A Day in the Life of a Harley Davidson Licensee

When Fanie Haarhoff bought the Sandton-based Harley Davidson store in 2009, he was already nearing retirement.


A Day in the Life of a Harley Davidson Licensee

With a background in parts and spares, Haarhoff was a director of Midas and nearing retirement when a friend from the Harley Davidson community approached him to assist in the finance department of his Sandton-based business.

“It was an interesting change of pace, in a business environment that spoke directly to my background and skills, but incorporated my passion for Harley Davidson as well. It was a good fit,” he explains.

Becoming a licensee

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Soon after joining the store, tragedy struck. The owner (and friend) was involved in a fatal biking accident. His wife took over the store, but by 2009 she w

anted to sell. Harley Davidson approached Haarhoff as a potential buyer – he knew the systems, the industry, and he had a relationship with Europe’s head office, which was based in the UK.

“I approached the ex-CEO of Midas, who was also a Harley enthusiast.” Together, they decided to make an offer.

Investing in the future

After they bought the business, the opportunity to purchase the property came up. “We decided to do it. It ensured we could stay exactly where we are located on Rivonia Road, which is an excellent location, but also well-known — everyone knows where to find us. We also knew it was a great area to invest in.”

Licensees vs franchisees

Unlike a franchisee, licensees do not pay franchise fees or royalty fees. However, they also do not receive the same level of head office support. Licensees must apply for the licence;and business background, financial standing and an understanding of the industry are all evaluated before the brand will accept a licensee. It’s then up to the licensee to get the most from the arrangement.

“The local head office, which in this case is situated in Cape Town, ensures that all standards are maintained, but it’s up to us to really get the most from the relationship.”

One way Haarhoff has achieved this is by aligning his marketing strategy with the brand’s global marketing campaign.

“We understand the group’s strategy, and this allows us to leverage off what they’re doing. This saves us costs, but it also means we get more mileage from what we do, because the message is enforced.“

Cash is king

“From the beginning, we made the decision that we would not purchase the business unless we were able to run it on a cash basis. We purchase everything outright, and then sell it. We have a wide selection of bikes and retail accessories, and so stock control is of paramount importance. We also don’t have an overdraft facility. This means that I need to keep an eye on the numbers. Each and every day I review our numbers.

“Without understanding your figures, there are so many things that can go wrong. Imagine you’re repairing a bike and you’ve spent R100 000, but you can’t send insurance an invoice until one last part arrives. If you aren’t on top of things, that could take weeks or even months. Success lies in the details.”

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A three-pronged business

According to Haarhoff, the business has three parts: The bikes (which includes an after-sales department that deals in services and repairs);parts and accessories;and motor clothes, which is a purely retail arm of the business.

“Each department has different sales and after-sales service styles, which means training, stocking models and management are all slightly different in each department. It’s essential to understand the different areas of a bu

siness when you go into something that has such a

strong retail base.”

Getting the balance right

When everything is purchased with cash, it’s imperative to get your stock right.

“We need to stay abreast of the latest models to ensure we have stock on our showroom floor, but we also need to understand the local market. What’s popular and will sell? What are the current socio-economic conditions? These impact our stock decisions. Having too much, or the wrong stock on hand is as bad as not having enough stock, so we constantly evaluate what we import from the US.

“On the retail side, most stock is manufactured in the northern hemisphere, which means South Africa is always a season early. This means our warehouse is ready to launch the latest gear as soon as the seasons start turning, but we need to ensure we read the market because we plan so far ahead.”

Service, service, service

For Haarhoff, service is the lifeblood of a business.

“This covers everything from keeping shelves well-stocked so that our customers can always find what they’re looking for, and an excellent after-sales workshop department, to the ability to source any part a customer might need. Ultimately, we are servicing a community, and that is the foundation of our success.”

The right people

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“People are the backbone of this business. With the right team in place, you can achieve anything.” In fact, Haarhoff and his partner have been granted the licence to open a second store, but they’re taking their time.

“Before we do anything we need to make sure we have the right team in place. That’s the centre of a winning recipe.”

The Sandton store currently has 32 employees, and according to Haarhoff, his sales manager and workshop manager are integral to the business’s success.

Top advice

“Nail the detail. If you’re not in the detail, you’re not in the business.”

Vital Stats

  • Company: Harley Davidson
  • Player: Fanie Haarhoff
  • Est: 2009
  • Contact: +27 (0)11 884 0454
  • Website: www.hdavidson.co.za
Nadine Todd
About the Author
Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

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