How to write a business plan for a car dealership?
Whether you are starting up a new dealership or looking to grow and improve the profitability of an existing one, having a well-crafted and comprehensive business plan is essential.
In this guide, we will cover why it's important to write a business plan for your car dealership, what information you need to include in it, the structure and format of such plans, as well as the tools that can help you create one quickly and easily.
With these resources at hand, you'll be able to confidently start or grow your own car dealership with success!
In this guide:
Why write a business plan for a car dealership?
- Information needed to create a business plan for a car dealership
- What goes into your car dealership's financial forecast?
- The written part of a car dealership business plan
- What tool should I use to write my car dealership business plan?
Writing a business plan for your car dealership forces you - the entrepreneur - to think critically about your objectives over the next 3 to 5 years, and create actionable plans to achieve them.
The business plan, therefore, serves as the roadmap for the expansion of your car dealership.
Once the plan is in place, you can compare your financial performance to what was planned and recalibrate your financial forecast as time goes by in order to maintain visibility on your future cash flows.
This process is crucial in helping you ensure that you know where the business is headed and have sufficient capital to fund operations and expansion.
Additionally, having a comprehensive car dealership business plan is mandatory if you need to attract potential investors (or lenders) who can provide vital capital to accelerate growth.
Investors will be looking for evidence that investing in your car dealership can generate a good return on investment. Therefore, they will want to see healthy growth, profitability and cash generation outlined clearly in the business plan.
Similarly, banks will use this document to assess whether or not you have what it takes to repay their loan and ensure that your dealership succeeds.
Now that we know why writing the business plan matters, let’s have a look at the information needed to assemble it.
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What information is needed to create a business plan for a car dealership?
Carrying out market research for your car dealership.
Carrying out market research is an essential step prior to drafting any car dealership business plan.
It helps identify target markets and understand customer needs, and allows you to evaluate the competitive landscape and develop strategies for positioning your dealership in a way that will give it a competitive edge in the marketplace.
Having this data is key in order to accurately forecast potential revenues, and to present a compelling commercial opportunity in the written presentation of your business plan.
Developing the marketing plan of your car dealership
Creating a sales and marketing plan is another prerequisite that ensures that your financial forecast includes an accurate budget for sales and marketing expenses.
This budget should include specific details regarding costs associated with advertising, promotions, sponsorships, and incentives in order to maximize the dealership’s sales.
The staff and equipment required for your car dealership
Comprehensive recruitment and investment plans also need to be outlined prior to writing your business plan as they will be needed when creating your financial forecast.
You will need to think thoroughly about how many staff members are required for the business to operate and what equipment will need to be purchased, and cost it all as accurately as possible.
Once you have gathered the necessary information for creating a business plan for your car dealership, it is time to move on to developing the financial forecast.
What goes in the financial forecast for a car dealership?
The financial forecast of a car dealership includes a Profit and Loss (P&L) statement, a Balance Sheet, a Cash Flow Statement, and Sources and Uses table.
Let’s have a look at each of these financial tables in a bit more detail.
The projected P&L statement of your car dealership
The projected P&L statement for a car dealership shows how much growth and profit are expected in the years to come.
The projected balance sheet of your car dealership
The balance sheet is an important financial report that provides insight into the overall financial health of a car dealership.
It includes all assets owned by the dealership, such as cars, inventory, buildings and equipment, as well as liabilities such as accounts payable, loans and other debt.
This document gives an overview of what the company owns and owes at any given time, and how much your equity is worth.
The balance sheet is especially useful for lenders and investors, who want to understand the solvability and liquidity of the car dealership. It provides insight into how much money is available to pay creditors or invest in new projects.
For example, if there are more liabilities than assets on the balance sheet, it could signal that the business is over-leveraged or that there is a need for more capital.
On the other hand, if there are more assets than liabilities, the dealership may have enough money to invest in new projects and give lenders peace of mind.
For car dealership owners, the balance sheet can be used to identify potential risks, gauge financial performance and make plans for future growth. It provides an overall picture of the dealership’s financial health and can help owners understand if their business is on track or needs to be improved.
The projected cash flow statement of your car dealership
A forecasted cash flow statement for a car dealership is a document that shows how money comes in and out of the business.
It is useful because it helps people understand how much money the dealership makes and spends, which helps make decisions about financing.
The initial financing plan
An initial financing plan is like a money map that shows where the money at the beginning of your car dealership business plan will come from and how it will be used.
It is important to have an initial financing plan when starting a car dealership so you can make sure you have enough money to cover all of your initial investments.
The plan should include information such as the total cost, who will provide the funds, what kind of loans or investments are needed, and other sources of capital such as grants or credit from suppliers.
Having this information in advance helps ensure that there are no financial surprises down the road.
Now that you have a better idea of what goes in the financial forecast for your car dealership, it is time to look at what goes in the written presentation which provides the context needed to understand how these projections were made and how they fit into the larger picture.
The written part of a car dealership plan
The written part of a car dealership plan is composed of the 7 main sections:
- The executive summary
- The presentation of the company
- The products and services section
- The market research analysis
- The strategy section
- The operations section
- The financial plan
Let’s dive into each section!
1. The executive summary
The executive summary of a car dealership plan should include the following key points: business overview, market overview, key financials, and the “ask” i.e. how much funding is required.
The business overview section should provide an overall description of the business, including its vision and objectives.
This includes information about the size of the dealership, type of vehicles sold, and any unique features the dealership may offer.
The market overview should include information about the size of the addressable market, current trends in the vehicle industry, and how the car dealership’s offerings intend to meet customer demand.
Next come the key financial highlights where you will include a brief description of the dealership’s financial situation and any expected future profits or losses.
Finally, the “our ask” section should include a thorough explanation as to what you are looking for from the reader of your plan. It is also important to detail how these funds will be used and what kind of return on investment can be expected.
2. The presentation of the company
The presentation of the company should start with detailed information about the structure and ownership of the company.
You should clearly explain what legal entity has been created to run the business, and who owns what percentage.
Additionally, it is important to state the exact location of the dealership, as well as give details about the management team that will be responsible for the day-to-day operations and implementation of the business plan.
3. The products and services section
When writing the products and services section of a car dealership's business plan, it is important for you - the business owner - to provide detailed information about the types of vehicles you offer, along with any additional services such as repairs or financing.
The goal of this section should be to show potential investors or lenders that customers will have access to quality cars, parts and service at competitive prices.
The type of vehicles offered by the car dealership should be clearly outlined in the business plan. This includes identifying which makes and models are available, as well as whether used cars are also sold.
It is also helpful to include information on who supplies these vehicles so investors can assess their reliability and reputation in the marketplace.
Additionally, if there are special features that make certain vehicle models stand out from competitors, those details should be included in this section as well.
4. The market analysis
The presentation of your market analysis should include information about demographics and segmentation, target markets, competition, barriers at entry, and regulation.
This will help provide potential investors or banks with an understanding of the size of the local market and how your car dealership is best positioned to capture market share.
The demographics and segmentation section will focus on the demand side, explaining how many customers are in the local market and what their expectations and preferences are.
In the target market section you will explain who you are targeting and why your offering fits the needs of these customers.
The competition part will focus on your competitors and you will explain how and why customers will prefer your dealership over theirs.
You will then explain what barriers at entry exist on the market, if any. This could include licensing requirements with car manufacturers or an important upfront investment to enter the market.
5. The strategy section
When crafting the strategy section of your car dealership's business plan, you should focus on the following key elements in order to appeal to potential investors or lenders: competitive edge, pricing strategy, marketing plan, milestones and risks and mitigants.
Having a unique competitive edge is essential for success in any competitive industry. This could include offering special promotions or services that are not available from competitors.Or you could benefit from territorial exclusivity with a car manufacturer preventing other competitors from selling the same vehicles you offer.
A clear pricing strategy should also be outlined as well which details how prices will be set and adjusted over time based on market conditions.
Your marketing plan will then outline how customers will learn about the dealership’s offerings and how customer loyalty can be maintained over time.
Finally, you should outline achievable milestones as well as strategies for dealing with potential risks or issues that may arise during operations.
Addressing these topics within the strategy section of your business plan will help demonstrate to lenders and investors your knowledge of the industry as well as show the steps you’ve taken to reduce risk associated with running your business.
6. The operations section
The operations section of your car dealership business plan should include detailed information about the staffing team and roles of staff members, recruitment plan, opening hours, key assets and intellectual property that the business needs to operate, as well as the suppliers it plans to work with.
When detailing the staffing team and roles of staff members, the plan should include information about the number of employees, their job titles and descriptions, as well as any qualifications needed for each position.
Additionally, it should include a recruitment plan that outlines how new staff members will be hired and onboarded into the business.
The operations section should also outline the opening hours of the dealership: when it opens and closes, as well as any special operating hours for specific services.
Furthermore, the plan should include information about key assets and property needed to run the business, such as a dealership license, customer databases, technology platforms or software licenses. Finally, it should list all of its suppliers that are critical to the running of the dealership.
By having a comprehensive operations section, the business owner can show potential lenders or investors that they have planned ahead and are well-prepared to successfully run their dealership.
7. The presentation of the financial plan
The financial plan section is where you will show the financial forecast that we talked about before.
Now that we have an understanding of the content a car dealership business plan should include, let's take a look at the tools and resources available to help us create one.
What tool should I use to write my car dealership's business plan?
In this section, we will review the different solutions for creating a business plan for your car dealership, including using Word and Excel, hiring a consultant or using an online software.
Create your car dealership's business plan using Word or Excel
Using Excel and Word to write a car dealership business plan can be an effective solution for some, but it should not be the first choice.
While Excel is cheap, creating a financial forecast without expert accounting knowledge is challenging to say the least. Creating a financial forecast on excel is often long and tedious and difficult to keep updated.
Using Word can help to create a plan from scratch, but it is time consuming as you have to start from a blank page and it requires hours of formatting the document once written.
Hire a consultant to write your car dealership's business plan
Outsourcing your car dealership business plan to a consultant or accountant is another potential solution.
Consultants are experienced in writing such plans and accountants are knowledgeable about creating financial forecasts that are accurate and free from errors though they may lack the industry expertise to forecast sales with precision.
The main drawback of outsourcing a plan though is the steep cost. Budget at least $2,000 (or £1,500) for a first iteration, more if revisions are needed after initial meetings with lenders and investors.
Overall, this is a good solution if you need your plan fast and are trying to raise a significant amount of capital.
Using a business plan software to write your car dealership business plan
Another alternative is to use online business plan software . There are several advantages to using specialized software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the financial calculations for you without errors
- You get a professional document, formatted and ready to be sent to your bank
- The software will enable you to easily track your actual financial performance against your forecast and update your forecast as time goes by
If you're interested in using this type of solution, you can try our software for free by signing up here .
We hope that this article has helped you to better understand how to write the business plan for a car dealership. If you still have questions, do not hesitate to contact us.
Also on The Business Plan Shop
- Car wash business plan template
- How to write a business plan for a car rental company?
Know someone in the car dealership industry? Share this article with them!
Founder & CEO at The Business Plan Shop Ltd
Guillaume Le Brouster is a seasoned entrepreneur and financier.
Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.
Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.
Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.
Published on 20 Mar 2023 , last update on 27 Jun 2023 , as per our editorial standards .
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Car Dealership Business Plan Template
Written by Dave Lavinsky
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 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
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. Venture capitalists will not fund a car dealership. They might consider funding a chain, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results.
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Your business plan should include 10 sections as follows:
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.
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.
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.
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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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.
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 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.
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.
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.
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.
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.
Download Our Car Dealership Business Plan PDF
You can download our car dealership business plan PDF here . This is a business plan template you can use in PDF format.
Car Dealership Business Plan FAQs
What is the easiest way to complete my car dealership business plan.
Growthink's Ultimate Car Dealership Business Plan Template allows you to quickly and easily complete your Car Dealership Business Plan.
Where Can I Download a Car Dealership Business Plan PDF?
You can download our car dealership business plan PDF template here . This is a business plan template you can use in PDF format.
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Other Helpful Automotive Business Plan Articles & Templates
Car Dealership Business Plan Template
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.
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.
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.
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.
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.).
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.
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
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
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.
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.
Wilson Toyota will primarily target the following customer profiles:
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’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 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.
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.
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
The promotions strategy for Wilson Toyota is as follows:
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.
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.
The following will be the operations plan for Wilson Toyota.
- 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.
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
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
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
Income statement, balance sheet, cash flow statement, 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.
Other Helpful Business Plan Articles
Car Wash Business Plan Template Franchise Business Plan Template Car Detailing Business Plan Template
How to Write a Car Dealership Business Plan
Opening a car dealership showroom is more than just putting for sale signs on a few vehicles parked in your driveway. When planning such businesses, you must comprehend and adhere to your state’s legal requirements and receive the relevant licenses. Furthermore, you must establish a suitable legal business structure, select a location, and choose the kinds of automobiles you want to sell.
To operate your business without any legal complications, you must obtain a car dealer license each year from your state to sell vehicles commercially. An insurance firm assesses your company to determine its financial stability, experience, and reputation before agreeing to offer you a bond—moreover, requests to see your business plan to decide whether they’ll finance your business.
There are many benefits to developing a car dealership business plan. One significant advantage is to have something to show a potential investor. In this article, we will talk about the following:
- What is a car dealership business plan?
- Why is it crucial to have a car dealership business plan?
- What should you include in your business plan for a car dealership?
What Is a Business Plan for a Car Dealership?
A business plan outlines your five-year growth strategy and a current picture of your auto dealership business. It outlines your company’s objectives and your plan for achieving them. Furthermore, it includes market research to help you with your goals.
Why Do Car Dealerships Need a Business Plan?
A business plan includes setting goals and objectives, defining strategies, creating an operational system, and identifying your target market. Moreover, it determines the capital requirements for starting a car dealership. Also, it acts as a guide for the company’s future and helps the company in achieving its long-term objectives.
What Should You Include in a Car Dealership Business Plan?
Successful business owners carry out a well-planned corporate strategy. Making a comprehensive plan for your car dealership business is the most incredible method to organize your business strategies. It can help reduce the chances of failure and mitigate financial risks.
Here are the sections you must include in your car dealer business plan. These sections will assist you in laying out your strategies and establishing a winning strategy.
It offers a quick preview of your business plan that lenders and investors can review to assess business viability. Potential investors and financiers may lose interest if you do not give explicit, detailed, and easy-to-scan material.
The executive summary is the first and most crucial component. However, business plan writers prefer writing it in the end, and it is because it summarizes every section of the business plan.
In this section, you should describe the kind of auto dealership you are running. The reader should know if you’re an online dealership selling new or used cars. This section should also respond to the following queries:
- Why do you want to open the dealership?
- The legal makeup of your dealership;
- The accomplishments it aims to make;
- The objectives it has for the future.
List the precise objectives that your organization wishes to accomplish. Your list of objectives should be quantifiable, detailed, time-phased, and realistically achievable. Every goal should have objectives and checkpoints that outline the steps needed to attain it. The purposes of your dealership can help your employees understand your vision and give direction to your operations.
Goods & Services Your Auto Dealership Company Provides
Outlining your auto dealership business’s products and services is the following step. It’shelpful to consider the following issues while considering the goods and services you provide:
- What is the business about?
- What goods and services do you provide?
- Why do you offer these specific goods or services?
- How does your company differ from your competitors that offer comparable products?
- What promotional strategies will you use to advertise your goods and services?
You might choose to evaluate your business plan compared to nearby competitors or online reviews. You can learn what others like and dislike about them. Moreover, it allows you to improve or avoid failing product strategies.
You must include a summary of the automotive industry in this section. This has several benefits, even if it may appear needless.
First, you gain knowledge by investigating the automobile dealership sector, and you gain a better understanding of your industry’s market.
Second, market research can strengthen your approach, especially if it reveals market trends. For instance, ensuring your strategy includes many possibilities would be beneficial if there was a trend toward autos.
The third reason for conducting market research is to demonstrate to readers your industry knowledge. Conducting the study and presenting the findings in your strategy will help you accomplish it.
You must include the answers to the following inquiries in your industry analysis section.
- How much money is the auto dealership industry worth?
- Is there a decline or growth in the market?
- Which companies dominate the market?
- What trends are influencing the sector?
- Do you expect business growth over the following five to ten years?
- How much do you expect your car dealership business will grow in the following years?
- What is the size of the target market?
- How much potential does your car dealership business have?
You can calculate such a figure by estimating the market size throughout the entire country. Furthermore, you can apply that number to your local population.
Your business plan needs to address both your direct and indirect competitors. Your direct competition will be other vehicle dealerships in the area, and your indirect competitors will include individual dealers, online auctions, etc.
In this part, you should also review the critical elements of your primary competitors’ business models. The clients they serve, the types of cars they offer, and their advantages and disadvantages should be the main topics.
A thorough competition study is essential, and it could help you identify and meet customers’ needs or preferences that none of your competitors currently address. The following are a few of the questions you must respond to in this section:
- How many businesses are already operating where you wish to start your auto dealership?
- Are they independent or franchised businesses?
- Do they collaborate with particular automakers?
- What kinds of cars (luxury, affordable, pre-owned, brand-new, etc.) do they offer?
- What is the typical pricing range of the autos they sell?
- How many workers do they employ?
- Do they provide maintenance and repairs?
- Do your competitors offer buybacks on the vehicles they’ve previously sold to customers?
- What deals and promotions do they use to attract potential customers?
- How many automobiles or other vehicles do they typically sell each month?
In this section, you talk about your target customers, and customer satisfaction. Does your dealership cater to used car and luxury automobile buyers? Are clients with bad credit your target market? Here are some details to include in your customer description:
- the cars they are looking for
Consumer research will give you specifics about your target market.
Product, Pricing, Place, and Promotion are the four Ps that traditionally make up a marketing strategy. Your marketing strategy for a car dealership should contain the following:
- Product: In the product section, you should restate the kind of auto dealership you described in your business plan. Secondly, go into depth about the particular things you’ll be selling. For instance, will you provide leasing alternatives along with new car sales?
- Price: List the prices you’ll be willing to provide and how they stack up against your competitors. With your marketing plan, you essentially present the inventory you will have on hand and the price ranges in the product and cost sub-sections.
- Place: It refers to your vehicle dealership’s location. Include your location and explain the importance of that particular area on the success of your business. Consider whether your auto dealership is near a busy shopping area, on a major road, etc. Talk about how your business might attract a regular flow of customers.
- Promotions: The section on promotions is the last in your marketing strategy for your auto business. Here, you will outline your marketing and social media plan for attracting clients to your business.
A solid management staff is crucial to proving your vehicle dealership’s capacity for commercial success. Many small firms collapse as a result of poor management.
Having a capable management team is essential. You will emphasize your unique qualifications for managing your dealership here. The sales managers you hire to run your auto dealership should have experience and a degree, so highlight those elements.
Explain each person’s responsibilities, roles, and tasks. Likewise, highlight their prior experience and discuss how they were successful in those positions. Include the leading executives from the management group of your dealership as well.
Here, you give your step by step breakdown of your 5-year financial statement. It should be subdivided into quarterly or monthly segments for the initial year and then annually for a comprehensive overview of your financial plans. Your cash flow, income, and balance statements comprise your financial information.
A profit and loss statement, called P&L, displays your revenue before deducting your expenses to determine your profitability rate.
It would help if you created projections when creating your income statement. Will you, for instance, sell ten cars every week and service 15? Do you expect a 2% or 10% annual growth in sales? The financial estimates for your company will have a significant impact on the assumptions you choose.
Try to establish your assumptions based on reality by conducting research to the greatest extent possible.
You can see your liabilities and assets on the balance sheets. While balance sheets may contain many details, try synthesizing them to address the most critical points. For instance, spending $50,000 to outfit a used vehicle store won’t result in profits.
Instead, consider it an investment that should bring you income for many years. In the same way, you do not have to immediately return a $50,000 check that a lender writes you. Instead, that is a debt you will eventually have to settle.
Cash Flow Statement
Your cash flow statement estimates how much cash you’ll need for your firm and ensure you never run out. Most business owners and entrepreneurs are unaware of the possibility of making a profit while running out of funds.
Include a few of the significant expenses required for your car business while preparing your financial report and balance sheets:
- Inventory and office supply costs;
- payroll or salaries paid to employees;
- business insurance;
- other expenses (if your company is a new one), such as license fees and permits, and computer software and equipment
This concludes the business strategy for your auto dealership. This section includes information about the kinds of vehicles your business offers, who buys them, and their price. Moreover, it discusses your marketing approach, travel plans, and means of transportation. Therefore, when writing this section, you must respond to the following questions:
- How much money do you require?
- What financial instrument(s) are necessary: ownership, debt, or even a governmental grant for free money?
- For how long is this cash available?
- What are other sources available to raise funds?
- Where does the remaining investment come from? If you apply for an SBA loan, is it your own money or investors in the private sector?
The Bottom Line
It is essential to conduct research before beginning any business. One of the most important things you should do before starting your auto dealership is to write a business plan. It can serve as a road map for achievement. Moreover, it can assist you in obtaining crucial funding, surety bonds, and licenses.
A business plan can ensure that your team members comprehend and execute your objectives and vision appropriately. Nevertheless, a vehicle dealership may be a potentially profitable and satisfying business with the proper marketing and promotion strategies and top-notch customer service. Additionally, a business strategy can be helpful for companies of all shapes and sizes. This paperwork will be crucial to getting your firm off the ground but will also help manage it in the long run.
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Used Auto Sales Business Plan
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Integrity Auto Sales
Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, auto sales & parts.
There is a need in Lane County for a large selection of quality used cars, and Integrity Auto Sales will sell these top-quality used vehicles at a competitive price. The owner and sales manager have over 30 years of combined experience in new and used auto sales. We will continue to develop our excellent working relationship with local dealers and auctions to bring the savings to the customer.
We will create a purchasing environment that caters to the customer’s needs. We are selling a professional service and an experience in car buying that will bring customers back again, as well as referring friends and family. We estimate an optimistic gross margin over the industry average. We will be successful because of the excellent team we have assembled and the drive and determination of the owners.
Almost everyone needs a car to get from point A to B. Many families have two or more cars. Due to the recent success of the new car market, there is a large inventory of used cars available for re-sale. New car sales have enjoyed the largest single month gain in October up 24%.
Used car dealers are notorious for unethical sales practices. Customers are inherently cautious and untrusting as a result. The more we can provide a high-quality sales experience, the more successful we will be. Our salesmen will provide a friendly and personal experience for the buyer. We will follow up and ensure customer satisfaction. We will rely on these customers for an excellent reference to other car buyers. This company will build an excellent working relationship with our suppliers and customers.
Integrity Auto Sales provides a unique car buying experience to the customers in the Willamette Valley. One that focuses on customer satisfaction first. We understand that vehicle purchasing is a necessary, but sometimes unpleasant experience. Our goal is to provide the customer with an enjoyable, honest service by satisfying individual customers practical transportation needs with a quality product.
We also believe it is important to have quality vehicles at a low cost, and will back each vehicle with a 30 day limited warranty. Our company will make a profit by generating sales. It will provide job satisfaction and fair compensation to its employees, and a fair return to its owners. Hard work and performance is rewarded through bonuses and commissions. Job satisfaction is very important for employees and owners, we will create a work environment that is enjoyable and profitable for all.
- Growth will be moderate to good, cash flows steady with several months of loss in the beginning
- Marketing will remain below 10% of sales.
- The company will invest residual profits (10%) into financial markets and approximately 50% into company expansion for the first year.
Financial Highlights by Year
We need $130,000 funding to start. That includes a $100,000 loan. Jonathan will invest $20,000 and Don will invest $10,000.
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Business Plan : Bentley car Dealership
: Would like to express my deepest appreciation to all those who provided me the necessary Information to complete this report. A special gratitude I give to Tarik Adnan & Sumon Akash whose contribution in stimulating suggestions and encouragement, helped me to coordinate my project especially in writing this report.
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