How to Open a New Ford Dealership

by Gail Cohen; Updated September 26, 2017
Ford will always be America's #1 motor car company

Despite plenty of competition from Japan, Korea and Germany, the Ford Motor Company--one of America's original automobile manufacturers--has maintained its image and market share through meteoric industry ups and downs. Smaller, more energy-efficient vehicles are quickly replacing larger gas guzzlers in Ford's lineup, making the Ford brand a sure bet as the 21st century moves into high gear. If you want to become a member of the Ford family of dealerships, put your pedal to the metal and you'll be helping folks buy American far into the future.

Write a standard business plan. Include all of the standard sub-sections of a solid business plan including an executive summary, marketing objectives, operational and management parameters, a competitive analysis and standard documentation that offers a comprehensive overview of how your Ford dealership expects to do business.

Contact the Ford Motor Company in Detroit and advise them of your desire to launch a franchise in your area. There may be non-competition zones that prohibit you from establishing a Ford dealership in close proximity to an existing one so clear your physical location choice with Ford before you take another step.

Request the Ford Motor Company's franchise package--a compilation of legal, operational and marketing agreements and practices that stipulate your guidelines for doing business under the brand name. If possible, visit Detroit and meet with staff charged with responsibility for establishing new dealerships to expedite your plan for launching your automotive enterprise.

Check the zoning laws in your area before you settle on a specific location. Even if Ford approves the location, your city, town, village, county or township may not. If you do get the green light, you may be required to apply for a zoning board variance. You must also receive permission to make such modifications such as erecting high-impact lighting and signs and paving a large parcel. An environmental impact study may also be required. One of the fastest ways to get past these steps is to convert an existing car lot to a Ford dealership.

Find underwriting. Ford Motor Company requires a substantive initial investment to acquire a franchise--usually more than $350,000. Ford expects you to put together a group of investors to capitalize your dealership, but if your business plan is well conceived and the area is ideal for a Ford dealership, corporate headquarters may be willing to help you find underwriting in your area. It's best to rely on your contacts for start-up funds.

Handle the legal and financial paperwork required to jump-start your Ford dealership and keep it up and running for that first critical year of business. You'll need a line of credit, licensing and occupation permits. Check in with the Department of Motor Vehicles in your state to see what regulations apply to your location and square away paperwork required by the Secretary of State so your sales tax structure is established.

Touch bases with the Environmental Protection Administration to get details on anything pertaining to laws that apply to businesses handling and disposing of toxins like gasoline, oil, antifreeze and other environmentally compromising products.

Get training from the Ford Motor Company on the ins and outs of owning a retail store and turn to the National Association of Automobile Dealers for additional help. Once you've completed the basics, pass along the essentials to your sales manager or other high-level hires so your dealership philosophy and business plan is communicated with salaried and commissioned staff.

Meet with commercial bond and insurance brokers to negotiate coverages and costs aimed at best serving your business objectives. While you're waiting for your policies and surety bonds to be issued, set up your finance arm so Ford automobile purchasers can turn to your dealership for the best mix of interest and payment terms.

Complete the build-out of your dealership, erect signs, install office set-ups, service bays, complete a parts department build-out and segment the showroom space to accommodate sales, credit and clerical work stations. Establish bank accounts to handle day-to-day business dealings, salary and commission payouts and other types of transactions. If arrangements with your accountant only cover quarterly and annual oversight, you will want an accounting software package on your computer system to keep track of daily and weekly payables and receivables.

Hire a great mix of new and seasoned employees. From your sales force to your parts and service staff, having men and women under roof who have already been trained to handle myriad tasks facing every dealership gives you a terrific opportunity to get off to the right start while offering newbies a chance to learn from the pros.

Populate the lot with cars and trucks. Put into place the marketing and advertising plan you drafted when you wrote your business plan and launch your new Ford dealership with a festive grand opening. Mix balloons, deals, refreshments and test drives to show car shoppers that the Ford Motor Company is your community's newest commercial family member.

About the Author

Based in Chicago, Gail Cohen has been a professional writer for more than 30 years. She has authored and co-authored 14 books and penned hundreds of articles in consumer and trade publications, including the Illinois-based "Daily Herald" newspaper. Her newest book, "The Christmas Quilt," was published in December 2011.

Photo Credits

  • © Ford Motor Company
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