Case Study: How One Teen Makes His Business Tick
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(YoungBiz) - Log on to www.leftysauto.com, and you'll automatically feel a need to fasten your seatbelt. A car revs its engine and a pair of headlights moves toward you as Lefty's high-performance slogan appears: "Welcome to Lefty's Auto, where it's your parts at my cost."
Eighteen-year-old Mike Wilson of Overland Park, Kansas, founded Lefty's Auto two years ago with a simple purpose in mind: to provide performance parts at reasonable prices for do-it-yourself car buffs like himself. Wilson had just acquired a 1987 black Corvette that "needed some work." He was shocked at the prices auto supply stores were selling parts for and decided to look for an alternative.
"My parents offered to help me start my own auto parts business as long as it didn't interfere with my studies and after-school activities," Wilson said. He made contacts with parts wholesalers, the companies that sell parts to auto supply stores, and signed agreements with a few that didn't require him to pay a fee to work with them and were willing to educate him on their product lines. The next item on his list was to get a plan.
|Give your mission statement some kick with this article.|
Wilson's interests, besides cars, are in business management, so he did some research and wrote both a mission statement and a business plan for Lefty's Auto. The business plan defined responsibilities for both a financial manager and a sales staff. He took on the financial tasks and some of the selling and hired a friend as a sales rep. That friend soon taught Wilson a valuable lesson.
"He copied my business plan and started his own competing company," says Wilson. What did he learn from this, besides to keep his business plan locked up? "Lefty's Auto is my company, and I need to control the operations," he says. His employees are now commission-only sales reps who work under a simple written contract. The more orders they bring in, the more money they can make.
Mike's sales reps must also know and follow his company philosophy: The customer comes first. If there is a problem with an order, "I am the one responsible for telling the customer why," he says. This doesn't mean that the customers run his life. Wilson's success has occasionally forced him to modify his business plan. "My first priority is school," he points out, "so during the school year I limit my company activities so I have time for studies and sports." He shares this information with his customers so they'll understand why he's not as readily available for questions during the school year.
A Team Effort
Advertising for Lefty's Auto is the responsibility of the entire company. Wilson runs ads in the school newspaper, and he and his sales staff pass out window stickers and brochures at school and at a local racetrack. The best ad is Wilson's 1987 black Corvette, now restored with parts from Lefty's Auto and turning heads at the racetrack.
When the orders become more than he can handle during the school year, Wilson immediately cuts back on these activities. That approach to business discipline keeps his customer service, his grades and even his entire body at a high level. Besides maintaining a GPA of 3.8 to 4.0, he takes extra business courses at a nearby junior college and is a four-year-letterman on the track team as a pole-vaulter.
Wilson pays his sales reps up to 20 percent commission on parts orders after paying his suppliers and taking a small profit. So his slogan, "Your parts at my cost," really means that he sells his products at his cost plus a small 20 percent markup. "Most auto supply stores have a 100 to 200 percent markup," he says. "My parts are very affordable in comparison."
In the fall, Mike will enter the University of Kansas as a junior because of all the college courses he's already taken. He plans to major in business administration and possibly go on to study corporate law. After that, the business plan for Lefty's Auto will probably undergo another change. "I will have to hire a business manager responsible for some of the day-to-day operations," he said. Those responsibilities will be well-defined in his organizational structure so the quality service Lefty's is known for continues.
One last question: How did he get the nickname Lefty? "To be honest, I don't remember," he said. "I'm not left-handed or even left-wing." With the success of Lefty's Auto and his dedication to customer service, education and entrepreneurship, it won't stand for "left out" either.