Kyle Coleman recently became a first-time dealer principal after 18 years working in retail automotive. His acquisition is the foundation for a group he aims to grow to 40 rooftops over the next 15 years.

Coleman has advice for those looking to own their own dealership. “The opportunity is there,” he says. “It is being able to take the risk.”

Coleman, 39, in May acquired Spirit Lake Ford, Spirit Lake Chrysler Dodge Jeep Ram, and Estherville Chevrolet GMC, all in Iowa.

As part of the negotiation, he is also able to acquire Motor Inn Auto Group in Carrollton, IA, which consists of a Chevrolet and a Toyota franchise, from the same owner. The goal is to close on that deal in 12 to 18 months, Coleman says.

The opportunity to acquire those two franchises, especially Toyota, was a contributing factor to his decision to acquire the other stores, Coleman says.

Coleman was general manager of Fort Wayne Toyota in Indiana, part of the Rohrman Automotive Group, previous to becoming a dealer owner himself.

He decided to buy his own stores last year, Coleman says. He had such good working rapport with the Rohrman group that they asked him to stay on until the last day.

“They have been a great tool for me to reach out to with their expertise,” Coleman says.

More upside in Spirit Lake

He settled on the Iowa acquisitions after considering 35 different deals. Spirit Lake is a small town of around 5,500 in North Iowa’s Great Lakes Region near the border with Minnesota. Estherville is 14 miles east of Spirit Lake.

Making the decision to buy there included researching areas and “figuring out the math,” Coleman says.

In the end, he saw more chance for growth in Spirit Lake, he says. Also, “I knew that going in and buying small stores that have a dramatic upside, you are able to get a better deal,” Coleman says.

The previous owner had little digital presence, no Customer Relations Management platform, and no third-party advertisements. They were “great to work with and pillars of the community,” Coleman says. But “the manufacturers were excited at the idea of a more modern dealer.”

Coleman, who is working with CRM platform provider DriveCentric, a company he worked with in his previous position, aims to create an end-to-end digital purchase experience for customers who want that as well as offer a full suite of AI tools.

He aims to keep as many of the previous staff as possible. “My goal is to help transition everyone into my organization and build on their talents and give them new tools,” Coleman says.

Some of the staff have been there decades and in a small community that is a real asset. In the Chevrolet GMC store in Estherville, for example, an employee has been there 27 years. “People come in just to say hi to him” Coleman says.

But Coleman also is currently hiring “in every department you can imagine.”

None of his recently acquired facilities is image compliant; the goal is to make them all compliant within a year, Coleman says.

“Colemanizing” acquisitions

Coleman sees a lot of opportunity for growth in Iowa and the manufacturers he has talked with about future acquisitions are interested in helping him expand, Coleman says.

But doing so strategically is crucial. That means timing the acquisitions and looking beyond the Iowa Great Lakes region.

“The worst thing we can do is grow the wrong way,” Coleman says. “We want to make sure we have all our processes (in place). To grow where I want to, I will have to grow outside this market.”

He doesn’t want to acquire a single point franchise two hours away, for example. That would be hard to manage, Coleman says.

“My goal would be to acquire smaller groups in a market. A lot of my acquisition plans are stores that have two to four locations already,” he says.

Coleman figures a group that size has processes and people in place. Then it is just a matter of bringing in his processes, adding top management, and “colemanizing” them.

He is interested in specific markets rather than specific franchises, Coleman says.

Family business

His initial acquisitions are all domestic franchises. Domestics do well in the area, Coleman says. There is also a sentimental tie to domestic brands – one of his grandfathers retired from Chevrolet, the other from Chrysler. The grandfather who retired from Chrysler is 89 and still living, Coleman says.

“Although I have represented multiple brands, it is exciting to talk to (him)” about Chrysler, Coleman says.

This article was written for Getting to Go, a buy/sell newsletter from Scali Rasmussen.