If you’ve ever run a car dealership, wanted to run a car dealership, or simply have a passion for business; keep reading. If not, stop here (not really, keep reading because this will be entertaining nonetheless).
This is where I tell you why I went from spending 7 years in the software business to one day dropping the big salary, leadership title, and upward corporate trajectory to start a used car lot. You wouldn’t believe the confusion it caused among close friends and relatives. On paper it made no sense, but to me it did. Here’s why.
I knew that the automotive sector was big. Really big. Like $1T big. I also knew that for the most part, it was still a very old school industry. How could an industry this big be so far behind technologically? This made me very curious.
This curiosity lead me to starting our own dealership. We called it Auto Hall. Get it? Auto Hall was easily the hardest professional year of my life. It was also the most rewarding. After going through the rollercoaster of obtaining a license, buying our first car, selling our first car, then ultimately exiting, I wouldn’t trade that year for anything.
Along the way I learned 5 key business principles that I think anyone could benefit from. Here are the 5 key principles that I learned from building our car dealership.
1) It teaches you how to work hard
Ask any young person whose dad worked in the car business if they worked hard. The car business is not only physically demanding, but putting in 80-90 hours in a week was the norm. The amount of daily preparation required just to prepare for your first customer, followed by the paperwork that had to get done each night well after closing. Oh, and when you are just a team of 5 there isn’t a day that goes by that you don’t wash or vacuum a car, take pictures of inventory, spray down the lot, take out the trash, mop the floors, clean the toilets, and many other laborious tasks. Oh, and I did I mention we were in Chandler, Arizona? A normal summer day was 115 degrees. I hope it doesn’t sound like I am complaining, because again, this was all part of the process.
2) It teaches you how to interact with humans face to face
Yes, can you believe it, there are still industries where people talk to each other. Fascinating, I know. There is real value in human interaction. Every single day you have the opportunity to change someone’s day for the better. In the car business, there was almost no greater joy than approaching a customer when they first walked in the door with their guard all the way up, to eventually giving them hug and handing them the keys to the new car of their dreams. I could write a post on that process alone. It was beautiful and taught me the value in quickly BRT (Building a Relationship of Trust).
3) It teaches you core business principles
From the outside looking in, it feels like the process of selling a car is simple, right? Wrong. Here are a FEW of the things that are required to process one transaction. First, you have to source the vehicle that you want to sell. When done effectively, this required extensive research and time (not anymore with Drivably, but that’s not what this blog is about). Once you’ve found the vehicle you want to buy, you have to purchase that vehicle, and work with the seller to transfer the title to your dealership. Simultaneously you have to coordinate the transportation of the vehicle.
Once it arrives, you have to recondition and merchandise the unit. The reconditioning process took an average of 3 days for us. During this process, we would do a thorough inspection of the car, coordinate any mechanical or body work with multiple vendors, along with a full detail. Once the unit arrives spit shined to our lot, we would take pictures of the unit, and upload into our system. Now the unit was “frontline ready”.
Now that the vehicle was frontline ready, we had to find a buyer for the unit. We would utilize a variety of different marketing strategies to attract consumers to that vehicle. Once the right buyer showed up and purchased the car (easier said than done), they had to sign a variety of documents, including loan origination documents from the bank. After we sent them off, we would have to process those documents, pay tax, close out the deal in our system, and reconcile the purchase at the end of the month.
This was just a FEW of the steps that it took to sell a car. I won’t get into the actual daily operations of the business. Net net, the car business forces you to learn finance, sales, marketing, operations, logistics, Human Resources, oh and of course, janitorial services.
4) It teaches you how to build meaningful relationships.
You ask any car guy for help fixing a dent on your door they’d say “I’ve got a guy”. This is the pure nature of the car business. For us, we had more than 30 vendors that we did business with. Each of these vendors we were very close to. Most of them we saw face to face weekly. The relationships you build in the car business are hard to explain. For those who have been around the business for a long time I think they take this for granted. I think this is one of the keys to running any successful business as it opens doors of knowledge, resources, and services that can and will help you fill any of the gaps that you might have in your business.
5) It teaches you how to persevere
In Arizona we have what’s called “monsoon season”. I’m not weatherman, but a monsoon is an aggressive combination of wind and rain that can reach 100+ MPH. We used to watch the skies as monsoons would roll in and immediately text our lot wash guys to be there first thing the next day. One day in June we experienced a once in a decade monsoon. This monsoon was so powerful that it lifted up our 800 pound gazebo in the back of the lot and smashed 9 of our cars. When I arrived at work the morning after the monsoon, I was welcomed by a pillar through the back window of a Subaru Forrester, and nearly $40,000 worth of other damages. While it wasn’t always a physical monsoon we were overcoming, the amount of times we had to huddle together and push through were plentiful.
So that's my story. If you want to learn how to work hard, how to create mutual benefit through deep interactions with people, learn fundamental core business practices, and how to get push through the monsoons of life, then start a car dealership. Would I have enjoyed having my Saturdays to spend time with my family and watch football instead of being in the dealership on our busiest day? Absolutely. But I wouldn't trade the lessons I learned on that little lot on Chandler Boulevard for anything.