Important Notice and Basis of Preparation

Jump to section

• Overview & contents
• i. Important Notice and Basis of Preparation
• 1. Executive Summary
• 2. Market and Opportunity
• 3. How a Workshop Actually Makes Money
• 4. Accreditation and Compliance
• 5. SWOT and Competitive Position
• 6. Operations and the Bay Build
• 7. Route to Market
• 8. Management and Governance
• 9. Financial Plan
• 10. Break-Even and Debt Service
• 11. Investment Analysis
• 12. Sensitivity and Scenario Analysis
• 13. Risk Analysis
• 14. Implementation Roadmap
• 15. Key Performance Indicators
• 16. Key Assumptions
• 17. Conclusion and Recommendation
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Capital and Operating Schedules
• C. Appendix C: Funding and Debt Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

This business plan has been prepared for Torque Precision Auto (Pty) Ltd, a proposed independent multi-bay motor workshop in a South African metro, accredited through the Retail Motor Industry Organisation and equipped to service and repair vehicles that are still under manufacturer warranty.

Basis of the figures. The model is built from bays, clock hours, utilisation, efficiency against book time and effective labour rate, priced at stream level and costed against stream gross margins. The income statement, balance sheet and cash flow statement are fully articulated: the balance sheet is derived rather than plugged and balances to the rand in every year, and the closing cash position reconciles exactly to the cash flow statement.

Published benchmarks. The Competition Commission published the Guidelines for Competition in the South African Automotive Aftermarket in December 2020 and they took effect on 1 July 2021, releasing in-warranty servicing to independent providers across a national parc of roughly 12.7 million vehicles. Franchised dealership labour rates run from roughly R1 000 to R1 200 an hour and higher, while RMI-accredited independent workshops typically sit between R700 and R1 000. MIWA represents more than 2 500 accredited workshops. The average mechanic salary in South Africa runs around R306 000 a year, rising to roughly R352 000 for senior technicians. These are cited where used.

Taxation. South African corporate income tax is applied at 27 per cent, with assessed losses carried forward subject to the section 20 limitation capping the set-off at the higher of R1 million or 80 per cent of taxable income. The Year 1 and Year 2 losses shelter most of Years 3 and 4 and are exhausted during Year 5.

What the guidelines are. They are non-binding guidance used by the Competition Commission in interpreting the Competition Act as it applies to the aftermarket, and were described as such by industry counsel at the time of implementation. In practice they have reshaped consumer behaviour and manufacturer conduct, and complaints can be laid with the Commission. But a business plan should not treat them as an entitlement enforceable by the workshop. The commercial protection is capability and documentation, not the guideline itself.

What is modelled rather than measured. South African labour rates, technician remuneration, MIBCO agreements, parts pricing, accreditation requirements and the application of the guidelines change frequently and vary by region, and must be verified with the Retail Motor Industry Organisation, MIWA, MIBCO and the relevant authorities before capital is committed.

Confidentiality. This document is delivered in confidence to the named recipient. It may not be reproduced or circulated in whole or in part without prior written consent.