How to Open a Motorcycle Dealership Business

Do you want to open a bike showroom in your area? Are you interested in starting a motorcycle dealership business? If YES, this post will definitely guide you with dealership cost, motorcycle franchise opportunities, business model and sample business plan profile.

Opening a profitable bike showroom is a lucrative business opportunity for young entrepreneurs. Not only in the metro cities, but you can also find a lot of successful motorcycle dealers in small towns and even in rural areas. And definitely, this is inspiring.

However, in this business, choosing the right brand and localized marketing plays a crucial role. And if you can create the right business model, you can earn a lot of money in this business. Definitely, opening a motorcycle dealership business is cash intensive. As the unit price is high, you must have a solid capital in hand in starting this business.

10 Steps Guide to Start a Motorcycle Dealership Business

Step 1: Motorcycle Dealership Market Potential

Currently, the Indian motorcycle market has a double-digit growth in sales. Hence, the country is one of the biggest two-wheeler markets in the world. Bajaj, TVS, Honda, Hero Moto Corp, Royal Enfield, KTM, Suzuki, Mahindra, Yamaha, and Hero Electric are the major players in the industry.

According to ICRA, a credit rating agency, “For the motorcycle segment that had witnessed stable to muted volume growth during FY2013-2017, FY2018 turned out to be a year characterised by secular growth across most sub-segments with overall domestic sales growing by 13.7 percent YoY during FY2018, a double-digit growth for the segment after a hiatus of five years. The growth has been driven notably by the 75-110cc sub-segment supported by general improvement in rural demand sentiment on the back of near normal monsoon.”

Hence, it’s clear that the market is there. And the manufacturing companies are constantly introducing new models with effective features and style. And this is a great time to initiate this business to make it successful.

Step 2: How Much Does it Cost to Start a Bike Showroom?

Possibly, this is the first question that you want the answer. Generally, initiating this type of business requires a good amount of investment. First of all, you will need to secure a wide space in the prime location. Additionally, you will need to arrange the stock. These are the two major costs. In addition to that, you will need to pay the utilities and staffing.

Depending on the business model and location, you will need at least 50 Lakhs to 1 Crore cash in Hand. After running the business successfully for two years, you can apply for cash credit or overdraft facility to enhance the working capital.

Step 3: Motorcycle Dealership Franchise Opportunities

Most of the top brands offer dealership franchise opportunities for selective locations. You will need to follow that. However, sometimes, big distributors or stockists can recommend a new selling point to the company. In both the cases, you will need to comply with company norms and regulations.

First of all, open the website of the brand you want to open the showroom. Then open the dealership apply page. As an example, to become a Bajaj dealer, open that particular page. [Click Here]. Put your details like Name, Email, Contact Number, Location etc. The company will send you the reply.

In a similar way, you can apply for any brand as such available in India.

Step 4: Create the Right Business Model

Generally, there are three common business models available in our country to open a bike showroom. The first option is the dealer point. You need a lot of capital and wide space for this model. You need to establish a showroom for selling the bikes and a workshop for repair and maintenance.

The second option is ASSC (Authorized Sales & Service Center). Comparatively, you need less capital than the first option. Here also, you need two separate establishments for selling and servicing.

The third option is the Sales Representative under a dealer. This is the most low-cost model in this business. And definitely, the sales commissions per motorcycle is less than the other two options.

So, depending on your fund capacity and space availability, you can consider the right model for your business. Generally, the motorcycle brands maintain a minimum distance between the two selling point. So, first check the availability of the opportunity in your locality.

Step 5: Prepare the Business Plan

The motorcycle dealership industry is a highly organized sector. In the time of applying, the company will inform you about the infrastructure and vehicle lifting details clearly. So, preparing the business plan is an easy task here.

The most important is creating a marketing plan. This type of business demands a wide sales promotion activity and brand awareness. Apart from the opening discount, you can think of different types of schemes and benefits.

Step 6: Select a Location

Location plays an important role in this business. You must select a location that has a wide front window. Provide easy parking for your customers. In the showroom, you need space for the insurance desk, selling counter, and accessories counter.

Depending on your business model, the company will inform you about how much space you need. However, a 3000 Sq Ft space is enough in starting a small motorcycle selling counter in the small towns and rural areas.

Step 7: Motorcycle Dealership Business Registration & Licensing

Business registration is a must. For a small counter, you can go with proprietorship option. However, if you need capital investment from other individuals, then you can consider LLP or Pvt Ltd options also.

After registering the business, you need a Trade License from the local Municipal Authority. pen a current bank account. And apply for GSTIN for tax payment.

Step 8: Setup the Store

Generally, a motorcycle showroom has the wide front space for showcasing the bikes. And it occupies more or less 50% of the total carpet area. You need to set up 2 or 3 selling point separately. Also, set up the insurance and finance counter. And finally, you must have an accessories counter.

The overall ambiance matters in this business. In the hot and humid weather, you need to provide the air conditioner. Also, provide comfortable chairs or sitting arrangements. The showroom needs to appear bright. So, pay attention to the flooring, wall color and lights.

Step 9: Resources

Generally, motorcycle companies provide the software solution. Otherwise, you can also maintain a POS for keeping the records and stock.

The other important resource is manpower. You need skilled and knowledgeable employees who can handle the customers with the solution of their every query.

Step 10: Motorcycle Dealership Business Promotion

You must have a solid promotional plan. Apart from the local paper advertising, you can think about TV advertising in the local channels. If you open the showroom in the rural areas or small towns then you can think about Bike Mela. Distributing flyers in the communal huts is another a great idea. Provide easy finance to your customer. Generally, the young, aspiring and adventurous people are the major buyers of motorcycles in India. So, think about an idea to attract them easily to make your motorcycle dealership business a great success.