Mark Smith has the Midas touch

This franchise owner built a business plan around doing good.

December 10, 2014; 6:00 AM • by Nathan Cushing

Mark Smith can say something no other Midas franchise owner can: “We represent 2.5 percent of the blood supply for Central Virginia.” 

Sitting at his desk inside his Short Pump location¹ with two Golden Retrievers — Dudley and Jumbo — next to him, Smith recalls the first blood drive his Midas held back in 2001. “[It] was a knee jerk reaction to 9/11,” he said. He called the CEO of Virginia Blood Services (VBS), Bob Carden, and asked if VBS was willing to do a blood drive at Midas. Every donor would get a free oil change. “Bob said it was a pretty stupid idea,” Smith recalled. “I said it might be. But what if?”

It proved successful, bringing out 26 people. At the time, the average VBS drive drew 18 blood donors.

“Now we have 500 people show up,”² Smith said about the last Midas blood drive. That’s why nearly 3 percent of the region’s blood supply comes from Midas. “I give away 2,500 free oil changes through VBS a year,” Smith said. With oil changes at $40.99 a piece, Smith does over $100,000 in free oil changes annually.

But those aren’t the numbers Smith dwells on. He said 60 percent of blood donors donate blood just once a year (you can donate up to 5 times annually). “If that population donated twice–just that one group donated one more time–we’d have a blood over supply,” he said.

Smith’s stores don’t only pump out blood. They also work with FeedMore (Smith sits on its board), and freely distribute coupons for free oil changes to local nonprofits and schools that, in turn, sell them to raise money.

Not only are Smith’s four Midas stores pumping out blood and money to community groups, they’re routinely setting Midas revenue records. Between the roughly 1,400 Midas stores in North America, the average brings in $703,000 each year. “We’ll break $3 million this year,” Smith said about his Short Pump store. “We’re the largest volume Midas store in the world.”

This success attracts corporate honchos to Richmond each year to figure out just what Smith does that makes him so successful. “I can’t answer that question,” Smith said. “I don’t know.”

But in listening to Smith talk about his life, his failures, and his success, you can boil it down to a single question.

What if?

“The only person I compete with is me”

Smith was flying to Los Angeles to interview with Toyota (the company his father worked for) shortly after finishing college in 1986 when a snow storm stranded him in Chicago at O’Hare Airport. He used his time to answer a Midas job post.

“Guy from Midas called me a couple of weeks later and said, what do I know about Midas,” Smith recalled. “Respectfully, not a lot,” he answered.

That didn’t matter. Smith got the job. “The more I got into it, the more I enjoyed it. I enjoyed the operations, I enjoyed the aftermarket, got to know something about it, got to know a lot of franchisees, many of whom are still very good friends today.”

After serving in several field positions with Midas, Smith eventually did its franchising real estate for the US and Western Europe. The job required travel roughly 200 nights a year. “I got tired of that,” and so in 1998 he sat down with the Midas CEO and said he wanted his own market to franchise. He had four options: Las Vegas, Baton Rouge, Sacramento, or Richmond.

Richmond’s proximity to beaches, mountains, DC, along with its business infrastructure, pulled him in. “It just made sense, everything about it.”

Like other top brass at Midas who become franchisees, Smith thought his corporate experience meant he’d have a leg up. “I kind of came into this thinking I knew what I was doing,” he said.

He didn’t.

“The first couple of years were bumpy. There were a lot of mistakes, a lot of self-inflicted gunshot wounds, a lot of bad choices,” he said. Some of that was because he fretted over competitors. “I’m going up against Firestone and Goodyear and the dealer’s OEMs,³ and your independents down the street,” he said. So he instinctively agonized over the traditional issues: costs, price matching, etc.

“I had done all the right things; was competing in all the right ways. Wasn’t getting any real traction,” he said. “The stores weren’t really evolving.” 

He realized he put too much thought on what others were doing. “I competed with everybody, and ultimately I just decided this is silly, and I just started ignoring everybody,” he said. “So now the only person I compete with is me.”

The new mantra for himself and his employees: “Let’s worry about execution. Let’s worry about experience…and let’s just make the rest of this take care of itself.”

Smith says there’s a difference between simple and easy.

“What we do is simple: we change oil. I put new brake pads in your Accura. I do very simple things. It’s not easy, but it’s simple,” he said. “So let’s focus on execution. Let’s figure out what we can do to demonstrably separate ourselves in little ways.”

Midas touch

Smith said you only have to look around to see other people and their businesses separate themselves: Gary Glover at Puritan Cleaners, Gary Weiner at Saxon, Andy Thornton and Sarah Paxton at LaDiff. Puritan cleans clothes, Saxon sells shoes, and LaDiff sells furniture. “But they’re a little bit more than that,” Smith said.

It was around the time Smith shifted gears with his Midas stores that he organized the first VBS blood drive by asking, what if offering free oil changes could bring people to donate blood?

Smith still asks himself and his employees what if? “Every week Julie, my office manager…and the rest of my team gets a ‘what if?’ from me. And some of them are just acutely stupid ideas,” he said. “And every once in a while a blind squirrel finds a nut: you come up with something that works. It’s just a constant work in progress.”

Not only does Smith provide for the community, but he does so not at the expense of his employees’ compensation. He said that between Midas, Goodyear, and Firestone, turnover amounts to between 150 – 200 percent. “I don’t have turnover,” he said. “I want my techs to be able to afford a house.”

Giving aways hundreds of thousands of dollars in free service, paying his employees very well, and not compromising on price should be a business disaster. But Smith is a nontraditional guy. Take his Colonial Heights store: he retrofitted a garage bay with a large walk-in refrigerator for Meals on Wheels to use. “It’s nontraditional stuff, but it works,” Smith said about his success.

About five years ago, the company’s top brass took notice and began flying out to reverse engineer what Smith does. “The COO and CMO will be out here on the 6th and 7th of January for that very reason,” he said. “A Midas shop had never done $2 million. Well, we did it so that’s old news. A Midas shop has never done $3 million. Well now that’s old news. So now we’re plotting a course to $4 million.” Remember: the average franchise does about $703,000 annually.

Midas would love if Smith took over more stores, and have offered him markets in Virginia and North Carolina. But Smith has no interest in moving. “I want to keep growing,” he said.

But the metric he uses to gauge that growth isn’t in oil changes or revenue. He talks about growth in the currency of good. “This year we’re going to give $130,000 – $140,000 to FeedMore,” he said. “I’d like that to be $200,000.” He doesn’t want 500 blood donors to come out for the next drive. He wants 600 donors, 700 donors. Even 1,000.

Speaking recently to students in VCU’s ASPiRE program, Smith told them about six times 18. That gets you 108. “What happens when you multiply the 6” between your ears by the 18” from your heart to your head?” he asked them. “It’s a whole different number.”

“You find the intersection of your intellect and your emotional curiosity. And some really cool things can happen.” Some of those things, like the things Smith does through his Midas stores, may be untested, risky, nontraditional. Smith proves that the world could use some more of that. “There are so many nontraditional solutions out there,” he said.

“We just got to say, what if?”
 
 

Photo courtesy of Midas

December 10, 2014 6:00 AM · in West End 2