Well,,here is some info for you..Here in the next couple of years I plan on opening a motorcycle/dirtbike/atv dealorship. And I'm starting to get info. together and a business plan together. But I was just wanting to know any info. from actual dealors and I figured the forums would be a great first place to find info..So I have some questions..first of all I don't know who I'm going to be a dealor for...probably yamaha, polaris, and honda..(not sure) Here are some questions...do you have to have a license to open a dealorship??? I plan on buying my own land to put my dealorship on (I want to have my house on it too) can you sell products on your own land or do you need a permit??? How did you get started??? did you get loans from a bank for all of your startup cost or did you get investors?? Do you have a shop also for repairs and service or are you just a dealor??? I plan on also selling gear......for example...oem parts...aftermarket parts....riding aparral...gear....oils...fuel....you know pretty much everything for motorcycles...dirtbikes...and atv's...I just don't know where to look for a distributer of all these items...
...So if you could give me any info on these questions..or any other info that you think I should know..or any advice or pointers I would greatly appreciate it!!

 

 

You will need to check with your local City Hall for information about the Business Lisc. of your local area.

As far as a Franchise, GET YOUR CHECKBOOK READY. You will either need to get FLooring Loan for inventory as well as parts inventory. Contact the Manufactures and talk with their local sells rep. He is going to be the best source of info for dealing with them.

You could always start slow and do service and aftermarket parts with co-signment or used bikes and quads and grow from there. That would reduce you initial cash layout.

Smitty

 

First of all, take a business course.
Don't know exactly what the current cost is, but count on qualifying for at least $250,000 in credit for the "floor plan". Just about everything in life requires licenses and permits the whole way through.
Look for what brands are not currently being sold in your area. Honda, Yamaha and Polaris are all easy sells; not because the machines are any better, but because they have a large established customer base. The Honda name is a great one to get; Honda could put four wheelbarrow tires on a "little red wagon" , charge $8000, and the Honda people would still eat them up. Polaris can be difficult to work with; they will want you to take on the ATV's, PWC's, snowmobiles and Victory motorcycles, and then pressure you to take a greater percentage of them every year. Whether you can sell them or not.
Look at dealers that have gone out of business in your area; what brands were they selling? That will give you an indication of what NOT to get into.
There's not a lot of money to be made in selling new machines; service and accessories are the big money makers.

 

Ya, I was planning on starting out somewhat small.. I was planning on buying 3-5 acres of land then build about a six thousand square foot building..then turn 1/4 of it as living area for my house..then have the rest as the shop..Then I plan on hiring a couple hands for servicing etc...I know that service is where big money is at...the reason...I see what some dealers charge for doing crap on peoples quads...a buddy of mine couldn't get his quad running right...everytime he would give it throttle it would die...I told him it was the carb...well he took it to the shop...It turned out to be that the needle wasn't in the sleeve...easy fix...but they charged him 171 bucks to fix it..but I meen they also put some parts in it...5 dollars worth...but ya thats where the money is at...I also am going to sell aftermarket parts...how can I get a distributer of aftermarket??? like dg pro armor...exhaust companies...fox..oneal..other clothing companies..because I can't be purchasing products at full price and then plan to make a profit off of it..so I need distributers...just don't know how????As for the dealership..I defenetly want to get into that..and Honda is actually my first choice to go with..but for starters..I plan on getting old and used dirtbikes and atv's and fix them up a little and sell them...to start out with..it will be cheeper to start that way before a dealership........I have some other questions too..

1...I defenetly need to make a good profit...to pay all the bills..to pay employees and to defenitly make a living for myself..So I was trying to think of some things or services I could provide to bring in a little bit more business or profit when I first start out..Because I know I have to start out slow then allow my business to grow over time....I'm just affraid that starting out slow I might not be able to bring in the money I need to survive...So I thought about offering these services~~powder coating,,,and maybe chroming (havn't did any research on that yet)

 

If you're truly serious about this, I'd consider finding a place to rent first. It would be easier/cheaper to take a few steps rather than a jump. Had a guy try this a couple of years ago in a town with about 8,000 people. No other dealers within an hour and a half, couldn't make it. It's got to be tough. You may find out you're better at wrenching on the things than selling them, that's where I'd start first and if things were going good after a couple of years then look at getting a franchise and/or getting a larger building or one of your own.

If you're in the city limits, you must check with the zoning laws and such, you may not be able to live in the back of your shop. Now if you're out of town, that may be a non issue.

It's going to be easier to make a profit if you don't have lots of bills to pay. It boggles my mind just thinking about getting a shop to work on one with all the tools, etc much less having to stock inventory with machines and parts.

Are there any niches you can fill in your area that no one offers? You mentioned powdercoating. Maybe that's something you can get your feet wet with and expand on.

Whatever you do, good luck. If you can make it past the first two years, you have a pretty good shot of surviving. Most new businesses fail in the first two years.

 

Do a search...I read on here a long time ago most manufacturers require a net worth over a million $ before you can sell their stuff......I think I remember Polaris wants 1.8 mil........try sending KNOWS-A-LOT a private message.......I'm sure he knows about this stufff........

 

you might want to check into the part about having part of the building as a living area and part as your business. it really becomes a pain when it comes tax day. you have to prove that none of the business area is being used for personal use and you can't depresiate the part you use for living. insurance gets to be a pain when you mix the two also. when i operated my construction company i moved it out of the house after the first year and just bought a large portable building to run it out of.

 

Quadracer18,

Each OEM has it's own limitations to who can and cannot become a dealer. They base it own net worth, building size, your knowledge of the products, dealership location, the nearest dealer that they also serve, your areas population along with others that I can't even remember right now.

I can tell you that the biggest source of income for ANY dealer is in the parts department. The service department is a moneypit for even the largest dealers. The parts department of any dealership makes up for well over 40% of a dealers yearly overall profits.

I would suggest your get a business license, sales tax number, and any other local requirements needed just for having a business.

Then rent yourself some nice building space, preferrably the closer to mainstream town traffic as possible and open yourself up an accessory outlet. This way, you can cater to those YOU want to cater to and not what an OEM tells you to do. Whether it be offroad or street accessories.

The first vendors you will want to get in contact with for accessories are PartsUnlimited and Tucker Rocky. Both of these guys have fair dealer terms to start off with and as long as you have regular business hours, a sign outside, and a presentable building, they will make you a dealer of their products unless someone else nearby in town has them and the rep is biased towards only one store in town having the product.

You can have a super inventory of ATV accessories for about a 10G investment. It only takes about 2G for the dirtbikes, and another 5G for the streetbikes. This will get you started. Don't order alot of useless stuff that will set forever before it sells. If it doesn't move in 3 months, you don't need it in your area.

For ATVs, you will want to start out with a single quanity of the following products and for every ATV that is sold locally in your area. Don't keep ArcticCat acesssories for example if there isn't an ArcticCat dealer within 200miles.

cv boot guards, rear racks, front racks, floorboards, grip heaters, tankbags, cargobags, bumpers, trailerhitches, gunracks, gunboots, camotape kits, k&n powerup kits, a decent selection of mud tires and wheels[dont go overboard on this one], camo seat covers, handguards, spotlights, horns, and winches are the most popular utility atv accessories.

sportquads actually require fewer things to keep cusomers happy. exhaust systems, airfilters, jetkits, nerfbars,bumpers,grab bars, tires, wheels, clutch levers, brake levers, cams, gasket sets, topend kits, grips, handlebars, tetherswitches,and even a few cool billet parts wil move surprisingly well even the average weekend sportquad guy.

The general stuff like sparkplugs, oilfilters, and a wide variety of chemicals shouldn't be forgotten either.

As for OEM parts. You would be surprised how many dealers sell to independant shops like i just described at wholesale prices. You just have to call around and find the better deal. Most sell to other businesses at %10 over cost. Let's say you need a rear axle for a TRX300. Honda's MSRP is $100. Dealer cost will be around $55. Your cost from the dealer would be $60.50 and then you could still sell it to YOUR customer for $100. Don't try and make your customer happy by cutting the price. Your dealer source for parts finds out about it and your acount is gone. Don't try and cut the guy who is helping you.


Operating a business such as this can be run easily by one or two people regardless of your customer base or area population.

Good Luck and don't forget to keep us posted on what you decide.

 

All good advice so far. If I can add something it is to take an honest look at what market and market share your proposed business will have. By that I mean how much business you can honestly expect to get versus the overhead and operating expenses your business will need. I have seen many businesses come and go and a few come and stay, a very few that have made their owners wealthy. It can certainly be done, and it's being done all the time, but for every successful business start there are umpteen starts that fail in a short period, failures that could have been avoided by properly assessing the expected market.
At the end of the day your business will have to generate an income flow sufficient to not only pay the overhead (Lighting, rent/mortgage, taxes, wages, insurance, the maintenance of any business loans etc. etc.) but an amount above that for your personal profit, otherwise you have just bought yourself a job.
By the way, your sound idea to reduce expenses by allocating part of the premisis for living area may not be permitted by your community ordinances. Something to check into.

How big is your community? Is it really big enough to supply the number of clients your business needs to succeed? Picture a Cadillac dealer in a town of 2000. He's going broke soon.

How many rival businesses are there for your product/service? Business is democracy at its finest. If there is enough traffic to support one more such equal outlet and provide a goodly income for all, then there is. If there are not enough cookies to go around, the less worthy, desireable, convenient, trusted, connected business will fail until the marketplace stabilizes.

Where's the startup moolah coming from? Payments on money borrowed for a business' startup push are a crippling burdon on a new enterprise. "I'll just borrow a million dollars from the bank and start a motorcycle shop" isn't a likely scenario. (I'm not suggesting that's what you're thinking, just making a hypothetical statement) The monthly payments at 8% interest/ 20 years (A profoundly unlikely low figure for venture capitol) for a million dollar loan would be $8283.60 You have to bring in $271.00 over and above every other expense each and every DAY of the year just to avoid defaulting on the loan payments.
Unless you have a Rockefeller or Vanderbilt for a co-signer, a bank isn't likely to consider that proposal. In fact any lending institution will want to see business prospectus that shows them on paper how your business will make so much income as necessary to ensure they will get their money back with interest, in virtual ironclad security. You may well be ready to take a risk, but they aren't.
Borrowing all the money needed is a really tough sell to a lender, chiefly because he knows better than you how difficult it will be for you to succeed in surviving, to pay it back.

Market share. That's a really big one. From my experience the successful, surviving and income generating new businesses are either
A). Those which provide a unique product or service not before seen in their locale, such as the first video rental stores in the 80's. These businesses when seen to be successful quickly sprout rivals to share the loot. and...
B). Those which do a markedly better job at what they do, than their competitors.

It can be done. I wish you well.
Mike