The automobile industry has tons of business opportunities for anyone who is interested. If you have been looking to venture into the sector, it helps to have the right tips. Read on for more information on how to go about it.
Decide on the area you want to specialize in
There are several areas you can go into and a few examples include:
- Sale of accessories, which requires you to find good suppliers. You can go into franchising, where you limit your business to a well-established brand or be a general dealer, retailing for many brands. Get some inspiration from one of Nigeria’s top success stories here.
- Mobile car wash business
- Bodyworkshops to fix damages to car exteriors
- Tire sales and repair
- Leasing business for car hires
- Shuttle services, ridesharing and so much more.
Think about going into an area that isn’t too competitive. Niche areas are ideal because the demand often outweighs supply. Another good idea is to limit yourself to one particular line instead of trying to sell everything.
For instance, if you decide to sell car accessories, you could focus on luxury car items. It sets you apart from other people who may be selling standard products that are readily available everywhere.
Carry out a proper market research
Let’s say you want to open a Kia dealership in a particular locality. Some of the first things to do are to find out if there is a demand for the products and services you plan to offer to customers in the locality and to carry out proper research to see how much competition there is.
A SWOT analysis will give you much of the answers you need. It looks at strengths, weaknesses, opportunities, and threats. You get a foundation upon which you will make any decisions regarding the business.
Another critical part of the market research is understanding your target audience. Do you want to target high-end car owners? Are you looking to provide solutions to middle and low-class car owners?
Come up with a profile or audience persona for your target customers. This will help you design your sales and marketing strategy in ways that target your preferred customers best.
Come up with a business plan
Now that you have all the insights from your research, it is time to develop a business plan. Think about it as the strategy that will guide all your activities. It highlights goals, timelines, plans of action, and the financial aspects of the business.
When developing the business plan, it is crucial to understand industry rules and regulations. There are specific guidelines you will need to abide by depending on the line you take. If you go into the dealership, for example, it helps to know things like emission standards.
Get the help of a professional lawyer to guide you through the process. It also doesn’t hurt to talk to other people who have set up successful businesses in the sector.
Decide what kind of a company you want to set up. It can be a limited (Ltd) company, partnership, or sole proprietorship. Understand the implications of each type, especially around things like taxation. Again, it helps to have expert advice on the best way forward.
Decide on the location for your business
Looking for the right location for your business is important if you want to run a brick-and-mortar establishment. You can also go online, depending on the type of business.
Without a doubt, things like body shops, car wash centres, and service stations need a physical location. Others like tire and accessory sales can work well in the online space.
There is also a third option you can explore. Mobile service stations remove the cost of the traditional physical locations. But, you must invest in a proper van with the right accessories. It should be able to handle the demands of constant movement as you serve your clients.
When looking for a physical location, take your time to find the right space. Your budget will determine where you set up shop. You must also have enough funds to cover expenses such as rent, overhead, and other running costs.
Raise capital for your business
A business plan will let you know how much financing you need for the business. Some sources of capital are:
- Your personal savings.
- A loan from family or friends. It is essential to enter an agreement on how you will repay the loan. And yes, you must treat the financing like any other loan. You do not want to lose family or friends because of money you didn’t repay!
- Apply for loans from financial institutions. It helps to have a good credit score when applying for loans. You get to enjoy better interest rates, allowing you to repay faster.
Come up with a sound marketing strategy
If you are entering a franchise agreement, you can leverage on the existing brand reputation. But, if not, you will initially struggle with brand awareness. It helps to put aside some money for marketing purposes. The good news is there are loads of opportunities to market a business inexpensively in the digital space.
Start by setting up a website. Your target audience will want to know about the company. They will most likely use the search engines to find you. Implement best SEO practices so that the search engines can find you easily. Such practices include using the right keywords, developing relevant and engaging content, and optimizing your site for mobile visitors.
- Take advantage of local SEO by listing your business in the local directories. It is also essential to open an account on Google My Business.
- Use social media platforms to get more visibility.
- Email marketing is effective and inexpensive. Start by developing a target audience list. Next, segment the audience for better targeting.
- Join relevant networking groups on different platforms like Twitter, Facebook groups, and LinkedIn.
Starting a business in the automobile industry is not different from starting any other business. Think about the area you want to go into. Do your market research, develop a business plan, and ensure you have sufficient financing for the business.
Also, take time to recruit the right staff and offer excellent customer service, as this would help you build a loyal customer base.
Dan has hands-on experience in digital marketing since 2007. He has been building teams and coaching others to foster innovation and solve real-time problems.