While you may be tempted to think that running a small used car dealership is all about finding a suitable lot and putting some cars on it in anticipation of customers, you really need to know that that is not the case. Like any other business, this one requires knowledge of the cars, expertise in their features, being familiar with competitive prices, and how to arrange vehicle financing. And that’s not all. You should also know local licensing requirements, possibly consider getting a quote for motor trade insurance, and learn more about how to acquire your first vehicle. Still, the mission is far from impossible and if you follow these tips, you’ll have much better chances of succeeding in your endeavor.
Create a business plan
No business can grow without a detailed business plan, which includes an analysis of your industry, local market and projected financial returns. The purpose of a business plan is not only to get your ideas on paper to help you identify challenges and weaknesses in the plan, but also to determine whether your revenue is feasible. Additionally, you need to understand that no investor or lender will work with you unless you have such a plan. Your business plan is the first step towards achieving your goals.
You may not have enough money to get your business started, in which case you have to look for alternative ways of financing your project. Luckily, there are several options available. To begin with, be prepared that some lenders and investors will want to check your personal credit. That’s why you should check your credit reports and correct any errors. If your credit score is low, make sure you pay off your debt and improve your score prior to seeking business funding.
Location, location, location
You should look for the best physical location for your dealership with easy access from main roads, with enough room for your vehicle inventory and customers’ vehicles. Check with your local zoning office whether you can legally establish your business at that location before you commit to a lease or make improvements to the property.
Make a shopping list
Before you start making money, you need to invest some in your business. Once you’ve sorted out the location and all requirements regarding your business, you need to plan your purchase well. Namely, you’re going to need office furniture and equipment, various quality car accessories, as well as uniform for the staff, to name just some of the things you need to buy.
Dealer licensing requirements
You need to obtain requirements for a vehicle dealer’s licence before starting your business. These requirements are related to building size and location, signage and operation hours. You’ll also be required to post a state-determined surety body and adhere to all state and local laws and regulations in order to get the necessary licences. Needless to say, the requirement vary from state to state, so make sure you know which ones apply to you.
You can’t run such a business on your own, which is why you should hire people to help you. Ideally, you should find experienced salespeople, preferably with automobile sales experience, but you can also opt for those who used to sell big-ticket items, such as yachts or expensive jewelry. Also, don’t forget you’re going to need at least one maintenance worker to prepare the vehicles for sale.
Design a marketing plan
When all the groundwork is done, you should focus on a plan to attract customers to your business. You can hire an expert to work for you or outsource one. Think about your brand logo, website and presence on social media platforms. You might want to consider direct e-mail marketing, as well as advertising in local newspapers and magazines.
You definitely need to organise a grand opening event to showcase your offer. Serve light refreshments and feature live music to attract curious visitors who may stop and browse. Advertise the event in the automotive section of local newspapers and place flyers at local automotive parts and service facilities.
If you follow these tips, you’ll be much closer to achieving your business goal, which will only stimulate you to work even more and harder to develop your business. However, that can never happen if you don’t take the right steps from the start.