cost
more because there is a lot more work involved.
For
a
general
overview the
Rear
above
diagram
presents an
Front
illustration of a car
where
the
front wheels are not
aligned
to
the rear thrust line.
This
can
happen
from
normal wear
and stress, whether
the vehicle
has adjustable or non-adjustable rear suspension. To steer straight ahead, the driver would
have to steer the front wheels slightly to the right. A common result would be that the
vehicle would possibly pull to the side. Wheel alignment requires a lot of accuracy because
it takes only a small misalignment to create problems.
Stage 1: The first stage involves the following steps:

1. Placement of the car accurately on the alignment frame ensuring that Toe, Camber
and Casters are in a proper visible position.
2. Angle readings are measured at all four wheels as indicated on the screen
3. The steering wheel is centered.
4. Front wheels are referenced to rear thrust line and set to specifications.
5. A continuous series of alignment iteration would be required unless the computer
shows zero angle deviation.
At the end this would result in all four wheels being parallel when the steering would be
centered. This is illustrated as follows:
Front
Rear
Stage Two: The second stage involves the following steps:

1. Angle readings are measured at all four wheels.
2. Rear wheels are set to specification. (Rear thrust line corresponds to vehicle
centerline.)
3. Steering wheel is centered.
4. Front wheels are referenced to the rear thrust line and set to specification.
2.3.1 Symptoms of a Car Requiring Wheel Alignment
Excessive or uneven tire wear.

Steering wheel pulls to the left or right.
Feeling of looseness or wandering.
Steering wheel vibration or shimmy.
Steering wheel is not centered when car is moving straight ahead.
2.3.2 Benefits of 4 Wheel Alignment

Most of the customers shy away from getting rear wheels aligned because of the cost and /
or their lack of knowledge of the workshops offering such services. The following are
some of the benefits of a four wheel alignment the importance of which should be
communicated to the customer by the Workshop employees:
Reduced Tire Wear

Improper alignment is a major cause of premature tire wear. Over the years, a properly
aligned vehicle can add thousands of miles to tire life.
Better Mileage
Mileage increases as rolling resistance decreases. Total alignment sets all four wheel
parallel which, along with proper inflation, minimizes rolling resistance.
Improved Handling
Most of the time the cars pull to one side and the steering wheel vibrates. The driver
has to constantly move the steering wheel to keep the car traveling straight ahead.
Many handling problems can be corrected by total 4 wheel alignment. With all the
system components aligned properly, road shock is more efficiently absorbed for a
smoother ride.
Safer Driving
A suspension system inspection should be made part of the alignment procedure. This
allows for spotting worn parts before they cause costly problems.
2. 4
Wheel Balancing Procedure
Properly balanced tires help minimize uneven wear and extend their life. When tires are
balanced, small lead weights are attached to the wheels to limit vibration of the tire and
wheels as they turn. Tires and wheels should be balanced when the tires are rotated
(normally every 6,000 miles), after putting on new tires, after fixing a flat tire, and any
other time a tire is removed from its rim.
There are two "planes" on which a wheel / tire assembly can be balanced:
1. The radial or static plane. Imbalance on the static plane can be described as wheel
"bounce" or wheel hopping, up and down.
2. The lateral or dynamic plane. Imbalance on the dynamic plane can be described as
side to side shake of the tire and wheel assembly, "shimmy" or "wobble".
Radial or Static Plane

(Bounce)
Lateral or Dynamic
Plane (Wobble)
The radial and lateral balancing wheel procedure is very simple wherein the wheel are
removed from the car and mounted onto the balancing machine one at a time. The
computer screen shows the angular deviations between the rim and the wheel (rubber) and
with the help of the machine the operator tries to balance the wheel horizontally and
vertically at best.
2.4.1 Symptoms of a Car Requiring Wheel Balancing
The most common signs of unbalanced tires are vibration and noise problems. When
driving with an out-of-balance wheel, the wheel literally bounces down the road rather than
spinning smoothly. This can affect the speed, handling and mileage of the car.
Most new models have lightweight suspension systems and are therefore, more sensitive to
imbalance than older cars. It is advised that the workshop employees recommend their
customers to have their cars wheels balanced when rotating the tires, about every 6,000
miles, etc. It is not uncommon for wheels to lose a wheel weight from time to time; so
periodic balancing minimizes the impact of unbalanced wheels on the car.
2. 5
High Pressure Cleaning & service mainly involves the cleaning of the outer body of the car
through a diesel driven pressure pump machine which ejects water at a very high pressure
from the hoses. The car is parked on a ramp after which it is lifted into the air by a Pressure
Piston Pump. The water slightly mixed with detergents for proper cleaning is sprayed from
the spray guns after which dry air is also used to remove any water drops left on the body.
Some Service stations also spray dry air slightly mixed with wax to give a shiny finish
which increases the life of the body paint. However most of the service stations manually
remove the water droplets with cleaning clothes.
Equipment Requirement
2. 6
The equipment required for running an Auto Workshop would relate to the activities that
the workshop tends to undertake. In this case, the equipment required would be as follows:
MECHANICAL REPAIRS & MAINTENANCE
Equipment
Number
Estimated Cost (Rs.)
Complete Mechanical Toolbox
26,000
Work Bench
5,000
Vice
9,000
Tool Box Cupboard
5,000
Voltmeter / Ammeter
5,000
Timing Light
12,000
Battery Charger
7,000
Compression Gauge
6,000
Others
15,000
Total
90,000
DENTING
Equipment
Number
Denting Toolbox
20,000
Mechanical Toolbox
13,000
Pressure Jack (Large)
30,000
Gas Cylinder
6,000
Carbide Tank
3,000
Welding Kits
6,000
Drill Machine (Hand)
3,000
Puller Jack
4,000
Others
15,000
Total
100,000
PAINTING
Equipment
Number
Painting Compressor (2 hp; 1k lbs)
15,000
Spray Gun (Small)
3,000
Spray Gun (Large)
4,000
Pipe
1,000
Others
7,000
Total
30,000
HIGH PRESSURE CLEANING

Equipment
Number
High Pressure Cleaner (including

Piston Pump)
550,000
Piston Pump
250,000
Total
800,000
WHEEL ALIGNMENT & BALANCING

Equipment
Number
Complete Computerized Alignment

Equipment (Including Heads, Disc
plates etc.) A Class
Computerized Wheel Balancing
Machine
Total
2. 7
1,000,000
650,000
1,650,000
Spare Parts & Lubricants Inventory
As is practiced widely, the proposed workshop would maintain an estimated inventory of

Rs. 125,000 for spare parts & lubricants.
2.7.1 Spare Parts & Consumables
This would mainly include items for general repairs like bush, break shoes, filter,
points, clutch plates, spark plugs, nuts / bolts etc. for about 8 to 10 models of most
common car brands like Suzuki, Toyota and Honda. These purchases would also
include daily consumables items like carbide, sand papers etc. that are required for
denting & painting services.
It is estimated that initial purchases for spare parts & consumables would amount to
Rs. 125,000 which would subsequently average to purchases of Rs. 3,200 on a
daily basis (Rs. 80,000 for 25 day month) after commencing of operations.
2.7.2 Lubricants
The workshop would also be required to keep a minimum inventory of lubricants to
meet the immediate requirements of the customer. Usually lubricants are expensive
and many workshops dont find it affordable to keep a large inventory of such
items.
It is estimated that an initial inventory of Rs. 25,000 would be required for
lubricants and the monthly purchases would amount to Rs. 10,000 per month after
resuming of operations.
MACHINERY & EQUIPMENT
3. 1
Wheel Alignment Machine
The procedure of wheel alignment was traditionally carried out based on manual iterations
which was largely dependent on the skill of the worker. The system was totally manual
where the angles and the alignment deviations were brought into conformity through
guesswork. Through the subsequent introduction of technology, alignment machines
were introduced which later developed in totally computerized and automated alignment
packages in which the alignment can now be done by sitting on a computer.
Majority of the wheel alignment machinery in the market is computer operated with
software based operating system. Some machines have electronic panels that only show the
deviations while the newer ones have a computer interface having more features. While
buying the alignment equipment, its important features need to be considered like
o User friendly interface of the software. Nowadays most machines are based on
XP based alignment software offering a very easy interface for the worker.
o The features of the software is also another important factor wherein the depth
and extent of alignment procedures and aspects are considered
o The features of the machine / alignment equipment need to be considered
especially the alignment time. Most of the newly automated machines require
only 5 minutes for complete alignment while the others which are possessed by
a majority of the alignment shops usually take 20 30 minutes for complete
alignment.
The prices of wheel alignment machines are based on two factors (i) Condition and (ii)
Make or Brand. Wheel alignment machines have a very long life lasting for over 15 20
years with very little depreciation. Because of this many machine suppliers in local
markets are refurbishing old / used machinery by repainting them and selling them in the
market.
There are two main makes of the machinery (i) of European Origin of famous brands like
LAUNCH, RAV, BIESRBERTH, HOFFMAN etc. and (ii) of Chinese Origin. However
since China is relatively new in this technology many people prefer to opt for European
brands because of their quality of features and brand establishment.
Brand new European machines cost around Rs. 850,000 1,000,000 (A Class) while the
others cost around Rs. 650,000 750,000 (B Class). Brand new Chinese machinery with A
Class features also costs around Rs. 650,000 750,000 but despite the low cost people
prefer to opt for European brands since Chinese Machinery are still in the testing stages.
For the purpose of this study we have assumed procurement of a new European branded
machinery costing around Rs. 1,000,000 having the latest features and easy to operate
facilities.
3. 2
Wheel Balancing Machines
The Wheel balancing Machinery is available on similar brands and makes as those of
alignment machines. However the price variation of these electronically operated machines
is greater where used machines cost around Rs. 200,000 while new ones cost around Rs.
1,200,000.
For the purpose of this study we have assumed purchase of a wheel balancing machinery
containing good features and costing around Rs. 650,000. The wheel balancing equipment
similar to alignment equipment has a very long life but requires more maintenance as
compared to alignment machinery.
3. 3
High Pressure Cleaning Equipment
High pressure cleaning equipment is relatively delicate machinery which has a lot of
deprecation such that it needs to be replaced after every 3 years. Usually the water tank and
the pressure valves and hoses loose their durability within this time period and need to be
completely replaced. For some service stations the replacement time period ranges around
2 years depending on the continuous use of the product.
High pressure cleaning equipment is available in local markets ranging from Rs. 750,000
to 800,000 of various European Brands like ITM ITALIA, EUROCLEAN, KRENZELEY
etc. Due to its high depreciation the high pressure equipment requires a lot maintenance
costs on a monthly basis which even amounts to one fourth of its original cost per month.
For the purpose of this study we are assuming a quality pressure cleaning equipment
costing around Rs. 550,000 having life of 3 years with a maintenance cost of
approximately 25 % of its written down value. An additional Rs. 250,000 will be required
for the purchase and installation of Piston Pressure Lift.
Since the machines require diesel fuel for operation, it is assumed that the fuel cost would
be Rs. 5,000 per month.
LAND & BUILDING REQUIREMENT

Land Requirement
4. 1
The proposed Auto Workshop setup is assumed to operate in 1,000 sq. yards that allows
ample space for Denting & Painting and Mechanical services and also for general parking
services for walk-in customers.
Covered Area Requirement
4. 2
The workshop is assumed to be totally covered with around 95% of the total area catering
to technical works and the remaining 5% for General Office and Stores. It is recommended
that minimum space be utilized for office and store setup to allow maximum number of
cars within the workshop vicinity.
The covered area for workshop operations would be divided between the proposed services
and would assume the following break up (including parking for standby / waiting
customers):
4. 3
Mechanical Works 350 Sq. Yards

Denting & Painting 300 Sq. Yards
Wheel Balancing & Alignment 150 Sq. Yards
High Pressure Cleaning 150 Sq. Yards
Recommended Mode
The proposed land will be acquired on a rental basis with 3 month deposit and 3 months
advance rent after which rent will be payable on a monthly basis.
4. 4
Office Furniture & Equipment
A total of Rs 80,000 is required for purchase of office furniture and related equipment. The
following table gives an assumed breakup:
OFFICE FURNITURE
Item
Number
Table & Chair Set (Owner)
10,000
Table & Chair Set (Customer Service)
5,000
Air Conditioner (Split Unit)
30,000
Waiting Chairs
10
10,000
Sofa Set for Customers
15,000
Curtains / Interior Dcor
10,000
Total
80,000
The Office Furniture & Equipment will be depreciated at the rate of 10% per annum
according to the diminishing balance method for the projected period.
Suitable Location
4. 5
The proposed location for an Auto Workshop considering the factors mentioned earlier
would be in a medium high income locality area where almost all of the nearby residents
are expected to have at least one car.
HUMAN RESOURCE REQUIREMENT
The Auto Workshop is a labor intensive industry where the labor cost constitutes a
considerable portion of the cost of sales. The following table gives a breakup of the total
administrative manpower required to operate the proposed setup.
GENERAL MANAGEMENT
Designation / Type
Number
Monthly Salary (Rs.)
Owner
Accountant
2,500 (10-12 hours)
Purchaser
5,000
Office Assistant / Store Keeper
2,500
Guard
2,000 (Night Duty Only)
Considering the size of the proposed establishment it is assumed that the owner would be
managing the overall affairs of the workshop. A part-time accountant is required to process
and check bills, invoices, job orders etc. The accountant is required to come at least once a
week with a minimum duration of 3 hours per each visit.
The purchaser would be primarily responsible for making daily purchases; spare parts
inventory purchases and other purchases as and when required. The office assistant would
be responsible for handling customers & complaints, following-up on bills and managing
all activities related to spare-parts store keeping. A security guard would be required for
ensuring safe custody of customer cars during the night.
The following table gives the details for the proposed technical labor that forms the
integral part of the cost of sales:
JOB / DUTY ALLOCATION
Designation / Type
Foreman
Number
8,500
MECHANICAL REPAIRS & MAINTENANCE

Designation / Type
Number
Mechanics (Ustad)
12,000
Assistant Mechanics
8,000
Helpers
3,000
DENTING
Designation / Type
Number
Head Denter (Ustad)
8,000
Denters
12,000
Assistant Denter
4,000
Helper
2,000
PAINTING
Designation / Type
Number
Painter Ustad
8,000
Assistant Painters
10,000
Helper
2,000
Total
16
122,500
The foreman would be responsible for checking and diagnosing the customers car to
ascertain any additional repairs / replacements that might not have been identified by the
customer. Once the estimates and repair / replacement work is agreed with the customer
the foreman would then allocate the job and ensure its timely completion. The foreman
would also be required to check the cars (trial run) before delivering them to the customers.
WHEEL ALIGNMENT & BALANCING
Designation / Type
Number
Operator (Incharge)
8,000
Assistant Operator
4,000
HIGH PRESSURE CLEANING

Designation / Type
Number
Cleaner (Incharge)
8,000
Assistant Cleaner
4,000
Total
24,000
The total monthly salary of the technical staff would amount to Rs. 146,500 and is
assumed to increase by 10% per annum.
FINANCIAL ANALYSIS & KEY ASSUMPTIONS
The project cost estimates for the proposed Auto Workshop have been formulated on the
basis of discussions with relevant stakeholders and experts. The cost projections cover the
cost of land, building, inventory, equipment including office furniture etc. The specific
assumptions relating to individual cost components are given as under:
6. 1
Revenue & Cost Projections
Revenue projections for this Auto Workshop include sales streams from two main sources
i.e. Denting & Painting and Mechanical Repairs & Maintenance. The Sales are expected to
grow at a real rate of 12% per annum which reflects on the anticipated growth in the
number of cars on the road hence the business is expected to increase based on volume
rather than increased service charges.
6.1.1 Gross Margins
The following table gives the Gross Margins for the proposed services:
SERVICE
Denting & Painting
GROSS MARGIN
27 %
SERVICE
GROSS MARGIN
Cosmetic Touchups
Accidental Repairs
Full Body Restoration
14 %
29 %
30 %
Mechanical Repairs & Maintenance
29 %
Maintenance Services
Major Repairs
Alignment
Balancing
33 %
14 %
90 %
91 %
89 %
76 %
Overall
56 %
6.1.2 Margins on Parts / Lubricants / Services

The Auto Workshop being a service oriented setup charges a margin on each of the
products it uses and services it provides. The following table presents the breakdown of the
margin:
SERVICE
MARGIN
Spare Parts
10.0 %
Lubricants
12.5 %
Subletting
25.0 %
It is assumed that the cost of parts, lubricants and sublet service is expected to increase at
the rate of 10 % per annum for the projected period.
6. 2
Rent Cost
The rent for the assumed premises will be Rs. 150,000/- per month. It is assumed that Rs.
900,000 will be given in advance before possession of premises. This will include 3
months deposit and 3 month advance rent. The rent would be payable on a monthly a basis
and is expected to increase at the rate of 10% per annum for the projected period.
6. 3
Construction Cost
The Auto Workshop involves construction cost which translates into three main
components as follows:
Office / Store Construction which involves a two storey building in which the ground
floor would accommodate the owners office and administration while the first storey
would serve as a store for spare parts and other items. The office and store construction
cost is taken to be as Rs. 750 per square feet which comes to a total of Rs. 675,000 for
the two storey structure (450 sq. ft. x 2). This cost is inclusive of all accessories and
fittings except for AC and Office Furniture.
Masonry work would be required in the area allocated for Denting & Painting and
Mechanical Works. It is assumed that the proposed workshop would be able to
accommodate 6 cars for mechanical repairs and around 8 cars for denting & painting at
one time. This would require a total of 14 bay areas to be constructed with
underground ducts and ramps in 6 of the bay areas for mechanical repairs. The cost for
masonry will be as follows:
MASONRY WORK FOR BAY AREAS
Item
Bay Areas
Mechanical Work (Duct & Ramp)
60,000
Denting
30,000
Painting
30,000
Total
14
120,000
6.4
The third main construction would be required for making two separate sections for (i)
Wheel Alignment & Balancing and (ii) High Pressure Cleaning. The cost of
construction for these would be approximately
o Wheel Alignment & Balancing (Rs. 400 per Sq. Feet x 1000 Sq. Feet)
o High Pressure Cleaning (Rs. 400 per Sq. Feet x 1000 Sq. Feet) requiring high
ceiling for piston pump car lift.
CONSTRUCTION COST FOR WHEEL ALIGNMENT / BALANCING

& PRESSURE CLEANING
Item
400,000
Ramp for Alignment
50,000
400,000
Total
850,000
(Note: For wheel alignment there should be at least a minimum space of 5 feet from the
front & back end of the car and a space of 2 feet at the sides for flexibility in operating the
machine)
6. 4
Utilities Requirement
The following table presents the assumed breakup of utilities on a monthly basis:
UTILITY
MONTHLY CHARGES (RS.)
Electricity
12,000
Water
10,000
Telephone
2,500
Entertainment
1,000
Total
25,500
It is assumed that utilities expenses will increase by 10% every year.

6. 5
Depreciation on Building & Equipment
Depreciation on Building, Technical Equipment, Alignment & Balancing Equipment and

Office Furniture & Fixtures is assumed to be at the rate of 10% per annum based on the
diminishing balance method for the projected period. Depreciation on High Pressure
Cleaning Equipment will be calculated on a straight-line basis with no salvage value at the
end of 3rd year; hence it has been assumed that this equipment will be replaced after every
three years at a cost which will be 10% greater than the acquisition cost of the previous
equipment.
6. 6
Labor Allocation Costs
The technical labor costs form an integral part of the cost of sales for the proposed Auto
Workshop. This makes it difficult to trace the labor costs specifically to the services
offered since a person can work on more than one function at one time. For the purpose of
this study the following breakup of labor costs are considered according to the workload
based on the number of cars for a particular type of service:
Labor Cost per Car (Rs.)
Denting & Painting
Mechanical Repairs
Monthly pay
Cosmetic
Accident
Restoration
Minor
Major
Mechanical
Denting
Painting
Foreman
46,000
38,000
30,000
8,500
18,000
1,700
28,500
4,500
1,700
9,500
7,500
1,700
23,000
1,700
23,000
1,700
Total
122,500
19,700
34,700
18,700
24,700
24,700
100
3,283
4,957
9,350
247
12,350
Cars (Estimated)
Labor Costs
6. 7
Working Capital & Pre Operating Costs
It is estimated that an additional amount of approximately Rs. 516,000 will be required as

cash in hand to meet the working capital requirements / contingency cash for the initial
stages. The requirement is based on the utilities and salaries expenses for at least three
months. The following table gives the break up.
ITEM
3 MONTHS COST (RS.)
Utilities
76,500
Salaries
475,500
Total
552,000
The provision for pre operating costs is assumed to be Rs. 50,000 which will be amortized
equally over a 5 year period.
6. 8
Account Receivables
A collection period of 45 days is assumed for sales. Further provision for bad debts has
been assumed equivalent to 10% of Gross receivables.
6. 9
Traveling & Miscellaneous Office Expenses
A monthly figure of Rs. 5,000 (200 per day) is assumed to be incurred for traveling
expenses and office purchases which are expected to increase at the rate of 10% per annum
for the projected period.
6. 10
Financial Charges
It is assumed that long-term financing for 5 years will be obtained in order to finance the
Auto Workshop setup which would mainly include Construction of Building, Masonry
work, Purchase of Equipment etc. This facility would be required at a rate of 15%
(including 1% insurance premium) per annum with 60 monthly installments over a period
of five years. The installments are assumed to be paid at the end of every month.
6. 11
Taxation
The tax rate applicable to sole proprietorship is the same as that of the salaried individual.
Therefore, we are assuming that the tax rate would be the same for the proposed photo lab
setup.
6. 12
Cost of Capital
The cost of capital is explained in the following table:

Particulars
Required return on equity
Cost of finance
Weighted average cost of capital
Rate
20.0 %
15.0 %
17.5 %
The weighted average cost of capital is based on the debt/equity ratio of 50:50.
6. 13
Owners Withdrawal
It is assumed that the owner with withdraw from the business once the desired profitability
is reached from the start of operations. The amount would depend on business
sustainability and availability of funds for future growth.
6. 14
Key Assumptions
Item
Assumption(s)
Sales Increase
12 % per year
Increase in Cost of Sales
10 % per year
Increase in Staff Salaries
10 % per year
Increase in Utilities (Electricity / Water / 10 % per year
Gas)
Increase in Rent
10 % per year
Increase in Office Expenses
10 % per year
Debt / Equity Ratio
50 : 50
Depreciation
o Building & Masonry Work
10 % per annum (Diminishing Balance)
o Technical Equipment
o Office Furniture & Equipment
o Wheel Alignment & Balancing
o Piston Pump Car Lift
o High Pressure Cleaning
Straight Line 33 % per year
High Pressure Cleaning Maintenance Cost
25 % of Cost Price
High Pressure Cleaning Replacement
3 years
Lease Period
5 Years
Lease Installments
Monthly
Financial Charges (Lease Rate)
15 % per annum
Tax Rate
Income Tax on Salaried Individuals
6.15.a
Revenue & Cost

MONTHLY REVENUE / COST SCHEDULE
Item
Revenue / Fee Charged (Rs.)

Fee
Charged
(Rs.)
Estimated
Cars
Denting & Painting
Revenue
Gross
Margin
(%)
Cost of Sales (Rs.)
Material
Labor
Spare
Parts
Lubricants
Subletting
181,000
Total Cost
132,271
27%
Cosmetic Touchup
(3 Piece Patching &
Paint)
5,000
30,000
1,000
3283
25,698
14%
Accidental Repairs
13,000
91,000
3,000
4,957
591
116
520
64,285
29%
30,000
60,000
6,000
9,350
2,727
667
2,400
42,288
30%
135,556
29%
Mechnical Repairs
190,000
General Repairs
1,500
100
150,000
247
614
67
84
101,130
33%
Major Repairs
20,000
40,000
12,350
3,636
427
800
34,426
14%
267,827
28%
TOTAL
371,000
ASSUMPTIONS
ASSUMPTIONS
% age of Revenue
General
Repairs
% age of
Revenue
10%
10%
2.5%
Sublet
Parts
Lubricant
7%
45%
5%
Spare Parts
Subletting
Lubricant
ASSUMPTIONS
Accidental Repairs
ASSUMPTIONS
% age of Revenue
Spare Parts
Subletting
Lubricant
5%
5%
1%
Major Repairs
Parts
Lubricant
Subletting
% age of
Revenue
20%
2.5%
5.0%
6.15.b
Revenue & Cost

MONTHLY REVENUE / COST SCHEDULE
Item
Revenue / Fee Charged (Rs.)

Fee Charged
(Rs.)
Estimated
Cars
Wheel Alignment /
Balancing
Revenue
Gross
Margin
(%)
Cost of Sales (Rs.)
Material
Labor
Spare
Parts
Lubricants
Subletting
125,000
Total
Cost
12,000
90%
Wheel Alignment
350
250
87,500
32
8,000
91%
Wheel Balancing
150
250
37,500
16
4,000
89%
17,000
73%
17,000
73%
29,000
85%

TOTAL
62,500
250
250
62,500
187,500
20
48
6.16
Projected Income Statement

AUTO WORKSHOP
Projected Income Statement (Rs.)
Year1
Year2
Year3
Year4
Year5
Year6
Year7
Year8
Year9
Year10
6,702,000
2,172,000
2,280,000
1,500,000
750,000
6,618,225
3,561,930
3,140,070
46%
7,506,240
2,432,640
2,553,600
1,680,000
840,000
7,412,412
3,918,123
3,588,117
47%
8,406,989
2,724,557
2,860,032
1,881,600
940,800
8,301,901
4,309,935
4,097,054
48%
9,415,827
3,051,504
3,203,236
2,107,392
1,053,696
9,298,130
4,740,929
4,674,899
49%
10,545,727
3,417,684
3,587,624
2,360,279
1,180,140
10,413,905
5,215,022
5,330,705
50%
11,811,214
3,827,806
4,018,139
2,643,513
1,321,756
11,663,574
5,736,524
6,074,690
51%
13,228,560
4,287,143
4,500,316
2,960,734
1,480,367
13,063,203
6,310,176
6,918,383
52%
14,815,987
4,801,600
5,040,354
3,316,022
1,658,011
14,630,787
6,941,194
7,874,793
53%
16,593,905
5,377,792
5,645,196
3,713,945
1,856,972
16,386,481
7,635,313
8,958,592
53%
18,585,174
6,023,127
6,322,620
4,159,618
2,079,809
18,352,859
8,398,844
10,186,329
54%
144,000
306,000
900,000
60,000
10,000
91,667
567,833
158,400
336,600
990,000
66,000
10,000
45,833
529,383
174,240
370,260
1,089,000
72,600
10,000
494,778
191,664
407,286
1,197,900
79,860
10,000
100,833
481,967
210,830
448,015
1,317,690
87,846
10,000
50,417
453,937
231,913
492,816
1,449,459
96,631
428,710
2,079,500
1,060,570
2,136,217
1,451,900
2,210,878
1,886,175
2,469,511
2,205,388
2,578,735
2,751,970
2,699,529
3,375,161
255,105
542,098
1,594,405
106,294
110,917
426,172
3,034,990
3,883,393
280,615
596,307
1,753,845
116,923
55,458
405,738
3,208,888
4,665,905
308,677
655,938
1,929,230
128,615
387,348
3,409,808
5,548,784
339,544
721,532
2,122,153
141,477
122,008
392,980
3,839,694
6,346,635
Financial Charges(15%PerAnnum)
424,156
353,587
271,673
176,591
66,224
Earnings Before Taxes

Tax
Net Profit
636,414
101,603
534,810
1,098,314
256,910
841,404
1,614,502
437,576
1,176,927
2,028,797
582,579
1,446,218
2,685,746
812,511
1,873,235
3,375,161
1,053,806
2,321,355
3,883,393
1,231,688
2,651,706
4,665,905
1,505,567
3,160,338
5,548,784
1,814,574
3,734,210
6,346,635
2,093,822
4,252,813
Monthly Profit After Tax
44,568
70,117
98,077
120,518
156,103
193,446
220,975
263,362
311,184
354,401
Revenue
Denting & Painting
Genera l Repairs / Maintenance
Net Sales
Cost of Sales
Gross Profit
Gross Profit Margin
General Administrative & Selling Expenses
Salaries
Utilities Expense
Rent Expense
Office Miscellaneous & Traveling Expenses
Amortization of Preliminary Expenses
Maintenance Expense
Depreciation Expense
Subtotal
Operating Income
6.17
Projected Balance Sheet

AUTO WORKSHOP
Projected Balance Sheet (Rs.)
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
552,000
826,879
1,371,554
2,032,376
2,146,430
3,100,595
4,960,684
6,328,771
8,595,775
11,162,954
13,266,437
Assets
Current Assets
Cash & Bank Balance
Accounts Receivable (Net)
83,775
93,828
105,087
117,698
131,822
147,640
165,357
185,200
207,424
232,315
Lubricants & Spare Parts Inventory
150,000
165,000
181,500
199,650
219,615
241,577
265,734
292,308
321,538
353,692
389,061
Prepaid Rent
900,000
900,000
900,000
900,000
900,000
900,000
900,000
900,000
900,000
900,000
900,000
1,602,000
1,975,654
2,546,882
3,237,113
3,383,743
4,373,993
6,274,058
7,686,436
10,002,513
12,624,070
14,787,813
Building & Workshop
1,645,000
1,480,500
1,332,450
1,199,205
1,079,285
971,356
874,220
786,798
708,119
637,307
573,576
Technical Equipment
220,000
198,000
178,200
160,380
144,342
129,908
116,917
105,225
94,703
85,233
76,709
Office Furniture
80,000
72,000
64,800
58,320
52,488
47,239
42,515
38,264
34,437
30,994
27,894
Machinery
2,200,000
1,851,667
1,519,833
1,202,850
1,485,898
1,175,975
876,878
1,232,857
932,104
639,244
1,063,353
Total Fixed Assets
4,145,000
3,602,167
3,095,283
2,620,755
2,762,013
2,324,478
1,910,530
2,163,144
1,769,363
1,392,777
1,741,532
50,000
40,000
30,000
20,000
10,000
Total Assets
5,797,000
5,617,820
5,672,165
5,877,868
6,155,756
6,698,471
8,184,588
9,849,580
11,771,876
14,016,847
16,529,345
Owner's Equity
3,023,500
3,258,310
3,799,714
4,576,640
5,522,859
6,846,094
8,317,448
9,969,154
11,879,492
14,113,702
16,616,515
Long Term Liability
3,023,500
2,584,510
2,074,951
1,483,478
796,922
Total Equity & Liabilities
6,047,000
5,842,820
5,874,665
6,060,118
6,319,781
6,846,094
8,317,448
9,969,154
11,879,492
14,113,702
16,616,515
Total Current Assets

Fixed Assets
Intangible Assets
Pre Operating Costs
6.18
Projected Statement of Cash Flows

AUTO WORKSHOP
Projected Statement of Cash Flows (Rs.)
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year10
Net Profit
Add: Depreciation Expense
0
0
534,810
567,833
841,404
529,383
1,176,927
494,778
1,446,218
481,967
1,873,235
453,937
2,321,355
428,710
2,651,706
426,172
3,160,338
405,738
3,734,210
387,348
4,252,813
392,980
Amortization Expense
10,000
10,000
10,000
10,000
10,000
(Increase) / decrease in receivables
(83,775)
(10,053)
(11,259)
(12,610)
(14,124)
(15,819)
(17,717)
(19,843)
(22,224)
(24,891)
(Increase) / decrease in inventory
(15,000)
(16,500)
(18,150)
(19,965)
(21,962)
(24,158)
(26,573)
(29,231)
(32,154)
(35,369)
1,013,869
1,354,234
1,652,295
1,905,610
2,301,087
2,710,088
3,033,588
3,517,003
4,067,180
4,585,532
Cash Flow From Operating Activities
Net Cash Flow From Operations
Cash Flow From Financing Activities

Receipt of Long Term Debt
3,023,500
Repayment of Long Term Debt
(438,990)
(509,559)
(591,473)
(686,555)
(796,922)
Owner's Equity
3,023,500
(300,000)
(300,000)
(400,000)
(500,000)
(550,000)
(850,000)
(1,000,000)
(1,250,000)
(1,500,000)
(1,750,000)
Net Cash Flow From Financing Activities
6,047,000
(738,990)
(809,559)
(991,473)
(1,186,555)
(1,346,922)
(850,000)
(1,000,000)
(1,250,000)
(1,500,000)
(1,750,000)
Cash Flow From Investing Activities

Capital Expenditure
Office Furniture
Technical Equipment
Lubricant & Parts Inventory
Preliminary Operating Expenses
Advance Rent
Net Cash Flow From Investing Activities
NET CASH FLOW
Cash at the Beginning of the Period
Cash at the End of the Period
(1,645,000)
(80,000)
(2,670,000)
(605,000)
(665,500)
(732,050)
(150,000)
(50,000)
(900,000)
(5,495,000)
(605,000)
(665,500)
(732,050)
552,000
274,879
544,675
660,822
114,055
954,165
1,860,088
1,368,088
2,267,003
2,567,180
2,103,482
552,000
826,879
1,371,554
2,032,376
2,146,430
3,100,595
4,960,684
6,328,771
8,595,775
11,162,954
552,000
826,879
1,371,554
2,032,376
2,146,430
3,100,595
4,960,684
6,328,771
8,595,775
11,162,954
13,266,437

SMEDA Auto Repair &amp; Service Workshop

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Pre-Feasibility Study

AUTO REPAIR & SERVICE WORKSHOP

Small and Medium Enterprise Development Authority

5TH Floor, Bahria

Bungalow No. 15-A

Auto Repair & Service Workshop

Provincial Chief - Sindh

Auto Repair & Service Workshop

This document is developed to provide the entrepreneur with potential investment

Quick and quality repair & maintenance services;

Market Entry Timing

Auto Repair & Service Workshop

Key Success Factors/Practical Tips for Success

Auto Repair & Service Workshop

iii) Technical Skill

Proposed Business Legal Status

This section will provide the total cost of the project.

Construction Office / Store

Construction Service Stations

Mechanical Repairs Equipment

Wheel Alignment Machine

Wheel Balancing Machine

High Pressure Cleaning Equipment

Spare Parts Purchases

Auto Repair & Service Workshop

Advance Rent & Deposit

Pre Operating Costs

Office Furniture & Equipment

Proposed Product Mix

DENTING & PAINTING

Body Restoration Services

Maintenance Services which mostly constitute running repairs / services like

Auto Repair & Service Workshop

Accidental Repairs which constitute chassis, mudguard, bumper, bonnet

Body Restoration Services which include complete restoration of vehicle body

1.7.3 Wheel Alignment & Balancing

Wheel Balancing refers to the proper distribution of weight around a revolving

1.7.4 High Pressure Cleaning

Auto Repair & Service Workshop

1.7.5 Sublet Services

3 Years & 5 months

Anticipated Source of Business:

Auto Repair & Service Workshop

Accessibility of Sublet Services

Quick Accessibility to Parts Market

Key Success Factors/Practical Tips for Success

Growing and Maintaining a Referral Network of Customers

Expedient and Convenient Auto Repair & Service Facilities

Auto Repair & Service Workshop

Skilled & Experienced Manpower

Auto Parts Inventory

Auto Repair & Service Workshop

Denting & Painting:

Auto Repair & Service Workshop

Two Wheel Alignment:

Four Wheel Alignment:

Auto Repair & Service Workshop

Stage 1: The first stage involves the following steps:

Stage Two: The second stage involves the following steps:

Excessive or uneven tire wear.

Auto Repair & Service Workshop

2.3.2 Benefits of 4 Wheel Alignment

Reduced Tire Wear

Wheel Balancing Procedure

SMEDA Auto Repair & Service Workshop

SMEDA Auto Repair & Service Workshop