There are several things to consider when planning to start a new car dealership, especially if you are in need of capital to finance the acquisition of the cars and secure an appropriate retail space. The location of the dealership, types, and amount of cars sold are all unique elements that will impact your profitability. Pro Business Plans has extensive experience working with car dealerships to start and grow with professional business plans designed to raise investment.
The new and used car marketplace is increasingly competitive, along with the options available for financing to dealerships. Investors and banks that lend may request a well prepared business plan that demonstrates the unique profitability of your company relative to alternative investments. A custom business plan for a car dealership has three main sections to reflect this including the business model, marketing strategy, and financial projections. The following sections are explained in more detail below:
The business model for a car dealership business plan is relatively straightforward, but also depends upon the location of the operation, brand of cars sold, and their age. Some car dealerships, for instance, for exclusively on used cars or maintain contracts with select manufacturers. If your dealership has a location in a high traffic and accessible location and easy access to high demand vehicles at competitive prices, it will be more likely to succeed and acquire the financing it needs to scale. The business model is often directed by the local competition and market demand, which may be determined in the market analysis.
The marketing section of the car dealership business plan outlines how your dealership will attract and convert leads. Smaller dealerships use aggregation platforms for car marketplaces or classified posts , or promote the dealership in its entirely on a broader and more general media network. We suggest leveraging all potential digital channels and having a well-structured website that contains information about the inventory in stock that links to individual advertisements for each car. Mass advertising that targets a general audience will probably have more views, but be presented to an uninterested audience relative to one that is well calibrated to consumers in the market to buy cars.
Unlike a speculative software company, the financial forecasts for a car dealership business plan are based on very few assumptions. In general, the profitability of the company will depend upon its gross margin on the sale of the car. At that point, fixed expenses such as the rental and payroll costs will be measured against the frequency of car sales and customer acquisition expenses. Professional financial projections should include a three to five-year income statement, cash flows, and balance sheet in addition to a break-even analysis. Banks and investors are likely to request these financial projections and understand how their assumptions were gathered, so it is important to use unbiased third-party research and information from comparable dealerships in order to form the basis of the forecasts.
Regardless if you are opening a new business, or expanding an existing one, having a business plan can help you to make more informed decisions and manage your money. It is also required by many lenders as part of your loan application.
This business plan template is updated annually to reflect the most up-to-date information on how to create a profitable operation. It was created by Chase Hughes, our CEO, and has evolved over hundreds of client engagements over the past 10+ years to become the backbone of operations and management for 1,000s of entrepreneurs.
Project future revenues using real industry data
Fully-compatible with Microsoft Excel and Word.
Critical information for operating and running the business.
Annually updated market research specific to your market.
A Business Plan is a description of the business, market, and expected financials. Plans may be used to increase sales and profitability, outperform competitors, and used to obtain bank loans or investor funding.
For startup founders and small business owners, the Business Plan is a fundamental resource for managing the business and making educated business decisions about the company’s future.
There’s no need to reinvent the wheel, though. There’s a standardized set of information and variables for most small businesses including the financial model, market research, and basic business overview that most executives are familiarized with.
Summary of what it does, how it operates, key staffing and operations procedures, risk & success factors, and management team bios.
Third-party information on the market size, key trends, growth rates, and competition both overall and for a specified region.
Complete financial projections including Revenue, Cost of Goods Sold, and Operating Expenses to produce Profit & Loss statement, Cash Flow statement, and Balance Sheet.
Comprehensive plan including market launch, social media, promotional strategies, pricing strategy, and web presence.
This is a functional model you can use to create your own formulas and project your potential business growth. Instructions will be included on the front page.
