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Do You Love Your BHPH Operation? You CAN and you SHOULD!

By Jessica Schulze on Wednesday, December 04, 2013 01:12 PM

Let me tell you a little story… I started a secondary special finance company in 2001. I had no business experience, no car industry experience and no finance experience. All I had was a degree in Chemical Engineering, $80,000 and a lot of determination. The business grew and made good money and I hired and trained staff and even moved into a bigger location. My bank was happy with me and, although there never seemed to be enough hours in the day, things were going well.

In the fall of 2008, delinquencies began to rise. I was not overly concerned; we all know a rise in delinquency in the fourth quarter is fairly typical. Then, on New Year’s Eve 2008, I was running the year end reports in a hotel in Puerto Vallarta. Delinquency that month had jumped up significantly and I had to charge-off $450,000 that night to stay within my bank covenants. It was one of the worst days of my life. I knew I was in trouble! I continued to battle charge-offs and delinquency issues throughout 2009 and even broke one of my bank covenants and was on a forbearance agreement with them. I spent 2 years digging out of that mess. I laid people off, improved my staff, improved my training and changed my underwriting among other things, but I managed to turn it around. Now the company is twice the size and produces four times the profit.

Did it suck? Absolutely! It was incredibly stressful.

Did it change my life? Absolutely! I learned a great deal and grew as a manager and a business owner. Learning those lessons allowed me to be where I am today; running two successful and profitable businesses while having plenty of time for my family and myself.

What did I learn?

  1. Running a business is all about the team! You absolutely cannot run a top-notch operation without A players who are in positions that capitalize on their strengths. It is always difficult to let someone go, but if the expectations and performance have been clearly communicated then take action today.  
  2. Your numbers CAN improve! If someone would have shown me the delinquency and charge-off numbers we are achieving today 5 years ago, I would have told them that those metrics were unattainable. We are able to achieve such great numbers because our systems and policies have been fine-tuned over the years and they are being executed by our excellent staff.
  3. Do what you do well! I am good at strategy, analysis and systems. I am not a very good manager and I am not great at detail. My partner’s strengths are in the areas that I lack. The result is that we both have more fun at work and the businesses benefits greatly. If you find there are areas of your operation that get less attention or passion because they are not fun for you, hire someone else to take care of them. If you would prefer to focus on sales, outsource your collections to Pivot Rock. You will be happier and your portfolio will perform better also.
  4. Your business can and should make you happy! I have spent many a year trudging along in my business, just considering it a means to an end. Fortunately, I now thoroughly enjoy going to work. It is personally fulfilling to help a dealer improve their operation and their bottom line by lending our expertise, whether through consulting or handling their collections.  


We devote so much time and energy to our businesses, it is important for our health and happiness that we are moving toward the entrepreneurial dream, which, by the way, is NOT a slightly profitable business which you cannot be away from for more than 2 hours at a time. (I recommend Michael Gerber’s book The E-Myth for anyone who relates to my previous comment.)

Pivot Rock Solutions specializes in helping auto dealers and sub-prime finance companies. We offer complete collections outsourcing as well as consulting services. We only service the sub-prime auto market and are experts in this field.

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