MATTU UNIVERSITY

COLLEGE OF ENGINEERING AND TECHNOLOGY

DEPARTEMENT OF MECHANICAL
ENGINEERING

COURSE NAME: ENTREPRENEURSHIP

TITLE: 3A AUTOSERVICE SHOP BUSINESS PLAN

PREPARED BY

Name ID No

1 Abdulrehim Akmel..................................Ru5721/12

2 Anwar Mohammed………………..….. Ru5293/12

3 Amanuel Gezahegn………………….....Ru4847/12

Submitted to [Link]

Submitted Date 05/12/2023

 ACKNOWLEDGEMENT
First of all, we want to thank Almighty GOD, who gave us courage strength and allowed safe
health to prepare this business plan. We would like to acknowledge the contribution made by
our teacher [Link] for building our basic knowledge. Then we would also like to thank
our friends for their support and help.

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 EXECUTIVE SUMMARY

3A auto service shop business plan is based on auto service shop. The owner of this business
plan is 3A auto service shop and the shop is give a wide range of vehicle service.
3A auto service is located in Addis Ababa, nefas silk sub city, around Jemo 1. Its place is
very convenient for auto service business because there is a lot of car owner’s, NGO and
different institutions. So that there is high demand for quality services.
The auto service industry is highly competitive. Each workshop within this field has high
capital costs, low margins, and a high intensity of competition. So that 3A automotive shop
will focus on providing excellent customer service, maintaining high-quality standards, and
maximizing efficiency and productivity in order to achieve success in auto service business.
3A auto service shop business is going to open with a capital of 1,160,000 birr which it gets
from the bank loan and owners. to increase the size of the business by providing quality
service to meet people wants So for this business it have two sources of money the first one is
the money that are collected from groups which holds 30% and the second is from the bank
loan which holds 70%.
For satisfy the customer needs of the business 3A auto service shop used different modern
mechanical equipment includes: Air Compressor, Jacks and Jack Stands, Oil Drain/ Oil
Caddy Oxygen-Acetylene Torch Press and a jack Torque wrench, Pliers and Screwdrivers.
3A auto service shop have their own management system which consists head mechanic who
control the overall activity of the shop and assistant mechanic and administrative staff who
control the activity of mechanical engineers and helper respectively.
3A auto service shop is responsible company, so that it uses scientific method and modern
equipment to remove waste products

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 Table of Contents
ACKNOWLEDGEMENT .........................................................................................................................
EXECUTIVE SUMMARY .....................................................................................................................ii
CHAPTER ONE ......................................................................................................................................1
Introduction ............................................................................................................................................. 1
1. Description of the project ............................................................................................................ 1
1.1 Definition of the project ................................................................................................................ 2
1.2 Economic and social impact on local communities ...................................................................... 3
1.2.1 Economic Impact: ...................................................................................................................3
1.2.2 Environmental impact on the surrounding are ....................................................................... 4
1.2.3 SWOT Analysis ......................................................................................................................5
CHAPTER TWO .....................................................................................................................................6
2. Market feasibility ............................................................................................................................ 6
2.1 Enterprise description ....................................................................................................................6
2.2 Enterprise competitiveness ............................................................................................................6
2.2.1 Competition and Buying Patterns ...........................................................................................7
2.2.2Competitive Advantages ......................................................................................................... 8
2.2.3 Barriers of the competitors ..................................................................................................... 8
2.3 Market potential ............................................................................................................................ 9
2.3.1 Marketing Strategy ................................................................................................................. 9
2.3.2 Service price Strategy ...........................................................................................................10
CHAPTER THREE ...............................................................................................................................10
3. Technical feasibility ...................................................................................................................... 10
3.1 Facility needs .........................................................................................................................10
Waiting area for customers with comfortable seating, TV, and refreshments .................................. 10
3.2 Mechanical equipment and machinery ........................................................................................10
CHAPTER FOUR ................................................................................................................................. 11
4. Financial Feasibility ...................................................................................................................... 11
4.1 Total capital requirement .............................................................................................................11
4.2 Project Economics .......................................................................................................................11
4.2.1 Project Financing ..................................................................................................................12
4.2.2 Project Cost .......................................................................................................................... 12
4.2.3 Machinery & Equipment Requirement ................................................................................ 13
4.2.4 Utilities and other costs ........................................................................................................ 15
4.2.5 Revenue Generation ............................................................................................................. 15
CHAPTER FIVE ...................................................................................................................................17
5. Organizational feasibility .............................................................................................................. 17

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 5.1 Business structure ........................................................................................................................17
CHAPTER SIX ..................................................................................................................................... 19
6. Conclusion .....................................................................................................................................19
6.1 Recommendation .........................................................................................................................20
6.2 REFERENCES ............................................................................................................................21

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List of Tables
Table 1: Time horizon of our business .................................................................................................... 3
Table 2: Project Financing ..................................................................................................................... 12
Table 3: Project Cost ..............................................................................................................................12
Table 4 space requirement cost ............................................................................................................13
Table 5: Machinery & Equipment cost ..................................................................................................13
Table 6: Furniture & Fixture cost .......................................................................................................... 14
Table 7: Office Equipment cost ............................................................................................................. 14
Table 8: Human Resource Requirement ............................................................................................... 14
Table 9 Operation duration ...................................................................................................................15
Table 10 production cost assumption ...................................................................................................15
Table 11 Revenue assumptions .............................................................................................................16

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 CHAPTER ONE

Introduction

1. Description of the project

3A auto service shop business plan aims to provide comprehensive vehicle services to
customers. The shop will be equipped with state-of-the-art tools and equipment to maintain
vehicle service, the business will be located in a convenient and accessible location, with
ample space for vehicle servicing, customer waiting areas, and office facilities.

The 3A auto service shop business plan aims to establish a reputable and reliable service
center for vehicle owners, offering a one-stop solution for all their service needs. By focusing
on technical feasibility and operational excellence, the business aims to become a trusted
partner for vehicle owners in the local community.

This business plan can be offer different service for the society in terms of quality vehicle
service like:

Oil change and filter replacement

Serpentine belt inspection
Wiper blade inspection
Tire pressure checks
Engine air filter inspection and replacement
Belts and hoses inspection
Brake pads service and replacement
Brake fluid exchange
Spark plug replacement
Transmission fluid inspection
Battery testing

The objectives of our project for the first three years of operation include:

To create a technology-based company whose goal is to exceed customer’s expectations?

To increase the efficiency of our services

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 To develop a sustainable quality services
 Become a leading auto service provider for the local community and automotive
industry.

1.1 Definition of the project

This business plan can be focused on auto service and simple repair of [Link] the main
objective of this project is to provide high-quality service for car owner’s in jemo and
surrounding area.
Size
The auto service shop will require a sufficient amount of space to accommodate vehicle
servicing, customer waiting areas, and office facilities. The location should be convenient and
accessible to attract customers and ensure easy access for vehicle drop-off and pick-up. So
that 3A auto service has provide sufficient space for its services.
Scope
The scope of 3A auto service shop is based on the services offered and the target market.
Some common services provided by 3A auto service shops include routine maintenance such
as oil changes and tire rotations, brake repair, and electrical system repairs.
The cause for offering small scaled business plan is the limitation of financial resources and
lack of specialized skilled human resources within the members.
Location
3A auto service shop located in Addis Ababa, nefas silk sub city, jemo1 Our location for an
auto service shop is a high-traffic area with easy access to major roads and highways. It have
ample parking space for customers dropping off their vehicles and be located in a commercial
area with other automotive businesses nearby. This can help attract customers and create a
convenient destination for all their automotive needs. Additionally, our location is visible and
easily identifiable to potential customers, with good signage and visibility from the road
Kind of input
The auto service shop will require a variety of tools and equipment for vehicle service. This
may include lifts, air compressors, tire changers, wheel balancers, and other specialized
equipment. Additionally, the shop will need a range of automotive parts and supplies, such as
oil, filters, fluids, and replacement parts for various vehicle systems.
Some mechanical equipment and tools used in our auto service shop.
Air Compressor

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 Jacks and Jack Stands
Oil Drain/ Oil Caddy
Oxygen-Acetylene Torch
Press and a jack
Torque wrench,
Pliers
Screwdrivers
Ratchets
Sockets
MultiMate , pry bars,
Various hammers and mallets
Wire cutters, and vice grips.

Table 1: Time horizon of our business

NO Activities Time schedule
1 Developing the project Sep 2024
2 Obtaining the license from Oct 2024
concerned body
3 Purchase materials and renting Nov-Dec 2024
the building
4 Promotional activity Nov-dec2024
5 Start running the business Dec 15-30 2024

1.2 Economic and social impact on local communities

The economic and social impact of an auto service shop on local communities can be
significant. Here are some key factors to consider:

1.2.1 Economic Impact:

1. Job Creation: 3A Auto service shops create employment opportunities for local
residents, including mechanics, technicians, and administrative staff. So that 3A
auto service shop also creates job opportunities for some local employer.
2. Local Spending: Auto service shops often purchase supplies and equipment from
local suppliers, contributing to the local economy. 3A auto service shop is

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 purchase different equipment’s from local suppliers such as: oil filter, oil,
different electric wires, and this market opportunities for local suppliers.
3. Tax Revenue: Auto service shops generate tax revenue for the local government,
which can be used to fund public services and infrastructure projects. Our shop
will generate tax revenue for local government.
4. Convenience: our Auto service shops provide a convenient option for local
residents to have their vehicles serviced, saving them time and effort.
5. Community Engagement: 3A Auto service shops may sponsor local events or
participate in community initiatives, fostering a sense of community engagement.
6. Skill Development: 3A Auto service shops will offer training programs or
apprenticeships, providing opportunities for local residents to develop valuable
skills and pursue careers in the automotive industry.

Overall, 3A auto service shops can play a vital role in supporting the local economy and
contributing to the overall well-being of the community.

1.2.2 Environmental impact on the surrounding are

The environmental impact of a 3A auto service shop on the surrounding area can also be
significant. Some key factors to consider include:

1. Waste Management: Auto service shops generate various types of waste, including used oil,
fluids, and old parts. We use proper disposal and recycling of these materials to minimize the
environmental impact. And also we use scientific suggested equipment and methods to
remove waste products to avoid environmental pollution.

2. Pollution: Auto service shops may contribute to air and water pollution through the use of
chemicals, solvents, and emissions from vehicles undergoing services. We are implementing
proper pollution control measures and adhering to environmental regulations in mitigating
these effects.

3. Energy Consumption: 3A Auto service shops require significant energy for lighting,
heating, and operating equipment. Implementing energy-efficient practices and utilizing
renewable energy sources can help reduce the shop's overall energy consumption and carbon
footprint.

4. Hazardous Materials Management: 3A Auto service shops often handle hazardous

materials such as lead-acid batteries, tires, and refrigerants. Proper storage, handling, and
disposal of these materials are to prevent environmental contamination.
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Overall, 3A auto service shops work to prioritize environmental sustainability by
implementing eco-friendly practices, reducing waste generation, and minimizing th overall
environmental footprint on the surrounding area. Regular monitoring and compliance with
environmental regulations are essential to ensure that the auto service shop operates in an
environmentally responsible manner.

1.2.3 SWOT Analysis

STRENGTH
1: Strong management team with lots of skills and determination
2: Skilled workers in car service with internship experience.
3: Enough financial backing which is must in running a business in a competitive market.
4: Strong marketing team to identify our target market and satisfy its needs, wants and
demands better than our competitors.
5: Location of our business is also a strength because it has a decent number of car owners,
NGO’s, governmental institutions.
6: And finally the concept of our business itself.
7: Advanced technology and equipment.
Weaknesses
 High competition from experienced and financial strong competitors
 Difficulty establishing trust
 Since we knew to this kind of business it increases the risk
Opportunities
Investing in marketing efforts such as social media can increases brand awareness and attract
new customers.
 Established online booking system
 Partnering with NGO and different institutions.
Threats
Exposure to an unpredictable economic environment. Such as economic inflation.
Strong competition from existing auto service shop because they have lots of experience and
strong financial power.
In conclusion, the auto service industry is growing, and there is still room for new entrants.
Our business aims to capitalize on this opportunity by providing high-quality and
environmentally sustainable car services. By conducting market research, identifying our
target market, assessing the feasibility of our business, and analysing our competitors through

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SWOT analysis, we have developed a unique value proposition that is designed to appeal to
our target customers. We are confident in our ability to achieve success and profitability in
the industry..

CHAPTER TWO

2. Market feasibility
3A auto service shop will be located in Addis Ababa, nefas silk sub city. The Company will
target the surrounding area of Jemo 1, furl, lebu, and Haile garment and ayertena.

2.1 Enterprise description

3A auto service shop have a multi-bay facility with a team of mechanical engineers, offering
a wide range of services including oil changes, tire services, brake repairs, and general
vehicle services. Our shop may also have a dedicated area for car washes and detailing
services, as well as a separate section for aftermarket installations such as audio systems or
performance upgrades.
The goal for 3A auto service are outlined below:
To create a service-based company whose goal is to exceed customer's expectations and
becomes a return client.
To increase the number of clients services by at least 20% per year through superior
performance.
To hire local employees to help stimulate the economy.
To bring back the community's trust in the auto service industry.
To provide excellent service for domestic and foreign automobiles.
To establish car wash in our shop in the next two years.
To establish full vehicle maintenance garage in the next three years.
To establish modern automotive company in the next decade.

2.2 Enterprise competitiveness

3A auto service shop competitive edge lies in the vision of its owner, who understand better
than many of their rivals that a service visit does not just include repairing a client's car, it
includes the entire service experience from the first time a client talks to their mechanic until
they decide to stop driving. The long-term profitability of a service firm of this type lies in

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the repeat customer that finds 3A auto service shop services an excellent experience, despite
the fact that they usually have suffered an inconvenient breakdown. The company will seek
to examine all aspects of the service experience to seek ways to improve its customer
satisfaction. In addition, all employees will be rigorously trained and retrained to think about
customer satisfaction in order to create a self-sustaining company culture that revolves
around this issue.
2.2.1 Competition and Buying Patterns
While many customers looking to get automotive repair services are concerned with price,
the primary concern is with building a relationship of trust between themselves and their
service provider. A large number of people within the country have experienced or heard of
bad service encounters within this market. As a person's car is usually connected in one way
or another with that individual's livelihood, a dependable automobile is crucial. Therefore,
many clients are willing to pay a little more for a mechanic they feel does a quality job and
understands their needs.
An automotive repair company that can anticipate, meet, and even exceed customer's needs
can build a defensible position within the market place and acquire market share at the
expense of other rivals.
There are several key performance indicators (KPIs) that automotive employers should strive
to achieve in order to ensure the success of their business. These may include:

 Customer satisfaction: Ensuring that customers are satisfied with the service they
receive is crucial for building a loyal customer base and generating positive word-of-
mouth referrals.
 Efficiency: Automotive employers should strive to complete repairs and services in a
timely and efficient manner, while still maintaining high-quality standards.
 Quality of work: Providing high-quality repairs and services is essential for building a
reputation as a trusted and reliable automotive service provider.
 Employee productivity: Ensuring that employees are productive and efficient in their
work can help to reduce costs and improve profitability.
 Financial performance: Automotive employers should track key financial metrics
such as revenue, profit margins, and expenses to ensure that the business is financially
healthy and sustainable.

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So that 3A automotive shop will focus on providing excellent customer service, maintaining
high-quality standards, and maximizing efficiency and productivity in order to achieve
success in our business.
The auto service industry is highly competitive. Each workshop within this field has high
capital costs, low margins, and a high intensity of competition, but thanks to the increase in
sales of cars in Ethiopia, which drives the need and demand of high quality auto repair and
service workshop.

2.2.2Competitive Advantages
Our competitive advantages include:
The eco-friendly approach that is sensitive to environmental issues.
A competitive pricing structure that provides value for money to our customers.
The quality of services led by educated mechanical engineers.
A range of specialized services that cater to diverse customer needs.
Our vehicle detailing service for corporate clients, offering added convenience and
value
Our competitive strategy is to leverage these competitive advantages to differentiate
ourselves from other players in the market. Through targeted marketing and
advertising efforts, we aim to position ourselves as a provider of quality and eco-
friendly vehicle auto services.
In conclusion, our marketing plan aims to position our business as a provider of quality,
customer-centric and eco-friendly car services. We will achieve this through a competitive
pricing structure, a focus on customer experience excellence, and targeted marketing efforts.
By leveraging our competitive advantages, we aim to differentiate ourselves from our
competitors and establish ourselves as a provider of choice for auto services in the city
2.2.3 Barriers of the competitors
We are analysis our competitors as it relates to the competition. We want to be able to
identify who are our major competitors and assess what are their market shares, markets
served, strategies employed, and expected response to entry? We likely want to conduct a
classic SWOT analysis
(Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or
competitive matrix. Outline our shop’s competitive strengths relative to those of the
competition in regard to service, pricing, promotion, and advertising. What are our shop’s
competitive advantages and their likely impacts on its success? The key is to construct it

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properly for the relevant features/benefits (by weight, according to customers) and how the
start-up compares to incumbents. The competitive matrix should show clearly how and why
the start-up has a clear (if not currently measurable) competitive advantage. Some common
features in the example include price, benefits, quality. Type of features, locations, and
distribution/sales. Sample templates are shown in competitive analysis helps our create a
marketing strategy that will identify assets or skills that our competitors are lacking so we can
plan to fill those gaps, giving us a distinct competitive advantage. When creating a competitor
analysis, it is important to focus on the key features and elements that matter to customers,
rather than focusing too heavily on the entrepreneur’s idea and desires.
Some barriers of 3A auto service shop competitors
i. Lack of academicals educated labour: Finding and retaining skilled mechanics and
technicians can be a major challenge for their auto service shops.
ii. Rapidly changing technology: Keeping up with the latest automotive technology and
diagnostic tools can be a significant challenge for our competitor auto service shops
iii. Lack of comfortable place for car owners.
iv. Lack of waiting area for customers with comfortable seating, TV, and refreshments
v. Lack of restrooms for customers and employees

2.3 Market potential

One example of a demand and usage trend in the auto service shop market is the increasing
popularity of electric and hybrid vehicles. As more consumers choose these eco-friendly
options, there will be a growing need for specialized service centres that can cater to the
unique service requirements of these vehicles. 3A Auto service shops will adapt this trend by
investing in training and equipment for servicing electric and hybrid vehicles, or risk losing
customers to specialized competitors.
2.3.1 Marketing Strategy
The key element of our marketing strategy for this business is referrals from our competitors
and market opportunities or customer needs. 3A auto service shop recognizes the need to
advertise this new service. Advertising the services is planned to increase business faster than
simply relying on word-of-mouth referrals alone. The 3A auto service shop's main
advertising effort will be creating a website. Each of these marketing approaches has the
advantage of being low cost and creating service awareness. Our shop's long-term marketing
goals are to use local radio and TV ads.

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2.3.2 Service price Strategy
Since the automotive repair industry is, operationally, a job-shop environment, it is somewhat
difficult to estimate service price. For job-shops, each individual service is tailored or unique
to that job, and is only initiated once an order is made. However, the service price forecast
reflect the professional opinion of 3A auto service shop owners in how much price we will
make based on different assumptions.

CHAPTER THREE

3. Technical feasibility
We are study the technical feasibility of our auto service shop business to implement and
utilize advanced technology, equipment, and software to effectively and efficiently provide
automotive services. This includes the feasibility of investing in diagnostic equipment and
customer relationship management systems to stay current with automotive technology and
meet the changing preferences of consumers. It also involves assessing the shop's capability
to maintain and utilize these technical resources to provide high-quality service to customers.

3.1 Facility needs

Waiting area for customers with comfortable seating, TV, and refreshments

Restrooms for customers and employees

Tool storage and workbenches for organizing and storing tools and equipment
Customer service area for greeting customers, discussing repairs, and providing estimates.
Lifts and hoists for vehicle maintenance and repair
Welding equipment for repairing damaged frames and body panels

3.2 Mechanical equipment and machinery

1. Tire changers and balancers for mounting and balancing tires
2. Brake lathes for resurfacing brake rotors and drum
3. Battery chargers and testers for diagnosing and servicing batteries
4. Alignment machines for measuring and adjusting wheel alignment
5. AC recovery and recharge machines for servicing air conditioning systems
6. Torque wrenches and impact wrenches for tightening bolts and nuts

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 7. Hydraulic presses for pressing bearings and bushings.

CHAPTER FOUR

Financial Feasibility
We are conducting a market analysis to determine the demand for auto services in the area
and projecting potential revenue and profitability and creating a detailed business plan with
Financial projections, including start-up costs, operating expenses, and revenue streams.
And also we are researching and comparing equipment and tool costs to ensure competitive
pricing and quality and Identifying and minimizing operational expenses such as utilities,
maintenance, and waste management.

4.1 Total capital requirement

The total capital requirement for our business plan have some scope. Generally, the start-up
costs of our business project that are based on auto service shop would include the cost of the
rent for shop, the mechanical equipment, the supplies, the labour, and the marketing.
Additionally, it has total capital requirement cost of building necessary structures, such as
reception and storage facilities. Other costs include licensing fees, insurance, and taxes. So
that to determine the total capital requirement for a project, a detailed budget can be listed as
follows and all of the potential costs also taken into consideration.
A detailed financial model has been developed to analyse the commercial viability of this
business plan. Various costs and revenue related assumptions along with results of the
analysis are outlined in below.

4.2 Project Economics

All the figures in this financial model have been calculated for estimated revenue of 1,160
million in the year one.
The following table shows internal rate of return, payback period and net present value of the
proposed venture:

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4.2.1 Project Financing
This business is going to open with a capital of 833,000 birr which it gets from the bank loan
and owners. Starting from this 3A auto service is to increase the size of the business by
providing quality service to meet customer satisfaction.
So for our business we have prepared two sources of money the first one is the money that
are collected from members which holds 30% and the second is from the bank loan which
holds 70%
Following table, provide details of the equity required and variables related to bank loan:
Table 2: Project Financing
DESCRIPTION DETAILS(in birr)
Total Equity (30%) 348,000
Bank loan (70%) 812,000
Total (100%) 1,160,000

4.2.2 Project Cost

Following fixed and working capital requirements have been identified for operations of the
proposed business:
Table 3: Project Cost
DESCRIPTION AMOUNT
(birr)
Capital Cost
Machinery & Equipment 220,000
Furniture & Fixtures 59,000
Office Equipment 66,000
Space rent 60,000
Human resources 125,000
Others 250,000
Total Capital Cost 780,000
Working Capital
Equipment Spare Part Inventory 50,000
Raw Material Inventory 100,000
Upfront Insurance Payment 30,000
Cash 200,000

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 Total Working Capital 380,000
TOTAL PROJECT COST 1,160,000

Space Requirement
Details of space requirement and cost related to building rent is given below:
Table 4 space requirement cost
DESCRIPTION ESTIMATED RENT in TOTAL
AREA m2 RENT
M2
Rented Space 300 200 60000
TOTAL 300 60000

4.2.3 Machinery & Equipment Requirement

Machinery and equipment for the proposed project are stated below:
Table 5: Machinery & Equipment cost
DESCRIPTION QUANTITY UNIT COST TOTAL
(Birr) COST
(Birr)
MECHANICAL
REPAIRS
Complete Mechanical 02 50,000 100,000
Toolbox
with Jack
Work Bench 02 15,000 30,000
Battery Charger 01 20,000 20,000
Compression Gauge 02 10,000 20,000
Others - 50,000
Total 200,000

Furniture & Fixtures Requirement

Details of the furniture and fixture required for the project are given below:

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Table 6: Furniture & Fixture cost
DESCRIPTION QUANTITY UNIT COST TOTAL COST
(Birr) (Birr)
Chairs 06 2,000 12,000
Table 02 5,000 10,000
Electric wiring and 12 1,000 12,000
lighting
Fans 10 2,500 25,000
TOTAL 59,000

Office Equipment Requirement

Following office equipment will be required for Auto Repair
Table 7: Office Equipment cost
DESCRIPTION QUANTITY UNIT COST TOTAL COST
(Birr) (Birr)
Computer 02 30,000 60,000
Telephones 02 3,000 6,000
TOTAL 66,000

Human Resource Requirement

In order to run operations of Auto Repair Workshop smoothly, details of human resources
required along with number of employees and monthly salary are recommended as under:
Table 8: Human Resource Requirement
DESCRIPTION NO. OF MONTHLY MONTHLY
EMPLOYEES SALARY SALARY
PERPERSON (Birr) (Birr)
Head Mechanic 01 35,000 25,000
Assistant 01 30,000 20,000
Mechanics

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 Helpers 04 10,000 40,000
Guard 02 10,000 20,000
Total 125,000

4.2.4 Utilities and other costs

An essential cost to be borne by the project is the cost of electricity and generator fuel
expense. The electricity expenses are estimated to be around Birr 15,000 for the first year,
whereas, generator fuel expenses are estimated to be Birr 30,000 and 35,000 birr for water for
the 1st yea

4.2.5 Revenue Generation

Based on the approx. capacity utilization of 93% and 07% for Mechanical service revenue
during the first year of operations is estimated as under
CONTACT DETAILS In order to facilitate potential investors, contact details of private
sector Service Providers relevant to the proposed project are given below:
Machinery Suppliers
The machinery suppliers easily available in Addis Ababa.
Raw Material Suppliers
Raw material required for auto repair and service workshop includes diesel, grease, oil and
cloth / towel are easily available in the local markets anywhere in Jemo, rest of the spare parts
required for mechanical service and spares are purchase as per customer from nearby shops.
KEY ASSUMPTIONS
Operating Cost Assumptions
Table 9 Operation duration
DESCRIPTION Details
DAYS OPERATIONAL/ YEAR 320 day

Production Cost Assumptions

Table 10 production cost assumption
DESCRIPTION Details
INCREASE IN COST PRICE 10% / year
SERVICING CAPACITY 20cars/day
CAPACITY UTILIZATION 75%

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Revenue Assumptions
Table 11 Revenue assumptions
DESCRIPTION
AVERAGE REVENUE 500/car
REVENUE GROWTH RATE 10%/year

Profit analysis
For the First year our budget cost = 1,160,000
Income = 2,400,000

Profit = income – budget cost

Profit = 2,400,000-1,160,000
Profit = 1,240,000

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 CHAPTER FIVE

4. Organizational feasibility
Organizational feasibility aims to assess the prowess of management and sufficiency of
resources to bring a product or idea to market. The company should evaluate the ability of its
management team on areas of interest and execution. Typical measures of management
prowess include assessing the founders’ passion for the business idea along with industry
expertise, educational background, and professional experience. Founders should be honest in
their self-assessment of ranking these areas.
Owner of the company: Anwar Mohammed, Amanuel Gezahegn and Abdulrehim Akmel

5.1 Business structure

Role and responsibilities given for the member’s base on their experience and academic
performance. The performance of organizational members have critical factor which affects
the toiler or success of the business so, there are some necessary trait required from the
owners these are;
Giving dignity to the customers as well as to the employers
Confidentiality.
Punctuality.
Locality.
Team work
Manager (Amanuel):
He is responsible for the overall management of the business, including setting goal,
developing strategies, managing finances, and overseeing staff.
Service manager (Anwar):
He is responsible for managing the service department, including scheduling repairs
managing technicians, and ensuring customer satisfaction.
Technicians:
They are responsible for servicing vehicles.
Service advisors (Abdulrehim):
Responsible for communicating with customers about their vehicle’s needs, providing
estimate, and scheduling services.
Parts manager (Duresa):

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Responsible for ordering and stocking parts, ensuring that the right parts are available for
repair and managing inventory.
Administrative staff/Receptionist (Helen):
She is responsible for answering phones, scheduling appointments, managing paperwork, and
providing customer service.

Diagram 1 Organizational hierarchy

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 CHAPTER SIX

5. Conclusion
In conclusion, 3A auto service shop’s business plan outlines a comprehensive strategy for
establishing and growing a successful auto repair business.
By offering a range of services, utilizing skilled technicians, and implementing effective
marketing and customer service strategies, the business aims to attract and retain a loyal
customer base. With a focus on quality, efficiency, and professionalism, the auto service shop
is well-positioned to thrive in the competitive automotive industry. The business plan
provides a roadmap for achieving long-term success and profitability, while also serving as a
guide for potential investors and stakeholders.
Overall, the plan demonstrates the potential for a thriving and sustainable auto service shop
that meets the needs of its customers and contributes to the local community.

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6.1 Recommendation
One recommendation for the 3A auto service shop business plan would be to conduct
thorough market research to identify the specific needs and preferences of the target customer
base. This will help in tailoring the services and marketing strategies to better meet the
demands of the local community.
Additionally, it would be beneficial to include a detailed financial projection and analysis to
demonstrate the potential profitability and return on investment for potential investors.
It only focus on narrow scope due to financial inability.
Lastly, incorporating a section on sustainability and environmental responsibility could also
enhance the business plan, as more customers are seeking eco-friendly options in the
automotive industry.

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6.2 REFERENCES
1. Mr, Ademe .S “Entrepreneurship for mechanical engineers” Mattu University, Ethiopia
November 2023.
2. Redwan assen “Feasibility study Auto Car Repair and Workshop Project” Woreilu,
Ethiopia 2020.

3. Duresa.T” Denbel fruit and vegetable farm business plan” Mattu, Ethiopia 2023.

4. Jeff Crawford “The Crawford auto repair “from [Link]. On

November 25, 2023 at 12 pm.

5. John Doe ” Auto Repair Shop” Bolsa Ave, Westminster 2023.

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