Car ownership has increased significantly in Zimbabwe. A lot of individuals are purchasing new cars everyday (mostly second hand) and others have existing vehicles which also need maintenance. Imagine such a huge market which needs servicing and maintenance and how much opening a car auto parts business will make you a very successful entrepreneur. Operating an auto spare parts business in Zimbabwe is very profitable.
The auto parts industry is resilient and although Zimbabwe is going through an economic downturn, this industry enjoys good profits. Before you start a motor spares shop business in Zimbabwe, you have to decide on the size of your business, location of business, products to offer and your target market. You should always carry out a feasibility study, market research and write a business plan before you venture into any business. Do not make the mistake of starting an auto parts shop business or any other business just because someone is doing it and he/she says it’s profitable. This article will explain how to start an auto parts shop business in Zimbabwe, and the auto parts shop business plan.
What you need
Location and Premises
Location will influence the viability of your auto parts business. The best place to start a motor spares shop business is where there are many people with cars eg it would not make much business sense to start an auto parts business in the rural areas as there are few people with cars. It is however important to ascertain that you’re choosing a market that has enough purchasing power.Assess the number of auto parts retailers in your prospective area. Investigate the size of your target market and their income patterns. Use quality marketing and advertising strategies. People can always come and find you because of the quality service and the type of parts you provide. You will need premises which include the auto parts shop, back offices, and a warehouse for your products.
You need to conduct market research and come up with a market entry strategy that will keep you viable. Identify your competition and understand how they do business, what their marketing strategy is and the amount of market influence they have. Most auto parts businesses are operated locally, only a few operate as a national chain. Most importantly identify the niche that you want to cater for. This will help you in formulating your marketing strategy.
Auto Spare Parts Products
You have to make a decision on what kind of products you will sell in your auto spare parts shop. There are several vehicle brands, so you can either concentrate on 1 type of brand e.g. your auto parts shop can sell only Toyota spare parts. Alternatively, you can sell spare parts of different brands e.g. Toyota, Nissan, BMW, Ford e.t.c.
There are many different types of auto parts you can sell. The motor spare products you can offer in your shop include
- Suspension parts
- Shock absorbers
- Ball joints & bearings
- Body parts
- Vehicle headlamps, corner lamps, tail lights
- Electronic censors
- Boots and Bonnets
- Motor Oils
You need to know exactly where you will get your auto parts supplies and your pricing strategy. Choose a niche you can work in and that is profitable. The products which you choose to offer in your auto spare parts shop will depend on your target market and the amount of capital you have. You will be sourcing the products from local and international suppliers.
If you are to succeed you need to manage your inventory properly. Satisfy all your customer needs and make sure that they find all of the supplies they require.The demand is steady over time such it is better if you keep your store fully stocked all the time. You therefore need a good supplier who delivers the right quality and on time. At startup, it may be hard to stock your store with all the auto parts you need. However you can cash in fast if you focus on providing parts that are highly demanded. Profits will keep rolling in if you a wide auto parts selection for your customers.
Cash flow management
Cash can be very difficult to manage in your auto parts business. When it comes to cash flow management, you cannot take chances. Account for all your cash inflows and out flows. In the first few months you may need to put back all the revenue you get back into the business to increase your supplies and grow the business. Costs for the motor spare parts business include salaries of employees, rent, inventory, shipping costs, electricity and water, taxes, insurance and advertising costs.
Management and employees
Depending on the size of your store, the number of your sales staff and cashiers will vary. You will need employees who understand auto parts and also the technical aspects involved. Employees who have a background in the repairs and maintenance of vehicles can do the job even much better. Good management is a determining factor in the success of the business.
Market for Auto parts shop business
Zimbabwe was in a recession from 2000-2008, and then the economy recovered in 2009 when the local Zimbabwean currency
was dropped in favour of the United States Dollar. This led to a period of economic growth, which resulted in more disposable income for Zimbabweans. Thus the number of Japanese vehicles imported by Zimbabweans increased rapidly. This created a large customer base for motor spares products.
It is important that you establish a reliable customer base who will give you repeat business. Repeat business is possible . Try hook your customers by offering repeat discounts. Your loyal customers can also subscribe for a loyalty card and get bonus points which they earn every time they purchase from your store. It will be good if you secure large customers as you will be guaranteed of repeat business. Potential customers for your auto parts shop include short term insurance companies, panel beating and spray painting companies, garages, transport companies, mechanics and individuals.
Pre-Written Auto Parts Shop Business Plan : Comprehensive Version, Short Bank Loan Version, Automated Excel Financial Statements
For an in-depth analysis of the motor spares shop business in Zimbabwe, purchase our business plan. We decided to introduce the business plans after noting that many Zimbabweans were venturing into the auto parts store business without a full understanding of the industry, market, how to run the business, the risks involved, profitability of the business and the costs involved, leading to a high failure rate of their businesses.
Our business plan will make it easier for you to launch and run a auto spares business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as the auto parts business plan will lay out all the costs involved in setting up and running the business. The business plan is designed uniquely for the Zimbabwean market.
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Uses of the Motor Spares Shop Business Plan (PDF, Word And Excel)
The auto spare parts store business plan can be used for many purposes including:
- Raising capital from investors/friends/relatives
- Applying for a bank loan
- Start-up guide to launch your auto parts business
- As a project proposal
- Assessing profitability of the auto parts shop business
- Finding a business partner
- Assessing the initial start-up costs so that you know how much to save
- Manual for current business owners to help in business and strategy formulation
Contents of the Auto Spare Parts Business Plan (PDF, Word And Excel)
The business plan includes, but not limited to:
- Market Analysis
- Industry Analysis
- Automated Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, loan repayment calculations, start-up costs)
- Marketing Strategy
- Niches you can concentrate on
- Risk Analysis
- SWOT & PEST Analysis
- Operational Requirements
- Operational Strategy
- Contact Details of some suppliers
- Why some Zimbabweans in the auto parts business fail, so that you can avoid their mistakes
- Ways to raise capital to start your motor spare shop business in Zimbabwe
The auto spare parts business plan package consist of 4 files
- Auto Parts Shop Business Plan – PDF file (Comprehensive – 64 pages)
- Auto Spare Parts Business Plan – Editable Word File (Comprehensive – 64 pages)
- Auto Parts Shop Business Plan Bank Version – Editable Word File (Short version for applying for a loan – 38 pages)
- Auto Spare Parts Shop Business Plan Automated Financial Statements – (Editable Excel file)
Business plan last updated in January 2019.
The financial statements are automated. This implies that you can change eg value of stock bought, markup etc, and all the other financial statements will automatically adjust to reflect the change.
Get the Auto Parts Business Plan (PDF, Word And Excel)
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