If you are passionate about cars and keen to make the switch from employed to self-employed, becoming a motor trader could be the perfect business idea to get you started. Cars are an item that will always be in demand, so finding customers for your new business should not be too difficult. But, it is crucial to remember that running a motor trade business is different to many other types of ventures.

One of the biggest differences between selling vehicles and regular products is the value of the goods is far greater. This means you will have less inventory, and your profit margins will likely be far higher. So, before you launch your new enterprise, it is essential to take care of the basics so when your business is ready to launch, you can ensure that it is as professional as possible and able to provide the best possible service to your first customers. Here are some of the factors to consider before starting up your motor trade business:

Conduct Research

Conducting plenty of research, so you feel confident you have the right level of knowledge to run your business is essential. Even if you have previously worked in the motor trade, it is still beneficial to update your knowledge to ensure you have all the latest information at your fingertips and can make informed decisions concerning your business. As well as brushing up on your vehicle knowledge, it is also helpful to research motor traders in your area so that you understand who your competition is and how they compare with your new venture.

Another critical consideration is researching current car prices and understanding which makes and models of cars will enable you to see the best returns. Researching the amount you can expect to pay and how much you can realistically make is essential. Understanding which cars are popular right now is also necessary to ensure you are not left with vehicles that you struggle to sell.

Write a Business Plan

Launching a business is always a risk. Finding ways to mitigate the risks posed by launching a new business is vital to give your venture the best chance of success. Thorough planning is key to business success, so writing a business plan is crucial to ensure you know precisely what you are doing and how you plan to do it. Your business plan provides the opportunity to formalise your ideas and to spot any potential issues before you launch.

Working through your business plan also provides you with a document that you can refer back to time and again as needed to ensure that your plan is on-track and progressing. So, spending a little time writing a business plan now will make life as a business owner much easier going forward.

Find the Perfect Premises

To run your new business efficiently, you will need a location to operate from and where potential customers can come along to view your vehicles. Depending on the size of your business, you may need a forecourt to display your cars along with a sales office, where you can complete transactions and store vehicle paperwork. However, if you are planning to run a motor trade business on a part-time basis in addition to your day job, you may choose to run the company from your home.

Wherever your business is located, you will need to ensure that you have adequate security measures in place to provide the best protection for your company. Trading cars means that your stock is especially valuable, and without the right level of security, the vehicles and your business are vulnerable. Whichever type of location you choose, it is essential to ensure that it represents your business in the most professional way possible and can securely store your vehicles. 

Set Your Budget

The size of your proposed business plans will dictate how much money you need to start up the company. If you plan to launch with a large inventory and start big, you will need a significant budget to buy your stock and plenty of space to store them. In this situation, you will need to consider how you will finance your fledgeling business and which funding options are best for you to pursue. 

 Arrange Insurance Cover

Arranging the correct level of insurance is vital when you run a motor trade business. Your insurance will need to protect every aspect of your company, including your business premises, your vehicles, equipment, and also provide public liability cover. You will need to organise motor trade insurance that matches your needs, so it is essential to consider your individual circumstances and how this may impact the coverage you need.

If you have points on your license, this may affect the insurance available to you, so it is helpful to learn how convicted drivers can remove points and get the correct insurance cover to protect your business based on your situation. If you are unsure about the type of insurance that you need, it is helpful to discuss this with the insurance broker, who should be able to advise you on the types of cover available to you based on your specific circumstances. If you are going to allow people to test drive cars or motorcycles, it’s important you also protect yourself from accidents that may happen. Get in touch with Lakeland motorcycle accident lawyer to see how they can help you.

Sort Out Your Paperwork

Keeping up-to-date with your paperwork is vital when you are starting any business. You will likely need to register your new business venture with HMRC and to then set up a system to record your accounts to ensure that you are keeping track of your company finances. As well as keeping track of your company accounts accurately, you will also need to manage other aspects of your business paperwork. Keeping up with organising and filing the paperwork for MOTs and vehicle tax is essential to keep your business running efficiently. It is also crucial to ensure you keep receipts for the sale and purchase of vehicles and any work you have completed on cars. Keeping thorough records will ensure that you can run your business professionally and get off to the best possible start.