Hey Everyone, I know this is starting your business forum, but in my case I am a single member LLC business looking to move to a new location and add partners, so it's very similar to opening a new business!
I own a small Auto Dealership in Seattle, and have been running it for the past 12 months since I got it off the ground by myself. It was a rough first year, but I finally got it profitable, but not by a lot, I am still making less money personally than if I had stuck to selling cars for a franchise dealership and working more hours also.
I have been in the car business for many years, and for me, I don't see a lot of growth working it like this by myself, as it is only one person's capital and credit worthiness, and a dealership needs a lot of credit and capital for keeping inventory on the lot, advertising, insurance, etc.
My business currently is set up as an LLC, and ownership would be divided by percentage.
I've got a couple friends, people I've worked with in the car business who are interested in partnering up to lease a larger location, have more inventory etc. The place we're looking at can hold 100 cars, versus 20 at my current location. Bigger building can also house a maintenance shop and detail shop, vs me sending those out currently.
One of the potential partners I've worked with for years and he has a lot of connections in the finance departments and can get sub prime credit customers loans, and also connect to the Latino community, which not too many dealers have in our area.
The other potential partner I've worked with also for years, and he doesn't have as much experience in sales and finance, but has experience in running the service department of a dealer, which is what we want to get into with the new location. He also will be able to invest more funds than the other two of us will, by probably double what me and the first partner can bring to the table.
My contribution to the business besides cash contribution would be getting new inventory at auction, checking out cars to buy, this is one of the most important things for a dealership is to have good cars to sell. I also have an existing line of credit to buy inventory, as well as a base of customers and reputation for my business online (5* on yelp). Others would be advertising online, management, and general running the business in terms of paying bills, keeping track of license updates and code, etc.
All three of us know how to sell, and we would all do this in the beginning in addition to our other duties until we get busy enough to hire salespeople.
So what I wanted your opinions of is how should this be divided up in terms of ownership? I might just be greedy, but I feel that I should have a little more percentage as when we first start, I will be using my dealer license to get the new location running and retailing right off the bat; generally a new dealer has to wait 2 months before the state will issue a dealer license. We would probably keep the same business name, as I have built up a customer base, and won them over with great service, hence my online reputation (5* on yelp, pretty rare for a used car dealer)
Thank you
I own a small Auto Dealership in Seattle, and have been running it for the past 12 months since I got it off the ground by myself. It was a rough first year, but I finally got it profitable, but not by a lot, I am still making less money personally than if I had stuck to selling cars for a franchise dealership and working more hours also.
I have been in the car business for many years, and for me, I don't see a lot of growth working it like this by myself, as it is only one person's capital and credit worthiness, and a dealership needs a lot of credit and capital for keeping inventory on the lot, advertising, insurance, etc.
My business currently is set up as an LLC, and ownership would be divided by percentage.
I've got a couple friends, people I've worked with in the car business who are interested in partnering up to lease a larger location, have more inventory etc. The place we're looking at can hold 100 cars, versus 20 at my current location. Bigger building can also house a maintenance shop and detail shop, vs me sending those out currently.
One of the potential partners I've worked with for years and he has a lot of connections in the finance departments and can get sub prime credit customers loans, and also connect to the Latino community, which not too many dealers have in our area.
The other potential partner I've worked with also for years, and he doesn't have as much experience in sales and finance, but has experience in running the service department of a dealer, which is what we want to get into with the new location. He also will be able to invest more funds than the other two of us will, by probably double what me and the first partner can bring to the table.
My contribution to the business besides cash contribution would be getting new inventory at auction, checking out cars to buy, this is one of the most important things for a dealership is to have good cars to sell. I also have an existing line of credit to buy inventory, as well as a base of customers and reputation for my business online (5* on yelp). Others would be advertising online, management, and general running the business in terms of paying bills, keeping track of license updates and code, etc.
All three of us know how to sell, and we would all do this in the beginning in addition to our other duties until we get busy enough to hire salespeople.
So what I wanted your opinions of is how should this be divided up in terms of ownership? I might just be greedy, but I feel that I should have a little more percentage as when we first start, I will be using my dealer license to get the new location running and retailing right off the bat; generally a new dealer has to wait 2 months before the state will issue a dealer license. We would probably keep the same business name, as I have built up a customer base, and won them over with great service, hence my online reputation (5* on yelp, pretty rare for a used car dealer)
Thank you
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