Sudden Succession

Following the death of their father in June, Shawn Smith and Kristin Dietz faced a decision on the future of Flip’s Tire Center, the business that Philip “Flip” Smith had operated for more than 30 years. There was no plan for the pair to take over the Van Nuys tire and auto accessories store and the elder Smith seriously considered selling and retiring. Career paths had taken Shawn to a chrome wheel wholesaler while Dietz became an accountant and taken a position as chief financial officer for a charter school in Burbank. But then the brother and sister found themselves the inheritors of the business; a well-known business that Flip Smith had built up since the early 1970s serving individual vehicle owners and car dealerships. Not wanting to let all that goodwill to just end, it became clear to Shawn Smith and Dietz to keep Flip’s Tires going to continuing serving its customers. “We decided to make a go of it,” Dietz said. The timing of that decision couldn’t have been worse, coming as it did just as the economy began to go flat like a tire with a massive leak. But with the advice and counsel of two friends of Flip’s who are also San Fernando Valley business owners and the reliability of long-time employees, the duo are indeed making a go of it. The younger Smith handles the day-to-day operations at the Sepulveda Boulevard store staffed by 11 employees. Dietz is the behind-the-scene partner who makes weekly appearances to check up on financial matters. The presence of their father, however, is still felt. In the office now used by the son hang the multiple awards and commendations given to Flip Smith from the City and County of Los Angeles and many charitable organizations for his volunteer work in the Valley. Above the cashier window hangs a large color picture of Flip wearing his trademark Hawaiian shirt. “It is strange feeling of Flip not being there but still seeing him,” said Lee Kanon Alpert, a long-time friend. Once having made their decision, the next move was to let customers, vendors and the many friends and associates Flip Smith made over the years know that the tire center was open for business as usual. Shawn Smith and Dietz went through hundreds of business cards found in their father’s desk to add to the mailing list and then spent hours personally signing by hand 1,400 letters that were sent to those contacts. Managing the Transition The transition to managing Flip’s was smooth once Shawn Smith settled into the office just off the showroom floor. Growing up he spent time at the shop, moving up from emptying garbage cans to changing tires to becoming a salesman. Some of the employees he now manages were once co-workers: the office manager with 18 years of service; one mechanic who has worked there for 26 years, another for 21 years. “This is a very dedicated staff that stayed with my dad even when knowing he was very sick,” Shawn Smith said. Dietz described her brother as a brilliant salesman in whom she sees many of the same qualities of their father; qualities that customers see as well that keep them coming back. Salesmanship, however, does not necessarily translate to the operational experience of tracking inventory, reducing overhead, managing a payroll and understanding an account ledger. That’s where Ron Feinstein and Phil Mundy come in. Both were life-long friend of Flip’s; Mundy and he played football together at Notre Dame High School. The two advise Shawn Smith and Dietz on operating the business, meeting every other week to check over the finances and discuss issues that arise. Feinstein has been in business in the Valley for 50 years, operating laundry equipment supplier All Valley Washer first with his late father and now with his brother, son, sisters, and brothers-in-law. Mundy owns Mundy Medical Marketing in Calabasas. “Between the two of us we bring a lot to the table,” Feinstein said. As close friends to the late Smith, Feinstein and Mundy were aware of how much time Smith put into the business and the personal approach he took to building the customer base. Since August, they have become aware of the areas where Shawn Smith needs guidance. In running a business day-to-day an owner needs to know what amount of sales they need to bring in to be profitable; or that a drop of 2 or 3 percentage points can be the difference between a good month and a bad month. “In small business you cannot sell at a loss and stay in business,” Mundy said. Flip’s Tire Center was struggling when Flip Smith died and in the months since its financial performance has been up and down. The retail side is doing well as owners continue to maintain their vehicles but what Shawn Smith called “the gravy” the work for car dealers and companies with fleets of vehicles has declined. Mundy, however, anticipates the business turning the corner in the next month or two. Whatever does happen in the months ahead, Shawn Smith and Kristin Dietz know that they achieved what Flip Smith had wanted all along for his business. “When we were younger that was his hope that my sister and I would one day run the business,” Shawn Smith said.