Electronics Repair Business Plan

Abbey Electronic Services is a full-service electronic repair business opening in the revitalized Cherry Grove section of Montclair. The opening of the business is in conjunction with the completion of the Cherry Grove Shopping Center. Two of the center’s tenants, Harry’s Electronics and Olson’s Appliance Superstore, have signed third-party repair agreements with Abbey Electronic Services. Abbey Electronic Services is under contract to provide authorized warranty service for selected manufacturers.

In addition to business clients, Abbey’s will be open to the general public for repairs of consumer electronics either with or without warranty service. The residential community in Cherry Grove has experienced explosive growth and will serve as a strong customer base for Abbey Electronic Services.

Abbey’s owner, Richard Abbey, has 25 years of experience in the consumer electronics repair field. His reputation for excellence is well established and he is a highly-respected electronics instructor at the community college’s Electronics Engineering Technology program.

Abbey Electronic Services will have a staff of two electronics technicians in addition to Richard.

1.1 Mission

Abbey Electronic Services aims to offer high-quality electrical repair services with a focus on convenience and rapid service. Additionally, Abbey Electronic Services is technologically savvy with computerized monitoring of all parts inventory, to ensure that critical parts are always in stock, while keeping a balanced level of inventory to maximize inventory turnover. Finally, Abbey Electronic Services has strong relationships with the regional vendors who are capable of shipping major parts rapidly (on an overnight timeline in most cases).

Abbey Electronic Services is about building a strong professional relationship with all our customers that is grounded in honesty, fairness and integrity of service.

1.2 Keys to Success

Abbey Electronic Services’ keys to success include:

• Exceptional, expedient, and convenient electrical repair services.
• Building a strong professional relationship with the customer base.
• Rapid order and delivery of electrical part items.

Abbey Electronic Services is a start-up business managed by Richard Abbey. The economic growth of Cherry Grove in the last several years has resulted in a revitalized community with numerous new services and businesses. As a result, the area’s need for reliable and convenient electrical repair services has substantially risen as well. Abbey Electronic Services will position itself to capitalize on the growing need of the middle- and upper-class market for quality electrical repair service in the metropolitan area. The company will be privately owned by Richard Abbey, with most of the additional funding coming from a ten year SBA loan.

2.1 Start-up Summary

Richard Abbey will invest personal funds. The remainder of the required financing will come from a ten-year Small Business Administration (SBA) loan. The following table and chart show projected initial start-up costs Abbey Electronic Services.

2.2 Company Ownership

Abbey Electronic Services is privately owned by Richard Abbey.

Abbey Electronic Services are the following:

Service Contracts/Factory Warranty Repairs/Out of Warranty Repairs

• Washer/Dryer: General Electric, Kenmore, Maytag, Whirlpool, Amana and Frigidaire.
• Refrigerators: Frigidaire, General Electric, Kenmore, and Whirlpool.
• Cooking Ranges: General Electric, Whirlpool, Frigidaire, and Maytag. 
• Televisions: Philips Magnavox, RCA, Sony, and Zenith.
• DVD Players/VCRs: Panasonic, RCA, Sony, and Toshiba.
• Camcorders: Sony, JVC, Panasonic, RCA, and Sharp.

Abbey Electronic Services’ focus is on meeting the demand of the local resident customer base, as well as service agreements with Harry’s Electronics and Olson’s Appliance Superstore. Abbey Electronic Services’ relationships with these two large tenants of the Cherry Grove Shopping Center will serve as a solid foundation for the growth of the business. The company estimates that about 60% of revenues will come from the these two business customers. It is estimated that these contracts will grow yearly at 15%. The remaining 40% will come from local walk-in traffic from local residents. We estimate that this segment of potential customers will grow by 15% annually. Over time, serving the local customer base will become the core of the business.

4.1 Market Segmentation

The table and chart below further estimates the total market potential of services rendered by Abbey Electronic Services in the metropolitan area.

4.2 Target Market Segment Strategy

The market of electronic repair services is very competitive. The majority of the successful electronic repair shops have strong local customer support from years of faithful service. The niche where Abbey Electronic Services positions itself represents one convenient location for business clients and local residents. The Cherry Grove area of Montclair has been booming with middle- and upper-class residential housing. Currently, there is no established electronic repair service in the area. Abbey Electronic Services success in obtaining service contracts from the two major electronic product tenants of the Cherry Grove Shopping Center immediately establishes the business as the local focus for electronic repairs.

Abbey Electronic Services will succeed by offering its customers high-quality and convenient electronic repair service. Each satisfied customer is a potential of five new referrals so the quality of our workmanship is key to growing the business.

5.1 Competitive Edge

The competitive edge of Abbey Electronic Services is its people. Location and marketing will get new customers in the door but without quality people, you won’t keep them. Richard Abbey knows this from working 25 years in the electronic repair business. In 1976, Richard started with J. Arnold and Sons, the largest electronic repair business in Montclair. He worked there for 10 years before taking over management of Lucas Electronic Repair. The business was struggling. In two years, Richard turned the business around. Lucas Electronic Repairs business increased by 150% during that period. The staff grew from four to eight. Richard remained as for another five years before returning to J. Arnold and Sons. As Manager of J. Arnold and Sons for the past eight years, the company has grown dramatically, from a staff of 10 to its current staff of 18.

Richard is also a successful teacher in the Montclair Community College Electronics Engineering Technology program. His approach in the classroom is the same approach with customers; straight forward and honest. He has been selected by the students as the best instructor five years in a row.

This is the competitive advantage Richard brings to everything he does whether in a business or a classroom.

5.2 Sales Forecast

The following table and charts show the projected sales forecast for Abbey Electronic Services.

Sales Forecast
	Year 1	Year 2	Year 3
Sales
Service Contracts	$137,000	$142,000	$155,000
Walk-In Customers	$98,000	$110,000	$120,000
Total Sales	$235,000	$252,000	$275,000
Direct Cost of Sales	Year 1	Year 2	Year 3
Service Contracts	$5,550	$6,200	$6,800
Walk-In Customers	$4,700	$5,500	$6,000
Subtotal Direct Cost of Sales	$10,250	$11,700	$12,800

Richard has hired electronic repair technicians, John Williamson and Jim Logan, to join Abbey Electronic Services.

John Williamson has 15 years of experience in the electronic repair field. John worked with Gilmore Electronic Repair for four years before joining Lucas Electronic Repairs. Since that time, John has moved into a senior position at Lucas. 

Jim Logan joins Abbey Electronic Services after working in the electronic repair field for 10 years in the Richmond Metro area. Jim has worked for both Premiere Electronic Services and Billings Electronics, which are the dominant repair businesses in Richmond.

Both of these technicians have a history of exceptional workmanship and great customer relations.

6.1 Personnel Plan

The following is the staff’s repair certification.

Richard is a certified to perform repairs on the following products.

• Washer/Dryer: General Electric, Kenmore, and Maytag.
• Refrigerators: Frigidaire and General Electric.
• Cooking Ranges: General Electric and Whirlpool.
• Televisions: Philips Magnavox and RCA.

John Williamson is a certified to perform repairs on the following products.

• Washer/Dryer: General Electric, Whirlpool, Amana, and Frigidaire.
• Refrigerators: Kenmore and Whirlpool.
• Cooking Ranges: Frigidaire and Maytag.
• Televisions: RCA, Sony, and Zenith.

Jim Logan is a certified to perform repairs on the following products.

• Televisions: Philips Magnavox, RCA, Sony, and Zenith.
• DVD Players/VCRs: Panasonic, RCA, Sony, and Toshiba.
• Camcorders: Sony, JVC, Panasonic, RCA, and Sharp.

The following is the financial plan for Abbey Electronic Services.

7.1 Break-even Analysis

The monthly break-even point is presented in the table and chart below.

7.2 Projected Profit and Loss

The following table and chart show projected profit and loss for three years.

7.3 Projected Cash Flow

The table and chart show the projected cash flow for three years.

7.4 Projected Balance Sheet

The table shows the projected balance sheet for three years.

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7622, Radio and Television Repair, are shown for comparison.