Bootstrapping a Two-Sided Marketplace to $10M: Sal Akbani, CEO of Gateway Classic Cars (Part 6)

Sramana Mitra: Why Kentucky?

Sal Akbani: Because it was closer and safer, and I only had so much money to spare.

Sramana Mitra: How did that pan out?

Sal Akbani: Really well. It’s one of our best-performing showrooms for the last four years.

Sramana Mitra: Were there lots of sellers in that market as well?

Sal Akbani: Yes, we have virtually no competition in that market. We dominate that market for the sellers.

Sramana Mitra: All this while, was there any external financing in the company or were you doing this in a bootstrapped mode?

Sal Akbani: It was all done internally. By that time, I had cashed out my brother. Everything was internally generated with cash flow growth. If we didn’t have the money, we didn’t grow.

Sramana Mitra: Let’s fast forward a little bit unless there are other strategic nuances that we ought to discuss. It sounds like you basically opened new showrooms in about 14 markets and you are about to open in a fifteenth market. If you could run us through those markets and the rationale behind choosing those markets, that would probably be a good way to cover the next piece of the story.

Sal Akbani: After we opened up Louisville in 2011, we waited for it to get to its feet. Within a year’s time, it was positive cash flow. We decided to take the money from St. Louis and opened up a showroom in Chicago. We did that in July 2012. Then we waited for Chicago. Chicago was a strong market. From there, we opened up the Detroit showroom. Then we had enough cash coming in that we could afford to open up a second showroom that was Indianapolis. That happened. I ended up opening three showrooms in 2013.

Sramana Mitra: Those were in?

Sal Akbani: Detroit, Indianapolis, and Tampa.

Sramana Mitra: Where are you revenue-wise?

Sal Akbani: In 2014, our operating revenue was $4.6 million.

Sramana Mitra: What happens in 2015?

Sal Akbani: Then in 2015, we had operating revenue of $7.7 million and a gross revenue of $35 million.

Sramana Mitra: How many showrooms?

Sal Akbani: Nine or ten.

Sramana Mitra: Each of your showroom is under a million in revenue. Is that what you’re operating with?

Sal Akbani: Yes.

Sramana Mitra: The last six show rooms are from 2016?

Sal Akbani: Yes.

Sramana Mitra: Where did you finish 2016 revenue-wise?

Sal Akbani: $10 million.

Sramana Mitra: Excellent. Where to from here? 

Sal Akbani: It’s not that we have not taken any external financing. We’re buying some of our real estate now.

Sramana Mitra: That’s through bank financing?

Sal Akbani: Yes.

Sramana Mitra: You have enough of a balance sheet to be able to do plenty of very nice bank financing on the real estate asset side.

Sal Akbani: Right.

This segment is part 6 in the series : Bootstrapping a Two-Sided Marketplace to $10M: Sal Akbani, CEO of Gateway Classic Cars
1 2 3 4 5 6 7