A few keys points to consider when starting a car dealership
Starting a dealership is a big undertaking and you’re likely doing as much research as you can. As a leader in the automotive software technology industry, we know a thing or two about what makes a car dealership run efficiently and productively. Here are some of the key points to consider when starting a dealership.
Picking the right location
You might think the only consideration when opening a retail business is where to set up your store, but there are many other factors that come into play. The cost of buying a commercial property can top millions of dollars regardless if it’s vacant or with an existing structure. If you’re going to lease instead, prices will range from $8k a month upwards to $20k/month and more for space in prime areas.
Choose the correct option for your business registration
If you’re looking to get into the automotive industry, there are a number of options for registering your business. Better to understand if you will need a sole proprietorship while other car dealerships register as general partnerships or limited partnerships. One option that might be right for some companies is obtaining an LLC status which can protect personal assets from lawsuits and also provides flexibility in regards to taxes.
Dealer License fee
If you are starting your own car dealership, you will need a dealer license to sell more than a certain amount of cars per year. If you do end up getting this type of license, it is important to find out what fees are associated with it as well so that they don’t come back to bite you later on down the road!
Surety and liability bond is smart business when opening a dealership
Surety bonds are an important piece of your business and the cost will depend on several factors. For instance, you need to consider how large a bond is for protecting consumers from fraud in relation to credit history.
If you have poor credit, it may be more expensive than if someone with better standing wanted protection against potential losses due to fraudulent activity, such as solicitation or misrepresentation by dealerships employees that could lead them into bankruptcy.
Embrace technology and use it to your advantage
Most of the reviews you will get online will be regarding your service department. If you want to keep your service department on track right from the start, then investing in automotive route sheets software is a must. The right car dealership management system with the necessary productivity plugins is a make or break to a busy dealership in this digital age.