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Growth Opportunities: Four Tips for Multi-Store Operators

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"MSOs must learn to step back and remember that they are not in the tire business anymore," says McCarron. "They are in the people business. The people they manage are in the tire business."

This MTD exclusive was provided by Dennis McCarron, a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive industries.


There are many types of independent tire dealerships throughout North America. There’s “Big Busy,” which is a giant store with a giant daily car count. “Big Slow” is in the same enormous building as “Big Busy,” but has a smaller car count. Then there’s “Small Busy,” which is just a roller coaster ride of a ton of cars, with half being worked on outdoors because there’s just no room inside. And of course, you have “Small Slow,” which is a three-bay operation with single-digit car count. 


All of these types can be pretty interesting when they are owned by the same person — a multi-store operator (MSO.) It’s easy for an MSO to wonder why one outlet always seems busy, while another seems dead. (And you can’t assume that “Big Busy” is the store that makes the most profit. That’s not always the case.) 


Let’s look at things an MSO can do to improve his or her business: 


Build your teams strategically. First and foremost, if you own more than two stores, I hope you have figured out that you cannot be in three places at once. When you owned two stores, maybe you were able to manage this feat. But three stores? It’s not happening. 


MSOs must learn to step back and remember that they are not in the tire business anymore. They are in the people business. The people they manage are in the tire business.


Let’s say you’ve mastered the art of delegation by either hiring strong people around you or hiring a middle manager. Congratulations! That’s a very big step. If you have five stores or more, you will need to do both. 


Let me know if this sounds familiar. Your first store made a lot of money and you were happy. You thought you could double your money by buying a second store. But all you did was double your headaches and split your profits in half. You doubled your employee problems, property problems and customer problems. 


That’s because you tried to divide and conquer. You took your awesome team in one store and robbed them of half the talent to fill your second store. 


Instead of building your second store’s talent from scratch, you broke the mojo of the first store and created two new teams that now need to figure out how to work together. 


You don’t have to do that again. It’s OK to build a solid salesperson up to an assistant manager, promoting that person out when the time is right. Just don’t do it all at once. 


If you build a new store, build a new team. It will take a year or so to find the right crew, but don’t destroy what you have developed in the first team. 


Homogenize your point-of-sale systems — pronto. Don’t wait to let the dust settle. If you acquired a store that uses a different point-of-sale system, get a matching set as quickly as possible. 


Yes, this will cause some tension in the store that has to give up the point-of-sale system they love — and sometimes love to hate — but it’s a great opportunity to build some credit in the bank by off-setting it with something they like, such as LED lights in the store or a new break room table — whatever was on the team’s wish list when you bought the store. (You did have a meeting to ask for their input, right?) 


Hire a dedicated HR person or a third-party that can handle HR for you. With two stores and roughly 15 to 20 employees, you can handle hiring, onboarding, termination, other disciplinary actions and some employee disputes. With three stores, this becomes someone else’s full-time job. 


There are too many rules, laws and pitfalls for you, as an owner, to try to figure out what’s right, what’s wrong and what’s legal.


 If you do hire an HR professional, make sure they have several years in that field and are certified. You don’t always need to pay out for a top-of-the-line person. You need someone who is functional and willing to stay current. 


Sharpen your marketing. Aunt Julie’s kid’s friend who is getting a marketing degree might be fine for a single-store location that needs someone to keep Facebook and Instagram popping daily. A multi-location business needs to step it up a little and have coordinated marketing programs and campaigns. 


And finally, here’s some extra advice for you, the owner. Once you grow to three stores, you’re going to feel like employees fall into three categories: superstars, strong bench and seat warmers. 


Don’t be that owner who spends too much time on the bench warmers. Focus on getting the strong bench to become your next-generation superstars. Don’t ignore the superstars. Ask for their help in growing your bench. And don’t worry about the seat warmers. They will likely be just that and will hop from team to team. And that’s OK. 

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