#216 - Business Development On A Shoestring Budget w/ Russell Moore

You are listening to the Independent Dealer.

Podcast with hosts Luke Godwin and Jeff Watson.

Hello and welcome to the Independent Dealer Podcast brought to you by Buckeye Dealership Consulting. Today we have our good friend Mr. Russell Moore with us all the way down in Conroe, Texas. He's going to join us today and talk about his upcoming education session at Buy Here, Pay here, United.

Yeah, he's great. I'll tell you, Russell, Russell and I got off to a little rocky start, if anybody's ever met Russell. Russell's very opinionated, and, you know, I'm not. I'm not opinionated at all. So we clashed a little bit. But I tell you, we've become fast friends and it's great to have Russell with us today. Introduce yourself, Russell.

Thanks, guys. Thanks for having me on. So I'm Russell Moore with Top Notch Used Cars in Conroe, Texas. We. My town's about 100,000 people. We have. I started in the business in 2013, so I'm the new guy in the. In the car business. But I took it upon myself to learn all I could in this. In this business, in this space. I wanted to do everything that I could to educate myself to get there as quickly as I've always been in business and I've been in my family business. We were in the building business prior to this. So I've been in that all my, all my life with my family. So once I started in the car space, I decided that I was going all in. And So I joined 20 groups. I joined everything that I could possibly do to learn this business. In my trade. I tell people all the time, you need to seek knowledge if you're going to try to. If you're going to try to expand in it, if you're going to try to grow in it and try to do that. So I'm currently a Tiada board member for the great state of Texas, and it's still a 20 group member to this day. So, you know, I just, I try to do the right things.

Well, Russell, let's back up a little bit. How in the world do you go from building, from a building business to the car business? Cause they are two totally different worlds. But I think, you know, actually Steven Watson did the same thing. Did he, Jeff?

I think so, yeah.

Company is what he had. I think they did commercial construction is what's. What he did. So my transition was pretty simple. My dad has started the business back in 56. As far as the building business, my brother and I took that over in 98 or so, and we ran with it. And as typical, you know, I still love my brother and we still get along great. I just wanted to go a different direction, and I figured it was easier for me to do something that I really loved. I love cars. I've raced them for 20 years. I've done circle track. Luke, you and I talked about that. You know, I've done everything with cars. I rebuild cars to this day. Old cars. My current project is a 69C 10 and a. And a 72 Blazer. So those are. I still love the cars. I love that line. Out of gone in 60 seconds. You know, the. He said there, I love the Marina blue to Catalina yellow and. And all. I mean, the allure of the cars. I just have always loved them. It's just something that. It was a natural fit. I should have done it years ago.

You know, I love cars, but I've begun to hate them. The more.

You turn your hobby into a job, and then it becomes, I.

Just hate cruisers as the ones that I hate.

Oh, come on. So, Russell, so tell us this, then. Give us a little more context before we jump into some of the information from what you're going to be teaching us at Buy Here, Pay Here, United. What? So when you decided to get into the car business, are you retail? Are you Buy Here, Pay here? I mean, how did you give us some of the nuts and bolts of what you wanted to do? What business model did you set up? And when you jumped all in with education, where did that take you?

Well, luckily, I got hooked up with a guy who recently passed away, good friend of mine. And he taught me. I asked the questions when I first started. I said, can I make a living in. In the car business and be honest? I mean, so that's, you know, because I knew so many shady dealers, like all of us do.

Yeah.

And I just. I couldn't do that. I had to do it the right way. And luckily, I got hooked up with a guy that was honest, and he showed me the way to do it on a smaller scale. And then I started ramping it up from there. I, you know, I knew I wanted to do Buy Here, Pay here because I knew that's where the money was. I knew a bunch of franchise guys. I knew all of that, but I just knew that Buy Here, Pay Here space was where and where the money was, and that's. That's what I was chasing at the time.

Well, that's, you know, it seems like buy Here, Pay here in Texas is kind of like cattle In Texas, it's everywhere, right?

Yeah.

And it seems to be a very good market. Is that. I mean, did you see. Did you know. I guess. Did you know consumers that were buying cars from buy here, pay here dealers? I mean, how do you. How do you know from being in business, from building business that you want to go directly to buy here, pay here? It seems like a lot of people just end up wanting to be in the business, and all of a sudden they realize they can't get the financing. They won't. They end up in the buy here, pay here space.

Oh, it was horrible the first year. I mean, I. What I started out, I started out part time, so I was still in the building business and the buy here, pay your business. So I have my lot right next to my other business. And so I'm sitting there walking back and forth during the day, and whenever I'm looking at that, looking back now, I'm sitting there going, my God, how did I do that? And I had another guy in town that tell me, he said, look, you either need to get in the car business or get out of the car business. You can't do it part time. And I applaud him for telling me that because that really helped me, help guide me, and I listened to him and I did it. Now flash forward six months later. It was a horrible thing because we're sitting there burning through cash, right? I mean, that was the one thing that. I mean, I'm selling my. My personal Jeep, my personal cars. I'm trying to sell all that so I can, you know, fund it. We wound up. What saved me was we had another business, the family business had, and we sold that. And that was my big seed money that carried me on for the next year to get me to the next step where Primalyn came on board and really helped me grow from that point.

It seems like that, Russell, and maybe you can correct me, but when you say you were burning through cash, was it burning through cash because you were doing so many loans or because you were eating yourself with overhead?

It wasn't overhead. It was. I was doing the loans. I wasn't over. I was only selling four to. Four to eight cars a month. But at the time, I didn't have the cash to do that. I mean, that was, you know, you're. You're talking, you know, four or $5,000 per car. And as we all know, I didn't make a dime on them things that they left off the lot, you know, so I'm not making enough going forward. So, yeah, that's why I was burning through cash.

That, to me, seems like more of the story of early startup. Early Buy Here, Pay Here is going out of business. It's not that you can't get the business. It's that you, you bankrupt yourself through cash flow because you don't. You don't appreciate the amount of cash it takes to even have your doors open. And in Texas, you open your doors and you're a successful Buy Here, Pay Here. I mean, that's like one thing that survives there is like Tex Mex and friggin Buy Here, Pay Here stores just thrive the second you put here.

It does if you have the cash to surv. And that's the main thing that I just can't. You know, I've heard both of you guys answer, you know, question. I said, well, how much money does it take? As much as you got. I mean, all of it. You know, that's. That's what it takes. And so, you know, I've heard y' all say $2 million, the magic number. And I couldn't say that that's wrong. I say that it's 2 million plus.

I think it's changed in the last 12 months.

Yeah, exactly.

So, Russell, let's talk about real quick. You. When did you start your reinsurance company?

I started reinsurance about four years ago. Okay, that was good decision.

Bad decision.

That was. It was an amazing decision. I should have started it two years before that. But it's so funny because I look back and go, I thought, whenever somebody pitched it to me, I thought that was the most hokey thing in the world. How am I going? I'm not a drug dealer. I'm not doing offshore accounts. That ain't what I do. And, man, I was so wrong. I should have done it, you know, a long time before that. For sure. That is an amazing deal.

I tell you, that's the one thing, you know, you guys out in Texas, y' all talk about cpi. Do you do CPI with Buckeye?

I do. I do cpi. I do. I do every. Pretty much every product they do, they have.

You know, what's, what's funny is, is I kept hearing about cpi, cpi, Texas. I'm not doing it. I'm not doing it. And, you know, we just started about a month or so ago. And I go, why the heck did it take me so long?

Exactly.

You know, so it's. It's always. It's always you don't know what you don't know until you don't know it and, and, and it's, it's such a buy here. Pay here opens up so many opportunities for dealers to make money. And, you know, with reinsurance, you can definitely expand that horizon, that margin. And it looks like, you know, four years ago, when you just started me, you were what, seven years in business when you started yours, Right? So, yeah, so, like me, we were in business almost 25 years before we did it. And we've been, we've, we've got, we've got reinsurance for, for 11 years now. But the growth in. And money we've set aside, because that is just, it's created. It's crazy. It put us on a different playing field than when, you know, if we hadn't done it.

And you look at all the other dealers that are in town, I know all the dealers. I know who they are. I don't know them personally, a lot of them, but I know they're not doing reinsurance. And so whenever I see. And I tell every one of them to do it, because that doesn't affect me one bit. But what it does for me is it allows me. I tell people all the time, find reasons to say yes. And what the reinsurance does for me with my warranties, with my service contracts, and for all of those things that Buckeye provides for me and has put out there, that allows me to say yes to my customers. And as you all know, they're going to come in and if they're yelling and screaming and I just go, we'll fix it and pull it around back, and that's. The conversation's over. It's done.

And you talked about when you, when you first started, you wanted to figure out how to not be one of those shady car dealers.

Yeah.

And this is, you know, like I said, it's saying yes. Right. Because, you know, honestly, taking care of your customers in the buy here, pay here business is the most important part of the buy here, pay here business.

Correct.

Because if you keep them riding, 98% of them are going to keep paying you no matter what. And so you, I mean, you got that so early, and so many people don't get that so early. And I think part of it is, is not enough cash, and part of it is they're just not those type of people. So, Russell, how did you balance in the early stages of your business, the amount of cash you had and taking care of customers and amount of business did you do? Because that. I dealt with that for, you know, for 10 years when I first started running my dad's business, and he dealt with it 10 years prior to that. How'd you get around all that?

Well, that was the hard part. I mean, you know, that's what I say about burning through cash. Well, I specifically remember, probably in the first six months, I had two cars blow up. I had no idea how I was going to pay for those, how that was going to work, how I was going to pay for those $4,000 motors. I just, you know, that was another car for me at that time. So I, you know, instead of buying a car, I would, you know, I fixed that, put that in the motor in there. Of course I'm buying used motors, trying to do the right thing like we always do. But at that point, I. That's how you burn through cash.

Yeah.

That's why people need to start reinsurance now instead of later on.

Yeah. Yeah. It definitely surprises me when people don't know. I visited a local dealer, Buddy, just the other day, and I brought that up, and he's like, what? And this guy's been in the business since I have. He's.

He's.

And he's like, what's reinsurance? And I was like, oh, my goodness.

Yeah.

This is why you need to come to buy here pay here United in April. This is why you need to be involved with education, because you've been operating for 15 years and you don't know what reinsurance is. You know how much money you have lost in taxes. You're still doing the right thing. You're still helping people out, but you're not saving yourself anything.

So both of you guys know dealers out there every day. So I have helped. I don't know how many dealers that I've helped with the reinsurance. I know two dealers specifically, and one of them, I think, one of Yalls old group member. But I told him I've been talking to him for three years, trying. He's got 1200 notes. And I was trying to get him to get reinsurance, and I finally talked him into doing it. And again, we were talking last night and I said, you know, I said, I'm glad I talked you into that. And he goes, oh, buddy, you don't understand how grateful I am that you did as well. I mean, he put a million dollars in the bank last year.

And that's. My dad never went to conventions. He never was in a 20 group. And he came from a Ford dealership. You know, you should. He knew these type of things anyway, and what he always tried to balance. And I just remember this so vividly is that when April 15th rolled around and he was having to figure out how he was going to pay his taxes and just the stress that that put him under and the amount of money he paid in taxes, which he, you know, he should have, he should have gotten a CPA a lot sooner. A real one, a car CPA should have done reinsurance so much sooner. You know, he should have structured deals a lot better. A lot sooner. You know, I just go, holy cow. If for some reason we could go back in time and start in 1985 the right way and learn all these things sooner, how much more money could we make? And that's, and I think that's what us being out here talking about these things. If we can set dealers up to do it the right way to start with, they don't get all the pain points that we had.

Right, right.

Right now.

So.

And the reason we do this is we all again, to transition. Russ, let's talk about what you're going to be educating us on down at Buy here Pay here United. For those of you that have not gotten signed up, there's still time. It's April 10th through the 12th. It's at the Bellagio. It's a $179 room rate or something. What is it? That's a resort fee. So it's like under 200 bucks. Like if you guys have tried to book travel in the last month, you know that $200 at the Bellagio is the last time you will ever get a $200 room unless it's a hojo. So if nothing else, book it. Just to have one final vacation before it becomes way too expensive for everybody.

Yeah. And Russell is speaking. Let's get this right. So I'm speaking at 9am on Tuesday at 12, and then Russell is speaking.

At 10am And Russell, what's your topic?

Business development on a shoestring budget.

All right, so what's that, what's that all about?

Well, you know, when, when they asked me and I said, you know, that would be a good topic because the way that they structured the buyer payer United was 100 level classes. 200, 300, 400. Kind of like college. Right. So, you know, when we're, we're trying to teach people, right. That's trying to be an educational. So we're trying to follow that path. So what is my, my section going to be a 100 level class? Yeah, probably is. But guess what? All of the dealers that come in there at a, at a 400 level, like say you guys, I think y' all could benefit from it because we all forget the things that we started out with 10 years ago. We forget the things that we did as, as new dealers when we didn't have money to, to come up with the little things that made a difference, that drove traffic into our businesses. So I feel like, you know, if we can get, get everybody reminded what got us going to begin with, right? I mean, the little things. I'll give you for an example, put a sign on your building, you know, that says you do financing. That's business development. Anything that you do that can make a strategic business decision, anything that helps increase revenue growth, any of that stuff is business development. Right? So we're trying to do the little things. Signs, reviews, anything like that is what is going to make your business better. So that's what we're going to try to talk about. And I think I've got a pretty good deal to go forward, so we'll see if it works.

I remember years ago we had a Best Idea 20 group session where it was something like, this is how. What can we do to develop, to do business development without really spending any money. And I'll never forget this one of a good friend of mine, Kevin, he came up with the idea of taking, going to local grocery stores and just asking if you could put your, you know, put a flyer in their break room promoting that you, that you finance cars and that if they said that they would get a percentage off the car, you know, if they bought an amount of business he got from that. Just that little simple thing that didn't cost him any money, just was mind, you know, mind blowing. And it's the little things that we all forget about. We worry about how much more money can we spend on auto trader, how much more money can we spend on car gurus or this or how much more money we can spend with SEO. But it's these little things that really move the needle, Russell. And, and that is where it's at for dealers. Just start out. And that's where we should go back to a lot of times on dealers who like us, have been in business forever.

Absolutely. I couldn't agree more. And that's what, you know, the things that I, you know, still remember and still do to this day. And whenever they asked me, I started writing all this stuff up and I'm going, I quit doing that a couple of years ago. Probably need to get back on that. So, I mean, that's the thing with like the 20 groups and all that stuff. It Reminds us that of the things that we need to, we know we should be doing.

Yeah. I was thinking that just the other day and I mentioned it here on a previous podcast, is that I don't have the community involvement like I used to. You know, when I was small, I would show up to every fair and every rodeo and every this and every that because it was cheap and easy for me, you know. And then I got to the point where I was too busy to do it and I didn't think my employees cared and I didn't want to be there on a Saturday and I stopped doing it. And I've noticed that at least my vibe is that my community word of mouth and involvement has definitely kind of fallen apart and lessened. And that is a wake up call for me to say you've got to stay true to the principles that got you to where you are now. You know, you can't be too big for your britches. You can't think that, oh, that's below me. I don't need to go to that street fair anymore or I don't need to do this. You know, I don't need to put donuts in the break room at the local factory like that's below me now. I just need to push more, you know, TV ads.

Russell, being in a, in a 100,000, you know, 100,000 population town or city that's depend on the state you're in. In Texas, that's a town. In Columbia, in South Carolina, that's a city. How can you stand out doing the things that Jeff's talking about, you know, what do you do to support your community in that size?

Well, the community aspect of it. I'm fortunate that my dad was mayor of Conroe for 13 years now. He's been out of office for quite some time. But I still know all the community leaders. I'm still involved with talking to city council members and all of those things. They, they were going to pass a couple of trying to get the flutter signs and everything, you know, just removed from everybody's businesses. And you know, I picked up the phone and I made a couple of phone calls to my friends that are in mayor at the time and had some discussions with those guys and showed them that look, that's, you know, we, we still use that kind of stuff. We still use banners, we still do those things. And, and, and that's my community involvement is trying to do that. I would love to be more involved. I'm trying to figure out what that is and what that looks like for, for top notch used cars to be involved. You know, there's a couple of things that always, you know, would like to do is, you know, the parades and things like that. Those are, those are always good. And that's what my old cars and stuff. We can take those and slap some top notch signs on and, and do those things to be involved with the community.

Russell, one thing I know that you're very passionate about and you just brought up is being involved in politics and things like that and, you know, associations. Can you just walk us through how you got involved with Tiada? And you and I have done some, you know, some behind the scenes things, trying to make sure NIADA is on the right path. You just kind of share your passion for that and, and what it looks like going forward.

Yeah, absolutely. So I guess I got to, I got to blame Jason Goswell. He's probably the one. You know, I've met Jeff Martin and he and I are friends, but I've never expressed interest to him that, that I want, he wants. And I didn't know how that worked right, because I'd never been on a board at that level. And, and so Jason was having a meeting with him one day and Jeff was like, man, I need to give me some more board members. And he, he came up with, he said, well, you need to call Russell. He said, he, you know, he'd probably be a perfect one. Well, you know, lo and behold, Jeff calls me the next day and came to town and we had a meeting and it went from there. And I said, yes. And, you know, those are the things that if you're involved with any kind of community event, whether it's Lions Club, whether it's Rotary Club, whatever, if you raise your hand, they're going to say yes, they're going to take you. Right?

So, you know, I know one organization that won't, because we've raised our hand.

We won't go there. We didn't raise our hand. We're all gathering, I think, you know, look, I truly believe that, you know, I'm the internal optimist about, you know, that like Nieda. I think some good came out of you and I raising our hands. You know, Boldman has, has included me in on, on the new bylaw. So we have made some, some headway and I truly believe that that was a grassroots effort from you and I standing up at the meeting last year. I, I truly believe that. I don't think that we were the complete driving force, but we dang sure got Them opened up and got the conversation started.

Yeah. And again, I go back to my experience yesterday when I went and visited about five or six or seven dealers here in town trying to rally their support for our Utah association. Right. Hey, guys, you need to be a part of the association. And they look at me like, what's that and why? And I'm like, what? I was like, you don't even know we have, you know, you know, there's lawmakers that are trying to pass laws that impact our business, right? Well, I don't know.

I just sell cars.

And I'm like, you know that they're trying to do things that aren't in our best interest. Right. Like, someone's got to defend this. Someone's got to stand up. So. So you're right. It's like, well, you know, maybe you make a little bit of noise in convention and it's not a direct change or a serious impact. But like you're saying, Russell, it does. You have to still say something. You have to still be there. Even if you think you can't fight a federal mandate for, you know, recall disclosures, like, you still need to be out there trying your best or what are you going to do? Just keep your head buried in the sand and try to sell cars until you can't sell cars anymore?

100%. And I will go one thing further is, you know, like the other day, cfpb, I saw this letter that they wrote out saying that the dealers were repossessing or let me rephrase that.

Stealing cars. Yeah.

So, you know, whenever I hear a government agency that is putting something like that out there, look, I'm not stealing a car. I'm not doing anything. If the customer is not paying, I may repossess their car. I would say one thing to Bob or nida. Why have I not seen a response to that? Well, they were responding to that.

They were too worried about who one of the NFL players talking about somebody call somebody a shady used car dealer and they're too worried about that, but not worried about this. It just makes no logical 100%.

Right. Brett Scott and Bob Boltman need to be be firing off letters to CFPB and talking to them right now. And I'm sure Brett and Bob are probably going to be sending me an email later on, but they still need to be involved in this conversation because I'm telling you right now, that is one thing that we cannot have going forward. I know we always play down to the lowest common denominator, which is those 10 dealers that are doing it wrong, and they're punishing the 95% of the of us that are doing it right. So why not let's go after those guys that are the 10% problem? Let's do them.

I agree. I've been. I've been an advocate of getting rid of bad dealers for a long time, and sometimes people shut me down and say, oh, you're limiting the. You're limiting the ability of people to. To get into business and to do business. But those people who do it wrong, they make it so much harder.

Such a ridiculous argument. Sure, let's drop the standard for doctors and dentists because we don't want to limit people's ability to be a doctor. So let's just lower the bar and let them all in.

I'm like, make the. Make the bond. Make the bond requirement higher. Make the education mandatory. Do all these things that you have to do in so many different, other different, you know, businesses, but no, let anybody be a car dealer.

So, you know, anyway. Exactly.

Yeah. To 2000 hours of training in my state to cut someone's hair, you know, Are you kidding me? And it's 16 hours to get your dealer license.

Yeah, exactly.

Well, this has been so great. We're looking forward to seeing you in Vegas in just a couple of weeks. So as a reminder to the audience, jump on, buy here, pay here, united.com. get signed up, get registered. It's the cheapest education you will get, probably for the rest of our lives. Things are never going to be the same again, so. And who doesn't want to be in Vegas in April?

It's going to be beautiful and so much so many dealers out there. There's going to be so much networking. We're going to be filming pretty much the whole time, Jeff. So it's going to be a lot of fun.

Can I add one more thing? You know, I'd like to say everybody thinks that, or a few people, I'm sure, think that this is just going to be a sales pitch for Buckeye. Guys, please do not think that. Go out there for the education. This is nothing. If you want to buy from Buckeye, that's fine. If you want to buy from one of the other providers, buy from them. But go here for the education because you got Brotherton Bonanno, you got all these guys that are going to be there, plus all the speakers, plus everybody. It's going to be a wonderful time.

Any. Any dealer, any buy here, pay here, dealer, that is a big dealer, will be there and they'll be speaking, and you need to be there to hear it.

For sure. 100% agree.

All right, Russ, thanks. We'll see in a few weeks.

Thanks, guys. I appreciate it. Y' all have a great day.

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