Upper Midwest Multi-Line Powersports Dealership, Michigan

$7.7M

Revenue

$560K

SDE

4.0x

Multiple

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Full Editorial Writeup

This is a multi-line powersports dealership in Michigan carrying several of the industry's top OEM brands across motorcycles, ATVs, UTVs, and scooters, rounded out with outdoor equipment, parts, accessories, apparel, and an in-house service department. The business does roughly $7MM to $8MM in annual revenue on sales of more than 700 vehicles per year, and it operates as an established franchise with recognition from its OEMs for outstanding sales performance. The dealership pulls customers from a multi-state radius and claims to dominate its local market area.

The economics here are a classic dealership stack: about $560,000 in cash flow on $7.7MM of revenue, which is a thin roughly 7 percent SDE margin typical of unit-sales retail where gross profit is dominated by low-margin new-vehicle sales and the real money sits in parts, service, apparel, and finance and insurance. The asking price of $2.23MM includes $580,000 of inventory and $250,000 of FF&E, meaning a large share of the price is working capital and hard assets rather than pure goodwill. The real estate is owned but sold separately at $1.6MM and is not part of the asking price.

What makes this notable for a buyer is the OEM franchise agreements and the entrenched multi-state customer base, which are hard to replicate and act as a moat for whoever holds the floorplan. It is a turn-key operation suited either to a first-time operator stepping into an established book of brands or an existing powersports dealer bolting on another rooftop. The flip side is that powersports is heavily discretionary and rate-sensitive, so the durability of that $560K cash flow is the whole ballgame.

Why we like it

The business generates $560,000 in cash flow on $7.7MM of revenue with over 700 units sold per year, giving you a real operating business with diversified income across vehicle sales, parts, service, apparel, and F and I. That service and parts revenue is stickier and higher margin than the vehicle sales, which cushions the cyclicality of new-unit demand.
OEM franchise agreements with several top brands are a genuine moat because they are territory-protected, hard to obtain, and cannot be quickly replicated by a competitor. Combine that with an OEM-recognized sales track record and a multi-state customer draw, and you own a defensible position in your local market.
The asking price of $2.23MM includes $580,000 of inventory and $250,000 of FF&E, so a meaningful portion of what you buy is liquid or hard-asset value rather than pure blue sky. That improves downside protection and gives you collateral to work with on floorplan and acquisition financing.
This is a turn-key, staff-run dealership that fits neatly as a bolt-on for an existing powersports operator who can layer shared overhead, buying power, and management systems across a second rooftop. For that buyer the effective multiple drops fast as synergies come online.

How to improve it

Attack the fixed operations mix by growing parts, accessories, apparel, and the service bays, which carry far higher margins than new-unit sales. A dedicated service manager and tighter bay scheduling can lift absorption rate and make the whole store more recession-resistant within the first year.
Build or professionalize the finance and insurance desk, since F and I on 700-plus units a year is one of the highest-margin profit centers in any dealership. Even modest gains in F and I penetration per unit flow almost entirely to the bottom line.
Pursue the additional OEM brands and product lines the listing flags as available, using excess floor space and the existing customer base to add units without proportionally adding overhead. More franchises deepen the moat and spread fixed costs across more revenue.
Tighten inventory and floorplan management to reduce aged units and carrying cost, which is where powersports dealers quietly bleed cash. A disciplined ordering and markdown cadence protects margin and frees up capital in a rate-sensitive environment.
Invest in a modern digital storefront, online inventory feeds, and reactivation marketing to the existing loyal base to drive repeat and referral sales. The multi-state draw suggests real demand that a sharper e-commerce and lead-nurture engine could convert more efficiently.
Grow the used and consignment vehicle business alongside new units, since pre-owned typically carries stronger gross margins and is less dependent on OEM allocation. This also gives you a cheaper price point to capture buyers who pull back during a downturn.

Diligence notes

Scrutinize the composition of the $560,000 cash flow to separate low-margin new-vehicle gross from parts, service, and F and I. Understand exactly how much of that profit depends on volatile new-unit volume versus the stickier fixed-operations and finance revenue.
Confirm the OEM franchise agreements are transferable and that each manufacturer will approve the buyer, since dealer agreements can be terminated or withheld on ownership change. Review territory rights, sales and CSI performance requirements, and any facility upgrade mandates the OEMs could impose post-sale.
Analyze the $580,000 inventory for aging, model-year mix, and floorplan debt, because stale units and floorplan interest can quietly erase reported cash flow. Verify how the inventory and floorplan liability are treated in the purchase structure so you are not buying dead stock at cost.
Model the real estate carefully given it is offered separately at $1.6MM and is not in the asking price. Decide whether to buy it, negotiate a market lease, and factor either the mortgage or rent into a pro forma, since occupancy cost is currently absent from the stated cash flow.
Review the last several years of unit sales and revenue to gauge cyclicality, since powersports is highly discretionary and rate-sensitive and the current numbers may reflect a strong point in the cycle. Stress test the model against a demand pullback to confirm the business stays cash-flow positive.
Verify staffing depth, technician retention, and manager dependence, because a dealership relies on skilled service techs and a capable sales floor. Identify whether the seller performs a critical role and what the transition training realistically covers.

Source

Originally listed on BizBuySell. View original listing →