Randall Reed began his career as an automobile technician and now runs one of the largest independently owned Ford and Volkswagen dealership groups in Texas. His aviation business, Starbase Jet soars from strength to strength.
Starbase has built a booming aircraft brokerage and charter business and continues to add to its fleet of aircraft under management. This growth has been thanks in no small part to its ability to deliver above average charter hours to aircraft owners. Reed’s sales and marketing skills plus an unwavering commitment to transparency and ensuring customer satisfaction in all aspects of his business life, as well as a deep commitment to serving local communities, lie at the heart of a business that continues to grow at an enviable pace.
Q: It is always amazing – and very satisfying – to find someone who epitomises the dream of working one’s way up from the first rung of the ladder, as it were. How did it all begin for you?
A: I started my entrepreneurial life early, in that at the age of twelve I had three jobs. Through high school I decided that I wanted to be a technician rather than follow an academic path, so I went to school after hours to study for a mechanic’s qualification. I then secured a job with an auto dealership as a technician, retooling engines for automobiles. After doing that for some time, it became repetitive and I decided I didn’t want to spend the rest of my life doing this, so I started to apply to colleges with the aim of studying for a chemical engineering degree. While I was waiting for the replies, I got a job as a Mustang restoration specialist, which is where I first came into contact with Ford, and established a lifelong affinity to Mustangs.
Anyway, I quit the technician’s role and did the first semester of the chemical engineering coursework. My mother passed away and in May 1981 I returned home to take care of the estate during the college break. I saw an advertisement for a salesman at Courtesy Ford in Littleton, Colorado. I applied and was granted a position. That was an education in itself. You were pitched right in to the sharp end of selling with no hint of a career path. It was pretty Darwinian. Only the strong survived. You either sold or delivered the numbers or you hit the road. I found that I thrived on it. I really took it to heart and did very well. In my first few months I was in the running for salesman of the month.
Then, the time came for me to quit the job to go back to college. The owner of the dealership, with whom I had almost no contact with up to that point, came to me and said “Randall, it is very rare for us to find a salesman who can do what you’ve just done. I’d like to suggest that you skip this semester and let us put you on a management fast track, with proper mentoring. If you don’t like it, I’ll personally pay for your next year at college.” I thought that was an offer I couldn’t refuse. They took me under their corporate wing and I found a tremendous mentor in Ron Boyer, who also became a lifelong friend. He was the golden boy of the dealership at the time and taught me a huge amount about what was involved in being a proper, professional manager. I had a natural flair for sales and marketing, and by adding management skills I upped my game to a winning combination. He taught me everything about customer service and relationship management plus the entire protocol of being a successful manager in the car industry.
By 1985, at the age of 25, I was promoted to the position of General Sales Manager running the entire sales operation for the dealership. By 26, I was promoted again to the position of General Manager, running one of the biggest automotive stores in the country. Then, when a store became available, the two partners of Courtesy Ford, Mr. Bill Beck and Terry Dixon, offered me a 2.5% stake in the store to become the Operating Partner and Dealer Manager for that store, with a contract that stated that I was to be paid on the profits of what the store sold. Again, I found myself in the position of survival of the fittest, you basically sank or swam, in other words. The store was located in Dallas, Texas. In 1988, with my wife six months pregnant, we packed all of our belongings and set out for our new adventure. We named that store Prestige Ford and today we still have it in our portfolio of dealerships. At the time I took possession, the store was up for sale because of its terrible performance. It was literally the worst store in the entire Ford U.S. operation, bottom out of 4,400 stores with the worst customer satisfaction scores.
I was 29, young, fearless and with nothing to lose, so I figured I would go for broke. I took all the processes I had learned in Littleton, Colorado and put a unique proposition together. The store turned around and flourished. We were selling around 40 units a month when I took over, and within a short time we were one of the top two Ford dealerships in Dallas and in the top 50 nationwide. We built the business on delivering total customer satisfaction and on encouraging happy employees, working to consistent principles – everything you would want to see in a successful business.
Because we did so well with Prestige Ford, that when another underperforming store became available, Ford called and said “Go take a look at it”. Which I did, and shortly thereafter in 1992, Park Cites Ford was born. Again, we took the dealership over and turned it around so that in 1993 we repeated the same thing with Planet Ford in Humble, Texas. And then again with Bill Fick Ford in 1995. We were on an unstoppable successful path with the pinnacle coming in 1997 with the addition of the #1, for 13 consecutive years, Ford dealerships, Planet Ford in Spring, Texas. Our dealership chain really began to grow in scale. We added our last dealership in 2013, with the addition of Randall Reed Volkswagen in McKinney, Texas. We took on a lot of debt to buy the stores, but the financial risk turned out to be well worth taking.
Q: How and why did you find time to get a pilot’s license while all this was happening?
A: When our third child arrived, my wife and I decided that we would much rather raise the children in a small town environment than in a big city like Dallas. So, in 2000 we found a beautiful home in Steamboat Springs, Colorado. The only problem was that it was an 800 mile commute to the dealerships. Plus, I was spending a lot of time on the road driving between dealerships. I tried to commute via scheduled airlines, but that was a total fiasco. I looked at jet cards, but they were too expensive. So I decided to fly myself. The obvious solution was to get my pilot’s license and buy a small aircraft. The first plane I bought was a Bonanza A36 which I used to commute between Steamboat Springs and the Texas dealerships. Then I upgraded to a Beechcraft Baron, and then I bought a King Air C90, and finally a new King Air B200.
My wife would travel with me when we went to do commercials for the dealerships, and then we started using the aircraft as a tool to help executives and sales management from the dealerships travel more efficiently. We made a practice of visiting other dealerships outside the Dallas area that had good reputations. We wanted to ensure that we learned ‘best practices’ wherever we could and this involved a fair bit of flying.
With this amount of traveling, I decided to buy a jet and bought a Cessna Citation V. I tried riding in the back instead of piloting and found it really boring, so went back to the King Air. But this left me with the Citation V as a spare aircraft. I had a friend, Joel Brookshire, who was also a pilot. The two of us went to our mutual friend with the FAA that had given me check rides for all my pilot certificates and asked him what it would take to start a Part-135 operation with a strategy to charter the Citation V out and make it work for its keep. He gave Joel and myself the advice and actually ended up assisting in our newfound venture. Joel became a minority partner in this new aviation business. In 2001, we received our Part-135 and Starbase Aviation came into being.
We were using the Citation V quite heavily and selling charter seats pretty well, so we decided to lease two late model Lear 60s and purchase another to start the charter business properly. Over the last three years Starbase Jet has grown exponentially. We went from four aircraft that we wholly owned, to eight, where we stayed for several years. Then over the past four years we have gone from eight aircraft to 28 owned and managed aircraft. I now fly a brand new Citation CJ2+. .
Q: What is the key to a successful aircraft sales business?
A: The key is continually looking for ways to improve our product, delivery and service. Undoubtedly for us a huge draw card is the fact that we have built up a very strong charter market here in Texas. It allows us to guarantee an above average number of charter hours a year for our managed aircraft owners and potential owners. We feel very comfortable offering that guarantee precisely because the charter business is so solid; and it has been very successful. We just sold an XLS+ for example and we have a number of potential sales in the pipeline that we are pursuing.
Aircraft sales to private individuals and companies are all about networking and communications. The more we grow, the more chances we get to make further sales. We sell many of the aircraft to our existing owner base as they look to upgrade, and when they tell their friends we are then able to sell to them as well. We have always specialized in the mid-to large-cabin end of the market and apart from one King Air we have not ventured into the turboprop market. We have a few light jets on the certificate, but very few.
Q: Which OEMs do you like, apart from Textron?
A: I like Bombardier and Embraer. We have built and are building up very solid relationships with both as well as with Textron. We make a practice of holding a number of major marketing events throughout the year which helps to promote and build our network of high net worth individuals. This opens up opportunities for our OEM clients. For example, at the end of July we hosted a spectacular display of Embraer business jets at an evening event at Starbase Jet’s Addison private hangar facility. An audience of 400 were able to take turns viewing an Embraer Legacy 650 and an Embraer Phenom 100, plus we had Ferrari and Maserati dealerships showing four beautiful Ferrari models – the Ferrari 458 Speciale, the Ferrari California and the Ferrari FF – and three top Maserati models, the GHILBLI Q4, the Maserati Granturismo MC and the Quattroporte GTS. The Ferrari 458 Speciale is the top performing Ferrari ever built, with a top speed in excess of 200 mph and the ability to go from zero to 60 mph in under three seconds.
Q: The top end of the Ford and Lincoln range doubtless brings new high net worth individuals into your circle on a regular basis?
A: The top end models certainly do. But we actively target market segments such as the oil and gas sector and the top auto dealers as well. Marketing and sales require you to commit to a continuing and sustained effort. You must have extremely good propositions that differentiate you from the competition. Our guaranteed charter hour proposition, for example, is one that very few other operators can hope to replicate.
Q: Where next for Starbase?
A: We are actively looking to grow into more of a full spectrum aviation company. We just recently bought a company that specializes in MRO and is a Part-145 shop. Right now we are using that capability to support our owned and managed fleet. However, we are looking at developing the old Braniff Airline Headquarters at Dallas Love Field to turn it into a very large 145 repair station capable of handling a number of OEM models. We are looking at incorporating a potential joint venture with our Chinese strategic alliance partners, Deer Jet. We are always on the lookout for talent to grow our aviation business and we constantly look for new opportunities for expansion. We are interested, for example, in providing jets to a new proposition that involves introducing a consumer/commuter style charter service between well travelled city pairs based on the King Air 350. The example here is the venture that Nick Kennedy is launching between Dallas and Houston, where his company, Rise, is offering unlimited travel between the two cities for a flat monthly membership fee. The trip takes around 54 minutes and Kennedy expects to schedule about 16 flights a day. The starter monthly fee is reported to be $1650 and there are three levels, with the Executive fee set at $2,150 and the Chairman fee at $2650. The standard package will allow a person to book two seats at a time, the other two will allow you to book four and six seats respectively. I think Kennedy’s idea is great and I believe that it will really broaden the base of people looking to use private air travel. We won’t be involved in this first venture, which already has backers, but we are communicating with him about supplying the aircraft for other city pairs.
We are also seeing a real pick up in aircraft sales. Until recently we have largely been simply organizing purchases for our own clients on the aircraft management side when they wanted to upgrade to a newer model. However, we have just closed five jet sales, four of which were new jets and one pre-owned, and we have another two possible sales in progress which should close before the end of December. On top of these successes for Starbase, our auto dealerships are doing extremely well. Now is a great time to be selling Fords, Lincolns and jets in America!