Case Study: Aim for a Successful Takeover
SHOP STATS: South Coast Xpress Lube Tire Pros Location: Bandon, Ore. Operator: Sam and Kelley Basey Average Daily Car Count: 22 Staff Size: 9 Number of Bays: 4 Ticket Average: $96
After a buyout at his telecommunications company he’d worked at for years, Sam Basey was looking for a change. And after stopping by his local quick lube—where he’d been a customer at for 10 years—he found his answer. The owner was looking to get out of the business, and because Basey felt he was too young to retire and the timing was perfect, he jumped on the opportunity. He officially took over on New Year’s Day of 2019.
“I have a lot of crazy ideas every day,” Basey says. “This was just one of the many.”
But with little to no experience in the quick lube industry—or the automotive industry for that matter—and the little to no processes in place for him as he took over, he knew he had his work cut out for him.
Initially, it was hard for Basey to gauge exactly what he was getting himself into. He says the former owner had few processes when it came to tracking KPIs. The numbers he did have were the shop’s total gross revenue and the cost of goods sold, but it wasn’t broken down further.
“It was really hard to get nailed down what the numbers were,” Basey says. “It’s been somewhat of a learning curve for us, to say the least.”
Thankfully, Basey has former corporate and managing experience from his telecommunications company. He managed a staff of 50 for almost 10 years, which really came in handy for running his business. But when it came to the nitty gritty, day-to-day aspects of ownership, he needed to do some research of his own.
First thing Basey wanted to do was work on the quick lube’s processes, but he needed help on how to do so. Before officially taking over, Basey worked in the shop for three weeks to become familiar with the shop’s processes. But ultimately, it was up to him to do his own homework on the matter.
Basey invested his time in reading industry content on growing the business. Right when he committed to buying the business in late 2018, the former owner even gave him a copy of NOLN early on to look over, which led him to subscribe to other business publications as well.
Utilizing Industry Help
As he was reading up, the vendors helped him more than he ever would have thought. Basey started renegotiating current vendor agreements and seeking out different ones, and through that, he was able to create a relationship with industry experts.
During the transition to owner, Basey added on an additional profit center and became a Tire Pros franchisee. Through this partnership, he made contacts with similar businesses on the tire side of things. And as a Castrol oil shop, Basey says the industry contacts there have always answered his calls on whatever questions he had.
Since studying up on the industry, adjusting processes, and adding additional profit centers, based on what numbers they had before, there was a 30 percent increase in business within the first couple of months. Basey says the biggest gross opportunity for them has been adding tires as an additional profit center.
Not only do you have to have enough capital to take over a business, but Basey says you have to have a lot of tenacity and perseverance to see it through—just keep pushing on and stick with it. A lot of Basey’s help came from his own demise and networking partnerships he created. While a business owner should help you become familiar with the business processes, it’s up to you to learn what you need to learn and reach out to who you need to reach out to.