Starting a Motorcycle Dealership Business in the United Kingdom

Beginner’s Guide on Starting a Motorcycle Dealership Business in the United Kingdom

Many entrepreneurs consider motorcycle dealership startups as easy profits. But when starting a motorcycle dealership business in the United Kingdom, you must know it’s a long, costly process. You must put up with the best business practices that will enable you to succeed in this industry as a beginner.

Here’s a guide on starting a motorcycle dealership business in the United Kingdom.

Industry Practice

Buyers of motorcycles in the United Kingdom have seen growth in recent years. According to statistics, the UK household spent an average of over 178 million pounds on motorcycles in the third quarter of 2020. Today, motorcycle manufacturers are counting on the Millennial generation because of how they fancy purchasing bikes. With that in mind, dealers should learn what their new audience is all about.

If you’re planning on starting a motorcycle dealership business in the United Kingdom, you have a chance to provide not only new bikes. Dealers in the UK cater to the needs of different customers from those looking for a fast bike or something bigger and fancy. They offer both new and used bikes, including tourers, mopeds, cruisers, and sports, among others. But offering after-sales care, including servicing and MOT testing.

Business Registration Process

You can transform your idea of becoming a bike dealer in the United Kingdom if you only get your plans right. But before you do that, you must first understand the motorcycle industry really well.

Here are some of the things you can consider before plunging into the business.

Develop a Business Plan

Developing a solid business plan gives you a clear plan for executing your ideas. The document will give you an idea of how much capital you’ll need to have, establishing your marketing, financial and operational strategies. What are the strengths and weaknesses, and how do you plan to tackle the challenges? Ask those questions if you opt for company incorporation services in the United Kingdom.

Register Your Business

If you want manufacturers, financiers, and suppliers to take your business seriously, you must register with the Companies Houses. The process requires you to have the legal documents ready. However, your business must have a business name before registering it. Ensure that you craft a business name that’s unique and resonates with your target audience and the industry. Once you have the name, you must decide which type of business entity you want to register. It could be a limited partnership, a sole trader, or a company. To know more, you can read our guide to company registration in the United Kingdom.

Research on Your Target Market

As an entrepreneur planning on starting a motorcycle dealership business in the United Kingdom, understanding the market is vital. Start by finding out whether there is sufficient local demand for your services or not. Get to know if the demand is on smaller models, new bikes, or second-hand bikes. It will cost you nothing if you find out how many motorcycle outlets are within your area. Knowing your competitors will help you establish:

The kind of models and make they sell and their prices.
If they are offering after-sale services, repairs, and MOT testing.
Whether they hire out motorcycles and provide other services such as Compulsory Basic Training (CBT) courses.
The level of knowledge their staff has.
If their premises have modern fittings or offer online selling.

Learn the demography of your target customers, whether a larger percentage is young men or it’s a mix of young and old.

Promote Your Business

It’s a general rule of thumb that you must get yourself known out there if you’re new in the industry. The only way to go about this is by promoting your business to your target customers. Start by getting referrals through the old traditional way of word of mouth. Again, you can create business cards and flyers and distribute them within the area you’re operating in. Creating your social media platforms is another angle you can explore. Ensure that the contents you put are authentic and clearly explain the nature of your business.

Develop a Website

In today’s time and age, businesses cannot reach so many target customers without a website. Therefore, create a simple website and provide all the relevant information, whether it’s your contacts, services you offer, among others. You can promote your business through your website either through Google or Facebook Ads. Learn your way through the online web and remember to take your customers’ feedback seriously.

Secure an Insurance Cover

Any entrepreneur would advise you that securing your premises and property is undebatable. You can decide to choose the right insurance cover for your business. This will depend on whether you’re buying and selling bikes or offering services and repairs on your premises. The most common insurance is the motorcycle trade insurance which is the general insurance cover. The policy covers protection for your stock, and premises which can be subdivided into:

Rider cover— covers you and your staff when riding the bikes.
Demonstration cover–allows the clients to take their motorcycles out into the road for test rides.
Motorcycle shop insurance—covers the building itself, as well as any contents.
Liability insurance—this policy covers both staff and public claims if there is a loss, injury, or any other eventualities.

Pricing Your Services

Starting a motorcycle dealership business in the United Kingdom will only be profitable if you set your prices correctly. You might decide to price in line with your immediate competitors unless you’re not targeting the same niche as your competitor. If you have used machines, then the pricing might be different. Ensure that whatever you charge will be sufficient to cover your overhead costs and you make decent profit margins. You might decide to offer discounts or special offers; however, you must ensure that it does not eat on your profits.

Motorcycle dealerships in the United Kingdom have their own legislation that a new beginner should be aware of before venturing into it.

Do I Need a License as a Motorcycle Dealer in the UK?

Before you move any further with the business, first, you must understand the following:

If you are offering MOT tests, you must get authorization from the Driver and Vehicle Standards Agency (DVSA). It covers the premises, testing equipment, and the person carrying out the tests.
If you have petrol storage tanks, you must get a certificate from the local petroleum enforcement authority. This is for non-retail filling stations; however, if you just store petrol in jerry cans or other approved containers, you need not get a certificate.
You must get a consumer credit authorization from the Financial Conduct Authority (FCA) whenever you offer credit terms.
The law requires you to register with the HM Revenue & Customs (HMRC) if you handle transactions of over 10,000 euros.
If you’re dealing with second-hand goods within the UK, some local authorities will register or license your business. You’re generally exempted if you’re holding customer credit authorization. Whenever you do not understand this and other regulations, you can check with the UK’s local authority or UK corporate service provider.
You must register all vehicle number plate suppliers with the DVLA.
The DVLA also issues trade license plates if you want to ride unregistered or untaxed motorcycles temporarily. You can only use the trade plates for specific purposes including, test drives, deliveries, and taking a motorcycle to another motor trader’s outlets. Remember, the trade license plates only exempt you from tax but not from MOT testing requirements. The license is only valid for between six to one year, after which you must renew.
The law in Wales requires you to register with Natural Resources Wales if your premise produces over 500kg of hazardous waste within a year.
If your business involves specific industrial processes, you’ll require a permit from the local authority environmental health department.
- Whenever you play any background music in your outlets, including the showroom area or workshop, you must get a music license from PPL PRS.
When you plan to sell or advise on selling general insurance, you must either get direct regulations by the FCA or by an approved representative of an FCA-approved principal insurer.

Rider Regulation

As a motorcycle dealer, you should be aware of the current rider legislation so that you can offer proper advice to your customers on which machine they can opt for legally. These also include whether or not they should have restrictor kits.

For further on starting a motorcycle dealership business in the United Kingdom, you might want to seek professional help such as 3E Accounting. Therefore, you can contact us.