If you know and love the car business, you’re in a great place to start your own dealership. You may have been in the habit of purchasing, fixing up, and selling cars on an individual basis for years. Now is the time to branch out.
Build Up Cash
Even if you don’t need a stick and bricks location right away, it is critical that you start to build up a wad of cash. As your business expands, you will need other employees, and that means insurance. You will eventually need to think about a location, and that means
Building up a hearty stash of cash will give you more flexibility. If you live alone and are still working for someone else, consider picking up a side hustle, getting a roommate, and asking an older family member for ideas on frugal living. Savings can be a snowball; as you have more money to work with, you can find better ways to save.
Work with Professionals
You will need to work with professionals to make sure that you have the right licensing, the best insurance, and the right legal setup for your entity so you can easily grow. This means working with great accountants, attorneys, car transport companies, and insurance agencies.
For a DIYer, it can be tempting to try to do all of these yourself. However, mistakes in the early setup of your business can come back in the worst ways. Focus on cars as a way to build up the dollars to pay these professionals so you can expand without having to back-pedal.
A great business plan is also worth the work. With a detailed business plan, you can take your existing skills, sales history, and future plans to a bank and borrow against your business. You may have friends and family who can lend you money. Make sure that you share this information with the bank and that you set up a payoff plan with those who lend to you personally. No relationship is worth damaging over money.
Protect Your Personal Credit
When you first start out, your business financing maybe a little precarious. It can be tempting to put everything you have into the business and live on a shoestring. While living frugally is always a handy skill, avoid putting your personal credit at risk.
If you own assets that can be borrowed against, such as your home or your own vehicles, never put them at risk to keep your business going. As 2020 taught us, not all challenges are ours to manage. One glitch can put you in a very bad place through no fault of your own.
Guard Your Reputation
A lot of your business will be online. It’s an unfortunate fact of life that those who sell cars, especially used cars, have a few bad apples in the industry. Make sure that your dealings are as transparent as possible. If you have an unhappy client, do your best to make it right and track down the problem.
For example, you probably know some great mechanics who will go through a vehicle for you before you buy it and before you sell it. If you know that there are potential problems down the road for the buyer, bring that to their attention. If you can, provide an estimate of the recommended repairs with the sale information so the customer can sign off on it.
When you’re stressed and over-worked, it can be tempting to hire the first applicant to take some of the load off of you and your current employees. However, one bad apple can really damage the working conditions in your business.
Small businesses in particular need to hire folks that are flexible. You don’t need someone claiming that a particular task is not in their job description; you need someone who will pitch in with whatever needs doing. Set a probationary period and carefully monitor the relationships in your business to make sure that your newest hire is working well in your culture.
Starting a small business can be a wonderful way to have a rewarding career and leave a thriving legacy for your family. If cars are your passion, starting a dealership can be a terrific way to focus your skills throughout your lifetime.