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Car Dealership Business Plan Template

Written by Dave Lavinsky

Car Dealership Business Plan

You’ve come to the right place to create your Car Dealership business plan.

We have helped over 5,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Car Dealerships.

Below is a template to help you create each section of your Car Dealership business plan.

Executive Summary

Business overview.

Wilson Toyota, located in Albuquerque, New Mexico, is a brand-new Toyota dealership that sells, leases, and services new and used Toyota vehicles. Our dealership will feature all the models that Toyota makes, from budget models to hybrids. In addition to our large inventory, we also offer in-house financing and service and repairs for all Toyota owners. With our competitive prices and world-class customer service, we plan to be the #1 Toyota dealer in the Albuquerque area in the next five years.

Wilson Toyota is led by Dylan Wilson who has extensive sales experience, including selling used cars for a previous employer. His experience and knowledge make him the perfect candidate to run a Toyota franchise.

Product Offering

Wilson Toyota will maintain an inventory of new and used Toyota vehicles. We will sell all Toyota models, including hybrid and electric vehicles. Some of the models we plan to sell include:

Wilson Toyota will also have a service center to help Toyota owners with routine maintenance, repairs, recalls, and part replacements. Additionally, Wilson Toyota will offer financing and insurance options for customers with all credit scores. Customers will find financing options at Wilson Toyota that they will not find at other area dealerships.

Customer Focus

Wilson Toyota will primarily serve the residents in the Albuquerque area. The city is home to thousands of families, professionals, and businesses in need of vehicles. We will offer budget vehicles to those who only need a basic model as well as luxury vehicles to those who have the disposable income to purchase something high-end.

Management Team

Wilson Toyota is led by Dylan Wilson who has been in sales for 20 years. Dylan Wilson has sold products in numerous industries, with his most recent experience being at a competitor dealership. Dylan Wilson is a car aficionado. He knows everything about the most popular models and how to find the perfect vehicle for every customer. His experience and knowledge make him the perfect candidate to run a Toyota franchise.

While Dylan Wilson has never run a dealership himself, he has worked in the industry for years. As such Dylan Wilson has an in-depth knowledge of the dealerships industry, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

Wilson Toyota will be able to achieve success by offering the following competitive advantages:

  • Location: Wilson Toyota’s location is near the center of town, giving us access to thousands of residents, local office workers, and passersby shopping in the city.
  • Great service at an affordable price: The complete array of auto services offered by Wilson Toyota is comprehensive, and Wilson Toyota will offer these services at a much more affordable price.
  • Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
  • Relationships: Having lived in the community for 25 years, Dylan Wilson knows all of the local leaders, newspapers and other influencers. As such, it will be relatively easy for Wilson Toyota to build brand awareness and an initial customer base.

Financial Highlights

Wilson Toyota is currently seeking $10 million to launch. Specifically, these funds will be used as follows:

  • Lot design/build: $100,000
  • Franchise fee: $400,000
  • Inventory: $9 million
  • Office equipment, supplies, and materials: $50,000
  • Three months of overhead expenses (payroll, rent, utilities): $250,000
  • Marketing costs: $100,000
  • Working capital: $100,000

Wilson Toyota Financial Projections

Company Overview

Who is wilson toyota, wilson toyota’s history.

Dylan Wilson incorporated Wilson Toyota as an S-Corporation in February 2023. The business is currently being run out of Dylan’s private office, but once the build-out on Wilson Toyota’s commercial location is finalized, all operations will be run from there.

Since incorporation, the company has achieved the following milestones:

  • Found commercial space and signed Letter of Intent to purchase it
  • Developed the company’s name, logo, and website
  • Hired an architect to design the showroom
  • Determined equipment and inventory requirements
  • Begun recruiting key employees

Wilson Toyota’s Services

Industry analysis.

Wilson Toyota competes against other new and used car dealerships, as well as online-only auto dealers and private consumer sales. The major trend in auto sales is that more people are purchasing vehicles online rather than through a salesperson. To meet this challenge, Wilson Toyota will offer flexible online purchasing through our website.

Even though the industry is changing, it is still growing and remaining profitable. According to Mordor Intelligence, the industry is expected to grow at a CAGR of 4% over the next five years. Even with the increasing demand for public transportation and cleaner forms of transportation, vehicles are still an essential purchase for most Americans.

According to a report by the National Automobile Dealers Association, the car dealership industry is a fragmented one, as the majority of operators are single-location businesses and employ fewer than 20 people. The market is estimated to grow to over $1 trillion in five years. Since there are no truly dominant competitors, barriers to entry are not as high as in many other industries, and a start-up can expect to have success in this growing market, Wilson Toyota is well-positioned for success. There is plenty of room in the industry particularly for conveniently located dealerships that cater to specific demographic trends and demands. In this industry, size does not necessarily mean an advantage, which bodes well for Wilson Toyota.

Customer Analysis

Demographic profile of target market.

Wilson Toyota will serve the residents of Albuquerque, New Mexico and the immediately surrounding areas as well as those who work in the area.

The area we serve is populated mostly by middle-class Millennials; as a result, they have the means to pay for higher-quality vehicles. Further, many are looking to transition to hybrid or electric vehicles, and middle-class earners are the primary demographic for these types of vehicles.

Customer Segmentation

Wilson Toyota will primarily target the following customer profiles:

  • Professionals

Competitive Analysis

Direct and indirect competitors.

Wilson Toyota will face competition from other companies with similar business profiles. A description of each competitor company is below.

Gibson Toyota

Gibson Toyota’s goal is to give its customers the best possible experience online and at its physical store. The professional and fun-loving sales team is committed to its customers’ complete satisfaction. Gibson Toyota prides itself on building relationships with its customers throughout all phases of the automotive journey whether it’s sales, service, or parts. Gibson Toyota provides auto sales and services for both new Toyotas and used cars.

While we expect that Gibson Toyota will continue to thrive. But since it is located in the next city, we expect more and more customers will frequent Wilson Toyota based on proximity and competitive prices we offer.

Johnson Auto

Johnson Auto is an independent used car dealership specializing in certified pre-owned vehicles. The team believes that the car-buying process should be as hassle-free as possible. The team takes pride in serving its customers to the fullest. The service center is one of the best in the area, and the team strives to get its customers back on the road as soon as possible. Johnson Auto maintains a convenient online parts inventory, and if a customer can’t find what they want there, the team will help them find what they are looking for. At Johnson Auto, the team is willing to answer each and every question a customer might have during the car buying process.

Wilson Toyota has several advantages over Johnson Auto, in that it specializes in selling and servicing one make of vehicle. Wilson Toyota will provide these specialized services at an affordable price point.

Foster’s Chrysler, Jeep, Dodge, Ram

Foster’s Chrysler, Jeep, Dodge, and Ram offers both new and used inventory, as well as providing service for these makes. The dealership also retails auto parts and accessories. This location also participates in Toyota Rent a Car, in which new Toyotas are rented by the day. Camrys rent for $48.50 per day and Corollas rent for $37.80 per day.

Foster’s Chrysler, Jeep, Dodge, Ram offers some services which are unique to the area, and thus we expect it will continue to draw a large clientele. However, because many of its services are geared toward a rental clientele, we expect to draw buyers who seek the same level of support.

Competitive Advantage

Wilson Toyota will be able to offer the following advantages over its competition:

  • Relationships: Having lived in the community for 25 years, Dylan Wilson knows all of the local leaders, newspapers, and other influencers. As such, it will be relatively easy for Wilson Toyota to build brand awareness and an initial customer base.

Marketing Plan

Brand & value proposition.

Wilson Toyota will offer a unique value proposition to its clientele:

  • Convenient location
  • Large inventory of new and used vehicles
  • Highly trained specialists
  • Significant personal attention
  • Moderate price point
  • Comfortable, customer-focused environment

Promotions Strategy

The promotions strategy for Wilson Toyota is as follows:

Commute Advertising

We will drive attention toward Wilson Toyota by leasing a billboard alongside multiple highways. Advertising on heavily traveled commute routes is an opportunity to alert large numbers of working individuals with disposable income of our opening.

Website & SEO Marketing

The company will utilize the website and SEO to attract new customers. The website will be easy to navigate and provide all the information and pictures needed to show our dealership and the vehicles we sell. The SEO strategy will also be managed to ensure that anyone searching for new Toyota vehicles will see our company listed at the top of the Bing or Google search engines.

Social Media Marketing

Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The company will use social media to develop engaging content, such as educational content about vehicles and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.

Advertisement

Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The company will advertise its brand in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.

Wilson Toyota’s pricing will be competitive so customers feel they receive great value when shopping for a new car. The customer can expect to receive quality services and personalized attention when patronizing the dealership.

Operations Plan

The following will be the operations plan for Wilson Toyota.

Operation Functions:

  • Dylan Wilson will be the Owner of the company. He will oversee all staff and manage the general operations of the company. He will also partake in customer service and sales until he has employed a full staff of sales professionals. Dylan has spent the past year recruiting the following staff:
  • Janie Wilson will serve as the dealership’s Administrative Assistant. She will assist Dylan with all the operational, executive, and administrative aspects of the business. She will also manage the phones until Dylan hires a receptionist.
  • Joe Smith will be the Services Manager. He will oversee all the operations of the services department.
  • Maria Kenway will be the Sales Manager. She will oversee all the sales staff and help out with customer service, managing sales, and the appraisal process for used vehicles.
  • Dylan will hire a full staff of service technicians and sales professionals to help with the service, sales, and customer services functions.

Milestones:

Wilson Toyota will have the following milestones completed in the next six months.

  • 3/202X Finalize lease agreement
  • 4/202X Design and build out Wilson Toyota
  • 5/202X Hire and train initial staff
  • 6/202X Kickoff of promotional campaign
  • 7/202X Launch Wilson Toyota
  • 8/202X Reach break-even

Financial Plan

Key revenue & costs.

Wilson Toyota’s revenues will come primarily from the sale of vehicles and secondarily from the sales of parts/accessories and auto services.

Labor expenses are a major cost driver for dealerships with service departments. Service technicians are salaried; therefore, attractive compensation packages are necessary to maintain qualified staff. Furthermore, large commissions help the dealership keep the best salespeople on staff. Other major cost drivers for the company include the lease, franchise fees, inventory and parts, and marketing expenses.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

  • Average annual franchise fees: $100,000
  • Annual lease costs: $100,000

Financial Projections

Income statement.

FY 1FY 2FY 3FY 4FY 5
Revenues
Total Revenues$360,000$793,728$875,006$964,606$1,063,382
Expenses & Costs
Cost of goods sold$64,800$142,871$157,501$173,629$191,409
Lease$50,000$51,250$52,531$53,845$55,191
Marketing$10,000$8,000$8,000$8,000$8,000
Salaries$157,015$214,030$235,968$247,766$260,155
Initial expenditure$10,000$0$0$0$0
Total Expenses & Costs$291,815$416,151$454,000$483,240$514,754
EBITDA$68,185 $377,577 $421,005 $481,366 $548,628
Depreciation$27,160$27,160 $27,160 $27,160 $27,160
EBIT$41,025 $350,417 $393,845$454,206$521,468
Interest$23,462$20,529 $17,596 $14,664 $11,731
PRETAX INCOME$17,563 $329,888 $376,249 $439,543 $509,737
Net Operating Loss$0$0$0$0$0
Use of Net Operating Loss$0$0$0$0$0
Taxable Income$17,563$329,888$376,249$439,543$509,737
Income Tax Expense$6,147$115,461$131,687$153,840$178,408
NET INCOME$11,416 $214,427 $244,562 $285,703 $331,329

Balance Sheet

FY 1FY 2FY 3FY 4FY 5
ASSETS
Cash$154,257$348,760$573,195$838,550$1,149,286
Accounts receivable$0$0$0$0$0
Inventory$30,000$33,072$36,459$40,192$44,308
Total Current Assets$184,257$381,832$609,654$878,742$1,193,594
Fixed assets$180,950$180,950$180,950$180,950$180,950
Depreciation$27,160$54,320$81,480$108,640 $135,800
Net fixed assets$153,790 $126,630 $99,470 $72,310 $45,150
TOTAL ASSETS$338,047$508,462$709,124$951,052$1,238,744
LIABILITIES & EQUITY
Debt$315,831$270,713$225,594$180,475 $135,356
Accounts payable$10,800$11,906$13,125$14,469 $15,951
Total Liability$326,631 $282,618 $238,719 $194,944 $151,307
Share Capital$0$0$0$0$0
Retained earnings$11,416 $225,843 $470,405 $756,108$1,087,437
Total Equity$11,416$225,843$470,405$756,108$1,087,437
TOTAL LIABILITIES & EQUITY$338,047$508,462$709,124$951,052$1,238,744

Cash Flow Statement

FY 1FY 2FY 3FY 4FY 5
CASH FLOW FROM OPERATIONS
Net Income (Loss)$11,416 $214,427 $244,562 $285,703$331,329
Change in working capital($19,200)($1,966)($2,167)($2,389)($2,634)
Depreciation$27,160 $27,160 $27,160 $27,160 $27,160
Net Cash Flow from Operations$19,376 $239,621 $269,554 $310,473 $355,855
CASH FLOW FROM INVESTMENTS
Investment($180,950)$0$0$0$0
Net Cash Flow from Investments($180,950)$0$0$0$0
CASH FLOW FROM FINANCING
Cash from equity$0$0$0$0$0
Cash from debt$315,831 ($45,119)($45,119)($45,119)($45,119)
Net Cash Flow from Financing$315,831 ($45,119)($45,119)($45,119)($45,119)
Net Cash Flow$154,257$194,502 $224,436 $265,355$310,736
Cash at Beginning of Period$0$154,257$348,760$573,195$838,550
Cash at End of Period$154,257$348,760$573,195$838,550$1,149,286

Car Dealership Business Plan FAQs

What is a car dealership business plan.

A car dealership business plan is a plan to start and/or grow your car dealership business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Car Dealership business plan using our Car Dealership Business Plan Template here .

What are the Main Types of Car Dealership Businesses?

There are a number of different kinds of car dealership businesses , some examples include: New Car Dealers, Used Car Dealership, and Online Car Dealership.

How Do You Get Funding for Your Car Dealership Business Plan?

Car Dealership businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

This is true for a used car dealership business plan as well.

What are the Steps To Start a Car Dealership Business?

Starting a car dealership business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Car Dealership Business Plan - The first step in starting a business is to create a detailed car dealership business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your car dealership business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your car dealership business is in compliance with local laws.

3. Register Your Car Dealership Business - Once you have chosen a legal structure, the next step is to register your car dealership business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your car dealership business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Car Dealership Equipment & Supplies - In order to start your car dealership business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your car dealership business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful car dealership business:

  • How to Start a Car Dealership Business

Where Can I Get a Car Dealership Business Plan PDF?

You can download our free car dealership business plan template PDF here . This is a sample car dealership business plan template you can use in PDF format.

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Car Dealership Business Plan Template

Written by Dave Lavinsky

Growthink.com How to Start a Car Dealership

Car Dealership Business Plan

Over the past 20+ years, we have helped over 4,000 entrepreneurs create business plans to start and grow their car dealerships. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a car dealership business plan template step-by-step so you can create your plan today.

Download our Ultimate Car Dealership Business Plan Template here >

What Is a Car Dealership Business Plan?

A business plan provides a snapshot of your car dealership as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for Your Car Dealership

If you’re looking to start a car dealership or grow your existing car dealership you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your car dealership in order to improve your chances of success. Your car dealership business plan is a living document that should be updated annually as your company grows and changes.

Source of Funding for Car Dealership Businesses

With regards to funding, the main sources of funding for a car dealership are personal savings, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a car dealership is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

Finish Your Business Plan Today!

Your business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of car dealership you are operating and the status; for example, are you a startup, do you have a car dealership that you would like to grow, or are you operating a chain of car dealerships.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the car dealership industry. Discuss the type of car dealership you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company analysis, you will detail the type of car dealership you are operating.

For example, you might operate one of the following types:

  • New Car Dealers : this type of car dealership business typically sells both new and used passenger vehicles. Usually, this type of dealership also has a service department and also sells parts.
  • Used Car Dealership : this type of car dealership sells used passenger vehicles, including cars, light trucks, sports utility vehicles (SUVs) and passenger vans.
  • Online Car Dealership : this type of car dealership retails automobiles online to consumers and businesses and provides services to aid in the purchase of automobiles. Some players offer their customers trade-in, car financing and car selling services.

In addition to explaining the type of car dealership you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

  • When and why did you start the business?
  • What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
  • Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the car dealership business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the car dealership industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards vehicles, it would be helpful to ensure your plan calls for plenty of options.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your car dealership business plan:

  • How big is the car dealership business (in dollars)?
  • Is the market declining or increasing?
  • Who are the key competitors in the market?
  • Who are the key suppliers in the market?
  • What trends are affecting the industry?
  • What is the industry’s growth forecast over the next 5 – 10 years?
  • What is the relevant market size? That is, how big is the potential market for your car dealership. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your car dealership business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: college students, soccer moms, baby boomers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of car dealership you operate. Clearly baby boomers would want a different atmosphere, pricing and product options, and would respond to different marketing promotions than college students.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most car dealerships primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other car dealerships.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This primarily includes private sellers. You need to mention such competition to show you understand that not everyone in the market for a car shops at a dealership.

With regards to direct competition, you want to detail the other car dealerships with which you compete. Most likely, your direct competitors will be car dealerships located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

  • What types of customers do they serve?
  • What types of automobiles do they offer?
  • What is their pricing (premium, low, etc.)?
  • What are they good at?
  • What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to stand outside your competitors’ locations and ask customers as they leave what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

  • Will you provide superior products and/or services?
  • Will you provide cars that your competitors don’t offer?
  • Will you make it easier or faster for customers to acquire your products?
  • Will you provide better customer service?
  • Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a car dealership business plan, your marketing plan should include the following:

Product : in the product section you should reiterate the type of car dealership that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to selling new cars, will you offer leasing options?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the inventory you will maintain and the price ranges.

Place : Place refers to the location of your car dealership. Document your location and mention how the location will impact your success. For example, is your car dealership located next to a high-traffic retail area, or on a main thoroughfare, etc. Discuss how your location might provide a steady stream of customers.

Promotions : the final part of your car dealership marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

  • Making your car dealership extra appealing to attract passing customers
  • Pay per click advertising
  • Advertising in local papers and magazines
  • Reaching out to local bloggers and websites
  • Social media advertising
  • Local radio advertising
  • Banner ads at local venues

Building Trust

Building trust between a car dealer and its customers is vital to a successful sales strategy. This should be clear in the business plan, where funders look to see the feasibility of the company once it’s launched. Earning customer trust is important because of the bad reputation, deserved or not, for car salespeople to try to take advantage of customers and because of the high amount of stress which the purchase of a large item like a car causes for buyers.

Below are the best ways to build trust in your customers.

Referrals and Testimonials

Running a dealership with a heavy focus on satisfied customers referring other potential customers can create positive word-of-mouth between contacts who already know and trust each other. An additional element to this is securing testimonial statements (either written or videotaped) from happy customers. This requires having those happy customers in the first place, as customers can sense if the testimonials are canned and will mistrust even further.

Transparency

If auto dealerships were extremely clear about all pricing, fees, and costs of ownership up front, customers might change their opinion of these companies. However, too often there is a great focus on a low sticker price to attract customers who later on feel they’ve been lied to when all of the add-on charges are explained. Can your dealership change this industry practice and make transparency into a competitive advantage?

Taking Your Time

By taking the sales process at a rate that the customer is comfortable with, you recognize that it is a difficult step for customers to walk into the world of the dealer and play on his home turf, so to speak. They will be feeling defensive and a bit thrown off, so tell them that you will take the time to answer any questions they have and to make sure they understand and have considered their options before moving forward.

Operations Plan

While the earlier sections of your car sales business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your car dealership such as serving customers, completing necessary paperwork, keeping the dealership clean, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 1,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.

Management Team

To demonstrate your car dealership’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in the car dealership business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in car dealerships and/or successfully running retail and small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 20 customers per week or 75? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your car dealership, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a $1,000,000 fleet order, that would cost you $500,000 to fulfill. Well, in most cases, you would have to pay that $500,000 now for inventory, transportation, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets, be sure to include several of the key costs needed in starting or growing a car dealership:

  • Location build-out including design fees, construction, etc.
  • Cost of equipment like computer hardware and software, etc.
  • Cost of maintaining an adequate amount of supplies
  • Payroll or salaries paid to staff
  • Business insurance
  • Taxes and permits
  • Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.

Car Dealership Business Plan Summary

Putting together a business plan for your car dealership is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the car dealership business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful car dealership business.

Car Dealership Business Plan PDF

You can download our car dealership business plan PDF here or use our sample car dealership business plan to help you get started on your own business plan.

For the quickest and easiest way to complete your business plan, Growthink’s Ultimate Car Dealership Business Plan Template has numerous features not available in the free template including automated financial projections which calculate your complete five-year financial projections including income statements, balance sheets, and cash flow statements.

Don’t you wish there was a faster, easier way to finish your Car Dealership business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s business plan advisors can give you a winning business plan.

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Car Dealership Business Plan

Executive summary image

A car dealership is a company that sells new or used vehicles to the general public under the terms of a dealership agreement with a carmaker or its sales subsidiary. Car dealerships are rewarding because they are connected to both the wholesale and retail markets.

Are you looking to start writing a business plan for your car dealership business? Creating a business plan is essential to starting, growing, and securing funding for your business. We have prepared a car dealership business plan template for you to help in start writing yours.

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Free Business Plan Template

Download our free car dealership business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

  • Fill in the blanks – Outline
  • Financial Tables

How to Write a Car Dealership Business Plan?

Writing a car dealership business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section of the business plan intended to provide an overview of the whole business plan. Generally, it is written after the entire business plan is ready. Here are some components to add to your summary:

  • Start with a brief introduction: Start your executive summary by introducing your idea behind starting a car dealership business and explaining what it does.
  • Market opportunity: Describe the target market in brief, and explain the demographics, geographic location, and psychographic attributes of your customer. Explain how your car dealership business meets its needs. Clearly describe the market that your business will serve.
  • Mention your services: Briefly describe the services that a client can expect from your business like new and used cars, maintenance and repairs of the car, car rental services, etc.
  • Management team: Name all the key members of your management team with their duties, responsibilities, and qualifications
  • Financial highlights: Provide a summary of your financial projections for the company’s initial years of operation. Include any capital or investment requirements, startup costs, projected revenues, and profits.
  • Call to action: After giving a brief about your business plan, end your summary with a call to action, for example; inviting potential investors or readers to the next meeting if they are interested in your business.

Ensure you keep your executive summary concise and clear, use simple language, and avoid jargon.

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2. Business Overview

Depending on what details of your business are important, you’ll need different elements in your business overview. Still, there are some foundational elements like business name, legal structure, location, history, and mission statement that every business overview should include:

  • The name of the car dealership business and the concept behind it: new car dealership, used car dealership, small car dealership, luxury car dealership, private seller, online retailer, or something else.
  • Company structure of your car dealership business whether it is a sole proprietorship, LLC, partnership firm, or others.
  • Location of your car dealership and the reason why you selected that place.
  • Ownership: Describe the owners of your dealership business and mention their roles in running it. Whose shares in the corporation are they, and how each owner helps in the business?
  • Mission statement: Add a mission statement that sums up the objectives and core principles of your business. This statement needs to be memorable, clear, and brief.
  • Business history: If you are already running this business, including an outline of the business’s history and how it came to be in its current position. If you can, add some personality and intriguing details, especially if you got any achievements or recognitions till now for your incredible services.
  • Future goals: It’s crucial to convey your aspirations and your vision. Include the vision of where you see your business in the near future and if you have any plans of opening a new franchise of your business in the same city in the future.

This section should provide an in-depth understanding of your car dealership business. Also, the business overview section should be engaging and precise.

3. Market Analysis

Market analysis provides a clear understanding of the market in which your car dealership business will run along with the target market, competitors, and growth opportunities. Your market analysis should contain the following essential components:

  • Target market: Identify your target market and define your ideal customer. Know more about your customers and which services or cars they prefer.
  • Market size and growth potential: Provide an overview of the industry. It will include market size, trends, growth potential, and regulatory considerations. Highlight the competitive edge and how your car dealership business is different from the rest.
  • Competitive analysis: Identify and analyze all other dealerships in the local market, including direct and indirect competitors. Evaluate their strengths and weaknesses, and explain how your business can offer qualitative services.
  • Market trends: Analyze current and emerging trends in your industry, such as changes in technology or customer preference as in the shift towards automatic cars. Explain how your business will cope with all the trends.
  • Regulatory environment: Describe any regulations or licensing requirements that affect the car dealership, such as insurance, dealer’s license, zoning permits, or safety codes.

Some additional tips for writing the market analysis section of your business plan:

  • Use a variety of sources to gather data, including industry reports, market research studies, and surveys.
  • Be specific and provide detailed information wherever possible.
  • Include charts and graphs to help illustrate your key points.
  • Keep your target audience in mind while writing the business plan.

4. Products And Services

The product and services section of a car dealership business plan should describe the specific services and products that will be offered to customers. To write this section should include the following:

  • Create a list of the services that your car dealership will offer, which may luxury cars, new cars, used cars, maintenance, repairs, etc.
  • Describe each product and service: For each service, provide a detailed description of what it entails, and the qualifications of the professionals who will provide the service.
  • Emphasize safety and quality: In all descriptions of services and products, emphasize the importance of safety and quality. Explain how your car dealership will ensure that all services and products are delivered with the highest standards of safety and efficacy.

Overall, a business plan’s product and services section should be detailed, informative, and customer-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

  • Develop your unique selling proposition (USP): Clearly define your unique selling proposition – it might be your pricing, the range of vehicles you offer, after-sales service, digital experience, specialization in vintage, hybrid, or sports cars, or any other aspect that distinguishes you from the competition.
  • Determine your pricing strategy: Develop a pricing strategy that is competitive and affordable, yet profitable. Consider offering promotions, discounts, or packages to attract new customers.
  • Marketing strategies: Develop a marketing strategy that includes a mix of online and offline marketing tactics. Consider social media, email marketing, content marketing, brochures, print marketing, and affiliating with online car buying/selling options.
  • Sales strategies: Mention your sales strategy as in – offer incentives and promotions to attract new customers, or partner with other businesses to establish referral programs that can help you generate more business. Consider offering incentives for referrals or special discounts for partnerships.

Overall, the sales and marketing strategies section of your business plan should outline your plans to attract and retain customers and generate revenue. Be specific, realistic, and data-driven in your approach, and be prepared to adjust your strategies based on feedback and results.

6. Operations Plan

When writing the operations plan section, it’s important to consider the various aspects of your business processes and procedures involved in operating a business. Here are the components to include in an operations plan:

  • Hiring plan: Tell the staffing requirements of your car dealership, including the number of employees needed, their qualifications, and the duties they will perform. Also mention the perks you will provide to your employees.
  • Operational process: Outline the processes and procedures that you will use to run your car dealership business. It includes the scheduling of appointments, meeting with clients, and everything else.
  • Inventory management: Provide details on how frequently new vehicles will be purchased, how the inventory will be cycled, and how the dealership will make sure it has a variety of automobiles to suit the demands of its clients in your inventory management plan.

By including these key elements in your operations plan section, you can create a comprehensive plan that outlines how you will run your car dealership business.

7. Management Team

The management team section provides an overview of the individuals responsible for running the car dealership business. This section should provide a detailed description of the experience and qualifications of each manager, as well as their responsibilities and roles.

  • Key managers: Describe the key members of your management team, their roles, and their responsibilities. It should include the owners, and senior management including their education, professional background, and any relevant experience in the industry.
  • Organizational structure: Describe the organizational structure of the management team, including reporting lines and how decisions will be made.
  • Compensation plan: Describe your compensation plan for the management team and staff, including salaries, bonuses, and other benefits.
  • Board of advisors: If you have a board of advisors for your business, then mention them along with their roles and experience.

Describe the key personnel of your company and highlight why your business has the fittest team.

8. Financial Plan

When writing the financial plan section of a business plan, it’s important to provide a comprehensive overview of your financial projections for the first few years of your business.

  • Profit & loss statement: Create a projected profit & loss statement that describes the expected revenue, cost of products sold, and operational costs. Your business’s anticipated net profit or loss should be computed and included.
  • Cash flow statement: Estimate your cash inflows and outflows for the first few years of operation. It should include cash receipts from clients, payments to vendors, loan payments, and any other cash inflows and outflows.
  • Balance sheet: Prepare a projected balance sheet, which shows the assets, liabilities, and equity.
  • Break-even point: Determine the point at which your car dealership business will break even, or generate enough revenue to cover its operating costs. This will help you understand how much revenue you need to generate to make a profit.
  • Financing needs: Estimate how much financing you will need to start and operate your car dealership business. It should include both short-term and long-term financing needs, such as loans or investment capital.

Remember to be realistic with your financial projections, and to provide supporting evidence for all of your estimates.

9. Appendix

When writing the appendix section, you should include any additional information that supports the main content of your plan. This may include financial statements, market research data, legal documents, and other relevant information.

  • Include a table of contents for the appendix section to make it easy for readers to find specific information.
  • Include financial statements such as income statements, balance sheets, and cash flow statements. These should be up-to-date and show your financial projections for at least the first three years of your business.
  • Provide market research data, such as statistics on the size of the industry, consumer demographics, and trends in the industry.
  • Include any legal documents such as permits, licenses, and contracts.
  • Provide any additional documentation related to your business plans, such as marketing materials, product brochures, and operational procedures.
  • Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your car dealership business should only include relevant and important information that supports the main content of your plan.

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This car dealership business plan sample will provide an idea for writing a successful business plan, including all the essential components of your business.

After this, if you are still confused about how to write an investment-ready business plan to impress your audience, then download our car dealership business plan pdf .

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Frequently asked questions, why do you need a car dealership business plan.

A business plan is essential for anyone looking to start or run a successful car dealership. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your car dealership business.

How to get funding for your car dealership business?

There are several ways to get funding for your car dealership business, but one of the most efficient and speedy funding options is self-funding. Other options for funding are:

  • Bank loan – You may apply for a loan in government or private banks.
  • Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
  • Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your car dealership, usually online.
  • Angel investors – Getting funds from angel investors is one of the most sought options for startups.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your car dealership business?

There are many business plan writers available, but no one knows your business and idea better than you, so we recommend you write your car dealership business plan and outline your vision as you have in your mind.

What is the easiest way to write your car dealership business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any car dealership business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.

About the Author

dealership business plan examples

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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COMMENTS

  1. Car Dealership Business Plan Template (2024) - PlanBuildr

    A car dealership business plan is a plan to start and/or grow your car dealership business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

  2. Car Dealership Business Plan Template [Updated 2024] - Growthink

    Get our car dealership business plan template and step-by-step instructions to quickly and easily create your business plan today.

  3. Car Dealership Business Plan PDF Example - SharpSheets

    Learn how to create a car dealership business plan with our guide, including key sections and a downloadable PDF template for reference.

  4. Car Dealership Business Plan: Complete Guide - SharpSheets

    In this article we go through, step-by-step, all the different sections you need in your car dealership business plan. Use this template to create a complete, clear and solid business plan that get you funded.

  5. Car Dealership Business Plan Template - PandaDoc

    Develop a business plan outlining your dealerships mission, target market, marketing and sales strategies, operations plan, and financial projections. Secure financing through loans, investments, or personal savings.

  6. Car Dealership Business Plan Template (2024) - Upmetrics

    Discover the key elements to include in your car dealership business plan. Our guide offers practical advice, templates, and examples to help you write your own.