Good Time to Buy a Dealership?

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Motorcycle sales since mid-September have been horrible, I’m told. And given low gas prices and scared customers, 2009 looks worse. Many dealers will probably want to cut their losses and sell their business. Other dealers, the more fortunate ones, may find themselves surrounded with good deals.

A couple of weeks ago I talked to a dealer in the South who is trying to buy a nearby competitor. This potential buyer has been in business since 1996. During the years of double-digit growth, he was able to pay off the mortgage on his building. He’s also been able to buy his inventory as soon as the flooring terms expire. In fact, because sales came to a standstill in mid-September — after months of record store sales — much of his money is now on his floor. But, as he says, luckily it’s been sitting there instead of the stock market.

So he called me up for articles on buying and selling a dealership. He was going to give the latter articles to the potential seller. You know, to soften him up to the idea.

One of our columnists, Clark Vitulli, founded America’s PowerSports Groupforsale, a large dealer network, so I suggested him. You can read his past columns here.

Another industry guru, Ed Lemco, has hosted seminars and written articles on buying dealerships. Dealers can see him in February when he hosts the annual meeting of the National Council of Motorcycle Dealer Associations in conjunction with Dealer Expo in Indianapolis.

And, of course, many books have been written about buying or selling a business. There’s also a lot of good stuff on the Web. For example, I like this article, which outlines who you should hire to help you buy a business. Our Southern dealer has already hired a broker to mediate his dealings.

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One Response to “Good Time to Buy a Dealership?”

  1. Clark Vitulli Says:

    While at America’s PowerSports, we acquired 17 powersports dealerships from San Diego to Boston and many markets in between. To accomplish those 17 acquisitions, we met with literally hundreds of dealers, counseled seriously with 100+ and developed term sheets with 50+. There are many complex and strategic issues to consider, including legal, accounting, family, investment capacity, personal, OEM, state, local, facility, timing and others. Having said that, this is an excellent time to buy the “right” powersports dealership, in the right market, with the right brands, under the right conditions (similar to stocks, except you can control many more of the variables going forward in this instance). Good luck — and let me know if I can help. Clark

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