How Much Capital would you need to start a Dealership?

Tractorstant

Member
Location
Monaco.
If someone was "mad" enough to want to set up an Ag Machinery dealership how much capital would you think you would need behind you?

I guess it depends on the Brand guidelines and stocking etc. But also buildings, workshops, vans, parts, etc.

Just curious to know people's estimations.
 

quattro

Member
Location
scotland
If someone was "mad" enough to want to set up an Ag Machinery dealership how much capital would you think you would need behind you?

I guess it depends on the Brand guidelines and stocking etc. But also buildings, workshops, vans, parts, etc.

Just curious to know people's estimations.
Start off buying second hand and work your way up
plenty doing it and built some good big businesses up, and probably wouldn’t want new stuff
selling new doesn’t always make it a better more profitable business
 
Most dealerships don’t start out as such
Most start of mechanical repairs and start a bit of dealing in machinery before they know if a few manufacturers come knocking offering them franchises then it grows from there . Can’t see someone just starting off with just a pile of cash no experience and good luck !!
 
Chap I work for has pretty much done the unthinkable.

Took on a machinery dealership from scratch, no existing business, premises or anything.
Had a bit of financial backing and had some support from another dealer out of the area but otherwise unaided.

It's in its 3rd year, 3 permanent staff, getting busier and busier.
 

MrNuts

Member
You don't need masses of cash, almost all new equipment is supplied on credit terms using stocking facilities from the finance houses, only issue is to get these stocking lines you need a trading history and some cash in the bank, most businesses don't have huge cash reserves. The cash is required to carry used stock/trade ins and parts. Rent for premises is paid monthly, and you need cash to pay staff.
You could start a decent business with £100k, from there it depends on how big you want to get. Remember the best dealerships are running a margin after tax of 3%.
 

kill

Member
Livestock Farmer
Location
South West
You don't need masses of cash, almost all new equipment is supplied on credit terms using stocking facilities from the finance houses, only issue is to get these stocking lines you need a trading history and some cash in the bank, most businesses don't have huge cash reserves. The cash is required to carry used stock/trade ins and parts. Rent for premises is paid monthly, and you need cash to pay staff.
You could start a decent business with £100k, from there it depends on how big you want to get. Remember the best dealerships are running a margin after tax of 3%.
Some now shifting trade ins out the door pretty much same day to independent dealers so save borrowing money and future repair costs.
A major franchise dealer near by is actually doing that with all their own brand tractors and even very recent low hour models.
 

Sid

Member
Livestock Farmer
Location
South Molton
If someone was "mad" enough to want to set up an Ag Machinery dealership how much capital would you think you would need behind you?

I guess it depends on the Brand guidelines and stocking etc. But also buildings, workshops, vans, parts, etc.

Just curious to know people's estimations.
Some farmers think they are dealers with the amount of kit parked up in their yards!
 

D14

Member
If someone was "mad" enough to want to set up an Ag Machinery dealership how much capital would you think you would need behind you?

I guess it depends on the Brand guidelines and stocking etc. But also buildings, workshops, vans, parts, etc.

Just curious to know people's estimations.
A friend of mine went through these motions 15 years ago with JD. Back then it was £1 million and that was when a 150hp tractor was £50,000. You obviously needed premises that met criteria and then it was money into stock as well as parts. There were various incentive schemes also available. This was before JD started putting money into dealers directly to keep them afloat though. So today things might look very different. I would think if you had the location and premises in an area where they needed a dealership you could negotiate a more partnership type arrangement.
 

Rejuvenating swards: Which option is best?

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Written by Brian McDonnell

Maintaining grass quality during mid-season grazing is important. Farmers can maintain quality by entering ideal grazing covers of 1,300 – 1,500kg DM/ha, and grazing down to a residual of 4cm every rotation.

If you are now in a situation where cows are not cleaning out paddocks as well as they should be, leading to the development of steamy grass within the sward, here are some options.

Common options for rejuvenating swards include:

  1. Take a silage cut, probably into bales, remove the material and start again with the aftermath...
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