Here's a post from another website, similar question.
Oh My...I presume you haven't also seriously considered buying new deck chairs for the next sailing of the Titanic!
Seriously, as someone who grew up in the retail automobile business (new and used cars) and spent fomative years in that business ,you need to consider this extemely carefully, and this forum is not the best place to start (and I've owned a Porsche for over 42 years).
I've known many "outsiders", successfully real estate people, bankers, lawyers, doctors, big time farmers (you name it ) who have been "longtime auto enthusiasts" who have accumulated significant capital and said "gee, that looks like fun...) and failed MISERABLY! Their shocking experience and rapid bleeding of what they believed were sufficient cash reserves make the recent blood letting in the dot-com business sound like a pleasure boat cruise by comparison.
You have not stated anything about your background and experience, so the following are "general" guidelines or warnings about considering such a venture:
1. The "Buy-In" or "Total Ownership" of a successful profitable dealership would run from $2.5 million to $20 million with an equivalent line of credit. Note that this is for fixed assets (parts, equipment, signs, etc) and "blue sky" ("goodwill" the value of an ongoing business) only. It does not include real estate or any residual used car inventory. Check the Automotive News web site (
www.autonews.com) to get an idea of current dealership listings for sale or brokers handling sales.
2. The manufacturer (Porsche, BMW, MB, GM, Ford) will have franchise agreements for qualifications (experience, financial, etc) you must meet. In their eyes, you can be an "owner-investor" without retail automobile experience as long as you have, or retain, a "successful" management team. IGNORE 99 percent of what the manufacturer says...they don't know a *&%$$*##-thing about most aspects of the retail automobile business. They know manufacturer to wholesale operations only...beyond that they are largely ignorant (and repeated prove it when they try to run a "profitable" so called- "factory store). Remember, they are paid "upfront" or short term net, you are depend on the daily "market" conditions.
3. You must have successful "TOTAL" business operations and finance experience for all aspects from the "front" (sales, business operations) to the "back" (service facility, body shop, etc) to be successful. You can have been recognized by the manufacturer with multiple sales awards ("floor knowledge) and think you will succeed and can FAIL MISERABLY! You can be a successful independent Porsche repair shop operator and FAIL MISERABLY! You must have a business plan and honestly judge your own abilities against all aspects down to the lowest level of knowledge (ie, how much does it cost to wash a customers car? What's the expense for disposables, like shop rags, etc., whats the parts inventory turnover and obsolete rate?, etc). You must constantly focus on cost control and the "back end" without over reliance of sales and revenue.
4. You must have extremely dependable and reliable business associates and suppliers that you can count on for advice and assistance both professional and financial.
5. You must have an extremely stable family environment. The automobile business is one in which you can experience an emotional rollercoaster...highs from successful sales, dealer introductions, etc. to extreme lows (operating losses, loss of valued customers or business reputation, unanticipated expenses, etc) all on a repeated "up and down" 30 day (or less) cycle. Spouse, child problems, depression, alcohol or substance dependence are all too common in this business.
Porsche, Ferrari, Lamborghini and to a lesser extent BMW, MB, Audi are "niche" dealerships that are often spin-offs of a larger successful dealer group operations. Except for those that built "stand alone" Porsche dealerships from scratch in the 1960's, a "stand alone" Porsche dealership is an extremely risky business venture of high fixed overhead and uncertain future revenue streams.
I would strongly encourage you to "dip your toe in the water" rather than "jump in head first" (the rosy reflection may be from the bottom of a largely empty pool!). Work in a Porsche dealership, learn every aspect, particularly about the "back end" even if you a a successful sales person. Look at flooring cost, banking finance arrangements, balanced manning by departments (productivity). If you do decide to go ahead, look for a "buy-in" arrangement with some clear contract arrangements, rather than a total "buyout". An owner without heirs or someone a few years from retirement may provide you a learning opportunity that would be invaluable in any decision.
Apologize if you already know all this or the impression it's all generally negative...like any business, it has both pros and cons for any investor particularly if you're an "outsider" or "glamour gumshoe" (successful salesman).
Regards,
Perry (42 plus years of Porsche Ownership)
