Start A Powersports Business

This is a typical all terrain vehicle sold by a powersports dealer.

The powersports industry encompasses several types of small recreational motor vehicles used throughout the United States. Some powersports vehicles, such as snowmobiles or personal watercraft, are only ridden in certain areas or at certain times of the year. Other powersports vehicles, such as motorcycles and all-terrain vehicles (ATV’s), can be found in many locations.

To appeal to the maximum number of customers, many powersports dealers carry more than one type of vehicle. Along with powersports sales, the dealerships commonly offer financing options and vehicle service. Some dealers also offer men’s and women’s riding apparel (See References 1).

Instructions

1. Examine your regional market. To define your market, look at two factors: your region’s geography; and the types of recreational activities residents enjoy. For example, if you are located near the Atlantic coast, your geography won’t include mountains or snow, but will include miles of connected waterways and many acres of privately owned land.

Using this information, you might assume that there’s a potentially good market for personal watercraft, and perhaps for all-terrain vehicles as well. To verify your impressions, look at regional sales data supplied by national manufacturers of personal watercraft (or other powersports vehicles). If the vehicles are registered with your state Department of Motor Vehicles (land vehicles), or your state Department of Natural Resources (personal watercraft), these agencies may provide this collective data in summary form.

Finally, obtain information on income demographics for your regional market. Purchases of powersports vehicles (with motorcycles a possible exception), represent purchases made with discretionary dollars. If your regional market includes only a small percentage of higher income residents, selling these motorized “toys” may present an uphill battle. For regional demographic data, contact your local Chamber of Commerce (See Resources).

2. Look at your competition. In analyzing your market, you may find two types of competitors: dealers that specialize in only one powersports vehicle, but carry several brands of that vehicle; or dealers that carry several types of powersports vehicles. Study your competitors’ product lines, and identify any possible market niches that have not been addressed (See Resources).

As an example, your competitor carries a good selection of light and fast motorcycles. However, although your area is popular with touring bikers, your competitor does not stock any touring motorcycles.

3. Handle your business logistics. To define your business structure, meet with a certified public accountant experienced in working with powersports, boating, or other businesses that market “toys.” Next, consult with a commercial insurance agent well versed in the hazards presented by powersports vehicles. Finally, visit your city or county clerk’s office for a business license.

4. Choose your dealership location. Select a location easily accessible from several regions, and readily visible from the main road. Make sure the facility has at least two entry and exit driveways and has a large customer parking lot for busy sales days. If your company shares parking space with another bustling business, arrange for overflow parking when necessary.

Most importantly, ensure that your location has sufficient outdoor space to display your powersports vehicles. Although you may have a few gleaming vehicles in an inside showroom, the vehicles displayed outside will help to attract attention (and customers) to your business. Plan to add a roof or canopy over the vehicles to protect them.

5. Hire experienced professional staff. Keep in mind that part of what you’re selling is the powersports experience, and that feeling can be best communicated by an enthusiastic sales staff. As is also the case with boat sales, employees who own, operate, and maintain the product they’re selling relate very well to customers.

If your facility will have a service department, hire employees with service certifications for the vehicles you sell. Send your service manager and other key personnel to a manufacturer-sponsored “service school” for proper training.

6. Order your powersports vehicles. Resist the temptation to order every style and color of powersports vehicle, as that represents extra expense and potentially unnecessary inventory. Stock three versions of each vehicle: budget, mid-range, and higher end for buyers with fewer budget concerns.

For example, when ordering personal watercraft, select three models for each manufacturer: standard one-person model; standard two-person model; and deluxe two-person model. For each model, stock a couple of different color choices and trim packages. Offer a “special order” option to cater to varied customer tastes. Obtain product information and graphics for all models.

7. Schedule your grand opening. Time this signature event for the beginning of your powersports season. If you sell several types of vehicles, choose the vehicle and time of year that will offer the “biggest splash.” Polish your vehicles until they shine, and arrange them so that buyers can walk around every vehicle on the lot.

Put together grand opening price and product packages that represent terrific values, and offer door prizes and refreshments throughout the day.

Publicize the grand opening with ads in powersports magazines and regional newspapers, and with a radio remote broadcast with a popular personality. Invite powersports personalities for extra appeal.