It’s been a busy year for Brian Wiginton and Frank Montgomery, who bought their former employer, Silver West Limousines, from its founder in April 2016 after having worked at the company for several years. The first challenge Wiginton and Montgomery had to handle: having to move their headquarters to Fort Worth from Haltom City, with their rent about to increase under a new owner. “The new owners wanted to double the rent without making any improvements to the building,” says Montgomery, 36, who worked more than six years for Silver West, starting as a chauffeur before moving into the office. “That was one of the first things thrown at us.”
Good thing, Wiginton, 43, and Montgomery found a 30,000-square-foot warehouse available for lease nearby.
“We doubled the space,” Montgomery says. “Vehicles at the old place were double-parked. Each vehicle now has its own space. Our office quadrupled.”
That’s helped promulgate the professional culture at Silver West that Wiginton and Montgomery want to promote.
The company today has 40 employees and 27 vehicles, including sedans, SUVs, vans, limo vans, stretch limos, limo buses and mini-buses. It also has partnerships that give it access to coaches that hold more than 50 people.
What’s on the horizon for Silver West: moving more into the large-coach business and lessening its reliance on the individual business that’s been hurt by ridesharing services like Uber.
Where these guys came from:
Brian, who grew up in Coleman near Abilene and has a bachelor’s degree from the University of North Texas: Just blue collar. I worked 10 years for the company as a chauffeur. I was in EMS for four years and worked in armed transport before then.
Frank, who grew up in Fort Worth and has a “master’s in hard knocks”: I’ve done a little bit of everything. Fast food. Delivered bread for Mrs Baird’s. Worked Harris downtown for five years as a patient care tech. I worked for Silver West for six, seven years, one and a half years as a chauffeur. I moved into the office because I had a young son at home. To be a successful chauffeur, you spend a lot of time in the car, a lot of late nights, a lot of weekends.
Buying the Company
Frank: I wasn’t satisfied with where I was and some things I thought needed to happen at the company. Brian and I were just talking one day.
Brian: I said I know people who could possibly back us. Frank came back in an hour and said let’s try this.
Was the company for sale?
Brian: He wasn’t shopping the business, but he was ready. He founded the company and started it with one vehicle in his backyard, and added vehicles and added personnel as the revenue just kicked in. He didn’t have anybody else in the family [who wanted the business]. We saw the opportunity to buy the company. The first meeting was at the Paris Coffee Shop. We put it on the table.
Frank: We presented him with a cash buyout. Then we presented him if he wanted to finance it himself. Within a week, he had already gotten back with us and agreed to a selling number. Then we started our due diligence, our financials.
Finding the capital
It took us about two years to secure the capital. I was taking [a client] to the airport one day. I said I’m looking to buy the company. She got on the plane. I sent her a text. I said, do you know anybody who'd want to invest in this? She talked to some other people and set up a meeting.
Frank: We went with private lending versus a bank because we don’t have the business experience. It took us a little bit longer to secure financing than if we were going to go to a traditional bank.
Brian: We originally wanted a loan. We didn’t want investors. All of our revenue comes from depreciating assets. There’s not a whole lot of margin for an investor who wants 10, 15, 20 percent of the company. It took two years [to obtain financing], and there’s a lot of moving parts. During that two-year timeframe, the fleet’s changing, collateral for the loan’s changing, the value of the assets is changing.
Frank: Taking an existing business and going with it has a whole separate set of challenges that in some ways are just as hard as a startup.
Brian: We had to prove to our clientele that we can do the job.
Changing the culture
Frank: When a chauffeur comes here, most of the time, they don’t view this as a real job. They think of it as a part-time job, a stepping point. [Rideshare services] have helped. Now anybody who wants to can be a chauffeur so to speak. Not that I think the people who drive for Uber are chauffeurs. There’s a difference between being a chauffeur and being a driver. It’s not just transportation from point A to point B. It’s an experience. If you take a limo to your prom or your wedding, it may be the only times in their lives they’re in a limo. At times, a chauffeur can be a counselor. At times, he takes on a bodyguard type of role or a concierge for somebody who’s not from the area. It’s getting to see that bigger picture. Financially, [chauffeurs] can make a very good living if they take ownership of the situation.
What’s the company’s growth plan?
Brian: We hired another outside salesman. We already had one.
Frank: But he was more of an inside sales and account manager. He’s brought on some pretty large accounts. He’s a proven sales person. Most of the things a salesman is selling, he can walk in and leave with a contract. In our industry, it’s more about relationships. He might have sold the person on Silver West, but it might be three or four months before they pick up the phone and need our services.
What’s the competition
Frank: There’s probably 10 companies in the Metroplex that offer everything that we offer. If you start looking at every guy who has an SUV or car service, there’s 200 companies in the Metroplex. When you factor in the [rideshares], there’s a lot of competition in the market. But DFW is growing, and there’s plenty of market share for everybody.
What’s your market share?
Brian: I don’t know if we could put a number on market share.
Where’s the product differentiation?
Frank: Customer service.
Brian on Uber: You’re lucky if they unload your luggage at the hotel. Most of them don’t even have insurance. We carry a $5 million policy.
What kinds of threats do you see?
Brian: I’ll be honest with you. Where our industry is heading is to the coach bus segment because of Uber. That’s where our future is. We still want to stay as much as possible in the airport transportation.
Frank: Our market is 75 percent sedan and SUV today, 80 percent corporate and 20 percent private.
Are you in the big coaches?
Brian: The biggest bus we have is the 36-passenger bus. We have partnerships. We just don’t have [the large buses] in the house.
So, you want to buy your own coaches?
Brian: That’s the plan. It’s a half-million per bus investment.
Frank: You have to factor in the maintenance. You have to factor in the internal costs. You have to factor in the DOT regulations. Our goal is to progress to the larger capacity. I think it’s a progression that we’ll take first with one of the larger capacity [50-passenger] mini-buses first. I see within the next two years, probably having a coach on the ground.
Could we see industry consolidation?
Frank: I think so. It’s definitely possible. What I see are some of the larger car companies are buying up some of the smaller coach bus companies to get more market share.
Brian: We’d like to buy smaller services; there are so many of them.
The limo industry is talking about the threat from autonomous vehicles down the road. Are you guys looking at that?
Brian: For people using a limo service, a car service, the market in autonomous vehicles is still a ways off.
Frank: If I’m driving down a highway and somebody keeps looking in his mirror, I know they’re probably going to merge, so I let him do it. Autonomous can’t detect those signs. In our industry, we’re looking at more internal functions and fully automating there.
Tell us some stories about the service.
Brian: We have clients who all we do is pick up Christmas packages for them. We’ve got situations where we don’t even have clients in our car.
Frank: I picked up a lady from the airport one day. When she gets there, her baggage is lost. I asked her if needed to go to Walgreens or CVS to get some things, even though her hotel has all of those things. She took me up. We stopped at CVS. It’s those little things like that that separate our company.
Do you enjoy driving celebrities?
Frank: You learn a lot about people. You get them in the car, you find out whether it’s just a persona they put on or the opposite.
Do you still drive for Silver West?
Brian: I still drive for the client who helped us out and a few others.
Frank: When needed. There’s nothing I will ask one of my employees to do that I’m not willing to do myself.