New Car Dealership: Developing a Business Plan


The proposed company category is a car dealership, which offers both new and used vehicles for sale alongside a service department. Therefore, the business requires a significant degree of investment in order to set up all three core elements of the dealership. The legal structure for the company is preferably a limited liability company or LLC due to better tax choices, personal asset protection, and improved credibility.

Industry Analysis

The main reason why the business should be started is rooted in the lucrative nature of the industry. Since lockdowns, car sales have been down, but the recent revitalization of the economy is a promising opportunity for benefitting from the recovery and growth phases. In addition, the entirety of the car dealership field is highly profitable and carries a moderate amount of risk, which makes the industry an appealing option.

Customer Analysis

In the case of car dealerships, the customers include the ones loyal to particular brands or individuals living in near proximity of the dealership. Demographics can range drastically, but the largest chunk of customers are middle age adults. The majority of customers are not superbly knowledgeable about brand differences or core mechanisms behind vehicle functionalities. Therefore, the customers purchase a car with a strong influence of their brand perception as well as car salesman/consultant’s recommendations.

Competitive Analysis

The direct competitors include only other car dealerships, whereas indirect competitors are private sellers. In the case of the latter, nothing substantial can be done besides building a reputation in favor of the dealership. However, other dealerships can be managed either by gaining a competitive advantage or cooperation in order to segment the market. The emphasis will be put on competitive advantage gain through talent acquisition and development.

Marketing Plan

The marketing plan will be divided into two sub-plans, one targeting customers in the area and another targeting top talent. Therefore, a significant portion of the marketing budget will be allocated towards marketing efforts to attract more talent. The main selling point for the potential employees will be the employee experience at the dealership. The business plan is centered around heavily investing in talent acquisition and development since the underlying paradigm is the notion that employee satisfaction translates into customer satisfaction.

It should be noted that in the automotive market, the image carries a twofold meaning. Firstly, it is the image of the actual car of a certain brand. It is shaped by a long-term presence in the market through a variety of channels such as advertising, reviews from friends and acquaintances, and personal experience (Al Kurdi et al., 2020). Essentially, car brands have become recognizable brands that inspire trust and associations with a certain degree of comfort, prestige, convenience, and reliability. Secondly, the image of car dealerships selling certain brands and the car dealership makes a corrective effect on the brand (Al Kurdi et al., 2020). A well-performed service for the sale of a branded car and a reliable car service contributes to the strengthening of the car brand.

Operations Plan

The operations plan is focused on running a car dealership in a similar fashion as other ones. However, the main emphasis of the operations will be given towards the structured hiring and employee training processes. Since the dealership plans to invest in marketing for talent acquisition, it will be followed up with a strict hiring procedure, where applicants will be evaluated on the basis of their experience, past sales records, and compatibility with the dealership’s goals and values. In addition, a strong degree of accentuation will be put on employee development through training.


The management structure will be centered around a transformational leadership style in order to build trust and relationships with the employees. The organizational structure will be horizontal with fewer hierarchal elements. The main reason is that the premise of the business plan based on employee satisfaction is critical for customer satisfaction. Evidence suggests that “it was found that customer satisfaction had a causal relationship with employee satisfaction and an understanding of the employees’ satisfaction role was extremely important in this context” (Al Kurdi et al., 2020, p. 3561). In other words, not only these two factors are correlated, but they are also directly interconnected. For example, “employee satisfaction is significant when it comes to define organizational success, particularly in the service industry. The need to enhance employee satisfaction is critical because it is the key to better business operations as it increases long-term employee productivity and retains profitable customers” (Al Kurdi et al., 2020, p. 3561). Therefore, the managerial efforts will be centered around employees and their experience at the dealership.


In conclusion, the business plan is focused on a new car dealership with a service department. The industry is highly lucrative and can become even more profitable due to the expected economic recovery and growth. Customers are mostly middle aged adults in the regional proximity to the dealership’s location. The direct competition is other car dealerships, whereas indirect competition is private sellers. The competitive advantage over the former competitors will be gained through talent acquisition and development. Thus, marketing efforts will go both for customers and prospective employees. Operations will be similar to standard operational processes at other dealerships but with a heavy emphasis on training and structured hiring. The transformational management style will be utilized in order to build trust and relationships with the employees.


Al Kurdi, B., Alshurideh, M., & Alnaser, A. (2020). The impact of employee satisfaction on customer satisfaction: Theoretical and empirical underpinning. Management Science Letters, 10(15), 3561–3570. Web.

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BusinessEssay. "New Car Dealership: Developing a Business Plan." November 29, 2022.