5 Tips before Starting an Automobile Business
Starting a business can be very tricky. There are many hoops one has to jump through to entice customers and to grow the business. Starting an automobile business is particularly tricky because of the many factors one has to consider. It’s important that before starting your own automobile business, you have to be passionate about cars or at least possess a keen interest in them. While it might be easy to choose any business you want to own, what motivates a business owner to keep going through the hard times and make the continuous sacrifice to grow it is because they’re passionate about what they do. A florist will never be motivated to run a restaurant because that’s not where his passion lies; similar with car enthusiasts running a clothing website. Before jumping head first into starting your own car business, consider your interest level. Are you passionate enough to push forward when the going gets tough? What sacrifices are you willing to make to keep the business going? How much time do you want to invest in running the business? What follows are a few tips to consider before embarking on an automobile business. This could help guide potential business owners on what to expect along the way.
- Business Plan
Before any new business is put up, it’s important to start with a plan, a detailed plan to be specific. A business plan is a written document outlining the mission, vision, strategies and how to achieve the goal of the business. It usually lays out a plan for marketing, financial, and operation for the business to follow. This is not exclusively used for new businesses too. Old businesses wanting to move in a new direction will have to create a new business plan outlining their new mission and goals.
Things to consider in the business plan are the overall service you want to offer. Do you plan to sell classic chevy truck parts or do you plan to sell parts for brand new Mustangs? Do you offer specialized services like an oil change or tire repair? Are you planning to buy an existing car shop or do you plan to start from the ground up and build the business up yourself? These are pertinent questions that are answered in the business plan. For people wanting banks to give them a loan to start a business, this is a crucial requirement before financial assistance is given.
- Choose The Location
Location is everything in a business. It could make or break one so selecting the right location should be thought of carefully. For an automobile business, it’s important that the location is easily accessible with enough parking spaces for all customers’ vehicles. The location should also be able to accommodate the garage part of the business as well as the office. Car shops usually need ample space for all the equipment and vehicles. Some car shops also accept repairs and servicing of semi-trucks and these vehicles require a huge space. These should all be considered in choosing the potential location of the shop.
- Equipment Needed
To determine what equipment is needed, you should know the types of services you offer. Almost all car shops have at least one air compressor present for standard tire repairs. These include pneumatic tools and auto lifts. Jacks are also a standard in any car shop. A shop that offers brake resurfacing should have a brake lathe. This will cut down on the cost of having to remove the rotors and drums and sending it to another shop. For repair and maintenance of suspension systems, a good strut compressor is also needed in the shop. This will make the shop more flexible and offer a specialized service that is not offered by many car shops. A good transmission jack is also essential in any automobile business. This will prevent any injuries from lifting heavy transmissions. Vehicle lifts are optional but they can make any car shop profitable. Work is done a lot easier and more efficiently because it’s easier to get under the car and get the work done. These should be of high quality because vehicle lifts are a major investment in a shop, one that should last many years.
- Funding Source
A new automobile business will usually require a starting capital of around $50,000 to $100,000. This includes the insurance, staff salary, cost of equipment, and rent. Unless you have this kind of money saved up, you’ll need funding to put up your business. One source of funding that’s very common to would-be business owners is banks. Through loans, banks provide a source of funding for small businesses that usually have a lower interest rate than other sources. Before approval of any business loans, banks require that a detailed business plan should be submitted along with a good credit score. Banks don’t shoulder 100% of the financial needs of a business but they can greatly help in reaching the needed amount. There are also other ways to secure funding other than banks. There are lenders who offer short-term loans but their interest rates are considerably higher than those of banks.
- Know The Industry
All business owners should be quite knowledgeable about the industry they’re in. It won’t do their business any good if they’re clueless about the ins and outs of the trade. Before opening up the business, significant research should be done about the car industry. Formulating a set of questions about the business and researching the answers is usually a good research flow to follow. This will help address any potential problems that you might encounter while running the business. It’s also important to outline your key selling point as an automobile business. It’s crucial that your business is not simply a copy of another one. You have to have a unique selling point that only you offer to your customers. This will set you apart from the competition and it will draw customers into your business.
There are many more factors to consider before starting your own car business. Things like licensing and hiring staff are a few points to note. But these 5 tips are the major ones to prioritize as this will lay the foundation of the business you’ll be putting up.