1.0Executive Summary
M2M Customs is a start-up auto restoration shop. The company is engaged in the restoration of old American cars, and the designing and building of hot rods, and street rods. Body work and rust repair is the majority of our work. Phaethon’s Chariot has recently bought a new state-of-the-art restoration shop, located at 6632 Reese Road, Memphis TN. The company is dedicated to providing the highest quality workmanship. M2M Customs keeps up on all the latest tools and techniques of the trade to perform the highest quality work possible today. Phaethon’s Chariot is located in Memphis, TN. Our company and employees are dedicated to doing each job right the first time, and retaining each car owner as a lifetime customer of our shop. The company is a state chartered corporation in Memphis, owned by Jovon Campbell. The owner has worked on car independently in the Memphis area for the past 10 years, and is committed to excellence every day. This new space allows the company to retain more work. The office area is comprised of 500 square feet and the shop area where the day-to-day work on the cars is performed is 5,000 sq.ft.
The population of the seven communities in close proximity to M2M Customs is estimated at 918,279. Roughly, this would mean that this area comprises a total restoration market in excess of $2.0 million annually. The company’s goal is to acquire a comfortable minority share of this nearby market. The marketing research and tailored marketing strategy described in this business plan will result in modest after-tax profits of in year 1, quadrupling after-tax profits within three years. It is estimated that by year 3, revenue will reflect a healthy market share of the local restoration market. Within the next twelve months it is the objective of the company to market to the local area to promote our business in Shelby County and surrounding areas. Our market segment will be 25- to 65-year old owners of old American cars. After year three we plan to expand our business to the Little Rock Ark, area. Our studies indicate that the Little Rock area does not have a lot of competition for our business.
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2.0 Situation Analysis
M2M Customs is an auto restoration shop located in Memphis, TN. The company is engaged in the restoration of 1970 and earlier American cars, and the building of custom hot rods. Body work and rust repair is the majority of our work. The total market for auto restoration in the communities which the company target is approximately $2.7 million. The share of this market channeled through auto restoration shops and word of mouth is directly proportional to disposable income. M2M Customs is best suited to serving the high-end customer share of the auto restoration market because clients of auto restoration can afford expensive materials and custom solutions. The company is unable to compete with large shops geared to mass production runs, nor can the pricing compete with the many “insurance job” body repair shops. The company is dedicated to providing the highest quality workmanship, meeting the agreed delivery dates, and executing the custom work exactly in accordance with the customers concept.
2.1 Marketing Summary
The type of customer who will be interested in the services of M2M Customs are predominantly male, and in the age range from 25 to 65 years. The majority will have an income in the $60,000 and up range. Some customers in the lower income ranges are interested in specific services, interior restoration, or paint work and parts sales rather than full restorations. The customers who M2M Customs plans to target want :
1.Quality full restoration or custom services, including engine, custom body work and paint.
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2.Timely completion of the work on their cars.
3.Competitive rates.
4.Close attention to detail, and commitment to quality.
5.Ability to offer ideas for alternatives and close customer services. This is a large market that has seen an upturn in the last few years. All indications are that this will continue for many years until leveling off at possibly double or triple the current market.
2.2 SWOT Analysis
Strength
The Internal Strengths inside of M2M Customs is that we have a dedicated staff in place ready to deliver excellent customer service to all of our clients. With our state of the ark “Sand Blasting” process we will use in
order to remove paint from the body of cars puts us well ahead of the competition.
Weakness
Being a new and smaller company in the classic car restoration community will be major pressure on M2M to excel and show the talent that we have in place. We will have to produce high end quality work on a daily basis to build our business up.
Opportunities
Having the opportunities to restore classic cars for valued collectors is the goal we have in place, along with showing off our new process of “Powder Coating and Sand Blasting” will ensure quality restorations that a collector can enjoy for many years.
Threats
With the demand for certain models of classic cars higher than others we have to remain aware of the limited parts that are made available to complete certain order and not get ourselves into problems with completing projects for our customers. We must actively build a solid foundation with suppliers to ensure we have the resources we need to become a successful business.
2.3 Competition
The general nature of competition in this business, and how the customers seem to choose one shop over another can be measured by customer loyalty and positive word of mouth. Customer loyalty and shop preference come from developing a trust between the customer and the business. To be successful in the automotive restoration business, one must truly believe in the old American cars and love them. The customer must truly be made to feel welcome and cared for. The trust that a customer feels, is based upon the business’ ability to recognize what it takes to please a customer, and then is built upon by continuously delivering to that customer at, or above, the that they expect. The level of attention and care that our staff bestows upon our customers sets us far above our competition. We also have extremely high standards for professionalism in the shop. Cleanliness, adherence to all shop rules, and efficiency are constantly applied. Prices are reasonable, and are perceived as being an exceptional value. Our shop offers the highest quality restoration work available today; we use only the highest quality parts and supplies on all of our jobs.
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All of this can be found in a professional shop environment and very comfortable for our customers. There are two other companies in the Memphis area that offer services similar to M2M Customs. One has been in business for 15 years and has an extremely high reputation within the restoration community. They currently have more work than the shop can handle and has a waiting list of three years. They are not taking any new customers. They also usually have one or more cars in most shows. The owner of M2M Customs worked for them while learning his trade. The other shop has been in business 9 years. They currently have a wait of 160 days for any new work. However most of their work is new business is mainly first time customers and their reputation in the community is not good and they rarely have repeat business.
2.4 Product Offering
M2M Customs will sell classic car restoration services to the general public at a shop rate of $45 per hour. This will include complete frame off powder coating restoration work for all makes of American classic cars and muscle cars. We will perform tasks such as mechanical repairs on older American cars, body and paint restoration including sand blasting, rust repair, electrical repair, as well as custom engine building, custom paint and metal fabrication. We specialize in pre-1970 American cars and trucks, and average frame off restoration will take 600 hours of labor, therefore our average labor charge for a complete restoration is approximately $27,000. There are additional charges for any parts that we have to get for the job. M2M Customs will perform any kind of work on pre 1970 American cars including, but not limited to regular mechanical service, and body and paint work.
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2.5 Keys to Success
These are our keys to success for M2M Customs
1.Maintain an untarnished reputation in our community.
2.Provide quality care to all of our customers.
3.Competitive pricing.
4.Flexible hours.
2.6 Critical Issues
M2M Customs has a modest program of marketing its services that include the following:
1.Flyers
2.Discounts
3.Newspaper and magazines ads
4.Press releases and magazines articles
5.Car shows
6.Local radio stations
7.Website
8.Calendars
Each of these marketing approaches has the advantage of being low cost and creating service awareness. The company is also considering the possibility of having a grand opening program that would feature discounts, food, a local radio disc jockey and other promotional ideas. We feel that the company website is one of our best marketing strategies. It is linked to City Search.com and many other classic car restoration oriented websites and portals. The site has news about our business, answers to FAQ’s and pictures of cars we’ve restored and the process of the restoration.
3.1 Mission
Our mission at M2M Customs is to provide customers with the most trustworthy personal service and quality craftsmanship available in the marketplace today. We are committed to making customer communication and satisfaction a priority, as well as offering comprehensive restoration and customization services to all consumers. M2M Customs is a renowned company where employees are proud to be team members, clients and vendors prefer us, competitors respect our expertise and the community recognizes our resources and contributions. •We can achieve this by only using the best of everything to do our restoration. •We produce high-quality work using the best parts and supplies available in the market place today. •We only employ the most knowledgeable people to work for our shop. •We have a metal fabricator who will build any part that we can’t locate for your car. •All of our restoration technicians go through a rigorous application process before we hire them. We employ only the best people to do our work.
3.2 Marketing Objective
1.Penetrate the automotive restoration market here in Memphis, TN. Within the next twelve months, it is the objective of the company to market to the local area to promote our business in Memphis and surrounding areas, our market segment will be 25 to 65 year old men and women who own old American muscle cars. After year two we plan to expand our business to the Jonesboro Arkansas area. Our studies indicate that the Jonesboro area doesn’t have a lot of competition for our business. 2.Substantially increase profitability. We will encourage price-sensitive jobs to go elsewhere by normalizing the pricing structure. This will allow for more high-end custom work to be performed for the less price-sensitive restoration market sector. This pricing will insure a quadrupling of net profits during the third year. 3.To improve the administrative processes of the company. This will allow a reduction in the owner’s involvement in simple administrative tasks from 50% of his time to 20%, thereby allowing him more time for sales and marketing tasks.
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3.3 Financial Objective
The business of M2M Customs does not require substantial outlays for inventory and virtually all sales are on a cash/credit card basis, so increases in sales will not be accompanied by initial cash-flow deficits. M2M Customs has a number of advantages that provide for a large amount of growth in the company’s cash account. Because it is the company’s policy that the clients can provide the parts for their restoration, or they can purchase parts through the company directly from a supplier/vendor. This keeps the company cost of goods low and all spare parts are sold and accounted for, therefore a high gross margin.
3.4 Target Markets
Our market segment will be 25- to 65-year old owners of old American cars.
Our target market segment strategy includes the use of local radio and television stations to convey the word about our business. We also plan on using advertising in publications such as Hot Rod and Super Chevy magazines. These publications are distributed to a wide variety of people who are all interested in old American cars, and muscle cars. Our strategy includes using people’s emotions to persuade them to restore an old car if they have one. We’re not limited to just a couple of different types of advertising, we also us flyers, discounts, newspapers, press releases and magazine articles. Our website, which is a well designed and cost effective way to tell people about our shop and our services, M2M Customs will use every way within its means to convey our message to the public.
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3.5 Positioning
M2M Customs seeks to establish a competitive edge in its new target market by increasing the level of customer contact and service that other competitors seem to oftentimes lack. Additionally M2M Customs possesses the necessary skills to produce the high quality restorations that are needed in this field. The establishment of the previously mentioned work processes that will ensure greater service will strengthen the contacts that promote word-of-mouth marketing and networking. Our competitive edge will come from hard work and customer satisfaction; we will only produce top quality work that is show ready when it leaves the shop. This will spawn good word of mouth, which will in turn generate work from past and present customers of our shop.
3.6 Strategies
The marketing strategy discussed in this business plan will generate the desired sales. These sales will begin with our website, and the Chamber of Commerce. It is a stated objective to transfer the administrative burden away from the owner, freeing up his time to meet with clients, to network at car shows and events, and to market the shop to prospective clients. Our market strategy is to flood the magazines and air waves with our shop’s advertisements, doing radio ads during morning and afternoon drive times. This is due to the fact that more people listen to the radio during these time frames, so if you have a really catchy ad during those times it’s probable that you will gain some customers from it. This means that someone will be answering the incoming calls.
This person must be carefully trained to recognize who must be called back immediately by the owner. The shop owner needs–and expects–close contact with the shop foreman. The shop is under pressure to produce the highest quality work possible, for example, a car that’s going to shows is going to foster sales. The owner must be armed with a cell phone and a pager. The important caller should be told that the owner will “call right back.” The more successful the marketing strategy is in making inroads into our share of the restoration market, the more important this communication response will become. In respect to the prospect list of clients, it is essential that a “salesman’s” approach be adopted to insure an organized, orderly approach to each prospect. Notes need to be kept on each client. Follow-up and persistence will pay off.
3.7 Marketing Mix
1.Advertising. Most restoration shops interviewed suggested Hemmings Motor News as the best place to advertise. In the regional telephone directory Yellow Pages two classification are possible: Auto Restoration–Antique & Classic, or Auto Body Repair & Paint. These two publications both have directories. In Hemmings, a color 1/4 page ad would run $1,700 per month for a year if signed by April 1, 2012, which provides a 15% discount. This averages out to $1,411 per insertion, even less for black and white. A quarter page ad in the Yellow Pages runs $1,200 a year. 2.Join The Chamber of Commerce. The image of M2M Customs would be elevated by joining the Chamber of Commerce. This would cost only $300 per year. Advertising on their electronic sign alongside the Interstate is free for 90 days. At present the sign would give 100 impressions per day to the shop. We expect this to increase M2M Customs income by about 10% during that 90-day period. 3.Advertising.
Development of a top quality logo and photography which can be used in ads, brochures, name cards, etc. Not counting printing costs, which vary by quantity and quality of paper chosen, the design costs for this would run about $1,500. A day’s photography would be an additional $850-$1,600. 4.Participation in Car Shows. Another image-building marketing tactic is participating in local car shows. These car shows are held just for the fun of it. This would require time and effort, but not much in the way of money. This should be coordinated to insure compatibility with the show’s concept and our image. If we attend a show out of the local area, costs would increase due to the expense of food, lodging, and protected transportation of a finished car to the show. A photo album can never compete with the real hardware. In addition to the above-mentioned activities designed to elevate the company’s image, it is essential to market directly to the selected target clients who all go to local car shows.
Success in making inroads into these names would set the stage for entry into the more prestigious auto restorer’s guild. Marketing these prime prospects must be carried out in a thoughtful organized way. Color literature including the newly designed logo should be completed as a first step. When marketing these prospects it will be important to present a portfolio of M2M Customs most innovative work. A relaxed face-to-face meeting, resulting in good communication between M2M Customs and the project car’s owners, should be all that’s needed to generate a first order. Networking is also very useful. It is important, once the logo and artwork materials have been completed, for the owner to make a point of introducing himself to important players in the restoration world surrounding Memphis. Good contacts include hot rod businesses, parts stores, custom car clubs, suppliers of paint, etc.
3.8 Marketing Research
All work is produced by our restoration staff and one shop foreman. All employees put in full 48-hour weeks. Additional technicians will be added where necessary and in line with success in penetrating the plan’s target market. By the end of June 2012, it is assumed that increased business volume will require two techs to put in a full 48-hour week. By the end of September 2012, increased volume will require hiring a new painter / body man working a 30-hour/week, and increasing to 40 hour/week by end of November. By the end 2012, M2M Customs will have five techs working full-time. It is assumed that a sixth tech will be added in either FY 2013 or 2014, depending on demand volume.
4.0 Controls
To be successful in the automotive restoration business, one must truly believe in the old American cars and love them. The level of attention and care that our staff bestows upon our customers sets us far above our competition. We also have extremely high standards for professionalism in the shop. Cleanliness, adherence to all shop rules, and efficiency are constantly applied. Prices are reasonable, and are perceived as being an exceptional value. Our shop offers the highest quality restoration work available today; we use only the highest quality parts and supplies on all of our jobs. All of this can be found in a professional shop environment and very comfortable for our customers
4.1 Implementation
M2M Customs has a specific time table that is necessary to set up the car restoration shop on schedule for Grand Opening. Each function is timed to coincide with the proper execution and time needed to complete each task.
4.2 Marketing Organization
M2M Customs is lead by CMO Jovon Campbell who is responsible for all internal and external marketing operations, along with Brittanae Odell who is the Office Manager for M2M Customs. Also on the M2M Customs team is Marcus Odell our shop mechanic. As the company expands over time so will the employees, and we will hire skilled employees to fit our needs.
4.3 Contingency Planning
This marketing plan is just that, a plan. Plans do not always work out and we have to be ready to deal with the likelihood that M2M Customs will not make good on the projections outlined in this plan. We also have to prepare ourselves for overwhelming success as well. We will use and develop and plan based off the data that we have collected to ensure not only present success for the company but also future success.
5.0 Conclusion
In conclusion M2M Customs wants to provide the general public with quality restorations that will last generation after generation. Our main goal is to become a staple in the car community in Memphis, TN and branch out to surrounding areas. We have taken a critical look at both our external and internal environment, and through our SWOT analysis we have indentified our strengths, weakness, opportunities, and threats inside of the car restoration market to come up with a plan aimed at ensuring that the desired results be achieved.
