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If you’ve always dreamed about being your own boss and you have a passion for automobiles, starting an auto dealership can be a great business idea. While auto sales have been in a decline for the past years, the economy continues to show signs of growth.
Since you will be investing significant capital in order to run your auto dealer shop, it is important that you plan ahead and make sure to do it right the first time. Another thing, finding the best location for your startup, should be a major consideration too. According to the National Automobile Dealers Association (NADA), Oklahoma, Florida, Arizona, Nevada, and California are among the best states to start an auto dealership in America.
Avoiding the following mistakes that many startup auto dealers do will certainly help you sail through the rough waters and achieve success:
Lack of Planning (Or Not Planning at All)
Planning might be the most tedious part of starting a business. But that’s the first and most important step. Without knowing your market, analyzing trends, and studying your business model, you will be operating in the dark. Creating a business plan lets you test how feasible your business idea is. It serves as your safety net which saves you a great deal of time and money in the long run. Your business plan covers your operational and financial objectives, which should guide you to effectively running your company.
Not Feeding Themselves with Enough Information
To succeed in any business venture, entrepreneurs should take time to study their craft. By studying, it means more than simply being updated with the latest trends about cars. More importantly, it involves learning the ins and outs of the industry, understanding the behavior of their target market, and so on.
Not Calculating Startup Costs
Startup fundraising is probably the hardest part when starting a business. It takes blood and sweat to raise enough money needed to support your business model. Even worse, one false step and your money blow up! Before calculating how much you need, it is important to define your clear funding objectives, particularly how much capital you need. Seeking funding too early is also not a smart move. Same with not providing a cash-flow analysis. Financial planning is central to revenue growth. It gives you answers to most of your funding questions, such as whether you need personal loans online to purchase tools or equipment, or whether you need to cut costs, allocate more money on certain areas like marketing and promotion, and so on. You see, financial management is more than tracking your accounts payables and receivables. If you’re looking to succeed in business, understanding your finances is key.
Not Paying Attention to Marketing
It’s true—word of mouth is the best form of advertising. But today, it is not enough for businesses to market their products more efficiently. That’s because consumers have more access to information they need. They can compare rates and prices right at their fingertips, through their mobile devices. For auto dealers, investing in digital marketing and other advertising tools is necessary. Branding is a different thing. It’s what sets a business apart from the others in the same industry. It’s what allows customers and clients to know what to expect from your company. Same with marketing, branding should also be given importance by startup dealers.
Not Seeking Help When Needed
Even the most successful entrepreneurs have shortcomings. And they don’t have to know it all to succeed in business. They don’t need to have all the skills required to do all tasks. What is essential is their management skills, which involves hiring the best people to help them achieve their business goals. Recruitment is a strenuous process. But it’s one of the most important steps to building a team that will deliver results and takes your company to success.
Not Investing in the Right Tools
Successful auto dealerships make use of the right tools that empower their staff, make them more productive, find and connect with customers, improve daily workflow and processes, and market their brand. There are various technologies that help auto dealers acquire, appraise, merchandise, and sell cars online and offline. Leveraging on these tools not only make startup auto dealers more efficient, but it also increases their revenues.
Positioning your car dealership to success takes more than flashy signs and slick business cards. It is not enough that you know the basics of the business you’re into. Every entrepreneur should take time to study the ins and outs of the industry. Diving into this business without sufficient business and financial planning, market research, marketing, branding, and tools can set any entrepreneur to a painful failure. Avoiding these common mistakes can greatly help you thrive not only in the auto dealership industry but in any other industry as well.