Floor Plan Your Inventory for Proper Cash Flow

NextGear Capital Helps Assure Dealer Success

You run a great business.  You find the right cars for your customers.  Your customers are happy and you make a good living.  Sure it’s hard work and long hours but you love what you do and you are a true entrepreneur – the backbone of the American economy.

Your bookkeeper tells you that you are making money and profitable.  But do you ask yourself “If I am profitable why am I always stretching to make payroll or buy that next auction unit”?

The answer is cash flow.  And cash flow is king.

While your bookkeeper can show you your financial statements, what you operate your business on every day is cash flow.  Cash flow is the lifeblood of your business and cash flow is the fuel for your growth.  Simply put, cash flow is the movement of money in and out of your company.

You’ve heard the term, “I was so successful selling cars that I went out of business”.  Why does that happen?  It happens because every time you sell a car you are out of pocket the money until you are paid by your customer’s lender — which can take weeks!  The more cars you sell, the more “cash flow” you need.

Think of it this way:  Let’s assume your average cash in deal is $7,000 and you sell 8 vehicles per week.  Each week your cash flow needs are $56,000 ($7,000 x 8) just for inventory.  If your customer’s lenders don’t pay you for two weeks after the sale you need $112,000 in cash ($7,000 x 8 x 2) in your business just to cover your cars…..not to mention payroll and other expenses.

If you successfully grow your sales to 10 per week you will need $140,000 in cash ($7,000 x 10 x 2). That is another $28,000 for selling two more cars per week.   This is why growing your business takes money!

Floor planning is the answer to this real issue and will provide you the cash flow to grow your business and not have to stretch to make payroll or stretch to buy that next auction unit.  Floor planning provides you the ability to buy that next auction unit and keep your lot full — full of cars and customers.

Keep your money – your cash flow – working for you in your business and not sitting idly on your lot.   Take your business to the next level by giving your customers more vehicle choices to drive more sales.

Floor planning your inventory can improve your cash flow and help you grow your sales.

NextGear Capital has the cutting-edge technology and industry-leading customer service to empower dealers to floor plan vehicles from virtually anywhere, at any time. Be sure to contact us at NextGear Capital for all your floorplanning financial needs!

 

Tags:


0 Comments

    Leave a Reply

    Your email address will not be published. Required field are marked *.