Opening a car dealership is an exciting time for a business owner. It is the opportunity for them to create a business, from the ground up, that has every chance of being successful. It is a dream that so many never get the chance to achieve. One of these reasons may be because they haven’t had the relevant guidance to help them at the start of their journey.
From looking for motor trade insurance that includes a road risks policy, to organizing finances and establishing a business plan, there are so many things that you need to take into consideration when it comes to starting your own car dealership.
Luckily, this guide goes into detail about some of the things that can make your life easier when it comes to your new business endeavour. So, let’s learn more.
Having a business plan is important for any business, especially those that operate as a car dealership. In short, a business plan is a written document that contains the goals of a business, the methods for achieving these goals, and the time frame in which you want these goals to be achieved by. For instance, if you’re the owner of a dealership, you may have the aim to sell 100 cars in a week and you may decide to improve your marketing and advertising to help make this possible by using dealer CRM software to aid in the car buying process and customer experience.
Of course, there may be other things that you may want to consider in a business plan too, such as whether you want to move location further down the line to increase the number of customers that you have, or if you want to reach a certain financial goal in your first year of opening. There are so many things you can include in a business plan. If you decide to do this, the process of starting your car dealership can be made significantly easier.
As well as having business insurance that can help to protect your business should they face any consequences, you also need to make sure you have the relevant insurance. As car dealerships are responsible for the buying and selling of vehicles, it is very important that they look into getting motor trade insurance. Put simply, this type of insurance is designed to cover the types of businesses that work on and drive the vehicles of their customers, as well as any that they own. Depending on the type of plan that you have, this could extend to just the business owner, certain staff members, or all employees. Without it, you won’t be protected if any damage should occur to these vehicles when they are in your care, as well as not remaining road legal.
Alongside motor trade insurance, you should also think about looking into public liability and employers’ liability insurance to offer extra protection should any customers or employees file a lawsuit against your business. Just like you would buy health insurance to ensure that you can cover the cost of any medical care you may receive, you should also do the same when it comes to your business. So, insurance is a must.
It can be hard to start your own car dealership if you don’t have the necessary funds to give you a helping hand. In most cases, many business owners will make the decision to take out a loan with their bank, if they don’t have investors who can provide them with an alternative stream of income in these early days. Most business loans that you can obtain from a bank, or professional lending company, allow you to receive a certain amount of capital that gets paid back at a fixed interest rate with regular repayment terms. If you manage your financial situation accordingly, you might be able to repay your loan back in a total of five years, but ultimately, this will come down to your individual circumstance. So, make sure you look over your finances before deciding to open a car dealership.
Finally, you’ll need to make sure that you adhere to the requirements when it comes to licensing your car dealership. Whilst you may think that you can leave this to the last minute, the truth is that you can’t. This is something that you need to get before you can even think about selling cars. If you want to be the most successful car dealership in your area, you need to take the time to look for, and buy, a dealer’s license that provides you with the opportunity to sell an unlimited number of cars per financial year. As well as this, it also ensures that you operate within the Consumer Rights and Safety Laws, which can negate the risk of legal costs in the future.
By following the list of tips above and any others that you can think of, you will be well on your way to achieving your dream of starting your own car dealership.