Auto Repair Service Workshop Rs. 4.33 Million Jun-2023

Pre-feasibility Study
AUTO REPAIR &

SERVICE
WORKSHOP
June 2022
The figures and financial projections are approximate due to fluctuations in

exchange rates, energy costs, and fuel prices etc. Users are advised to focus on
understanding essential elements such as production processes and capacities, space,
machinery, human resources, and raw material etc. requirements. Project
investment, operating costs, andrevenues can change daily. For accurate financial
calculations, utilize financial calculators on SMEDA’s website and consult financial
experts to stay current with market conditions.
Small and Medium Enterprises Development Authority

Ministry of Industries and Production
Government of Pakistan
Pre-Feasibility Study Auto Repair & Service Workshop
Table of Contents
1 DISCLAIMER .......................................................................................................... 1
2 EXECUTIVE SUMMARY ....................................................................................... 2
3 INTRODUCTION TO SMEDA................................................................................ 3
4 PURPOSE OF THE DOCUMENT ........................................................................... 3
5 BRIEF DESCRIPTION OF PROJECT & PRODUCT ............................................ 4
5.1 Process Flow .......................................................................................................... 5
5.2 Installed and Operational Capacities ...................................................................... 6
6 CRITICAL FACTORS ............................................................................................. 7
7 GEOGRAPHICAL POTENTIAL FOR INVESTMENT ......................................... 7
8 POTENTIAL TARGET CUSTOMERS / MARKETS ............................................. 8
9 PROJECT COST SUMMARY ................................................................................. 8
9.1 Project Economics .................................................................................................. 8
9.2 Project Financing ................................................................................................... 8
9.3 Project Cost ............................................................................................................ 8
9.4 Space Requirement ................................................................................................. 9
9.5 Machinery & Equipment Requirement .................................................................. 9
9.6 Furniture & Fixtures Requirement ....................................................................... 11
9.7 Office Equipment Requirement............................................................................ 11
9.8 Human Resource Requirement ............................................................................. 11
9.9 Utilities and other costs ........................................................................................ 12
9.10 Revenue Generation ............................................................................................. 12
10 CONTACT DETAILS ............................................................................................ 12
10.1 Machinery Suppliers ............................................................................................ 13
10.2 Raw Material Suppliers ........................................................................................ 13
11 USEFUL WEB LINKS ........................................................................................... 14
12 ANNEXURES ......................................................................................................... 15
12.1 Income Statement ............................................................................................... 16
12.2 Balance Sheet ....................................................................................................... 17
12.3 Cash Flow Statement............................................................................................ 18
13 KEY ASSUMPTIONS ............................................................................................ 19
13.1 Operating Cost Assumptions ................................................................................ 19
13.2 Production Cost Assumptions .............................................................................. 19
13.3 Revenue Assumptions .......................................................................................... 19
13.4 Financial Assumptions ......................................................................................... 19
June 2023 i
1 DISCLAIMER
This information memorandum is to introduce the subject matter and provide a general idea
and information on the said matter. Although, the material included in this document is based
on data/information gathered from various reliable sources; however, it is based upon certain
assumptions, which may differ from case to case. The information has been provided on as is
where is basis without any warranties or assertions as to the correctness or soundness thereof.
Although, due care and diligence has been taken to compile this document, the contained
information may vary due to any change in any of the concerned factors, and the actual results
may differ substantially from the presented information. SMEDA, its employees or agents do
not assume any liability for any financial or other loss resulting from this memorandum in
consequence of undertaking this activity. The contained information does not preclude any
further professional advice. The prospective user of this memorandum is encouraged to carry
out additional diligence and gather any information which is necessary for making an informed
decision, including taking professional advice from a qualified consultant/technical expert
before taking any decision to act upon the information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk or www.smeda.org
Document Control
Document No. PREF-NO 04
Revision No. 03
Prepared by SMEDA-Sindh
Revision Date June 2023
Provincial Chief (Sindh)
For information
mkumar@smeda.org.pk
June 2023 1
2 EXECUTIVE SUMMARY
Auto Repair & Service Workshop is a service facility where automobiles are repair and
overhauled by auto mechanics and electricians, it also offer paintwork repairs to scratches,
scuffs and dents to vehicle damage as well as damage caused by collision and major accidents.
It is proposed to be located on main roads or prime locations of urban as well as semi-urban

areas to target maximum walk-in customers as well as customers coming in from contacts,
referrals and companies.
Installed capacity is 4,164 cars per year and initial utilization of 60%
Total Cost Estimates is Rs.4,337,571 with fixed investment Rs.2,577,500 and working capital
Rs.1,760,571.
Given the cost assumptions, IRR and payback are 42% and 3.79 years respectively
The most critical considerations or factors for success of the project are:
• Most significant consideration
§ Relevant work experience required in repairing, body touchups etc of cars.
§ Technical Skill required of repair and maintenance of cars.
§ Growing and Maintaining a Referral Network of Customers
• Equally important factor
§ Marketing Skill required to attract customers from residential and corporate

sector to help maintain customer base
§ An adequate inventory for denting and painting based on prior experience and
business volume is required for quick services
June 2023 2
3 INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was established in
October 1998 with an objective to provide fresh impetus to the economy through development
of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the national income,
through development of the SME sector, by helping increase the number, scale and
competitiveness of SMEs", SMEDA has carried out ‘sectoral research’ to identify policy,
access to finance, business development services, strategic initiatives and institutional
collaboration and networking initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment has been a
successful hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business development services is

also offered to the SMEs by SMEDA. These services include identification of experts and
consultants and delivery of need based capacity building programs of different types in addition
to business guidance through help desk services.
4 PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs in
project identification for investment. The project pre-feasibility may form the basis of an
important investment decision and in order to serve this objective, the document/study covers
various aspects of project concept development, start-up, and production, marketing, finance
and business management.
The purpose of this document is to facilitate potential investors in Auto Repair & Service
Workshop by providing them with a general understanding of the business with the intention
of supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally documented
sectors attains greater imminence as the research that precedes such reports reveal certain
thumb rules; best practices developed by existing enterprises by trial and error, and certain
industrial norms that become a guiding source regarding various aspects of business set-up and
it’s successful management.
Apart from carefully studying the whole document one must consider critical aspects provided
later on, which form basis of any Investment Decision.
June 2023 3
5 BRIEF DESCRIPTION OF PROJECT & PRODUCT

Auto Repair and Service Workshop is a service facility where auto mechanics repair
automobiles, provide basic and extensive auto related services as well as schedule
maintenances. It also offer paintwork repairs to scratches, scuffs and dents to vehicle damage
as well as damage caused by collision and major accidents.
The auto repair industry is highly competitive. Each workshop within this field has high capital
costs, low margins, and a high intensity of competition, but thanks to the increase in sales of
cars in Pakistan, which drives the need and demand of high quality auto repair and service
workshop.
The details of locally produced and imported cars from 2017-2023 are as follows:
Description 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Cars (Local 217,774 209,255 94,325 151,794 226,433 101,984

Production)1
Following key parameters must be address as per this pre-feasibility study:
• Technology: This proposed workshop with computerized diagnostic system uses a

number of tools including scanners, mechanical repairs tools box, denting tools box and
tools for painting to provide services to the customer’s car.
• Location: The Auto Workshop business is very much dependent on the location of its
setup. Auto Workshops located on main roads or prime locations to target maximum
walk-in customers as well as customers coming in from contacts, referrals and
companies. This setup can be established in cities like Karachi, Lahore, Rawalpindi,
Hyderabad, Faisalabad, Multan, Peshawar and Quetta etc. This business can also be
undertaken in all small 2nd tier towns in addition to suburban towns of large cities.
• Product: The proposed workshop addresses the unmet need of having a quality auto
repair workshop that provides:
§ Quick, quality repair and maintenance services
§ Denting and Painting services
1
www.pama.org.pk (Pakistan Automotive Manufacturers Association)
June 2023 4
§ Easy access to new and used retail parts from nearby shops to meet the demand
of the customer
• Target Market: The proposed location for an Auto Workshop considering the factors
mentioned earlier would be in a medium to high-income locality area where almost all
of the nearby residents are expect to own at least one car.
• Employment Generation: The proposed project will provide direct employment to 18

people. Financial analysis shows the unit shall be profitable from the very first year of
operation.
5.1 Process Flow
Mechanical Services
Car / Time / Cost Repair /

Job Order
Customer Estimate Repalcement
Delivery to
Test Trial
Customer
The above diagram illustrates the basic process flow for mechanical repairs.
1. The customers comes in with the mechanical problems of his car
2. Wherein a job card is prepared based on the problems faced by the customer. The
foreman then further run the diagnostic checks of the car for any additional problems.
3. The customer is then provided with time and cost estimates depending on whether the
parts need to be repaired or replaced. On agreement of the customer, the job is allocated
by foreman to the concerned mechanic.
4. It is necessary to test run the car by the foreman before it finally delivered to the
customer, for quality assurance.
June 2023 5
Denting and Painting
Time / Cost Dneting /

Car / Customer Job Order
Estimate Reshapping
Body
Body Filling on
Painting Rubbing Preparation for
Patches
Paint
Part
Final Delivery to
Drying Finishing Replacement
Customer
(If any)
The above diagram illustrates the basic process flow for denting and painting.
1. The customers comes in with their damaged cars
2. Wherein a job card is prepared based on the problems faced by the customer. The
foreman then further run the diagnostic checks of the car for any additional problems.
3. After the estimation of time and cost, the car is given to the Head Denter who reshapes
the car back into form and hands it over to the painter.
4. Initially the reshaped body is prepared for painting by applying coating and patch
filling, which are then smoothened by rubbing.
5. The body is then painted and left for drying after which waxing are applied to ensure
proper shine.
6. In case of accidents, irreparable parts are replaced before making the final delivery to
the customer.
5.2 Installed and Operational Capacities
The operational capacity of this workshop is 347 cars per month. The assumed operational
capacity during the first year of operations is 60% with annual increase of 5%.
June 2023 6
6 CRITICAL FACTORS
The main critical success factors that affect the decision to invest in the proposed business are:
• Hands on Experience: Having a thorough knowledge and hands on experience of all

the relevant technical details is necessary for entry into this business. Relevant work
experience is the most important pre-requisite because it has a direct impact on the
successful management of the business.
• Marketing Skill: Another critical factor is that the entrepreneur must have effective
PR & marketing skills. These marketing skills should enable the entrepreneur to
carryout business development activities to target his potential customers and to
maintain his existing client base.
• Technical Skill: The third critical factor relates mostly to technical skills which are
mandatory, in the absences of technical skills and knowhow there will be loss of time,
energy and above all unsatisfactory service would lead to customer dissatisfaction.
• Growing and Maintaining a Referral Network of Customers: The main factor is to

attract and maintain a loyal customer base through a customer-oriented focus on
business rather than concentrating on volume and losing out old customers. All the
workers at the workshop need to be trained and held responsible for providing superior
service and developing long lasting trust bond with the customers. This is very
important in this industry, where trust and honesty reflect on the image of repair and
service facilities. This would help in maintaining a consistent revenue base, to ensure
stability of business on the long run.
• Inventory for denting and painting: An adequate inventory based on prior experience
and business volume needs to be maintained in order to give quick service and prevent
any inconvenience caused to the customer.
7 GEOGRAPHICAL POTENTIAL FOR INVESTMENT

The Auto Workshop business is very much dependent on the location of its setup. Auto
Workshops located on main roads or prime locations to target maximum walk-in customers as
well as customers coming in from contacts, referrals and companies.
June 2023 7
8 POTENTIAL TARGET CUSTOMERS / MARKETS

The proposed location for an Auto Workshop considering the factors mentioned earlier would
be in a medium to high-income locality area where almost all of the nearby residents are
expected to have at least one car. As well as nearby offices are also important to have increasing
number of customers.
9 PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial viability of this
project. Various costs and revenue related assumptions along with results of the analysis are
outlined in this section.
9.1 Project Economics
All the figures in this financial model have been calculated for estimated revenue of Rs.7.15
million in the year one. The capacity utilization during year one is work out at 60% with 5%
increase in subsequent years up to the maximum capacity utilization of 85%.
The following table shows internal rate of return, payback period and net present value of the
proposed venture:
Table 9.1 : Project Economics
DESCRIPTION DETAILS
INTERNAL RATE OF RETURN (IRR) 42%
PAYBACK PERIOD 3.79 years
NET PRESENT VALUE Rs.4,894,349
9.2 Project Financing
Following table, provide details of the equity required and variables related to bank loan:
Table 9.2 : Project Financing
DESCRIPTION DETAILS
Total Equity (100%) Rs.4,337,571
9.3 Project Cost
Following fixed and working capital requirements have been identified for operations of the
proposed business:
June 2023 8
Table 9.3 : Project Cost
AMOUNT
DESCRIPTION
(Rs.)
Capital Cost
Machinery & Equipment 1,430,000
Furniture & Fixtures 171,000
Office Vehicles 101,000
Office Equipment 175,000
Pre-operating Costs 700,000
Total Capital Cost 2,577,000
Working Capital
Equipment Spare Part Inventory 19,953
Raw Material Inventory 264,069
Upfront Building Rent 1,200,000
Upfront Insurance Payment 76,550
Cash 200,000
Total Working Capital 1,760,571
TOTAL PROJECT COST 4,337,571
9.4 Space Requirement
Details of space requirement and cost related to building rent is given below:
Table 9.4 : Space Requirement
ESTIMATED TOTAL RENT TOTAL RENT

DESCRIPTION AREA (Monthly) (Yearly)
(Sq.ft.) (Rs.) (Rs.)
Rented Space 2,500 100,000 1,200,000
TOTAL 1,200,000
9.5 Machinery & Equipment Requirement
Machinery and equipment for the proposed project are stated below:
June 2023 9
Table 9.5 : Machinery & Equipment
UNIT COST TOTAL

DESCRIPTION QUANTITY
(Rs.) COST (Rs.)
MECHANICAL REPAIRS
Complete Mechanical Toolbox with Jack 02 150,000 300,000
Computerized Diagnostic System 01 600,000 600,000
Work Bench 02 15,000 30,000
Battery Charger 01 25,000 25,000
Compression Gauge 01 15,000 15,000
Others - 50,000
Total 1,020,000
DENTING
Denting Toolbox with Welding Kit 02 40,000 80,000
Pressure Jack (Large) 01 40,000 40,000
Oxygen Cylinder 01 15,000 15,000
Carbide Tank 01 25,000 25,000
Drill Machine and Grinder (Hand) 02 20,000 20,000
Others - 25,000
Total 225,000
PAINTING
Painting Compressor 01 70,000 70,000
Spray Gun (Small) 01 5,000 5,000
Spray Gun (Large) 01 10,000 10,000
Pipe 01 5,000 5,000
Others - 25,000
Total 115,000
Genset (03 KVA) 01 70,000 70,000
TOTAL 1,430,000
June 2023 10
9.6 Furniture & Fixtures Requirement
Details of the furniture and fixture required for the project are given below:
Table 9.6 : Furniture & Fixture
UNIT COST TOTAL COST

(Rs.) (Rs.)
Stools 10 2,000 20,000
Chairs 06 5,000 30,000
Table 01 25,000 25,000
Electric wiring and lighting 12 3,000 36,000
Fans 10 6,000 60,000
TOTAL 171,000
9.7 Office Equipment Requirement
Following office equipment will be required for Auto Repair and Service Workshop:
Table 9.7 : Office Equipment
UNIT COST TOTAL COST

(Rs.) (Rs.)
Computer 01 70,000 70,000
Printer 01 25,000 25,000
Telephones/Mobile Set 02 40,000 80,000
TOTAL 175,000
9.8 Human Resource Requirement
In order to run operations of Auto Repair Workshop smoothly, details of human resources
required along with number of employees and monthly salary are recommended as under:
Table 9.8 : Human Resource Requirement
MONTHLY YEARLY
NO. OF
DESCRIPTION SALARY PER SALARY
EMPLOYEES
PERSON (Rs.) (Rs.)
CEO / Owner 01 100,000 1,200,000
Head Mechanic 01 70,000 840,000
June 2023 11
Assistant Mechanics 01 40,000 480,000

Helpers 04 30,000 1,440,000
Head Dentor 01 70,000 840,000
Assistant Dentors 01 40,000 480,000
Helpers 03 30,000 1,080,000
Head Painter 01 70,000 840,000
Assistant Painter 01 40,000 480,000
Helpers 01 30,000 360,000
Guard 01 30,000 360,000
TOTAL 16 8,400,000
9.9 Utilities and other costs
An essential cost to be borne by the project is the cost of electricity and generator fuel expense.
The electricity expenses are estimated to be around Rs.410,400 for the first year, whereas,
generator fuel expenses are estimated to be Rs.683,100 for the first year. Furthermore,
promotional expense being essential for marketing of Auto Repair and Service Workshop is
estimated as 0.15% of revenue.
9.10 Revenue Generation
Based on the approx. capacity utilization of 93% and 07% for Mechanical Repairs and
Denting and Painting respectively, repairing revenue during the first year of operations is
estimated as under:
Table 9.10 : Revenue Generation – Year 1
NO. OF FINISHED CARS REPAIRING

CARS GOODS AVAIL CHARGES / REVENUE
DESCRIPTION
REPAIR INVENTORY ABLE CAR (Rs.)
ED (No.) (No.) (No.) (Rs.)
Combine
2,498 104 2,394 5,980 14,316,120
Revenue
TOTAL 14,316,120
10 CONTACT DETAILS
In order to facilitate potential investors, contact details of private sector Service Providers
relevant to the proposed project are given below:
June 2023 12
10.1 Machinery Suppliers
The machinery suppliers easily available in the areas like Shershah and Plaza in Karachi and
in different parts of Pakistan.
10.2 Raw Material Suppliers
Raw material required for auto repair and service workshop includes diesel, grease, oil and
cloth / towel are easily available in the local markets anywhere in Pakistan, rest of the spare
parts required for mechanical repairs and denting and painting are purchase as per customer
from nearby shops.
June 2023 13
11 USEFUL WEB LINKS

Websites
Small & Medium Enterprises Development Authority www.smeda.org.pk
(SMEDA)
Government of Pakistan www.pakistan.gov.pk
Ministry of Industries & Production www.moip.gov.pk
Ministry of Education, Training & Standards in http://moptt.gov.pk
Higher Education
Government of Punjab www.punjab.gov.pk
Government of Sindh www.sindh.gov.pk
Government of Khyber Pakhtunkhwa www.khyberpakhtunkhwa.gov.pk
Government of Balochistan www.balochistan.gov.pk
Government of Gilgit Baltistan www.gilgitbaltistan.gov.pk
Government of Azad Jamu Kashmir www.ajk.gov.pk
Trade Development Authority of Pakistan (TDAP) www.tdap.gov.pk
Security Commission of Pakistan (SECP) www.secp.gov.pk
Federation of Pakistan Chambers of Commerce and www.fpcci.com.pk
Industry (FPCCI)
State Bank of Pakistan (SBP) www.sbp.org.pk
Punjab Small Industries Corporation www.psic.gop.pk
Sindh Small Industries Corporation www.ssic.gos.pk
Pakistan Horticulture Development and Export www.phdec.org.pk
Company (PHDEC)
Punjab Vocational Training Council (PVTC) www.pvtc.gop.pk
Technical Education and Vocational Training www.tevta.org
Authority (TEVTA)
Pakistan Readymade Garment Technical Training www.prgmea.org/prgtti/
Institute
Livestock & Dairy Development Department, www.livestockpunjab.gov.pk
Government of Punjab.
Punjab Industrial Estates (PIE) www.pie.com.pk
Faisalabad Industrial Estate Development and www.fiedmc.com.pk
Management Company (FIEDMC)
Pakistan Automotive Manufacturers Association www.pama.org.pk
UN Comtrade Database http://comtrade.un.org/
June 2023 14
12 ANNEXURES
June 2023 15
12.1 Income Statement
Calculations SMEDA
Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue 14,317,500 17,746,438 21,027,531 24,787,379 29,088,922 34,002,899 37,495,089 41,244,597 45,369,057 49,905,963
Cost of sales
Cost of goods sold 1 (Denting and Painting) 2,042,400 2,416,470 2,733,098 3,075,347 3,444,988 3,843,905 4,046,017 4,248,318 4,460,733 4,683,770
Cost of goods sold 2 (Mechanical Repairs) 1,126,425 1,332,732 1,507,359 1,696,116 1,899,981 2,119,991 2,231,460 2,343,033 2,460,185 2,583,194
Operation costs 1 (direct labor) 6,555,000 7,481,895 8,212,228 9,013,576 9,892,872 10,857,723 11,944,121 13,107,018 14,383,136 15,783,498
Operating costs 2 (machinery maintenance) 119,715 141,641 160,200 180,261 201,927 225,310 237,157 249,015 261,465 274,539
Operating costs 3 (direct electricity) 410,400 451,440 496,584 546,242 600,867 660,953 727,049 799,753 879,729 967,702
Operating costs 5 (genset) 683,100 751,410 826,551 909,206 1,000,127 1,100,139 1,210,153 1,331,169 1,464,286 1,610,714
Total cost of sales 10,937,040 12,575,588 13,936,019 15,420,748 17,040,761 18,808,022 20,395,957 22,078,306 23,909,534 25,903,417
Gross Profit 3,380,460 5,170,850 7,091,512 9,366,632 12,048,161 15,194,877 17,099,131 19,166,292 21,459,523 24,002,546
24% 29% 34% 38% 41% 45% 46% 46% 47% 48%
General administration & selling expenses
Administration expense 1,560,000 1,711,884 1,878,555 2,061,454 2,262,160 2,482,407 2,724,098 2,989,320 3,280,364 3,599,745
Administration benefits expense 46,800 51,357 56,357 61,844 67,865 74,472 81,723 89,680 98,411 107,992
Building rental expense 1,200,000 1,320,000 1,452,000 1,597,200 1,756,920 1,932,612 2,125,873 2,338,461 2,572,307 2,829,537
Communications expense (phone, fax, mail, internet, etc.) 78,000 85,594 93,928 103,073 113,108 124,120 136,205 149,466 164,018 179,987
Office vehicles running expense 90,900 99,990 109,989 120,988 133,087 146,395 161,035 177,138 194,852 214,337
Office expenses (stationary, entertainment, janitorial services, etc.) 31,200 34,238 37,571 41,229 45,243 49,648 54,482 59,786 65,607 71,995
Promotional expense / Signage etc 21,476 26,620 31,541 37,181 43,633 51,004 56,243 61,867 68,054 74,859
Insurance expense 76,550 68,390 60,230 52,070 43,910 43,883 35,106 26,330 17,553 8,777
Professional fees (legal, audit, consultants, etc.) 28,635 35,493 42,055 49,575 58,178 68,006 74,990 82,489 90,738 99,812
Depreciation expense 197,800 197,800 197,800 197,800 197,800 210,132 210,132 210,132 210,132 210,132
Amortization of pre-operating costs 140,000 140,000 140,000 140,000 140,000 - - - - -
Bad debt expense 429,525 532,393 630,826 743,621 872,668 1,020,087 1,124,853 1,237,338 1,361,072 1,497,179
Miscellaneous expense 1 350,000 385,000 423,500 465,850 512,435 563,679 620,046 682,051 750,256 825,282
Subtotal 4,250,886 4,688,758 5,154,352 5,671,885 6,247,007 6,766,446 7,404,786 8,104,058 8,873,365 9,719,635
Operating Income (870,426) 482,092 1,937,160 3,694,747 5,801,154 8,428,430 9,694,345 11,062,234 12,586,159 14,282,911
Gain / (loss) on sale of office vehicles - - - - 40,400 - - - -

Earnings Before Interest & Taxes (870,426) 482,092 1,937,160 3,694,747 5,841,554 8,428,430 9,694,345 11,062,234 12,586,159 14,282,911
Earnings Before Tax (870,426) 482,092 1,937,160 3,694,747 5,841,554 8,428,430 9,694,345 11,062,234 12,586,159 14,282,911
Tax - - 635,018 1,514,846 2,395,037 3,455,656 3,974,681 4,535,516 5,160,325 5,855,994

NET PROFIT/(LOSS) AFTER TAX (870,426) 482,092 1,302,141 2,179,901 3,446,517 4,972,774 5,719,664 6,526,718 7,425,834 8,426,918
June 2023 16
12.2 Balance Sheet
Calculations SMEDA
Balance Sheet
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Assets
Current assets
Cash & Bank 1,300,000 191,940 889,795 2,084,605 2,815,278 3,436,774 4,182,143 4,699,254 5,142,684 5,579,742 7,407,222
Accounts receivable 39,226 43,923 53,115 62,760 73,803 86,427 97,942 107,863 118,649 130,514
Finished goods inventory 475,523 525,668 582,401 644,321 711,886 785,593 849,832 919,929 996,231 1,079,309
Equipment spare part inventory 19,953 24,787 29,437 34,779 40,907 47,926 52,969 58,398 64,384 70,983 -
Raw material inventory 264,069 328,055 389,592 460,297 541,404 634,301 701,035 772,891 852,112 939,454 -
Pre-paid building rent 100,000 110,000 121,000 133,100 146,410 161,051 177,156 194,872 214,359 235,795 -
Pre-paid insurance 76,550 68,390 60,230 52,070 43,910 43,883 35,106 26,330 17,553 8,777 -
Total Current Assets 1,760,571 1,237,921 2,059,645 3,400,367 4,294,990 5,109,624 6,020,430 6,699,518 7,318,884 7,949,630 8,617,044
Fixed assets
Machinery & equipment 1,430,000 1,287,000 1,144,000 1,001,000 858,000 715,000 572,000 429,000 286,000 143,000 -
Furniture & fixtures 171,000 153,900 136,800 119,700 102,600 85,500 68,400 51,300 34,200 17,100 -
Office vehicles 101,000 80,800 60,600 40,400 20,200 162,662 130,129 97,597 65,065 32,532 -
Office equipment 175,000 157,500 140,000 122,500 105,000 87,500 70,000 52,500 35,000 17,500 -
Total Fixed Assets 1,877,000 1,679,200 1,481,400 1,283,600 1,085,800 1,050,662 840,529 630,397 420,265 210,132 -
Intangible assets
Pre-operation costs 700,000 560,000 420,000 280,000 140,000 - - - - - -
Total Intangible Assets 700,000 560,000 420,000 280,000 140,000 - - - - - -
TOTAL ASSETS 4,337,571 3,477,121 3,961,045 4,963,967 5,520,790 6,160,286 6,860,959 7,329,915 7,739,149 8,159,762 8,617,044
Liabilities & Shareholders' Equity

Current liabilities
Accounts payable 9,976 11,808 13,413 15,162 17,066 19,022 20,126 21,252 22,446 20,662
Other liabilities
Total Current Liabilities - 9,976 11,808 13,413 15,162 17,066 19,022 20,126 21,252 22,446 20,662
Other liabilities
Deferred tax - - 293,150 293,150 293,150 234,520 175,890 117,260 58,630 0
Total Long Term Liabilities - - - 293,150 293,150 293,150 234,520 175,890 117,260 58,630 0
Shareholders' equity
Paid-up capital 4,337,571 4,337,571 4,337,571 4,337,571 4,337,571 4,337,571 4,337,571 4,337,571 4,337,571 4,337,571 4,337,571
Retained earnings (870,426) (388,334) 319,832 874,907 1,512,498 2,269,845 2,796,328 3,263,066 3,741,115 4,258,811
Total Equity 4,337,571 3,467,145 3,949,237 4,657,404 5,212,478 5,850,069 6,607,416 7,133,899 7,600,637 8,078,686 8,596,383
TOTAL CAPITAL AND LIABILITIES 4,337,571 3,477,121 3,961,045 4,963,967 5,520,790 6,160,286 6,860,959 7,329,915 7,739,149 8,159,762 8,617,044
- - - - - - - - - - -
June 2023 17
12.3 Cash Flow Statement
Calculations SMEDA
Cash Flow Statement
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Operating activities
Net profit (870,426) 482,092 1,302,141 2,179,901 3,446,517 4,972,774 5,719,664 6,526,718 7,425,834 8,426,918
Add: depreciation expense 197,800 197,800 197,800 197,800 197,800 210,132 210,132 210,132 210,132 210,132
amortization of pre-operating costs 140,000 140,000 140,000 140,000 140,000 - - - - -
amortization of training costs - - - - - - - - - -
Deferred income tax - - 293,150 - - (58,630) (58,630) (58,630) (58,630) (58,630)
Accounts receivable (39,226) (4,697) (9,192) (9,645) (11,043) (12,624) (11,515) (9,920) (10,786) (11,865)
Finished goods inventory (475,523) (50,144) (56,733) (61,920) (67,565) (73,707) (64,238) (70,098) (76,301) (83,078)
Equipment inventory (19,953) (4,835) (4,650) (5,342) (6,128) (7,019) (5,042) (5,429) (5,986) (6,599) 70,983
Raw material inventory (264,069) (63,986) (61,537) (70,705) (81,107) (92,897) (66,734) (71,856) (79,221) (87,342) 939,454
Pre-paid building rent (100,000) (10,000) (11,000) (12,100) (13,310) (14,641) (16,105) (17,716) (19,487) (21,436) 235,795
Advance insurance premium (76,550) 8,160 8,160 8,160 8,160 27 8,777 8,777 8,777 8,777 8,777
Accounts payable 9,976 1,831 1,605 1,749 1,904 1,956 1,103 1,126 1,194 (1,784)
Cash provided by operations (460,571) (1,108,060) 697,856 1,788,784 2,355,500 3,593,083 4,960,796 5,710,291 6,503,410 7,384,843 9,736,701
Financing activities
Issuance of shares 4,337,571 - - - - - - - - - -
Cash provided by / (used for) financing activities 4,337,571 - - - - - - - - - -
Investing activities
Capital expenditure (2,577,000) - - - - (162,662) - - - - -
Cash (used for) / provided by investing activities (2,577,000) - - - - (162,662) - - - - -
NET CASH 1,300,000 (1,108,060) 697,856 1,788,784 2,355,500 3,430,421 4,960,796 5,710,291 6,503,410 7,384,843 9,736,701
Cash balance brought forward 1,300,000 191,940 889,795 2,084,605 2,815,278 3,436,774 4,182,143 4,699,254 5,142,684 5,579,742
Cash available for appropriation 1,300,000 191,940 889,795 2,678,579 4,440,104 6,245,699 8,397,570 9,892,434 11,202,664 12,527,527 15,316,443
Dividend - - 593,975 1,624,827 2,808,925 4,215,427 5,193,181 6,059,980 6,947,785 7,909,221
Cash balance 1,300,000 191,940 889,795 2,084,605 2,815,278 3,436,774 4,182,143 4,699,254 5,142,684 5,579,742 7,407,222
Cash carried forward 1,300,000 191,940 889,795 2,084,605 2,815,278 3,436,774 4,182,143 4,699,254 5,142,684 5,579,742 7,407,222
June 2023 18
13 KEY ASSUMPTIONS
13.1 Operating Cost Assumptions
DESCRIPTION Details
SIFT LENGTH 12 hours
NUMBER OF SHIFTS 01
DAYS OPERATIONAL PER YEAR 330 days
13.2 Production Cost Assumptions
DESCRIPTION Details
INCREASE IN COST PRICE 5% / year
REPAIRING CAPACITY 4,164 cars
CAPACITY UTILIZATION 60%
13.3 Revenue Assumptions
DESCRIPTION Details
AVERAGE REVENUE (INCLUDING DENTING & Rs.5,980 / c5ar
PAINTING AND MECHANICAL REPAIRS)
REVENUE GROWTH RATE 5% / year
13.4 Financial Assumptions
DESCRIPTION Details
PROJECT LIFE 10 years
DEBT EQUITY RATIO 00 : 100
June 2023 19
Small and Medium Enterprises Development Authority
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road, Lahore
Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
www.smeda.org.pk, helpdesk@smeda.org.pk
REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE

PUNJAB SINDH KPK BALOCHISTAN
3rd Floor, Building No. 3, 5TH Floor, Bahria Ground Floor Bungalow No. 15-A
Aiwan-e-Iqbal Complex, Complex II, M.T. Khan Road, State Life Building Chaman Housing Scheme
Egerton Road Lahore, Karachi. The Mall, Peshawar. Airport Road, Quetta.
Tel: (042) 111-111-456 Tel: (021) 111-111-456 Tel: (091) 9213046-47 Tel: (081) 831623, 831702
Fax: (042) 36304926-7 Fax: (021) 5610572 Fax: (091) 286908 Fax: (081) 831922
helpdesk.punjab@smeda.org.pk helpdesk-khi@smeda.org.pk helpdesk-pew@smeda.org.pk helpdesk-qta@smeda.org.pk

Auto Repair Service Workshop Rs. 4.33 Million Jun-2023

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Auto Repair Service Workshop Rs. 4.33 Million Jun-2023

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Pre-feasibility Study

AUTO REPAIR &

The figures and financial projections are approximate due to fluctuations in

Small and Medium Enterprises Development Authority

It is proposed to be located on main roads or prime locations of urban as well as semi-urban

• Most significant consideration

§ Relevant work experience required in repairing, body touchups etc of cars.

§ Technical Skill required of repair and maintenance of cars.

§ Growing and Maintaining a Referral Network of Customers

• Equally important factor

§ Marketing Skill required to attract customers from residential and corporate

Concurrent to the prefeasibility studies, a broad spectrum of business development services is

4 PURPOSE OF THE DOCUMENT

5 BRIEF DESCRIPTION OF PROJECT & PRODUCT

Description 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23

Cars (Local 217,774 209,255 94,325 151,794 226,433 101,984

Following key parameters must be address as per this pre-feasibility study:

• Technology: This proposed workshop with computerized diagnostic system uses a

§ Quick, quality repair and maintenance services

§ Denting and Painting services

• Employment Generation: The proposed project will provide direct employment to 18

5.1 Process Flow

Car / Time / Cost Repair /

1. The customers comes in with the mechanical problems of his car

Denting and Painting

Time / Cost Dneting /

1. The customers comes in with their damaged cars

5.2 Installed and Operational Capacities

• Hands on Experience: Having a thorough knowledge and hands on experience of all

• Growing and Maintaining a Referral Network of Customers: The main factor is to

7 GEOGRAPHICAL POTENTIAL FOR INVESTMENT

8 POTENTIAL TARGET CUSTOMERS / MARKETS

9 PROJECT COST SUMMARY

9.1 Project Economics

Table 9.1 : Project Economics

9.2 Project Financing

Table 9.2 : Project Financing

9.3 Project Cost

Table 9.3 : Project Cost

9.4 Space Requirement

Table 9.4 : Space Requirement

ESTIMATED TOTAL RENT TOTAL RENT

9.5 Machinery & Equipment Requirement

Table 9.5 : Machinery & Equipment

UNIT COST TOTAL

9.6 Furniture & Fixtures Requirement

Table 9.6 : Furniture & Fixture

UNIT COST TOTAL COST

9.7 Office Equipment Requirement

Table 9.7 : Office Equipment

UNIT COST TOTAL COST

9.8 Human Resource Requirement

Table 9.8 : Human Resource Requirement

Assistant Mechanics 01 40,000 480,000

9.9 Utilities and other costs

9.10 Revenue Generation

Table 9.10 : Revenue Generation – Year 1

NO. OF FINISHED CARS REPAIRING

10.1 Machinery Suppliers