For many General Managers (GMs), running a dealership feels like the pinnacle of a career in automotive retail. You’re steering sales and service, balancing gross margin against expenses, and managing a team while keeping customers satisfied. But for those with bigger ambitions, there’s another step: ownership.

Becoming a dealer principal is a defining leap. Your operational expertise gives you a head start, but ownership isn’t just management on a larger scale, it’s a fundamentally different role. You’re not only running a business but also structuring investments, aligning with manufacturers, and managing a new set of stakeholders.

For GMs who aspire to make the jump, the following roadmap provides a practical, step-by-step process to move from operator to owner.

Step 1: Define your Ownership Vision

Ownership is not about buying just any store – it’s about finding the right store. Start by clarifying your personal vision. Do you want to operate a single-point dealership or eventually grow into a group with multiple rooftops? Do you prefer a metro market with scale or a rural store with deeper community ties? Are you committed to a specific brand, or are you brand agnostic and would you consider opportunities across both domestic and import OEMs?

Equally important: what’s the long-term play? Some owners seek a lifestyle business, some target platform growth, and others plan for an eventual exit. Putting your answers on paper turns vague ambition into a compass, helping you evaluate opportunities and eliminate deals that don’t align with your goals.

Step 2: Assess your Readiness

Strong GMs are proven operators, but ownership brings new responsibilities. The question is not “Can you run a store?” but “Can you manage an enterprise?” You’ll need to recruit and retain talent beyond the walls of one location, engage with compliance and franchise law, and speak the language of capital markets.

Create a personal scorecard of strengths and gaps. Where do you shine? Where do you need help? From there, commit to closing gaps – whether through mentorship, training, or surrounding yourself with experts. Recognizing what you don’t know is a strength; the right advisors can help you avoid costly, deal-killing mistakes.

Step 3: Build your financial Foundation

Capital is a requirement for ownership. OEMs typically require minimum liquidity and net worth, and sellers want to see proof of funds before taking a buyer seriously. Beyond personal equity, you may need partners – family offices, private investors, or co-investors -who align with your vision.

Debt financing is another piece of the puzzle: senior loans, floorplan facilities, and working capital lines. In some cases, sale-leasebacks on real estate can free up liquidity, though they come with trade-offs. The key is a well-documented capital structure that makes you credible in the eyes of lenders, OEMs, and sellers alike.

Step 4: Understand OEM Requirements

Manufacturers are active gatekeepers and key stakeholders in buy-sell transactions. Most require at least five years of experience managing a new-franchise dealership before considering a candidate for ownership. Expect interviews, customer satisfaction metrics, and even training programs as part of the approval process.

Facility upgrades are another frequent requirement and can be costly. Finally, never overlook Right of First Refusal (ROFR), which allows OEMs or other dealers to step in and assume your deal. Knowing these requirements upfront allows you to target brands where approval is realistic and negotiate with eyes wide open.

Step 5: Assemble your Deal Team

No one goes through a buy-sell alone. A strong deal team signals professionalism to sellers and helps you avoid costly oversights. At minimum, you’ll want an M&A advisor, dealership counsel, a CPA, and financing partners. Depending on the deal, you may also need specialists in real estate, environmental compliance, IT/DMS, and insurance.

Define roles early and have non-disclosure agreements ready. Sellers respect a buyer who is professionally represented and prepared.

Step 6: Source and evaluate Deals

Opportunities emerge through brokers, peer networks, and succession situations. While most stores are marketed discretely through M&A broker-controlled oversight, many deals happen quietly. For GMs still employed, confidentiality is critical.

Build a simple pipeline tracker to log opportunities and stage them – introduction, NDA signed, valuation in progress. Then, develop a quick screen process to determine which deals warrant deeper diligence. Look at the market demographics, brand growth potential, facility condition, and financial health. A simple go/no-go decision memo for each store will save you from wasting time and resources.

Step 7: Structure your Offer and LOI

When you find the right store, the next step is a Letter of Intent (LOI). This is where many first-time buyers make mistakes. LOIs should clearly define whether you’re buying assets or stock, set working capital targets, establish exclusivity periods, and outline contingencies for OEM approval.

A thoughtful LOI doesn’t just protect you from surprises—it positions you as a serious buyer and gives you leverage when entering diligence.

Step 8: Execute Diligence thoroughly

Diligence is where deals are won or lost. Financial reviews should validate earnings, tie out the general ledger, and uncover risks in warranties, parts aging, or working capital. Operational diligence should examine inventory aging, recon cycle times, and compliance in F&I.

Legal diligence includes franchise agreements and advertising practices. Real estate diligence requires Phase I reports and facility compliance reviews. Don’t overlook people (org charts, comp structures, retention risks) or IT (DMS contracts, data ownership, cybersecurity posture). Even brand reputation matters – look at customer reviews to uncover risks.

Document every finding, assign remedies, and decide whether issues can be solved through price adjustments, indemnifications, or operational fixes or if there are deep cultural or institutional issues that cannot be overcome.

Step 9: Secure Financing and OEM Approval

Once diligence checks out, financing must be finalized. Lenders will want credit memos, underwriting, and clear loan covenants. At the same time, OEM approval requires detailed packages, leadership interviews, and commitments on facility upgrades and customer experience initiatives.

Meanwhile, prepare for closing mechanics: inventory counts, HR onboarding, vendor transitions, and IT cutovers. The more detailed your checklist, the smoother the transition.

Step 10: Govern, grow, and avoid Pitfalls

Ownership begins at closing. Early habits set the tone. Establish governance and advisory structures, maintain cash discipline, and think strategically about growth. If your ambition is to build a platform, how will you scale shared services, add brands, and capture efficiencies?

Common pitfalls include underestimating working capital, signing weak LOIs, ignoring ROFR risk, and overlooking IT transitions. Each of these can sink momentum, cash flow, or even entire deals.

The GM’s Edge

Here’s the good news: as a GM, you already know how to operate a store. That operational knowledge is a powerful edge, but ownership adds new dimensions: capital, governance, compliance, and long-term strategy.

The leap from GM to dealer principal is not easy, but it is achievable with discipline, preparation, and the right team. You’re not starting from zero – you’re building on years of frontline expertise. With a clear vision, strong financial foundation, and structured approach, you can make the move from operator to owner and become the kind of dealer principal that OEMs, lenders, and employees want to work with.