Building a business from scratch: A true story

Charles BarkerEver wonder what it takes to build a successful business from scratch? The short answer is lots of hard work, a passion that propels you to reach new heights every day and a willingness to take risk. It also doesn't hurt if you recognize the opportunities that come from being in the right place at the right time.

For the longer answer, we asked Charles Barker, chairman of Charles Barker Automotive, a new and used car empire in Virginia Beach, Va., to tell us how he went from humble beginnings to multimillions.

Married to his high school sweetheart, Susan, and with two grown children, Barker is still actively involved in running his business. At the age of 67, he loves what he does so much that retirement isn't even in the picture. In fact, he's added another passion that requires a significant portion of his time: a foundation he established to help disadvantaged youth.

Below are his observations about the challenges and rewards along the road to business success, what it takes to be an entrepreneur and the joy of giving back.

Tell us about your childhood.

My father was a union sheet-metal worker and we moved from city to city. When I was a young boy we lived in eight to 10 cities and since he worked month-to-month, there was a time when we lived in a house trailer so he could pick up and move to another job.

My father and my mother both grew up very poor in the mountains of rural Virginia. It's sort of how I grew up, but they always provided for me.

What type of education did you have?

I graduated high school in Virginia Beach and attended business classes at Old Dominion University. I didn't graduate from college; from an educational standpoint, I'm pretty much self-taught. But I took various classes at Wayne State University, Emory University and University of Michigan, where I was exposed to management education and leadership styles. I also attended General Motors Institute to learn the automotive business.

What was your first job?

I had a paper route at age 12, and at 16 I was a cashier in a grocery store. Sometimes I worked there overnight, stocking shelves.

Since Susan and I got married, I've only had four jobs. My first job was for the city of Virginia Beach Parks and Recreation. I made a whopping $300 a month, lining the football and baseball fields and maintaining the parks for the city.

After that, I moved to the Norfolk and Western Railroad, which is called Norfolk Southern today, working the 11 p.m. to 7 a.m. shift as a clerk. Sometimes I worked 16 hours straight because the more senior guys had the option to work overtime, but the older guys didn't want to. I didn't like the hours so I learned shorthand and typing in order to get a day job. I was making $12,000 a year; we had an $86-a-month house payment, a car that was paid for and a retirement plan.

Later, I sold life insurance for about five years, earning about $16,000 a year. I became the first agent in the company to sell over $1 million worth of life insurance their first 12 months with the company. Later, I became the third-largest producer.

How did you get into the car business?

A couple of friends of mine were in sales at Colonial Chevrolet in Norfolk and they were making about double what I was earning. My wife encouraged me to give it a try. I loved selling life insurance and probably would have stayed if not for Susan, but in the first year selling cars, I more than doubled my previous income.

I went to Colonial Chevrolet in 1970 and I sold my first car in January 1971, a Camaro. I will never forget it; I made a $350 commission on one car.

How did you move up in the car business?

I had a great mentor, Josh Darden. His father and uncle were founders of Colonial Chevrolet. I began winning sales awards and promotions. I just kept moving up the line and one day he asked if I wanted to be a vice president and head of sales. We had a sales force of 40, with 10 to 15 managers. I was in charge of all that, earning in excess of $150,000 a year. In the '70s that was good money.

Later (in 1980), he gave me the opportunity to be a 25 percent minority partner. I probably hocked just about everything I had and bought into the operating business, not including the real estate, which would have been very expensive.

I became president and CEO of the newly formed Colonial Auto Group by acquiring eight franchises in addition to Chevrolet. We purchased Toyota first, then Cadillac, Subaru, Volkswagen, Mitsubishi, Maserati, Sterling, International Trucks -- all in the Norfolk and Virginia Beach area.

When did you go out on your own?

In 1990, I decided to go out on my own. It was an amicable parting. I took Toyota and Volkswagen and later acquired Infiniti, two Lexus dealerships, Nissan, Mercedes-Benz and a huge pre-owned outlet.

When I left, I asked one person to come with me, Nathan Drory. I told him I would allow him to buy into our first acquisition as we grew, just as Josh did for me. Nathan is my partner, president and CEO. He started selling cars at age 21 and has been with me 30 years.

What is the key to your business success?

You cannot have loyal customers unless you have loyal employees and you treat them right. We have 500 people working for us and we're always looking for ways to build loyalty. We have a lot of long-term employees and we have what we call a Rolex Crown Club. If you've served 25 years, you get a Rolex watch and we make a big ceremony out of it. In 2013, we awarded four Rolexes to outstanding associates.

In any company, about half your employees are fully engaged; another 30 percent are somewhat engaged and 20 percent not engaged at all. If you can move from 50 percent fully engaged to 80 percent fully engaged, think what that does for your company's performance and their attitudes and earnings.

Also, successful people build successful people. If you bring in a person and we're successful, that person will work harder and want to be part of a winning team.

What is the key to your personal success?

Throughout my career I was always very goal-oriented. I set a plan and I follow it every day. When I joined Colonial (Chevrolet) my first goal was to go from sales into management. I was always setting another goal; I think that came from my mentor in the life insurance business, Jack McHugh. We never left the office without a plan. It was a constant goal-setting process and feeling of achievement.

I also think you have to have a mentor. I had one in the life insurance business and Josh was my mentor in the car business. He lent me some money to become a partner and I borrowed as much as I could from the bank. Once (the banks) saw that I was successful, they believed in me and I could borrow more as we grew larger.

What makes an entrepreneur?

You can have all the degrees in the world, but a strong, positive attitude is the most important thing. It gives you purpose. Of course, you have to have skills and talent, but positive attitude is your engine; without it you can't run the race.

To step out of your comfort zone is a risk if you're working for a company that offers education, advancement opportunities and other forms of security. I think people look for security too often. I say take risk, and try challenging things and you'll improve your position in life.

Talk about some of the challenges you've had to overcome.

You're always in competition with everyone else, so you have to try to stay ahead of them and work harder. The challenges we faced back then are pretty much the same as they are today: You sell cars one at a time.

I've been through General Motors' strikes, recessions, oil embargoes; it takes leadership from me and my team to get through tough times. During the latest recession, we cut expenses by $2.5 million. We looked at the budget and did it in just a few hours. You have to do what you have to do. Making tough decisions improves success.

You have to make tough decisions, but don't make the mistake of not explaining them to employees. In the last recession, we had an all-company meeting. We had decided we didn't want to lay off a single employee. In the meeting, we told employees they will keep their jobs, but we have to cut expenses, including a 5 percent cut in pay. I asked if they would rather lose 5 percent of their pay or see a fellow employee lose his job. They all took the pay cut with a great attitude. We've since added the 5 percent back.

How do you give back?

One of our business goals is good corporate citizenship. This is where my satisfaction comes from today. Our foundation, Champions for Kids, is 19 years old and we've raised more than $3 million. We've given it all back to youth-focused needs and we give it all locally. Almost 100 percent goes back to the charities we support.



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