Operating 10 Locations and Building a Real Estate Portfolio

In this episode of Know to Grow: A Light to Heavy Duty Podcast, Chandler Kohn sits down with Sean Ryan of Point Spring & Driveshaft to discuss the historical expansion into a 10-location business. They discuss some of the challenges and opportunities that exist in growing a business inorganically, as well as the value and flexibility vis-à-vis real estate ownership.

Chandler Kohn: Welcome back to another episode of Know to Grow a Light to Heavy Duty podcast. I’m your host Chandler Khon and today I have on Sean Ryan with Point Spring and Drive Shaft, based out of Pennsylvania. Sean, welcome to the show. Look forward to hopping in a discussion here and thanks for coming on. Tell us a little bit about yourself in Point Spring.

Sean Ryan: Sure, yeah. Thanks for having me, Chandler. It’s really nice to be here with you. Point Spring is, you know, typical for the aftermarket for heavy duty on highway parts and Service. We have 10 locations, mostly in Pennsylvania, central to Western Penns. We have eight stores and we have one store in Ohio, one store in West Virginia. We’re actually celebrating this year is our 100 year anniversary, which is super exciting. Really proud about that. And yeah, yeah, I’m third generation so I’m really hoping that we make it past 100 years and continue on. So yeah, it’s a great industry, Great, great company. I love being a part of it.

Chandler Kohn: I love the heavy-duty space, love exactly what you guys are doing. You know, kudos to getting to 10 locations. It’s really hard to do. It’s really hard to break past two, three or four locations. So very well done. Looks like you’re doing very well. You know, some of the stuff that we’re going to talk about today is your expansion strategy, particularly as it relates to real estate. I think you’ll have a really good perspective on that. Again, this is a kind of a four CEOs by CEOs podcast and I’ve wanted to have the right person come on here to talk about real estate and real estate strategy and so forth. You know, before we get into that, let’s talk about, you know, how big is Point Spring from a technician or just employee standpoint. And then let’s talk about some of the services you do across your locations.

Sean Ryan: Sure. So total company wide, we have about 150 employees. The, you know, out of our 10 locations, we have seven that do some sort of service, three that are just parts and you know, the service ones go all the way from kind of lesser work drive shafts, that kind of stuff to full blown service. I mean, you know, reframing, I mean pretty much anything on a heavy duty truck. So we have, you know, in the service side of our business we probably have across the company, I’d say maybe about 30 technicians. So it’s a very important part of our business for sure.

Chandler Kohn: That’s, that’s impressive. And then are you guys involved in mobile and some of these other different types of services? As well.

Sean Ryan: No, we’ve never gotten into the mobile space. You know, we partner with people that do it. Same with like towing and wreckers. Like we’ve never done that. But we have a lot of partners that do that and bring, bring us work. Nothing we, we’ve expanded into to this point.

Chandler Kohn: And then a little bit about the timeline. You know, kind of take a step back. Obviously it’s the 100th year anniversary. That brings you back to 1926. But you know, maybe talk about like from, from the 80s or something like that. Like, you know, the locations you have and then you know how you ended up at 10 locations of what that timeline looks like.

Sean Ryan: I will go all the way back, but I’ll be very brief. Yeah. So we started in 1926 here in Pittsburgh where there’s the three rivers, two. Two that meet and turn into one. And at that location they call it the Point. Right now there’s a state park there. But our first location was actually right there at the Point in downtown Pittsburgh. So we are at the Point. We made springs, so we were Point Spring at the time. And then eventually we moved, you know, a little bit further away from downtown. Yeah, but then like you said, really from the 80s, we, we’ve been acquiring since then. I mean, so not only acquiring, but green fielding. We opened up our Fairmont store back in, I think 1982. Built that from the ground up. My grandfather and my dad were involved. You know, 1997 was a. Our largest acquisition. We bought a company called Break Drum and Equipment. We had four locations, they had eight locations. So it was a massive undertaking. I wasn’t here for that. But you know, I still hear stories about it and there’s been, you know, a couple handfuls of one or two location acquisitions over the years as well. It’s just always kind of been a part of our strategy.

Chandler Kohn: Excellent. And we’ll jump into some more detail on this in a bit. Have you divested anything or has it just been kind of adding on?

Sean Ryan: We’ve never divested. We have had locations close, but we’ve never, we’ve never sold any locations or any, any parts of the business.

Chandler Kohn: Okay. And then let’s talk about maybe the operations a little bit before we get into some of this kind of the real estate and other things, you know, I guess are you guys, you know, kind of forward looking on technology in the shop, management software to, to run an efficient operation? What, what does that look like from your standpoint?

Sean Ryan: We are not as forward looking as I would like on the shop management side, I, I, we do a, I say a very good job just because we’ve done it for so long. We have people that really don’t need shop software. They just kind of get it done. Having said that, I’m sure we could be more efficient, you know, if we were to explore that. And it is, it is on our docket to explore the software side of things more, more deeply. Right now we run our software, our shop, everything really, in our business runs through our, our business system. We, we run it on a system called Odoo. And, and through that we’re able to track, you know, technician efficiency, you know, by technician, by location. So we look at that at least monthly. So I’d say we’re, you know, we’re kind of right in the middle. We’re not cutting edge. And I don’t think we’re behind the pack either. I’d say we’re right in the middle, technology wise, and hoping to move closer to the tip of the spear.

Chandler Kohn: Good. And then explain the state of the industry from your perspective. Obviously, last year was kind of a lowering tide. You know, you’ve had the ongoing freight recession. Vocational demand looks to be there across municipalities and some other sectorial things. But tell us about how you perceive the state of the industry. What it’s what you expect 2026 to look like.

Sean Ryan: So, yeah, 2025, you know, industry wise, I’d say our area was pretty much the same as most of the rest of the country. We were fortunate to bring on a couple new salespeople at the beginning of the year that more than made significantly more than made up kind of the market downturn. So we were, we were up a good chunk in 2025 due to those couple sales guys we brought on. So that was, that was a great, you know, talent Investment in Talent, 2026, you know, I’m, I think probably everybody would say we have no idea, honestly. And I don’t, I, I do feel optimistic about 2026, though. I was, you know, I think we were, I was talking to you about the weather before we got on recording. I think this cold is going to really, really help in the spring. And, you know, the industry can only stay down for so long. Trucks break, you got to fix them. You know, the stuff has to move eventually. So I’m pretty optimistic. I don’t think it’ll be a banner year, but I definitely think it’ll be, you know, up 5 to 10% would be my best guess.

Chandler Kohn: And that’s a lot of what I heard at heavy duty aftermarket week, great buy in Texas two weeks ago, kind of, kind of the same sentiment, especially second half of the year. Hopefully things are going to turn around. So it’s good to see that kind of at the localized level and based on who I’m speaking with as well. Did you have any, any part shortages impact you last year? And how did you handle inventory management?

Sean Ryan: No, not particularly. I mean, there was a few isolated cases of suppliers running into, you know, specific issues, you know, specific company issues. You know, there’s a notable bankruptcy out there that impacted, you know, some of the brands that we bought. But generally speaking, we didn’t have any real, like supply issues that was pretty much contained to, you know, the year after Covid and maybe the year after that. Since then, it’s been, it’s been pretty much back to normal on the supply side.

Chandler Kohn: Okay, good. So let’s, let’s talk about some of these acquisitions and, you know, how you’ve approached them. So, you know, a lot of times we’ll see, you know, the heavy duty brand or shop is going to, you know, make acquisitions. Maybe it’s, it’s one or two, right? And then they, they integrate them for a year, then maybe go and add another one and maybe they get really good at it, you know, add two or three at one time. But the integration is always the challenge. So for the acquisition in 97, talk to us about the thought kind of behind going and acquiring what, eight of those? Is that what you said?

Sean Ryan: Yeah, yeah. This is all, like I said, secondhand for me, but I’ve heard a ton of stories about it. The, you know, we had four locations. We were point spring and drive shaft. So we were really a special specialist in driveline suspension, that kind of stuff. Brake drum was the, they were the powerhouse, you know, also in our market for break, you know, they break drums, wheel end, that kind of stuff. So it’s not like we didn’t do anything in that and they didn’t do anything in our market, but we were certainly the leader on our side and they were the leader in their market. So it really was not only location wise, a great scope, it was also, you know, expanding the line of businesses that, you know, really made us a full line provider to, you know, to the fleets and to the repair garages. So that was a major contributing factor, I think, to, you know, the desire to want to make that acquisition happen back then.

Chandler Kohn: And that was, you know, nearly 30 years ago now. And I’m sure a lot of, you know, those Sites or that business was kind of paper based, just kind of more simple, kind of blue collar type of work. Like, you know, truck breaks and you come in and fix it, you get the part for it. You know, now things are kind of more horizontally spread, you know, from a digital standpoint across the operation, you know, maybe one treasurer or CFO across the entire operation. And then some of that integration, you know, is much harder nowadays. I feel like talk to. Do you, do you. Have you heard anything about what those integrate integration challenges look like in 1997 maybe compared to how they would look now?

Sean Ryan: Yeah, you know, again, the second hand. But I heard from many different people that it was an extraordinarily challenging time. I think it was. And frankly, I even have memories. You know, I was a kid at the time. I was probably 13. My dad was so stressed that it was actually coming home with him, like it was impacting him that much. It was just, it was a massive undertaking. And, and it was a good 18 months to 2 years of just kind of brute force. Right. Just as problems come up, tackling them constantly making sure that the culture was, was not going sideways. You know, all that stuff in addition to, you know, you have, you have locations that are closing, merging. I mean, it was, it was, it was everything you would imagine would it be. And it was difficult.

Chandler Kohn: Yeah. So you’ve talked about, you know, you guys primarily own the real estate, Right. You own the real estate at nine locations and then you lease one. From an M and a standpoint, what I do, some of the wealthiest business owners that we see own their real estate. Tell us a little bit about Point Spring’s strategy around real estate in terms of buying or leasing. It. Looks like Ryan’s frozen.

Sean Ryan: I’m sorry, I didn’t, it cut out for a second. I didn’t hear the question.

Chandler Kohn: Okay. You know, I was going to say you guys own, you own nine. Nine locations of real estate. You lease one. Help us help the listeners understand kind of what that real estate strategy looks like for you. Of course, some, some of the wealthiest business owners own their own real estate. Right. So we’d like to dive into this topic a little bit to understand kind of your approach here.

Sean Ryan: Sure. I mean, so, you know, I’ve been with the company 13 years and you know, I literally, I inherited the, the real estate portfolio. So, you know, I, it wasn’t an active decision I made. It was, it was a, a reality that I stepped into, but it’s one that I largely have continued. It’s not, we haven’t changed course since I’ve been sort of in charge here. You know, like I said, our. Our facility in West Virginia, we built. You know, we bought the piece of land and built it, and we’ve owned it ever since. It was just. It was just kind of how my, my grandfather, my dad approached the business. And it, like I said, it served us well. It’s given us a lot of flexibility. You know, we don’t have to ask permission for anything. Right. I mean, it’s. If we want to build a new. We have a location up in Troy, Pennsylvania. It’s pretty remote. You know, we wanted to add service to that business or that location, and we just built another building. Right. So we. It gives us a ton of flexibility to adjust the. The real estate to our needs and not kind of be beholden to a landlord or anything like that.

Chandler Kohn: When was the. When was the last one was that greenfield establishment?

Sean Ryan: That one was actually right around when I started Troy. We opened 13, 14 years ago. Started with one guy selling almost kind of out of his garage. We released a building, we leased a larger building with an option to purchase. We purchased the building, and then like, you know, five years after that, we. We added a. Another shop. And, you know, at this point, it’s. It’s probably in our top four largest stores from. From zero, you know, 15 years ago.

Chandler Kohn: And how do you guys think, you know, did you ever consider brown building it and kind of, you know, kind of converting an industrial building to your purposes, or did it always make sense to kind of build from scratch?

Sean Ryan: I don’t know. I don’t think we’ve ever taken an industrial building and converted it. Yeah, usually it was either we’re buying a business that has either one or many locations that already has their operations, or we did it from scratch on our own.

Chandler Kohn: Makes sense. I totally get it. See where we jump into here now? So when it comes to that location, you know, 13 years ago, you know, a lot of times businesses, you know, it’s a. It’s a decision they have to make in terms of, you know, do they want to deploy this cash to the real estate or do they want to, you know, lease the space and hang on to that cash and deploy it elsewhere? You know, how do you think about, you know, your approach to financing that real estate? Or how would you think about it now? Right. If you were to go in and get another location, whether that’s Greenfield or make a. Make an acquisition?

Sean Ryan: Yeah, I mean, it’s. It’s. I can’t believe how much things have changed over those years. Back in the day, you know, when my, when my father was running the company, they’re very conservative. You know, they always had, in my opinion, excessive amounts of cash. So it wasn’t even hard for them to think about if they found an opportunity they liked. They could pay, pay in cash and still have ample reserves. So it was pretty easy. It wasn’t hard for them to. To be able to justify, you know, making those purchases. We’re in a bit of a different situation now. We’ve done. We’ve done a couple acquisitions, we’ve done some, some ownership consolidations, the. That we, you know, we paid some family members for, for shares, that kind of thing. So we have a pretty sizable amount of debt now. So it would be a different equation. We’ve actually kind of even tapped the brakes a little bit on looking at, you know, significant investments in new, new acquisitions. But I figure in three or four years, you know, we’ll be in a. In a position to kind of start looking aggressively again and, and we’ll definitely do that at that point.

Chandler Kohn: So if we think about, you know, you guys are predominantly in PA with and then you have one location in Ohio. Tell, tell the listeners about how like, you guys would approach expansion, you know, in terms of, you know, county locations, traffic counts, you know, maybe adjacent tenants, zoning and expansion. Can you. To play a big role in auto service, maybe your parts delivery routes and kind of the proximity there. How do you think about that?

Sean Ryan: The ideal candidate for us is, you know, we’ve got a pretty, pretty circular area of our footprint. If we find a location or an opportunity that, you know, just kind of expands that footprint just a little bit in one direction, that’s really ideal for us. We have our own tractor trailer that runs a loop around to all the different locations every single week to add in one more location that’s kind of in the middle or on the fringes of where we already are. It’s easy to operationally integrate that. So that’s ideal for us. Another kind of, maybe not intuitive thing that we look for is we prefer more rural areas than bigger city areas. You know, if, if I’m looking at an opportunity and like, you know, even like a city like Harrisburg, like, I’m not that excited about, there’s just. There’s so much more competition there. We found, like I said with Troy, Pennsylvania, it’s, you know, it’s kind of in the middle of nowhere, and if you do good work and there’s enough people there that need, need service and need Parts, you’re the only game in town, so. So that’s appealing for us. If we find a location that’s not really, you know, in the center of a. Of a major metropolitan area, that’s usually a plus for us.

Chandler Kohn: Yeah. Is it. Is it along like that location, for example, or any of them? I mean, I guess there’s some of them probably kind of near major shipping corridors, major highways. Is that the case or not really?

Sean Ryan: No. No. I mean, yeah. I don’t know how they do it up in Troy. Honestly. It’s. It’s 20 miles south of Elmira, New York. That’s the, you know, the town that maybe people have heard of that it’s closest to, but it’s not on any major highways. It’s kind of up in the mountains. And there’s. I mean, there’s industry up there that drives it. There’s some oil and gas stuff up there. You know, it’s. It’s about an hour north of Williamsport. But, yeah, it’s just. It’s. It’s just kind of a hidden gem up there.

Chandler Kohn: Yeah, I hear that. And then, you know, in terms of funding. Growth. In growth, it comes in a variety of ways. I mean, that could be online sale. That could be, you know, breaking into new locations or, you know, expanding your, you know, the inventory that you carry. Have you ever considered doing a sale leaseback, where, you know, you sell the real estate to somebody, lease it back, and then take that capital and kind of reinvest it into the business for something else?

Sean Ryan: It’s something I have thought about a lot, many times over a period of many years, and I still think about it to this day. It’s not something that we’ve ever done or I’ve never even really explored it in any amount of depth. I mean, I’ve, you know, I’ve researched it online. I’ve never engaged any formal real estate professional to help me think about it. So, yeah, we haven’t done it, but it is something I’ve given a lot of thought to.

Chandler Kohn: Interesting. Good. And, you know, one thing for owners to know is I have this conversation quite frequently. I’ve actually had it twice this week. Once today and once Monday. It’s Thursday now. But, you know, talking about, you know, if an owner wants to kind of exit their business but they also own the real estate, you don’t. You don’t have to think about those two things together. In auto service, let’s just say a piece of real estate’s worth $3 million. If you were to Exit the business to a kind of a national credit worthy tenant. For example, you know, the cap rate on that real estate would maybe drop from 8% to 6 or 7% and thus the value of that real estate goes up. You know, and, and you know, an owner could think about selling that now to a real estate investment trust or doing a 1031 exchange to somebody to, to those groups that wouldn’t previously be interested. But another, you know, but because a national tenant now owns the, the business and is leasing the space that that property value comes up. So you know, like I said a few minutes ago, you know, some of the wealthiest, you know, and most successful automotive service owners, you know, own their real estate. So great to see you’re, you’re well positioned kind of across the portfolio. So well done there. Yeah. Yeah. I think one in kind of getting into back to the operational section of things. You know, obviously managing 10 locations is probably pretty difficult. What mechanisms are in place to make Point Spring successful and having the, the company run in sync versus kind of each of their own business units?

Sean Ryan: Yeah, it’s a, it’s a, it’s a trade off. So I mean it, number one, it’s, it’s the people. I mean you, you’ve, it’s the people at every level. So the upper management needs to be extremely strong. The branch manager position at every location is absolutely critical and even the supporting staff, you know, if you don’t have enough of the right people, you know, the location can suffer and, and sometimes go under. So it really is about having the right people that have the knowledge that have, you know, the commitment to the company that believe in the, in the mission, you know, want to do right by the customer. I’d say the people is 80 to 90% of it. And then rest of it is, is, you know, also difficult. But it’s the, the processes, it’s the constant training, it’s the, it’s the, you know, how do you, you know, how do you make a 10 location company even approaching something like a McDonald’s where everything’s repeatable, everything is, is documented. You know, we try our best. We’re not, we’re certainly not as good as them, but that’s, that’s the goal is to be, be like a, a professional organization and document things and train, train, train, all that kind of stuff.

Chandler Kohn: And I’ve talked about middle management a good amount on this podcast. Do you have between the branch managers managing each location and yourself? Do you have a GM between both of you guys? Or are you the gm.

Sean Ryan: Now we have a. We have a vice president of operations. Who he, he oversees all of the branch managers, all the purchasing, you know, all of the logistics for the company. He’s been with us almost 40 years, 35 years. He started as a delivery driver. He’s done almost literally every position in the company. And, and, and he’s worked his way up, and he’s one of the strongest members on our team.

Chandler Kohn: That’s excellent. So from. Yeah, I guess a lot of the time, you, You. You spent a lot of your time on kind of steering the company strategically while he’s managing kind of each of the branch managers and the overall operation. Tell us about how you’ve kind of been able to maybe learn how to take a step back and kind of guide the company at a very high level from an executive standpoint.

Sean Ryan: Yeah, you know, I, I was kind of thrown into this. I mean, I always knew I wanted to work here. And, you know, I’ve been here 13 years. My dad passed away a lot sooner than I think any of us, you know, wanted him to. You know, he was, he was in his late 60s, so it wasn’t like, totally premature, but certainly, you know, unexpected. And, and we didn’t plan for that. So I definitely had a lot to learn about, you know, running be, you know, presiding over the whole company. And I, you know, probably the thing I underestimated the most is just how important the culture is. I mean, you know, it’s, it’s. If something is. Is bothering one or more people and it doesn’t get addressed, it, you know, it doesn’t go away, it festers, it gets worse, and it spreads. That was a really hard lesson for me to learn. And, and, and I learned it. And I feel like the last two years we’ve been on really, really strong footing and everybody’s aligned from, like I said, from the senior leaders to, you know, the majority. You know, everybody I talk to at this point seems to be on, on a good, good footing with us. So culture was. Was the biggest thing I’ve kind of taken as. As I used to almost think it was like a. I don’t know, like a fluff type of thing. But I really am a believer that it’.

Chandler Kohn: It. Are you able to share kind of what that cultural challenge was, or do you feel comfortable sharing that?

Sean Ryan: Yeah, I mean, it was several things all at the same time. You know, my dad was, Was a very inspirational leader for the company. Very inspirational leader. You know, the, the jokes that people like to tell about him was, you Know, he could go to a location and he would tell them, hey guys, I need you to run into this wall until it falls over. And then when he would leave, everyone get excited and say, wow, we get to run into this wall until it falls over. He was just kind of one of those guys. So him passing affected the company more than I thought it would. We had also, we were going through a business system change. You know, we were on an old system and we moved to the Odoo. That was, that was 12 months of agony that really stressed the organization and we also had a couple year period where we were, we didn’t have strong leadership on the finance team and we didn’t have good financials, we didn’t have tight numbers and that impacted everybody, the operations. I mean it was, it was these three things kind of combined and it, it definitely did a number on the culture. You know, once we fixed the O. Odu’s working great now we have a great new control. Not new. Our controller’s been with us a year and a half. He’s got everything caught up and you know, really taking the time to focus on the culture. You know, it’s been, it’s been like I said, a good couple of years.

Chandler Kohn: Good. And I missed that, I missed that last piece from you because you kind of froze up a little bit. Did you say financial? Something along the lines of like financial clarity or just financial efficiency within the organization?

Sean Ryan: Yeah, we had, we had a two year period where we, we didn’t have strong financial leadership. So our financial statements were six months behind. You know, our collections efforts were a mess. I mean it was just a mess. And that again, like I underestimated how big of an issue that would be for the operations. But it’s hard to operate a business if you don’t know what the numbers are. So, so that was, that was very challenging.

Chandler Kohn: Yeah, yeah. And you know, especially some of these businesses in this space are still paper based and it’s, it’s kind of a, kind of a mess from that standpoint. You know, I have one of my clients in the heavy duty space. You know, they, their numbers at the end of every month, they’re ready on the fifth, roughly. You know, I have some other folks that it’s the 15th, there’s the 20th, but you know it’s you, you can, if they’re, if they’re ready soon or you, you understand how organized an organization is. You understand that you can report back to your branch managers pretty quickly after that month end and in course correct. It’s just overall, it’s a, it’s a more transparent, driven organization which, you know, contributes to the, to the success overall. So, so yeah, that’s helpful. Thank you for going into detail there. You know, if, if you know, a lot of these owners, as, you know, probably better than I do in this space, you know, a lot of them are looking to grow, whether that’s like, you know, a group like Merck’s Truck and Trailer that’s adding on or, you know, of course, your, your big ones like Fleet Pride and then every, everybody in the middle kind of like the True north size. You know, if you have an individual kind of owner like your, yourself in a different part of the country now, how would, how would you, if they’re looking for advice for other leasing or buying real estate, you know, what would, what would you say? What would be your angle?

Sean Ryan: You know, frankly, I, it’s served us well to own the real estate. You know, I, I, and I know that kind of flies in the face of the conventional wisdom for, for the big companies, for the, the private equity fleet pride. You know, they don’t own hardly any real estate if, if any. So we’re on the opposite side of the spectrum. But it’s really served us well. It’s given us, like I said, the flexibility to control our own destiny. You know, it’s helped us with, you know, our banking relationship, you know, having that, that real estate. And we’re also a little bit unique that we don’t have a separate real estate company. The, the Point Spring actually owns the real estate, you know, in the company. So, you know, that’s a lot of equity that we can, you know, the banks can kind of rely on. So that’s been super helpful. So, you know, if you put a gun to my head, I would say I, I really don’t know if it’s the right answer, but it’s worked well for us. So, you know, I can’t, I can’t say I don’t recommend it.

Chandler Kohn: It’s hard to go, to go wrong when you, when you invest in an appreciating asset and your business is cash flow in right. And you can still continue to grow. So I think that’s very helpful. Sean. You know, we look forward to finishing out the hundredth year and watching your success here and getting to, to year 125 here over the next bit. And, you know, congratulations and thank you again for hopping on today. Well done. We really appreciate it.

Sean Ryan: Absolutely. Thanks for having me. It was fun.