Fred Timbrook has 20 rooftops spread across rural Virginia and Maryland, some of them literally in the middle of nowhere. He knows they may produce just a fraction of what a metro dealership might do.
“Twenty rural equals probably four metros,” Timbrook told Yossi Levi on the CDG podcast this week.
But Timbrook has mastered the rural world, and it works for him.
Driving the news: Timbrook's rural game plan comes down to cycle management.
"Highs typically aren't as high and lows typically aren't as low," he said. For a group funded entirely on its own equity, predictability is the foundation on which everything else is built.
Plus, he likes the quality of life in a rural market.
“The quality of life for me, my family, our employees, their families, is of the utmost importance,” he said.
The breakdown: Timbrook’s stores average just over 50 units a month. Some do 30, some do 100.
Staffing numbers run at about 14 to 15 employees at the smallest rooftop, and 45 to 50 at the largest.
One person often covers multiple jobs, and managers sometimes oversee multiple rooftops.
"It takes as much work to run a small store as it does a large store," Timbrook said, crediting the observation to dealer Mike Leep.
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Between the lines: Timbrook shared some of the benefits of rural operations.
For instance, he pays lower rent, has lower real estate costs, and there’s a lower cost of living for employees.
His farthest store is 250 miles out, with enough geographic overlap to swap vehicles and pull staff across rooftops when it makes sense.
The biggest structural headache is vendor pricing. Per-rooftop costs don't scale with store size, and at 15 units a month, they bite.
"If I'm going to pay four grand a month for, let's just say, vAuto, it's easier to swallow that in a store that's doing 100 used cars a month versus one that might do 15,” Timbrook said.
He's renegotiating his CDK contract with the same problem in mind.
Worth noting: Timbrook diversifies his portfolio by running powersports stores and collision centers, too.
His two Honda powersports stores did 189 units last month and finished the first quarter up 22%.
Timbrook said the return on investment beats the car business, the cost of entry is low, and being in the mountains drives natural demand for side-by-sides, four-wheelers, and adventure bikes.
He's already looking at a third location.
Bottom line: Timbrook grew up in rural areas, and with his winning formula, owning dealerships in those spaces works. His group finished up 1.3% in the first quarter on existing brands.
And now, he wants more growth. Specifically, he wants 25 rooftops by age 62, and 50 by 72. "Fifty years; 50 stores, we're going to do it," Timbrook, 56, said.
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