Interested in being your own boss? Selling cars is one way to do it. As with any other entrepreneurial endeavor, however, it is important to do your homework and make sure you check off all the right boxes.
In this post, we’ll cover some of the basics—some of the preliminary steps to take before you get your dealership off the ground.
Used Cars or New Cars?
Before you do anything else, you face a basic decision: Are you going to sell used cars or new ones?
Selling new cars will allow for some higher profit margins, but it also comes with a steeper startup cost; you’ll likely need an investor in order to pull this off.
Used cars, meanwhile, come with lower startup costs, but also lower earnings potential.
Planning Your Business
Once you make this preliminary decision, the next step is to put a business plan in place.
One aspect of this is financing. Will you need to work with a floor plan company in order to acquire inventory? As you consider financing, also think about things like employee salaries; marketing plans; business equipment costs; and what F&I products you’ll offer, along with your vehicle inventory.
Getting Official
The next considerations are licensing, bonding, and insurance.
A dealer’s license will allow you to sell an unlimited number of vehicles each year—absolutely critical for your dealership business! A surety bond, meanwhile, can help protect you from contract defaults from vehicle suppliers and wholesalers. Finally, comprehensive insurance is highly recommended for all dealerships.
Location, Location, Location
The location you choose can be make or break for your dealership.
On the one hand, the best locations are the ones that have high visibility and get a lot of traffic—so somewhere on a busy road, in a more active part of town, is advisable.
With that said, it’s also wise to think about proximity to competition. It may be hard to get a used car dealership off the ground if you open it right next door to a more established dealership.
Enlisting a Sales Team
One more thing to note is that cars don’t sell themselves—so you’ll need to get a sales team that can close deals for you.
Make sure you seek sales professionals who know how to listen to customers’ needs, provide them with a pleasant experience, and be consultative rather than pushy or prescriptive. Also ensure you have a good sales leader who can provide coaching when necessary.
Get Started with Your Dealership
The first step in launching a car business? Doing your research and knowing what you’re getting into. These steps should provide a good beginning. To learn more about successful used car entrepreneurship, reach out to Get My Auto today.