From $270M to $490M: Ryan Downing on Growth, Family Business, and What’s Ahead | Ryan Downing, Dealer/CEO of Ross Downing Auto Group
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From $270M to $490M: Ryan Downing on Growth, Family Business, and What’s Ahead | Ryan Downing, Dealer/CEO of Ross Downing Auto Group
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Dodge
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New cars are the gas of the fire, man.
The way that I view it, you know, manufacturers,
I think that they want us to make money
so we stay in business,
but do they necessarily want us making all the money
on every new car?
You know, I think they want us to make some money,
but not all the money, right?
They're more worried about the market share
and sales effectiveness.
And quite honestly, you know,
that's kind of what we watch is
we don't really watch the new car gross.
I really could care less about the new car gross.
I need new cars in operation, units in operation
to fuel the other departments.
Today I'm joined by Ryan Downing,
dealer and CEO of Ross Downing Auto Group.
Five years after taking the reins
of his family's 50 year old dealership group,
Ryan has nearly doubled revenue
and he's just getting started.
His biggest challenge now,
balancing legacy with ambition.
As he honors the generations that came before him,
he's executing his master plan.
Scale Ross Downing Auto Group to 20 rooftops by 2040.
A big thank you to our sponsors
for making this episode possible.
Auto hauler exchange, Equifax and CDG recruiting.
And now let's get into the show.
Ryan Downing on the CDG podcast, Ryan, welcome.
Thanks, Josie. Appreciate you having me.
One of the first questions I wanted to ask you,
before we talk about your background and the dealer group,
but it's just one thing that stood out to me
in your intake form was 20 stores by 2040.
20 stores by 2040.
Today you are the dealer principal and CEO
of Ross Downing Auto Group.
You're I believe a fifth generation dealer.
So you've, you know,
we haven't had many fifth gens on the platform.
Sorry, apologies, third generation.
But I mean, this is, you guys have accomplished a lot.
Almost half a billion dollars in revenue this year.
And we'll talk all about it.
Talk to us a little bit about 20 stores by 2040.
What are you up to over there?
Yeah, so, you know, on the third, fifth generation,
whatever it is, we got some broken branches
in our family tree.
So, you know, my grandma outside of the family,
so my great, great grandpa started a automotive group
north of the town that we're in.
We're in Hammond, Louisiana.
They started in Amy, Louisiana.
And real small town, grandpa married into the family
and then ended up breaking off and doing his own thing.
So third generation under the Ross Downing name
and proud of that.
So, you know, when we're talking about 20 stores by 2040,
you know, man, I remember looking back, you know,
we talked about the power of your mind
and just, you know, trying to think at a higher level
and trying to think at a higher frequency.
You know, I remember sitting there
talking to my dad one day and I was like,
man, how do people run more than one store?
And I was just sitting here trying to learn everything
and take it all in.
And, you know, you feel like you're getting sucker punched
with stuff and, and, you know, fast forward
to the end of COVID of 2020.
And I walked into his office
and I was running one store at the time
and there was a little story with that too.
I didn't jump on later, but running one store at the time
and I go to him and say, Hey dad, look, COVID happened.
We got all this stuff going on.
Every store's kind of going their own different direction.
We need somebody to pull everything together,
kind of get some synergies back in place,
get everything kind of aligned, have a common message
and get everything back on track.
And without hesitation, he looked at me and said,
you do it, I'm not coming back up there.
And so when he said that,
I didn't know exactly what he meant by it,
how much he was going to kind of let go of things.
But I quickly realized that it was probably a test
to see what I could or couldn't do
through that time of questioning how to run one store
and then having to run three stores.
A lot took place in the level of thinking has to rise up
to the occasion.
The cool thing about it is, is what you,
what you might doubt or dread for a period of time,
once you get thrown into the fire,
you quickly overcome that with,
within about a 30 day period.
You start thinking differently and realizing that,
you know, there's a way to do this
and we're going to do it and we're going to be successful.
Getting to the 20 stores,
once I realized, hey, this, this can be scalable.
This can be repeatable.
This is about people, inventory and marketing
and how we see things that are all astounding
and how we want to execute on those things.
And so, through those three things,
if we have those things dialed in and we're all astounding,
we're probably going to have a really good
shout of being successful.
So I started pushing that through our organization,
really put our leadership team together,
went through a lot of culture training,
leadership training, things like that,
and realized, hey, we can do something special here
and we don't just have to be the little guy playing
in your hometown.
We can be somebody bigger than that.
We can be a group that you hear about, a regional player.
We can acquire stores in other markets
and do different things.
And so, that's what we're currently looking to do,
is how do we take four stores,
grow at the 20 stores by 2040?
Okay, well, first of all, what did you dread?
Cause you've, the business has almost doubled in four years
and from 270 million in pace and 21 to 490 this year,
million top line.
That's not, I mean, that's no small feat.
So let's just start with you on a personal level.
Like, what did you dread?
And then let's go into the business a little bit more,
but let's just start there.
So when I say dread, I don't necessarily mean dread,
probably more doubt.
You know, I think a lot of times, you know,
when you come from a family background, you know,
where my grandpa was under the impression
where his saying was, you're better to run one store right
than run multiple stores wrong.
Right?
So you're laughing because you heard that before?
I'm laughing because I grew up in the lanes,
in the auction lanes where people would tell me,
you know, you'll never be able to hire a team of buyers
because no one will spend your money
and care about it as much as you.
And like all these fricking annoying gas adages,
which look, I understand why some people feel that way.
Everyone is giving you the reflection
of their lived experiences.
But I just, I thought like,
how can you possibly tell me that with a straight face?
And to my left is a car max buyer who just, you know,
I guess that sort of is the stereotype, right?
They just keep their hand up all the time,
although they are very smart.
So I don't wanna discredit them here.
There's a whole method to that.
But I get the, I know the feeling
because I came from the same world
where it was like scale is the devil.
It's, you know, good luck scaling.
And, you know, then you talk to someone who has scaled
and it's a completely different mindset
where, you know, they just think way bigger.
So that's why I laugh.
Yeah. And, you know, look, I like the challenge.
So, you know, you kind of, you know,
so my dad ended up growing the group to three stores.
You know, my dad is not-
You said three, right?
Yeah. So he went from one to three.
You know, he's, he's, my dad is not your typical car guy.
No ego involved at all.
You talk to any car guy, man.
My dad has no ego.
He's very, very conservative.
So, you know, here I am.
And those are the two guys I'm following
from a very conservative nature.
And just growing at a slow pace over, you know,
we've been in business for 52 years
and I'm looking at things going, okay, well,
how do I, how do I achieve what I want to do
at the pace that we're currently growing?
Cause this is going to take forever.
You know, like we're, we're moving at a slow pace.
And then you look around and you see some other guys
and they're moving quick.
The other thing that I saw there too was, you know,
we're losing people cause we're not growing fast enough.
So you lose good talent because they outgrow you.
And so, man, there was only so many times
that I was going to allow that to happen before it's like,
hey, we got to put together a growth plan
or these people are just going to leak out of the organization
and somebody else is going to, going to gain them.
That's kind of the, the deal.
There's a lot of awakenings that I guess kind of happen
when you start looking around and start trying to figure out
where do you really want to take the company?
And so I didn't dread going through that.
How do you respect the previous generations
as you move towards what you want?
That's a hard thing to do.
My dad expected me to know every rebate
on the rebate schedule, right?
So I can't tell you all of those things
and run multiple stores.
So what ended up happening is, is I would just say,
dad, I can't tell you that,
but we're on pace to sell over 9,000 cars this year.
We're creating career opportunities,
moving a lot of cars and the business is doing well.
And so that's the way that kind of run thing.
How many times has your dad been at the dealership
in the last like two years?
Not a whole bunch.
He's shown up for a few pictures.
Then he showed up for the 50th anniversary,
whichever way.
And I asked that intentionally, right?
And which is, you know, my next question being,
what's your operating style that has led to
such high conviction, you know, in this, like I said,
you're, you're leading this group here after, you know,
you guys have been around for, you know, decades.
How are you leading the group?
And, you know, my follow up is going to be,
let's do a little walk here of the growth,
but let's just start with like, what is the leadership?
And I'm not talking about like, you know,
the fuzzy, fluffy kind of stuff.
We can get to that later.
But I think just actually like what,
how was your vision been for operating this group and growth?
Yeah, I'll give you a few things.
I might touch on a little bit of what you're talking about,
fluff, but I'll dive into how, how we operate.
There's a lot of respect for the roll-standing name
that I operate with.
So when I come to work every day, it's not for me.
It's not for personal gain.
I come to work for the name on the sign.
I come to work for the people who show up here every day
to respect the name on the sign and to support their families.
So I have an obligation to represent that name well
and to help create career opportunities
for those employees that have shown up
and continue to represent that name well at a high level.
So that's really my driver for how we operate.
So back to the numbers now, that's helpful.
You've grown roughly 220 million in about,
I mean close to five years, say four to five years.
Like start high level.
Like what was the goal when you became CEO,
dealer principal, what did you seek out to do?
How did you plan your growth?
Walk us through that a little bit.
Yeah, so funny story, right?
So let's go back, say five years.
So I was 29 at the time.
And here I am stepping in,
no formal handoff from my dad or anything.
This is just me saying, hey,
we're gonna pull together a leadership team.
My dad had more of a shotgun approach.
He had people who counted on right,
but didn't have team meetings and things like that.
It was more one on one type stuff.
So here I am, I pull everybody together for a teams meeting,
which everybody was still kind of adjusting to at that time.
And of course, first meeting right,
we pull everybody together.
You got a couple of people scrabbling in a little late.
And I had a couple of people on our leadership team
that I caught an eye roll or two about people doubting
that we were gonna consistently meet every week
and we were gonna really get any type of traction with this.
Long story short, man,
through pulling our leadership team together,
several of those people,
I think they kind of thought when my dad could retire,
that they could kind of do what they wanted to do.
And that's not the way that we're gonna operate.
So we made a lot of high level leadership changes,
positioned the right people in the right places
and started to just get traction
with who we are and what we're trying to become.
So we didn't talk about this division of 20 stores by 2040.
Until recent, we've just been talking about growth
and preparing our people.
When you start talking about the numbers,
that's where it really started.
One of the things that I knew if we were gonna grow,
my dad wants to see a lot of consistency
across the organization.
And so I keep referencing my dad
because we do work together very well.
We talk daily, even though he's not up here.
And I have a lot of respect for him and what he's done,
but he also respects what I wanna do.
So in return for that,
I'm not gonna put him in a position
or put our company in a position
where we can't grow sustainably.
So one of the things that I actually admire most
about our organization is,
through putting this leadership team together,
I started to really focus in on sustainable growth,
regardless of COVID, regardless of any of that.
We don't rely on new car profits, period.
All three of our General Motors stores
are over 100% total absorption.
Couple months back, I had one store at 145% total absorption.
So our team does a great job with that.
Our Chrysler store that we just bought in last June,
people, they get a bad rep.
I think it's better than what people are leading to believe.
That stores the lowest in our group on total absorption
at 94% and that number's not satisfactory.
So when we grow, it's gotta be in a sustainable way.
So when we get to 20 stores by 2040,
it's gotta be in a healthy, sustainable way.
We don't want stores to have stores.
They gotta turn off the cash that's needed
to grow in a healthy, positive way.
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That's, I don't want to gloss over that.
I mean, a hundred plus percent absorption is,
I mean, remarkable.
Many people would die for that.
How, how have you done that?
It's like, tell us about that.
That's not, that's like, it's a pretty big deal,
especially to do it across the entire group.
Yeah, new cars are the gas of the fire, man.
The way that I view it, you know, look,
the manufacturers, I think that they,
like they want us to make money so we stay in business,
but do they necessarily want us making all the money
on every new car?
You know, I think they want us to make some money,
but not all the money, right?
They're more worried about the market share
and sales effectiveness.
And quite honestly, you know,
that's kind of what we watch is,
we don't really watch the new car grows.
I really could care less about the new car grows.
I need new cars in operation, units in operation,
to fuel the other departments.
And we put capable people in those departments
to capture all the business.
Service, parts, used cars,
they have to capture all the business
that new cars can bring.
And that's how we view the business.
We preach.
What are some of the, stop.
I can tell, what are some of the tactics you deploy?
Give me the specifics, like to achieve,
you said one store is at 145%?
Not on the year, that was one month,
but that was the highest month.
Obviously that upsets me.
I got you.
But every store on the year, I will tell you this,
the GM stores on the year are anywhere between 108
and 115% total absorption.
So we're not just clipping the number,
I mean, we're there by a decent margin.
Okay, and what would I, as a consumer,
what would that experience feel like to me?
And, you know, conversely, as a manager in the department,
what am I doing or what am I equipped with?
Like give us a little lay of the land
of what it's like to achieve, you know,
115% consistent absorption.
Yeah, so, you know, look, for a consumer,
it's pretty straightforward.
When you're priced the way that we order cell cars
in the markets we're in, at the volume we do,
it's pretty straightforward.
What you see online is the price you pay.
You walk in, that's the price that you get.
You know, we're in a town of about 20,000 people,
45 minutes from Baton Rouge, 45 minutes from New Orleans.
So we're not in a place that's supposed to sell,
you know, over 9,500 cars a year.
It's just not supposed to happen.
So what we do is we just, we're extremely transparent.
Whether that be new cars, used cars,
we price the cars to sell.
Don't really care a whole lot about the gross.
We chase the numbers and some people
might disagree with some of that.
But that's the way that we run it.
And we fuel our used car department
and service department by doing that.
Just so I understand, you're optimizing,
you're on, at a very great clip,
you're really optimizing your dealership
for the trade-ins for used and for the retention,
the retained business for service.
Yeah.
That's essentially what you're telling me, right?
Your new car department is really a funnel
for those, and you're taking a very long-term
look on the business, right?
Yeah, absolutely.
The way I kind of view it is,
we push all our chips on the table in new cars,
and we bet the house that the other departments
are gonna do what they're supposed to do.
And so we have a, yeah, so we have a lot of,
we put a lot of emphasis on those departments.
I wanna say pressure because, you know,
when you get the right people and equip them
with the right resources,
they perform really well and take pride in their work.
We really try to run the business in a way
where it's just transparent for our customers
to come in and transact with us.
We build a lot of trust.
The name in this area says a lot,
according to a lot of people that I speak with.
When they see the Rolls-Downey name,
they respect it, they trust it.
Other people, whether it be people in our industry
or not, they know it.
And so we just try to put a lot on that.
So every day we come into work, man,
we see how many new cars we can get out.
We let the other departments do what they're supposed to do.
It seems to make the manufacturers happy,
and seems to be working well for us.
So this strategy, which, again,
it's a good long-term strategy, right?
A short-term focused person
is not gonna likely deploy this.
How has that impacted your margin,
going from 270 to close to 500 million in revenue annually?
As your margin, your net-to-sales, is that declined?
No, so net-to-sales is actually better than pre-COVID.
Obviously not as good as COVID
when you're selling a bunch of cars at MSRP
or even plus on special units, right?
But as far as the net-to-sales,
it's better than it was pre-COVID,
and those numbers are very healthy.
So my assumption here is that
you're at somewhere in an industry standard
of like three to 5%,
you don't have to give exact numbers,
but that's kind of my assumption.
Based on that, how have you been able to grow
so significantly without harming your net margin?
What have you been doing to do that?
If you go back to the beginning of the conversation,
I really talked about staffing, inventory, and marketing.
So when you go back to the time
when I was really trying to figure the business out,
my mid-20s, my dad had purchased a third dealership,
and during that time,
I was going from used car manager
at one store to GM at another store,
and I told my dad I wanted the opportunity
to run two dealerships.
And during that time, I actually did not succeed at that.
I failed so fast,
most people didn't even realize it was an attempt.
But to this day, I still have,
I came up with something and wrote down the reasons why
I did not succeed at trying to run two stores.
And so that was a lot of fuel for growth
because when I get faced with challenges,
I want to take those things on.
So I boiled that down, I have a bunch of notes on it,
boiled it down to inventory, staffing, and marketing.
What does that mean to us?
Because that means something different to every dealer, right?
But for us, I had to narrow that down
for what that means in our organization.
And there's nothing worse than walking through a shop
and not having the whole shop filled with technicians.
When you see empty stalls,
that shouldn't be the case at Ross Downing.
Technicians need to be in every stall.
When you see inconsistencies with staffing on the sales floor,
we can't have inconsistencies with staffing on the sales floor.
We need the sales floor to match the inventory levels
at all times.
So if inventory is at a certain level,
I need the staff to meet the demand of sales
that we expect with that inventory level.
And so when I started putting all this together
and then you look at our marketing budgets
and how we're marketing and are we marketing
for what we really want to do,
that has allowed us to maximize
in all these other departments.
So by making sure that we're not skimping
on parts counter people
and making sure that we have every stall filled in the shop
and making sure that we have the right number of advisors
to take in the workload,
when you start getting that balance right,
people's performance elevates, throughputs maximized,
and that's how we protected the margin
to let the business grow in a healthy way
as we operate the way that we do.
Okay, so you turned up the dial on staffing,
from my understanding.
You got very serious and ruthless about that
to maximize throughput.
How'd you do that?
I mean, where did you find the people?
Yeah, I mean, where did you just like, yeah.
So I got tired of hearing the excuses
that we can't find the people.
And so I told all my direct reports,
you gotta remember, I'm in my mid 20s of this,
I think I'm about half crazy
because I'm trying to tell them how to interview people.
But I told them, I said, hey, all right, that's fine.
We're gonna do two interviews a week.
Every position that you need somebody for,
set two interviews a week.
You said, okay, how are we gonna do that?
Ads running at all times.
So if you go look for ads in our market,
we have ads running for every position all the time.
General manager, F and I, sales everywhere.
We have ads running because you never know
when somebody's gonna leave or blow out
and you don't know when those things are gonna happen
and so many dealers get caught flatfooted.
And the next thing you know,
typically those things come in twos or threes
and not just onesies.
So whenever we see those kinds of things happening,
we have to be ready to move.
That doesn't mean that we're ready to change
the people that we have,
but we have to have enough skin in the game
to be prepared for the unexpected.
And so once we started doing that,
the first guy, one of the guys who was actually
one of the biggest doubters of two interviews a week,
he came back and said, dude, I got three interviews this week.
And so then all of a sudden the next person was like,
how'd you do that?
And they started talking.
It was like, man, I was networking with this guy,
I talked to this guy, asked a couple of people
for some friends.
We have our jobs posted.
Yeah, it seems like you,
so you changed the mentality to a growth mindset, right?
If you're thinking about growth,
it's like gotta always be interviewing,
always have a pipeline, totally makes sense.
When you look back,
what has contributed most to your growth?
What specific department
has actually contributed most to that growth?
You know, I think it's hard to really say one department.
You know, what I would say though,
is we've put a big emphasis on fixed operations.
Fixed operations, even through COVID,
a lot of people were talking about the margins on cars
and we just stayed focused on fixed operations.
We committed to a lot of training,
a lot of consulting.
We've had a lot of things happen in the fixed ops
to maximize marginal parts,
maximize our warranty reimbursement,
maximize our door rates,
and to put all these things in place.
So those two departments
have probably been the most impactful use cars.
We were in pretty good pre-COVID,
but we've sustained that as well.
So it was like we had the use car piece down pretty well
and just really started to hammer out fixed operations.
And I'm just, just out of total curiosity,
has there been any person or training or service,
something that has helped you,
you know, disproportionate amount here,
that you say, wow, this was a barrier,
your game change out or dealership, anything like that?
Yeah, man, so there's a guy,
I don't know if he would get upset or not,
but I'm gonna say his name.
But he's a parts consultant, his name is Dave Paikusch.
And Dave does a great job.
He's been represented in a lot of NADA 20 groups
and we had him come into the store, man.
We did a DMS conversion to dealer track.
And he came in and helped us get a lot of stuff
straight in the DMS.
He's really good with all that.
Really make sure that you're monitoring
your parts department.
We have routine calls with him on a regular basis.
And yeah, he does a great job.
So, you know, most people would come on
and tell you about their used car department and all that,
but you get that parts that parts, yeah.
You don't hear about parts often.
You don't hear about that often.
It's not flashy, man, it's not flashy.
But when you get that right,
you get that first fill, the first time fill rate up,
you start doing all those things,
those technicians are happier.
You get the shop filled with technicians,
get the advisor set right, do all those things.
All of a sudden now, now you're really turning some hours.
Have you cut anything big?
Any line item, any expense, any investment?
Have you made any big cuts along the way?
You know, I have not made any big cuts.
I think we run a fairly lean operation for the most part.
Obviously if we're running out
of total absorption numbers,
most people would consider that to probably be lean.
We have about 355 people in our organization
across four stores.
And so what I would say is no big cuts.
I've actually been focused on trying to ramp up
some different things.
So you know, more so on the personnel
to be ready for the growth that we hope to have.
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What are you trying to ramp up?
Like where are you growing budgets
making more investments?
Yeah, potentially some of those places
are in our accounting office.
I'm talking about all the non-flashy stuff.
I don't know, but I think this is really important
because if I'm a dealer or from a vendor
or if I'm just an enthusiast and I'm listening right now
and I'm listening to a dealer who's progressive,
who's growing, who's focused on developing their group
and you're literally telling me right now
where you are investing money.
And it doesn't need to be flashy.
The accounting department back office
is really, really important.
It's the, I call it like the pulse of the dealership.
So what type of investments are you making there?
Or what type of investments are you looking to make there?
Yeah, so I'll tell you this, man.
We went through some times and one of the hardest challenges
that I went through was actually some changes
that we had in our accounting office.
We had some tough times and some different things
that occurred and when we went through that,
I didn't really know how to navigate it.
So we had to get some people in to help us
and thankfully our CPA firm has some people
that could come in and help us get something straight
and some provide some support staff
and some training along the way.
So I'll tell you right now that there's been
a lot of internal promotions going on in our accounting office.
We've also done some hiring from outside.
One area where we're heavy in our accounting office right now
is controllers and that's by design.
So I have a corporate controller
and then I have three controllers underneath her
as well as an office manager.
When you look at that, you go,
why do you need a corporate controller
and three controllers for four stores?
And I always tell our team,
if we can't do it with double the stores, don't do it now.
So when we were at three stores,
I would always tell everybody,
if we can't do it with six stores, don't do it.
So if somebody brought me an idea.
So you're pretty much saying like, do what's scalable,
build for scale, that's essentially
what you're telling the team.
That's it, build for scale.
We're not going to just add one off program.
If we can't do it with six,
we're not going to do it with three.
We have four now.
If we can't do it with eight,
we're not going to do it with four.
And so I'm prepping the accounting office
for what I think could come in the next several years.
And the one place that slowed me up the most
from production and revenue generating activities
was when we went through hard times in the accounting office.
And there's a few people in particular
that really stayed committed to us
and helped us through that transition of those times.
And I don't want to see the accounting office
be a distraction to our growth.
That shouldn't be the case in my opinion.
I got burned by it once.
Don't plan on getting burned by that one again.
So if we can't do it with eight.
When you say I got burned by it once,
what specifically happened?
Well, we had some things change
where we had some turnover
and didn't have people trained up,
didn't have good processes in place.
And, you know, when that ended up happening,
you know, we were just kind of caught flat footed.
We couldn't operate efficiently.
It creates some dysfunction.
Huge bottleneck.
Yeah, huge bottleneck.
I mean, everything follows through there, right?
So we have 355 employees, 19 of them are in accounting,
and they touch everything.
So it's like, you know, you're selling all these cars,
selling over 9,500 cars, doing 490 million in revenue.
355 employees.
And at one point in time, we had nine people back there.
So it's like, okay, well,
that's probably not sustainable or healthy
in any way, shape, form, or fashion.
So we went ahead and...
Yeah, redundancy, yeah.
Yeah, so we just staffed it up.
And so when I say you got burned,
you know, there's a lot of things
that you slow down on when you have issues like that.
You know, it's, I think,
a lot of the areas that dealers overlook
are the ones that will slow you down the most
and kind of like we talked about, right?
We overlooked the parts department.
We overlooked the accounting office and all those things.
But if you get those things down and right,
you always have somebody that wants to be a used car manager.
You always have somebody that wants to be an FNI.
You always have somebody that wants to do those things.
But you don't always have people
that are highly motivated to be in those other departments.
So creating stability back there,
creating leadership in those departments,
building people up to perform
at a higher level in those departments
really makes the rest of the business so much simpler.
It seems like you've made a lot of investments in people
from what I can tell.
It seems like that's the through line here.
Like you've really been growing your overall team
to be more efficient, to build for scale,
and to maximize every opportunity.
What am I missing?
Other than the investment in additional people,
which along the way, the right people
will bring the right processes.
Have you used any exceptional tools or any systems?
I mean, what else don't I know about
what has led to your growth beyond the additional people,
which along the way, the right people
have brought the right processes, of course.
Like what am I missing?
Yeah, so look, I'm a big believer that
I've been afforded some opportunities
that maybe some other people don't just naturally come into.
The life coach we talked about,
some other training things, right?
I mean, there's not a whole bunch of 20 year olds
sitting in 20 group meetings and seeing the information
that I've been able to be exposed to.
So once I was in a position to start making
some different decisions, we did partner
with the John Maxwell Company,
which is now Maxwell Leadership.
So John Maxwell is a key name in leadership
and most people that watch your podcast
are probably aware of who he is.
So we had them come in and do some culture training
and different things like that.
And through working with them and really
getting some momentum on that side of things
as far as team building and trying to build that team
when I first was getting started,
we then moved into an operating system called EOS.
Yep, we've talked about it on the platform, yeah.
Yeah, I've heard you all talk about it before.
And EOS has been a big deal,
but what I would tell people is if you're not ready
to go to work, don't start the program.
Because if you're really gonna be committed to it
and do it, you need to be prepared to work.
And if you go to it and you really set things up right
and you are serious about it
and you're gonna have your quarterly meetings
and you're gonna be held accountable,
you need to be prepared to go to work.
Because most organizations that are in a growth phase
or might be going through a generational change,
you're gonna have your work cut out for you at some point.
And so starting all this around that time
created a lot of transparency with who needed to be
on the team, who needed to be off the team
and kind of led to all of these changes
that I've discussed with our people.
So that has been a key driver to get everybody aligned
and moving forward.
What's on your mind now in terms of areas of opportunity?
What are you thinking about nowadays?
What are you focused on?
I always like to say, we always have our big rocks, right?
Where our attention is directed towards
and where we're spending most of our energy and effort
as leaders.
So what are you spending most of your energy on nowadays?
Yeah, so, look, if you can't tell already,
my mind is constantly working on different things.
But I am obviously looking to grow.
And you've heard me say scale in people.
I'm really looking for the best opportunities for us
to grow, but to do it in a scalable and sustainable way.
There's no reason for us to look to grow
if it can be scalable and sustainable.
We should have a blueprint.
We should have everything mapped out in a way where
if we're gonna go into a new store, new opportunity,
it needs to be as simple as just tapping a gun
on the shoulder saying, hey man,
this is what we're going to do.
Are you up for the challenge?
Says yes.
Guy or girl's in the store going to work
and it's as simple as just copying and pasting
the roll-standing processes into the next opportunity.
I am looking for growth opportunities,
so new stores, right?
Looking for networking opportunities,
because look, we've been with General Motors
and brand new to CDJR.
A lot of people don't know us.
Trying to get our name out there to other manufacturers
and things like that.
We want to be diversified.
And the other thing is is creating career opportunities
for our employees.
I would say those three things are big.
And when I say career opportunities for our employees,
a lot of that probably falls under organizational structure.
You can look at a lot of groups who grew
and they all do it differently.
And I think there's a right way for each group to do it.
I want to find the best way for us
and the best way for our people.
Those three things are probably the biggest.
I'm gonna push you here for some vulnerability,
which I think you'll deliver.
But what do you struggle with?
You seem like a very methodical,
planned out, principled, in a good way, of course.
I say that with, you know, extremely principled.
You follow a North Star,
which seems like it's been ingrained with you
at a very young age.
Just like, you know, you seem like someone
that has, you know, strong morals
and your parents raised you well.
That's just my very 45 minute assessment.
So take that as a compliment.
But what do you struggle with?
What is hard for you?
I think struggling for me is breaking out of the mold
of the previous generations
and maybe what they were comfortable with
and moving into something that
none of our generations have been comfortable with.
But it's what I know is attainable
and what we can do with the people we have.
And I struggle at times trying to balance that out
with, you know, keeping some respect
for what the previous generations
have done for our company
and then moving forward with an aggressive
growth approach, moving forward, you know, so that's...
I'm glad you said that because, listen, I'm no expert,
but I've interviewed probably 1,000 people in my lifetime.
And I think one thing that struck out to me was,
is it 20 stores by 2040 in order to, you know,
as you mentioned, like balance out or like respect, right?
The prior generation, would it otherwise be 20 stores by 2030?
There's no, no one could tell you how fast or slow to grow,
but I did wonder, you know, it's like,
I don't know anyone that has a 2040 plan
other than China who has a 100 year plan.
And so, and so naturally it makes me wonder,
like, you know, what's the driver for that?
And you sort of answered that, which I appreciate.
It's like, you're trying to balance this growth
and your personal desires while with a transition
from another generation, which maybe was not as growth focused
and maybe they didn't even want to grow at all.
So I think that's sort of the balance that I'm, you know,
kind of trying to, you know, understand here.
Yeah, so there was growth opportunities.
Feel free to tell me that I'm full and I've completely
misread you, that's totally cool.
I get that a lot.
You know, I've kind of been forward thinking like that
pretty much my whole life, you know,
so each opportunity has, or each generation
has had opportunities to grow and taking advantage
of some of this, my dad probably would have done
more opportunities, you know,
but not every deal works out the way
that you think it should.
And, you know, so to get back to your question of,
would it be 20 by 2030?
You know, yeah, do I think that that's realistic
for us right now, or it would be operated
in a way that I would be okay with it?
Probably not, you know, there's a certain standard
that I want to operate at, you know,
we don't just want to have stores that have stores,
we want to be the best ran dealer group
in the regions that we're in.
There's no reason for me to have stores
that perform at a mediocre level.
There's no reason for me to have stores that we just go,
oh, that's just the way they perform.
So it's got to be done the right way, you know.
We're not going to run four stores with 95%
or higher total absorption,
and then buy another store and say 70% is okay.
So when we go in to grow and do these things,
it's got to be in a sustainable, scalable way.
Hey, if that's sooner than 2040, great, so be it.
I think there's an opportunity for that.
I also think there's an opportunity
that 2040 is the number,
and I don't foresee it going past that.
If we do what we're supposed to do,
but I'm not going to add stores
just for the sake of adding stores.
I understand.
If they can't be ran and represent a Roth Downing name
the way that I expect it to be ran, we're not going to grow.
Well, I understand the message,
and I think the message to me,
if you didn't tell me anything else,
and you just said 20 by 2040,
I would simply say, you know,
you are focused on efficiency.
You're not here just to spray and pray.
You really care about quality,
and I think that's reflective
in the numbers that you mentioned earlier.
We're not just growing just to say we grew to stroke or ego.
We're going to take every single asset,
every single gem, polish it,
and then we're going to go to the next one.
And the speed and pace at which we can do that
may accelerate over time,
but at the end of the day, we want to do it right.
By the way, I think that's a distinct model.
I've had plenty of people on this podcast
that would do a slower model to that
and just not even buy any stores,
and I've had other people that are buying
one or two stores per month,
or attempting to at least,
and are taking a different approach,
which is like, let's just see if it works,
if it doesn't, we'll divest it,
and we'll go on to the next one.
So I think the bottom line here is like,
there isn't one way,
and there's just different ways to the top,
and many people do different ways.
Yeah, and I would say, look,
we don't have to take a one-at-a-time approach.
I think we have the people and the resources
and the ability to do more than that.
So the right opportunities come up.
I think we could find ourselves,
at some point, moving at a faster pace
or more than one opportunity at a given time.
We have the people, resources,
and ability to get that done, like I stated.
So I still would want it to be in a way
that represents the Raw-Stounding name,
the way that it should be.
And we have a high standard,
and we don't plan on dropping that standard
for the sake of growth.
I'm not willing to do that,
but I think, and after buying the Chrysler store last June
and doing what we did as quickly as we did it,
I think that was my next question.
Yeah, I think we can do it pretty quick, so.
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So you bought the Chrysler store,
took it from 70K to 282K, quadrupled fixed-stop revenue.
That's fixed-stop only.
How'd you do that?
What did you do in that specific store?
Yeah, so, you know, look,
we were fortunate that store was in our hometown.
So, you know, we went into that store.
We had a few people that we could move over
and we hired a few other people
and just trained them a little bit before they came in.
The service department was not an area
where we really did that.
Going back to June 3rd of last year,
we walked into the store and with 48 hours,
everybody on the sales side walked out.
I think we had three technicians, couple advisors.
One is still with us,
working in our body shop at our Chevy store.
The service manager is now in our parts department.
So we were able to retain a small crew.
They had about 25 people,
including the family members that were there.
And we went in and just implemented
what we do at Ross Downing.
So we looked at what the staffing needs were.
We knew the inventory was not right
and we knew that the marketing was not at the levels
that we wanted it and in the areas we wanted it.
So we went in and did that as quickly as possible.
You know, when you're specifically talking about fixed-ops,
I will tell you, you know, fixed-ops growth
is grown through sales.
Now, it's not gonna grow as quickly
as the timeline I'm giving you,
but when we bought that store,
it was doing 30 to 40 cars a month combined, new and used.
We closed on that store on June 3rd and in October,
we did 173 retail units out of that store.
So by getting our message out there,
getting our people out there,
having our service BDC beginning to prospect
service customers and get people in.
And then we went from about three or four technicians
to where we're up to about 12 right now
and really have the shop at probably maximum capacity.
That's how we got the service numbers
to go from 70 to 280,000.
Okay, so you said they're people,
then you said service BDC.
Yeah.
And you said marketing, I'm just jotting this down.
So just walk me through for a second.
What did you change in marketing?
When you're doing certain things on social media
and you're putting a little money on,
putting money in paid search,
social media for the service department,
not all dealers do that or do that in the right way.
We have a store that, in our opinion,
was very underperforming
and probably neglected on that side of the business.
So we had a lot of customers from our area
just driving their vehicles to other dealers
to go get service.
And so we really just flipped that nature
that they knew the messaging was out.
Again, our name and the area that we serve
has a pretty good reputation.
So once they got out,
people just started to come over to us.
We email blasted a lot of our other owner bases
to let them know that, hey, we have a new store,
we can now service your Chrysler Dodge Jeep Ram product.
And that's kind of how we did that.
Our service BDC is a centralized service BDC
that helps the advisors with incoming calls,
scheduling appointments, things like that.
So obviously when you're going through that buy and sell,
everything's kind of hectic for a little while.
They really did a great job,
our service BDC did, of helping manage that traffic
and setting those appointments up
as we brought in technicians and balancing that workload
in a way that made sense.
And that's been a big help to keep it organized.
What's next?
What's next for you right now?
I know I asked you earlier, what's your top focus?
But you recently acquired a store.
What drove that acquisition?
Was it a specific deal?
Was it a brand you were looking for or a geography?
That deal was probably not necessarily the most attractive.
We're working out of a very subpar facility.
We have to build a new facility on the same property.
So I wouldn't say that it was the deal.
The deal was in our hometown, so we did the deal.
Okay, so it was a local deal.
You've already improved the blue significantly
but given the growth you've mentioned,
I would assume that it's trickled down to profit.
So you're into it.
We're gonna be working on some different things
with that location, but like I said earlier,
we've really spent a lot of time building up our people.
So what's next?
I think it's looking for the next opportunity.
We've proven to ourselves, we've validated
what our beliefs are and what our vision is
and our expectancy is for growing.
And I think we know that we have people
that we can deploy and succeed and future by selves.
And as we make other acquisitions,
we plan to use the people that we have
and the processes that we have
to make them successful very quickly.
If there is someone listening right now,
maybe the CEO or chairman of some of the largest groups
in the world, or maybe a mom and pop dealer
who's getting by, but if there is one thing
that someone listening right now could be helpful to you,
what would it be?
What would you, you know, if you have the ears right now,
thousands of people in our industry,
what would you tell them?
No pressure.
Let's crowdsource a solution for you
on this podcast at this moment.
Yeah, you know, I think there's a lot of people
that have traveled the road that I am,
at least the road that I think I'm on, right?
So, you know, there's a lot of people
who traveled that road and they aspired to grow,
wanted to grow, didn't necessarily know how to do it,
but they figured it out and they did it.
And, you know, I think the thing that is always good
is when you can find somebody that has traveled that road,
that is willing to share that knowledge with you
and kind of spur that along to help build
the confidence level that you can end up in their position
and that, you know, you can accomplish these things.
You know, again, for me, it's not about the name
or it's not monetary in any way.
It's really about, you know,
how do we create career opportunities for our people
and change the communities that we serve?
And if we can do those things,
then I'd be happy with the growth,
but there's a lot of people out there who have done that.
So anybody that's willing to mentor others,
whether it's myself or anybody in my generation,
if they've done it before,
I would just encourage them to do that.
I've had a few people that have helped me
and really goes a long way with making sure
that the next generation of dealers
is confident enough to move forward in these next steps.
Because it's not very clear cut.
It isn't, and there's a lot of change right now.
And it's a big reason why we do what we do here at CDG.
So shameless plug on our end,
but did you, by any chance,
did you sign up for our dealer group chat?
Waitlist, did you see that by any chance?
Yeah, I had a few things going on,
so I didn't get to it,
but I've seen it on LinkedIn and I am looking at it.
I'm planning on getting signed up for that,
hopefully in the next week.
Okay, well, if you go to dealershipguide.com
and you press on services at the top there,
there's a bunch of services.
The last thumbnail at the bottom is the group chat,
you can just drop your name there
and you know your phone number.
And we're literally working right now in real time
of creating these groups.
We've already created a handful of them.
We have 800 dealers that sign up,
which is incredibly exciting.
And I'm obviously intentionally also mentioning it now
because we want to continue growing this
and we don't want to roll it out too quickly.
Similar to you, by the way, right?
Like we're not, we could have,
people are DMing me like,
Yoci, am I in a group already?
Literally right now, DMing me and I'm saying no.
And it's in your best interest
because we want to do this right.
So it's kind of slowly but surely here,
but similar thing, we're just trying to connect dealers.
And man, dude, the sky is the limit.
I don't even know what's going to happen,
but it's pretty remarkable to be able to,
in a position to put people together
and just to help people kind of get ahead.
So it's really exciting stuff.
Yeah. Hi, Ryan.
This has been fun.
Before we wrap up here, anything I haven't asked you,
anything you want to mention,
anything you want to ask me, anything else on your mind?
You know, look a lot of respect
for what you guys are doing.
I just got back from a 20 group today.
And one of the guys in there was telling me
that he's thinking about canceling another subscription
just because you guys are providing
so much more information and it's real time.
I think what y'all are doing is very impactful.
It's getting a lot of momentum and a lot of attention.
Y'all are just doing a great job.
So really appreciate everything y'all are doing
in the industry.
Really appreciate y'all having me on.
Hopefully look forward to being back on as we grow
and execute on the vision that we have set.
We're going to have to hold you accountable here
for the next time you come in a bot.
Good work.
All right.
Good work.
Ryan Downing from the Ross Downing Auto Group.
Ryan, thanks so much for coming on.
Yeah, thanks Joseph.
Appreciate it, man.
Thank y'all very much.
All right, hope you enjoyed that episode.
Please give the podcast a rating.
Consider subscribing to the show
and check the show notes for links to what we talked about.
Thanks for tuning in.
I'll see you guys next time.
About this episode
Ryan Downing, CEO of Ross Downing Auto Group, shares his journey of nearly doubling the dealership's revenue from $270M to $490M in just five years. He discusses the challenges of balancing family legacy with ambitious growth plans, aiming for 20 stores by 2040. Key strategies include focusing on fixed operations, transparent pricing, and investing in staff. Downing emphasizes the importance of sustainable growth and maintaining high standards, while also reflecting on the lessons learned from previous generations in the automotive industry.
Original notes
Today I’m joined by Ryan Downing, Dealer and CEO of Ross Downing Auto Group.
We break down his plan to scale to 20 dealerships by 2040, how he’s achieved 100% absorption at every store, and what it took to grow group revenue from $270M to $490M in just five years — plus much more.
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Topics:
00:41 How to achieve 20 stores by 2040?
01:43 Biggest challenge taking over during COVID?
03:47 Key growth strategies for scaling?
07:27 What is your leadership and operational style?
11:03 How to ensure sustainable growth and staffing?
21:01 Why focus on fixed operations for growth?
24:20 Biggest challenges in scaling accounting?
28:39 Best leadership and training initiatives?
33:04 How to balance tradition and innovation?
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