Outline of the Report

Situation Analysis
Colins Car detailing was founded by Colin Ford is an auto-detailing business. It was going well because of its lower
prices ($80- $120) and loyal customer base. In just four years, he could manage to get 150 customers and $5,000
profit per year. Mr. Ford was planning to go for college education in September, so he was considering the future
course for his business. His profit margin was 35% which was higher than others because he was running CCD from
home and getting discounts on materials. But because of high demand and less availability, backlogs were getting
created which could result in customer loss. There were three other competitors in the area but the CCDs major
competitor was Blitz Auto Spa as its prices ($295 to $395 + 25% discount) were closed to CCDs. Because of its
lower prices, CCD could tempt new category of customers in addition to resale customers who were not able to
afford higher prices for vehicle-detailing. So for CCDs future, Mr. Ford was considering whether to sell/wind up the
business, expand the services, become the mobile-detailing company, go with a partnership with a golf-course or
franchise the business.
Problem Statement
What Mr. Ford should do with his business in the light to his college education at University of British Columbia?
Options

Sell/Wind up his business and pursue summer internship

Expand the services and include cut polishing
Purchase a truck and convert CCD into a mobile detailing company
Engage in a partnership with a near-by golf course
Franchise the business

Criteria

Entrepreneurial spirit of Colin Ford

Funding of college education

Evaluation of Options
After evaluating all the options, going with the franchising looks to be the best keeping Mr. Fords entrepreneurial
spirit in mind and he could earn an extra income as royalty which may help him in funding college expenses.
Recommendation
Mr. Ford should go with franchising his business as he does not need to give up his business to which he is
passionate about and earning extra income would be helpful for colleges tuition fees and personal expense.

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Situation Analysis
Car detailing industry in Canada was likely to strengthen in future as countrys economy was growing and
municipalities had begun to regulate environment-friendly policies to curb pollution and considering banning home
car washing to save water.
Colin Ford started Colins Car Detailing (CCD) in West Vancouver, British Columbia. He was passionate about his
work and believed that attention to detail and work ethics is critical to the success of CCD. Began with the vehicle
washing, vacuuming and waxing at just $15 (85% less than others) but customer response was not very encouraging.
After doing some more research and rising prices to a reasonable level, his customer base got increased. During his
schooling, Mr. Ford handled the business by working on the weekends due to decreased demand and full time when
demand was high. Promotional activities and word of mouth helped CCD to have 150 customers and annual profits
of approximately $5,000 at the end of fourth year. 1-3 vehicles could be detailed per day and it took 3-5 hours per
person. The charges were between $80 and $120 with 35% profit margin. CCDs margins were higher than
competitors as business was running from owners home and he was getting discounts on detailing materials. Due to
high demand and fewer timeslots, the backlogs were getting created, so CCD had to turn some customers away. Mr.
Ford was worried as this could lead in permanent customer loss.
There were three major competitors in car detailing service industry- Rods Exotic Auto Spa that had strong
reputation for providing excellence quality detailing services with free pick-up and delivery. Full detailing was
priced between $350 and $450 and not all could afford it. Rods also had additional services apart from full
detailing. Second was Blitz Auto Spa with more than a decade experience. Full detailing prices were affordable from
$295 to $395 along with discount coupons of up to 25%. Because of the pricing, this could be major competitor for
CCD. Third was Park Royal hand Wash that offered good quality cleaning services (priced at $29.95) but not full
detailing. These services took only 20-30 minutes, so customers did not mind waiting.
There were typically two types of consumers- affluent owners who did not mind in paying higher price for reliable
service and had their vehicles detailed several times in a year and others were consumers who were looking for
resale of their old vehicles and wanted to improve them at minimal cost to get the higher resale price. Because of
lower price, CCD has enticed a new category of consumers who did not want to resale and spend higher price. These
became the loyal customers for CCD and get their cars serviced 2-3 times in a year.
Mr. Ford set to join University of British Columbia in September and his top priority was ensuring enough funds to
pay first years tuition and personal expenses. He was also eager to grow his company. So he was considering some
future plans for CCD like expansion of services, becoming a mobile auto detailer, establishing a partnership,
franchising the business and even selling the business and pursuing internship for the summer.
Problem Statement
What Mr. Ford should do with his business in the light to his college education at University of British Columbia?

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Options
Mr. Ford has following options:
1.
2.

Sell/Wind up his business and pursue summer internship.

Consider following options for future:
2.1 Expand the services and include cut polishing.
2.2 Purchase a truck and convert CCD into a mobile detailing company.
2.3 Engage in a partnership with a near-by golf course.
2.4 Franchise the business.

Criteria
The priority wise arrangement of different criteria is as follows:
1.
2.

Entrepreneurship spirit: Mr. Ford enjoyed running his business and was passionate about it.
Funding the college education: Mr. Ford wanted to have enough funds for his colleges first years tuition
and personal expenses.

Evaluation of Options
1.

Internship work is less flexible & more tedious than CCDs and he may not like working there as he likes it in
CCD. So if Mr. Ford sells CCD and pursue the internship, then the first criterion will not be fulfilled as He will
be earning the same money as he had earned running CCD in summers, so the second criterion is partially

2.

getting fulfilled.
If he considers future options for CCD, then first criterion will be fulfilled completely as he does not have to
give up his business and:
2.1 If he includes the cut polishing in the services, the price would be higher and a mistake in cut
polishing could damage the vehicles finish, so there may be chance to lose some loyal customers. He
also needs to spend some extra money for insurance and rotary buffer. In that case, his income would
be lesser than earlier (exhibit 1).So he will be having lesser money for the college education. Thus
second criterion is not fulfilled.
2.2 If he purchases a truck and converts CCD into mobile detailing company, he needs to buy additional
equipment and increase the price; therefore chance of losing loyal customers. Hence income could be
reduced. In addition, he had no experience of any such work. So the second criterion is not fulfilled.
2.3 If he engages in a partnership with a near-by golf course, there will be operational challenges like
double booking and to handling the payments from golf course clients. Moreover, golf course would
take 10% of the sales booked in exchange for CCDs advertisements. Thus pricing would be higher to
offset the commission. Also service might not be completed by the end of the customers round i.e. in 2
hours and 20 minutes.
2.4 If he franchises the business, he may tap the new market of North Vancouver with population of
130,000. He will earn monthly royalty in exchange of CCDs name. Thus he could earn extra income
to fund his education without increasing the price and reducing customer base. So second criterion is
fulfilled.

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Recommendation
Mr. Ford should go with franchising his business. His entrepreneurship spirit will be maintained as he does not have
to give up his business. Also he could earn additional income as royalty to support the funding of his college
education.
Action Plan
1.
2.
3.
4.

Contact career services departments of North Vancouvers seven secondary schools.

Visit there, propose the idea of franchising CCD and select the students who will implement it.
Give them training of complete detailing of vehicles on weekdays.
Open the franchise there and help the students in running it for a month.

Word Count: 1093

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Exhibits
EXHIBIT 1: Impact of including cut polishing
Components
Normal Operation
Operation with Cut Polishing
Price of complete detailing/car (in $)
100
125
Profit %
35
35
No. of customers in a year
150
120
Customer visits/year per customer
3
3
Time taken/vehicle (in Hours)
4
4
Income of Ford/hour (in $)
15
15
Total profit per year (in $)
15,750
15,750
(Price*Profit*Customers*visits/100)
Total income per year (in $)
27,000
21,600
(Income/hour*time*Customers*visits)
Assumptions:
Customer base would reduce 20% to 120 if price is increased as many customers will not pay higher prices.
Price of complete car detailing per car currently under normal operation is $100.
Time taken for complete detailing by a car is 4 hours.
There would be 3 visits per customer in a year.

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