Published in Automotive News Oct. 13, 2014
Auto dealer Mike Wood is living proof that the harder you work, the better your chances of getting ahead.
"I came from nothing," he reminds people, proudly recalling his small-town upbringing, working odd jobs to pay his way through life, the son of a West Virginia sawmill operator.
Through long hours and hands-on involvement in every corner of his business, from tending to his service department to driving cars back from auctions, Wood, 49, has rapidly built a group of four dealerships in seven years -- two Kia stores in West Virginia, a Toyota dealership in Pennsylvania and most recently a Ford store closer to home in Morgantown, W.Va.
He has more growth plans. But first he says he is learning to master a new business skill: letting go.
"I've been on top of every decision we've made in these stores," he says. "And I've got to acknowledge that I can't do that anymore. I'm going to have to let my managers make their own decisions. And sometimes, it just drives me crazy. I'll be on the verge of asking, 'Why are you doing it that way?' But I can't."
Delegating is a business skill that eludes some retailers -- even those who have been around years longer than Wood, who opened his first store in 2007. Business consultants warn that micromanaging staffs can be unproductive -- throwing out perfectly good plans just because "the boss says so" -- as well as harmful. More than a few dealership owners have seen talented managers quit in frustration when overruled by a store owner. And the bigger and more diversified a business gets, the less familiar with small details an owner is.
Wood gets it. He knows that to keep showing results and growing, he has to build a strong management structure that functions on its own. As much as he enjoys running a dealership day to day, he realizes that ongoing success requires him to rise to the next level.
But it's difficult. One recent early morning, on his way to a finance teleconference, he stopped at his Freedom Kia store in Westover before the sales staff was fully on duty. He found a customer who wanted a car, and Wood closed the deal. Then he went on to the finance call.
That might not be so common in the years ahead.
"Things are changing now," he says. "I'm still in every store every day. I walk through every customer lounge and service shop every day, shake every customer's hand and try to talk to every employee. It's real important that I'm visible. But I can't run it all.
"I've had to learn how to be a better dealer. Other things are coming into the picture. I've had to become better at reading financial statements. I go to board meetings now. I do pricing. And I'm engaged in politicking to make some of our growth plans possible."
He has elevated one of Freedom Kia's store managers to become operations manager over all four stores. He recently recruited a fixed-operations manager from North Carolina to stay on top of parts and service at all of his manufacturers.
He has hired a CFO to oversee all stores. Each of the four dealerships used to have separate accounting. Two now have combined accounting, and all four will soon.
Wood also is creating a business development center to service all four stores.
In the past, Wood was general manager of all of his stores. Each store will now have a general manager. He also has designated one person to take charge of all employee training.
The retail business has grown so fast that it never had an employee handbook. Wood never saw the need.
"I was always right there to answer anything you wanted to ask about," he says. "Now I've got 180 people stopping me to ask 'Hey, Mike' questions, so we're putting an employee handbook together."
All of which has left the self-made dealer a little bemused when he remembers how things were just a few years ago, he says.
While working as a manager for auto groups in four states, Wood saved $450,000 toward his dream of owning a dealership someday.
After he talked Westover's previous Kia dealer into accepting that nest egg as a down payment and giving Wood a 12-month buy-out arrangement, Wood worked six days a week, often until the late hours of night, enlisting his wife to help turn around a store that had been losing $25,000 a month and barely selling 17 vehicles a month.
Within a year, he was selling 70 vehicles a month on his way to about $40 million a year in sales and an 8 percent profit margin.
"I've always run a very lean operation," Wood says. "At that Kia store, we were doing $40 million a year, and the owner, general manager and sales manager was me. And the janitor, greeter and file person was my wife. Our office manager also does payables, receivables and posts deals. And the receptionist is also our title clerk."
'Some great advice'
Before expanding into his second Kia store, in Clarksburg, Wood sought the advice of another West Virginia dealer, Larry LaFon, owner of Advantage Toyota in Barboursville.
"He gave me some great advice. He said, 'If you add a store, you're going to go from 100 percent efficiency to 80 percent. And then if you add another one, you'll go to 70 percent. Every time you add a store, you're going to lose a little more efficiency. You just have to accept it.'
"He said, 'There's only one you, and you have to focus on what only you can do. And let go of the other stuff or it will drive you crazy.'"
Every year has meant more hands-on work. Last year, Wood acquired an underperforming Toyota dealership across the state line in Uniontown, Pa. He arrived on Day One to have all of his salespeople walk out, most of them before he had even met them. An employee who stayed told him that the staff had heard Wood was a tyrant who intended to work them long hours, six days a week.
In the days before winning back some of them, Wood and two other staffers ran the sales floor by themselves. Wood went into the street offering $500 signing bonuses for people who would work there.
This year, salespeople also walked out as Wood prepared to take over Superior Ford in Morgantown and rename it Freedom Ford. He again tried to reassure them and bring back some of them.
He can show them his results: All four of his stores are now profitable, netting between 5 and 9 percent of sales.
"I am adding layers of people -- not removing people," he says. "I'm also adding to our operations."
Soon, he plans to open a quick-service operation near one of the Kia stores, and build a car wash at the Toyota store to give all customer vehicles a wash after service.
In the next 12 months, he plans to spend about $5 million to build a new store for the Toyota franchise. And the year after that, he plans to spend $10 million to construct a new store for Ford, and one for the Kia franchise in Westover.
He is also considering other dealership acquisitions.
"Begrudgingly, I'm giving up some control," he says. "I've always loved doing it all. I'm not afraid to do it all -- to mop floors, change oil, work the phones, close the deal, pick up cigarette butts in the parking lot.
"I love the grind of this work," Wood says. "But at some point, you've got to trust in the talented people around you."