Colorado entrepreneur carries on family tradition as Big O Tires franchisee
Denver—Growing up, Scott Koldenhoven never intended to work in his family’s tire businesses. But as fate would have it, Koldenhoven is now one of the largest Big O Tire franchisees in the U.S., with a stake in 13 stores in Colorado and New Mexico.
In a recent interview with Parts & People, Koldenhoven talked about his path into entrepreneurship.
“As a senior in college, I wanted to go into marketing,” recalled Koldenhoven, a 1988 graduate of Dordt College, a small liberal arts college in Sioux Center, Iowa. “But my dad wanted me to go to work for him.”
At the time, his father, Hank, owned and operated three Big O Tires stores: one in Fountain, that opened in 1972, and another two in Colorado Springs. After graduating, Koldenhoven decided to take his father’s advice, and he wound up spending 20 years behind the counter of one of the Colorado Springs stores.
Koldenhoven recalled working for his father in high school and always being the “low man on the totem pole.” Learning to cope with struggles and developing a strong work ethic were lessons he said he learned early on that served him well later in life.
Strength in numbers
Eventually, Koldenhoven and his brother, Bruce, bought their father’s three stores in 1994. The original Fountain location is still in operation today, and the two Colorado Springs locations closed and relocated, he said.
Looking to expand his operation, Koldenhoven said he sought out Mitch Beranek, a friend and fellow Big O Tires owner in Fort Collins and Cheyenne, Wyo. The group of partners expanded to include Bruce Koldenhoven, Jeff Schwab and Keith Blake.
The key to making the business partnership work, Koldenhoven said, was that all stakeholders were Big O Tires franchisees. As acquisitions were made in Denver, some of the business partners changed, he said, and General Manager Mike Pryor was brought into the fold, allowing for expansion into Santa Fe and Albuquerque, N.M.
Among the 13 locations he and his partners own, there are approximately 150 employees, Koldenhoven said. For those who show consistent performance over time, opportunities for partnership are presented, he said. “I want my good people to stay.”
Efforts are being made to increase store count and market presence in Albuquerque, Koldenhoven added.
Backed by TBC Corp., Big O Tires
Once a Colorado-based corporation, Big O Tires is now a part of TBC Corp., in Florida, that owns several popular retail outlets, including NTB, Midas, Tire Kingdom, and Merchant’s Tire & Auto Centers. The portfolio also includes warehouse distribution, which Koldenhoven says offers a distinct market advantage.
“They look at dealers as assets and want to do what’s right for the dealer,” he said of TBC Corp. officials. “I couldn’t ask for a better business partner.”
Although many Big O Tires locations can sell most brands of tires, he said he’s a true believer in the Big O brand.
When Big O Tires develops new tires, input is solicited from dealers on such things as the name, look, and performance characteristics, Koldenhoven said.
“From a buyer’s standpoint, we’re fortunate to be involved with TBC,” Koldenhoven said, adding that most new tire inventory is sourced from TBC’s warehouse in Denver.
Other key tire brands sold include Michelin, BF Goodrich, and UniRoyal, he added.
KPIs and customers
When reviewing the performance of an individual location, Koldenhoven said he looks at three key performance indicators (KPIs) — gross sales, gross profit, and tire sales-to-service ratios.
“In our industry, a healthy tire-to-service mix is 60 percent/40 percent,” he said. “We’ve seen tire margins fall over the years, but service tickets have increased.” His stores all conduct most types of general repair and maintenance, he added.
“The other side of the coin is if we’re going to hit KPIs, there’s no way we can do it without providing great customer service,” he said. “If you take care of customers’ needs, then the numbers will come. I go to work every day and try to make what I’m doing better.”
Reputation management is handled through a combination of secret phone shoppers and in-store customer surveys, Koldenhoven said, something the Colorado region store owners do as a group.
The stores also rely on radio and print advertising to increase foot traffic to the stores, he said.
Koldenhoven was honored at the Big O Tires national sales conference this summer in Las Vegas, earning the Point of Light Award for his extraordinary contributions to the brand. The previous year, he earned the International Franchise Association (IFA) Franchisee of the Year award.