Your passion is automobiles. You love the sound of car engines. You love putting vehicles back together. You love hitting the open road with the windows down and music blaring. You love all things cars. You also have a business mindset and want to turn your passion into a dream job.
So you read up on rules, regulations, and laws (not to mention licensing and insurance) in your state and decide you want to open an independent car dealership. Here are three things to consider before taking this path.
New or Used Cars
Before opening a car dealership, you need to decide if you’ll sell new or used cars. Selling new cars can allow you to sell top-of-the-line vehicles that sparkle and turn heads on your lot. However, selling new cars will also require more startup capital, and you might not be able to find an investor or bank to give you enough money to stock your lot with new cars.
If you sell new cars, exotic cars, or classics, then you might also have to consider enclosed car shippers, assuming you provide a car transport service. This service is essential for higher-priced and rare cars because of the weather and safety of the car. It also provides convenience to your customers and increases your target audience because you can sell cars regionally.
Since used cars tend to be less money than new cars (depending on the make, model, and how rare a vehicle is, of course), it’s less of an investment to open a used car lot, not to mention a lower risk since you won’t need as much money to start your business. Whether you want to sell new or used cars is your decision and there are benefits and disadvantages for both avenues.
A Plan for Success
While there are some products and ideas that sell themselves, you’re not reinventing the wheel—car dealerships aren’t a new concept. While you can lure customers to your dealership with customer service, deals, and a good line of vehicles, you have to create a plan for success to ensure you make it as a car dealership owner.
As with all businesses, you’ll need to create a business plan. In fact, a business plan is especially important for your business because you’ll likely need capital via investors or a bank for your inventory, office space, etc.
You’ll need to do extensive research on everything. You’ll need to learn the ins and outs of the industry and figure out how much it’s going to cost to run your operations. The cost of your industrial roofing or the type of roofing you use will even have to enter the picture. Not only will a good building and roofing protect you from Mother Nature, but it will help make your dealership stand out.
Of course, you’ll also need to consider how your business is going to stand out. How are you going to market your business? How will you spread brand awareness? What is your brand? What makes you different from other dealerships? These types of questions, and many others, need to be visited when creating your plan for success.
Hiring Your Dream Team
The final thing to consider is hiring your dream team. You might have to do countless tasks and work in areas you’re not an expert in the beginning, but the faster you build your dream team, the sooner you’ll have an expert working at every position.
Your strengths might be managing employees and raising capital. Your dealership will also need a team of salespeople, marketing gurus, lawyers, etc. After all, you’re selling a high-priced product and moving cars is going to take experts in many departments. You and your team can learn on the job, but a car dealership, whether new or used, is a big risk because of how expensive vehicles are. You can increase your chances of success and ensure every department runs smoothly by hiring experts in every area.
There are many factors to consider before opening an independent car dealership. Deciding between new or used cars, creating a plan for success, and hiring a dream team is non-negotiable during this process.