Dorian S. Boyland is taking care of business as he bustles about his 29,000-square-foot Honda dealership. He’s preparing for the grand opening of his Greenfield, Wisconsin-based location, although he opened its doors in July of 2001. This event is more of a reception for African American fraternities, sororities, and alumni of Boyland’s alma mater, the University of Wisconsin.
Boyland, whose dealership is located just outside of Milwaukee at the south end of town, wants to spread the word about his business to Milwaukee’s black community, most of which is located at the north end of the city. He also wants to let city residents know that although his headquarters are located in Gresham, Oregon, relocating to Milwaukee to run the Honda dealership was a sort of homecoming.
Boyland, 48, is excited about the festivities, but he intends to get a return on this investment. Make no mistake about it, he is meticulous about how he spends money, keeping advertising less than 10% of gross profits. And Boyland doesn’t pay salaries to his sales team. No more than 10% of gross profits in commissions are paid to managers, and no more than 15% of gross profits in commissions is awarded to sales managers. When allocating expenses, Boyland commits 35% to new car sales, 30% to used cars sales, 25% to service, and 10% to parts.
The auto dealer operates with one goal in mind: net a 3% to 3.5% profit of total sales from all his locations. It’s a goal that has made Boyland Auto Group a profitable seven-dealership empire. In addition to the Wisconsin dealership, Boyland owns Astoria Ford, Astoria Hyundai, and Gresham Dodge — all located in Oregon — and All Star Ford and All Star Toyota in Washington state. He’s also planning to break ground in Florida for Mercedes-Benz of Orlando.
In three years, Boyland Auto Group has zoomed from the No. 30 spot on the BE AUTO DEALER 100 list to No. 6. Boyland Auto realized a 3.6% net profit on $156 million in gross sales in 2000. It posted 2001 gross sales of $169.1 million at all its franchises. That figure is based on 8,000 total units sold — new and used cars and trucks. In 2002, the dealerships generated $204.8 million in gross sales, based on 9,300 total units sold. Net profit was 3.4% and 2.8%, respectively. And while other dealers rely heavily on deep-discounted fleet sales to boost revenues, Boyland Auto has yet to resort to this strategy. And Boyland says he never will.
“I never ask how many cars we sold,” says Boyland. “I ask my sales managers how much profit did we make. I operate on the premise that if I sell a car for $20,000, I know that 3% (or $600) of that amount is going to go to my bottom line. Now, how I get that 3% is how we operate the store — from the bottom up.”
Boyland’s intrepid approach, combined with his recent entry into the high-end luxury car market, has earned him the coveted distinction of being named BE Auto Dealer of the Year.
THE NUMBERS TELL THE STORY
In these days of sluggish sales and excessive inventories, Boyland’s cost controls are a never-ending process. He bides by the book, a financial analysis generated monthly that is reviewed by all store managers. This information sharing allows every general manager and sales manager to critique one another, exchange ideas, and establish goals and guidelines.
Volume is very important to dealers because manufacturers expect them to achieve a certain level of market penetration. But as Boyland sees it, “You can be No.1 in terms of volume, but if you are constantly losing that manufacturer money, you’ll be taken out of business.”
That seems unlikely to happen to Boyland. All Star Ford grossed $69.1 million in sales and a 5% net profit in 2002. And Boyland Honda exceeded first-year expectations. “He had a 300% increase in profits,” says Marc Burt, manager of minority business development at American Honda Motor Co. “He has been very successful in duplicating some of the processes he’s used in his other stores.”
It helps that Boyland is not only a respected car salesman, but also great at accounting, says Roger Cole, general manager of All Star Ford. “I have been with Dorian for the past four years. I have learned more from him during that time about how to run the store on a business basis, where it’s all about percentages.”
Boyland Honda outpaced competitors in its respective market. In fact, as a group, “We were up 15%, in terms of units sold, mostly due to his dealership, which had an increase in 2002 of 74%,” says Burt.
A NEW BALL GAME
A self-described “nice guy,” Boyland is laid back in his demeanor, although he says people often find his 6-foot-4-inch frame intimidating on first encounter. But ask Boyland’s employees, and they’ll tell
Boyland attributes his business savvy to his mother and role model, Alice Boyland, who died three years ago from lung cancer. Thanks to his mother’s encouragement, Boyland earned a bachelor’s degree in business administration and computer science, all while making a name for himself in baseball. He became a college All-American and a University of Wisconsin Hall of Fame inductee.
After graduation, Boyland put business on hold when he was selected as a second-round draft pick for the Pittsburgh Pirates. He played with the team in 1979 when it won the World Series and a year later moved to Oregon to play with the Portland Beavers in the minor leagues. He retired after almost eight years in the sport.
Shortly after, Boyland secured a job with semiconductor giant Intel Corp. as a systems analyst. Before he was scheduled to start his new gig, however, he received a call from Ron Tonkin, owner of one of the largest auto dealer groups in the U.S. “He asked me if I wanted to get in the car business. He told me to come work for him for 60 days and if I liked it I could stay, and if I didn’t I still had my job at Intel,” recalls Boyland, who showed up assuming he’d be a manager. “They handed me a piece of paper and a pen and said, ‘You are a salesman.'”
Within two months, Boyland was promoted to assistant manager, earning more money than he did as a reserve for the Pirates. Though the average salary for a ballplayer at that time was $100,000, Boyland was making a little less than average. Hooked on selling cars, he never looked back. “I loved the business from day one because it was like sports; it was competitive. Every day a new customer was like a new pitcher,” he says.
It was the summer of 1985 when Boyland, then a new car sales manager, was approached by Tonkin to go into partnership to buy a pre-existing Dodge dealership. With a
30% financial interest, Boyland was on a different playing field. He admits he didn’t understand the dynamics of putting together a buy-sell agreement. Nevertheless, he scored as dealer principal and general manager of Ron Tonkin Dodge, helping to take it from last in new car sales in its zone to No. 1. He did so by relying heavily on advertising and aggressive sales tactics.PASSIONATE ABOUT PROFITS
Boyland’s success as a car salesman did not go unnoticed. Two years into the operation, Chrysler executives prodded him to sell his interest and operate his own dealership. He did so after much deliberation and with Tonkin’s blessings.
Boyland acquired Gresham Dodge, in partnership with the minority investment division of Chrysler. He owned 25% of the dealership, and Chrysler fronted the balance of the costs to be repaid through dealer profits. “You own a certain p
ercentage of the stock and then, through the profits of the store, you buy more shares,” Boyland explains. “That was a great lesson that I learned. Knowing that until I owned 100% of the stock, I still just had a job.”
With that in mind, Boyland was determined to make enough profits to buy out Chrysler’s majority share in his dealership. It typically takes five or six years for a dealer to buy out the stock. By 1991, Boyland owned the dealership 100%. “A lot of dealers never reached that 100% mark and they ended up losing their stores,” he says.
Although he had total ownership, Boyland still wasn’t turning a profit. “I had a lot of inventory, so manufacturers were happy,” says Boyland. “I spent a lot on advertising, so newspapers were happy. My commission structure was high, so my salespeople were happy. But I wasn’t making any money, so I wasn’t happy.”
He spent three days at home putting together a game plan — a bottom-up formula for controlling cash flow and expenses. He changed inventory, pay plans, pricing, and advertising.
“I can’t control 0% financing. I can’t control the market. I can’t control how business is doing in the region. I control those things I know I can to guarantee I’m successful,” says Boyland. “So, I didn’t have to carry 200 Chryslers on the ground when my 45-day supply was only 100.” That strategy has worked and Gresham Dodge has operated in the black every year since.
A TRIPLE PLAY
Boyland doesn’t go looking for opportunities; they come to him. In 2000, he was
Boyland credits his ability to generate cash to his philosophy of making and saving money. For example, he sold Boyland Toyota, in Redding, California, after a year in business. The profits from that sale contributed to the capital he needed to increase his store count.
Return on investment is the deal breaker for Boyland, says Dan Kaiser, a partner with Astoria Ford and vice president of Beaverton Nissan, All Star Ford, and Boyland Honda. Kaiser was once Boyland’s boss at Ron Tonkin’s dealership. Since 1995 he has been working in partnership with Boyland. “His background is in accounting. He was a numbers guy and could concentrate on net profits,” adds Kaiser. With the exception of Gresham Dodge, all of the dealerships have an invested general manager and partner. (Boyland would not disclose the amount of their financial stake.)
Like the commitment he made to Honda, Boyland plans to make sunny Florida his new home to run his Mercedes-Benz dealership, which he calls a triple play: “It’s a luxury car franchise, it’s [an] LOI new open point, and it’s located in Orlando.”
Scheduled for completion in 2004, the Mercedes dealership is in partnership with AutoNation, a Fortune 500 firm and the largest car dealer in the U.S. The Fort Lauderdale, Florida-based company owns about 375 new vehicle franchises in 17 states. Boyland’s stake is 51%. His initial cash investment will be about $3 million of the more than $11 million estimated cost. The rest will be financed.
“We are delighted that Dorian has been given the opportunity to become a member of the Mercedes-Benz family,” says Sheila Vaden-Williams, president of the National Association of Minority Automobile Dealers in Washington, D.C. “This is significant in the face of challenges in getting a proportion of high-line luxury franchises owned by minorities even though, on average, sales of about 25% of their cars are to people of color.”
Boyland grows excited when discussing business strategies. “You have to have a passion for this business,” he says. “There’s a lot of money to be made and a lot of money to be lost. But whether you are selling cars or shoes, you go into business to make money. That’s the bottom line.”