Every business owner loves to be busy. It’s a good sign. But business owners like Kevin and Sherrie Gibson at Midas Auto Service and Tires on Erie Street, also know that cash flow isn’t all there is to a healthy balance sheet.
Fortunately, when the Gibsons’ Midas franchise faced a temporary cash flow crunch, despite being both busy and profitable, Perth Community Futures was able to respond quickly with short-term financing to see them through.
“We had a steady stream of customers from Day One,” says Kevin. “The Midas reps who personally monitor new franchises for the first two weeks were flabbergasted and told us, ‘We don’t see this.’
“At first Midas corporate wanted to put us back out on Ontario Street, but we knew the new section of Erie on the west side of town was ideal for us. So I found an excuse to meet with the Midas construction consultant at the Tim Horton’s out here and sat in a window so he’d see all the traffic over my shoulder. By the end of our meeting he realized we were right. Without my having to say so.” So the new shop opened at their Erie Street location October 23, 2013.
Their instant success was largely due to Kevin’s own reputation around Stratford for customer service. “I’d been in the auto repair business in town for 25 years,” says Kevin. “Starting from washing cars to oil changes to tires to front office to servicer manager. And when people find someone they trust, they tend to stay with you. Look for you, even.
“And it’s often the little extras that people remember – like not only offering shuttle service but swinging by school to pick up their kids. One customer had a flat battery in Grimsby and refused to buy another until she was back in Stratford to get it from us.”
Kevin’s track record also included managing the former Midas store on Ontario Street for five years, 2004-09. Several years later the local franchise became available and Midas’ corporate office contacted Kevin about picking up the opportunity because of his devotion to customer service. So the Gibsons sprang into action and rallied “every source of personal, family and friends’ cash, and maxed our personal credit resources to secure the franchise,” Kevin recalls.
DIP IN THE ROAD
“We were busy from the start and even made a small profit in the first year,” points out Sherrie, who takes care of the books. “But although people drive year-round this is actually a cyclical business. We needed short-term help to get past a seasonal dip that we knew was coming.”
Given that they were already fully invested in their business, Perth Community Futures was able to step in with financing to see them into the next season. “They were very helpful and we were amazed at how easy it was to work with them,” says Sherrie.
The Gibsons are working hard to retire the loan early – Kevin drives school bus part-time, and Sherrie still works as a registered nurse at Stratford General Hospital. “Sometimes it feels like a lot,” Sherrie nods. “But there are times when you do things to support your own business.”
“It is a bit unusual to work with a franchise business,” says Nigel Howard, Perth Community Futures’ General Manager. “But whatever the ownership model, these are local businesses that employ people.
“Whereas banks typically will not deal with new franchise owners until they have a few years behind them, we can fill that role. And on our side, it actually helps add diversity to our loan portfolio.”