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Best Practices for Powersports Startups



Starting a powersports manufacturing company can be exhilarating, but there are a lot of success factors to employ. These factors do not necessarily translate directly from other markets. In my 25 years of working with startups and product launches, I've identified patterns of success and failure. Here are ten best practices that business owners new to the industry should be aware of.

Trademark and patent early. Do a search to identify if your company name, logo, or slogan is already taken. Name or slogan confusion can result in costly legal battles or business going to a competitor. LegalZoom can be an affordable option for small businesses to file trademarks. Consulting with an IP (intellectual property) attorney may also be necessary. United States patent law has shifted from first-to-invent to first-to-file. Provisional patent applications put your stake in the ground and buy time to develop the concept. Without IP, your product is wide-open to copying by competitors. The business world will always be a poker game, but with patents and trademarks, at least you’ll have some cards to play.





A snowmobile brand sourced offshore that came back ashore under another brand


Own your designs. Having a great idea isn’t the same as owning it. Entrepreneurs often turn to suppliers to develop CAD models, prints and tooling — what comprises an actual design — with the supplier obtaining an exclusive supply agreement from the business owner in exchange. But if the new product has too high of a price and isn’t selling, there is no option for the entrepreneur to re-source with a lower-cost vendor. Worse, the supplier may legally own the design and could eventually offer the parts on the market directly. When outsourcing product development, have a plan to maintain ownership of the design files. If you are handing off your project to a low-cost manufacturing region, consider parsing the sub-components or holding something back to prevent your product from coming ashore under other brands.

Consider SEO in all communications. Every time you publish something you have an opportunity to include keywords that search engines will find. Original content is now king in SEO, not link swapping or other outdated methods. Include a TAGS section in the communication with the main words your customers will be searching for. Tag videos too. Every word counts.

Master the art of where to spend money and where to save money on your products. Cost reduction improves cash flow, widens margins and lets your products rank higher in online shopping comparisons. But I’ve also observed an engineering VP cheapen an accelerator pedal that had been the focus of serious safety recalls. Making engineers wear red noses and use Etch A Sketch was apparently next on his agenda. Don’t relax standards on things that are important to customers and be sure to test changes before implementation.

Stay humble. Once, I was trying to convince the owner of a UTV manufacturer to test a new vehicle more thoroughly before launching. He had come from an industry where new product concepts landed on store shelves in a matter of weeks. His response turned out to be famous last words: “We are going to be more nimble and not have as much red tape as big companies like Polaris.” The product turned out to be a failure, and eventually the company collapsed. Study why things are done the way they are in the powersports industry; learning things the hard way can put you out of business.

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Your business has key functions that are not optional, just like your body’s vital organs. Some startups basically ignore their supply chain and Cost Of Goods Sold (COGS) and go straight to promoting sales heavily. Others invest time and money to “build a better mouse trap” but neglect their marketing and social media launch, then are left wondering why the world didn’t beat a path to their door. Government regulations are another business consideration that some companies overlook or misunderstand. A prudent regard should be maintained for all areas of the business although, of course, priorities will change as the company grows. Ignoring an area completely or saying you will “take care of it later” is like saying you don’t need your lungs or kidneys to work right now — and how smart is that?

There are great ideas, and then there are great ideas whose time has come. Some ideas require a seismic market shift to catch on, even if they are good ones. Will the forces be in place for the market to accept your product? Can you tell your story strongly enough to force that market shift? Really? Appealing to early adopters or fringe users may portend big things somewhere down the road, but it will not produce significant cash flow now.

If you recognize a business association that is doomed to fail, get out of it quickly. One of the keys to identifying whether a business proposition will fly is if the stakeholders agree upon the value each offers the other and the expectations of each are well defined. Put another way -- if one party is "using" the other party the business relationship is doomed. Bad situations between business associates with fundamentally different values or mismatched assumptions seldom resolve themselves and can become very ugly indeed. Practice the 80/20 rule. Spend your resources on opportunities that have a great chance of success, and get out of the ones that do not.



Success is defined as having your product or service in the field for one full year, achieving financial targets, without major warranty or safety issues. Calling anything else success is premature. I have known entrepreneurs who acted as if their five-year business plan was in the bag because they had created a functional prototype. Building a prototype is like painting your house. Most smart people can figure out how to paint their own, that is, one house. That is a far cry from running a full-blown house painting business in a competitive environment, with lots of regulations, employees making mistakes, other house painting companies undercutting you on price … you get the idea.

Every launch has a panic phase with people working long hours to solve unforeseen problems. The earlier you panic, the better. Indeed, operate with a sense of urgency all the time. When it comes to growing a business Malcolm Gladwell’s 10,000-hour competence rule precedes Tim Ferriss’ four-hour workweek.



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