Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
Editor’s note: Few industries have been harder hit than auto dealers in the last two years, and yet many have survived and some are thriving. Ian Moquist, owner of IAN Inc., has worked with auto dealers throughout his career in advertising. “I knew there were important lessons they could teach the rest of us after weathering the worst of the recent economic storm,” he says. With the go-ahead from Upsize, he recently sat down with his client Michael Stanzak, owner of Key Cadillac, to glean survival tactics.
Ian Moquist: When did you first see trouble on the horizon?
Michael Stanzak: The third quarter of 2008 was great, but we could see a real meltdown beginning in the last quarter of 2008. GMAC was running out of money, new car sales were cut in half and we entered 2009 in survival mode. We didn’t really know what was going to happen to General Motors. Many dealers were waiting to find out if they were even going to remain in business. We were apprehensive and it was an extremely stressful time.
Moquist: What was your mindset, given the situation?
Stanzak: As a management team, we decided to be proactive rather than reactive and I think that’s really what saved us in the long run. I would tell any business owner that in order to survive tough times, the first thing you should do is streamline where you can. Our managers took fairly significant pay cuts across the board. Although we didn’t publicize it at the time, that cut in pay as well as a reduction in hours for certain staff helped. We also did a detailed, line-by-line expense review and cut as many non-essentials as possible. We didn’t wait we did those cuts right away.
Moquist: Where were you affected most, and how did you respond?
Stanzak: The credit crunch was perhaps the most challenging aspect. Because of the problems with GM, we had no lease programs available, which meant that 40 percent of our business literally evaporated. We needed to sell something to survive, so we found a new market in used cars. In 2009 we ended up having a very good year in used cars and it became another strong revenue source for our business.
Moquist: What was the most important focus of your business during this time?
Stanzak: As a company, we drove home the message that we valued our customers, whether they were buying a car or not. We’ve been in business since 1973 and we felt that our core of loyal customers needed to know that we were there to help them however we could. So we concentrated hard on things we could control, like service and maintenance.
Moquist: As the business owner, what was your most important role during this time?
Stanzak: I’ve always been really involved with the dealership, but I made sure I was even more approachable and accessible. I walked the show floor constantly. At the same time, I became the spokesperson in our advertising. I think it’s so important during troubled times that owners and managers become even more visible to solve problems, and show customers and employees that you are sticking with it. To be able to come out of the tunnel feeling confident about the future and not too beat up by it, you’ve got to have good people and you’ve got to stay in the game.
Moquist: What did you do about marketing and advertising?
Stanzak: Even in 2009 we still made a conscious effort to advertise, but we took a really long, hard look at our marketing strategy. People get into a comfort zone when things are going well. We needed a different set of eyes to look objectively at what we were doing. We became more customer-centric in our marketing and also targeted potential new customers from dealerships that had gone out of business.
We did have to make some tough decisions. For example, how much should we focus on core customers in our backyard versus going outside of our primary marketing area? We also collaborated more than ever before with our dealership partners across the Twin Cities in terms of advertising power and dollars.
Moquist: What does the future look like now for Key Cadillac and auto dealers in general?
Stanzak: We’re in recovery mode. October and November of 2010 were great months for business and I believe 2011 is going to be a really good year. We’ve expanded our used car market, we’re seeing more new car sales and thankfully, there seems to be an end to the constant change we’ve experienced over the past couple of years.
Independent businesses need to make it through trying times in order to make money. Remember, this is a marathon not a sprint. I see businesses that have survived the past few years as being much better, not worse, for the wear. As for Key Cadillac, we’re now operating smarter and wiser, and are even more customer centric than before. And our management team has much higher esprit-de-corps.
Ian Moquist,
IAN Inc.:
952.915.6065
ia*@****nc.net
www.ianinc.net
Michael Stanzak,
Key Cadillac:
952.920.4300
ms******@*********ac.com
www.keycadillac.com
