Whether you’re thinking of opening up a used car dealership or you have already taken steps to make your used car dealership dream a reality, there are some things you should know before you dive into this project. Opening a used car enterprise is challenging but also rewarding. It’s also something you shouldn’t take lightly if you intend to succeed in this industry.
Many businesses open every year and fail. If you want to be one of the businesses that make it ten or twenty years down the road, you need to treat your enterprise like a serious endeavor instead of a hobby or side project. Part of taking your work seriously is ensuring that you have all the necessary knowledge to operate it effectively.
Brush Up on Employment Laws
Unless you are the only person employed by your used car service, you’ll need to know the rights of your employees and the laws surrounding employment. If you’ve never owned a company before, you may have more to learn than someone who is transitioning from owning another type of company to a used car dealership would. Even though the learning curve might seem steep, there are just a few key laws you’ll want to know before hiring your first employee.
As a business owner, you should take time to acquaint yourself with the Worker’s Compensation Act. This act provided some crucial protections for employees. One of the protections that employees may have in a large number of states throughout the U.S. is protection against being fired simply because you filed a workers’ compensation claim. Although some states may not make it illegal to fire someone for filing a workers’ compensation claim, it can still open you up to negative press or having a poor reputation as an employer if you fire employees for reasons that seem unfair to the general public.
Secure Appropriate Mentorship
Before you start a used car dealership, you may want to seek out a mentor to guide you along the way. Of course, this is relatively optional. Many entrepreneurs kickstart their companies without a mentor–according to Luisa Zhou, the number of entrepreneurs who report having a mentor at the beginning of their business venture is about 22%.
Still, even though less than a quarter of new business owners choose to have a mentor guide them, it doesn’t mean that you need to follow the crowd. If you could use some extra guidance, you should put your feelers out for others in your area who have successfully started a used car dealership. If you can’t find anyone locally who matches your mentorship preferences and needs, it may be time to get on a networking website like LinkedIn. Once you’re on that website, you can ask used car dealership professionals in your area if they would be willing to provide support to you as a fledgling business owner in exchange for an advertisement or partnership in the company.
Study Industry Growth
Before you take the plunge and open up a used car dealership, you should consider how much competition you may face in your field. If there aren’t any used car dealerships in your area, you might not have to worry about the competition. Still, in the United States, there are a decent amount of used car dealerships despite relatively slow growth in the industry. According to IBISWorld, used car dealers experienced a growth rate of about 1.8% annually. This statistic was calculated as an average between 2018-2023, so it’s still relevant today.
When you are setting up a used car dealership for the first time, you won’t want to assume you know everything. Taking the time to research the industry, commercial law, and best practices for commerce will ensure that your company will have the best chance at generating a profit. It might be tough, but it’ll be worthwhile.