2 people to include if considering exit from BHPH
Julian Codding, a member of the National Alliance of Buy-Here, Pay-Here Dealers Hall of Fame, recently decided to retire from a full-time commitment to his BHPH dealership, closing the lot and waiting for the remaining contracts to reach their terms.
To begin a two-part series from BHPH Report, Codding discussed the two most important individuals who operators should consult if they’re considering a similar decision. Emphasizing that he’s neither an attorney nor an accountant, Codding explained he developed his exit strategy based on four decades of day-in, day-out dealership experience.
“I want to share with you some of the things I’ve learned,” Codding said. “I learned these things the way I learned everything in life; most of the time the hard way and some of the time listening to people.
“I don’t assume any liability in my comments,” he continued. “I hope they are of some value to you. You must seek the counsel of a qualified attorney and accountant. Be sure they understand you and your business.”
Someone who likely understands your business most is the first individual Codding suggested that BHPH dealers should consult with if looking to leave the operation: immediate family.
“If you’ve spent (invested) years in building a buy-here, pay-here business, it certainly has been a family project,” Codding said. “Consult with your family. Give them time to reflect what the best business, personal and family decision is.”
Next, Codding recommended that operators move beyond their family sphere, tapping a trust friend who will tell you the “unvarnished truth.”
Codding indicated that most BHPH operators likely have a confidant whose judgment they value. He suggested that before engaging in a conversation with that trusted friend, dealers who are thinking about leaving the business should arrange their ideas in writing.
“An old boss used to make me write long detailed reports and then never read them,” Codding said. “His answer was, “If you don’t write it down, you don’t have a plan. You’re only talking.”
And Codding also mentioned a strategy to help operators determine who that trust confidant could be.
“By the way, do you know how to tell who your best friend in life is? It is simple. It’s the person that listens to you the best,” Codding said.
“A great friend will listen and then tell you what you might not want to hear,” he continued. “Those people are a treasure. It goes without says that the first best friend that will tell you what you might not want to hear is your spouse.”
Next, Codding touched on when BHPH dealers should have this discussion with their immediate family and trusted friends. He noted it should not be on a “really good day” when the store turned several vehicles in a single shift. Or it should not happen on a “really bad day” when customers won’t respond to collection calls or the repossessed vehicle appears to be a shell of what it was at the time of delivery.
“There’s a story of a fatigued Pope who one evening passed the private chapel near his bedroom in the Vatican. It was his habit to start and end each day there in prayer. He simply placed his hand on the chapel door as he passed one night and said ‘God, it is your church. I’m going to bed,’” Codding said.
“The other thing that can happen is a psychological profile identified as the Tahiti Syndrome as Tahiti means paradise in Tahitian,” he continued. “The profile is of a high stress, Type A personality who has worked him/herself to the point that when finally forced to take a vacation to Tahiti, refuses to come back. They won’t leave Tahiti for any reason. They become almost like a person who is scared to leave their home.
“Interestingly enough, within five years these individuals will have created some type of business or organization in Tahiti and will be on their way to re-creating another unbalanced life,” Codding went on to say.
Finally, Codding mentioned one other critical component to assembling a possible exit or succession strategy, especially how it pertains to employees and service and capital providers.
“Don’t tell anyone else until your plans are completely set,” Codding said.
Now that he is not selling vehicles every day, Codding is offering his Hall of Fame wisdom to operators who are members of the NABD or who attend one of the organizations events such as the upcoming East Coast Conference in Orlando, Fla., on Nov. 3-5. Through his website, Codding indicated that he wants to reach out to operators who are making the investment in training and development through what’s offered by NABD.
Beyond a segment labeled Compliance University, the upcoming NABD East Coast Conference features dual-track workshop sessions starting at 3 p.m. ET on Nov. 3, covering BHPH best operating practices and compliance.
The program features many of the nation’s leading attorneys, experts and successful operators who will share their latest tips and insights that bring success in the highly competitive subprime auto finance market of today.
The conference also will open with a first-time attendee reception.
“The compliance workshops will also include affordable compliance solutions which will help operators avoid legal and regulatory mistakes that can cost millions of dollars,” said NABD founder and president Ken Shilson, who added that upon completion, all attendees will receive a compliance certificate that proves their participation.
The Best Operating Track includes sessions on:
— Website design and content
— Technology solutions
— Payment devices
— Marketing strategies to gain market share
— Inventory sourcing and reconditioning
The NABD East Coast Conference is scheduled for Nov. 3-5 at the Wyndham Orlando Resort International Drive in Orlando, Fla.
The complete agenda and speaker information is posted and will be continually updated on the NABD website at www.bhphinfo.com. Registrations can be made at the website or by calling (832) 767-4759.
Editor’s note: Watch for another upcoming feature coming in BHPH Report Extra where Codding goes into a more details about how operators can successfully exit the BHPH business.