In July of 2016, Frank O’Regan was hired by Balise Motor Sales as the Business Manager for their two Mighty Auto Parts franchises. When Frank arrived, the two franchises were under performing and operating at a profit loss. The sales were historically stagnant, the gross margin was low, they had low inventory turns and poor team morale. The two franchises were almost completely dependent on the internal customer base, the Balise dealers. Over 90% of their total sales volume were to the Balise dealers, internal customers. Their external customer count was very low in both franchises.
Within just a few months, Frank had rebuilt both his sales and operational teams and within 6 months, the sales and margin were on the rise. Frank had hired a new salesperson, reassigned an existing staff member into sales, training both within the first 6 months. In Frank’s first full year of business 2017, the operational loss disappeared, and the race was on towards growing sales, margin, and profitability. At the same time, Frank changed the entire stock-ordering process. “I developed a return process for “dead” inventory to the vendors and significantly increased the inventory turn ratio from 2.2 turns per year to 4.8 turns per year,” said O’Regan.
Frank O’Regan, Business Manager
The second full year, 2018, sales grew by over 21% versus 2017, margins grew by over 300 basis points and, for the first time in the company’s history, both franchises were profitable. “During 2018, I focused on internal customer sales. I emphasized working closely with all the dealer’s parts managers. What excited me was the amount of new external customers that came on board. In 2018, the Mighty franchises I managed were nominated as Franchise of the Year from Mighty Corporate. This is quite an honor as Mighty has over 100 franchises across the USA and they only nominate 5 each year,” said O’Regan.
In 2019, Frank’s third full year at the helm of Mighty, the franchises growth even surpassed their 2018 results. Frank had very low employee turnover and his team was maturing, and their confidence was growing. Their continued growth was due to additional product lines being brought into inventory and these high volume and very profitable product lines. The permission to invest in more product lines was made because of Frank’s ability to manage his inventory dollars so well and increase his turn rates.
The year 2019 was also influenced by the fact that Frank had to relocate one of his warehouses. This was a massive project that took almost two months and Frank managed every aspect of the move on his own. He did this faster and cheaper than expected. In 2019 Frank changed his salespersons pay plan to a more commissioned based plan and the sales team really performed well. 2019 was another record year of profitability for these 2 franchises beating the previous year by over 90%.
“I was very pleased when my two franchises were once again nominated by Mighty for the Franchise of the Year award. They also won the prestigious Summit Club award given out by Mighty. The Summit Club is a yearlong contest for Mighty franchises where you earn points for sales, margin, inventory turns and participation of Mighty corporate driven programs. This was the first time this franchise won that award,” said O’Regan.
In 2020, COVID happened. It started to impact Frank’s business around April. Prior to that, sales were up 30% over the previous year. Frank reduced his staff from 12 team members to just 3, including Frank. “Putting the 9 team members on furlough was especially hard for me” Accordingly, sales suffered due to the pandemic, but no one missed a day of work. For the year, sales finished down 20% but amazingly, profitability was up over 50% compared to the previous year. My team did a fantastic job of working as a team throughout the pandemic.”
In 2021, Frank’s team was almost completely back to work. All team members that were asked returned from furlough. He did not lose 1 employee through the pandemic. “Through May of 2021, our sales were up an 80% and profitability was up over 50%, again.”
In just 5 years Frank almost doubled his sales volume from where he started, fixed the inventory overstock problem, grew his customer sales from a 90/10 ratio internal to external customers to a well–balanced 50/50 ratio. More importantly, Franks two franchises were generating net profits that placed his franchises in the top quartile of the Mighty network.
Watch full video interview below.
Contact Frank O’Regan via LinkedIn or his Career WebFolio.
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