Opening a new shop?

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canuckerjay · Mon Jan 16, 2006 2:01 am

I currently love my job, but have always wanted to open my own bike dealership. Like most of you, I love bikes, know a fair bit about the marketing of them and the mechanics of them. THis would be a fair ways off; perhaps 6-10 years away if I do it.

But can anyone give me any info on exactly how that kind of operation gets started and approx. how much capital is needed?
If anyone here is tight with a dealer or better yet is a dealer, what particular challenges did you find when you [or your buddy] got started?

Thanks,

Mustang · #2 Unread post by **Mustang** » Mon Jan 16, 2006 4:22 am

I believe it varies from dealership to dealership, but they want you to have a certain amount of net worth, liquidity and so on.

You could buy a location of course, but unless the seller was giving financing you'd have to have some money to put down.

Which type of motorcycle would you want to sell? Did you want to buy an existing location?

TechTMW · #3 Unread post by **TechTMW** » Mon Jan 16, 2006 6:47 am

It really depends on what kind of bike you want to sell. Some manufacturers require that you only sell their brand of bike and nothing else. And as Mustang mentioned, most manufacturers now require you to have a fairly large amount of liquidity. (For H-D, I believe you are required to have at least $600,000 in a bank account somewhere.)

You also have to contend w/ the manufacturers control over your facilities. Again, H-D (and BMW i think) have yearly inspections of your facilities to determine how many new bikes they are willing to send you in the next year. The less "glitzy and glamorous" the facility, the less stock they will be willing to give you.

Ever wonder why all McDonalds pretty much look the same? It's similar for a dealership.

Depending on brand, you also have to purchase or lease all of the specialized computer equipment that your technicians will need to work on and diagnose bikes. Techs really aren't taught much of the basics any more, it's all down to the computer now (For the most part.) There are specially trained techs who have been to schools (MMI, AMI, etc) who learn everything about a motorcycle from top to bottom, but these techs are harder to find and cost you more.

You also have to deal with government regulations. Garages are under all kinds of regulations these days due to the many chemicals and petroleum products that are used in daily operation. Provincial, local and national fees will probably have to be paid yearly, as well as standards that must be met for periodic inspections.

So, to sum up, it really depends on the bike you want to sell, and whether or not that manufacturer will support you in that area. If you live in in a town of 500 people out in the middle of nowhere, you will get little to no factory support for your endeavour. This kind of thing must be looked at on a case by case basis.

MASHBY · #4 Unread post by **MASHBY** » Mon Jan 16, 2006 11:26 am

Also the smaller the shop the less your credit so a small shop will have to purchase all machines outright.A larger shope might have couple of months to pay for them.Which would be mean you might about $100,000 tied up in stock.Seriously hurting your cash flow.the other option would be to try and buy a and already running dealership.

High_Side · #5 Unread post by **High_Side** » Mon Jan 16, 2006 2:47 pm

I've thought about this but there is one little problem (er, besides the funding): When I wanna ride SO DOES EVERYONE ELSE! Ever wonder why bike shop employees are so cranky? 'Cause they are putting up with customers when they want to be out riding! A snowmobile dealership: NOW THATS WHERE IT'S AT!

Wizzard · #6 Unread post by **Wizzard** » Mon Jan 16, 2006 4:20 pm

High_Side wrote: Ever wonder why bike shop employees are so cranky? 'Cause they are putting up with customers when they want to be out riding!

And that's the truth!
Regards, Wizzard

CentralOzzy · Mon Jan 16, 2006 4:38 pm

You'd have to keen to take this up for all the reasons stated....but if I was going to do it, I'd buy an existing Dealership & the good will that goes with it.

paul246 · #8 Unread post by **paul246** » Mon Jan 16, 2006 5:54 pm

Another angle you can approach from is an "all-make" used bike shop. Find a decent location that you can expand in the future. Get your tools together and gradually acquire a few good used bikes with which you are sure you can make a reasonable profit.

Accept other bikes on consignment. This is the cheapest method to broaden the selection on your floor.

Set aside a work area for customers who like to do some of their own work. They'll order parts through your shop and will come in handy when YOU need an extra hand.

See if you can acquire a dynometer further down the road. A good used unit will do. Not only can you use this to tune your own stock, but customers will pay to run their machines through as well. This item alone will make your shop popular.

Carry some normal profit center items like oil and filters.

Have a coffee and couch area. This makes customers feel welcome. Make your shop a destination.

Don't make it pretty, leave it be, as a REAL bike shop should be.

Sev · #9 Unread post by **Sev** » Mon Jan 16, 2006 7:02 pm

The above is a brilliant idea.

canuckerjay · Tue Jan 17, 2006 3:11 am

Thanks guys; If anyone else has any advice or info, let me know. If and when I get around to doing it, I'd want it to be a bit different than what's out there. I like the above ideas!