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Tips for Starting Your Own Car Dealership

Tips for Starting Your Own Car Dealership

Whether you’ve been let go from your job in recent weeks due to the global pandemic or you simply want to make a change this year, you might be thinking about opening a car dealership. Although people have had a recent period where they drove less than usual, this trend isn’t set to last forever. This being said, if you get organized now, you can open a business in the automotive arena later this year, and hit the ground running. Here are some factors to consider as you work to make your dream a reality.


The first thing you must do before starting a car dealership is research. Look at the automotive market in general and find trends you can focus on to help your business succeed, as well as point out business mistakes to avoid. Learn as much as you can about what customers are looking for, how and when they buy, and where the most growth is happening.

On top of that, investigate potential competitors, too. Look at not only other car dealerships in the city or suburb where you plan to open your dealership, but also at online businesses targeting the same kinds of customers as you. Discover what other dealerships have to offer, the level of service they provide, and how they market their venture. The more information you have, the easier it will be for you to see a way into the market and beat your competition once you are in.

A Point of Difference

Next, consider how you might create a point of difference that sets you apart from your competition as there are many angles from which you can approach this. For example, you might decide to target a particular audience that has so far been ignored or choose your niche based on a particular type of car or price point. You could also choose a unique location or sales method, or innovatively market your wares or services. The method you choose to help your dealership stand out should come from the gap you see in the market and what you think will work based on your passions, skills, and budget.

However, ensure the point of difference you decide on is of interest to people. It must be something that opens you up to a large enough market that you can launch well and grow the business over time, while still providing you with a specific audience.


Technology is available to make running a car dealership more stress-free, productive, and affordable than ever. There are all sorts of quality dealership inventory management systems on the market that save time and cut costs.

Use software to improve your sales processes and conversion rates by always knowing, at a glance, the location of your vehicles. This way, customers can take test drives and inspect cars whenever they want. Plus, you can audit inventory, monitor status indicators such as vehicle battery and fuel levels, and track cars with GPS. Inventory management tech also helps you avoid having old stock sitting around for too long that can end up costing your business money.


When you’re working on setting up a car dealership, remember that you don’t have to do everything alone. For example, find a mentor to guide you. This might be someone you pay to give you advice or someone who has been in the business for many years who’s willing to help you for no cost. Many business organizations and government departments can set you up with mentors and other helpful resources, too. Furthermore, seek out the advice of experienced lawyers, accountants, financial advisors, and other consultants who can help ensure that your business progression is both legal and sound.

A Business Plan

Another essential step to setting up a successful car dealership is making a detailed business plan. These plans help you ensure that you’ve investigated and thought out every part of your new venture, from its structure and the roles and responsibilities of various partners, to sales processes, marketing avenues, financial considerations, projected cash flow, and profit and loss.

The plan will also act as a guide as you launch and then build your business. With it, you won’t go off track and get distracted by opportunities that won’t help you obtain your vision. Plus, your planning should alert you to potential risks and threats to look out for now and in the future.

It’s exciting starting your own business, especially if it is the first time you’ll ever be self-employed. However, you must also give yourself the best possible chance of making the venture a success and set yourself up to avoid financial trouble. To do this, follow the steps above.

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by Dirk DeBie // Contributor to Businessing Magazine.

Opinions expressed by contributors are their own.