New car franchise dealership can be lucrative and high profitable companies, but they also require a great investment and work. They are usually open at least 12 hours a day 6 to 7 days a week. They must have a large inventory of cars so that people have several brands and models of colours to choose from. They are also very regulated and have to follow federal, state and local laws. Before starting such a company, make sure you will invest the time and money necessary to make it a success.
How to start a new car franchise dealership?
We go with the business plan. This should include things like initial and monthly budgets, hours of operation, marketing and car manufacturer that add up with you. Follow the car franchise dealership recommendations.
Find capital and investors
New car dealerships require a lot of capital to get started. For example, General Motors requires a minimum initial investment of $ 350,000. The costs of a dealership for yourself or do not have enough assets to leverage the financing, look for investors. Your car dealership will interest people looking for a non-intervention investment that has the potential for large profits.
Search for a location
You can find land on which to build a concessionaire or look for land with an existing building that suits your needs. You will need several hectares to accommodate your inventory of new vehicles. A good possibility would be a car dealership that has gone bankrupt. Make sure that the reason you went out of business was not because of its location. Also, make sure that any place you choose is close to other car dealers, but that these do not sell the same brands you are going to offer. And check with the local planning and zoning department to make sure the dealership complies with all regulations.
Get a new car dealership franchise
Take over an existing franchise from a merchant who wants to retire or leave the business. You can also check the distributor’s website for information on how to purchase a franchise. There are also franchises of car dealerships that may consider associating with you if they have no presence in your area.
Be careful with all licenses and regulatory requirements
Enter your business and consult with the State Department of Motor Vehicles to meet the specific licensing requirements of your state. Request a license for sales tax and, if you will hire people, check with your Department of Labor for the requirements related to taxes and withholdings.
Negotiate with financing companies, although potential buyers can get auto loans through local banks and credit unions. You can offer to finance director at the dealership. This can be done through local and national banks or financial entities.
You will have vendors, a sales manager, finance and support staff. Also, most new car dealers also offer vehicular service, so you will have to hire staff for this part of the business. Each car manufacturer will probably have its own training program. There are other training programs offered by industry groups such as the National Association of Automotive Dealers.
Market and promote your business
Place ads in all forms of local media, newspapers, television, radio and trusted websites. You may want to consider advertising on a billboard in a place with a lot of traffic near your dealership. You can also see the automobile trade publications that circulate in your area to see how they carry it out.
Car sales can be seasonal, with more activity during the spring and summer months, so make sure that the budget yields you for low sales times. Like any business, a new car dealer may have losses at first. Make sure you have enough reserve capital to cover months of losses and make sure that investors understand this possibility.