Torque Precision Auto Business Plan — Key Assumptions
Every operating, pricing, capital and funding assumption behind the model, and the seven most in need of independent verification.
Key Assumptions
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- 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
- 16.1 Operations and pricing
- 16.2 Capital, cost and funding
- 16.3 Assumptions most in need of independent verification
16.1 Operations and pricing
|
Assumption |
Year 1 |
Year 5 |
Basis |
|---|---|---|---|
|
Bays |
4 |
10 |
Phased behind demonstrated utilisation |
|
Qualified technicians |
4 |
10 |
One per bay; trade-tested motor mechanics |
|
Apprentices |
— |
3 |
Registered through merSETA from Year 2 |
|
Clock hours paid per bay |
1 960 |
1 960 |
Roughly 245 working days at eight hours |
|
Bay utilisation |
46% |
81% |
Booked work in the diary |
|
Efficiency against book time |
90% |
110% |
Technician experience, tooling, parts at the bay |
|
Book hours invoiced |
3 245 |
17 463 |
The product of the three ratios |
|
Posted labour rate |
R795 |
R795 |
At the accessible end of the RMI-accredited band; held flat |
|
Discount leakage |
7% |
7% |
Goodwill, quote variance and rework |
|
Effective labour rate |
R739 |
R739 |
Posted less leakage |
|
Parts attachment ratio |
0.95 |
1.14 |
Parts revenue to labour revenue |
|
Labour gross margin |
66% |
66% |
Technician cost is the principal direct cost |
|
Parts gross margin |
27% |
27% |
Multiple suppliers, negotiated volume terms |
16.2 Capital, cost and funding
|
Assumption |
Value |
Basis |
|---|---|---|
|
Vehicle lifts and bay equipment |
R1 320 000 |
Roughly R132 000 a bay, phased with commissioning |
|
Diagnostic equipment and data |
R680 000 |
Multi-marque platform, oscilloscope, programming, first-year subscriptions |
|
Alignment, aircon and specialist tools |
R880 000 |
Alignment in Year 2; specialist tools front-loaded |
|
Premises fit-out, solar, WMS and vehicles |
R1 850 000 |
Front-loaded; the four opening bays need all of it |
|
Parts stock and working capital |
R2 870 000 |
Sized against R3.06m of operating cash consumption in Years 1 and 2 plus fast-moving stock |
|
Contingency |
R400 000 |
Equipment commissioning and unforeseen fit-out |
|
Total capital deployed over five years |
R8 000 000 |
|
|
Overhead |
R3 529 000 rising to R7 465 000 |
Premises, service advisors, workshop manager, systems, insurance and compliance |
|
Depreciation |
Phased asset schedule |
Lifts, fit-out and solar over ten years; alignment and tools over eight; diagnostics and vehicles over five; WMS over three |
|
Promoter and investor equity |
R5 400 000 |
68% of capital deployed |
|
Asset finance |
R2 600 000 |
Drawn against equipment at 55% of cost, 13.75% over five years per tranche |
|
Capital moratorium |
Two years |
Interest paid from Year 1; principal from Year 3 |
|
Corporate tax |
27% with assessed losses carried forward |
Section 20 limitation applied; no tax before Year 3 |
|
Debtor days |
18 days |
Retail pays on collection; fleet and insurer accounts on terms |
|
Creditor days |
30 days |
|
|
Parts stock |
35 days |
Held tight against a fast-moving list |
|
Exit multiple |
4.0x Year 5 EBITDA |
Driven by contracted fleet work and the technician team; readers should substitute their own |
16.3 Assumptions most in need of independent verification
|
Assumption |
Modelled |
Verification required |
Consequence if wrong |
|---|---|---|---|
|
Workshop manager recruitable |
Appointed at Month 1 |
Direct market testing in the chosen metro on availability and package expectations |
Three of the five largest sensitivities are people outcomes. Without the right manager the numbers do not hold |
|
Catchment supports 17 463 book hours |
At least 60 000 households within 15 minutes |
Vehicle density, competitor mapping and dealer presence in the chosen suburb |
Utilisation is the second-largest lever. Below 73% the downside case applies |
|
Two fleet contracts achievable |
First signed by Month 12 |
Documented engagement with at least three prospective accounts before opening |
The Year 2 expansion is gated on it, and contracted work is what stabilises the diary |
|
Posted rate of R795 sustainable |
Held flat across five years |
Local rate survey against dealer and independent competitors |
The largest single lever. R716 to R875 swings EBITDA by R2.58m |
|
Trade-tested technicians recruitable at plan cost |
Ten by Year 5 at 66% labour gross margin |
Direct engagement on availability, MIBCO grades and package expectations |
Technician scarcity is high-likelihood and directly limits the book |
|
Diagnostic data access reliable on target marques |
Multi-marque platform plus targeted subscriptions |
Trial subscriptions and engagement with manufacturers before opening |
In-warranty work on marques where access fails is unavailable |
|
Asset finance with a two-year moratorium |
R2.6m at 13.75%, five years per tranche |
Written terms from an equipment financier before drawdown |
Principal cannot be serviced in Years 1 and 2 and the facility breaches on its first test |
The list is ordered by consequence. The first three determine whether the plan works at all, and all three can be tested by enquiry and engagement before meaningful capital is committed. The next two determine the labour line that carries the profit. The last two determine whether the in-warranty proposition and the financing structure work as designed.