Project Feasibility Study

Table of Contents
1.0 Executive Summary: .......................................................................................................................... 3
2.0 Introduction: ..................................................................................................................................... 3
3.0 Study Parameters/Area:.................................................................................................................... 4
4.0 Market Viability: ................................................................................................................................ 4
5.0 Target Market: .................................................................................................................................. 4
6.0 Competitive Advantage: ................................................................................................................... 5
7.0 Financial Constraints: ........................................................................................................................ 5
8.0 Start-Up Costs: .................................................................................................................................. 6
9.0 Operating Costs: ................................................................................................................................ 7
10.0 Revenue Projections: ........................................................................................................................ 8
11.0 Sources of Financing: ........................................................................................................................ 9
12.0 Profitability Analysis: ......................................................................................................................... 9
12.1 NPV:............................................................................................................................................... 9
13.0 Conclusion: ...................................................................................................................................... 10 `
Project Feasibility Study

1.0 Executive Summary:

Auto shine car Care is a UK based car wash chain having its major presence in various parts of Scotland
and England. It was planned and developed in 1989 and became operational on 1st February 1990 in
Aberdeen Scotland. It is one of a kind car wash which is efficient, Cost effective and customer oriented.
AUTO SHINE CAR CARE CENTRE boasts 10 car valet centers throughout the greater Glasgow area, serving
around 3000 customers on a weekly basis, from simple car washes to Auto shine car Care Special Valets,
It provide a high quality service to all of its customers.
Auto shine car Care UK is now planning to enter the Asian market using sub-continent as a gateway and
Pakistan as the first step towards the initiation. Pakistan is a country with a population of 180 million.
Urban areas like Islamabad (project site) has a dense population and most citizens have personal
vehicles. This is why Auto shine car Care has chosen to target this market as it seems more profitable as
compared to other cities of Pakistan.

2.0 Introduction:

This document is developed to provide an economic, financial and social feasibility of the project of
launching a branch of Auto shine car care center, a UK based car wash chain in Pakistan. This will be
state of the art technology, which will be introduced first time in Pakistan. This study will include the:

Study Parameters
Required investment.
Return on investment (ROI).
Financial analysis of the investment.
Financial viability.
Economic viability.
Social viability.
Technical viability.
Risks
Back-up Plan
Alternate (if any)

The data is obtained by taking stakeholders (client) requirements and expert judgment, using parametric
and analogous analysis (from the UK branches as well as local car washes), The data is analyzed using
financial management techniques and is presented in this document using Microsoft tools. Online
forums such as google and Pakistan government firms such as Pakistan Bureau of statistics website
have been used to extract secondary data.
The aim of the document is to provide a snap shot of the project to the client company with regard to
financial aspect, market study (situation analysis and marketing mix) and determine and analyze the
viability of the project. This document will help the client to analyze the decision of making this
investment by using authentic quantitative and qualitative data presented in the most comprehensible
form.

Justification

Our process is designed to improve the life of your vehicles painted surfaces. All grit and mud is
removed so our soft cloth can gently clean and polish the vehicle.
Tests conducted by the University of Texas to compare surface disturbances showed that a single home
hand wash on an automobile can produce scratches that penetrate as deep as 1/10 of the total
thickness of the automobile paint. Similar tests were conducted by University of Munich and they got
the same results.
Study objective

The aim of this project is to provide a premiere full service car wash and to meet the needs for a cleaner
vehicle.

Scope of study

3.0 Study Parameters/Area:

The aim of the document is to provide a snap shot of the project to the Sponsor or company with regard
to financial aspect, market study (situation analysis and marketing mix) and determine and analyze the
viability of the project. This document will help the sponsor to analyze the decision of making this
investment by using authentic quantitative and qualitative data presented in the most comprehensible
form. This report gives insight into various aspects of a car care center setup including both technical
and general information for the service offered. The document also allows flexibility in change of
various parameters to suit the customized needs of the entrepreneur.
Aim

4.0 Market Viability:

In this section, we provide an assessment of the market demand for our services. The analysis reveals,
who will buy, how much of our services and what they are willing to pay for it. Our market analysis is
purely base on random sampling
Islamabad is the capital city of Pakistan therefore is filled with people belonging to higher middle class
and upper class. Therefore each household has at least one car and at maximum more than three.
People, mostly white collar workers have less time at their disposal. With the need of time most people
having cars are fed-up of waiting on typical service stations, therefore the market for a fast track,
efficient and cost effective car wash is a very appealing service for the general public.

5.0 Target Market:

The target audience for this project is the general population of Islamabad. People with big cars but less
time at their disposal are the main target of this organization and the niche targeting will be done in the
detailed marketing report that will be conducted by the outsourced marketing consultants (cost not
included in the start-up cost as it is being done in the pre-project phase). ` Project Feasibility Study

Proposed Business Legal Status

Although the legal status of business tends to play an important role in any setup, the proposed Auto
Shine Car Care Center 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.
Location will be chosen as a commercial entity and must be registered by Capital Development Authority
and legal contract of 5 years will be made by the owner.

Proposed Business Technical Status

Technical recommendation regarding any business always plays a vital role. Technically this business is
viable and easy to implement. There are no such technical constraints which will tend to hurdle the
implementation of this project. As the required technical equipment, has already been installed in many
countries so this is a mature technology which can be installed in any part of the world. On the other
hand the equipment is not complex to install as well operate. At the time of installation Vendor
Company will also train the technical staff and provide assistance as and when required.
Equipment required for this project is as below:
Washing System
Drying System

Technical Skill
Another critical factor relates mostly to technical skills required especially for operating computerized
car shine and cleaning machines. The machine operators should be properly trained in order to
completely inspect the systems, take computer measurements. 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.

Hands on Experience
Having a thorough knowledge and hands on experience of all the relevant technical details for this
specific business 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. Technically
sound and experienced workers with high motivation of learning will be highly recommended.
6.0 Competitive Advantage:

AUTO SHINE CAR CARE CENTRE is one of a kind car wash. As the purpose of the project is to provide
quality services to the customers and satisfy The special features of the car wash are listed below:
UK based brand (will be marketed using this brand strategy).
6 minutes car wash.
Very cost effective.
Waiting area with climate control for the customers.
Imported wax and shampoo.
Special trained staff.

AUTO SHINE CAR CARE is not just a car wash, its a brand

7.0 Financial Constraints:

The finances of the project will be done by the sponsor. The main source of the project finances is
Equity. As it is a single owned company (has flexibility to turn into partnership), all the finances will be
done by the sponsor himself. However if needed a local partnership can be arranged, in this will be
solely depends on the consensus of sponsor. In case of partnership, all the partners must share the cost
as well as the profits according to the agreement.

Moreover, depending on the situation, the finances can be done through the following sources:

Loan Loan will be taken from the local banks with the minimal interest possible. Loan can also
be taken from the Development Financial Institutions present in Pakistan such as Saudi Pak
Investment, Pak Qatar investment etc.
Venture Capitalist: If need be, the monetary help of any venture capitalist can be used.

The complete costing and financial analysis is done in the following sections. ` Project Feasibility Study

Human Resource Constraints:

As this project is one of the unique project in this location, so we need skilled and experienced
staff that can easily as well as professionally operate the machine and can resolve the issues as
and when occur. Employees having hands on experience on such equipment is highly
recommended.
The business is more operational rather than a project, in such environment; this is not possible
to keep an eye on all the employees every time so what the employer demand is: All the
employees should be loyal and satisfied with their jobs so that they can put their 100% effort to
make it successful, own their actions and must be honest with the employer for whom they are
working because they are dealing with employer tangible (building, expensive equipment, cash
etc.) and intangible assets (customers, companys reputation).

To mitigate the effects of these constraints, following are the precautionary measures which
should be taken very precisely on time:
Train the staff at the time of installation of machinery and make a practice of scheduling
training time by time. Must available the User Manual of Machine in the local
language, so that we can ensure the understanding of the machine. In this way machine
operator will know what to do and what should not do.
Share the profit with the employees in the form of appraisals, awards, bonuses and
yearly increments. Employees should not burden them more than their capacity. Give
them proper rest during job and also give them some break to relax. Realize the
employees that you really worried about them and also own them.

Risk Factors

Operations and financial results are subject to various risks and uncertainties, including those
described below. All these risks should be visualize very keenly and anticipate the impact of
these risks on our project & implement the contingency plan as and when required.

1. Market Fluctuations

Market fluctuation is one of the factors which can cause the decline of any running business
so in this regard we will carefully monitor the changes in market conditions; it is difficult to
completely avoid the impact of market fluctuations due to economic cycles in countries
around the world and changes in the demand for end services. Market downturns,
therefore, could lead to decline in the services demand and increase in the inventory
amounts, as well as lower sales prices (in case of same service provider come in the
market).

2. Fluctuations in foreign exchange and interest rates

The initiation of our project is heavily depends on the foreign exchange rate because the
machinery will be import. So the minimal change in foreign exchange rate will effect very
much on the projected budget, As a result our consolidated business results and financial
condition are affected by fluctuations in foreign exchange rates which ultimately affect the
revenue and increase payback period.
In the same way the increase in foreign exchange rate will cause increase in prices of
utilities (raw material, electricity, fuel etc.) and wages of employees.

To reduce these effects of exchange rate fluctuations, we introduce the buffer of 5% of
current foreign exchange rate, so we can bear this fluctuation up to 5%.

3. Natural Disasters

Natural disasters such as earthquakes, typhoons, fire and floods, as well as accidents, acts of
terror and other factors beyond the control could adversely affect the business operation. Such
events could consequently cause severe damage to the business. We will subscribe to various
insurances; however, these plans and insurances are not guaranteed to cover all the losses and
damages incurred.

4. Competition

The Car Wash industry is extremely competitive in Islamabad. Typical car wash industry is a big
competitor for Auto shine car care center. In areas like Islamabad, typical car wash center are
really well settled so its very much tough to create space in the market. We are very much
confident about the service we are going to provide, the efficiency of our system will spoke
itself and advertise our company. We have to capture the clients by giving highest standards of
quality, customer care and feedback system. Customers can take online appointment as well as
by dialing a toll free number which will be launched in near future.

5. Strategic Alliance
For business expansion and strengthening of competitiveness, the Auto car shine care may
engage in strategic alliances, including joint investments. But time and money are necessary to
achieve integration in areas such as business execution, technology, service, and personnel, and
it is possible that these collaborative relationships cannot be sustained due to issues such as
differences from the partners on management strategy in areas such as capital procurement,
technology management, and service providing, or financial or other business problems the
partners may encounter.

6. Human Resource Handling
a. Equipment misuse
b. Securing resource

Auto car shine care works hard to secure superior human resources for
management, technical and other areas when deploying business operations.
However, since such superbly talented people are of limited number, there is
fierce competition in the acquisition of human resources. Under the current
conditions, it may not be possible to secure the talented human resources it
requires.

http://www.renesas.eu/ir/company/risk.html
8.0 Start-Up Costs:

http://www.autowash.com.au/car-wash-building-construction/