If you plan on selling more than 5 cars a year than you will need to start a used car dealership that has a set location. This location can be anywhere if it passes the requirements that have been set within the area you plan to be in. Do a quick search online on your State specific website to find the exact outline that they require before you can start a business.
Once you have done your research you can start planning the opening of your dealership.
- Business Plan-Take the time to set up a detailed business plan, from start to finish. You can find examples of it all over the internet, or you can work with a professional. It should not only include your startup plans, but the costs that are related to it. Budgets are important when it comes to running a successful business. You will need to cover all the local requirements, the state requirements, and be able to stock the lot with inventory.
- Entity-When deciding on a business entity it should be based upon one main thing. Do you want the business to be held separately from the rest of your life? If yes, then you should form an LLC (limited Liability Corporation), or a regular corporation. This allows the business entity to be separate from your personal entity. If something should go wrong with the business, your private home life will not be held accountable.
- Taxes-As you know, you will have to pay taxes on your earnings, so set this up immediately. Register with your local and federal governments and set up a tax ID number. This will allow you to file your taxes by using a specific number that is assigned to your dealership.
- Accounting-Along with taxes you will need to set up a bookkeeping and accounting system. There are lots of good programs that you can get to run on your computer to log in your daily numbers. Some of them will even help you file your yearly taxes. If not, and you are unfamiliar with taxes, you may want to hire a good accountant that knows business taxes.
- Permits-If you made an in-depth business plan you will already know what you will be required to have. Make sure that all your used car dealers business permits, licenses, and insurance are current and posted as per the requirements of your area. Never skimp on your insurance policy because it can save you from lawsuits in the future.
- Brand-If you are not familiar with this term as it applies to business you may want to read some information on it. Investopedia defines it as a way for consumers to identify with your business. For instance, if you specialize in trucks, then you could use trucks as your brand. Pickup man could be your advertising lingo, for example. The brand is not something that you can touch, or see, or even smell. It is something that is related to you as a business owner. Once it is set, it can be hard to change, so market wisely.
- Internet-Use the internet to boost your visibility, which will boost your sales. Make a website, use social platforms, and write blogs to increase your visits. You may want to consider hiring professionals because this stage is important for business in this decade.
Owning a profitable dealership can be a challenge, but one that can be overcome with detailed planning and execution. Take advantage of the area that you are in and build a following of loyal people. Repeat business will also lead to new business through referrals and gossip.
