Mergers and Acquisitions
What’s your dealership’s mission? IS IT MORE THAN JUST MAKING A PROFIT? By
Michael McGregor
A
Supreme Court Justice once of businesses are looking inward when presenting themselves to the public. obser ved that “the true Statements like “we are after complete symbol of the United States customer satisfaction,” “we will not be is not the bald eagle. It is undersold,” “safety is our priority” and the pendulum. And when “we offer the highest quality” are what the pendulum swings too far in one I mostly find. direction, it will go back.” This pendulum swing may be happenA few have vision statements, but ing right now with regards to corporate the purpose of those is to explain why profits and employee wages. According customers should shop at their stores.. to the Federal Reserve Bank of St. Louis, An effective mission statement corporate profits as a percentage of explains your organization’s reason for gross domestic product (GDP) more existing. It’s a simple, short explanation than tripled from a low of 3.7% in 1985 of your company’s purpose and intent. to a high of 11.5% in 2021. This mission statement At t he s ame t i me, can support a company’s employee compensation as of being the best or I urge you to find vision a percent of GDP declined being the lowest- priced by 20% over much of this or whatever that vision is. your mission. same period, from the high But a concise statement point in 1970 to the low point of 2015. must give your employees, customers and stakeholders an idea of what you are all This is partially what is behind the “great resignation” we observed durabout. And it should give your associates ing COVID-19. We’ve seen decades a greater sense of identity. of unparalleled profits in corporate In my previous career, my mission America, while workers’ wages have was “to keep people driving by providing remained stagnant. peace of mind with predictable, affordSome workers feel they have been left able, high-quality car care.” out and their wants have been ignored. The “keeping people driving part” The pendulum has now swung back in was intended as the general purpose their direction. Many are looking to “feel good” — implying we help move “work to live” rather than “live to work.” people and society forward. The other They want to be valued for the work parts related to our subscription-based they do and they demand higher pay. model that was intended to re-engineer the auto service business. Why else would 4.5 million people quit their jobs last November — the Customers and employees bought highest resignation rate per month into our mission. This was reflected ever, according to the Bureau of Labor in everything we did in our stores and Statistics? Workers voted with their feet. even in our community involvement. While there are many ways to attract Every month, each of our stores took in and retain employees, I’m going to a donated or abandoned car and fixed it focus on just one — having a mission up at no cost for needy people through or purpose they can buy into, other Goodwill’s Car Donation Program. Our than just making a buck. employees felt really good about this and A quick check of some leading autoit reinforced our mission to improve motive chains’ websites tells me that a lot the auto repair business for everyone.
58
05_MTD_Columns.indd 58
When I exited that business, I chose to reinvent myself as an investment banker. I was no longer on the grand mission of re-engineering the car care business and was instead “just doing deals.” My son, Neil, who was maybe eight years old at the time, told me that what I was now doing was just as important as what I did before because I was helping people. So that’s my mission. I help people. If a tire dealer wants to pick my brain about what their options are, I’ll spend some time educating them — even though I can’t represent them if they are too small. If a tire wholesaler is facing liquidation because their main vendors pulled their lines, I‘ll see what I can do to engineer a quick exit — even if it’s too late. If a multi-location tire dealer is breaking even, I’ll look at their books and give them ways to improve their performance. I speak at industry conferences to help educate tire dealers. I write this column to hopefully make you more aware of the private capital markets — and your options. All of that is without getting paid. Now don’t get me wrong. I make a great living as an investment banker helping people in the automotive business. But it’s my mission that drives profit and not the other way around. I urge you to find your mission. It will benefit you and your business. And it will benefit your employees — giving them a higher purpose to rally around. ■ Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers.com/automotive/tire-and-service). He advises and assists multi-location tire dealers on mergers and acquisitions. For more information, contact him at michael. mcgregor@focusbankers.com.
MTD June 2022
5/31/22 2:17 PM
