4min chapter

The Basement with Tim Ross cover image

Jeremy Anderson on building a STRONG MARRIAGE, & releasing CONTROL | The Basement w- Tim Ross

The Basement with Tim Ross

CHAPTER

Holding in Gas, Embracing Weaknesses, and Judging Others

Challenges and humorous anecdotes about holding in gas for 17 hours, different types of food that affect the smell, flaws and their impact on judgment, and embracing weaknesses.

00:00
Speaker 2
That does it mean- That's the point I was just going to get at. You tell that you're very, you run a very decentralized model.
Speaker 1
Which is good and bad. You know, the great part is why we do it. We want our leaders and we have some minority partners too. We want them to feel completely empowered to the environment that they're inside of. We want them to feel like their partners, even when they're not,
Speaker 2
even when they don't have skin in the game.
Speaker 1
And we want them to feel like their hands are on all the levers that can, you know, participate in success. And we take anything that we do from a centralized management company level, we don't take lightly. Because if it adds expense in the store, that's going to lessen our ability to hold those operators accountable. You know, I mean, you walk into some, even single point small family dealerships. You've talked to the operator and he's going, you know, I've got these, you know, miscellaneous fees, these management fees. I'm paying for the jet. I'm paying for the, you know, the tickets of the game. I'm paying for this. I can't control my, my average size. They own their own advertising company. I'm not allowed to choose this. I'm not allowed to do that. And at the end of the day, you've basically got a desk manager running a car store sometimes. And we feel very differently, we've done a lot to protect that. Now, having said that, as business evolves, our guys have needed our support and our help. And we realized a long time ago that being a GM is more than really any one person can accomplish. So we did start to build kind of supplemental, you know, help, not just supervision. We have regional platform managers. We have what we call use car regional directors. We have what we call e-commerce directors that help facilitate the operations at the store level. We have a team of fixed operations, kind of consultants that work with our service managers. And we've got, you know, technician recruiters. We've got two teammates that kind of facilitate the budgeting of our marketing spend in each store. And, you know, and most of these folks have 12 to 15 stores each. In the case of our marketing team, I mean, they're split down the middle. They've got 33 stores at peace. It's a lot. We ask a lot of our people, we pay them very well.
Speaker 2
And, but it does give that. What's paid them well? What is an average GM make? I don't want to go like too high, too low, just like average, you know, 66 stores. Right. What does that look like?
Speaker 1
Well, let's do the math. So last, you know, trailing 12 months, you know, at the end of Q1, I think our net profit called $800 million. Right. We buy that by 66.
Speaker 2
I'm not that good. Oh, we got, we got 12, let's just say 12 roughly.
Speaker 1
Right. So, you know, yeah. So in, in we pay our guys kind of the industry standard and we, you know, look, there might be some allowances here and there, but you
Speaker 2
know, it's it's
Speaker 1
10 grand a month in salary and 10% of the net.
Speaker 2
Got it. So 12 was a roughly 12 million a store, 10% and a small salary.
Speaker 1
We have a lot of people make a lot of money.
Speaker 2
I'm sure you do. One thing that comes to mind is being a decentralized model, I mean, on a much smaller scale than you, but I've tested, you know, multiple models throughout the years and just, you know, with different types of autonomy and independence versus kind of corporate support, it seems like how do you even do it? Right. And what, at your scale, like how do you run a decentralized model at such a scale without, you know, having these, you know, single points of failure or other things just kind of break down. I mean, there's a reason people go to a decentralized model. Right. It's for, you know, processes, having, you know, systems, things that are sort of ingrained and make it easier to manage and scale and have more predictability. But how do you do it? And again, I'm
Speaker 1
sure it comes down to the people, but like how it's, you know, it's all people. And again, it's, you know, we give people enough support where if they don't know the answer or they don't have that specific process or they don't, you know what I mean? It's there. There's a playbook there for our operators. But if he wants to run a different system or run a, you know, in a different manner, we don't universally, you know, support like, I can think, and again, maybe this is more relevant 15 years ago than today, but like an up system. You know, there's software that will, you know, rotate consumers amongst your sales floor. We've never mandated anything like that. If somebody wants to run, you know, have an internal BDC, they can have an internal BDC as long as we approve the budget and it works within our confines and the stores succeeding on, we've kind of have four pillars, right? So low turnover, right? So we're people, animals, we manage our turnover. You know, people don't follow rules, they follow leaders. So, you know, turnover is a direct reflection of that leader's ability. If the stores are, you know, sales efficient, if their CSI is in good standing with the manufacturer, and then lastly, if they're on budget, and you know, our budget's kind of our Bible and that's gotten really complicated in kind of the post-COVID days. But we start in late November, building out templates and we have, you know, great accounting team in the peripheral and an incredible kind of what I call chief financial analyst and then a few people under our COO and then our entire executive team gets together, works with these operators and we bang out, this year it'll be 66 budgets at about two weeks. And I mean, we go from eight in the morning to eight nights. So you're looking for,
Speaker 2
yeah, and so as a GM, you're looking for, you want me to have low turnover, you want me to have a strong customer service index rating, right, for the audience, it's listening and you want to pretty much deliver a good customer service and get, you know, good ratings from the customers. And then you want it to hit budget, right? Do any of these incentivize bad behavior? For example, right, like when I think about low turnover, is anyone throwing money at the problem maybe exceeding budget to reduce the turnover? Sure, always,
Speaker 1
always. For each, you know, for each action, there's an equal, not a passive reaction.
Speaker 2
My brain is right away thinking about how can the system be game? No, well, you,
Speaker 1
and you're not wrong. And you probably think like, you should be one of our operators. You know, it's funny, years ago, I can remember, we're just very, so we're very transparent. So every one of our operators can see every single other one of our operators, financial statements. I mean, it's all right there for it. You know, if you're part of our organization, the leadership, you see it all. And the same thing from a traffic management perspective. So you can, you know, you can tell me what, you know, if you're sitting in Naples, Florida, you know what our big hottest or our two big hottest stores in Tampa are closing on their econ traffic and on four lead submissions. You know all that information. And it's funny, because when we first started to kind of promote and, you know, community that, you know, in the past, you could just go to the CRM and get that data for your store. But when we started kind of holding it up to the light for everyone to see, man, we had people right and left trying to game the system. And they would take in, you know, quality leads and try to reclassify them to get them out of their account to raise their clothes, right? So look, I mean, always, you're always going to get that. And you have to be really careful on what drum you're banging on. Because if it has, you know, a knee-jerk reaction that can negatively affect that customer experience, you know, profitability can't be your God or your God, you know, there or all the time. I love that.

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