Welcome to another edition of the Car Dealership Guy Podcast Recap newsletter—the key lessons from top operators, founders, and execs shaping the future of auto retail.
Today's guest is Kyle Coleman, Founder and President of Coleman Automotive Group.
We dig into his whirlwind year of acquisitions, the personal sacrifices of entrepreneurship, how he structures his private equity fund, and why snail mail works in rural markets.
The entrepreneurship journey demands real family sacrifices.
While social media shows the highlights, the hidden costs of rapid dealership growth on family life tell a different story.
"Everybody out in the world, they see the posts, the growth posts, the acquisitions, the excitement, the finish line, so to speak. But, on the personal side, there's a lot of stress and lot of things that go into that, and a lot of sacrifices that you make to do this."
His wife works full-time in the business, often more hours than other office employees, while his mother moved in to help with their three boys during the growth phase.
Hiring the right CFO changes everything, even when you overpay.
Bringing on a CFO with 20 years of automotive experience who moved from the West Coast to rural Iowa for the opportunity proved transformational.
"I gave her probably more than what the company could afford, but it's the chicken or the egg type of conversation, you know, which comes first. So bringing her aboard was more important than maybe overspending a little bit for where the company was currently at."
The investment pays dividends when the right executive cares more about success than personal comfort, sometimes keeping sleepless nights over business performance.
Long-term vendor contracts hurt dealers with zero accountability.
Month-to-month contracts with maximum one-year terms prevent vendors from changing behavior after signatures.
"Some of these companies, they lock dealers into these five, 10 year, 15 year deals, and there's no increase in what's expected from them. There's nothing to hold them accountable. Once they have your signature, it locks you into a 15 or a 10 or five year agreement. How does that add value to a dealer's day-to-day operations?"
The result: inherited contracts that become dead weight—think $120,000 annually for unused systems while paying separately for functional alternatives.
Rural markets still respond to tactics that don't work in metros.
Snail mail marketing works exceptionally well in smaller markets where dealers haven't been aggressive with advertising.
"I was a firm believer that mail was dead before I came to rural markets...when we come in, like the idea that mail works is because, well, they haven't gotten a mail piece that said, ‘Hey, we'll do this, or we'll do that,’ in probably a decade."
Handwritten-style letters generated calls from people wanting to thank management personally—a response that would never happen in saturated metro markets.
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Private equity fund structure separates operational and investment decisions.
Partnering with Ralph Marquiselli, a serial entrepreneur who sold a top-10 payment processing company, to manage Prime Dealer Equity fund creates clear separation.
"He allows me to separate myself to where there wouldn't be any belief that I'm pulling strings for both, right? So then investors get that comfortability of knowing that, on a daily basis, there's somebody that's running Coleman Automotive. And then there's somebody that on a day-to-day basis is watching and running the fund."
The separation ensures neither entity compromises the other's decision-making while giving investors confidence in dedicated leadership.
Deal discipline prevents expensive mistakes that look attractive.
Walking away from a massive store that would have exceeded an entire group's volume and profit combined over key details requires discipline.
"There was one that was a really, really, really big store…I mean it would have been a shining staple for the amount of volume it would have... to put in perspective, it would have sold more cars and netted more than my entire automotive group in one. But we just couldn't get past a few key details."
Walking away cost $35,000 in legal fees but proved wise when considering the EV mandates and CAFE rules that would have created ongoing compliance headaches.
Retained earnings reduce capital needs as the group scales.
Each successful acquisition generates cash that funds future deals without raising as much external capital.
"As these dealership acquisitions happen, you know, there's less and less need for acquiring more money, right? We don't have to go out and raise as much on each deal because there's retained earnings in the deals that we already have."
This creates a compounding effect where early investors benefit from additional acquisitions without dilution.
Floor plan strategy prioritizes speed over savings during acquisitions.
When acquiring stores, inheriting existing floor plan relationships often makes more sense than negotiating better terms with new lenders.
"There's already pain points when you do an acquisition, so many pain points... sometimes it's just for convenience of saying, ‘Hey, we're going to go with what they currently have.’"
Takeovers require less documentation and auditing than switches, making inherited relationships the path of least resistance when deals already face multiple roadblocks.
Give general managers frameworks, not micromanagement.
Empowering GMs to operate within core values and minimum standards while adapting to local market conditions drives results.
"Here's your box. These are the things that matter to me. These are our core values. These are our minimum standards. But as long as you live within that framework of those few things that I give you, as a general manager, you have full reigns to make an impact."
One-size-fits-all approaches fail across different market types. And what works for advertising in rural areas would be a waste of money in metropolitan markets.
Don't chase deals just because you want them.
Discipline on valuations means walking away from stores priced on potential rather than actual performance.
"You don't want to buy a store and overpay for a store just because you want the store, right?”
Many sellers return months later, accepting lower offers after their profitability drops while sitting on the market.
