Contrary to business forecasts, the economic landscape in the UK is decidedly frosty and beginning to contract. This is something of a surprise, as the landslide victory by the Conservative Party was expected to continue growth in the nation’s labour, manufacturing and property markets. Despite this, the IMF has recently reduced its growth forecasts for the UK, while the small business market has also begun to contract at a surprising and unexpected rate.
Making Used Cars your source of Income: How to Craft a business from Automobiles
Despite this, there are some markets that offer opportunity for growth. Take the new car sales market, for example, which has recently continued its record breaking growth path and expanded for the 41st consecutive month. This has had a knock-on effect for the used car market, creating the chance for forward-thinking entrepreneurs to establish a low-cost start-up. There are several ways in which used cars can be used to underpin a business model, however, and choosing the best possible option is crucial to long-term commercial success.
While ambitious entrepreneurs may be inclined to establish a business through which they can purchase and subsequently sell second hand cars, this would require a large initial investment that does not guarantee a viable return. After all, margins can easily be squeezed while the economy, while there is also immense competition in the form of established brands such as Exchange and Mart. Instead, entrepreneurs may want to consider alternative options for making money in this market.
Service Provision and Adding Value in the Used Car Market
One of the most effective options is the addition of value to used vehicles, especially those that have been significantly dilapidated or run-down over time. Not only can damaged or worn cars be acquired for much less than their standard retail price, but those with the necessary skill can also restore these vehicles to add considerable value over time. If applicable, it may even be worth investing in classic car restoration and this increases profit margins even further.
If you are in the market for a low-cost and sustainable business model, however, you may be better served by offering specialist used car services such as auto repair and valeting. Although this offers lower margins and requires more intensive labour, it benefits from more sustainable levels of demand among consumers and is ideally placed to capitalise on current market growth. Ultimately, your decision will depend on your perception of the market, and your underlying appetite for risk as an entrepreneur.
