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Extreme Motors Inc.
- 1. 1 Table of Contents Executive Summary ........................................................................................................................................... 2 Description of Extreme Motors Incorporated. ....................................................................................................... 2 Background ------ ------ .................................................................................................................................................. 2 Background of ------ ....................................................................................................................................................... 2 Financial Goals and Estimations ................................................................................................................................ 3 Marketing strategies and Plan of Action .................................................................................................................. 3 Risk Mitigating Milestones .......................................................................................................................................... 4 Why Are We Better than The Rest? ........................................................................................................................... 4 Start-up Requirements ..................................................................................................................................... 4 Licensing to Operate in Toronto ................................................................................................................... 5 New Salespersons, Reinstatements or Individuals Associated with a New Dealer ...................................... 5 New Dealers .................................................................................................................................................................... 6 How much is it going to cost for Extreme Motors to be launched? ................................................................. 6 Services/Products .............................................................................................................................................. 7 Financing AND OTHER Options ................................................................................................................... 7 Financing Options ......................................................................................................................................................... 7 0% finance ....................................................................................................................................................................... 8 Leasing .............................................................................................................................................................................. 8 Personal contract plan .................................................................................................................................................. 8 Under OTHERS are: ...................................................................................................................................................... 9 Market Analysis ............................................................................................. Error! Bookmark not defined. Market Segmentation ................................................................................................ Error! Bookmark not defined. Target Market Segment Strategy ........................................................................... Error! Bookmark not defined. Market Needs .............................................................................................................. Error! Bookmark not defined. Market Trends ............................................................................................................. Error! Bookmark not defined. Market Growth ........................................................................................................... Error! Bookmark not defined. Industry Analysis ........................................................................................... Error! Bookmark not defined. Competition and Buying Patterns ......................................................................... Error! Bookmark not defined. Industry Participants ................................................................................................. Error! Bookmark not defined. Main Competitors – SWOT ANALYSIS .................................................... Error! Bookmark not defined. Marketing Strategy ........................................................................................ Error! Bookmark not defined. B2B Marketing ............................................................................................................ Error! Bookmark not defined. Pricing Strategy .......................................................................................................... Error! Bookmark not defined. Sales Strategy .............................................................................................................. Error! Bookmark not defined. Sales Forecast .............................................................................................................. Error! Bookmark not defined. Sales Programs ............................................................................................... Error! Bookmark not defined. Strategic Alliances ......................................................................................... Error! Bookmark not defined. Operations ...................................................................................................... Error! Bookmark not defined. Financial Background and Statements ..................................................... Error! Bookmark not defined. Appendix A: Products ................................................................................. Error! Bookmark not defined.
- 2. 2 Executive Summary Description of Extreme Motors Incorporated. Extreme Motors Canada will have at least 72 cars available for re-sale. This would include all major brands such as BMW, AUDI, Toyota, Volkswagen, Saturn and Porsche, among many others. The company is one that respects each and every customer; it wants to appeal to its target market and, thus, has offered many financing options. The key to our success will be our ability to connect with the public. Once the public can recognize our brand, we are sure that profitability will be enormous. The company hopes to begin working from a rented unit based on Mississauga, Ontario. The company further expects to expand shortly after the first year. With the income that is potentially available in this market, to open a used car dealership anywhere in Toronto will have a great turnaround. With years of experience on our back, the employees managing Extreme Motors Canada are more than specialists at selling cars, they are well organized, partnered with one goal and have been able to successfully run many used-car dealerships in North America. With the future of expansion, this company is sure to make Toronto a profitable one, contributing hard-earned money to this great city, and to the overall wealth of this amazing country. Background of Owner ------ ------ ------ ------ was working in ------ Company since 2004 to 2009, as a sales officer in Afghanistan and from 2009 to 2012; Mr. ------ was partner in Armaland Import Export in Turkey. Since 2013, he is the sales representative for Dimes Canada. Mr. A. ------ has years of experience under his belt and is ready and capable to put his skills into practice in the Canadian field. With much support, Mr. A. ------ has been an outstanding member of his community for over 20 years, is friendly and knows how to get the job done on time and with the greatest of delicacy, assuring quality time and time again. Background of Partner ------ ------ ------ ------ worked in foreign exchange early in his life and then was the Principal Director of the ------ Company Limited in Kabul, Afghanistan. He also was involved in a family construction business and handmade carpets. In 2009, he moved to Turkey and began exporting carpets from India and Afghanistan for wholesale. In 2012, he came to Toronto, Canada and commenced importing machine made, “high” rugs from Turkey. Mr. ------ has been an entrepreneur for the last 10 years and more; he is knowledgeable in the fields of commerce, has great ambition and knows about the industry in-depth.
- 3. 3 Financial Goals and Estimations Extreme Motors Inc. has 72 products, sold in quarters, totaling 4 times per year. The average price of cars is around $6,000, although the prices range from $2,500 to $13,500. In this case, the best-case scenario consists of the following: Extreme Motors Inc. has 72 products sold 4 times per year, with intense marketing (COGS at $10,000 per quarter), totals 288 cars per year. In a year period, each car can range in price, depending on our supplier. Therefore, we will count $6,000 as the average price and use it as our foundation for the prices given under the best-case scenario. The preceding scenario would give us a net income of $1,728,000 per year with about $40,000 in marketing costs and another $40,000 in miscellaneous costs. That would give Extreme Motors Inc. a yearly profit of $1,648,000. In this case, the ideal case scenario consists of the following: Extreme Motors Inc. has 72 products are sold twice per year with COGS at $10,000 for each half, totaling 144 cars sold per year with expenses for marketing only ranging from $15,000 to $20,000. Therefore, for each car, we will use the lowest possible average for each car, using $4,500 as our base number. In this case, we will be earning a net income of $648,000 and spending approximately $40,000 per year in expenses, which do not include all withstanding costs, our gross for Y1 is potentially $608,000. In this case, the worst-case scenario consists of the following: Extreme Motors Inc. has 72 products sold only once per year, at an average price of $5,000 and the expenses consist of $20,000. At this rate, and at the lowest possible level of enterprising, we will still be profitable and still make it through to the next year counting our dollars and using them straight into the business for another profitable year. Therefore, we would be looking at a yearly net income of $360,000 minus some marketing expenses, we will potentially gross Y1 about $340,000. This is still a very hopeful scenario, even at its worst. Marketing strategies and Plan of Action The main goal is to attain the most ROI (Return on Investment) as possible. Therefore, some specific marketing tactics have been developed to fulfill this plan. The company is going to use a straightforward approach to business: Lowest prices for the best quality possible in their parameters. This means that according to their location, we will save them on administrative, marketing and handling fee, materials and labor, among other expenses. Based on this strategy, Extreme Motors is predicted to gain most customers from referrals. By bringing the prices lower than their market target, we will be able to gain customers that want a better price for their
- 4. 4 vehicle/transportation needs. Among our finest tools for getting these customers are excellent advertising methods, including website and customer service personnel, and modern design strategies for infrastructure with dedicated professionals ready to help all customers that walk in, call, email or contact us. Satisfaction is guaranteed at Extreme Motors Canada and there is 100% money back guarantee (within 24 hours) if the car/vehicle/transportation stops functioningi . The company is looking into beating all types of risks, therefore, to overcome client satisfaction risks, we urge our personnel to work hardest and best in order to attain our goal as #1 in the GTA and surrounding areas. Risk Mitigating Milestones The secrets to our success will be in overcoming our threats, taking them as opportunities, and take as much flexible risks as possible in order to attain a client base and potential Year 5 to 10- year stability, and beyond. To accomplish this, the achievements will need to be: 1. Making sure all of the permits are attained, licenses for selling and storing cars and fees for start-up. 2. Using the most up-to-date cars and computer equipment, purchasing new ones for each new campaigning program. 3. Informing clients of all the offerings available by our company in order to expand needs basis. 4. Focusing on the market as much as possible, following all manners of communication that would reach the most people, using all avenues online and physical, that exist to help this business flourish. 5. Venture into areas of our expertise; succeed at being number one in the city, and being published as such by a sponsor company. 6. Sub-contract knowledgeable and certified personnel, never compromise quality for price. Why Are We Better than The Rest? Extreme Motors is the best because it offers innovative solutions to clients. We take the initiative to point out the things that would make their space more functional and affordable. We figure that alternatives and options are best to use with customers, as per our experience, so we have set out to offer them to all of our customers. By using visual aids, customers will have a direct glance at what their structure will be like in the future. If Extreme Motors Canada cannot get it done, we will sub-contract and makes sure that the clients’ demands are met. Additionally, our name will be behind all jobs, assuring quality and respect to the money-back guarantee policy at Extreme Motors Canada. Start-up Requirements Licensing and Education $10,000 - $20,000 Marketing and Research $25,000 Rent $20,000
- 5. 5 Transporting, Shipping, Deliveries $10,000 Website and Online Development $10,000 Salaries $15,000 (3-month period) Miscellaneous $26,964 Total: $106,964 to $116,964 Licensing to Operate in Toronto According to the Ontario's Vehicle Sales Regulator, there are specific steps we must take to take Extreme Motors to its next level. Extreme Motors must be registered as a dealer and as an individual associated with a dealer, since there are two of us. Therefore, these are the steps outlined on the site that must be followed in order to be registered in Ontario. Extreme Motors has followed all the steps following below and has achieved the licensing course passing grade. Extreme Motors is now capable of selling, trading and buying cars as a Dealership. New Salespersons, Reinstatements or Individuals Associated with a New Dealer Step 1 – Review the Individual Application1 form to confirm what documentation is required. If applicants are (or have been) licensed in another Canadian jurisdiction. Step 2 – Request a BackCheck report. Results will be sent directly to OMVIC within 24 hours. Step 3 - The Individual Application will advise if there is a requirement to complete the OMVIC Automotive Certification Course. Note: Applicants may choose not to complete the course unless/until the application is ready for approval. Step 4 - Applicants can complete the OMVIC Certification Course in one of two ways: Self-study correspondence course OR On-site (classroom) course. Once registered, the Automotive Business School of Canada (ABSC) will send the course information via courier. Insert the ABSC Student ID in the relevant section of the Individual Application form. This will ensure that ABSC will send results directly to OMVIC once the course has been completed. Note: The Individual Application cannot be approved until the applicant has completed the OMVIC Certification Course. Step 5 – Retain a copy of the completed application and all attachments. OMVIC must be notified within 5 business days of any changes to the information provided for the purpose of obtaining registration. Note: Applications cannot be accepted unless the “Certificate of Dealer” (section F) has been completed. Step 6 – Send the original completed Individual Application form with all required attachments and fees to OMVIC in person, by mail or courier. Note: OMVIC does not accept Individual Applications submitted by fax. 1 Form is found on http://www.omvic.on.ca/portal/portals/0/pdf/RegistrationForms/Individual_Application.pdf
- 6. 6 Step 7 – Check registration application status for Individual Application or Salesperson Change Application2 . The status of a processed application will be shown for thirty days. New Dealers Step 1 – Review the Business Application form to determine all required documentation. Download the form3 . There is a Business Application Form Checklist at the back of the Business Application form. DO NOT SUBMIT YOUR APPLICATION TO OMVIC UNTIL STEP 6. Step 2 – The Business Application4 form will advise which individuals are required to submit an Individual Application form. Those individuals must complete the process set out above for all completed Individual Applications should be submitted with the Business Application. Step 3 – Any registered salespersons transferring to the new dealership that are not in a position of authority (as described in the Business Application form) must complete a Salesperson Change Notice. Step 4 – Obtain all supporting documentation for the Business Application. Step 5 - Retain a copy of the completed application and all attachments. Step 6 – Send the original completed Business Application Form with all required attachments in person, by mail or courier. Step 7 - Do not submit required documentation relating to business premises until OMVIC confirms the application is in its final stages. Step 8 - Check registration application status for Business Application, Branch Application or Business Change Notice5 . The status of a processed application will be shown for thirty days. How much is it going to cost for Extreme Motors to be launched? We are looking for funding of at least $100,000. Why? We need to secure our margins. We want to enter the Canadian market big so we can win big. The more we invest into it, the better. Outside this funding request, we are also securing a loan of at least $50,000 each. This will help in securing a profitable beginning with cash in hand for the second year if needed. If we do not use the funds secured for the second year, we will repay it back to the bank/lender/investor. We are looking to triple this money, however, so in terms of repaying anything, let it be completely clear that we are more than willing to work day and night to pay you off. Once we are in the market, all there will be are profits. How do we know this and how 2 Form found on http://www.omvic.on.ca/portal/DealersSalespersons/RegistrationServices/CheckApplicationStatus.aspx 3 Form found on http://www.omvic.on.ca/portal/portals/0/pdf/RegistrationForms/Business_Application.pdf 4 Business Form Found at http://www.omvic.on.ca/portal/portals/0/pdf/RegistrationForms/Business_Application.pdf 5 Individual Registration Form found at http://www.omvic.on.ca/portal/portals/0/pdf/RegistrationForms/Individual_Application.pdf
- 7. 7 can we assure you this? We have the best location. Mississauga. 5211 Creekbank Road. L4W 1R3. Tel.: 905.812.0016. www.extrememotors.ca. Mississauga is a thriving city. It holds more than --- people and most are all hard working employees who work outside the home from 9 to 5 pm from Monday to Friday, are approximately 25 to 44 years old and have income sufficient to purchase many cars, if need be. Therefore, we want to target them. We want to make sure they know where to find us, so our marketing needs to be big. We are talking about radio, television segments, newspapers, online forums, online advertising and more. We need to get the word out, celebrate the inauguration of this fantastic place and tell the world to come see us. We will offer prices and gifts for all visitors no matter what time of the year it is. We will sell until we can't any more because this is our passion. We love people, we are passionate about business, we are young, we have experience and others love us! Our mission is not impossible. This is a definite one, especially in this market, it is booming! Services/Products *All Found in Appendices Besides offering specials, car finder options, consignment and finance opportunities, Extreme Auto Inc. also provides the best customer service in town. Financing AND OTHER Options Keeping with our ethics and work standards, Extreme Motors is ready to present to every customer financing AND OTHER options, however, more than that, we will also explain their options and help them in choosing one or none. It depends on each customer and what his or her needs are. Let us review our policies for financing options. Financing Options Through various banking institutions, our company is qualified to grant customers with Auto Loans to meet their needs. We have interest rates ranging from 0% to 19.99%, depending on Approved Credit. Extreme Motors requires a down payment from customers who are not creditable of at least 25% of the purchase price. If the amount granted is not or less than 25%, then the interest rate on the loan increases. The opposite is also true if the quantity granted is or more than 25% of the purchase price. We have dedicated teams of long-term finance professionals who offer you a wide variety of plans to suit your financing needs. They work together with you to find the best terms and finance rates available. If the clients come in unsure about their credit situation, we will be able to grant them FREE, On-The-Spot Credit Checks on all three major credit organizations. With many years of credit experience and a strong desire to give each and every customer the best terms available for purchasing and financing a vehicle,
- 8. 8 Extreme Motors will get them approved. 0% finance Best for People who can pay a large deposit. Typical cost None. How it works The customer can pay a deposit – 35 to 40% of the car's price isn't unusual – and the rest of the money in interest-free monthly installments. Drawbacks Loan terms can be shorter than other forms of finance, so monthly payments may be higher. They're also unlikely to get a discount on a 0% deal, and this kind of car finance isn't available on all cars. Leasing Best for People who want a new car regularly without the hassle of owning it. Typical cost Monthly payments are normally between $100 and $400 a month. How it works The customer can choose their vehicle and how long they want it for, and state their annual mileage. These three factors determine their monthly payments. With some schemes, they can opt for the payments to include maintenance. Drawbacks The customer will normally pay a few months' rental in advance. And they have to take out comprehensive insurance to cover damage – which is costly for expensive cars. Personal contract plan Best for People who want to keep repayments low and like a new car every two to four years. Typical cost Between 7% and 14% APR.
- 9. 9 How it works The customer puts down a deposit, pays monthly installments as they go along, and leaves a lump sum to pay off at the end of the contract. The amount the customer defers, which is set by the finance company, is called the minimum guaranteed future value. The lender guarantees that the car will be worth that amount at the end of the contract. When the contract ends, the customer has three options: • Pay the deferred sum and keep the car • Sell the car privately to fund the final payment • Hand the car back to the dealer If the car is worth more than predicted, the customer can use the difference as a deposit on a new car. Extreme Motors Canada offers a higher level of consumer protection than an unsecured personal loan. Drawbacks Extreme Motors Canada usually work out more expensive overall than hire purchase, especially if the customer decides to pay the final deferred sum to buy the car. And there are a couple of complications. First, the customer has to estimate the mileage – and be charged (say, 20p/km) for each kilometer above the estimate. Second, if the customer returns the car, it has to be in good condition – any damage will be charged. Under OTHERS are: Interest Rate, term of loan, down payment, rebates, and monthly payments: The client can negotiate the interest rate depending on their down payment. The customer must assure their transaction so that every element of the contract is correct and read for verification. Extended Warranties: Our business manager will always be there to serve our customers. However, if a car has extended warranty without having to purchase an extra policy, we will never insist on the customer purchasing it. We want the best for our customers; we want them to fell comfortable depending on us, letting their family rely on us for the transportation needs. Therefore, depending on each transaction, we will act according to strong work ethics and complete reliance on our social responsibility duties. Rust Protection, undercoating, and fabric and paint protection: The rust protection and the undercoating are usually done at the manufacturer. Therefore, it does not need to be done again, especially not by us. If the customer wishes to do it, they can easily be referred to the nearest mechanic; we are strictly sales of vehicles. All cars, or most, will have Rust Perforation Warranties, and this will be expressed to each client. If the customer
- 10. 10 wants to negotiate based on fabric or paint conditions, that is possible and we will make sure to meet their needs before ours, as to increase our profit margin every year more and more. Alarm systems and window etching: We will offer alarm system, they will competitive in pricing with our competitors. We will offer them based on its lack on the car being purchased, if it is already installed, we will not offer it. Our rates will be better than other companies as we will MATCH and give a 10% discount if need be in order to gain our customer base. Insurance: We do not offer insurance options. We will not offer or point to any insurance companies in the area. That is out of our jurisdiction.