In any given day, there could be millions of vehicles on the road. Cars are fastest way for individuals and families to travel from one place to another. Businesses need trucks or other commercial vehicles to deliver raw material to factories, finished goods to warehouses, shopping centers and even end users. If there is one business that offers the greatest potential for profitability, it is auto dealership.
This does not mean, however, that a dealership is automatically profitable. Cars may be essential to most people and many businesses can’t do without them, but you have to remember that each year millions of cars of every make, design and size roll out of the assembly lines of various car manufacturers and delivered to thousands of auto dealers around the country. Many auto manufacturers produce all types of vehicles from sedans, MPVs, SUVs, Crossovers, vans, hatchbacks to commercial vehicles such as trucks and often they manufacture different models for each. Despite the massive size of the market, competition can be quite stiff.
If you are thinking of putting up an auto dealership, there many things you’ve got to consider. The first of course is the capitalization. It is estimated that a new auto dealership requires a minimum investment of not less than $100,000. That is a lot of money, so the next requirement is extremely important.
Choosing the franchise is the next important consideration. As already said, there are many car manufacturers. So you have to decide which car brand promises the highest profitability. You can determine that by simple research of the popular cars in the country, the market potentials of various brands and the track record of various car companies in terms of ability to come up with new models that people would like to buy.
You may be selling the most popular car brands, but even this is not an assurance that your car dealership would be a success. Besides the competition provided by other dealers of other car brands, surely there are other dealers that are selling the same brand that you do. You can’t be complacent. You need a good business plan; effective and flexible strategy.
If you do not the experience in managing a business much less an auto dealership business, you’d need the help of people that are knowledgeable experienced and well trained in the ins and outs of auto dealership business. They would be the ones who would help you to develop a viable business plan, effective strategy. Hence, hiring the right people is a must. But you may not have adequate skill even for this task. Fortunately, you really do not have the hiring yourself since there are some companies offering consulting services to auto dealers comprising of hiring, business development, inventory management and marketing. They offer a variety of training programs to managers as well as salespersons.
At the forefront of helping dealers achieve profitability and improve their services to customers is the National Automobile Dealership Association (NADA). The nada training and dealer services program is a continuing program available to member dealerships. So after you have set your dealership, the best you can do to ensure that your dealership succeeds is to join NADA.