While small businesses across the U.S. are reopening and adapting to the new normal, we’ll be highlighting stories of OnDeck customers who are facing these challenges head on. They share ways they changed their business operations to deal with new realities and how they used financing from OnDeck to help along the way.
We recently spoke with OnDeck customer Pavel Ihnatovich, who operates GS Motors in Hopkins, MN, and has used his OnDeck financing to invest in inventory and cash flow.
Tell us about your background and your business. How did it start?
I always wanted to do something different. In 2008, I was in the car export business, and luckily, it was one of the businesses that didn’t get hit hard by the recession. I did that for a while before focusing on local business only, but that wasn’t really doing it for me. I did notice, however, that electric cars were coming off lease and were affordable, so I went all-in on electric vehicles (EVs) about three-and-a-half years ago after selling the last of my gas cars.
I’d say that my business is unique – it’s the only business of its kind in Minnesota. It was hard work from the start, but I positioned myself well, to the point that now I am well known in the Twin Cities within the EV circle.
What have been some of your biggest challenges as a small business owner?
Cash flow, which is usually every business owner’s challenge. If you have money on hand, you can keep working without having to liquidate inventory at a loss. With good cash flow, you feel much more confident and are much better at dealing with customers and making sales.
Second to cash flow is finding the best marketing strategies to bring in customers. After trying a few things, including Facebook ads, I found that local radio ads did the best for me.
Why did you choose OnDeck and what’s been your most memorable experience working with us?
About two years ago, I wanted more freedom with my cash flow, so I decided to shop around for a loan. I tried my bank and another online lender, and those went nowhere. Then I found OnDeck after some more research. It didn’t hurt that Barbara Corcoran from Shark Tank was promoting you!
With OnDeck, it’s been simple. I was initially hesitant, but it was so easy, very professional, and very fast. I got approved for line of credit from OnDeck in about a day, and it was nice to be funded soon after my approval. I ended up making even more money because I had freedom with my cash flow. Even with the expense, I was able to double my profits with the flexibility the OnDeck line of credit gave me.
How have you used the money?
Mostly for cash flow and inventory. Getting cars from the point of purchase to my business costs money. I buy nationwide, so there is shipping and delivery costs, not to mention reconditioning before the sale.
There is a bit of seasonality in car sales – April through July are bigger months, and that also flows into tax season for businesses. When I have funds available, I can do better with trade-ins, too.
How has the coronavirus impacted your business? Have you had to do anything to adapt to COVID in the long term?
The immediate impact was the slowdown in sales, especially in April. Even though we were considered an essential business, the state was closed and there was a stay-at-home order, so people were travelling less for a time. I was looking at different forums to see what people were saying about the situation. The gist of it was, until people feel safe, they will stay home. They don’t want to get sick themselves. I understand that.
I kept an eye on my finances and determined that I didn’t need to go crazy. I still had some sales coming in, but I was mostly limiting unnecessary conversations. It’s just me – and it has been just me even before the pandemic – and my interactions with customers are by appointment only. The customers who do come in will see that we are disinfecting more frequently and have additional hand sanitizer out. And of course, I wear a mask to protect myself and the customer.
A lot of dealerships are experiment with home delivery and contactless delivery, but it’s not fool proof, since you still need to interact with the customer and the delivery driver. The way I do things now is the safest I can be because I have total control.
With COVID persisting as long as it could, I think people will get smart to how an EV allows them to skip gas stations and avoid mass transit while driving emission free – all things that can be positives down the line.
What’s the future look like for GS Motors?
There’s a breaking point in inventory where I can handle the work by myself, before I need help. Right now, it doesn’t make sense to bring in employees because I wouldn’t be profitable. Maybe in a year I’ll be able to increase my inventory, location, financial reserves, and potentially bring on sales staff.
What do you love about being a small business owner, specifically in this industry?
It allows me to try new things – sometimes succeeding, and sometimes making mistakes. It’s like being an artist. I worked briefly over a year for somebody and then I realized it was not for me. Making the change paid off in the long run.
Since the switch, I’ve seen demand grow, especially EVs as a second car. There are a few different things that make EVs appealing: the environmental aspect, less maintenance, and cost of fuel. My goal is to educate the customer and guide them to a car that would work for their needs. I’m always honest – sometimes I must tell customers that an EV isn’t a fit.