Colin’s Car Detailing - the Protagonist

Colin’s Car Detailing

The Protagonist

Colin Ford, the owner of Colin’s Car Detailing (CCD), a man with high entrepreneurial spirit. He started this business 4 years back when he was just 14 years old that is too without any prior work experience. The success of business reflects his good business acumen, and flair for self-owned work. He has just finished his schooling and set to join university of British Columbia in Vancouver for his further studies in the coming September.

  The Company

• Founded in 2009 in West Vancouver, British Columbia.
• Initially, CCD provided services such as vehicle washing, vacuuming, and waxing.
• Flyers were used as the advertisement tools.
• Competitive pricing, 85% less than the other players’ charges. ($ 15 only for a service which is provided by others in $ 100)
• Due to lack of experience it struggled in attracting the customer initially.
• After several months later the charges were increased to a more reasonable level, and with this change greater proportion of customers elected to have their vehicle detailed instead of only washed and vacuumed.
• The company grew consistently for the last three years.
• Use of one time promotional activities such as advertisement in his high school yearbook, sponsoring local charity car washes, and donating CCD gift certificates to silent auctions that supported local causes. But the most effective form of promotion was word of mouth.
• By the end of fourth year, CCD had a client list of 150 customers and had earned annual profit of approx. $ 5, 000 (in addition to the $15 per hour Ford paid himself to perform vehicle detailing services)

SWOT Analysis of Colin’s Car Detailing.

Key Issues:

1. Objectives of Colin Ford

• Going to college is definite
• Need to enhance earnings to pay the fee for the college.
•  If I move ahead with the previous model of Study+business, would it be feasible at the level of college studies?
• I want to grow my business through partnership, service addition, or by changing the model (going mobile). But I need to save money for the fees and other expenses at the college. So, any change demanding huge investment would not be serving the purpose.
• By looking at Mr. Ford’s personality (his high entrepreneurial spirit) it is a distant possibility for him to do job under someone else’s supervision.
• If I can’t use the present model of study + business at college level, I need to maximize my profits in the next three months.

1. Industry Analysis

• The Canadian car-detailing industry was currently influenced most profoundly by economic trends. Since the Canada’s economic growth was improving, demand for car detailing was likely to strengthen in the coming months.
• The industry experiences disproportionately high demand in summer months and disproportionately low demand in winter months. As summer is approaching, selling or shutting the business at the peak season seems a bit unreasonable.  
• The seasonal business of the industry seems favourable to Mr. Ford. As, in summers he is free, and even he can employ his friends to meet the enhanced demand.

1. Market Analysis

• There are basically two types of consumers: affluent owners of expensive vehicles, Vehicle owners who prepare their vehicle for resale.
• CCD with its low pricing has attracted a new customer segment which was hesitant earlier due to high cost of detailing services but now converted into loyal customer base that are more likely to visit CCD twice or thrice a year.
• With a loyal customer base now CCD is more open to more aggressive marketing to the other two segments of customers.
• With the growth in economy the growth in the number of customers is evident.
• North Vancouver with a population of approx. 130,000 seems to be a good potential market but Rod’s has already moved to the place.

1. Competitors’ Analysis

• Three major competitors in the area: Rod’s Exotic Auto Spa, Blitz Auto Spa, and Park Royal Hand Wash
• Rod’s is 14 years’ old company, reputed for excellent quality detailing services. Pick and drop facility for the customers, targets premium segment of customers, quite costly ($ 350 to $450). It also offers additional services such as, dent removal, engine shampoo, paint touch-ups, window tinting, wheel repair, and cut polishing. Its recent shift to North Vancouver opens an opportunity for CCD to attract its customers in West Vancouver. But as there is significant difference in the services offered by Rod’s and CCD, shifting of customers seems a bit difficult.
• Blitz Auto Spa, working for more than a decade in North Vancouver, new to West Vancouver. Provides high quality detailing services. Also provides additional services. Price range is $ 295 to $ 395. Uses Coupon discounts for regular customers.
• Park Royal Hand Wash: not completely in detailing business. Offers good quality exterior and interior cleaning. Quick and convenient services for the customers to maintain their vehicle’s appearance. Priced at only $ 29.95. Time saving services (only 20 to 30 minute).
• There is no such major threat from the competitors in present situation. Every player is playing on their specific strengths. But for attracting new customers quick and cost effective service would be more appealing.

1. Environmental issues

• Canadians’ growing environmental awareness affected the car-detailing industry. Pressure for the use of environment friendly product is increasing. CCD is already using environment friendly products. The pressure on the other players using industry grade products will be more, and if they switch to customer grade product their cost would be increased.
• The legal action by municipalities for saving water and banning home car washing indicates growth in the number of customers in near future.

1. Financials

• The current profit margin is 35%.
• The annual profit for the last year was $ 5,000 (in addition to the $ 15 per hour Ford paid himself to perform vehicle detailing services).
• Mr. Ford has personal savings of $ 6,000. He may also get $ 4,000 from his parents.
• Expenses of college fees and other expenditure are not provided but it may be considerably high.
• In case of enhancing additional services such as cut polishing, an annual investment of $ 1, 750 would be required. It would also increase the prices for the customers to 25% more than a regular detailing service.
• For going mobile, an investment of $ 10,000 would be required which seems a considerably high investment in the situation.
• Partnership with golf course requires an investment of $ 150. 10% of the sale price of each detailing appointment would be given to golf course management.

Challenges:

• I have to join the college what should I do with a well-established business.
• If I decide to go with study and business both, would I be able to manage it?
• Do I need a change in operations of the company
• If I continue, I need to attract customers
• If I decide to shut the business, what is my plan till September?
• Should I sell the business? (Does not seem convincing by looking at the high entrepreneurial spirit of Mr. Ford. Moreover, absence of suitable buyer is also a concern)
• If I scale up the services, where to find the adept staff?
• In operations, minimizing the time taken in the service. Moreover, the customer relationship management needs improvement.
• Lack of timeslots may result in the permanent loss of customers.