Are you about starting a car salesman company? If YES, here’s a complete sample car salesman business plan template & feasibility report you can use for FREE to get started. Okay, so we have considered all the requirements for starting a car salesman company. We have analyzed and drafted a sample car salesman marketing plan backed up by actionable guerrilla marketing ideas for car salesmen. So let’s proceed to the business planning section.
Table of Content
- 2. Executive Summary
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 13. Startup Expenditure (Budget)
Why Start a Car Salesman Business?
Starting a business or rather a career in auto sales can be very rewarding, but it is also not a job for everyone. A car salesman business is ideal for a car enthusiast who is equipped with good business sense.
Your day -to-day activities in this line of business may include checking invoices, speaking with prospects, negotiating deals, and managing a sales force. You need to possess a strong sales culture and interpersonal communication skills if you wish to go far in this business.
You do not need special skills to run this business; you only need to have a strong sales and management background. Profit rest entirely on the dealer’s wholesale pricing and cost of inventory, bonds and insurance and other overhead. In general, a dealer can make between 2% and 3% of the sticker or invoice price of the vehicle.
There are so many laws and regulations governing the sale of vehicles, and most dealerships depend on good customer service to fuel future growth. But you can increase the odds of making more money by specializing and putting together a detailed business plan.
A Sample Car Salesman Business Plan Template
1. Industry Overview
Businesses in this industry sell new and used passenger vehicles, provide repair and maintenance services and offer financing and insurance options. A report has it that this industry is highly cyclical in nature and is vulnerable to economic shifts such as fluctuations in employment, overall consumer spending and financing rates.
Within the five years to 2018, statistics has shown that this industry has trended upward, as per capita disposable income and consumer confidence have grown, which have encouraged consumers to increase spending on discretionary purchases. From 2018-2023, experts expect revenue is to keep growing, albeit at a slightly slower pace than during the previous years.
Also note that this industry has moderate barriers to entry. Entrepreneurs willing to venture into this industry must be prepared to comply with state regulations, manufacturer franchise agreements and start-up costs. Have it in mind that every state has different licensing requirements and regulations for car dealers and salespeople.
Worldwide, car dealers sell about 95 million new vehicles per year. The Chinese automotive market, based on unit sales, is more than three times larger than the three other BRIC nations combined. The US car dealer industry includes about 46,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $1 trillion.
It’s very important to note that consumer spending and interest rates drive demand for cars. The profitability of individual companies relies on the volume and mix of cars and services sold. Bigger companies can offer a wider selection of cars and have advantages in marketing, purchasing, and finance, but smaller companies can compete favourably by offering superior customer service or serving a local market.
2. Executive Summary
Green Generation Cars is a new sales and leasing Service Company being made available to vehicle buyers throughout Downtown Cincinnati and the State Of Ohio. We will sell top-quality environmental friendly vehicles at competitive price.
We will be successful because we plan to offer something different to what the industry is already used to; environmental friendly cars. We at Green Generation Cars expect an optimistic gross margin over the industry average. We will be able to achieve this due to the new alternative we bring to the industry and our diversified workforce.
We boast of a workforce of people from different backgrounds, but with the hunger to present our prospective customers with an experience they won’t forget in a hurry. Our goal is to provide our customers with an enjoyable, vehicle use experience. Our plan is to focus on our target market, courageous early-adopters who see themselves as “energy pioneers,” and environmentalists.
We at Green Generation Cars have an excellent advantage over other car sales businesses in Ohio. We will stand out as the preferred alternative to fossil fuel transportation systems. As visibility of our vehicles increase, sales among environmentalists and the younger generation will increase by 50% each month thereafter.
Profits made initially will be used to settle any overhead costs related to purchasing, then to the rapidly expanding photovoltaic recharging station and mechanic’s garage, then to pay off the initial investments. All our inventories will be bought in advance to stock the showroom floor and to outfit every executive, sales person, and mechanic with a zero emissions vehicle.
As our profit margin increase, we will then invest back into research and development opening the doorway to a secondary market role for Green Generation Cars to become a patent holding company and clearing house. Green Generation Cars was founded by a group of friends, headed by Mr. Sebastian Crooks in July 2018. This unique company was established to address the need for niche sales of new and pre-owned environmentally friendly automobiles.
Mr. Sebastian Crooks boasts of a degree in Environmental Resource management from Yale University. He has led many movements to ensure a sustainable environment for all citizens of America. He started the Cleaner Sky movement in 2014 to grow the awareness of the implications fossil fuel powered engines have on the atmosphere and global warming. Mr. Sebastian has been in the sales and leasing field since 1994. Having completed nearly 15 years at various local dealerships, he has a complete knowledge and experience in this industry.
3. Our Products and Services
We plan to offer Downturn Cincinnati an alternative to the normal car driven on its streets. Our plan is to drive our zero emissions vehicles and hybrid automobiles around. We believe it will be the best way to get the younger generation and environmentalists involved with a more sustainable form of transportation.
To further emphasize the point, members of the board of directors will drive around in a totally electric automobile borrowed from the showroom – an all-electric Toyota RAV4 sports utility vehicle. Instead of plugging into a standard outlet that provides electricity from a coal or gas power plant, all our automobile batteries will be recharged using photovoltaic cells – solar power.
A solar-powered passenger electric car like this conserves energy. Below are the few cars we will be selling and leasing at Green Generation Cars, as we hope to add more as the industry grows.
- Toyota Prius
- Electric Chevy Volt
- Honda Clarity Plug-In Hybrid
- Ford Focus Electric
4. Our Mission and Vision Statement
- Our vision at Green Generation Cars is to establish a car dealership with a respectable gross margin in environmentally-friendlier automobiles.
- Our Mission is to provide early adopters and the younger generation within the State of Ohio and the united states with environmentally-friendly automobile choices and to help other automobile buyers become aware of the growing menace caused by burning fossil fuels.
Our Business Structure
Mr. Sebastian Crooks will act as the company president for the first five years for a minimal salary of $36,000 in exchange for his commitment of energy and know-how. The board of directors which comprises of industry leaders will be compensated for their services by a return of profits on their investment.
Two sales staff will work the sales floor for the first year compensated solely by commissions earned on a 5% pay scale. Also three mechanics, specializing in alternative energy vehicles, will be paid $3,200 monthly.
The mechanics’ salaries will steadily increase every year by 5% to reflect the increased human capital acquired by the mechanics’ maintenance experience. The maintenance and secretarial staff will take care of administrative matters and sales room decorum. Below are the professionals we plan to employ to achieve our business visions and goals.
- Garage Manager
- Human Resources and Admin Manager
- Sales and Marketing Manager
- Information technologist
- Maintenance and Secretarial staff
5. Job Roles and Responsibilities
- Boosts management’s effectiveness by recruiting, selecting, orienting, training, coaching, counselling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; and developing incentives
- In charge of fixing prices and signing business deals
- In charge of providing direction for the business
- Establishes, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Charged with signing checks and documents on behalf of the company
- Evaluates the success of the organization
Admin and HR Manager
- In charge of overseeing the smooth running of HR and administrative tasks for the organization
- Tasked with maintaining office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Makes sure operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Defining job positions for recruitment and managing interviewing process
- Carrying out induction for new team members
- In charge of training, evaluation and assessment of employees
- In charge of arranging travel, meetings and appointments
- Oversee the smooth running of the daily office cum business activities
- In charge of managing the daily activities in the car garage
- Ensures that proper records of cars are kept and the garage does not run out of cars
- Ensures that the garage facility is in tip top shape and cars are properly arranged and easy to locate
- Interfaces with third – party suppliers (vendors)
- Controls distribution and supply chain inventory
- Supervise the workforce in the garage sales floor
Sales and Marketing Manager
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- In charge of supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
- Finds out mechanical problems often by using computerized diagnostic equipment
- Tests parts and systems to ensure that they are working properly
- Repairs or replace worn parts
- Uses testing equipment to ensure that repairs and maintenance are effective
- Explains to clients the car problems and the repairs done on their vehicles
- Adheres to checklists to ensure that all critical parts are examined
- Manages the organization website
- Handles ecommerce aspect of the business
- In charge of installing and maintenance of computer software and hardware for the organization
- Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
- Manages the organization’s CCTV
- Handles any other technological and IT related duties
- In charge of preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- In charge of financial forecasting and risks analysis
- Performs cash management, general ledger accounting, and financial reporting
- Tasked with developing and managing financial systems and policies
- Tasked with administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization
Maintenance and secretarial staff
- Makes sure that all contacts with clients (e-mail, walk-In centre, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries
- Tasked with cleaning and washing all the cars in the garage at all times
- Ensures that toiletries and supplies don’t run out of stock
- Cleans both the interior and exterior of the garage facility
- Handles any other duty as assigned by the garage manager
6. SWOT Analysis
We at Green Generation Cars had to employ the services of SOS consulting to perform our swot analysis. Through their rigorous research and analysis, which had to include talking to our prospective customers and diverse workforce, they were able to note that people obtain an automobile as a result of a change in the individual’s life situation (marry, divorce, lose a spouse, move, win the lottery) or investment/tax situation (sell house, large wage increase, receive inheritance).
The need can arise anytime, but spring and summer months are when most people are thinking about upgrading their transportation. They also provided us with the information that people investigate car sales and leasing services anytime they are planning to get new cars.
They either walk through the car dealerships where they have shopped in the past and/or a place that has been highly recommended. Those buyers, who do not know any dealer lots personally, will begin asking their friends, family, co-workers, etc., for recommendations. To further emphasis on their findings, below is a summary of what they believe are our strengths, weakness, opportunity and threats in this industry.
Our core strength at Green Generation Cars rests on our team of experienced professionals. We have also established a network of suppliers in order to buy and sell products that are of the highest quality. We will also make sure our customers are always satisfied by encouraging the two most important values, honour and integrity. We also plan to increase workplace morale by rewarding employee success with monetary compensation.
According to our swot analysis, our major weakness is simply fact that environmental friendly cars are not yet popular amongst the Ohio populace. Also since we are a new car dealership business in Downtown Cincinnati and we don’t have the financial capacity to compete with multi – million dollars dealers in the country, we might find it hard penetrating the market.
The growing awareness of the effect of carbons emitted from our everyday use of fossil fuels has created a demand we at Green Generation Cars plan to fill. People are becoming conscious of the environment and the dangers their activities pose to the earth. Global warming and climate change being showcased every day on our televisions have grown an awareness that will make our services and products acceptable and appreciated by our customers.
Just like any other business, one of the major setbacks that we are going to face at Green Generation Cars will be convincing people to patronize our services. But we believe that the opportunity we have in this industry far outweighs this threat. Another threat that might befall our business according to our swot analysis will be the arrival of a new car dealership outlet in the same location where ours is located.
7. MARKET ANALYSIS
- Market Trend
Green Generation Cars is bound to be affected by forces and trends in the market. These include economic, competitive, legal/political, technology, and customer issues.
- Economic Environment
According to our research, positive forces for our business include the generally prosperous economy that is currently in place, full employment, rising wages, and low inflation, leading more people and businesses to be willing to consider a new car for themselves.
The strong stock market means people are making more money, primarily in the form of capital gains. Also, even though corporate downsizing is mostly seen as a negative trend, it has positive implications for Green Generation Cars.
- Legal/Political Environment
Indeed the new tax laws for automobile deductions are gradually becoming complicated for the average sales person to stay current with and understand. Car leasing is a way to save money and taxes.
- Technology Environment
We at Green Generation Cars acknowledge that some technological advancement like computer programs can make financial recordkeeping and tax preparation simple. We have employed an accountant, Mr. Fred Kendell from Midas Accounting to run the financial end of the business, including learning and updating auto sales and leasing software.
- Customer issues
We also know that as long as there is competition in the marketplace, a need will remain for sales professionals. Pricing may no longer be a point of negotiation as clients are more likely to buy from someone they like and trust than from someone who rubs them the wrong way. The more reason we will careful train our staff, to align them with the company’s visions and missions.
8. Our Target Market
Our customers at Green Generation Cars are divided into three groups: early-adopters, the younger generation, and cost-conscious-new-automobile-buyers.
We at Green Generation believe this particular set of customers will likely be our first because these people will eagerly try buying a car that operates on alternative fuels in addition to being an automobile pioneer. We believe that this type of customer will range widely in age but will share an interest in car engineering and maintenance. We also believe that these customers can be reached easily by advertising in magazines marketed to automobile enthusiasts, engineers, hobbyists, mechanics and scientists.
- The younger generation
These set of customers will likely set out to buy zero emission cars because these automobiles affect their future. They all know that environmentally friendly automobiles will not pollute their air or guzzle their gas. The younger generations are now witnessing the cumulative and destructive effects that carbon-based-fuel systems are having on the environment and global eco-political structures.
Our customers at Green Generation Cars will also include environmentalists. We believe that this set of customers exercise their purchasing power for the obvious environmental benefits. We believe these customers can easily be reached by direct marketing campaigns to local conservation groups, outdoors athletic clubs, and environmentally-sensitive political parties.
Our Competitive Advantage at Green Generation Cars is the particular niche and market we are trying to fill. We have an edge over other operators in the industry because of our specialization in zero emission vehicles. Green Generation Cars will grow from four board directors plus two sales persons, one IT personnel, an accountant and one mechanic
Our media strategy will focus on direct marketing to local groups and clubs, as well as advertising in magazines. Sales prospects will be finalized in person, through mail-order, over the phone, and via the Internet. We also believe that as the visibility of our cars increases, sales among environmentalists and the younger generation will increase by 60% each month thereafter.
9. SALES AND MARKETING STRATEGY
Most of our inventory will be bought in advance to stock the showroom floor. Green Generation Cars is expected to grow in sales at a rate of 15% per month, starting from the conservative estimate of eight cars sold. Note that this financing will come initially from the executive board, giving room for plenty of opportunity for credit to cover unforeseen expenses, if necessary. Growth will be rapid and produce profits almost immediately.
10. Sales Forecast
Payroll alone in our early business stages to be about $51,000 for one mechanic and one accountant, while all sales staff operate on commission. Indeed margins are very hard to put together as the average per unit costs do not include marketing costs, promotions, or salesman commissions. But our overall average per unit revenue over per unit costs is based on past sales from other dealerships.
We hope to attain a margin that high in the future. We also anticipate a heady monthly increase in sales starting small (selling 8 cars in the first month). The gross margin within the first year will be modest, rising in the second and third year. Our major budget items will include salary, rent, sales and marketing expenses, utilities (including costs of photovoltaic cell maintenance), insurance, taxes and licensing.
Green Generation Cars net profit is also expected to reach outstanding levels in the first year, rising in the second and the third year. All of these profits can then be fed back into research and development opening the doorway to a secondary market role for Green Generation Cars to become a patent holding company.
- Marketing and Sales strategy
Just like we stated above, our media strategy will focus on direct marketing to local conservation groups, outdoors athletic clubs, and environmentally-sensitive political parties, as well as advertising in magazines marketed to automobile enthusiasts, engineers, hobbyists, mechanics and scientists, and through good ratings in consumer protection reports.
We also acknowledged that our board of directors as industry leaders and our employees will all bring their professional expertise and avocational contacts to Green Generation Cars and provide a solid foundation of connections for future marketing ventures.
We also plan to develop a one-page newsletter to be mailed quarterly to select target customers and prospects in our database. The newsletter can be used to update clients on available vehicles, leasing information, and tax related benefits.
Green Generation Cars will also put together a news release which will be sent to newspapers and magazines announcing the launch of Green Generation Cars. Our President Mr. Sebastian Crooks is an important member of the Ohio Chamber of Commerce.
He will also make himself available for speaking engagements at other community or civic organizations. Becoming a sponsor in a community event is also another low-cost way of increasing awareness and building goodwill in the community. We will also reward our customers for their repeat business. This can be accomplished by offering a discount special price to past customers who returned.
11. Publicity and Advertising Strategy
Promotion strategies will differ depending on the target market segment. Due to the importance of word-of-mouth/referrals among all market segments when choosing a pre-driven car dealership, we have put together plans to create awareness, stimulate trial, and build referrals.
A cost effective campaign focused on direct marketing, and advertising is being proposed. Our publicity and advertising strategy was effectively and carefully designed to communicate our brand. Below is how we plan to promote Green Generation Cars;
- Put adverts on community based newspapers, radio and TV stations
- Encourage the use of word of mouth publicity from our loyal customers
- Make use of the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
- Make sure we position our banners and billboards in strategic positions all around Downtown Cincinnati
- Share our fliers and handbills in target areas in and around Downtown Cincinnati
- Advertise our business in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and ensure that all our staff members wear our branded shirt or cap at regular intervals.
12. Our Pricing Strategy
Green Generation Cars is a zero emissions car selling firm established to provide the people of Ohio with an alternative to fossil fuel powered vehicles. Our plan is to encourage impulse buying, which is we believe it is very necessary we maintain a flexible pricing strategy.
Our projection for this niche market is compared to a collection of standard business ratios for other auto sales industries. Our experienced management understands that the prices we keep will tell a lot about our brand. Our plan is to bring to the people of Cincinnati cars that are environmental friendly and will still serve them well. We believe that our unique products will be priced slightly above the industry average.
- Payment Options
For both business and consumer clients, Green Generation Cars will be well positioned as a full-service car sales and leasing service. Unlike products which are produced, then distributed and sold, car sales and leasing services are produced and consumed simultaneously in a real-time environment.
This is why we plan making the services available in a convenient manner to our clients. Green Generation Cars will maintain extended hours and meet with clients in their home or office, whichever is more convenient. This flexibility is especially attractive to elderly customers.
Car buyers can contact Green Generation Cars by telephone, fax, and e-mail. We also anticipate a 20% mark up over cars obtained from dealer auctions and fleet companies. The leasing industry norm for the leasing portion of the business is 10%. We have also partnered and registered with the necessary financial institutions in the country and we hope to make use of that relationship. We will accept;
- Payment by via bank transfer
- Payment via online bank transfer
- Payment through point of service machines
- Payment via check
- Payment via bank draft
- Payment via mobile money
13. Startup Expenditure (Budget)
Our goal at Green Generation Cars is to grow a business that will serve the needs of our customers and also ensure a balanced positive cash flow. With our diverse workforce and experienced board of directors, we plan to build a classic business that will invest residual profits into company expansion. We went through a great deal of hurdles to estimate our startup costs and overheads for the next three years.
It is believed that all new entrants in the industry operate with negative profits through the first two years. We at Green Generation Cars plan to avoid that kind of operating loss by understanding our markets, our competitors, industry direction, and the products we sell. Outlined below are the ways we plan spending our start-up cost;
- The Total Fee for Registering the Business in Cincinnati: $900.
- The budget for insurance, permits and license: $10,000
- The Amount needed to acquire a suitable Facility for 6 months in Oklahoma (face lifting of the facility inclusive): $75,000.
- The Cost for the purchase of furniture and gadgets (fridges, TVs, Sound System, tables and chairs et al): $20,000.
- The Cost for Equipment: $15,000
- The Cost for inventory : $3,000,000
- The Cost of Launching a Website: $700
- Our marketing and publicity budget – $150,000
- The cost for our opening party: $6,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al): $7,000
From our detailed analysis above, we will need $3,284,600 to start Green Generation Cars. We have also put plans in place to raise the funds.
Generating Funding / Start up for Green Generation Cars
Green Generation Cars was founded by five friends led by Mr. Sebastian Crooks. These experienced men, Adam Kendell, Pete Lennon, Otis Craig and Martins Mist are all from different walks of life and they are ready to invest their years of experience in Green Generation Cars. Thus, we have restricted the sourcing of the startup capital for the business to just three major sources.
- Generate part of the startup capital from personal savings and sale of stocks
- Generate part of the startup capital from friends and other extended family members
- Generate part of the capital from the bank (loan facility).
Note: This group of friends has been able to raise $2,000,000, and they are at the final stages of obtaining a loan facility of $1,200,000.
14. Sustainability and Expansion Strategy
Our strategy to build customer sales includes telemarketing and encouraging clients to refer future clients. Networking within business groups, civic groups, church groups, etc. is important, even if the business results are not immediately felt.
We understand that people will always want to obtain financial and auto sales and leasing services from someone they trust. Groups may also offer the opportunity for the business person to give a talk to the membership—an excellent public relations opportunity.
We at Green Generation Cars also plan to build our business capacity steadily based on the assumption of roughly $278,000 in annual payroll, 10% current and long-term interest rates, a 30% tax rate, and an available inventory totalling $8,988,048. Assuming demand does not outstrip supply, these conservative assumptions project immediate success for Green Generation Cars.
We are also prepared for our suppliers to release new products within the next 8 months; drastic increase in the price of inventory could threaten the stability of our business. Such fluctuations would only be threatening if they were industry-wide. Barring monopolistic manipulations of the supply of inventory, success is just around the corner. Also objectives have been set for Green Generation Cars so that actual performance can be measured against them.
Each subsequent year, new objectives will be set for these benchmarks, and actual performance will be measured against them. If actual performance falls short of objectives, investigation will be made into the cause, and plans adjusted accordingly. We at Green Generation Cars will keep track of the source of all new clients so as to measure the effectiveness of each type of promotion.
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts various banks in the United States: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting feasibility studies: Completed
- Leasing, renovating and equipping our facility: Completed
- Generating part of the startup capital from the founder: Completed
- Applications for Loan from our Bankers: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
- Establishing business relationship with banks, financial lending institutions, vendors and key players in the industry: In Progress