If you are a car enthusiast, starting a used car business is a great idea. It simple—people need cars, thus the potential to thrive in this industry is enormous. According to IBISWorld, in 2019, used car sales in the United States were more than $118 billion in revenues. Now, this business is often intimidating but with the right guidance and the proper tools in your arsenal, selling used cars will be the entrepreneurial breakthrough for you.
Here are the tips to set you on the right track on your journey towards financial freedom in the used car business.
Do A Market Analysis
Before starting your entrepreneurial journey as a used car dealer, knowledge of the used car market is essential. What are consumers looking for in a used car? What are other used auto dealers doing? What price range appeals to a buyer? Understanding how the market works will make it easier for you to know your target clients.
Identify A Niche
Find a niche and maximize on it. A niche is useful in elevating your used car business. Maybe you could decide to sell one brand of car at a specific price range. This way, you get to reach your target audience effectively.
Create A Business Plan
A clear business plan is a good thing if you want to succeed in any business. Creating a business plan will help you map out the details and the direction of the business. With a business plan, you will focus all your energy in filling the niche. Your business plan should include:
- Estimated startup and running costs
- Name of the business and number of employees
- The target market
- Duration before breaking even
- A reasonable price range for your cars.
Getting Your Inventory
You need to know where you are going to source your vehicles and at a low price. When it comes to auto auctions, there are numerous choices. It’s advisable, if you are an independent dealer, to start small. This means buying cars at a reasonable price, then over time, you can build a bigger, better inventory from money earned through sales.
It is, however, important to note that, when you bid for a car at an auction, asses the mechanical condition of the vehicle first. Minor problems like busted headlight lenses, a faded paint job or missing fog lights are easy to repair yourself using power tools, a headlight restoration kit, and application of a quick clear coat. For serious mechanical problems, getting a professional is advisable.
Register Your Business
You should register your business with all the relevant authorities. Get all your permits and licenses for operating a used car lot business lest you risk getting fined or worse—a shut down. You should also set up a bank account and an accounting office to keeping your books up to date.
Set Up a Showroom and Get a Website
Build Your Brand
Your brand is important in the eyes of potential clients. A strong brand shows what your business stands for and will help you get a better perception of a new customer against your competitors. Build your brand by offering after-sale services. For example, you could get a headlight restoration kit and offer headlight repairs and cleaning services or even turtle wax services to clients. Create new marketing strategies by learning what customers want. By doing this, you’ll beat competitors and reap huge profits in your business.