One can envisage the likely curriculum vitae of someone who has crafted a significant business with 20 outlets nationwide, a 45 percent market share, an annual turnover of $28 million and 170 employees.
It certainly wouldn’t be a high school dropout.
But then when life gives him lemons, Steve Lange has always been one to make… an entire lemon empire.
Melinda Collins sits down for a chat with the serial entrepreneur and creator of Tony’s Tyre Service.
Although his path to success was lined with tyres rather than lemons, the journey has been equally as rough.
Pressured to leave school the day he turned 15, Steve didn’t get the traditional education coveted by many. Instead he took what he had and made the most of it.
The result: Tony’s Tyre Service.
“I pretty much went straight into the tyre industry at that point in Cambridge in the Waikato,” Steve explains of his early exit from classroom confinement.
“Then I moved locations down to Hastings in the Hawke’s Bay and started in the tyre retreading industry.”
By the age of 18 he was made foreman of that retreading factory, but left when he felt his growth was being held back. “I wanted to become manager and I didn’t see that they would give me that opportunity in the time frame I wanted it.”
His next move was to work as foreman for an independent tyre company that was expanding and at 21 he was transferred down to Palmerston North to manage a new factory they had purchased. “The next step from there I thought was to own my own business.”
In 1982 at 23 Steve Lange and business partner Phil Jones purchased the first Tony’s Tyre Service in Palmerston North. “We paid $45,000 for that first business,” Steve says.
“Five years later I bought Phil out of our two stores for $680,000. I bought him out because it was always my plan to make it on my own anyway, I just had to pay him a hell of a lot more money than I had wanted to,” he laughs. “A month later we had the share market crash.”
Sales dropped, margins dropped and at one point Steve was paying 23 percent interest on his loan. “It was late 1987, I was under significant financial pressure. I decided the only thing to do was to increase cashflow.”
Naturally the best option was to… open another store?
“I went to three banks, got three credit cards, went to my major supplier and got an extra 30 days credit and went and opened a store in Wanganui. I needed the cash flow to service my debt and that was the only way I knew how.”
Luckily that store “kicked off really well,” so in 1988 he opened another store in Levin and in 1989 he opened the first of two stores in the Wellington market.
It was a financial tightrope; borrowing to open more stores to instigate greater cashflow. Such is the nature of tightropes that there came a point where he lost his footing. The bank manager informed him they were calling in his debts in 24 hours.
He was immediately on a plane to Auckland and soon after he strode into the chief executive’s office at Westpac. “If you guys are going to close me down tomorrow, I suggest you put some arses on planes and take a look at my business.”
It must have been a commanding visit because pretty soon arses were put on planes and the bank decided not only to rescind the threat to call in the debt, but to extend him another loan.
By the time he sold to Bridgestone in 2008 Steve had not only pulled himself back from near financial ruin more than once, he had developed the largest independently owned tyre company in New Zealand, with 20 stores and an average of 45 percent market share across all the regions it operated in.
Tony talks candidly about the secrets to his success below…
Why was Tony’s Tyre Service so successful?
“The goal right from the outset was to deliver the best service in New Zealand and sell as many tyres as we could.
Tony’s had a really strong culture within the people and at the end of the day it’s people that make the difference. When I sold the business, eight of the staff from the original store were still with me after 26 years, so we had a really strong culture.
We lived by a couple of rules; rule one was the customer is always right, rule two was that if the customer was ever wrong, refer to rule one.
We did a lot of marketing that was quite unique but at the end of the day
you can market it as much as you like, but if the customer doesn’t enjoy the experience they won’t come back. So we put a huge amount of resources into developing our people and working with a positive attitude and it’s worked.
The average across the regions was a 45 percent market share; we had five stores in Christchurch, when we sold, but in the likes of Palmerston North and Wellington market our market share was well up over 50 percent.”
You took some risks, how integral is risk to success in business?
“I have a reputation for being a bit of a risk taker. As time went on they’re a bit more calculated risks, but they are still really risky and innovative concepts for the industry.
We had many, many firsts for the industry that almost everybody has picked up now, the likes of the free puncture repairs we did, also the product called Tyre Cover Plus, where if you bought a tyre off Tony’s and you wrecked it, we would replace it free of charge; that was a first in the industry.”
What range of businesses are you involved in now?
“In Wellington I have a bar and restaurant, an online voucher company, a web development company and an online entertainment come data company.
In the Manawatu area I have a used vehicle car yard, a finance company, a fibreglass chimney manufacturing company and a water treatment and crop disease treatment business.
They tell me I’m meant to be retired or semi-retired – that hasn’t really gone to plan.”
Your business interests are so diverse, does success in business require passion for an industry, is it about having a winning formula or idea for a venture or is it just about being a good businessman?
“You’ve got to have a passion for it; unless you enjoy it you’re never going to be successful at it. The secret is if you haven’t got the skills, you employ them. Bringing the right people around you is the biggest resource for success.
A great businessman is someone who can identify people who can make it a success.”
What’s the biggest lesson you have learned in business?
“Learning how to manage people. There’s no one management style that works for everybody; the art of managing people the way they like to be managed, or that they react to better is by far the biggest skill you can develop.
The lesson I learnt early on was that to grow you need to develop people. You’ve also got to be willing to empower them to make decisions.”
Is the formula for success the same no matter what the company or what the market is doing?
“You’ve got to be able to move with the market of course. But the rules haven’t changed since Adam was a cowboy. The same basic rules apply; look after your customers, look after your people and obviously have quality products.”
What’s in store down the track?
“Four of the companies I’m involved with are start-ups and I’m looking forward to developing those. That’s going to keep me busy over the next two or three years.
Retirement is going to work because you want to, not because you have to. I do think business people would find it difficult to retire because they are successful because they enjoy challenges and that’s the old story, if you want to get something done, ask a busy person.
As long as I can stay vertical, I think I will always be involved in business in some way or other, I’m just going to try and get a bit more travel and a bit more fishing done.”
