This information helps you determine how much financing your business needs and helps outsiders determine whether lending you money or investing in your business is a wise use of their funds. You'll probably also want to note any personal seed capital your business has, or will have. Financiers want and often require entrepreneurs to put their own funds in the venture, and the greater the portion you commit relative to your net worththe better. You must also determine which type of financing would be most suitable for your business.
In fact, sometimes it seems as though every person in the U. And while the reality may not be quite so simple, the truth is that most licensed drivers either own or co-own, a car.
In fact, many drivers own more than one car. However, many of those same drivers who are interested in owning a motor vehicle often find themselves unwilling to commit to purchasing one new. In the United States, Put these facts all together, and it becomes apparent that the used-car market is certainly a lucrative opportunity for those who might be willing to invest.
And those who commit themselves to running a used car lot without putting in the necessary preparation time used business plan pro software just find themselves and their investment kicked to the curb.
And while these pre-opening-day procedures might seem tedious, they may well mean the difference between success and failure for your business. So, before you really get down to business, you need to assess existing demand.
Choose a potential location for your dealership, and then research the number of used cars sold within ten miles of that location over the space of a year. Research those purchases further, to determine the percentage of types of vehicles being sold trucks vs.
Make special note of makes and models that sell more frequently. Finally, make note of any competing dealerships, as well as what those dealerships offer. If you can see that there is an unfulfilled demand for used cars in your area, then you should be able to move forward with confidence.
Then, by locating the average profit per vehicle, you can get an approximate idea of how much profit your dealership stands to make per year.
Identify your target clients. Your customers are the single most important factor to the success or failure of your business, so taking the time to identify who they are and what they care about is absolutely vital.
Take a look at the types of cars you plan on selling, and then do some research to determine the age, gender, and income level of the average individual who owns those types of vehicles. Later down the line, this will allow you to tailor your marketing and advertising efforts towards those who are most likely to be interested in what you have to offer.
Compare the advantages of franchising vs. Building and opening a dealership from scratch is an expensive and risky endeavor.
Because of this, many dealership owners choose to franchise. Franchising makes it possible for owners to sign franchise agreements with larger, more financially stable car manufacturers.
This means that the car manufacturer allows the franchisee the right to use established branding and marketing materials, and to participate in promotional deals.
The car manufacturer also helps to supply the dealership with quality used automobiles. In return, the dealership owner is required to prove that he or she has the money and the talent to be able to operate the dealership and turn an acceptable profit.
The car manufacturer will likely also take a significant portion of those profits both as an initial fee, and as an annual due, but given that the dealership will be able to benefit from associating with an established manufacturer, the overall rewards are often more than enough to offset the costs.
Consider whether or not you want to include a service department. Used cars, even the newer models, tend to require more maintenance than those straight off of the factory line.
On the other hand, the cost of developing and operating a service department can be prohibitive, and the department may take some time to pay for itself.
Determine your startup costs. This will give you a more accurate idea of what your initial costs may be. Identify your financing options.
While some owners may have the personal fortunes to be able to finance the opening of their own dealerships, the truth is that opening a used car lot can require hundred of thousand, or even millions of dollars—which is something that many prospective lot owners simply do not have.Business Plan Pro Free Download Latest Version for Windows.
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