How to Start a Motorcycle Dealers Business
What does it take to open a motorcycle dealers business? It requires careful planning if you want to succeed but the most important thing is to find a niche that is underserved.
Thinking about opening a motorcycle dealers business? We tell you what you need to know to get started.
Start a business selling motorcycles and you will be in for a fun ride!
Industry Outlook for Motorcycle Dealerships
The motorcycle dealers industry is chock-full of SMB entrepreneurs. On a national level, there are approximately 4,300 dealerships pulling in combined annual sales of $18 billion. But since the 50 largest dealerships only account for 10% of industry revenue, the industry is extremely conducive to startup entrepreneurs willing to invest the time and resources that necessary to launch a successful motorcycle dealership.
On the downside, the motorcycle industry is susceptible to cyclical trends and economic pressures. Although motorcycles are highly economical from a fuel efficiency perspective, many consumers consider a motorcycle to be a luxury item that adds to (rather than replaces) personal autos.
Setting Realistic Expectations for a New Motorcycle Dealership
Unfortunately, many entrepreneurs approach a motorcycle dealership startup with visions of a fast launch and easy profits. But in reality, the launch of a motorcycle dealership is usually a long and costly process. It can take one to two years from the type you begin writing your business plan to your grand opening.
Additionally, most motorcycle dealerships sustain losses for at least a year after their opening. As a result, your dealership will need to have enough startup capital to cover at least twelve months of losses as well as your initial set-up and inventory.
The Importance of Motorcycle Manufacturer Relationships
Profitable motorcycle dealerships are built on strong relationships with motorcycle manufacturers. New dealerships represent additional selling opportunities for motorcycle manufacturers. But they can also inflict damage on the manufacturer's brand if they close quickly or provide inferior service to buyers or repair customers.
Before you invest a dime in your startup, contact several motorcycle manufacturers to determine whether opportunities exist for new dealers in your area. If your geographic territory is already saturated with dealerships, the manufacturer may not be willing to establish a relationship with your startup.
Also, it's important to evaluate each manufacturer according to the amount of support they are willing to provide your startup. It's not unreasonable to expect manufacturers to provide advertising, training and other resources for their dealers.
Best Practices: Business Plans for Motorcycle Dealers Businesses
A great business plan will lay a strong foundation for growth in your startup motorcycle dealers business.
Business plans address a wide range of issues, including startup financials. Not surprisingly, lenders immediately turn to the financial section and use the accuracy of your forecasts to gauge the value of other parts of the plan.
As a result, we strongly recommend educating yourself in business plan financial basics before finalizing your business plan's financial chapter.
Take a Look at Competitors
Prior to opening a motorcycle dealers business in your town, it's a smart move to see what the competition looks like. Try our link below to find competitors near you. Just enter your city, state and zip code to get a list of motorcycle dealers businesses in your community.
Gain a knowledge of how existing firms have positioned themselves in the marketplace, and then design your business in a way that sets you apart from the others.
Getting Advice from Experienced Entrepreneurs
Once you've finished assessing the competion, the next step is to speak with somebody who is already in the business. If you think your local competitors will give you advice, you're being overoptimistic. Why would they want to educate a future competitor?
On the other hand, an individual who has a motorcycle dealers business in a different city can be a great learning resource for you, after they realize you reside far away from them and won't be stealing their local customers. Many business owners are happy to give advice to new entrepreneurs If you are persistent, you can find a business mentor who is willing to help you out.
Where can you find a motorcycle dealers business manager who is willing to talk to you but doesn't live nearby?
No problem! Just use the link below and try a random city/state or zipcode. Then start dialing for advice until you are successful.
Motorcycle Dealers Business Acquisitions: Financial Considerations
Startup motorcycle dealers businesses carry a host of financial risks and concerns. Without an operational history, it's hard to predict how your startup will actually perform in the marketplace.
Although there are many benefits to buying an existing motorcycle dealers business, the financial advantages rank near the top of the list. Many entrepreneurs buy an existing business for the sole purpose of tapping into the financial benefits of an established customer base.
An acquired business also has documented assets and earnings - a big advantage with lenders and investors.
Consider Buying a Franchise
You should know that your odds of doing well in business greatly improve if you become a franchisee rather than going it alone.
As part of your process in starting a motorcycle dealers business, you may want to assess whether franchising might alleviate your startup process.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.
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