Treading on the Competition
Entrepreneur Matthew L. Brown has been known to slam on the brakes and come to a screeching halt on plenty of business deals over the years. Perhaps it was because the numbers didn’t add up; perhaps the deal just didn’t feel right. Whatever the reasons, walking away at the right time never hurt. In an industry that is constantly changing, the shrewd Queens-based businessman continues to burn rubber on the competition from coast to coast.
At 68, Brown sits at the helm of Big Apple Tire Inc., one of the largest and most successful Black-owned tire maintenance service distributors in the New York metro. The company has been Brown’s baby since 1986 and it has made him a millionaire a few times over. It was launched as a franchise of the Goodyear Tire and Rubber Co. of Akron, Ohio. At the time, Brown had worked for the tire manufacturer for more than 20 years in various capacities, including as a field sales associate, district manager, marketing manager and senior vice president.
He rose to the top of the entrepreneurship world from humble beginnings in the tiny rural town of Demopolis, Ala., where he was one of a dozen children. Owning his own business was, perhaps, always his ultimate goal. “I’ve always been a businessman, even as a kid,” he says in an exclusive interview with The Network Journal. “There’s nothing like having your own business and making the decisions about how things should and should not be done.”
Big Apple Tire currently employs about 50 people. While Brown is reluctant to divulge the company’s current annual revenues, an interview with a national business publication in the late 1980s, reveals that the business saw annual revenues of $1.75 million in 1988.
Road to entrepreneurship
Brown says his journey to independence began in 1980, when he established Rubber City Capital Corp., a minority enterprise small business investment company, or MESBIC, for Goodyear. MESBICs are federally funded private venture capital firms licensed by the U.S. Small Business Administration to provide capital to minority-owned businesses. Rubber City Capital was designed to help attract more minority entrepreneurs to the Goodyear family as franchisees. “[Goodyear] started to realize the importance of diversity and attracting a wide array of clients and customers,” Brown says.
However, the actual MESBIC program didn’t get under way until 1985. Brown managed to obtain $50,000 in funding through the initiative and started Big Apple as a company-owned store. He eventually bought it for about $120,000. In 1989, what was then known as Big Apple Tire and Auto Service Center became Goodyear Tire & Rubber Co.’s No. 1 franchise in the Mid-Atlantic region, selling more tires than any other single franchise store.
Brown is credited with pioneering the development of the Black-owned dealership, a business structure that continues to be a focal point and revenue generator for African-American entrepreneurs in the automotive industry. In the industry’s current intensely competitive environment, one might say that Brown epitomizes the nimble player, some of whom are slowly slipping away from the traditional “Big Three” automakers—Ford Motor Co., General Motors Corp. and DaimlerChrysler AG—as foreign automakers and suppliers increase their stake in the U.S. market and as the nation’s economic growth slows.
In these times, Brown says, a sound growth plan—such as investing in new equipment and technology—and a solid marketing strategy are crucial to success. “Equipment costs and advances in technology are all important factors in business. As the industry changes so does your business plan and marketing strategies,” he says.
Several factors are impacting the survival of the tire industry’s minority players, not the least of which is falling sales. According to a study earlier this year by the Rubber Manufacturers Association of America (RMA), a national trade association in Washington, D.C., total shipments of tires to distributors across the country will decrease by the end of the year, albeit by fewer than one million units. Original-equipment passenger tires alone are projected to decrease by 4.5 percent, to about 46.0 million from 48.2 million units in 2006. “Revisions to 2007 tire shipments reflect changes in the U.S. economic growth predictions for both the consumer and commercial sectors,” says Dan Zielinski, the RMA’s vice president of communications.
Equally significant is the predicted sharp decline in sales for wide base and on-highway commercial truck tires. Zielinski says those sales are expected to drop by about 30 percent this year, due in part to changes in environment protection regulations related to tires. The only category that is expected to experience a noticeable increase in sales is replacement tires for light trucks. That market segment will increase by 500,000 units to about 34 million by the end of the year. Zielinski says this is due in large part to consumer demand for light truck vehicles.
In addition to falling sales and new environment regulations, safety concerns also are influencing change in the tire industry. Zielinksi notes that more than half of the states earlier this year issued proclamations or statements to support the tire industry’s efforts to promote safety and celebrate National Tire Safety Week in April. In the metro area, only New Jersey and Connecticut issued tire safety proclamations. New York was absent from the list this year.
The federal government estimates that nearly 700 fatalities and 33,000 injuries occur annually in automobile accidents that are attributed to under inflated tires. An RMA study shows that less than one-quarter of all motorists regularly or properly check the pressure of their tires. In addition, less than one-third can tell if a tire is bald (little or no tread on the tire.) “Proper tire care is essential to vehicle safety and optimum fuel economy,” Zielinksi says. “We encourage people to take a few minutes each month to check the air pressure in their tires.”
Adjusting to change
While the automotive services industry has indeed grown dramatically and seen many changes since Brown arrived on the scene more than 20 years ago, lucrative business opportunities still exist for entrepreneurs, he says. He makes this declaration despite the RMA’s gloomy analyses and forecast for a slow rate of growth in the tire industry as a whole.
“There is still a need to service vehicles that are used by large corporations and growing industries such as telecommunications and transit services,” Brown says. “The successful tire store must go beyond just selling tires. Great customer service keeps the door open every day.” He should know, as the recipient of dozens of community and business service awards over the years, including the “Outstanding Minority Business Enterprise” award from the U.S. Department of Commerce Minority’s Business Development Agency in 2003.
Brown offers this simple, yet cogent advice to other small minority business owners hoping to emulate his success: “Know the market—study it—examine trends and find a mentor,” he says. “Be prepared to work long hours and never stop learning all that you can about the business.”
By Glenn Townes