The motor industry is not one to be entered into lightly. All sales professionals know this. The hours are long and often unforgiving. A standard day in the motor industries is 10 hours rather than the usual 8 and most sales professionals and service staff usually find themselves working long after closing time. The days off are few and far between and when all the rest of your friends are enjoying a Saturday at the beach or a Sunday dinner with their families you’re at work selling cars. Moreover, most car salesman I know are constantly coming into work on their days off to deal with paperwork and admin that they just don’t get time to do while they’re busy selling cars. If you have a talent for sales, and a love of cars, however, there’s simply no other profession that’s even crossed your mind.

As well compensated as sales professionals are for their efforts, there comes a time when the seasoned salesman gets that entrepreneurial urge and gets the urge to set up their own dealership. Although this can-do attitude should be respected and values, a car dealership is not a prospect that should be entered into lightly. Here are some important caveats you should consider if you’re seriously considering starting your own dealership...

Expect to spend money… but that doesn’t mean overhead shouldn’t be managed

It takes an unusually high amount of startup capital to start an automotive business although your outstanding sales record and industry knowledge will be highly advantageous in helping you secure the capital. The expense of shipping cars to and from your dealership, human resources, a robust IT infrastructure, security and the other myriad costs of running a 21st century car dealership can all add up.

Let’s not forget that the motor industry is a low margin business, so managing overheads will be amongst your highest priorities. Think long and hard about which overheads will result in the highest return on your investment and spend accordingly.

Find ways to build value for customers

In an age where customers are increasingly skittish about spending money, and in an industry where profit margins tend to be pretty low, savvy car dealers need to find other ways to build value to their customers. While manufacturers and main dealers can afford to be much more generous with discounts, independent dealers need to cling to every penny of profit they can get. Fortunately, the most precious commodity in the motor industry needn’t cost you a penny… Trust. Find ways to get your customers to trust you and you’ll reap the dividends for years.

Boost your margin with robust aftersales

While your background may be in sales, you’ve likely been working in dealerships long enough to know the importance of robust aftersales. The margin on parts, fluids and technician’s time will likely eclipse that of the cars themselves. Plus, you have so many more opportunities to build in value in your service department. By offering free or discounted oil change services, brake fluid changes and gearbox oil changes you will increase your customer retention and keep them coming back to you for services, repairs and (of course) new cars.  

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