How to work a car business - Automotive Sales Training - Jim Ziegler
Researching the market The first step in any business is to determine if there is a demand for your product or service Once you have determined the application, you must consider how your business could attract some of that demand 1 customers.
Determine the number of cars sold in your area Suppose, for example, that the typical car buyer is ready to visit a dealership within 10 miles Jan. 16 km from their home Try to determine the number of cars sold within 10 mile of your proposed car dealership Suppose 50,000 cars are sold in this region every year.
Once you know the total number of cars, research purchases by category, for example, how many cars are purchased, compared to what trucks is the percentage of cars sold are new and how many are used You may even be able to determine the number of cars by Honda model, Ford, etc.
Evaluate existing car dealers on Say market, for example, that 3,000 new Hondas sold in your area each year, you are considering a Honda dealer How many existing Honda dealers in your area Among the sold Hondas, how many were purchased by consumers who went online and bought a new car from a dealer located outside the city.
This analysis will help you determine if there is a need for a new dealership in your market.
Determine your ideal customer Every business needs to identify their ideal client Your ideal customer is a summary of the features that your best customers have in common When you identify the ideal customer, you can design your business to meet their needs 2.
Look for age, sex, occupation and income level of the customer you are trying to attract Suppose you want to open a Honda dealer Do research to determine the type of people who buy a Honda.
You maybe find the perfect Honda customer is a man between the ages of 27 and 50 that the client is a professional white collar with a level higher than the average income Honda customer owns a Honda before, or has a family member who owns a Honda.
Many auto dealers to build customer relationships by selling cars and providing service Some clients return to car dealer to get service on their vehicle.
Find out where the ideal customer gets their Honda car maintenance are they to their dealer or repair shop This information can help you create a service that will attract customers.
Calculate the size of your market The objective of your research on the franchise market is to determine whether there is sufficient demand for your product In the end, you must know the dollar amount of sales of your product, and you can assess how the customer demand that you can attract 3.
Suppose that 3,000 new Hondas sold in your area each year, you are also planning to sell used Hondas that generate 2000 sales each year the size of your market is 5000 Hondas.
Based on your research of existing automotive dealers and customer demand, you think your new concession can attract 20 of the existing car market Honda 20 This figure would mean 5,000 sales of new and used cars, increased 20 1000 car sales.
Assume that the average profit per car given to both new and used is 500 If your dealer sold 1,000 cars, the company would generate 1,000 cars X 500.5 million in profit Moreover, you feel that your service would create earnings 300 000 total profit dealer would total 800,000.
Add up the costs required to start your car dealer The typical car dealer may require millions of dollars to open and operate your biggest cost will be your inventory of cars 7.
Floorplan refers to the cost of the vehicles you have on your car lot in addition to the cost of your floor plan, you will need to buy or lease property to build or renovate buildings on the property for your room exposure and perhaps for a repair service.
If you use a franchise, you have to pay the car company charges initial deductible Once you're operating, you have to pay the annual fee for your franchise agreement.
Car dealers also have to continuously train employees on the new car features, so that they can explain these features to customers that you incur significant costs for training.
Decide how you will finance the cost of your Dealership Financing Your dealer is a huge commitment that you will need to think about how you can find the money to open your dealer 8.
Most car dealers finance their floorplan by a bank The cars on the lot used as collateral for the loan floorplan A dealer may also incur huge costs to design and build their showroom and repair center.
In addition to car inventory, you may need to hire dozens of employees you will need money to meet payroll every month.
If you borrow money, you'll need to provide sufficient collateral for your loan you may have to pledge personal assets as collateral for your loan, the bank will also see detailed financial projections These projections explain how your business will generate a profit and repay the bank loan.
Think of the regulatory requirement to start and operate your Dealer Your state, county or city will be requirements to run your dealership Many of these rules are in place to protect consumers who make a significant investment in purchase of a car 9.
Your state will ask for a license to sell cars as your main activity While individuals can sell cars to another, a car dealership that sells many cars per year will need a license to exploitation.
To build your dealer, you will need to get building permits from your city or county.
Your state will require you to have multiple forms of insurance to run your dealership One type of insurance required is a bond This link is set up to protect the car buyer of any fraud related to a car purchase.
How to open a car dealership 9 steps (with pictures), open, dealer, region each year to operate your dealer.