#65 - Brittany Hibdon - How They Built This

Hello, and welcome to this episode of the Independent Dealer Podcast, continuing our series on how you built this, how we built this, how they built this. Who built it, Luke?

Well, today, Brittany Hibdon built it, and she is so awesome. And I'm sure some of y' all seen her at conventions and all over the place, but one thing that she pointed out that is just blows my mind. Not blows my mind, but it's just. It's so right on. Is she talks about the best thing they've done is the culture they built at their dealership and how all the employees pull in the right direction. That is amazing. Everybody can learn from this episode. Sit back, relax, take your notebook, and start writing. Brittany's got a lot of stuff for us today.

Say hi, Brittany.

Hi, everybody.

Welcome to the Independent Dealer Podcast, the podcast for auto dealers to learn and grow together. Here are your hosts, Luke Godwin and Jeff Watson. Okay, Brittany, thank you so much for joining us. We really appreciate your time. First off, Brittany, give us maybe a little bit of a background. How did you get started in the automotive industry? Is it a family thing? Was it for fun? How did you get into it?

Well, yeah, I did grow up in the car business. My dad was a dealer. He used to have a Chevy store. Kind of grew up around it. When I was a senior in high school, I started answering the phones for him, and I would sit there when the sales guys were doing their training and kind of got sucked in. And I'd, like, sit there learning with them while they were watching their Joe Verde back in the day. And eventually one day I just asked my dad, I'm like, hey, can I just learn this stuff and sell cars instead of answer the phones? And he said, sure. So when I turned 18, I went and got my sales license and haven't really looked back since.

That's great. What size store was?

Was a Chevy, gmc, and Pontiac store. They are not in business anymore. Kind of got caught up in the GM bankruptcy thing in 2008, but it's just kind of in my blood. I love the car business. I've been selling cars since I was 18. And about nine years ago, my husband and I opened up our own independent lot.

So you were selling cars up until that point, like just at a sales store or at a store?

Yeah, yeah. So I pulled cards from my dad for a lot of years and then became an Internet manager when that was first kind of a thing in the early 2000s. And then when my dad store closed, I did a brief stint as a body shop. Manager, which was. That was really interesting. And it kind of helped me understand fix apps a lot better because we do have a service department. But then in, let's see, in 2010, my husband and I just both really missed the car business. He grew up in the car business too. That was actually how we met. His dad was also a Chevy dealer and we both just kind of missed it and decided, you know, who needs gm? Let's just open up our own store and do our own thing.

Was your husband and his dad's dealership in the same area or.

So a really, really funny story. So my father bought his Chevy store from my husband's father. This was back before we knew each other, and that was when we met.

Oh, great. That's awesome.

Yeah, yeah, yeah. So it's fun. We, we laugh, we say, you know, our kids are doomed. We've got the car business and bloodlines on both sides.

Very cool.

So in 2010, you guys decided to go out on your own and create your own used car lot. Husband, wife, team. How did it start? Was it you just brought a couple cars in? Did you do outside financing, cash deals? What was kind of your idea or business model at the time?

Well, we both grown up in the franchise world, so that was kind of, you know, all that we knew. So we started with a couple of sales guys, a couple of technicians, just real small. We had a few banks. Thankfully, with the connections that we'd had in our new card days, we were able to get signed up with one of our local credit unions right away and a couple of other local banks. Credit Acceptance was one of the major banks that we used a lot in those early years. We do still use them quite a bit. But yeah, we probably only had like three or four banks to work with when we first started.

That's a lot more than most. So you were. You're pretty much a prime retail all the time for the. I mean, forever.

Not really prime. We actually over the years have kind of settled into really being solutions providers and helping the subprime market. But we've never done buy Care paycare. So just from the get go, we had Credit Acceptance and then a couple of other subprime local banks that we use.

How did you start with? Where did the. Did you, did you buy a location, did you lease it? And then where did your flooring line come from? Did you self floor from yourself or did you go out and secure a line?

We did go out and secure a line. We really have the capital to do it ourselves. When we started we had to kind of start off on the not very cheap plan, you know, as a new store. But again, luckily I was really blessed because I had a lot of connections from all my years in the franchise world and a good friend of ours happened to be working for NextGear at the time, and I think kind of helped pull some strings and get us started with them.

So you, you still using next year at this point?

We do not as much as we used to. And of course over the years we've been able to negotiate a lot better, you know, rates and fees and stuff with them. But we left in the very beginning. I think we were on like the do not tell, don't ask, don't tell program because we didn't have any history or financials to show them. And so it was kind of, you know, high costs for higher risk. But over the years, we've built our business. We've been able to negotiate really good, good deals with them.

You ever tried to get at your local bank to help you out or four cars or anything like that?

Yeah, our local banks don't seem to be real interested in the flooring game. I don't know. Do you guys have any luck with that? I really haven't had much luck.

Well, it's funny, we were talking someone yesterday and they had had luck with it and maybe it's regional as well. I know that, you know, California, maybe some regulations or something might be bigger than different parts of the country.

Yeah, it could be. I kind of in the early days, talked to several of our local banks and every single one of them had no interest.

So how are they now? Yeah, go ahead, Go ahead, Luke.

I was just saying now. So from there, starting it with you and your husband. Fast forward 9, 10 years. Where do you guys sit now? What do you. What's your current makeup? Retail, prime credit, subprime credit, kind of units, employees.

So we have grown a lot. When we first started, we were servicing a few vehicles and selling like 10, 15 cars a month. We built it up to probably 2017, 2018, selling like 60 cars a month and clear through summer of this year, kind of maintaining that volume. Got a lot more people working here than we used to and carrying about 80 to 90 cars in stock. The last probably, I'd say 90 days. We're definitely seeing a little bit of a decline just kind of all over Northern California. I don't know if you guys are experiencing that there, but our volume has definitely been off. So we're working hard to try and get back on Track for our normal, which is usually about 60 cars a month.

Very cool. Most of that credit acceptance or is it kind of a mix of 5050 or anything like that?

It's a mix. We do about 70% subprime, but it's not all credit acceptance. You know, over the years I've added a lot more banks. So now we've got, we've got Doc still, but we've got Westlake, we've got Loco, we've got cps, we've got regional, some other banks that are willing to kind of play in that subprime world.

That's great. What? Just I know a lot of people, a lot of people out there interested in cac. Do you do pools or are you just doing money up front?

We're doing pools. We just closed our, I think it was 16th pool a couple months ago and we're about to close our 17th, hopefully by the end of this month.

That's great.

I would really recommend, you know, anybody that's looking at to do the pool option. There's a lot more money in the long run by going that route and we're at the point where now we get the monthly money every month as well.

I want to jump in there. I have that question because I actually just got an email back from the market area rep for my area and I think I was set up with CAC in the past and I fell out because we didn't do enough deals and have the right inventory makeup or whatever our situation was. But I think I'm being re established here in a couple of days. And so I definitely would like to know the difference between the pool program and the 100% upfront because I think we've had a gentleman on the podcast recently that talked about he does just the 100% upfront program and doesn't worry about the down the road profit sharing. What's your take on that?

You know, that was a harder decision for me to make in the beginning days because the idea of having all your money up front when you're just trying to get rolling and maybe you're not closing pools as fast. It is really. It's tempting and it's helpful to have that money up front. But the other program, the pool program, I really think it's a better long term strategy. There's a lot more money over time as you're participating in the collections that credit acceptance is making. And so I'm glad that we did it. It probably did make things a little bit tighter those first couple of years. To do it that way. But you'll still, in your initial advance, you still are getting enough that you know you can cover your costs on the vehicle, get your flooring paid off, if that's what you're doing, pay your people. You're just continuing to participate in more profit over time.

How long does it take for you to realize that profit down the road, Brittany, Is it almost immediate or is it a year out? What are you seeing?

Well, so with the pool program, every time that you close a pool of 100 deals, then you do get, I think they call it a profit express check, which is kind of a big chunk of money that they hand to you in kind of advance of their expectations of how that particular pool is going to perform. And I can't tell you how many times that that check, the 100 pools count, has shown up at like, just the right time. You know, payday, sales tax, you know, whatever is going on, that's been really great. But the monthly money, I'd have to go back and look, but it's a good couple of years after you close the pool before you start seeing that.

Okay, I'd always wondered that. I was wondering if it. So as soon as you close 100, you get a check, but then it may be a year or two out before you start getting that monthly money on that pool.

Right. I'm probably not the right person to explain the technicality on it, but it kind of has to do with when the receivables gets below a certain threshold and the collections are there, then they allow you to kind of start participating in that on a monthly basis. Once they've collected on enough of that.

Once their risk is totally minimized, then they start sharing the back end product. So now what about your employee makeup? How many people do you have there at the dealership? And maybe generally, where are their roles? When you're doing 50 to 60amonth, how many salesmen does that take? When you're doing a 50% subprime, 60% subprime, we've got.

We have four right now. We've had as many as five and as little as three. But then I've also got our finance manager that handles all of our funding that will jump out and take ups and kind of act in overflow capacity when needed. So it seems to work. That's about the right number for us. We also have a bdc, and that's part of why we're able to make it work with only three or four people. Because I've got a couple of girls in there that are making 200 phone calls a day, each person driving traffic to the showroom. So then my salespeople role is more just to help the people as they're arriving. So it makes it. Possibly do it with less salespeople, but also we have more people making calls.

Yeah, let's don't sleep on something. She just said. I think 200 phone calls a day. Wow.

Yep.

That's it. I mean, that. That's how you drive traffic to your store. And where those phone call, where those are. Is it cold calls? Is it internal leads? Is it calling customers and asking for referrals? What's going on in there?

Not cold calls. It's a combination of. We get a lot of leads from our website, we drive a lot of traffic to our website with, like, radio ads and Facebook stuff, that kind of thing. And then so we're calling those deletes from our website, which is, you know, an active person that needs our help and wants to know about our cars, that kind of thing. And then we also do a little bit of advertising on Facebook and on Google, you know, like, pay per click type stuff. And so we're calling those customers as well.

That's great.

That's.

And you have how many people making 200 phone calls a day.

Right now? Two. That's kind of varied between two and three, depending on lead volume. And lead volume has definitely been off a little bit the last couple of months, but. But we've got a massive database of all the leads from a lot of years, so there's an opportunity to, you know, kind of wake some of those back up and see who maybe is back in the market or ready for another car and that kind of thing.

That's what's so important with CRMs. And we, you know, I try to stress that enough. You got to mine your CRM, because that's where deals come from.

Yeah.

And it sounds like that's a big step in your process and what makes you successful. Let's talk about your dealership and how it's. Are you in a old store or is it something you built on your own? What does it look like?

No. So we are in the old store that my husband's family used to have their shoving dealership in. So it's about 70 years old, and, you know, the roof leaks somewhere new every year. And we've gotten really good. I laugh and say, we've gotten really good at playing a game of Tetris because we've got desks, you know, in every which way? And we fit a lot more people into this tiny building than it was originally designed for when it was built as a Chevy showroom in the 50s.

So you're saying you've outgrown.

Looks like maybe they left one of their impact printers, one of their Oki daddies there in the background. If anyone's watching us on the YouTube, she's also got a museum.

We actually still have to use them. Yeah, we still have to use them.

I bet. I bet.

That's so funny.

Oh, that's hilarious. So, Brittany, tell us this from that trip from going from 2010, when you built the dealership and you were doing 10 or 15, you and your husband, to where you are now, four salesmen, 60 cars, CAC many lenders. What did you learn? What was maybe one of the highlights or where do you think maybe a turning point for you was in that time period? Anything you can point to that would be like, hey, when we started doing this, that's when it really started rolling.

You know, I don't think there's any one magic wand, but it's just those, you know, small but calculated efforts day after day after day. I'm a pretty determined person and have, you know, big ambitions and just not one to let go. You know, for example, with the portfolio of lenders that we've built, I think I had to bug the Wells Fargo rep every week for about a year and a half before he finally gave our little independent store a chance. And so, you know, it's not any. Any one big special thing, but just a combination of a lot of effort and not giving up on stuff. I also think. Oh, go ahead.

No, go ahead.

I was gonna say, I also think just kind of making the conscious decision probably about five, six years ago that you have to spend money to make money, which was a really big, kind of tough call for me as a pretty frugal person to realize that, you know, just existing here is not going to draw people to us. But, you know, you got to have a calculated marketing plan. And we've had a lot of success over the years doing a lot of radio. As Facebook's become a thing, we're kind of shifting from some mass media more to the social world. Social media, but just always kind of putting our name out there, and me getting over myself and, you know, not caring anymore to be on the radio and put my faith over Facebook and that kind of thing.

Yeah, I mentioned that, I think, in a conversation we've had previously where you said it's a little weird at first, when the person recognizes you in the grocery store as the lady that wears the pickle costume on the ads or the lady on the radio, hey, you're that really annoying voice on the radio that comes on all the time, every 10 minutes.

So that.

Yes. Yeah, that is pretty funny. And kind of had to get to the point because I'm really in person, a pretty reserved, conservative person. And so having to realize that, you know, we can get outside of our own box and try new things and really just stop caring about what other people think was kind of a huge turning point, I guess, for me.

Yeah, I think a lot of several people we've had on the show talked about that, that the ones who have really capitalized on social media and in YouTube and places like that, it's getting out of your comfort zone and actually doing something you're. Your attitude as a person wouldn't necessarily let you do. And I think once we get past that point, it's amazing the results we get from it. So that's very interesting. You brought that up. What's the worst mistake y' all made as being a dealer?

Oh, boy. There's been several, you know, we will try different new things. I think we all kind of get caught up sometimes with the. The new shiny object. You know, you go to a trade show and you see something fun and spend money on something that doesn't work. We've tried sometimes kind of trying to be all things to all people instead of just recognizing that we have a niche and getting really good at it. And so a couple years ago I had to say, you know what, we got to look at the demographics in our area, we got to look at the banks that we have and recognize that we've built a really good reputation for helping people that need help. The people that, you know, have credit challenges or we're not very far away from one of the state colleges. So we help a lot of first time buyers, you know, kind of just recognizing that like our niche is to help people, that maybe the big new car stores won't help and not try to compete in that world of, you know, the best price and the latest and greatest vehicle, but instead do what we know and love and are good at.

It took me a long time to figure that out. And I think Alexa really stressed that to me was that, you know, what we are good at? Buy here, pay here. We need to quit worrying about everything else and do it. But that's so important that you said that. So what's the best thing you've done. We hear the worst. What's the best?

You know, I would have to say my team, the culture that we've built here. I've worked really, really hard to make sure that I've got every. Every person in the right seat is the right person. And there's a really awesome book called Traction that talks about that. And the last few years, we've just built a wonderful team, and they will step up and do whatever is needed whenever there's no such thing as that's not my job, or no, thanks, I don't want to do that. Just really got a fantastic group of people that love coming to work every day, love each other, and will fight for each other and fight for those deals every single day.

That's Jeff. It's so funny hearing the opposite of dealers that we've spoken to, because yesterday, I believe when we were interviewing someone, they said that the worst mistake they made was staffing. And that's the best thing you've made is staffing, which, honestly, if you have the right staff in place, everything else works out, right?

Yes. Yeah. For the most part, you know, I think that really is where it all starts. You know, if. If you got a group of people that don't enjoy what they're doing, customers are gonna walk in the showroom and they're gonna feel that, you know, it's like when I walk into the mall and, you know, you got a kid standing there with a bad attitude that obviously doesn't want to help you.

Yeah. And I think to that point, Brittany, I'm sure you probably say staffing, but you probably had to let some people go. Right. I think the mistake is when you hold on to those people too long and they don't feel fit your culture, that's a mistake. But for you, it sounds like you've probably got the people in the right seat, and some of those people don't get a seat anymore, I imagine.

Right. And that's definitely been a challenge, especially because we've created such a wonderful, you know, kind of family atmosphere with our culture here. As a leader, I have struggled with that before, you know, kind of giving people the benefit of the doubt for too long and, you know, thinking, well, you know, they're. They're gonna fit in. It's gonna work out. And I've started to learn in more recent years that those are the people. It's actually really important to get in or out quickly because they have, you know, an opportunity there to kind of ruin our existing culture. If they're not the right thing.

Yeah. That's so important. So you say you're in your. Your husband's family's old dealership. Did y' all purchase that or are y' all leasing it? What's going on there?

We lease it. We lease it from the family. Yeah.

Are there any things that I'd be interested in? And so many people think the grass is greener on the other side. Are there. Are there business restrictions being. I mean, Northern California is kind of its own state. Are there any issues you have being in a place like California, where we, from the outside might think that it's not super friendly to entrepreneurs or small businesses?

Yeah, that's an excellent question. And you. You asked, what's one of the things that we did wrong, opening a business in California?

No, but that's true. I mean, even people we've talked to, we ran into someone the other day. I'm trying to remember who it was, but they said, well, their big issue is that so many businesses are leaving California that they. They. They're losing. They're losing those clients.

Yeah. I have a friend that works for a DMS company, and he called me up the other day because he was trying to sign up a client in California. They're a fairly new dms. And he started asking me all these questions. And, you know, we've got sales tax that's based on address. Not even town or zip code or county, like, literally down to the address. We've got battery tax, we've got tire tax. We've got, you know, just all this nonsense. And by the end of the conversation, he was like, you know, I don't think we're gonna expand into California.

Wow.

And we've had a lot of companies over the years. I mean, I've had finance companies that have just pulled out and said, you know, we're not going to do business there anymore. We used to have a great extended warranty company that we used that doesn't do business in California anymore. There are a lot of challenges to being in the kind of unfriendly for business space.

Wow. Since we talked about warranties just then, do you have a reinsurance company or do you sell outside warranties? What do you do there?

We do. Yeah. We have for about maybe three years now, and that has just been awesome. I'm lucky to have a couple of dealer friends that really encouraged me to get going on that. I always kind of thought, you know, well, we're too small and that's not going to pencil. And now being a couple years into doesn't matter how small you are. Put that money away. Don't give it to somebody else. And we've been really impressed with how quickly it grown.

Oh, yeah, 100% agree.

Yeah.

So you have a shop there, which helps when you have reinsurance company. How. How big is. How vital is your shop to. To your company? Did you. Did you open with a shop immediately? And I guess, you know, is it. Do you take an outside work or you just do recon there?

No, we do a lot of outside work, so we do all of our own recon, but we also do about 250 to 300 customer pay repair orders every month.

That's great.

So that's definitely a big part of our business in, you know, leaner times. The service department is what has gotten us through when sales go down and we do a lot of customer pay. We're in a real small town and there's probably six or seven different repair shops and another dealership that does customer pay, but we definitely do the most volume and help a lot of people in our local area.

Well, that's great. That's awesome. What else you got, Jeff?

Nothing I'd say. Brittany, is there anything you would leave for those listening that you would say, any encouragement or recommendations or words of wisdom you could leave with the audience from your experience.

You know, keep learning. Always keep learning. You know, things like this, going to different conferences, networking with other dealers. You know, sometimes that can be hard to do with your competitors at the auction, but, you know, get outside your local area and connect with other dealers and, you know, don't be, don't be too proud to ask questions. And I have learned so much. I mean, every idea in this whole company came from somebody else. And it's, you know, got my spin on it. I don't get combination of a lot of different dealerships, processes and ways of doing things, but I'm always asking more questions and looking for ways to improve. And I think just having that network of support is really, really important.

Well, that's awesome, Brittany. We see you at so many conferences, and I know, I know you're trying to learn and get ahead on everything you do. We didn't ask. One thing that I want to follow up is cars. How do you source your cars? Do you do the buying? Does your husband do the buying? Do you have a buyer? How do you do that?

I did the buying for a lot of years. I have had a buyer for about the last year and a half. It freed me up to, you know, be in the Store more and kind of chart our course forward for the company. Hard to lead when you're on the road a lot because we're like two hours away from the closest option and about four hours away from the the bigger auction. And so having a buyer has been really helpful to me. And we do go to the auctions, but we also do a lot of stuff online. ACV dealers forum, even a little bit on smart auction. You know, just looking at everything and everything because you're not going to find anyone spot that's going to get you everything you need. It's just putting in the work and looking at a lot of cards. Get a few.

That's great. Thank you for talking about that.

Awesome. Brittany, thank you so much for your time. We really appreciate you joining us today. I know it's super valuable and this 40 minutes we've had with you has been great. I'm sure people are going to learn a lot. I've thought of a few things that I wrote down that I'm like, oh, yeah. I mean, just the fact that you said that you've got to spend to where you want to be. I keep forgetting that. I keep forgetting like if I want to be at 50 cars, you gotta.

Spend like a 50 car dealer.

Yeah, yeah.

I gotta spend on advertising like a 50 car dealer. It doesn't go the other way around. That's just so obvious. But yet we just miss it.

Yes. Yeah. Well, it's backwards of how we want to think, but it really is the truth. You gotta decide how many cars you want to sell and then spend accordingly.

Yep.

So smart. Thank you so much.

You bet. My pleasure. Thank you guys for having me.