#299 - How I Built This w/ Stan Sumrall

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 this week by Buckeye Dealership Consulting. We're going to air for you guys an interview that Luke did, at least here, Pay here. Summit 2023.

Yeah, it's really exciting. We, not you, because you decided not to come help me. Interviewed Stan Summerall. Very dynamic guy. He's Jeff. He's one of those stores you like. He gets into the business, does it the right way, everything's going great, he's crushing it, and then all of a sudden, somebody pulls the freaking rug out from under it. I mean, crash and burn, bankruptcy, really, no fault of his own. Just. Just situation. And then. Then he went with CAC for a long time and started working with them and help build their program and. And. And then decided it was time to get back in it. And, man, he has really, really crushed it. I think at the time we recorded this about a month ago, he had $88 million in receivables or something to that effect.

That's wild. Yeah. So listen to the episode, guys. It's really cool. You'll hear some of his experience and Luke interviewing. My three major takeaways were the first one. Luke gives me some great props, even though I wasn't there. I appreciate you, you know, building me up. Secondly, that guy's been through a lot, man. He has been kicked and. And gotten back up. And he loves the phrase at the end of the day. So count how many times you hear him say at the end of the day.

Can we take shots while we're doing that? Yeah.

All right, guys, here it is.

So I'm Luke Godwin, co host of the Independent Dealer Podcast, and many of y' all listen, which is astonishing to me. Jeff Watson and I started out five years ago to help dealers, and it was really Jeff Watson's idea, and I was just someone who didn't turn him down. And here we are five years later, and Jeff's too important to be here today, and he doesn't send his regards, and I'm sorry for that. His wife made him go on vacation, and so he's about 45 minutes north of here. And he did ask earlier today if anybody asked about him, and I told him no.

Yes.

So we do a little segment on the Independent Dealer Podcast called How I Built this. And some of y' all may be. May know. Guy Raz does one How I Built this. And he's had some of the most amazing innovators on this podcast. And so we set out to say, okay, what dealers have we or do we want to meet that really embody how I built this? And some of the dealers are in this room. Dan Grosvenor did one with us. Nick Marcosian. And I really encourage you to go back if you not heard those and listen to them. It's inspiring. The one thing you find out is that even the dealers who do it the right way and have really grown and that are amazing. It didn't happen overnight. And they had failures, too. We all have failures. No matter how good we are in business, if you don't listen to these failures, you're doomed to repeat those failures. So today we have a special guest, if not the largest lease here, pay here dealer in the country, one of them. I know nothing about lease here, pay here, so I'm not going to help you with this. I do know that y' all do, and I find it so interesting. I know buy here, pay here. Stan knows buy here, pay here, and he changed it to lease here, pay here. He did it for a reason. So without further ado, Stan, thanks for being here. Welcome and introduce them, the audience, to who you are, your beginnings. And then we're going to get into a bunch of questions. And we only have an hour. And I've heard that you like to talk a lot.

Obviously.

I don't like to talk a lot.

Really.

So here we go. Stan, who are you?

Yeah, well, let me start from the beginning. You know, obviously, I'm Stan Sumrall, born and raised in Mississippi. Born in 1966, by the way. That's a long time ago. But. But at the end of the day, you know, got out of school, had a choice to, you know, get married or go to school, you know, go to college and stuff. So I chose, you know, well, I'm going to get married. Well, then how are you going to feed the family? So I ended up deciding I'd go in the military and join 82nd Airborne. Went in the military for a few years, jumping out of planes, and then got back home, and then very quickly, because we only got an hour. So I'm trying to speed through this, so I'm giving you the fast version. But once I got out of the military, got back home and everything, and then I'm like, okay, well, how am I going to feed the two kids that I have? Well, one and one on the way, and. And then we've seen an ad in the paper, and lo and behold, it was a sales position at a Toyota Store and went into car business. And that's kind of where we started.

And what's funny is he didn't realize when he joined the 81st, 82nd Airborne, 82nd Airborne Division that he would do something that would help him for the rest of his life in the car business, and that is jumping out of planes. I thought that was a lot funnier. It didn't land as funny as I thought it was gonna land, but, I mean, that's what we do every day. Oh, yeah, we jump out of planes, we fight fires. And I'm. I mean, the amount of, you know, you didn't know it at the time, but the amount of knowledge that you gathered from being in the military and organization of the military, how did that affect the way you. You open your business and run your business today? Was there any correlation?

Well, there's an absolute direct correlation and everything. A lot of it had to do with my upbringing, but a lot of it had to do with the military structure of the military and everything, too, and leadership and went through the ranks real fast, jump master qualified, all of this type stuff. But at the end of the day is lead from the front, not from the rear, you know, and the way I always led the guys underneath me and everything is follow me. All I want you to do is duplicate what I do. I'll never ask you to do anything that I1 haven't done already or will do today, you know, all I ask you to do is just follow me, you know, and that's kind of how we did it.

There's so many of us that we get to a certain point in our dealership, and we don't bend over to pick up the piece of trash in the lot. Right?

Right.

And we go, hey, can you go pick up that trash? But real leaders pick up the trash. Right?

Right.

Yeah. And the military really shows us the way to do that. How many of y' all out there? Because I want to try to make this a little interactive. How many of you out there? And we do have a franchise dealer. I think one or two franchise dealers in the audience now. Who else have worked in franchise dealers in this room? There's got to be more than one. Come on, raise your hand. Not as many as I thought. Right. My dad was franchise. My grandfather was a franchise for dealer. My dad worked in franchise dealers until 38 years ago, until he opened our store. You said you answered an ad for Toyota sales position.

Right.

How long were your salesman?

Well, we started October of 87 in. In the car business and everything. And sales in a month, just about every month, the entire time I was there and, and then moved through the ranks and stuff and went to F and I school, all of that stuff up until 96 is when we opened our first door. But prior to that, I actually come out of sales because I wanted to learn the process in the service department. So I went into the service department to learn the actual process and pricing and structure and all of this stuff at the backside of the service department because I knew I was going to need it when we opened our own store. I didn't want other shops being able to take advantage of me and basically, let's call it, just rip my head off on pricing and stuff. That I needed to better understand that I knew how to do a bunch of the work myself, but I didn't know how they priced it and the markups and the margins and all of this type stuff. So once I got that knowledge, then I transitioned, opened my first store in 96.

I think one of the things I'm lacking in my career of automotive is the service side of the new car. Service side. I think it's so important for us to understand that I've built a service apartment from scratch and I have made massive mistakes because I didn't understand it right. How did all those positions help you structure your businesses? When you opened the positions, you worked in the franchise stores. How did it, how did you take that and mold it into the. To the first dealerships you had?

Well, the first store that I had and everything was just one independent small store and everything. And you know, like a lot of us didn't have a lot of money and didn't know we didn't have floor plans back then. So it was hard to get money. Thought I would just go down to the bank and get the money. Obviously that didn't work. And actually we had a choice. And I'm going to pivot to this just a little bit because it kind of set the stage of how we got there is we got approved for a loan to build our first house, you know, and then it was either okay, we'll build a house or build a business. You know, which way do we want to do it? Because we're approved of that. And I talked to the banker and he said, you can use it either way you qualify for that amount of money. And so we already owned a small lot and everything. So we took that lot, we started building. We actually, you know, we worked on the weekends and nights, still working at the dealership as a service Advisor and everything and working on it on the weekends. And we finished the building and everything else. And then we realized, oh, heck, how are we going to get any cars? You know, we don't have a floor plan. You know, we got a building now we got to pay a note on and no house for my wife. So we're really in a buy now. At least I was, you know, and. But at the end of the day is, you know, call my grandmother, you know, I'm like, you know, can I borrow any money? You know, we need to start the business and stuff. And she said, well, I got some CDs coming due and everything or, you know, maturing and stuff. She said, I think it's around 15 grand everything. You can have all of that, you know, and do what you can. So we took that 15 grand, realized real quick. I didn't buy many, you know, wouldn't buy anything today, but it bought a few back then and stuff. So as we were working through it and trying to start and everything, and then we went to the stores that I worked for, said, we need inventory. You're wholesaling all of this inventory, you know, give me a first shot at it. So two of the owners, two of the stores and everything, they said, look, everything that we've got title delay on, we'll allow you to have. If the title comes in Monday or comes in Friday, you got to pay me by Friday. And then I'm talking to wholesalers and like, okay, well, if that title comes in and I can't sell it, will you buy it? Oh, yeah, that'll be okay. And so, I mean, we're in panic mode at this point. So we started getting their cars and we started moving and growing and expanding and all of this kind of stuff.

You know, being creative when it comes to inventory sourcing, we talked about earlier getting cash, going to friends, going to family. All these things help you grow. And it's hard sometimes. Oh yeah. You know, the one thing when you. We did a pre interview and I was just listening, I was thinking, talk about the sacrifice it takes of you, your wife, your family to put a house on hold, to take your personal wants and put them aside to start a business. Some people today don't understand that you have to do that. I mean, a lot of kids today don't understand that sometimes you have to not buy that Porsche and wait a little bit. Right? How did you understand that? Because that is really advanced thinking.

Well, it boils down to that nothing comes without sacrifice. Nothing. So at the end of the day, you know, my wife was loan closer for a mortgage company and everything. And we knew that she had enough income for us to barely skim by. We had one vehicle is all we had, you know, that we shared. And at the end of the day, we lived off of her income by herself. I didn't take any income out of the business for two years because we had to build cash. We had to keep every dime of it in. And I did the paint work, you know, because we built a makeshift paint booth off the back of it. So I'd actually fix the body work and do the paint work on the weekends, pull the transmissions, you know, and swap them. I do not know how to build a transmission, by the way, still to this day, but I can build a motor if I have to. But I choose not to get my hands dirty anymore. But at this point. But at the end of the day, we did all of that and it was seven days a week, nonstop in and around church because we didn't miss church. But outside of that, I mean, we lived and breathed and poured everything into that business to build a livelihood for our families and build a livelihood.

You did. I was floored at the amount of businesses, lots, everything that you grew to up until about 2008. We got a lot here, y'. All. I mean, you can start writing them down. Cause I was writing them down and I could not keep up with as fast as he was talking. So he came to me, they said, well, you had to have three lots. I actually had six in all these businesses. Name the businesses you had prior to 08.

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We had six independent stores, the Hyundai dealership. We had a daily auto transport. We had nine big rigs hauling cars all over the country. We had two truck accessory, custom wheel stores, extreme conversion, everything. We had a farm center and we had two paint shops.

Y' all get all that?

From 1996 till we bought the Hyundai dealership in 2000, we had went with a $15,000 borrowed from my grandmother to six independent stores, the franchise store, nine big rigs for our transport company, hauling cars, two truck accessory custom wheel stores, and two paint shops in a farm center.

That is, that's something else.

I, I mean, I wouldn't advise any of you to try that though. No, I promise you.

No, that's either gray hair.

I'm just telling you.

He's actually like 30 years old.

Yeah, I was 100 years ago.

So, you know, we, we went through these and Everybody in here understands 08. I read something the other day, it said 08. And, and while you're living through 08, I didn't understand this. You did at some point, but apparently it's the largest turndown, financial turndown since the Great Depression. And I thought it was the greatest thing ever because I could buy any car I wanted to buy here, pay here business was wonderful, we were crushing it. But people in the retail business were not. And were you dabbling in the buy here pay here at that point? Were you in the buy here pay here? What were you doing? What were your dealerships looking like prior to 08 or prior to what you do now?

Well, let me give you a small setup to that conversation to that actual 08 downfall and everything prior to that. In 2001, obviously the twin towers got hit, all of the banks froze. Well, we had seven of our nine big rigs sitting behind our farm center at seventy something hundred dollars a month, sitting, just sitting, not earning any revenue because all the business stopped. If those that were in the business at that time know this, it completely stopped. And then, and then a little bit after that and everything. One of our rigs got in a bad accident. You know, it was a 18th accident out of 20 something accidents and everything in just a 24 hour period. There was a mismark construction zone, top of hill, on a bridge, nowhere to go kill some people. And four years later, lawsuit. You know, they had actually pierced the LLC and everything was coming after other businesses and everything else. And the only way to stop it was to BK. And so we filed bankruptcy. $7 million worth of equity in all the commercial real estate, all the businesses, all the revenue, everything just gone all in one move. So then we went, you know, went on vacation up to the Tennessee and everything and laying in hotel room trying to figure out what the heck we fixing to do to feed the family, start back over and everything. And then I get home and then Don Foss calls and says, get on a plane and come up here and talk to me. Because we were a large credit acceptance dealer at that time. We were one of the largest in the country and the highest volume per month.

So at that point, let's back up just a hair. I'm sorry. Let's frame this.

There's a lot.

Yeah, there's a lot going on here. So. 0102 is when your downfall started. And that's my fault. I was thinking.08. So you are a CAC dealer and Don Foss is the founder of cac. In case y' all out there don't understand that. One of the most inventive people in our industry really and truly.

Innovator.

Innovator. He passed away last year, the year before. And I mean, CAC's a big player, and that's what you were using, right? And pretty good life. But you had a. You had a business that sunk you. One business out of 12 that really took you under. And we talked about this. You lost everything. $7 million in equity gone.

I had literally 30 days after that. So I got the call when I was in church, and I can tell you literally thought I was having a stroke, sitting on the side of my bed and everything. I was 37 years old at that time. And 30 days later, my chin starts turning gray. Now it's just white. But either way, a lot of stress, a lot of problems. My faith held me through it. I can say my own pastor looked me straight in the face and said, I don't understand how you're standing. People have committed suicide for much less. And I said, the thing that they don't understand, that I understand, it wasn't mine in the first place. I just got to use it for a period of time. And at the end of the day, you know, And I shared this with Terry yesterday. I said, between Genesis and Revelation, it says, it'll give you. The Lord will give you desires of your heart. There's nowhere in there that says it'll let you keep it. Nowhere between each cover. There's nowhere in there. And he could take all of it tomorrow, you know, but at the end of the day, I'm not Driving the bus anymore. You know, it wasn't me. It was opportunities and different things that the Lord allowed to put in our place, to move up that hill and everything as fast as we did. And we don't have time to go into them. I'll be happy to share some of them with you tonight. And it'll blow your mind how opportunities just landed in our lap and we expanded, but either way, we lost it all and then had to rebuild and stuff. And then Don Foss called and said, come up. And he wanted to actually create and start building and putting credit acceptance stores in all the markets that we weren't at. And I said, wrong answer. A bad idea. It's not going to work. I mean, he flew to my store and we sit in our Hyundai store and everything, him and Keith McCarthy Klusky every year for years. And we would just strategize about how to grow the business and how to get better at it and all of.

This stuff, how CAC can get better.

At what they're doing and how can you grow that company and stuff. And then when, you know, in the course and I went to work for them to try to help them, I said, well, I'll give you a year. And six years later, I was still there. But we helped them develop and work. But we were one of the first dealers, first six dealers. Because it was Don Fossa's stores, Keith McClusy, Anthony Underwood, and my store, the first ones. It was on the first computer program to be able to do the automated approvals, you know, caps 1.1 for Y', all that understand credit acceptance. And we blew up volume.

And that was after you got back in the business, or was that before we crashed? So before you crashed, you were one of six of their original CAC 1.0.

Right. We had it for 18 months before it was released to the rest of the dealers.

And so Don false calls you and says, hey, I know you're not in business anymore, obviously. Obviously you're not in business anymore, but I love you. I need you to. I need you to come help me.

Right?

And you said, yeah, I'll give you a year. Right? How did you end up there? Six years. Well, why did you. Why did you stay and why did you want to stay? And what did you learn during that period?

Well, we were building, you know, when we were in. I mean, we had. We had only had a few reps, you know, they wasn't doing that much business. They were trading at $34 a share, you know, their. Their BHAG goal was $100 a share and, you know, and how to get there. He knew I knew how to build businesses, you know, and grow them fast, you know, so how do you expand it? How do you do all this stuff? So we went in and we're doing strategic planning, meetings and marketing and all of these different things and in training and all of this stuff. And there was just so many things that were sort of dysfunctional on some of those. In a prime example is their training. You know, you'd spend all this money, go up there for five days, and they would tell you the what. They never explained how you do the business or why you should do the business. They just give you all the what they miss the key pieces of the puzzle that motivates anybody to make changes. And so we ended up, long story short, six years later, I handled everything west of Texas. I had Alabama, had both Dakotas, had Alabama, had Georgia, had the Carolinas, had over Florida and a few other states in that stint. And it was basically come in and train, hire directors, train them, teach inventory sourcing, and get them to understand the path to sell and the path and how to build this portfolio and everything. But, you know, we'd go to corporate and everything. And then, you know, what was everybody else doing? Everybody else was going out to eat or going to the bar or whatever it was. I went to the collector's department. I sit behind the scenes because I wanted to understand, just like I did in the service department, you know, before I got out of the other. I needed to understand how does the backside of the finance company work and how was it put together? How did you get the money? How did you fund the money, how did you create the performers and all of this stuff? I spent all my time behind the scenes, every visit that I made up there because I had full intentions of, had a vision of I'm opening back up and we're going to do buy here, pay here, and create and open a related finance company. But how do I raise the capital? The people that know that are behind those doors and credit acceptance that I work at. So every minute that I was in corporate, I was behind the scenes, you know, listening and having meetings and discussion with all of those.

That is, you knew the whole time when you were working there that it was, it was a bridge to going back into business.

I knew after probably six or eight months, after I got my head clear, that took a little minute.

Yeah, I can't imagine that the thought process of going, okay, you know, I failed at this One I felt first, right? Going and taking this job, I mean, it had to be. You had to just, you have to have amnesia almost at some point to say, okay, I'm ready to go again. When did that time come? When did you know it was ready? It was time.

Exactly. Where we're at today, I seen the market and I was even having a conversation with Don about it and everything. And I said, we're at the opportunity. How much money can you get and how much can they actually raise? You know, because we can't grow unless you got cash and got them convinced to actually do the market, to realign the markets in the entire country and redesign the actual pay plan that was focused on nothing but growth for the sales department and a three year plan to go from 34 reps to 150 reps and then bounced to 300. I think they're close to 500 reps now. But at the end of the day, you know, it took two years to argue in that, in every meeting to try to get them convinced because they kept viewing it as, oh, we're giving them a raise. Why would we give them extra money for not doing any more work? Well, we're going to take their market from this big to this big and they've got to still make a living in this hole. But ended up, you know, it worked, you know, and every quarter after that included to this day has been more profitable than the quarter before. I mean, and they exploded and they're trading close to $500 a share now. So, you know, but I knew that it was time because I seen the opportunity, the way the market that it was crashing, it was coming to the bottom and in no time. Better to get in the business, as you already know is when there's nobody buying, there's nobody selling. Create and function and serve a need in the market when the lenders are out of your space, not only for credit acceptance and get them to blow up on volume and everything else, but also for me. So I made the conscious choice and everything. Okay, well, we put money back in the bank, we've got our feet back under us and everything else. And so we started back up with 75 grand. Now I had a little bit extra there because I had, you know, stock in the company and everything else that I didn't want to let loose of yet. And we ended up, you know, cashing it all in. I should have kept it, by the way, but hindsight's always 20 20. But anyway, we started the store back up with one store. 75 grand.

And what year was that?

That was in 09.

In 09. And it was buy here, pay here, buy here, pay here with 75 grand.

We were using credit acceptance to do part of the deals to try to help cash flow and stuff and build in the buy here, pay here at the same time.

And for some of you young folks out there, if there are any out there, I might be the youngest person.

In the room, probably.

No, I'm just kidding. But $75,000 was a good bit of money back then to do buy here pay here, I'd probably equate it to maybe 200 grand. 250 now, maybe. But not enough to get crazy big, but enough to get going.

Yeah.

And so, so you, you were off to the races, right?

And.

You, you started growing businesses again, right? And I think you said you got to about 22 million as a buy here, pay here store. How many stores did you had it at that time?

Three.

Three. Yep. And. And that was in what year? 2015 or.

It took us probably four years, I'm guessing. You know, as you get my age, you start forgetting timelines.

How did you, how did you raise more capital during that time?

Hey, guys, it's that time of year again. It is tax time. And of course, our friends at Tax Tax Max, they are the place to go to to file taxes for your customers. If you're not familiar with the program, I definitely recommend you go back and listen to our previous episodes to really wrap your brain around what this program can do for your dealership.

Yeah, it's not just for the buy here pay your store either, Jeff. This is for retail dealers getting that extra down payment to make the deal work. And also for service facilities, if you have a service facility in your and your dealership, you can use this money to either pay down that debt or get some debts or get some repairs made. So I've got some buy in this year, Jeff. I'm gonna go full throttle at it and make a difference.

Yeah, that's. That's exciting news. Use the discount code VIP40. So if you use VIP40, that's our discount code to get you 40% off the VIP package, which is like the top of the line Tax Max situation. You gotta file a couple of returns to pay itself back, but it's definitely worth it. So VIP40. Taxmax.com.

Oh, it wasn't easy, you know, but I understood how to, how to put that stuff together and actually go out and, you know, actually propose and gain investors and everything. So we started Pitching it and pitching it and pitching it, pitching it. And we finally started getting some smaller investors and everything else and opened, you know, Southeast Auto Finance, which is our related finance company. And then we started growing even more and started cranking that dial even a little bit harder and stuff, and then got the bank lines after that. And we got 5 million with First Tennessee with our first line, because after we already had a bunch of buy here pay here on the books that we were shifting over. And so we had enough equity and enough cash flow and everything to carry it. And then it's all relationships and relationships that we even had in people that we met while I was with credit acceptance, you know, and teaching it all over the country and stuff.

That's so funny you say that, because I'm looking at dealers out here in this room, and many of you use, lease, or pay your capital, and that's why you're here. You're helping to develop that relationship. And you're getting to talk to Terry, the owner, to talk to Tim the CEO and all the staff. You're able to make those relationships.

Right?

They're. They're supremely valuable. Oh, yeah.

Oh, yeah.

You know, it's. That's super interesting. So we're about to. We're about to. To hit the pinnacle of buy here pay here. You got about 22 million.

Right.

And you decided that you're going to switch the lease here pay here.

Right.

Why?

Well, we had been looking just. Yeah, I'm going to try to bring this as quick you can.

Take your time, because this is release or pay here. We're here now, so.

Oh, yeah, we're.

I sped us through.

Yeah, we're in the key part. And what y' all really want to know is how do we get to where we're at in this piece of the puzzle? But at the end of the day, how do we create the relationship? How do we meet them? You know, in God honest truth, this. This is fixing to blow your mind. Is my daughter, my youngest daughter and everything. My caboose that's way behind my other two children. I've got nine grandkids now, but we had a caboose in the middle of all of this. But at the end of the day, she's deathly allergic. She got shellfish allergy. Every time we crossed the Florida border, we would end up in an emergency room. I mean, every trip. And she always wanted to go to Disney. So that being said, she's going on a youth trip with the church. Well, guess where it's at in Florida. We were already going to Tennessee to the Smokies, and she was going to the youth trip. And I said, you know, and we're already. I mean, we're actually left. I mean, we're going to the mountains and everything. And we just felt uneasy about it. It's like we're not letting her go to Florida and us not be close enough to get to her. Not going to happen. Get choked up a little bit. But that being said, we go to Florida. And I said, well, they're having a convention down there, you know, let's register and all this stuff. We'll just go to the convention. We'll stay north of Orlando to where we're close enough to her at night and everything, and we'll go to the convention, you know, and try to create some other relationships.

I think that was the national convention in 2018.

Yes.

At the only time they've had it there. In Orlando.

In Orlando. And so we had some relationships already there and everything. And we started looking for other opportunities and all this stuff. And not to tell you all the people we met, but the one we did meet and the one that we were chasing because we needed to better understand, because we knew the tax structures and all the stuff and all the benefits of doing lease and controlling our destiny and controlling our asset. We need it. Because we didn't want to go down through another downturn and not have control of our business. We met Terry and Tim and we sit and talk, you know, and we started making that transition, you know, to where we get the money. Well, it was them, you know, and understanding how to do it, you know, and it took us probably a year and a half because we had to get operating systems, we had to change processes. We had to do everything from scratch to try to understand and learn how do you structure these deals and how do you do all of that stuff. And then we kicked it off and everything's in the rear view mirror at that point.

That's just super amazing that. Just serendipitous that you were going to Tennessee, but you turned around and you go down there because you want to be near your daughter and you make this relationship.

So God did that, by the way. I didn't make sure everybody knows that for sure.

I get worried. Somebody said earlier today about, we know how maybe it was Tim. We know how hard it is to switch dmss. And I switched dmss and I've done it twice now. And one of them was just the same company just going to their new platform I never want to do that again, ever, ever.

Oh, it's a nightmare.

It's a nightmare. I mean, you went a little further past that. You switched a whole train of thought Again, I know nothing about leasing or payer, so I don't even. I wouldn't even want to begin to learn how to structure a lease here, pay here.

We took an exit.

I mean, you went, was it hard?

Oh, it was probably the most difficult thing you've ever seen because we had to not only change dmss, change the structure, change the advertising, change the sales pay plan, change the manager's pay plan, change the culture in the store of how to structure and how to do. And we started one store, our main store, the one I was sitting on and everything. So we slowly started moving. We didn't bring our second store until a year later because we wanted to make sure that we had our hands wrapped around it tight enough. And the one I sit on and to where I could touch it every day before we allowed it. So the rest of them stayed doing with our related finance company and they were flipping over the lease. But we also had to get them to understand it and teach them the benefits to where they understood what and how much greater of an opportunity it was for the consumer versus what we were traditional business we were doing. And then once they finally, as I like to say, drank the Kool Aid and it was. And even our main store, it was probably a year and a half later. And I can remember it like I was yesterday. I come through and everything. And Gigi Main manages my main store and everything. And she says, you got a few minutes before you head out to the auction everything? I said, yes. She said, did you realize? I'm like, yeah, I've been telling you that for the last year and a half. I'm pretty sure I did, you know, and then she just keeps going through one statement after the other. Did you know? Did you know? Did you know? Why wouldn't they do this? And I'm like, no kidding? And we went from 30 some contracts in a month, and we consistently did. She did 123last night, last month on a third of an acre.

Wow.

And she's. And she's cranking those numbers every single month. So you can't duplicate that, by the way. I mean, it's just difficult for that small of a store to do that.

There's a lot of training out there for, for retail, buy here, pay here. There's a lot of training out there. There's significantly less training for Lease here, pay here. I mean, right? Did Tim and Terry teach you how to do this? I mean, how did you figure out the difference? And how did you figure out how the do pay plans how to do all this?

Well, some of it was trial and error, but a lot of it was them. A lot of it was Bill. I mean, you just keep going. Everybody in this room, you know, a bunch of the guys that were sitting up here speaking. That's how you learn. You listen to the guys that's been there and already trailed that, you know, blazed that trail and everything, and utilize. Not every model, not everything that these guys have been talking about will fit your individual store. You have to decide who you want to be and how do you get there. And then everybody here, every single person here, including the dealers that are sitting in this room, will do whatever it takes to help you. You just got to have a vision and a goal and lay it out.

That's so interesting that you and I don't want to lose this train of thought. Is Nick still in here, Joker?

I can't see. I got the light in there.

But he said something in our. In the breakout session, and he said I had to decide the dealer I wanted to be, right? And talk about that. How do you decide the dealer you want to be? Because I maybe I don't even know the dealer I want to be yet. And I've been doing this a long time, right? Where's that come from?

I think it's what market do you want to serve? You know, and we made a conscious decision is we wanted to be that person that changed the way. That's why we call new way, because we're doing things a new way, because we wanted to change the way the business is done in the individual market. We didn't want to take advantage of the underserved in our markets. We wanted to be able to get. Give them a hand up. And you can't do that doing traditional buy here, pay your business. It's a vicious cycle. You know, there's no warranty. They're buying them as is and oh yeah, you know, it broke down and everything. But they'll be back next tax season. They'll buy another one from us. You know, we didn't want to be that person. You know, we wanted to be able to give them and change their lives, which we want all of them because a bunch of them are just habitual credit problems that they just don't choose to ever pay anybody. But at the end of the day, there are that portion of the market and everything that truly is looking for an opportunity to stand up. And we're the ones that can do it. We're the ones that can change their life and elevate them to that next level where they can go to the credit union. And we made that conscious decision. That's what we wanted to do. We wanted to serve that particular piece of the market. We knew it was a hole and a need and we knew it was a need customer and a need purchase. You know, and I, and I've always said it and everything. I've had managers, even one a few months ago was arguing in our Alabama store and everything. It's like, you know, we've got a lot of customers want to come in and they credit union customer, we ought to do this, we're doing this. I said, ain't happening. And he said, well, we can make all this extra money. I said let the other dealer have it, I don't want their money. And I said, we're not changing what we're focused on. I said, we can't be all things to all people. You can't be a master of all things, figure out who you want to be to the market and just be the best at it. It's that simple.

Hey guys. Jeff, it might be tax time and you might need some money. I know I need some cash. I hit up the bank the other day. It's like, you got to feed me because we're growing, we need the cash and promolent is there to help if you, you know, if you need it. Because you're going to need it if you do it right. Right now.

Yeah, there is definitely a bigger appetite for the cost of cars. Obviously. You know, we talk about buy here, pay here kind of having its day, hopefully soon. And, and all the writings on the wall of some of the bigger lenders and banks and money guys tightening up and pulling back which is just pushing more people into our market. I've seen it. I had the largest month I've ever had last month in October. So as far as dollars amount loaned out, right. So I finally went over the half million dollar threshold in one month. And that, that puts a bit of a constraint on the all in the oil cash flow. So I'm definitely feeling it.

Yeah, I mean it's, it's time. Let's put the throttle down and let's call our buddies at Primaland because they're gonna, they're gonna help you in business, they're gonna help you look at your books, do it the right way. And they're also give you that cash to grow. I love that. I, my wife, if y', all, if y' all listen to podcasts, she, she tells me she's my, my brain really. She tells me what to do a lot. And so, but she, she told me this. A couple years ago, I decided I wanted to sell jacked up trucks because I thought that was going to be awesome. It's really awesome to build jacked up trucks, right? And selling them is a little difficult, especially when you're primarily buy here, pay here, right? So I end up selling jacked up trucks, buy here, pay here wise, because I couldn't, couldn't get rid of them, right? So I had to figure out a way to get rid of them. But, but she goes, well, you're trying to be too much. You're trying to be retail. You're trying to be buy here, pay here. I'm not saying you can't do it, but when you decide exactly what you want to do, it helps everybody. It helps you, it helps your employees because they know what you are too, right? You and I talked about a month ago, and at that point you had $77 million in receivables, and you currently have nine stores. And you told me last night you said, hey, I'm gonna give you an updated number tomorrow. So just a month ago you were at 77. Now you're at 85 million in receivables with nine stores and you're selling. Then you said 469 last month or 494. We sold last month, 494 cars. Wow, that's incredible. Did, did you go out and buy other dealers, businesses to get to this size, or is this all just organic growth?

Well, two things. One, we did buy stores out in Tampa and you know, to be able to make up some of that, you know, business that we had lost, you know, that we had sort of drained down because cars were too high. We wasn't willing to pay that extra money for all these cars because the risk was on me, not on the consumer. And so we brought it. We actually bled our portfolio off, you know, by probably 15, 1800 contracts, maybe a little bit more. And we had an opportunity to buy a store down or multiple location stores down in Tampa. And we bought those stores in February.

February of this year.

February of this year. So it gave us a little bit of shot in the arm and everything. And then where this growth has come from is what we've said all along and everything. The market is sort of like 08. It's on the bottom, and it's already starting to make that term. That's why I made the comment and everything about next year. It's not next year. It's right now. I mean, it's staring us in the face. I mean, we're living it right now. I mean, we're at. How many. Brad, was we months to date as of yesterday? All right. We're 193 months to date already this month.

Wow.

You know, prior to when that turn happened, and the prices of the cars come back in line to where we were actually push purchasing a large number of cars every week again to start feeding it and go back into growth mode and stuff. It was about the second week of July it started making that turn. I mean, I went from one auction to the next, and you could see that the prices drop and less dealers in the land had changed. And I said, it's here. You know, and we started cranking it as hard as we could and everything. And I think we were close to 400 or so, whatever that number was, that particular month. And we've been upper 400s ever since.

So we kind of skimmed over you buying those dealerships. Was it hard?

Man, I tell you, I wouldn't recommend anybody do what we did. I'm just telling you that was not a good idea. That was painful already in a painful market. That was not a smart decision. But we did it. And we've. You know, I think Tim had actually asked me one time and everything, well, how's it going? And stuff. And I said, you know, it's like trying to save the Titanic when it's already standing on its nose with a roll of duct tape, you know, and he says, no, really, how's it going? That's how it's going. And it's still sinking, you know, I said, you know, it was so far gone, it's hard to stop the bleeding as soon as you take over a failing store. And my wife's like, well, you should have knew it was failing. And I said, it wouldn't have been for sale if it wasn't failing. You know, of course, you know, you don't. I mean, rarely do they sell a successful business, you know, unless you overpay for it.

What? Why was it failing?

Mismanagement. I mean, I could go, we ain't got time to go into all the problems and everything, but I can tell you is just everything from fraud to employees stealing to the list just goes on and on and on. The owner got sick, hands off. And it was just an absolute disaster.

Are you gonna be able to fix it?

Oh, we're fixing it. I mean, we're starting to make the turn, and I think by January we should be back on our feet. But we've been bleeding money ever since, you know, but at the end of the day is we have fired nearly 100% of employees and started over. And if y' all know, it takes time, no different than in our own business. It takes time to not only train the staff, to get them to drink the Kool Aid, to where they understand how to start turning that volume. Another prime example is our Pearl Store. You know, the Pearl Store has been there for going on four years now. You know, so we went through a few managers and stuff. And then we're trying to push, trying to push, trying to push. And we're doing, you know, 18 to 20 something a month. And everything is fighting and fighting and fighting. And I was going to mention it early when they was talking about make the decision to close the store, not close the store. And I'm like, you know, it's just barely breaking even, you know, do we close? Do we not? Do we close? Do we not? And I said, we're just going to hold on because we're going to get the right team. We're going to get them to drink the Kool Aid, we're going to make that turn. They did 89 last month, you know, so in one salesperson done 55 of them by themselves. I mean, they drank the Kool Aid finally, you know, a few months ago, but they finally got there.

People in process is always correct.

People in process is all it is.

A friend of mine, he since passed, but he had three stores in North Carolina and one was in Goldsberg, and we were in 20 group together. He kept just. It's horrible, it's horrible, it's horrible. Right? And then he hired the right person.

Right.

And it just took off. I mean, it was his least overhead and his most profitable store, like almost immediately.

Right.

Do you have any plans to open any more stores? I mean, nine's a lot. And we heard earlier, I think Dan said he heard five was hard.

Try nine.

So which one was the worst, five or nine?

I don't. I don't think there. I think it's what capacity and what team and senior team you have in place to be able to handle it. We brought Tom on, you know, which was our lender at the bank for our other finance company. And he was VP with the bank and everything. And we finally got Tom on board with us. My son's come on board with us and stuff and getting some of the senior team prior to us doing some of the stuff that we knew was coming because it was setting the stage. But our next growth, not only in the stores and getting them up and doing what they're doing. Our goal is, and my goal is, is to get those nine stores on the ground well enough to outside of tax season, they're maintaining an average of over 500amonth and then during tax season breaking 1000amonth. And we'll easily get there. But at the end of the day, we have no intentions of opening any other brick and mortar mortar stores we've already created and built which a year and a half later we finally got it live is and it got the bugs worked out of how we want it with our online approval system and in our indirect leasing company is already sitting in place.

That's great.

So we're gonna, we're gonna. Because twofold one, we know we're gonna be able to gain a lot of momentum and everything with all the lenders and all the competitors and everything pulling out our space. But what does those dealers and markets that I don't have a story in need, they need a lender. So we're going to go in and do what I do best and train them and teach them how to buy inventory and how to structure and how to do these deals. And then we're taking the lease. They get the down payment, we're getting the contract.

That's a easier way to grow.

I'll let you know in about a year. I don't know yet. But I feel yes, we should be able to scale it tremendously faster, especially with the need of lending in the dealers for the dealers to stay in business in those smaller things.

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