Founder Of The Company The company was called KYK Automotive Inc. , and was started by Peter Yadav, the sole owner of the business. The business was started up as a partnership back in March of 1993, with the three partners being Peter Yadav, Ramesh Kapil, and Sam Kapil. They thought of the name KYK with the initials of all three last names. All three were previously working as car mechanics, with the two brothers, Ramesh and Sam working at one place, and Peter was working at a Petro Canada station, all in downtown Toronto.
The three have known each other since they were all enrolled in the army together back in their homeland of India, and remained close friends ever since. Upon coming to Canada, they each found separate jobs as car mechanics, and helped out one another in finding better positions or better paying jobs. Once they were all settled down, they would always get together on the weekends and discuss about further opportunities that they could go into. Their initial thoughts were to open up a mechanic shop, with them three being the mechanics.
It was through these small talks that the idea of opening up an Auto Parts retail store came about The Idea The three friends would always meet up on the weekends to relax and discuss about further opportunities for the future that would lead them to better profits and greater success. They thought hard about opening up a mechanic shop and having them three being the only mechanics their, which almost passed through. They had found a spot and were getting their capital together when one day, Peter suggested that he would be interested in something else.
He wanted to go a step ahead and he had always noticed that the people who delivered the parts were always so busy, and had pretty much a work overload, where they were denying new clients because they just couldn’t handle all the workload. The mechanic shop would have been the easier route for the three, but they loved challenges and wanted to try something new as well, something a little less physically demanding, and something that would require them to use their brains a little more.
When Peter suggested the idea, the other two were a bit hesitant because it was something they weren’t familiar with, and the idea of putting all their money into something that wasn’t 100% clear to them sounded a bit risky. Peter suggested though that they did know all the basics of the business since they were mechanics themselves, and that all they really needed to do was to learn about the software to look up different parts that mechanic shops needed, and that they would slowly start up and learn the rest of the business as they move along.
He persuaded them on the fact that the business had a lot of demand and very few suppliers and since they already have three experienced people in the trade, they could start up the business right away. An advantage that these three had was the ability to troubleshoot as well for their customers, for instance, if the mechanic had trouble identifying what could be wrong with a customer’s car or what the part is called that he/she required, these three with their background and knowledge of the industry, could assist them in finding the exact part.
The auto parts stores at that present time were unable to do this which was thought to be an excellent addition to their possible new venture, and would make their company stand out. With all these factors into play, they started to dig deeper into it and came up with an excellent choice and business decision when they decided the location. The Location During the time that they were all deciding on a location, and since they were all newlyweds and had family coming from their homelands, they needed to move out of the city and to a location in the suburbs, which was something they had decided before thinking of the new business.
After months of searching for the best location that would bring in the most business, they found a location in the Mississauga/Brampton area, where there was a shortage of parts stores but an overload of mechanic shops. This would be their best opportunity to get in on the profits of the auto parts industry. The major breakthrough for them in particular was that in that time, there were many immigrants coming from their homeland of India, and a majority of them had settled down in the Mississauga/Brampton area, and a majority of them were mechanics and had opened up businesses in that area.
This was a large part in the deciding factor of locations because what they had realized was that these mechanics were ordering from shops that barely understood what they were talking about, and half their parts would be delivered wrong with no fault of their own or the parts store, it just a communication problem. With Peter and the two brothers opening their shop near here, they could easily take all of this business away from other parts stores for the simple fact that they all speak the same language, are from the same place back home, and their would be no communication problems for either of them.
This would save time for the mechanics because the amount of incorrect parts they receive would decrease and in turn, would increase profits for the new business. The location ended up being 1767 Drew Road, which is in an industrial area in Mississauga, and was close to many mechanic shops within a 5km radius. Day-To-Day Operations They had opened the store on March 1, 1993, with just the three of the partners working there. They had Peter as a counterperson, who would be answering calls and providing prices to customers, billing the customers and locating the parts.
They had Ramesh delivering the parts to all the customers and marketing their business as he was on the road, kind of like a salesman. Then they had Sam helping out at the store, with all the walk in customers they had, along with order picking the parts for the different garages as Peter needed some help as well. The business started off with a boom right from the get go, and within a couple of months, they had realized that they would require more employees to be able to keep up with all the demand, and to keep their customers happy.
They had learned that the number one factor in deciding auto parts suppliers to deal with for mechanic shops was speed and accuracy of parts, and that the price of the parts was after that. By knowing this, they had brought in two new delivery drivers so that they could get the parts out quicker to their customers, and that if they had new customers, they would be able to handle the additional workload. They now had all three of the partners handling the business at the store, and if need be, Ramesh would do some deliveries during the peak hours.
Peter was doing most of the work inside the shop however, for example, he would be the one to answer most of the calls, he would be ordering most of the parts from various locations, and he would be stocking and picking parts as well. This didn’t sit too well with the other two partners and this is where the partnership would breakdown. The End of The Partnership As Peter started handling most of the business and the other two were being treated as employees rather than partners, they felt the urge to let their feelings be known since they all had an equal say in the company.
After a few discussions, the two brothers decided that they did not want to be part of this business anymore, and wanted out. They did not leave on a sour note however, and waited until Peter could find employees to replace them, and after a couple of months, the other two partners had left the partnership and moved onto another venture. Peter now had sole ownership of the business from December, 1994. He had with him 2 delivery drivers, and one person assisting him inside the shop, answering calls and helping pick orders and stock shelves.
Business was still going great for him, but he had to narrow his customers down to locations within a 5km radius because he didn’t want to expand anymore, and his main clients were within that area so his business wouldn’t suffer regardless. Business After The Partnership Peter continued to run the business successfully, and kept all of his customers happy. He made one significant change to the business which was to stop all sales to the general public. He realized that he was losing some trust in his mechanic shops because they were losing out on some profits.
The way the business worked was for example, Peter would supply shop X with a part at a cost of $15. The shop would then charge the customer $30 for that part, and an additional rate for installation. Now when Peter would sell directly to the public for $15, the shops were losing out on the additional profit and when they realized Peter was selling it to them and taking away from their business, they felt betrayed and did not want to deal with Peter anymore.
After a few complaints, Peter realized that the best business decision would be to keep the mechanic shops happy because they were his main repeat customers, not the occasional walk-in customers. This also gave him some more free time to handle other business operations so it worked out even better for him. After a couple of years, he decided he wanted to add something to the business. He realized that he had been receiving many calls about tires, especially throughout the winter months. He met up with a local tire shop that had bought few parts from him and struck a deal for some winter tires.
He would certain things like this for seasonal parts and make up a small flyer to show his customers what he was adding to his inventory at different times and they would sell off very quickly. The End of The Business The business had been running extremely well up until 2006, where the profit levels were decreasing, not by a huge amount but a noticeable amount, due to all the competition now in the area. When the business started, there was only one other parts store in the 5km radius, and in 2006, there were 6, which easily explains why profit levels were decreasing.
All the shops had their own suppliers, and there were price wars going on with all the auto parts stores. Peter stood firm on his stance that he would not participate in these price wars, and the price he had was the price you would get the part for. The business kept going with a decent profit up until 2008, and then he decided that it was not worth staying in business as the amount of stores opening up was still increasing, and the price for parts was decreasing. In November 2008, he decided to close the shop.
New Opportunities Peter had thought about retiring and took some time off from work, but after only a couple of months off, he had started on getting back into the parts business. He found an existing business for sale back in downtown, Toronto. The building is attached to a car body shop, which is coincidentally owned by Sam Kapil, his former partner from KYK. He has been going in to the parts store, which is called Khapco, and seeing how the business is doing and if he would be interested in it, and so far he hasn’t decided on anything, but he tells me he’s not done working yet.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 25 September 2016
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