Free Used Car Dealer Business Plan
For Raising Capital from Investors, Banks, or Grant Companies!
Please note that the financials
in this complete free business plan are completely fictitious and may not
match the text of the business plan below. This free business plan demonstration
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and Excel documents for this business plan, please click the button below! Also,
the text of the business plan is formatted with a fully automated
table of contents.
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templates. All business plans come in Microsoft Word and Microsoft Excel format.
Each business plan features:
- Excecutive Summary
- Company and Financing Summary
- Products and Services Overview
- Strategic Analysis with current research!
- Marketing Plan
- Personnel Plan
- 3 Year Advanced Financial Plan
- Expanded Financial Plan with Monthly Financials
- FREE 30 Page Sample Private Placement Memorandum
- FREE PowerPoint Presentation for Banks, Investors,
or Grant Companies!
1.0 Executive Summary
The purpose of this business plan is to raise $500,000 for the development of a used car dealer while showcasing the expected financials and operations over the next three years. The Used Car Dealer, Inc. (“the Company”) is a New York based corporation that will provide sales of used car and minor vehicle repair services to customers in its targeted market. The Company was founded in 2009 by John Doe.
1.1 Products and Services
The business will be actively involved with the sale of quality used cars that have relatively low mileage and are no more than 7 years old. The Used Car Dealer will specialize in offering pre-owned cars that are approximately two to four years in age and have mileage that does not exceed usage of 15,000 miles per year. The Used Car Dealer, in addition to local marketing strategies, will use several online marketing channels to quickly turn over the Company’s inventory. Once the business receives its needed capital infusion, the Owner will develop an online Ebay Motors account from which to conduct nationwide auto sales. The business will also provide minor vehicle repair services, which will generate substantial streams of high margin revenue for the Used Car Dealer. The third section of the business plan will further describe the services offered by the Used Car Dealer.
1.2 The Financing
Mr. Doe is seeking to raise $500,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate.
1.3 Mission Statement
The Used Car Dealer’s mission is to become the recognized leader in its targeted market for sales of quality used cars and automotive services.
1.4 Mangement Team
The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the automotive sales industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.
1.5 Sales Forecasts
Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.
1.6 Expansion Plan
The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to implement marketing campaigns that will effectively target individuals within the target market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Used Car Dealer, Inc. The Company is registered as a corporation in the State of New York.
2.2 Required Funds
At this time, the Used Car Dealer requires $500,000 of debt funds. Below is a breakdown of how these funds will be used:
2.3 Investor Equity
Mr. Doe is not seeking an investment from a third party at this time.
2.4 Management Equity
John Doe owns 100% of the Used Car Dealer, Inc.
2.5 Exit Strategy
If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of the Used Car Dealer. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings.
3.0 Products and Services
Below is a description of the used car sales and automotive services offered by the Used Car Dealer.
3.1 Sales of Used Cars
Management anticipates that it will be able to turnover 50% of its approximate 30 automobile units from its inventory every month by the end of the first year of operation. This will allow the Company to earn a significant profit on the sale of the automobiles it sells in addition to the revenue generated from rentals during this time. As stated earlier, the business will specialize in purchasing automotive inventories that are relatively new. Management will seek to purchase vehicles that are approximately two to four years of age. The business will also seek cars that have no more than an average annual usage of 15,000 miles per year. In order to promote sales, each car will be certified by an mechanic that will ensure that the car is usable. The business may offer a three month, 3,000 mile bumper to bumper warranty for certain car sales. The Company will maintain an expansive lot from which to conduct its sales.
3.2 Automotive Repair Services
The Company will also provide additional services such as on-the-spot minor repairs for a vehicle’s air conditioning, brakes, or hoses. The Used Car Dealer will also provide cleanings, basic auto maintenance, and emergency repairs for its customers as part of this menu of services. The Company does not intend to offer expansive vehicle repair services as the facility will not be completed for complete automotive diagnostics and repairs. However, studies completed by the used car dealership industry have founded that the addition of minor automotive repair services significantly increase per ticket revenues and provide locations with a more steady stream of clients.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the analysis will detail the economic climate, the used car dealership industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economic market condition in the United States is in recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. Many economists expect that this recession will continue until mid-2010, at which point the economy will begin a prolonged recovery period.
4.2 Industry Analysis
In the United States there are over 5,600 established businesses (with one or more locations) that actively engage in the sale of used automobiles. The industry employs approximately 112,000 people and generates average annual payrolls exceeding $3.5 billion dollars. The industry generates approximately $19 billion dollars on an annual basis. The industry grows at an annual pace of 4.2%. This trend is expected to continue as the availability of the Internet has made it easier for businesses to target individuals seeking to purchase and rent automobiles. Additionally, as the nation’s wealth increases, and more people demand luxury and quality pre-owned, Management anticipates that the market will begin expand and consolidate.
4.3 Customer Profile
Management expects a broad range of customers to purchase cars from the Company’s local dealership and from its online sales activities. The business has outlined several demographics that represent the Used Car Dealer’s average customer
4.4 Competitive Analysis
This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.
5.0 Marketing Plan
The Used Car Dealer intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Used Car Dealer.
5.1 Marketing Objectives
• Develop an expansive sales presence on EBay Motors, Autotrader.com, and other major automotive sales websites.
• Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth advertising.
• Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
5.2 Marketing Strategies
Retail automotive marketing to the target market will be the most difficult portion of the marketing strategy. This is because one of the essential elements to reaching a retail audience is that the Company must build a certain brand affinity with the customer. Management fully expects to enlist the help of a local advertising and marketing firm to reach the Company's targeted consumer. The business will use extensive Internet advertising methods to develop the dealership’s business. Once the business begins operations, the owners will aggressively develop an EBay account from which the Company will market the cars. Each purchaser of the Company’s vehicles will be required to make a deposit on the sold vehicle and arrangements for the delivery of the car. The business will also list its vehicles on several other online used automotive forums including Autotrader.com, cars.com, and several other major online databases of used car inventories. One of the essential elements to developing this sales channel is to quickly develop the Company’s online rating within auction sites like EBay. This will give the business credibility among its potential purchasers.
In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Organizational Budget
6.3 Management Biographies
In this section of the business plan, you should write a two to four paragraph biography
about your work experience, your education, and your skill set. For each owner or
key employee, you should provide a brief biography in this section.
7.0 Financial Plan
7.1 Underlying Assumptions
• The Used Car Dealer will have an annual revenue growth rate of 10% per year.
• The Owner will acquire $500,000 of debt funds to develop the business.
• The loan will have a 10 year term with a 9% interest rate.
7.2 Sensitivity Analysis
The Company’s revenues are subject to change depending on the general economic market. However, the business will be able to maintain its operations profitability as the business is not limiting itself to local advertising. The business will use multiple forms of advertising to ensure a fast turnover of its used inventory. Additionally, in times of economic recession, many people resort to the purchase of used cars versus new ones.
7.3 Source of Funds
7.4 General Assumptions
7.5 Profit and Loss Statements
7.6 Cash Flow Analysis
7.7 Balance Sheet
7.8 General Assumptions
7.9 Business Ratios
Expanded Profit and Loss Statements
Expanded Cash Flow Analysis