Business Profile: Harley Davidson

Harley dealer rides out ominous beginning, growing pains

Most Americans remember exactly what they were doing when the news of the Sept. 11 destruction of New York’s Twin Towers stunned the country. Steve Tuchschmidt was sitting in the Milwaukee, Wis., corporate headquarters of Harley-Davidson, preparing to sign the paperwork to seal a business deal he’d spent two years contemplating and researching.

Tuchschmidt had been accompanied to Harley Davidson headquarters by his father, who had briefly left the group for a drink of water. When the elder Tuchschmidt returned to the board room and relayed the unfolding events, the meeting broke up temporarily to assess the urgency of the situation.
Tuchschmidt recalls that his father cautioned that perhaps he should forgo the deal. Amidst the confusion and despair surrounding the day’s events, Tuchschmidt maintained his goal to secure a Harley-Davidson dealership in mid-Missouri. The deal was struck. The papers were signed.

Although an ominous beginning for any new business, Tuchschmidt was confident he was making the right decision as he had spent the previous two years visiting Harley-Davidson dealerships throughout the country to determine if this was the plunge he wanted to take.

“This was during the peak of the Harley-Davidson phenomenon,” Tuchschmidt said. “I couldn’t afford existing dealerships.”

At least that’s what he thought until Harley-Davidson of Missouri became available. With the blessing of Harley-Davidson, Tuchschmidt was able to buy the Columbia dealership at its original location on Range Line Street.

After operating at that location for four years, Tuchschmidt opened the new facility in late fall 2005 after looking for building sites for more than a year. The new site, off Interstate 70 at the Lake of the Woods Exit, affords interstate exposure and room for expansion.

“I bought five additional lots when I bought this one,” Tuchschmidt said. Purchasing the five lots gave Tuchschmidt some leverage to get the street name changed from Remm to Freedom Drive.

Although Tuchschmidt said that, according to Harley-Davidson guidelines, he “overbuilt,” he has already outgrown his building.

“I have 22,000 square feet and when I moved in here, I thought ‘there’s no way I’m going to fill this up,’” he said. “Now we’re cramped for space.”

To accommodate the dealership’s growing pains, Tuchschmidt has had a presence at the Columbia Mall the last three holiday seasons. Each year’s sales have outpaced the previous year’s.

“The first year, we were in a kiosk and just did so-so,” Tuchschmidt said.

“Last year we had 500 square feet off the Food Court and this year we have 1,200 square feet on the Target wing. The mall is trying to encourage me to stay annually.”

In addition to the Columbia Mall, Tuchschmidt has also been approved by the Harley-Davidson Corp. to build a second dealership in Jefferson City.

“It took us several years to perform well enough to be awarded the opportunity by Harley-Davidson to open a second retail location,” Tuchschmidt said.

Tuchschmidt has spent the past 10 months searching for a building site.

“After studying traffic counts and growth, we are concentrating our efforts along the Highway 54 corridor,” he said. “This will be a full fledged dealership with sales, parts, motorclothes and a service department.
Tuchschmidt anticipates purchasing the land sometime shortly after the first of the year with an opening date of late summer 2007. The Jefferson City dealership will be 10,000 to 12,000 square feet.

The Columbia store employs 27 to 35 full and part-time employees, depending on the season. The dealership carries around $1.5 million in inventory, with retail space occupying 11,000 square feet of the building.

“We keep 100 to 150 motorcycles in stock at all times,” Tuchschmidt said.
Mid-America Harley-Davidson is an independently owned franchise, and Harley-Davidson, unlike other motorcycle manufacturers, is on an allocation system.

“I only get 350 new motorcycles a year,” Tuchschmidt said. “I sell about 150 pre-owned each year, too.”

New Harleys range in price from $6,495 to $32,000.

Harleys have been around since the early 1900s, and servicing bikes is a key component of the Harley-Davidson business model. Jim Coin, service advisor for Mid-America Harley-Davidson, has been with the dealership since closing his own small motorcycle repair shop in Branson three years ago.
“I’d rather work here than be the president,” Coin said. “I’ve ridden Harley-Davidsons since I was 16 years old. I’ve always had a Harley in my garage.”

Coin is proud of the service department’s technicians and capabilities.
“We have a drill press, a press and a lathe and we have three real talented guys who can do a lot of fabricating to customize bikes,” Coin said.

Today’s Harley-Davidson stores are not just about major purchases, like a motorcycle, however. A wide array of Harley-Davidson merchandise, from bar stools to key chains, has become highly popular with motorcycle enthusiasts.

As far as worldwide brand recognition, Tuchschmidt said only Coca-Cola eclipses the Harley-Davidson name. Also, Tuchschmidt says the two most common requests for tattoos are “Mom” and the Harley-Davidson emblem, in that order.

Although new to the motorcycle business, Tuchschmidt is not new to motorcycles. A self-admitted “gear head,” he had never actually owned a Harley before opening the dealership in 2001.

“I’d been riding motorcycles since I was nine years old,” he said. “My whole family has ridden their whole lives. But I owned that other ‘H’ brand.”