A business plan should lay out everything you and any stakeholders (other owners, investors etc.) need to know about the business. For most people, a business plan is designed to convince banks and investors that your business is viable and worthy of cash investment.

Because so much rides on a business plan, it’s important to include all the important information that makes a case for your business but also includes contingencies and strategies to show you can handle any scenario.

It’s always advisable to have a professional look over your plan to make sure it’s ready to go to potential investors but before you get it checked, here are some things you need to consider when writing an automotive business plan.

Equipment needed

The equipment you need to start your business should be mentioned in your cash flow forecast and start up costs but you also need to give justification in the body of your plan.

You need to show investors why the spend on that piece of equipment is necessary, especially if you’re setting up a technical business. Investors might not understand your need for transmission jacks as well as a regular vehicle lift, for example, so it’s best to explain.

Depreciation of assets

Unfortunately, the company van you buy in year one isn’t going to be worth £30,000 year on year so you need to account for depreciation in any financials you offer up. You can either look at the rate of depreciation for the specific type of vehicle or you can use a standard rate. For example, if you expect your new van to last five years, it’ll depreciate by £6,000 per year.

Repairs

If you’re setting up an automotive business with a lot of equipment, you need to consider repair costs within your business plan and financials.

How much will spare parts for column lifts cost and how long will they last? What work is going to need to be done on your company vehicle? Will your premises need any upkeep?

Competitors

You might not think there are any competitors nearby but you need to consider the market as a whole, not just in relation to your specific business type.

Let’s say you’re the only company in the area that prepare classic race cars. That doesn’t mean you don’t have any competition. Are there classic car restorers nearby that have taken on this kind of work?

Think about where your target audience are currently having this kind of work done. Even if the businesses they go to are far away or not as niche as your business, they’re still competitors. Any investor will pick up on this and accuse you of not understanding the market.

However, if you can present a good case for why those customers will start coming to your business (more specialist, more experienced etc.) then you can show investors that the presence of the competitor is not a threat.

Positioning

Even if you have your pricing worked out along with a logo and the designs for a website, you still need to formally define your position within the market. This is another thing that sets you apart from competitors.

Ask yourself, are you budget or high end? Are you a generalist or specialist? What are your values? All of this will help you establish your brand and where you sit in the market.

Writing a business plan is time consuming but take your time over it and you’ll be rewarded with an overview of everything that needs to be known about your new business. Not only will this help banks and investors decide if the business is viable but it’ll give you a plan of action that will help you hit your goals.