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Make that five H-D dealerships for Adam Smith

By By Liz Keener

Power 50 dealer adds two more Harley stores in Texas

By the end of 2014, Adam Smith’s Calculated Risk Group owned two dealerships. Now the group totals five Harley-Davidson stores in Texas.

The Calculated Risk Motorcycle Group in late June announced the addition of two East Texas dealerships — one in Longview and the other in Nacogdoches. Adding those two to Adam Smith’s Texas Harley-Davidson in Bedford, Adam Smith’s Texoma Harley-Davidson in Sherman and Adam Smith’s Harley-Davidson of Waco, which was acquired in January, brings the Calculated Risk Motorcycle Group to five dealerships.

Adam Smith is the owner of Adam Smith’s Calculated Risk Group, which now owns five Harley-Davidson dealerships across North, Central and East Texas.

Adam Smith is the owner of Adam Smith’s Calculated Risk Group, which now owns five Harley-Davidson dealerships across North, Central and East Texas.

Both of the new additions have been renamed. What was formerly The Harley Shop in Longview has become Adam Smith’s Roughneck Harley-Davidson, and the former Texas Thunder Harley-Davidson in Nacogdoches is now Adam Smith’s Lumberjack Harley-Davidson.

Both dealerships previously were owned by Keith and Gail Calhoun and Jeffrey and Sandra Brown. Smith had spoken to Keith Calhoun in the past about the possibility of adding the Longview and Nacogdoches dealerships to his lineup, but the conversation grew more serious after Smith closed on the Waco dealership. Smith told Calhoun that he was interested in making one more deal this year, and as Smith already had stores in North and Central Texas, East Texas was an area that intrigued him.

The Longview and Nacogdoches locations worked perfectly into Smith’s hub-and-spoke strategy, he said. With the Dallas/Fort Worth area as the Calculated Risk Motorcycle Group’s hub, Smith was looking at dealerships within in about a two-hour drive from there. Having stores that close together allows for staff to advance their careers within the family of dealerships, and it allows for employees to return home and sleep in their own beds following training sessions in the DFW area.

“I like that we can have group training at one place, and everyone can come in for that training. So if Bedford is hosting a big training event, then everybody from each store can come in for it, instead of the trainer having to go from dealership to dealership to dealership across a bunch of different states.”

Timing also played a big role, as Smith knew now is the time to buy from a financial standpoint.

“The cost of money is about to turn right. The interest rates are not going to stay stupid forever, and you can borrow money really cheap right now, and [Calhoun] was able to get a fair multiple for his dealership because blue sky values and multiples for dealerships are pretty good right now. And so it was a deal that worked out for everybody. He’s happy, and we’re happy,” Smith told Powersports Business.

When Smith looked at the Longview and Nacogdoches dealerships, he saw two stores that were performing adequately, but had potential to increase vehicle sales, service sales and overall revenue.

“The whole market was asleep, and I’ve been looking at it for 10, 15 years just salivating about getting out there and doing something. And finally, if you wait long enough, the opportunity does present itself,” Smith said.

Smith knows how to develop successful dealerships. He opened his first Harley-Davidson dealership in 1997 at the age of 23, and by his mid-30s he had bought three and sold two of them. He’s owned the Sherman dealership since 2004, and the Bedford dealership since 2011.

Both Adam Smith’s Texas Harley-Davidson and Adam Smith’s Texoma Harley-Davidson were named Powersports Business Power 50 dealerships in the first two years of the program, with Texas Harley-Davidson being named the No. 3 dealer in 2014. The Bedford dealership is also the No. 1 Harley-Davidson dealership in Texas, as ranked by the OEM, the Calculated Risk Motorcycle Group reports, and Smith’s dealerships have earned multiple Harley-Davidson Bar & Shield Awards.

With that experience, Smith and his team are poised to make an impact on East Texas. People are the most important ingredient to any dealership, Smith says, so he’s looking at staffing numbers at the two new stores first.

Rob Edwards, who has 15 years of industry experience and most recently was the general manager at a dealership in Missouri, has been brought on as GM of the Longview and Nacogdoches stores. The next step is to make sure the employees who are currently working at those two stores are in the positions they want to be in and are qualified to be in.

“The team is a good team. They’ve all been there quite a bit of time. They’re experienced. They know what to do. I think that a lack of training from the owner in the past has held them back, has held the dealership back. Anybody who knows us knows we spend a ton of money on training, so that’s going to get fixed pretty quick,” Smith said.

Adam Smith is already considering a new location for Roughneck Harley-Davidson.

Adam Smith is already
considering a new location for Roughneck Harley-Davidson.

Before serious training begins, though, Smith plans to expand the teams at those two dealerships. Thirty people are currently employed between the two stores, and increasing the staff is a top priority.

“When there’s only 15 team members inside the building, there’s only so many people you can help on a busy Saturday, so if you’ve got
30 or 40 team members spread across the dealership, you can help a heck of a lot more folks at an event on a Saturday,” he said.

If the dealerships immediately started launching events, which are important in Adam Smith’s Calculated Risk Group’s culture, they wouldn’t be able to serve everyone coming in the door at the current staffing levels, Smith explained.

“You can only sell so many motorcycles in one Saturday, one person, so if you have two sales guys, there’s only so much they can do in a day. There’s only so much they can do in a week and a month and a year,” he added.

It will only be after the staff numbers have increased and everyone is trained that Adam Smith’s Roughneck Harley-Davidson and Adam Smith’s Lumberjack Harley-Davidson will begin launching full marketing efforts and hosting a barrage of events.

“It wouldn’t do any good if we brought in customers within the next 90 days because they’re not going to get the right show, and they’re not going to get what we’re about. They’re going to get some blend of the way it used to be and the way it’s going to be, and it’s just not going to come off right, so I’m not expecting us to really twist the throttle back until … somewhere around November we should be turning the corner, so in March we’re ready to go,” Smith explained.

Adam Smith’s Roughneck Harley-Davidson is also set for a move within the next two years, as the Calculated Risk Motorcycle Group plans to build a new facility for the Longview dealership. The current facility is nice, clean and in a good location, Smith said, but it’s too small. Smith is currently looking for some land on which to build a new building, which will total around 30,000 square feet. He plans to nail down the location soon, so it can be operational within about 24 months of the acquisition.

Smith says his approach to carefully staffing up and training before launching big marketing efforts is the slow way, but he believes it sets his dealerships up for the long term. He took the same approach with the Waco store, which, after its January acquisition, began to blossom this summer.

“It’s really starting to throttle up, and I’m really proud of our crew,” he said. “I can’t take any credit for it, but it’s setting up the building blocks the right way from the beginning because we’ve already done what I told you we’re going to do in East Texas. We did the steps, and it’s starting to pay off now, and it will pay off in 2016 and ’17 and ’18 and ’19 because the folks we’re building on are going to be there for that period of time, so we’re really, really happy. Each month is a new sales record, but we’re still not where we’re able to be.”

Smith added, “That market was a lot like East Texas, where they were doing fine, but they weren’t capturing all that could be captured with enough floor coverage and events and the right marketing message.”

With three new dealerships added within about seven months, the Calculated Risk Motorcycle Group has a lot of work to do over the next 12-18 months, but Smith said his team, including Neil Noble, Jason Bremer and the employees at all of his stores, is up for the challenge.

“If you put together the right team with the right players on the team, and you give a crap about them, and you give them the opportunity to do the things they haven’t been able to do elsewhere, then they’re going to stick around, and if they do that, everybody can really succeed,” Smith said. He added that he’s smart enough to know when to bring in people to help him and to give up some ownership, control and money for the betterment of the team and the company.

So, is Adam Smith done making acquisitions? Don’t count him out yet. He said as an entrepreneur, he may never be done, but he knows he has to have the right staff to help him build any new dealerships.

“If we don’t have the right people lined up, we’re not making an acquisition, so if it’s five for the rest of my life, fine. If it’s more in the future, fine,” he said. “I can’t answer that question directly, but I know me, and something’s going to come up. If we do a good job at our stores, talented people will come calling, emailing, or knocking on our door, and when they do, we’re going to find them a store.”

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