Auto Dealer Business Plan: Milestones That Matter

Auto Dealer Business Plan: Milestones That Matter

by

Eric Powers

Your car dealer business plan should include a timeline of the business’s success. This does not have to be an exhaustive timeline, showing every step you will make along the way, but should at least cover these kind of important milestones in the life of your car dealership.

Finish Build-Out: When will construction of your location be finished so that you can place cars in your showroom and put the finishing touches on the space? Open for Business: When will you officially open for business? (Events or promotion surrounding this opening should be mentioned elsewhere in the plan.) First Sale: There will be some time between opening and making that first sale, so think ahead about when it will happen by thinking through the process of marketing, selling, and earning the trust of customers. Showing a first sale on day one will seem naive to most readers, as the car sales process will take a little time for any customer, especially from a brand-new dealership. Break-Even on Cash Flow: This shows the point where cash inflows for the month exceed cash outflows for the month going forward. This is the point at which cash reserves should no longer be the lifeblood of the dealership and dividends can even start to be paid to investors, if required. Profitability: The point at which the business first earns profit on the income statement will be a bit later than breaking even on cash flow, as there are certain non-cash charges, like depreciation, to cover before actual profitability is achieved. Adding Key Staff: Hiring an additional manager, more salespeople, or other key staff, are important milestones in the maturation of the company. New Location: Down the road, many dealers open additional locations to take advantage of the successful administration and marketing they’ve established with the first one. By adding another location in a tow that is close, but not so close as to cannibalize business of the first, you can start to build on your foundation. Alternately, if the new location serves a different customer target market you can avoid this competition between units. If expansion is part of your plan, give a date in your timeline for when the next location will be added.

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