Owning your own dealership can be a dream come true for someone who loves motorcycles. Starting a business takes very hard work, but setting up your own store and being successful is a very rewarding experience. As a dealer, you can choose to start a franchise with a popular brand like Harley-Davidson or establish your own independent store with new and used motorcycles. With adequate financing, a good location, a possible contact with a dealer and business knowledge, you will succeed in becoming a motorcycle dealer.
Steps
Method 1 of 3: Learn How to Operate a Dealership
Step 1. Spend time working with motorcycles
To run a good motorcycle business, you need to know everything about them. You must read about makes and models, their problems, the difference between them and the repair work. You must convince investors and business clients that you know about motorcycles.
- Get an old motorcycle and take care of it. Learn about parts and perform maintenance to learn more about these vehicles.
- Take automotive classes at a local school or online. Make sure the curriculum includes motorcycles.
- Spend time at a motorcycle dealership or store. You can do small jobs if necessary before you are allowed to handle them.
Step 2. Gain business experience
It is not enough that you know about the product. The other part of a dealership is maintaining a business. Investors and brand manufacturers are looking for people who demonstrate the ability to lead and manage a business. Learn about the aspects of running your business (for example, how to manage workers and please customers).
- Look online for courses and local schools to learn basic business skills, including sales and marketing.
- You should spend time observing the operation of a motorcycle store or dealer. Pay attention to how these businesses operate, dealing with issues ranging from proper business license to proper billing for parts.
Step 3. Conduct a market survey
In order to attract investors to obtain financing and run a successful business, it is important that you know the area where you are going to establish the store and how to make the dealership successful in it. You have to judge how in demand a motorcycle dealer will be and where you are going to locate your store. Stay far enough away from the competition while looking for an area where business will be strong.
If you are going to offer a brand line, it is important that you know how present it is in the market and how people respond to it. If the brand is not established there, you should think of ways to sell the brand or carry a limited number of units
Step 4. Make a business plan
Your business plan should describe the company. Basically, this document should gather all the important business information for potential investors. Focus on your business goals and how you plan to achieve them. Include the management structure of the company and why you are a good candidate to open a dealership. Explain how much money you need to set up the dealership and how you will make it profitable.
- Business plans often have a company overview section that includes products, target market, sales plans, a management team section, and a financial plan section.
- Keep a clear and concise plan. Investors like to see that you have a very clear path to success in mind.
- Keep a dynamic plan. You can consult it while operating the business. Use it and add information to it to keep goals clear and business on track.
Method 2 of 3: Open a Franchise
Step 1. Complete a preliminary application
To open a franchise for a major brand such as Harley-Davidson or Indian Motorcycles, you must start by visiting their website and submitting an application. This prospective application will put you in contact with one of their representatives to have them analyze your certifications.
Anyone purchasing an existing dealer must also complete this potential dealer application
Step 2. Assemble the necessary finances
Franchisee dealers have a minimum amount of financial capital required to ensure standard business practices that will make you successful as a distributor and protect the brand image. You should consider the money for internal operating expenses (such as parts, uniforms, and management systems), but also for expenses such as facility and labor costs. You can get this money through bank loans, acquaintances and investors.
- A loan or line of credit from a bank is the most available source of financing. You should verify your credit, cash flow, and business plan before they loan you the money.
- Investors can help, but they are hard to find. You should talk to people who share your passion and want to do business with you, or introduce your franchise to someone who believes in your business plan.
- For example, as of 2017, Polaris requires not only about $ 150,000 to $ 200,000 as a minimum investment (which does not include the cost of facilities), but also a $ 500,000 line of credit.
Step 3. Set up in a place
You are going to require a lot of space to operate a franchise. Brands like Yamaha require large visible buildings. You need to find a place that is friendly to retail businesses and receives a lot of foot traffic. The building should feature the brand name prominently on the exterior while offering sufficient space for business operations and a showroom.
- For example, Yamaha requests 1000 m2 (10,000 sq. Ft.) Of counter space, 70 m2 (750 sq. Ft.) For accessories, 70 m2 (750 sq. Ft.) For parts and 90 m2 (1000 square feet) for a service department.
Step 4. Sign a contract
After speaking with the dealer's representatives and salespeople (if you're buying an existing franchise), the information can be verified and approved. Then you can get a business license from the government and sign the contract.
Step 5. Hire employees
A small motorcycle shop may operate only with the owner and possibly with family and friends. However, a large dealership will need a large number of people to perform different functions (for example, sales and operations). You should interview candidates for employees with a good work ethic and knowledge of motorcycles. Then take care of the documentation.
Employee insurance may be necessary to get a business license, but you will likely also need to report your hires and verify them for tax purposes
Step 6. Get a business license
Check with your local government officials to find out what documentation you need to submit. The state needs information about your business (for example, the number of products you sell, information about ownership or rent, sales tax identification, workers' compensation insurance, etc.).
For example, in New York, once the application is processed, you must schedule a facility inspection and maintain a sign displaying your business as a dealership
Method 3 of 3: Open an Independent Dealer
Step 1. Find a small location to open the store
If you have a motorcycle repair business, used unit sales, or new unit storage without a franchise, you don't need as large an amount of space as a brand name dealer. You should find a place that suits your needs. Often it should be a small but conspicuous shop with garage space to work on motorcycles.
Vehicles left outdoors suffer environmental damage over time, so find a place where you can limit exposure as much as possible
Step 2. Calculate the business costs
Often $ 10,000 to $ 50,000 is enough to start a business, but you need to factor in additional expenses (such as advertising, shipping, employees, and specialized tools). These expenses add up, so you will have to figure out how to keep the business profitable in the long run.
You should save enough savings to last a year. It may take a while for the business to become profitable
Step 3. Gather your funds
Small stores require less funding than dealerships to get started, so much of the financing can be secured from friends and family. However, many potential small business owners need to get loans from the bank or venture capitalists. You should seek small business loans, equity financing, or convince someone that your idea is sound and that you have the motorcycle and business experience to be successful.
- Debt financing can be a good idea if you have good credit. You will pay a monthly fee without sharing ownership of the business with the bank.
- If you chat with people online or in person, there is the possibility that you will find someone who believes in your business plan or who will contact you to share the expenses.
Step 4. Get the proper license
Check with your local government to find out what type of license you need to sell motorcycles. This can be a lengthy process and involves proper documentation and background checks to see if your business practice is ethical. You will have to pay application fees and license plates. Then you have to wait months for the application to be approved.
For example, in California, you must complete a training program and pass a test in addition to business documentation and local licenses
Step 5. Assemble the inventory
Now that your business is established, you must supply it with products. Franchise dealers have the benefit of displaying the official brand. However, as an unaffiliated distributor, it will be up to you how to supply the store. You can use the motorcycle and customer knowledge to match a range of products with what customers want.
- You can buy used motorcycles or fix old ones (from people throughout the community).
- To transport new motorcycles, you can buy them individually or contact the brand's headquarters by looking for their phone number or email address. Check their catalog and then see how you can place an order.
- Also consider ordering motorcycle parts and accessories. Make sure you raise the price enough to make a profit.