For the smart entrepreneur, dealerships are lucrative and highly profitable enterprises. While they require a lot of work and a considerable initial capital, dealerships can make you impressive profits selling cars, motorcycles, scooters and other automobiles.
If you are planning to start your own dealership, you may want to talk to entrepreneurs running dealerships in your locality and learn a few things about the trade.
You can use this Honda scooter dealer locator to find dealerships in your area. Talk to the dealers about the registration process, the laws they have to abide by, and the challenges of making money in the business. Their insights should give you a good place to start your research into the dealership business and how best to start your own. The following are some of the other ways you can get ready to open your own dealership.
Write a Business Plan
No dealership would be worth much without a business plan that outlines everything necessary to kick-start the business. The plan should include the initial capital investment needed, monthly budgets, marketing plan as well as the daily hours of operations. With a well-written marketing plan, that clearly outlines your business proposition; the process of finding the necessary capital becomes easier.
Dealerships require a minimum investment of over $300,000. This is a staggering amount for a new investor. The money is only the initial capital, thus, you should look for more than this amount if you are to start on a high note. You could also seek to establish relationships with financing institutions that can lend you money against your existing assets. To retain control of your dealership and at the same time get the capital investment you need to put your plan into action, consider approaching investors who prefer a hand-off approach to investment.
Find the Perfect Location
Based on the amount of money you are willing to spend to get started, you can either build your own dealership, perhaps on a leased piece of land or look for a building that can comfortably accommodate your dealership. A proper dealership might require several acres of land. If there is a car dealership in your area that went out of business sometime in the past, its land may still be available for setting up a similar enterprise. Additionally, go for a location that is not too far from the existing dealerships that sell automobiles from a different set of brands with which you are in partnership.
Make sure you comply with all the requirements of the licensing authorities. These include state, federal and local licensing and regulatory requirements. Visit the State Department of Labor and talk to the officials about the requirements you need to meet regarding withholding and taxes.
Follow the above steps and you will have the information you need to launch your business from the idea stage to materialization. Take your time and plan everything properly. Proper planning will give you an edge in the marketplace and allow you to transform your new dealership into a moneymaking enterprise.