auto car wash

Institute of Management, Nirma University of 20

Project Management

Final Project Report

Automatic Car Wash

September 9, 2013

Submitted To:-

Prof. H K Srivastava

Submitted by:-

Ameya Pai Angle

121105

MBA FT 2012-14


Project Title: Automatic Car Wash

NAME OF THE CAR WASH SERVICE STATION

UPA Auto Services

PROJECT OBJECTIVE:

To set up a station with automatic car wash system in Ahmedabad

VISION

To be the best and most preferred car wash service provider in Ahmedabad

MISSION

To provide high quality service at affordable price

To establish a close relationship with customers by providing satisfactory services and gaining

their loyalty


WORK BREAKDOWN STRUCTURE

Finance

1. Capital Raising

2. Balance sheet

3. Forecasting

Operations

1. Admin office

(i) Coffee machine

(ii) ATM

(iii)Seating Arrangement

2. Equipments/Machinery

3. Material

4. Replenishment

5. Parking

Construction

1. Soak pit

2. Office block

3. Land

4. Main Machinery

5. Amenities

Human Resource

Licenses and Permissions

Marketing

1. Marketing strategy

2. Sales Strategy

Services & Rates


OPERATIONS

1. A quotation from KKE Car Wash Systems has been analyzed and it is decided to order

following package from them :

KKE 300 – 4 KKE100985 : KKE 300 : Basic Car Wash System 28,09,100.00

Polisher KKE100977 : Triple Foam Wax System

KKE100989 : Entry Point Under Chassis Wash

KKE100976 : Car Wash Standalone Exit Side

Blowers 30 hp

KKE101212 : Upgrade to SOFT FOAM brushes

KKE100974 : Backlit Wash Cycle Display

KKE102414 : Car Wash Lights

KKE102415 : Car Wash High Pressure Wheel

Blasters

With Water Recycling System : The Smarter Way 30,31,000.00

Apart from this , Recommended spare kits (Driver motor, brush motor, emergency costs,

emergency switches) cost Rs 1,00,000 .

Monthly Maintenance charges are only Rs.6000 and software charges are Rs35,000.

2. Coffee Vending Machine will be procured from Snapdeal.com. The cost of machine is

around Rs.18000. It needs to have a power connection, 5litre of water can and Premix of tea

and coffee.

Coffee (Nescafe) premix comes in 16 x 1kg basket. 1kg costs 175Rs. Yield is 80cups per

kg of pack. Cost of coffee premix is Rs2800 per 1280 cups on an average.

Tea (Nestea) premix comes in 16 x 1kg basket. 1kg costs Rs.145. Yield is 80cups per kg

pack. Cost of Tea premix is Rs2320 per 1280 cups on an average.

Apart from this Ice Tea packet costs Rs. 110 for 500gm pack. Water can from bisleri

costs Rs.80 for 20ltrs of water.

3. ATM machine will be setup in the premises. Maximum area that ATM machine can take is 4

m2

. Bank pays you rent of Rs.5000 to Rs.10,000 depending on the area in which it is to be

setup. The area is taken on lease. We will assume that bank pays a rent of Rs.8000 on an

average.


4. Water is the most necessary resource needed for this business. On an average a car needs 115

to 170ltrs of water. Our water tank is going to be 10,000 liters. On an average, sintex tank

with 3 layers cost Rs. 7 per liter. Therefore cost of buying a 10,000ltr tank will cost roughly

Rs. 70,000.

5. Washing soap: We will get 3D Pink Car Washing soap. 5 gallon drum costs around 45$. So it

would cost around Rs.2700 per drum. 5 gallon is equivalent to 18.92 liters. 30ml of soap is

needed for 1 gallon of water. On an average a car consumes 40gallon (Avg 150 ltrs) of water.

Hence a car will consume around 1 liter of soap. Hence 1 drum can serve around 19 cars.

Hence Rs. 142 is consumed by a car in the form of soap. Soaps would be brought in bulk.

Considering 3 days shipping and delivery time. We would order for next lot when there

would be 15 drums left in the stock.

6. As seen in the video of KKE car wash system on YouTube, it takes 7 minutes on an average

to wash a cry and dry it. (External wash). Internal cleaning would take longer time. I.e.

atleast 15 to 20 minutes. But internal washing or cleaning would not be done in bay area.

7. Total area required is assumed to be 120 sq mtr. Out of this 45 sq mtr is required for the

washing bay. 16 sq mtr is required for the admin block, which would include Toilet,

changing room, Managers desk, Sofa set, Television, Coffee vending machine. 4 sq mtr is

reserved for ATM machine. Rest 55sq mtr has been kept for parking and interior cleaning.

8. Flat Screen 21 inch LG Tv would cost around Rs.10000. And cable connection would cost

maximum Rs. 250 per month.

9. For Sofa set I have 2 options

1. Buy new sofa set which is available for approx Rs. 30,000 ( including transport )

2. Second hand teak wood sofa set for Rs. 6000 which looks good in condition as per

the photo shown on online website

10. A HP DJ 1050 printer would be brought for Rs.4000. It is copier cum scanner.

11. Office Almirah for Rs.19,500 .

12. Philips mini vaccum cleaner for Rs.2500

13. A second hand office table is currently available in Ahmedabad for Rs.3000

New table would cost around Rs.8,000 minimum. Two tables would be brought

14. Two Desktop PC’s would be brought. Average cost of system with decent configuration of

Windows 7, 320Gb and 4gb RAM would be roughly Rs.13000 each.


CONSTRUCTION

1. Land Selection:

Land selection has to be done on some factors. First being “shape and size”.

It should be rectangular area and there should be parking place too. Other features that

should be seen before land selection are that the it should setup at busy stress, Corner

plot, Near Traffic Signal, Near Shopping Mall, Cinema Theatre and public place where

there decent crowd. This is ideal location. But in ahmedabad, these would be residential

areas hence we need to setup in a location away from such place.

Currently the location that I have thought are Thaltej or Gota, on SG Highway. The

reason being is, it is easy to find commercial plot on lease in these areas. Also travelers

on SG Highway would easily locate the location.

The land would be taken on lease for at least 15 years. The rental cost of commercial land

in Thaltej is Rs.7 per sq ft and in Gota it is Rs. 3 per sq ft. We need a land of 120 sq mtr.

So rental cost approx would be Rs.9000 in Thaltej and Rs.4000 in Gota. We will choose

site at Gota.

2. Machinery Requirements:

Electric Supply: 3 phase 440V AC 50Hz (Mentioned in the brochure)

Bay Area :

o Length: 9.75mts

o Width: 4.5mts

o Height: 3.5mts

Approximate 45 sq mt area has been reserved for this.

3. Restroom

Rough cost of restroom construction is Rs.50,000. Western style commode would be

built and a wash basin. Toilet soap and a towel would be kept.

4. Cost of constructing Soak pit and oil and grease trap, water connection is Rs. 8lakh

including civil work beneath the bay area.

5. Construction of Office block is around Rs.12,000.

6. 55 sq mt has been kept for parking and interior cleaning.

(Civil work construction rates are approximate as per conversation with a veteran who

has been running a traditional car wash business )


HUMAN RESOURCE

1. Staff Requirement:

1 Technician to operate the system

3 Laborers to park cars, wash interior and other odd jobs

1 Manager to manage the entire station

2. According to minimum wage Act , with effect from 1st April 2013, minimum wage for

Skilled, Semi-skilled and un-skilled laborers are around Rs.205.

3. Salary for Technician would be Rs. 12,000 per month (Gross )

Responsibilities:

Operate the car wash system and ensure its smooth functioning

Handle all the software and hardware related queries of the Car wash system

Ensure the maintenance and repairs of the car wash system and other equipments

including tool kits.

Documentation of the records

4. Salary for Manager would be Rs. 9,000 per month (Gross)

Responsibilities:

Billing and maintaining record of the transactions

Replenishment of the inventory and procurement of any material required.

Payment of bills

Salary distribution for other employees.

Handle all bank and finance related queries

Ensure cleanliness of the premises

5. Salary for Laborers would be Rs. 6500 (Net)

Responsibilities:


Cleaning interiors, cleaning premises, parking vehicles, moving vehicle on and off the

bay, disposing garbage in the bins and dropping them to the agencies which accept the

automobile and garage wastes such a cotton waste.

6. Muster roll, safety kit or first aid box will be kept. Insurance from ESI would be given to all

employees. Provident Fund will not be given unless the strength of the employees is more than

10.

Agencies accept the waste and give receipts in return. Our business would maintain those receipts

as file records. These wastes are then dropped at waste treatment plants such as Taloja near

Panvel in Maharashtra.

LICENSES & PERMISSION

The licenses and permissions that are required are

Registration as per shop and establishment act

NOC from Municipality

To obtain NOC, money needs to be pumped under the table and around Rs.35,000 is required

including official amount.

NOC from Pollution control board

To obtain this NOC, again weights have to be kept on paper in form of cash. Around Rs.25,000 is

needed for this work.

Another Rs.20,000 ( unofficially ) is needed to obtain water and electricity connection.

Health Department personnel would come to inspect the premises as to check safety kits,

restrooms, drinking water etc. This process would cost Rs. 5000 to make them happy in form of

food, beverages and miscellaneous expense.

Also if the location is just besides highway, we need to keep road setback distance as prescribed

by the government.

(The information has been obtained from a conversation with a veteran who has been

running a traditional car wash business)


SERVICES & RATES

Services that would be provided would be

1. Exterior Cleaning

2. Interior Cleaning

3. Combo offer for both Exterior and interior cleaning

Currently rough figure for exterior car wash would be Rs. 400

Rough figure for interior cleaning would be Rs.300

And combo offer would be for Rs.650

MARKETING

Marketing budget would be Rs.25000 initially for first month. From next month onwards

marketing budget would be Rs. 15,000 for every quarter.

The focus would be on the time required to perform one wash. As traditional car washers take at

least 20 minutes to wash the car, people have to wait in line for a long time. With automatic car

wash it takes hardly 7 to 8 minutes for a complete exterior wash. Hence an article would be

posted in various newspapers regarding our new service.

I would issue discount coupons of 10% in the first month and would insert them in newspapers

in the locality. Apart from this, such coupons would be available at www.snapdeal.com also and

maximum discount of 20% would be given. Information pamphlets would be distributed at

traffic signals.

Other marketing initiatives would be done online. Social media marketing would be done

through facebook. Few videos of our operations would be uploaded on youtube. Corporate

discount of 10% to 15% would also be offered.

FUTURE PLANS

We would start bike washing services soon.

There would be service to pick and drop facility but for extra

charges.

Would be buying a generator too.

http://www.snapdeal.com/


FINANCE

A current account would be opened in corporation bank with CC

(cash credit) limit of 40 lakhs. The same account would be used for all other transactions

related to my business.

I am assuming that my father will be giving me Rs.3500000 in

the form of cash generated from the piece of land which was sold last year.

Assuming that there would be around 40 cars per day, my

business runs for 26 days in a month.

Balance Sheets:

Cash 200000 Capital 3500000

Retained Earning 0

Bank Balance 603000

Loan

Plant Property Equipment 5297000 Long Term Debt 2700000

Machine 3030000

Equipment 100000

Software 35000

Water Tank 70000

Building 1200000

Soak Pit 800000

Television 10000

Furniture 15000

Printer 4000

Almira 20000

Desktop 13000

Total 5297000

Depreciation Accumulated 0

Liscence 100000 100000

Amortization 0

6200000 6200000Total Assets

Balance Sheet Beginning Year 1

Asset Liability

Total Liabilities



Retained Earning 189594.4

Bank Balance 1235561

Loan


Machine 3030000

Equipment 100000

Software 35000

Water Tank 70000

Building 1200000

Soak Pit 800000

Television 10000

Furniture 15000

Printer 4000

Almira 20000

Desktop 13000

Total 5297000

Depreciation Accumulated434633.3

Liscence 100000 91666.67

Amortization 8333.333

6389594 6389594

Balance Sheet Ending 1st Year

Asset Liability

Total LiabilitiesTotal Assets





Loan


Machine 3030000

Equipment 100000

Software 35000

Water Tank 70000

Building 1200000

Soak Pit 800000

Television 10000

Furniture 15000

Printer 4000

Almira 20000

Desktop 13000

Total 5297000


Liscence 100000 91666.67


6453631 6453631

Balance Sheet Ending 2nd Year

Asset Liability

Total Assets Total Liabilities





Loan


Machine 3030000

Equipment 100000

Software 35000

Water Tank 70000

Building 1200000

Soak Pit 800000

Television 10000

Furniture 15000

Printer 4000

Almira 20000

Desktop 13000

Total 5297000


Liscence 100000 91666.67


6524072 6524072

Balance Sheet Ending 3rd Year

Asset Liability

Total Assets Total Liabilities


Income Statements:

Revenue from Operations 5834400

Operating Expense

Total Soap Coast 4433684

Machine Maintanence 72000

Salary 65500

Electricity 240000

Lease 48000

Cofee /Tea 30400

Miscellanious 30000

Total Operating Expense 4919584

Operating Profit 914815.8

Income From Other Source

ATM 96000

Non Operating Income 96000

EBITDA 1010816

Depreciation 434633.3


EBIT 567849.1

Interest 297000

EBT 270849.1

Tax 81254.74

PAT 189594.4

Year End 1st Year



Operating Expense

Total Soap Coast 4877052.632


Salary 72050

Electricity 264000

Lease 52800

Cofee /Tea 33440

Miscellanious 33000

Total Operating Expense 5411542.632



ATM 96000


EBITDA 1102297.368



EBIT 659330.7018

Interest 297000

EBT 362330.7018

Tax 108699.2105

PAT 253631.4912

Year End 2nd Year



Operating Expense

Total Soap Coast 5364757.895


Salary 79255

Electricity 290400

Lease 58080

Cofee /Tea 36784

Miscellanious 36300

Total Operating Expense 5952696.895



ATM 96000


EBITDA 1202927.105



EBIT 759960.4386

Interest 297000

EBT 462960.4386

Tax 138888.1316

PAT 324072.307

Year End 3rd Year


ACTIVITY DIAGRAM


RISK MANAGEMENT

Owner of the land might tell me to vacate the land. In such cases, I would try to make a

strong agreement in the beginning itself. Notice period would be little longer. Apart from

this, I would try to wash owner’s car for free as a small gesture of goodwill. A good

relationship would be maintained from the beginning itself.

There might be competition arising in future. I will try to mitigate it with strong

marketing and trying to attract customers with various new offers.

Inspection authorities would be tackled from the beginning itself through some unethical

ways which is not supposed to be done actually.

Soak pit and water treatment would be given utmost important. Soak pit would be

cleaned once in 6 months and water would not be released on the streets. Utmost care

would be taken and healthy relationship would be maintained with the neighbors.

EXIT POLICY

If I am trying to exit my business, I would plan it well in advance. First I would try to reduce my

CC limit from 40 lakhs to 25 lakhs to 15 lakhs and then to Nil in the period of one year. Than

would sell of the machinery or auction it. Would try to sell the business to someone who is not

from this state. Would ensure all the paperwork is done properly and then exit.


REFERENCES

For land rates :

http://www.magicbricks.com/property-for-rent/Commercial-Land-real-estate-Ahmedabad

For Coffee vending Machine

http://www.snapdeal.com/product/nescafe-coffee-vending-machine-spectra/612445

For Coffee, Nestea and Ice tea premix

http://hospitality.financialexpress.com/20040712/equipmart03.shtml

http://bigbasket.com/pd/182914/nestea-iced-tea-premix-lemon-500-gm-pouch/

Water Used

http://www.scientificamerican.com/article.cfm?id=top-10-water-wasters

Tank

http://in.answers.yahoo.com/question/index?qid=20110523005228AAkucWZ

KKE Video

https://www.youtube.com/watch?v=7IEQQz9FpDA

TV

http://electronics.pricedekho.com/tv/lg/21fu3av-21-inch-flat-tv-price-pnYYj.html

Sofa sets

http://www.fabfurnish.com/Fab-Home-Gardenia-Sofa-Set-%28Double-Seater-and-Two-Single-

Seater-Sofa-With-Coffee-Table%29-13471.html

http://www.ebay.in/itm/Teak-Wood-Sofa-Set-

/261265753618?pt=IN_Furniture&hash=item3cd4a70612

http://www.magicbricks.com/property-for-rent/Commercial-Land-real-estate-Ahmedabad

http://www.snapdeal.com/product/nescafe-coffee-vending-machine-spectra/612445

http://hospitality.financialexpress.com/20040712/equipmart03.shtml

http://bigbasket.com/pd/182914/nestea-iced-tea-premix-lemon-500-gm-pouch/

http://www.scientificamerican.com/article.cfm?id=top-10-water-wasters

http://in.answers.yahoo.com/question/index?qid=20110523005228AAkucWZ

https://www.youtube.com/watch?v=7IEQQz9FpDA

http://electronics.pricedekho.com/tv/lg/21fu3av-21-inch-flat-tv-price-pnYYj.html

http://www.fabfurnish.com/Fab-Home-Gardenia-Sofa-Set-%28Double-Seater-and-Two-Single-Seater-Sofa-With-Coffee-Table%29-13471.html

http://www.fabfurnish.com/Fab-Home-Gardenia-Sofa-Set-%28Double-Seater-and-Two-Single-Seater-Sofa-With-Coffee-Table%29-13471.html

http://www.ebay.in/itm/Teak-Wood-Sofa-Set-/261265753618?pt=IN_Furniture&hash=item3cd4a70612

http://www.ebay.in/itm/Teak-Wood-Sofa-Set-/261265753618?pt=IN_Furniture&hash=item3cd4a70612


Printer

http://shopping.rediff.com/product/hp-all-in-1-printer-scanner-copier-dj-1050/10522345

Table

http://noida.quikr.com/Steel-almirah-locker-Manufacturer-In-Noida-New-Delhi-Gurgoan-NCR-

W0QQAdIdZ125934503

Philips vacuum cleaner

http://www.ebay.in/itm/Philips-Mini-Vacuum-Cleaner-Fc6048-

/380555454719?pt=IN_Home_Appliances&hash=item589adf68ff

Office Table

http://ahmedabad.olx.in/office-table-iid-537594282

Minimum wage rate

http://www.paycheck.in/main/salary/minimumwages/gujarat

http://shopping.rediff.com/product/hp-all-in-1-printer-scanner-copier-dj-1050/10522345

http://noida.quikr.com/Steel-almirah-locker-Manufacturer-In-Noida-New-Delhi-Gurgoan-NCR-W0QQAdIdZ125934503

http://noida.quikr.com/Steel-almirah-locker-Manufacturer-In-Noida-New-Delhi-Gurgoan-NCR-W0QQAdIdZ125934503

http://www.ebay.in/itm/Philips-Mini-Vacuum-Cleaner-Fc6048-/380555454719?pt=IN_Home_Appliances&hash=item589adf68ff

http://www.ebay.in/itm/Philips-Mini-Vacuum-Cleaner-Fc6048-/380555454719?pt=IN_Home_Appliances&hash=item589adf68ff

http://ahmedabad.olx.in/office-table-iid-537594282

http://www.paycheck.in/main/salary/minimumwages/gujarat

auto car wash

Documents

automatic car wash system

basic car wash system

kke car wash systems

rent of rs

car wash lights kke102415

car wash standalone

layers cost rs

cost of machine