Anyone wishing to enter the business of selling brand new cars should consider that they will need to be licenced to start a dealership in some parts of the world.
If you are an employee, then your employer will hold the licence and you don’t have to worry about that aspect – all you need to do is brush up on your sales technique and familiarise yourself with the particular make and models your employer sells.
Starting a Business
Before you can trade, you have to decide what type of company formation you are going to enter into. You may want to trade as a limited company to protect your personal assets from seizure should things go wrong and your company goes into liquidation. Perhaps you are envisaging going into business with somebody, in which case you might decide upon a partnership arrangement.
Whatever type of business you decide upon, you should bear in mind that most people do not like to deal with one-man or sole trader type companies and in the case of a car dealership you will be likely to set up as a limited company to inspire trust in your customers and to be able to obtain a licence.
Apart from a director, your company will need somebody who takes care of the financial side. Daily banking will be necessary as car dealerships deal with a lot of cash – not just money for the vehicles you sell but also for spare parts and accessories. Whoever you employ must be a person qualified for the job, such as an accountant or bookkeeper. Your business of selling brand new cars will absolutely depend on it. You will need sales staff apart from yourself to be able to deal with the work load.
Choosing the Right Location
This will be vital if your business is to be a success. The outlay for this will be considerable, as you will have to provide enough outdoor space in the forecourt for a good selection of cars and a building large enough for housing a range of cars, offices for staff, toilet facilities for staff and visitors, a reception area, a repair garage and an area where you will keep a stock of spare parts and accessories.
Even if you lease the premises rather than purchasing the land and buildings, you will have to find large sums of money for the lease and to pay staff until you make enough sales and have established a cash flow. Finding the right location may take some time, as sizeable units are usually situated out of town in industrial estates. Established car dealerships don’t change premises that often, so finding a purpose built unit will take even longer.
Buying a Business
An established dealership will have regular customers and your business of selling brand new cars will be off to a flying start with customers already on waiting lists for models they ordered. If your customer service is excellent, these customers will sing your praises and word-of-mouth advertising will bring in new business.
Reference: Auto Transport > Used Cars > Having a Successful Business Selling Cars
