Disasters Come When You Least Expect Them!
As Kristen and Kent Cristy were looking forward to a great Thanksgiving celebration with family in November 2009, they didn’t know their world would be upended two days before the holiday by fire trucks screaming in the night.
At 4:20 a.m. they got the call that Reeves Tire & Automotive was on fire. They rushed to their store to find a 2,800 degrees Fahrenheit blaze feeding on the 3,000 tires they had stocked in a wood mezzanine. By the time the smoke had cleared, the store was a total loss.
Investigators determined the fire had started in a utility closet. Because of the timing, no one was in the store, so thankfully there were no injuries.
“It was never a consideration that we would have a severe fire that would disrupt our business,” says Kristen. “Fortunately, because we had recently changed insurance carriers, we were covered with business interruption insurance. When we asked for quotes from different insurance carriers, business interruption insurance was a part of the package offered at nearly the same price as the policy from our old company. It was very beneficial that we changed. The old policy didn’t carry this coverage.”
Reeves Tire & Automotive is on a busy street in Joplin, Mo., next door to Kristen’s father’s automotive dealership. It was because of this proximity that Kent and Kristen were able to get their business back on track almost immediately.
“My dad allowed us to use his car lot and office and we were able to install four lifts and an alignment rack in our warehouse. In just two weeks, we were back in business,” says Kristen.
“It was the business interruption insurance that allowed us to recover so quickly and pay our employees the entire time we were rebuilding,” explains Kent. “When we opened under our new setup, we only lost 30% of normal sales from the time of the fire until the new store opened. The temporary setup was necessary to remain open to serve our customers without the risk of them having to find a new shop to service their needs — and to keep our employees. After the new store opened, we enjoyed two high growth years.
Kent and Kristen have been members of a Dealer Strategic Planning 20 Group for almost six years. In fact, their advice about insurance coverage won the Best Idea Award at one of the meetings.
Each member is required to bring in one best idea to share and the group members vote on what they perceive as the best idea overall. The Cristy’s advice about business interruption insurance was a winner.
Kristen added this when she presented their idea, “In addition to business interruption insurance, it’s important to also have everything in the store on a digital recording or video tape so that you can recall the value of the contents should everything be destroyed.” Another disaster comes their way
Now, everyone would agree that one disaster in a business should be enough to bear, but the Cristys were hit a few years later with another crisis. Their computer crashed. A virulent virus infiltrated their system through one of their suppliers’ POS links. To make matters worse, their cloud back-up system did not function properly and their data was lost.
“During the computer crash we did operate a few days ‘back to pen and paper,’ but they did set us up with a temporary computer system that we used until our original system was restored,” says Kent. “We learned that you could conduct business using a pen and paper. It was hard, but we kept the business going.”
This second disaster led to another “Best Idea Award” for the Cristys as they explained to their 20 Group peers how they created an Emergency Guidebook to help whenever their business is “out of normal.” This guidebook contains contacts, systems, insurance contact list, locations, inventory, major vendor phone list, invoice templates, price matrix, stock inventory price list, major equipment list, etc.
“It is our ‘life support’ information should anything disastrous happen in our business again,” says Kristen. “When our computer crashed, we didn’t have paper invoices or anything on hand to keep the business moving. We had to re-create all of our templates on paper so we could sell tires and service.”
While Kristen grew up working off and on in her father’s tire business, Kent was headed in a different direction after graduating from Missouri Southern University. As a science major he intended to pursue a career in the medical field. However, Kristen’s father needed help in the shop, so after graduation, Kent started out sweeping floors and changing tires.
“I started in the business, literally from the ground up,” smiles Kent. When Kristen’s father faced some medical issues he decided it was time to pass the baton. Kent made an immediate transition from employee to store owner.
He is quick to point out his participation in their 20 Group has been a wonderful help. Recently he sent a message to his 20 Group peers: “Groupies — we just finished our first engine replacement with a final invoice of $9,700 and a nice gross profit. Before joining the 20 Group this job would have been recommended to another shop and we would have lost a sale. Thanks to all of you in Group 400 who helped us overcome a barrier which will hopefully become a new profit center.”
Kent and Kristen opened their second store in 2012 with help from their insurance settlements. Kent is not satisfied with two stores and is looking for more opportunities to expand.
“I grew up learning the tire business from dinner table discussions and I knew eventually that I would get involved in the business full time. When my dad’s medical condition dictated a change, it was natural that Kent and I take over the tire store along with help from my brother-in-law, Michael Brownfield.
“After graduating from Missouri Southern, I accepted an HR/PR job at a corporation with full benefits and vacation. Moving to the tire shop, I gave up the benefits, vacation and jumped into the tire shop operation.
“At first, we were primarily a tire shop with brakes, alignment and suspension services being our primary business. Our ratio of 80% tires and 20% service returned a reasonable profit, or so we thought.
“When we joined DSP’s 20 Group we learned that expanding our auto repair and service would help us increase profitability and let us be able to expand our operations.
“Learning that side has been a huge hurdle for us, but after hosting the Group at our Joplin location, I sent a note to my 20 Group: “Thank you again for attending the meeting and giving such useful advice. Our labor rate went up the day after the meeting. Flush machines have arrived and training has begun as well as many other steps toward improvement... all on advice taken from you.
“We feel like you all are our own cheer leading team, rooting us on and encouraging us to keep moving forward.”
Now, their tires to service ratio is around 70/30.
At one meeting, Kristin used their experience as their best idea submission: “Listen to our 20 Group.”
Pat Brown is a Dealer Strategic Planning Inc. (DSP) 20 Group facilitator. Modern Tire Dealer parent company Bobit Business Media (BBM) acquired DSP from its owner and founder, Norman Gaither, in January 2016. Formed in 2007, DSP launched the first 20 Group established specifically for the retail tire and service industry. DSP offers tire and automotive service dealers the opportunity to share best practices, benchmark against the industry, and improve their financial performance. From its initial startup with one group and 20 members, DSP has grown the business to seven groups, and currently has more than 100 independent tire dealers as members. For more information, see www.dsp-20group.com or contact Brown at (419) 420-5915 or email@example.com.
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