Regardless of how the economy is going, people will always need cars, vans and other means of transportation, and many go to a dealership to purchase a vehicle. Opening one can be a profitable venture. But being knowledgeable about cars is just one of the ingredients needed to run a successful dealership - you'll also need to manage inventory and staff, and be able to attract new customers. Read the steps below to get the information you need to open your new business.
Steps
Step 1. Decide if you want to buy an existing dealer or open a new one
- Buying an existing dealer may require a larger investment, but you will take over all of the company's assets, including suppliers, employees, reputation and customers.
- Opening one from scratch requires careful planning, but it will also allow you to develop your style and reputation.
Step 2. Examine your local competition
Understand how your competition attracts customers, where they advertise, and what kind of promotions they do
Step 3. Develop a business plan
- Decide if you want to sell new or used cars, or both, and what type of financing to offer customers.
- Choose whether to focus on one brand or deal with multiple car brands.
- Determine the cost of the venue.
- Estimate the cost of the necessary equipment, such as computers, printers, phones, and office supplies.
- Determine the start-up capital needed to buy your new or used car inventory by contacting auto manufacturers and researching used car prices.
- Decide how much staff you need and how much you are willing to pay for it.
- Determine how much you will need to set aside annually for taxes, insurance, accountant, and legal costs.
- Estimate notary costs for sales and leasing by asking professionals.
- Plan an advertising budget.
Step 4. Raise the starting capital to open the business
Ask your bank for a loan or look for private investors who want to finance your business.
Step 5. Learn about the legal requirements to open a dealership
Most countries require permits based on the number of vehicles sold annually, and will also require you to provide test plates for the vehicles you sell.
Step 6. Find the location for your business
Make sure it's a highly visible and busy place to attract more customers.
Step 7. Buy inventory
Step 8. Take care of the sales contracts, certificates of ownership and all other necessary documents
Step 9. Hire people who are in tune with your way of selling and who best represent your company
