Les Schwab

“Within five years, 60 independent dealers had joined. They added fifty million in annual sales without Les investing a dollar in real estate or inventory.”

“By 1970, Les had codified his profit sharing into what he called the 100 story. For every hundred dollars of store profit, 25 went to the manager, 10 to the assistant manager, 27 to the employee bonus and retirement fund. The company kept 38%.”

“On January first, 1952, at 34 years old, Les Schwab walked into his tire shop as the new owner. It was a leaky 1400 square foot shed with no running water and no indoor plumbing. It had one employee. The annual sales for the year before were 32,000 dollars.”

“By the time he died, Les Schwab Tire Centers was distributing over half of all profits directly to employees. The employees' trust held three hundred and thirty-two million dollars. Store managers routinely made 200,000 dollars a year, and many retired as mill…”

“Give people real ownership, not promises. Share profits monthly, Not maybe someday. Promote from within, not from above.”

“13 years later, when the family finally sold, the market value of Les Schwab's creation was over three billion.”

“By his senior year, Les controlled all nine Oregon Journal routes in Bend. He was making 200 dollars a month during the Great Depression. More than his high school principal.”

“With that simple instruction, Les became the first major tire dealer in America to build his business around his own name instead of a manufacturer's brand.”

“Most American corporations have fat salaries for the top people and treat the people at the end of the line as peons. I guess that is why, if you're on the ball, you can beat them.”

“By 1975, Les Schwab had over 60 company stores plus 60 member dealers. Revenue exceeded a hundred and thirty million.”

“From a leaky shed in Prineville to over 400 stores across seven states, all maintaining the culture he'd established in the 19 fifties. By 2000, annual sales crossed one billion dollars”

“Everyone thought personal service would become obsolete in the digital age. Instead, it became more valuable precisely because it was rare.”

“He solved the eternal problem of expansion capital by making his managers into bankers. They funded growth not because they had to, but because they wanted to. Their equity was building while it sat there. Meanwhile, the company got interest-free loans from th…”

“Effective immediately, all manager shares dropped from 50 to 45%. If they appointed an assistant, that person got 10%. If they didn't, the company kept the extra five percent.”

“In an industry notorious for low margins and high turnover, Les Schwab stores outperformed competitors by 30 to 50%.”

“Les took over five of them, and within a year, he had tripled the business Fred Meyer had been doing. Here's what's remarkable. He was selling the exact same tires at higher prices.”

“Every Les Schwab store would follow this model. Every manager would be a partner, not an employee.”

“That first month, Les did 2800 dollars in sales, about what the previous owner had done. But by June, something had shifted. Sales hit 10,000 dollars a month. By year's end, he'd done a 150,000 in revenue. Five times what the previous owner managed.”

“By not making tires, he could always offer customers the best option without defending a bad product. In the long run, what is best for the customer is best for the company.”

“Most telling was by 1975 Les Schwab dominated the Pacific Northwest without acquiring a single competitor. Every store was built from scratch or recruited as a member dealer.”

“Another tired dealer opened in Madras around the same time. Shiny new building, proper equipment, all the advantages that Gordon lacked. That competitor went out of business in two years.”

“Frank would manage the Redmond store. He'd pay Les 200 dollars monthly rent and take 400 dollar salary. After that, they'd split all profits fifty-fifty. But here's the genius part. Frank had to leave his share of the profits in the business until his stake eq…”

“Les Schwab built a three billion dollar tire company in the mud and gravel towns of the Pacific Northwest. And he did it while charging higher prices than his competitors, and he did it while giving away half of his profits.”

“He built a multi-billion dollar business selling tires by treating his employees like owners. His businesses outcompeted every competitor simply because his employees cared more.”