Auto Broker Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Auto Broker Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start an Auto Broker business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
Your Business Planning Package will be immediately emailed to you after you make your purchase.
- Bank/Investor Ready!
- Complete Industry Research
- 3 Year Excel Financial Model
- Business Plan (26 to 30 pages)
- Loan Amortization and ROI Tools
- Three SWOT Analysis Templates
- Easy to Use Instructions
- All Documents Delivered in Word, Excel, and PDF Format
- Meets SBA Requirements
Auto brokers work in a unique capacity within the car selling industry given that they source a specific vehicle on behalf of a buyer. The gross margins, as such, are extremely high from providing the services to the general public. One of the nice things about these businesses is that they are able to render their services both directly to individual buyers as well as car wholesalers and car dealers. There are always a number of specialty car dealers that need to source a specific vehicle for their client. As such, these businesses are able to operate with strong gross margins and a low operating and overhead cost. Typically, the startup cost associated with an automotive broker ranges anywhere from $30,000 to $50,000 depending on whether or not the business is actually going to take possession of any vehicle is sourced on behalf of the customer. Usually, if an auto broker is going to be sourcing vehicles directly and acquiring from for their own account and they are going to be able to obtain a line of credit that is secured by the vehicle inventory that is being purchased. Almost all banks and lenders are willing to extend this type of credit to an automotive brokerage business. Additionally, it should be noted that these businesses are relatively immune from negative changes in the economy but an economic recession almost always has a modest impact on top line income.
An automotive brokerage business plan should be included if an individual owner operator is seeking to acquire capital from a financial institution or private investor. Most importantly, a three-year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page should be developed so that the financial institution or investor can understand how the business will repay its obligations on a month-to-month basis. Although many automotive brokers will operate in a more localized capacity, the power of the Internet has allowed these businesses to immediately have a nationwide presence from the onset of their operations. It should be noted within the business planning document how the individual auto broker will be able to develop ongoing relationships with car dealers and car wholesalers on a nationwide basis immediately upon launching business operations. A demographic analysis regarding the types of buyers should be included as well with a focus on median household income, median family income, and the percentage of income that is available for the purchase of a new or used vehicle. Given that everyone does need a car, the demographic analysis is included within the business planning document can be somewhat broad.
Of equal importance to the business plan is the auto broker marketing plan. This document needs to be at least 10 to 15 pages in length and should showcase primarily how the brokerage will operate in an online capacity. Many third-party websites such as auto trader.com, eBay.com, and others allow for auto brokers to place advertisements on these websites in order to make sales. As such, it is imperative that the auto broker not only maintain a proprietary website but also ongoing platforms that allow for the sales of vehicles directly to the general public. This is especially true of the auto broker is going to be acquiring vehicles for their own account and needs to have a method for ensuring inventory turnover. Many auto brokers also maintain profiles on popular social media platforms such as FaceBook, Twitter, Google+, Instagram, and Reddit. This is important especially if the auto broker is going to be selling cars directly to the general public and provided that these firms are able to maintain a strong following the inventory turnover rate can be increased significantly. A presence on social media, especially with a profile that has strong reviews, also boost the brand-name visibility of the business while ensuring that customers are working with a legitimate car selling and car brokering operation. Almost all businesses these days do maintain some presence on social media in order to boost their online visibility. Beyond this type of marketing, many auto brokers will also use pay per click marketing in order to drive traffic to their respective websites. If done correctly this can produce a very strong return on investment as it relates to the underlying advertising budget. Many auto brokers we use a third-party firm to provide the ongoing management of this type of marketing. While these expenses may be high, in the long run it is very much worth it if the auto broker does not have the proper internal staff to manage their Internet marketing.
An auto broker SWOT analysis should be developed as well. As relates to strengths, auto brokers are one of the few companies within this industry that are able to generate significant gross margins from direct brokering services as well as sales of vehicles. Their operations can be contracted during times of economic recession so that they are able to remain profitable and cash flow positive in any economic climate. As relates to weaknesses, this is an industry that is highly competitive and cars are a commodity. This lends to both being a strength and weakness at the same time. The underlying operating costs can also be high especially as it relates to marketing and advertising fees. For opportunities, most auto brokers will seek to expand their working capital line of credit so that they can purchase and deal in a larger number of vehicles on an ongoing basis. This is really the only way that these be businesses are able to expand. For threats, this is a highly established industry and there are going to be no issues moving forward with changes in regulation or technology that would impact the way that these businesses conduct their operations. Given the auto brokers do not maintain large inventories on their books they can scale back or require additional vehicles that are in demand among the general public. The high gross margins generated from revenues coupled with the moderate overhead and operating costs makes an auto broker a strong small business investment.