Web Information

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1 Web Information General Information Chief Director Alex Young Director of Outreach Hasan Picket Director of Operations Alex Grupe Business Industry: Auto repair Services Our Mission: Sharing skills and expanding automotive knowledge. Business Summary AirMechanic is a mobile app that brings together the car owners and average joes with a knack for cars. Helping owners with minor vehicle maintenance, on their schedule, and without breaking the bank at a mechanic shop. Customer Problem Car care is expensive. A single trip to handle minor maintenance can really add up financially. According to the American Automobile Association the average person in the United States pays $ per year on automotive maintenance alone. But many of us have that friend or buddy that is handy with cars. That person we call on to help us with a little automaintenance here and there. However, not all of us are lucky enough to have that go to person to handle all their needs and handle them when we need them. Service Offered Our application offers a very unique and simple service. Similar to applications like Uber we do not provide direct services to consumers, instead we serve as a conduit between individuals who need auto repair and maintenance and individuals with vehicles in need of their services. Competitors Our competitors will be almost entirely competing auto service providers such as private repair shops and freelance mechanics. Our competitors are numerous but often stuck using costly facilities and consumers are required to make their schedules fit. Target Market Because of the ease of access to our mobile application, our market is potentially anyone with a smartphone. Our target base for users is car owners aged 45 to 54 years of age. This age group spends on average $338 annually, more than any other age group on automotive maintenance and repair. According to the United States Census Bureau, this population is roughly 45 million individuals. Sales Strategy We would start focusing our efforts toward this population in the South Atlantic area of the United States in the states like Delaware, Maryland, Virginia, Florida, and the District of Columbia as the US Census lists these as the states with the highest population of individuals aged 45 to 54. Business Model Our model is to recruit individuals with automotive service experience and knowledge to be clients of our services. These clients will then be available for app users to contact to attain services. Our app will automatically handle the transaction and take a percentage as a fee for our services. Strategic Advantages Our advantages over our competitors include: No overhead costs passed on to users Clients have full control over their sales Convenience for all parties Create competition in particular locations Shareable repair records with other clients

2 Pro-Forma Income Statement Like other cloud based mobile services like Uber, Lyft, and AirBnB. Our income comes solely from one kind of transaction, namely the fee we charge clients to use our product. This fee (20%) is charged on top of the cost the base transaction. Then sales tax and credit processing fees are added on top. Because of the innovative nature of our product, it is incredibly difficult to estimate the level of sales and income we would produce. It could potentially be very little or very high. This risk is at the heart of truly innovative ventures like these. In order to find an estimate, we took our closest similar innovative venture, Uber, and used 0.01% of their average number of daily trips to be conservative (DMR, 2014) which brought us to 1000 daily transactions. We then took that number and multiplied our average transaction of our clients ($300), which was in and of itself a rounded down industry average of auto repair transactions. Using the fee we charge (20%) we can determine the average amount we would take per transaction would be about $ Pro-Forma Income Statement Taking the fee we charge, the average transaction, and our estimates of the number of daily transactions. We can then give a very conservative estimate where our business can be, even if our success is only a fraction of Uber s. This is reflected in our Income Statement.

3 Startup Costs Starting up, the vast majority will be actually developing the application, a coexisting website, and getting the application published onto the apple app store. We used online estimating applications to estimate the cost of application development. In addition, we interviewed Dr. Stephen Gilbert, Assistant Professor in the Industrial and Manufacturing Systems Engineering department at Iowa State University. Doctor Gilbert suggested an even higher estimate of $80,000 (Gilbert, 2016). To air on the side of conservativeness we used the highest estimate of $80,000 for an application and website together (Otreva LLC., 2016; Imason Inc., 2016) as well as $99 for publishing (Apple Inc., 2016). Startup Expenses The cost to start our partnership was estimated to be $2,000 to write up our legal partnership agreement. This partnership agreement is very important when going into business with others (Spadaccini, 2015). Source: gravitatedsm.com As we are being very lean in our startup phase and out entire office will be utilizing open source and free digital software. When needed, we will utilize a collective workspace such as Gravitate in Des Moines (Gilbert, 2016) which operates as a sort of incubator for smaller organizations. The remainder of our startup costs will be comparably smaller; things like business cards, accounting software, and tax accounting (Stevens, 2000; AvizaGroup, 2008; Gilbert, 2016).

4 7 Break Even Because of our lean startup methodology and absence of real-estate or human capital outside ourselves, we have the potential for a very high contribution margin (91%). This means that for every dollar we make in sales, 91 cents goes to our fixed costs and bottom line profit. This high number is symptomatic of how many unknowns we are working with and are unable to account for. This number, of course, would drop as our needs would change farther along in our maturity. More realistically we would like to operate at or around a 60% margin. Based on our average transaction amount and average selling price per unit (which would be the same because of the nature of our service) the software determined that our break-even point would need to be 4 transactions a day or 1407 transactions annually. This will likely not be very feasible towards the beginning of our venture, but once we establish ourselves in the market four transactions a day will be very doable. Break Even Analysis

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