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How to Start a Motorcycle Dealership

Written by:

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by:

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

How to Start a Motorcycle Dealership

Fast Facts

Investment range

$50,900 - $102,800

Revenue potential

$250,000 - $600,000 p.a.

Time to build

3 – 6 months

Profit potential

$50,000 - $120,000 p.a.

Industry trend




How to Start a Motorcycle Dealership

Motorcycle enthusiasts are a passionate bunch that enjoys hitting the open road. If you love motorcycles, you could start your own motorcycle dealership, grab a piece of a growing $35 billion industry and provide others with the bikes of their dreams. 

But before you crank it up, you might want a bit of business savvy. Luckily, this step-by-step guide has all the info and insight you need to kickstart your motorcycle vision. 

Step 1: Decide if the Business Is Right for You

Pros and cons


  • Share your passion with other motorcycle lovers
  • Strong profit potential
  • Opportunities for multiple revenue sources


  • Requires significant startup capital
  • Profit margins on new motorcycles are low

Motorcycle dealership industry trends

Industry size and growth

Motorcycle Dealership industry size and growth

Trends and challenges


  • Electric motorcycles could enable a dealership to offer an eco-friendly option
  • Interest in retro motorcycles, such as old Indian models, is being replaced by demand for new, retro-inspired styles. 


  • The motorcycle industry is having difficulty attracting new customers, while existing customers are aging. 
  • Motorcycle dealers have failed to attract women to the motorcycle market, which makes for a much smaller target market. This could also present an opportunity for a creative entrepreneur to develop marketing that appeals to this market. 
Motorcycle Dealership Trends and Challenges

Demand hotspots

Motorcycle Dealership demand hotspots

How much does it cost to start a motorcycle dealership business?

Startup costs for a motorcycle dealership range from $50,000 to $100,000. Costs include renting a shop and lot space, inventory, and an operating budget. 

Theoretically, you could start a motorcycle dealership online, but you’d still have to purchase inventory and have a space to store the bikes, so you might not save much on startup costs. 

An alternative would be to develop a buy-sell motorcycle site, where users could sell and buy used motorcycles and you take a commission on each transaction. Your main cost would be building the site, which could cost several thousand dollars.  

In addition to motorcycles, you’ll need a handful of items to launch your dealership, including: 

  • Motorcycle display equipment
  • Repair tools and equipment
  • POS system
Start-up CostsBallpark RangeAverage
Setting up a business name and corporation$100 - $500$300
Business licenses and permits$200 - $300$250
Website$200 - $1,000$600
Initial Marketing Budget$300 - $500 $400
Shop and lot rental deposit$5,000 - $10,000$7,500
Display equipment and other equiment$10,000 - $20,000$15,000
Initial inventory$25,000 - $50,000$37,500
Operating budget$10,000 - $20,000$15,000
Total$50,900 - $102,800$76,850

How much can you earn from a motorcycle dealership business?

What you charge for motorcycles will vary based on the type and model, and whether they are new or used. Motorcycles generally range from $4,000 to $20,000, with an average price of $10,000. 

If you’re selling new and used bikes, your profit margin should be about 20%. In your first year or two, you could sell 250 motorcycles a year, bringing in $250,000 in annual revenue. This would mean $50,000 in profit, assuming that 20% margin. 

As you gain traction, sales could climb to 600 motorcycles a year. With annual revenue of $600,000, you’d make a tidy profit of $120,000.

Motorcycle Dealership earning forecast

What barriers to entry are there?

There are a few barriers to entry for a motorcycle dealership. Your biggest challenges will be:

  • Funding the startup costs
  • Having extensive knowledge of various motorcycle brands

Related Business Ideas

If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
How to Start a Motorcycle Dealership

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Step 2: Hone Your Idea

develop a business idea

Now that you know what’s involved in starting a motorcycle dealership, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.

Analyze your competitors 

Research motorcycle dealerships in your area to examine their products and services, price points, and customer reviews.

  • Make a list of motorcycle dealerships that offer similar products and services. 
  • Review your competitors’ motorcycles – their features, pricing, and quality. Also take a look at their marketing to determine their target market. The goal is to find an underserved target market in your area that could become your niche. 
  • Check out their reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
  • Identify your competitors’ strengths and weaknesses and capitalize on the latter. For example, your competitor may not do motorcycle repairs, which you could offer to attract customers. 

This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.

Why? Identify an opportunity

You’re looking for a market gap to fill. For instance, maybe the local market is missing a shop that specializes in new and used Indian motorcycles or that sells accessories like helmets and leather gear. 

You might consider targeting a niche, such as dirt bikes or sport bikes.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

You should sell a mix of new and used motorcycles. You could specialize in a certain brand or offer a variety. You can also add revenue by offering repairs, spare parts and accessories. 

How much should you charge for motorcycles?

Your prices should be based on market prices in your area, but also on your costs to acquire the motorcycles and your overhead. 

Once you know your costs, use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will depend on the motorcycles you offer. If you offer a wide variety, your market is likely to be very broad, so you should market on TikTok, Instagram, and Facebook. You could also advertise on motorcycle-related forums, blogs, and groups. 

Where? Choose a location for your motorcycle dealership

You’ll likely need to rent a shop with a lot. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

The location should be easily accessible to your target demographic, with good road connectivity and parking facilities. Visibility is crucial, so opt for spots with high footfall or vehicular traffic, such as near main roads or shopping areas. Ensure the rent or purchase price is within your budget, and take into account future expansion possibilities. Lastly, check local zoning laws and regulations to ensure you can legally operate a dealership in the chosen location.

Motorcycle Dealership business idea rating

Step 3: Brainstorm a Motorcycle Dealership Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better 
  • Name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords, such as “new and used motorcycles”, boosts SEO
  • Name should allow for expansion, for ex: “MotoVerse Dealerships” or “TwoWheel Horizons” over “RetroRide Cycles” and “TrailBlaze Bikes”
  • Avoid location-based names that might hinder future expansion
  • Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation. 

Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward. 

Step 4: Create a Motorcycle Dealership Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

  • Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
  • Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
  • Product and Services: Describe your offerings in detail.
  • Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
  • Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
  • Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
  • Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
  • Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
  • Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
  • Appendix: Include any additional financial or business-related documents.
what to include in a business plan

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to motorcycle dealerships. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your motorcycle dealership will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts. Here’s how to form an LLC.
  • C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. Read how to start a corporation here.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
types of business structures

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Form Your LLC

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

  • Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a motorcycle dealership. You could try crowdfunding if you have an innovative concept.  

types of business financing

Step 8: Apply for Motorcycle Dealership Licenses and Permits

Business Licenses and Permits

Starting a motorcycle dealership requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You’ll need a motorcycle dealer’s license in your state. Each state has different requirements. You’ll also need to follow guidelines set by the Federal Trade Commission

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Bus.iness Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your motorcycle dealership business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
types of business insurance

Step 11: Prepare to Launch

Launching a Business

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as FrazerCDK Global, and vAuto, to manage your inventory, purchases, sales, and workflows. 


  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero
  • If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Create a website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. 

Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Contact Now”.  This can sharply increase purchases. 

Online Marketing

Some of your business will come from the casual passerby or online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness. 

Here are some powerful digital marketing strategies for small businesses: 

  • Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
    • Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area. 
    • Instagram: Same benefits as Facebook but with different target audiences. It’s a very good platform for creative businesses. 
    • TikTok: This social media platform has over 1 billion monthly active users and it is used primarily by a younger demographic.
  • Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.
  • Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal. 
  • Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
  • Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
  • Payper-click marketing – Use Google AdWords to perform better in searches. Research your keywords first.
  • Influencer marketing – Pay people with large social media followings to promote your motorcycle dealership. You can find micro-influencers with smaller followings and lower rates.

Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. 

Traditional Marketing

Traditional marketing is any form of marketing that uses offline media to reach an audience. Some options that might work for a motorcycle dealership business include:

  • Signage – Put up eye-catching signage at your dealership and website 
  • Flyering – Distribute flyers in your neighborhood
  • Sponsor events – Pay to be a sponsor at events relevant to your target market
  • Seek out referrals – Offer incentives to generate customer referrals to new clients. 
  • Press releases – Do press releases about new bikes, sales, etc.
  • Billboards Repeat exposure to a business message

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your motorcycle dealership meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your motorcycle dealership business could be:

  • Best selection of new and used motorcycles in town
  • Caught the biker bug? We can help
  • Vintage motorcycles, fully restored
  • Save the planet. Go electric. 
unique selling proposition


You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a motorcycle dealership business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in motorcycle dealerships for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in motorcycles. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

Building a Team for a New Business

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a motorcycle dealership business include:

  • Salesperson – assist customers, make sales
  • Repair Technician – repair motorcycles
  • Marketing Lead – create and implement marketing strategies
  • General Manager – accounting, scheduling, inventory management

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Motorcycle Dealership – Start Making Money!

Running a Business

Motorcycle lovers rarely lose their passion, so the industry is sure to stay strong. The motorcycle market is steady even in tough economic times and withstood the pandemic much better than other industries. With your own dealership, you’ll be feuling that market, doing what you love, and making a healthy living.

Now that you’ve cranked up your business knowledge, it’s time to roll up your sleeves and put your motorcycle dealership on the road to success!

Motorcycle Dealership Business FAQs

Is a motorcycle dealership profitable?

A motorcycle dealership can be profitable. Your best bet is to sell a mix of new and used motorcycles to have a higher average profit margin. You’ll also want a good location with high visibility.

What is the growth potential of a motorcycle dealership?

A motorcycle dealership can boost revenue by offering repair services and motorcycle-related products. It can also expand to multiple locations.

What type of business is a motorcycle dealership?

A motorcycle dealership has NAICS Code 441228, which is the motorcycle, ATV, and other motor vehicle dealers industry. It’s also a form of retail sales.

Can you start a motorcycle dealership on the side?

Having a full-blown dealership is a full-time job. But you could buy used motorcycles, restore them and resell them online to start building a reputation before opening your own shop.