Financial Necesseties For Any Small Car Dealership

If you’ve got a fervent passion for cars, and you’ve always wanted to start a business, then you may have been playing around with the idea of dropping your nine-to-five, and opening your own dealership. For those with a bit of knowledge and competency, opening a dealership is a very attainable way to start your own business and do something you love. In this post, I thought I’d touch on some of the big financial necessities you’ll need for your dealership.

While we all see the same image when someone says “car dealership”, the massive lot and showroom really aren’t that necessary. It’s 2016 now, meaning that all you really need to call yourself a car dealer, is the initial capital to buy a car wholesale, and the internet connection to advertise it. Of course, you’re going to need a little more space than your driveway if you want to have more than one car on sale at a time! Once you’ve secured enough capital, there are many good places to source your vehicles from. Online auction brokers, such as ADESA, have become steadily more popular in recent years, but obviously you may not be happy with the idea of paying for something you’ve never seen. You’ll still be able to find various traditional auto auctions, which don’t require a dealership license or other qualifications.

All business owners need to make sure they’re getting all the right insurance, and this is especially true for auto dealers. After all, you’re not exactly running a micro-bakery! After a little research, you’ll be able to find many companies offering building and contents insurance, as well as services protecting you from public liability and various other risk factors which come with running a business. If you want to show your customers that you’ll go even further for them, then you may want to consider purchasing some gap insurance as well. Sure, you may not have a lot of capital to throw around in that first opening period of your business. Still, failing to have certain kinds of cover can really come back to bite you. Make sure that once you’re insured you’re keeping to strict record-keeping standards as well. You may need this in the event of a claim.

Record keeping, and good organization in general, is essential if you want your car dealership to really take off. While not all of it is going to be necessary, keeping accurate and detailed records of all your past transactions will give you a greater understanding of how your business is growing, and the areas where it needs the most work. Aside from that, keeping a meticulously organized diary can be a huge help further down the line. You may be looking ahead at various regular tasks which may seem trivial to you now, but can end up being a massive drain on your valuable time. You’ll try a few systems before getting it right, so start today!

I hope this has been some help with organizing the finances for your car dealership. Like many business models, when you have your finances meticulously organized, everything else falls into place.

Is Your Business Insured Against Meteorite Damage?

Have you looked at your insurance policy recently and, if you have, is your business insured against meteorite damage? This might seem like an odd question to ask, but a surprisingly large number of businesses have an insurance policy tucked away in a drawer somewhere, but it is not until something untoward happens that they pull it out to see whether or not they can make a claim.

So what should a business be covered for?

As far as UK law is concerned, a business is not required to carry insurance, unless it has an employed workforce. In this case, the business must carry employer's liability insurance, for a minimum of £5 million. This cover provides protection for the regular workforce; as well as temporary staff, including casual and seasonal workers, against injury resulting from negligence on the part of the owners of the business.

If the company owns and uses motor vehicles in the normal course of its operation, then it is also necessary to carry third party motor insurance cover. Most businesses using vehicles will, however, choose to carry additional motor vehicle fire and theft cover, or indeed arrange comprehensive motor vehicle cover.

Just as we all accept that there are certain risks to owning a home, and choose to carry home insurance cover, so too most businesses accept the need to protect their assets. The difference, in the case of a business, is that there are more than just the business's premises to protect. Buildings, together with their contents, naturally need to be protected, just as a home does, against such things as fire, flooding, burglary, or even from being struck by a meteorite.

One additional requirement for a business when looking at property insurance is the need to also cover any losses incurred as a result of an interruption to normal business, following damage to the premises. Many businesses overlook this particular risk, and research suggests that more than three quarters of all businesses that suffer a major incident, without cover for the interruption to their business, fail within one to two years.

Again, because of the particular requirements of many businesses, property insurance can be extended to cover a wide variety of different things, with extensions including engineering insurance, goods in transit insurance, terrorism insurance, glass insurance and frozen food insurance.

There are several other risks that a business may, or may not, choose to insure against, and two in particular are worthy of note here.

The first is to provide protection for the business's employees. This will normally mean providing the workforce with private medical insurance cover. It is also common for employers to arrange life insurance cover, so that an employee's family is provided for, should he die while working in the business.

In the light of the current high cost of private medical insurance, many businesses today cannot afford to meet the full cost of providing cover, and so offer a scheme that allows their employees to purchase cover themselves at a subsidized rate. The second area for which businesses will often voluntarily provide insurance cover, is that of financial risk. This covers the business for such things as the theft of money, the business's inability to meet its financial obligations when a customer fails to pay his bill, and monetary losses resulting from dishonesty on the part of an employee.

A business may also decide to include key person insurance on their policy, if the business is at risk of incurring substantial loss should key individuals within the business die, or become disabled.

Finally, a business might decide to cover the risk of losing income should one or more of the business's licenses be withdrawn, or simply not renewed, for a reason that is outside of the business's control.

The cost of business insurance can be high, and some businesses see this as one area in which they can save some money. Unfortunately, even a small uninsured loss can be enough to bring a seemingly thriving business to its knees.