B-B-Bad To The Loan

Rough roads ahead have you fearing a loan default? Here are some ways to bargain with your banker.

When Mike Schwartz, 40, walked into an ailing Harley-Davidson motorcycle dealership in 1992, he could smell the opportunity. The dealership was located in a part of Wilmington, Delaware, that had seen better days. And when he was told the bike he ordered would take two years to arrive, it was clear service was a problem. Management, a throwback to an era that owed more to the racing circuit than the business circuit, didn't seem to have its heart in the business anymore. Schwartz told the owner to contact him if he ever wanted to sell.

Two years later, in the winter of 1994, Schwartz got a call from the owner, who was ready to unload the business. Schwartz bought the company, which consisted of a note from the seller and about $300,000 in equipment and inventory, for less than $1 million. Working as both owner and general manager,Schwartz returned the dealership to robust health within a year and a half, a period during which the Harley nameplate enjoyed a popular resurgence.

But he didn't have long to rest on his laurels. His lease was set to expire, and Schwartz was about to make some big decisions.

Rather than staying put, or moving to the other side of town, Schwartz set out to create a "destination" dealership. To realize his vision, Schwartz bought land in nearby New Castle, Delaware, razed the existing buildings, and started building from the ground up. The result was Mike's Famous Roadside Rest, a 42,000-square-foot complex complete with a restaurant, dealership and museum, all just off the main artery of the northeast corridor of Interstate 95.

And a "destination" is exactly what it became. On some weekends in the spring of 1999--the dealership's first spring season since completion--upwards of 5,000 Harley faithful (as well as the merely curious) made the pilgrimage to Mike's Famous to bask in the glow of one of America's great cultural icons.

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This article was originally published in the February 2000 print edition of Entrepreneur with the headline: B-B-Bad To The Loan.

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