In his three decades running Prestige Automotive Group, the accolades have piled up for president and CEO Gregory Jackson.
He jump-started his ascent in the auto industry when he opened his first dealership in Detroit in 1993 after completing the General Motors Dealer Academy Program. Through the program, GM lent him money to open the store and gave him up to seven years to pay it off. Jackson says he paid it off in seven months by putting every extra penny toward loan payments. He added a second dealership two years later.
That began a buying spree spanning 12 years. At one time, Jackson owned and operated 18 dealerships and 28 franchises in Florida, Oklahoma, Ohio and Michigan.
The dealership mogul quickly captured the industry’s attention. Jackson became the first African American auto dealer and owner of the fourth black-owned company to generate $1 billion in annual revenues, according to BlackBusiness.com. Jackson says Prestige Automotive Group grossed $1.67 billion in 2005 and had profits of over $1 billion for about a decade.
Other accolades include the Mercedes-Benz Best of the Best Award and a BE 100s Auto Dealer of the Year award from Black Enterprise. Jackson’s other companies are Jackson Automotive Management, which owns Copper Ridge Golf Course in Davison, Mich., and Lafayette Ventures LLC, which is restoring Lafayette Towers in Detroit. He also co-owns and sits on the board of directors of two Chinese-American joint venture corporations in Beijing and Wuhu, China.
Jackson is still a busy guy, despite whittling down his dealerships since the Great Recession’s automotive shakeup. Now he’s down to two that employ about 140 people and gross around $350 million annually.
Passing It On
“I was seeking to get out of the business a couple of years ago and started selling off stores. I didn’t think my children were interested in the auto business, and I never pushed them toward this business. It’s a tough business to be in, despite its rewards. An automobile dealership is basically five or six businesses under one roof, and it takes a certain set of skills to run.”
But his children had other ideas. His daughter earned graduate degrees in business and economics, his son in business and filmmaking, and both have returned to the business with new skill sets.
“I am ecstatic about this,” he says. “They are actively involved in the two dealerships that we own. We have an active succession plan, where they will soon become not only the chief operating officers of the company but also 100% owners.”
Jackson is celebrating the occasion in a big way, just shy of shouting off the rooftops. Celebratory plans include anniversary shirts for employees, splashy billboards around town, social media proclamations, an anniversary bash, and 30% discounts on certain services.
“We’re hoping to do more, because we consider it to be a significant milestone,” he says. “We want people to know we’ve been here for them, we will continue being there for them, and hope they will continue to be here for us.”
Numbers Don’t Lie
As the next generation takes over, Jackson sees the future with bright eyes. He says running a lean operation, keeping a tight rein on expenses, and having a right-sized staff and cash in the bank ensure a profitable future.
He speaks from experience. When new-vehicle sales plummeted as the auto industry tanked in 2008, Jackson said Prestige barely felt a bump in the road.
“The industry lost thousands of auto dealers,” he says. They weren’t losing money, but they couldn’t handle a downturn due to a lack of cash. Any mismanagement of money showed up significantly. The dealers that survived had a good understanding of their finances and how to manage their money. They were not robbing Peter to pay Paul. They actually had a rainy-day fund.”
Jackson, a certified public accountant, worked for some of the largest accounting firms in the world, learning how to manage money well. He also sat at the helm of his own cookie manufacturer, accounting company, and real estate investment firm before entering auto retail.
“Because of these ventures, I understood business on a granular level,” he says. “If you understand the numbers and can read a financial statement, you know where you stand. The numbers don’t lie. “
Success, he says, is tied to knowing and understanding the numbers, setting goals, and managing by the numbers.
“This has been an effective strategy for our company, and one I’ve passed to others,” he says. “I’ve grown several other managers and five or six dealers. I taught everyone to manage by the numbers.”
Keys to Success
There is no ticket to success, but there are a few things beyond education that led to Prestige’s successful journey, according to Jackson.
One was his tendency to roll up his sleeves and work hard. Growing up, he said he was always ready to work, whether it was sweeping the kitchen or mowing the lawn. “I was always knocking on doors, asking if there was any work I could do for them,” he says, “I’ve always had an affinity toward work because I consider it learning.”
A business owner, he says, has to be willing to work. “I’m not talking from 9 to 5 or even 9 to 6. I’m talking about whenever the work is necessary, even if it’s the Fourth of July. If something happens at the store, you need to take care of it,” he says. “If you put in the work, you can be really successful at whatever you want to do.”
Success also came out of that willingness to learn, he says. Being a student of the industry will drive a dealership’s success. To gain business understanding, he advises news reading, studying D.C. legislation, and joining industry associations.
Hiring the right people also helps, he says. “These days it’s a never-ending battle. … It’s become a struggle to find the right people and get them to do the right thing. Our hiring and training efforts are ongoing. We have to show them you can have a career here.”
That includes treating people well to keep them on board. “We try to show a level of empathy and compassion toward our employees and their families to let them know we care about them so that their reason for being with us goes beyond financial reward.”
In the Family
As Jackson prepares to turn over his business to the kids, who he hopes will pass it on to the third and fourth generations someday, he has some recommendations to share with other family-owned dealerships.
First, he says don’t force the next generation to take on the business. “If you force it on them, they will not do a good job with it.”
Next, start planning early from an estate and trust standpoint. “You need a strong owner with a sincere desire for the business and the skill set for it. Sometimes you have the desire and not the skill set, or the skill set and not the desire. A good balance must exist between those items.”
He also recommends making sure successors have had a peek behind the curtain about what it takes to run a dealership. “Let them get their hands dirty,” he says. “Otherwise, the kids see a nice home, fancy cars and great vacations and will not see the work that goes into it.”
Jackson’s son started at the dealership by weeding around the first store, graduating to washing cars, then doing oil changes and office work. He followed that with college and attending the National Automobile Dealers Association Academy. His daughter started with office filing, shredding papers and counting cars on inventory day. She also attended college and the National Auto Dealers Association Academy.
“Despite all that, they remained unconvinced about working in the business,” he says. “But then I started selling dealerships, and they realized I was really planning to sell the business, and it reignited the fire in them.”
Eye on the Future
As Jackson readies himself to turn over the keys, he’s made his successors aware of the challenges before the industry.
The face of retailing is changing, he says, which presents both challenges and opportunities. Carvana’s online shopping platform has altered expectations for brick-and-mortar dealerships. Now it’s expected that every dealership will have an online platform available for auto purchases.
“The future of auto retailing is likely a mix of online and in-person sales,” he says. “We also may see more factory-direct sales to consumers, like what Tesla does now.”
As much as factory-direct sales may challenge dealership operations, Jackson sees service needs presenting an opportunity for growth. Cars are becoming more sophisticated electronically but simpler mechanically.
“We will not be fixing transmissions and internal combustion engines. We’ll be fixing electric motors and other technology,” he says. “Dealers can become more service-oriented and offer home or workplace services.”
Navigating the industry’s challenges and opportunities will hinge on finding the right people for the job. The dealership that succeeds in that, he says, will have the most success.
Originally posted on F&I and Showroom