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Sun State Fun Sports – Mount Dora, FL – June 7, 2004

June 7, 2004
Filed under Power Profiles

CONTACT
17512 Highway New 441 West
Mount Dora, FL 32757
352/735-2900

OWNER
Mike LaRoe

BUSINESS PROFILE
LaRoe purchased the dealership in 1985, and it had existed a decade prior to that. The 6,000-sq.-ft. shop, 30 minutes north of Orlando, is in the top 20 U.S. stores for both Kawasaki and Suzuki sales. Carries motorcycles, ATVs/utility vehicles, and Sea-Doo PWC. Sold 1,300 units last year, of which 600 each were motorcycles and ATVs, 100 were watercraft. “Dollar-wise, we sell more motorcycles because we average a couple of thousand dollars more per unit,” says LaRoe. On track for $10 million this year. 15 employees.

GREATEST CONCERN
“I’ve been here for nearly 20 years and cycles haven’t really affected us because we’ve increased our business every year,” says LaRoe. “I’m concerned about the influx of off-brand product from China. The big-box stores are retailing them, but not offering any kind of customer support. I had an interesting call —somebody wanted to set us up as a service center. No — my service department is overloaded anyway. When I told them my labor rate, they were flabbergasted.”

WHAT’S HOT?
Sizzling at Sun State: the entire Kawasaki Vulcan cruiser lineup, the Suzuki GSXR sport bike lineup, and four-stroke watercraft, whether the Kawasaki 1200cc or 1500cc Jet Ski STX, or the Sea-Doo 4-TEC. “We tend to sell more of the high-end four-stroke watercraft, which is positive. But we’ve just noticed a dramatic and quick decrease in low-end sales as soon as four-strokes were available. The four-stroke PWC have 100-hour service intervals instead of 50-hour, have fewer problems, and are really enjoyable. But watercraft is a pretty small segment of what we sell now. When we sold 600 units five or six years ago, it was one-third of the business. In ATVs we sell dozens and dozens of basic 300cc units that are priced between $3,000 and $4,000. More people can afford that than a $7,000 four-wheeler. We’re 10 minutes from the Ocala National Forest, a pretty vast riding area, and it’s rural here. Several guys who work for me have four-wheelers and they just haul hay from the barn to the horses.”

CUSTOMER BUYING TRENDS
“That $3,500 ATV customer is completely different from the 800cc to 1500cc cruiser guy, and our sportbike guy is younger,” says LaRoe. “The beauty of it is that in Florida we don’t have any insurance requirements for motorcycles, so we can sell sport bikes. I talk to my dealer buddies in places like Maryland, and insurance is such an impediment to sport bike sales. The monthly insurance bill is as much as the bike payment.” When it comes to PG&A, “we don’t have the kind of sales we should, but it’s because we have no space. It’s a real restriction on properly displaying and selling these products.” In the works are plans to build a new 25,000-sq.-ft. facility, with a target date of February 2005, the 20th anniversary. “Friends in 20 groups are doing that same volume, but their building is four to five times bigger. Then again, they have three times as many people and overhead.”

ANTI-POWERSPORTS ISSUES
Some forest roads in the Ocala National Forest have been closed to non-licensed vehicles. Tagged dual-sport motorcycles can ride anywhere. “We go to the forestry and land-use meetings,” says LaRoe. “The forest is the most godforsaken patch of pine trees and sand you’d ever want to see. Powersports users couldn’t hurt this in a million years. Meanwhile they lease parts for clear-cutting. In the meetings, they won’t even talk about that.” Watercraft issues seem to have faded away, LaRoe adds, probably due to fewer sales. “And Florida’s a pro-boating state, anyway.”

PARTS AND SERVICE
Sun State Fun Sports has three full-time technicians, two teenaged part-timers, a service manager, and two service writers. While LaRoe can get all the graduates he wants from nearby MMI, he prefers natural wrenches who “started sweeping floors in the motorcycle dealership when they were kids.” He adds that his parts folks keep their area “neat, clean, and organized. It’s just hard to deal with such a small space.”

WORDS OF ADVICE
LaRoe advises getting into a 20 group, preferably a non-OEM one, “so you have access to other dealers and some benchmark data to base budgets and sales on. I’m in a Spader Business Management 20 group and attend their dealer-management workshops. It has made a huge difference in my business. Six years ago I was frustrated and didn’t consider my business to be viable. Spader showed me that I was doing better than I thought, but I could fine-tune. The biggest benefit is being able to talk with other high-performing — and even low-performing — dealers to see the right and wrong way to do things. It has paid for itself tenfold, especially considering I’m building a new dealership. Five of the guys in my 20 group have already done that, so I’ve gotten to learn from their mistakes and tour their facilities.” LaRoe says dealers also need to “maintain a margin on which they can make a profit. Watch the amount of inventory and personnel.” psb

— Julie Filatoff

If you would like to share your story with the readers of Powersports Business, please contact Julie Filatoff at filatoff@cybermesa.com.

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