I’m thinking of starting my own consulting business in order to help people save money when they purchase a new automobile. I worked in the car business for two years and want to use all my experience to help people. I’m not sure where to begin as far as my legal structure is concerned. Any help would be great.
— B. Holland, Via the Internet
It sounds like you are interested in becoming an auto broker, who typically helps car shoppers find a desired new or pre-owned vehicle and negotiate the price before buying. To improve your chances of succeeding, you should have more than two years of experience under your belt. Contacting a few of the successful auto brokers in your area will help you find out how they operate their business.
According to Jeff Fortson, an Atlanta-based automotive consultant and the editor of JeffCars.com, brokers are typically paid in a number of ways. “A broker can be paid a flat fee by their client or a flat fee by the dealer,” explains Fortson, who notes that some brokers may charge a percentage of the MSRP. “Fees can range from an average of $400 and up, depending on the price of the vehicle.”
Choosing the right legal structure for your business is important for both legal and tax reasons. A sole proprietorship works best for a one-man consulting operation. Many self-employed consultants choose it because it’s easy to set up.