With 11 stores and 65 employees, Bob Simpson of El Bufalo Pawn in south Texas is a busy guy. Whether he’s visiting a store, hiring and training employees, or cooking up a new marketing campaign, he strives to stay on top of his business. He and his partner cousins, who both had previous pawn experience, opened their first store in 1995. They now have nine stores in Laredo, TX, plus one each in San Antonio and Lytle.
Bob’s biggest challenge with a large operation is auditing, checking, and visiting stores. “So many employees also means many employee challenges. There is always some employee ‘scandal’ going on somewhere. You have to get word of it, and tackle it right away before it festers and makes things even worse,” he says.
To set their stores apart from their competition, they try very hard to be different – especially to be more flexible and friendly. “They open at 9, so we open at 8:30. We open an hour earlier on Sundays too. They close on July 4, we are open on July 4. They do 60-day loans, we do 90-day loans. They pull items right away after pull date, we automatically hold items for one week and longer if they have left payments on them earlier. They do 3-month layaways, we do 10-month layaways. They do not cash checks, we do.”
When hiring employees, Bob looks for customer service and sale experience. “You have to be a people person to succeed in a pawn shop. We have to say ‘no’ a lot, and there is an artful way to do that without offending the customer. The most successful employees are the ones who have mastered this art.” He also looks at longevity with previous jobs and flexibility. “For Laredo employees, we ask that they can work at any store so changing schedules is much easier.”
Bob developed an employee manual that shows new recruits how to deal with various business transactions, including opening and closing procedures, security procedures, testing jewelry, spotting fakes and counterfeits, handling layaways, handling check cashing, handling money transfers, making deposits, etc. He uses email as the primary communication method to keep everyone on the same page. Each manager has their own email that they need to check throughout the day as does each store. “The NPA alerts are great in that I can easily forward them out to all the stores. For more urgent notifications, we will have someone call all the stores, or the stores that might be affected by the notification,” he shares.
How does Bob decide when and where to open a new store? He looks at some key factors before making his decision, such as: distance from the nearest competitor and his own stores, in and out traffic flow, number of people that live within a few miles, socio-economic demographics, and cost of purchasing/renting. To fund his first store, he and his cousins went to work after college and saved – a lot! They put together an SBA loan package and took it to their local bank, but it was declined unless their parents co-signed. “That was not going to fly,” Bob said. “We revamped our SBA loan package and took it to another local bank who approved us. We have been with them ever since. The CEO told me that one of the bank auditors specifically called us out as a customer to drop, but thankfully, he knew he had no obligation to do so and stuck with us. Each new store was another loan with the same bank (IBC Bank) and they have financed all of our stores.”
He also advises, “You will spend less time inside the individual stores, so you will need to have a crew you can trust. And never presume anyone is 100% trustworthy. Anyone can fall given the right circumstances. Audit, audit, and audit. Change the person auditing. Send the supervisor to check on things. Have quarterly manager meetings to train and talk about things going on inside their stores. And of course, make sure you have access to capital. You never know how fast loans will grow or how long a store will take to become profitable. Make sure you have a cushion.”