Families, public groups make 1st generation dealers rare
If your last name isn't already on the sign in front of a car dealership, getting it there has become a tough goal to achieve.
That's not to say that starting and overseeing a multimillion-dollar business was ever easy, but first-generation dealers are an increasingly rare breed.
"Without having a dad in the business, one, you've got to be willing to work hard; and, two, you've got to get some breaks," says Jason Hachmeister, majority owner at Sterling Chevrolet in northwestern Illinois. "Thankfully, both happened for me."
Hachmeister was drawn into the business by a dealer he caddied for while attending school. Dealer Ed Bozarth persuaded him to abandon plans for medical school and attend law school instead.
After moving up the ladder at Bozarth's stores in Colorado and Kansas, Hachmeister branched out on his own, buying Sterling Chevrolet in 2007.
In the past, ambitious youngsters wanting to break into automotive retailing would start at the bottom and gradually work their way up to general manager, hoping eventually to buy out the owner or go off on their own when an automaker opened a new point. That scenario doesn't happen much anymore.
"The opportunity still exists, but it's harder today than it was 10 years ago," says Robert Glaser, president of the North Carolina Automobile Dealers Association. "I don't think the factories want that new guy to come in. They'd rather it sells to a consolidator, an AutoNation or whatever, than that young entrepreneur who's got a lot of fire in his belly but not necessarily a lot of money in his pocket."
These days, only a tiny percentage of the nation's dealerships go on the market in any given year, and many manufacturers are trying to shrink, not expand, their retail networks. When a store does come available, the cost now tends to be far out of reach for most people, so it usually gets gobbled up by one of the big dealership groups or a veteran dealer eager to expand.
Consequently, many aspiring dealers wind up on a path that culminates in a manager position for a large group, perhaps accompanied by a small equity stake, but with little possibility of becoming the actual dealer. For some, that may be enough. But it's not the trajectory that people with similar dreams could enjoy in the past, and it often takes considerably longer now for someone to reach the top, too.
Becker-Myers: Purchase opportunities are limited.
"I don't see a lot of people having the extra income right now to buy their own points," says Julie Becker-Myers, director of the automotive technology program at the Midland, Mich., campus of Northwood University, where many would-be dealers study the retail business. "We don't have a lot that are just sitting there that are feasible for people to buy."
Tatiana and Will Dyer overcame the monetary obstacle by getting each of their parents, who are entrepreneurs, to bankroll their purchase of an Ohio dealership. The couple sold that store after two years and used the proceeds, along with more help from their parents, to buy the Chevrolet and Mazda dealerships in Florida that they, along with Will's brother John, now run.
Tatiana Dyer, 27, credits their parents -- hers are immigrants who became involved in commercial real estate, and her father-in-law founded numerous companies -- with giving them far more than financial backing. "That's where we learned to be entrepreneurs," she says.
Without that type of assistance, many would-be dealers end up getting their big break through a relationship forged early in life, as Hachmeister did.
Jason Brickl, 39, a Northwood graduate, was a high school sophomore when Darlene Ballweg, a Chevrolet dealer in his Wisconsin hometown, hired him to work in her service department. When he was 26, she brought him back to be her general manager.
"There are opportunities for people to be able to do what I did, but they're not going to fall in your lap," says Brickl, now 39 and the CEO of the Ballweg Family of Dealerships. "The Ballweg family allowed me to come in and be a part of their organization. It started out as me not having family in the business, but now they are very much an extended family."
Hachmeister says he often is reminded how uncommon it is to get where he is without having followed the footsteps of his father or uncle. Many customers and vendors just assume Sterling Chevrolet is his family's business.
Says Hachmeister: "I just got asked where my dad was the other day by one of the auction drivers, and how long my dad had had the store."
Jesse Snyder contributed to this report
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