It is a motto for entrepreneurs as well as the subtitle of a book I found in my mailbox last week.
The phrase caught my attention as I was preparing to write this column about Michael Holmes of Vienna.
Five years ago, Holmes left a promising future with the Carlyle Group, the District-based private- equity giant, to run his father-in-law’s chainlet of 11 automobile service stations in Northern Virginia.
You could argue that there wasn’t anything uncertain about his decision, given that he was going to work for his father-in-law. Besides, if he failed, his wife had a blossoming career at a big Washington law firm.
But Holmes ached for a chance to run his own business. He had ideas to test. He wanted to be a frontline operator instead of crunching numbers for Carlyle real estate deals and working his way up the high-pressure — albeit lucrative — ladder of high finance.
So at 27, he jumped.
“I thought it would be an interesting opportunity to build a business,” said Holmes, now 32. The bouncy, six-handicap golfer is a self-described “VP in charge of everything” at Virginia Tire & Auto, founded three decades ago by his father-in-law, company president Myron Boncarosky.
Works for his father-in-law? Six handicap? Hmm. I was dubious. I asked Holmes what he brings to the table, other than accounting experience and an MBA from the University of Chicago, which he earned while working full-time at Carlyle.
For starters, he unified all the stores under a single brand, Virginia Tire & Auto, which is boring but tells you what the company does and gives it one identity. That also allowed for a marketing strategy.
The big change came when Holmes invested $1 million to put all 11 stores on the same computer network, allowing faster delivery from suppliers, instantaneous daily reports on what was selling and what wasn’t, and better tracking of customer needs.
Holmes said he failed to predict how difficult the adjustment would be to the new computer operation, but it allowed him to reduce paperwork, better allocate resources and save money.
He used his finance and real estate experience from Carlyle to buy the land under three of the stores from Shell for $6.5 million. The move gave Holmes, his wife, Julie, and Boncarosky a stake in prime retail real-estate locations. It also changed the economics of the business, freeing them from frequent rent increases and enabling them to make more favorable, long-term purchase agreements on gasoline.
The finance and accounting graduate of Virginia’s Washington & Lee University now commands a real estate and auto service barony that includes 403 employees and $67 million in revenue.
“Myron built this up, and now we want to take it to the next level,” he said, dressed in his Virginia Tire & Auto-labeled shirt — with tie — and a winter fleece with a similar logo.
Holmes thinks about things, which I like. For example, calling the tire store “a knowledge business” — because “people tell us the problem with their car, and we have to find out what is wrong and fix it.”
More than 1,500 customers a day visit VT&A’s locations, from Centreville to Ashburn to Vienna. Although all of the shops are under the Virginia Tire umbrella, some have branding agreements with Goodyear, others with Bridgestone and a couple have Shell signage, making for a diverse group of names.
The business is divided into gasoline sales and shop sales. Gasoline accounts for about $30 million in annual sales at four locations. Most of that money goes right back to the gasoline supplier, leaving Holmes a little more than $1 million in gross operating margin — before he pays any of his bills.
The real money is in the annual $37 million in “shop” sales, which covers everything other than gas: tires, parts and auto repairs.
Based on similar companies I have written about, I estimate that Virginia Tire & Auto ends up with a profit in the low, single-digit millions. Holmes wouldn’t comment on profit, saying only that he is salaried and earns a percentage on the store operations, mostly owned by Boncarosky. Holmes and his wife, however, have a small share (in addition to the stake in real estate).
Holmes said the company has purchased what he calls “two A locations” in Northern Virginia and hopes to build stores on them in the next three years. The real estate aspect, which is his area of expertise, is difficult because he faces competition from fast-food chains and big drugstores, like Walgreens and CVS, for the best spots.
Boncarosky lives in the same house he bought in 1979 for $136,000, although he and his wife have made a few concessions to success: They own luxury cars and a beach house.
“Given what he’s built, he lives fairly modest,” Holmes said.
They also own some commercial townhouse condos near George Mason University, the area where Virginia Tire & Auto’s headquarters are located. Inside is a rabbit warren of offices and conference rooms where 18 administrative employees work.
The place is littered with whiteboards, on which Holmes has scrawled his ideas and diagrams for the business’s future.
He points to a stack of feel-good messages that you find on those daily office calendars that sit on your desk. He points to one by McDonald’s founder Ray Kroc: “If you work just for money, you’ll never make it, but if you love what you’re doing . . . success will be yours.”
For previous Added Value columns, go to www.washingtonpost.com/business. Follow Tom Heath on Twitter at @addedvalueth.