From whether it’s okay to have two car loans at once to ways to compete with your competitors, there’s much to be considered when you’re opening a car dealership. The first thing to consider is if opening and running a car dealership is a viable option for you.
If you have sales experience or a sales manager that does, and a good business head on your shoulders, then it may be a great idea and quite lucrative as well. However, there are a few things to consider and questions you should ask yourself before you make the decision to open your car dealership. A few of those things are listed below for your perusal.
Do Your Research Carefully
The last thing you want to do is jump into the car dealership business without first doing the proper research. The research includes things like whether you need a surety bond for your business, what the best location is to put your business and even taking a few classes to help with marketing and business. The more research you do, the better prepared you’ll be when you finally open your doors.
Your Customer Base
Your target audience is going to be your local community. This consists of family, friends, and sales referrals, especially in the beginning. Is your dealership going to be located in a working-class neighborhood or a more affluent part of town? Who lives in this area? Baby boomers? Retired couples? College students? Knowing these things helps you with what type of cars to carry and what price points to set, as baby boomers can certainly afford a more expensive car than a struggling college student.
Type of Dealership
If you’ve done your research, then you already know that you need to decide on the type of dealership you want to open. Decide whether you want to deal with new cars, used cars, or a mixture of both. You could also focus on luxury cars, foreign cars, or even just electric cars. This will be decided during your research of your customer base, by figuring out what sells the best and what the people of your community are looking for the most.
Your Business and Financial Plan
Never open a business or sink your money into opening a car dealership without drawing up a solid business and financial plan first. If you’ve never developed one of these plans before, it might be best to consult a professional, so it’s done the right way, the first time. This car dealership is your future, so you don’t want to leave anything to chance.
Research Licensing Requirements
To open a car dealership in any state, you’re going to need to have a business license and follow the rules and regulations of that particular state. Each state is different, so make sure to research the licensing requirements in the state you’re opening the dealership in. Some states have few requirements and light fees, while others have heavy fees and stringent requirements for licensing.
Research Legal Provisions and Requirements
Once you open your dealership, you’re going to be required to adhere to federal and state legal provisions and laws. From surety bonds to insurance and laws that differ from state to state, you need to research them all, and if you don’t understand something, ask for help.
These are just a few things to consider when you’re thinking of opening your own car dealership. Considering the things above will help you open your dealership and help you make your business the success you’ve always wanted it to be.