Every business is unique, and Hallenbeck Coin Gallery is nothing short of that. Taking us into the world of coin dealership, Tom Hallenbeck talks about the processes within their business and how they are coping with the changes. Marrying the past and the present, Tom takes us back to the time he was growing up as a coin collector to managing a full-service coin dealership in this changing time where everything is online. He identifies the three types of collectors out there and gets into the management side of the business – from fostering innovation to taking a creative approach to driving motivation. Finally, Tom reflects on his role as an entrepreneur, breaking down the misconceptions about the coin dealing.
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Managing A Coin Dealership Business In A Changing World with Tom Hallenbeck
I’m Tom Hallenbeck with Hallenbeck Coin Gallery. I serve the Colorado Springs Community as a coin dealer, but also we do estate appraisals. We deal with elder law attorneys. We buy and sell scrap gold and silver. We’re much more than a coin dealer.
Tom, I appreciate you taking time. We have Tom Hallenbeck. He’s the President of Hallenbeck Coin Gallery. Tell us about your business and who you serve?
We’ve been in business for many years. We serve the Colorado Springs Community and throughout the region of the Rocky Mountains. We buy and sell coins and precious metals. We also do estates. The average person we buy from, normally the majority of our advertising is geared toward purchasing. We buy mainly from men and women who have estates or collections they’ve either accumulated or inherited that they want to fairly liquidate.
I’ve driven past this place. I’ve lived in Colorado Springs forever. You think about, “It’s a coin shop.” That’s what’s in my mind. When you talk about serving the community and the estate planning side, what does that look like?
With a lot of estates, somebody inherits a collection whether it’s through a father or grandfather. Usually, it’s the male side of the family. They are collectors more so than women typically. When they get it, they’re like, “What do we do with this thing?” We will go through from pennies, nickels, dimes, all the way through silver dollars, gold coins, value each item and then give it to the estate. We do two types of appraisals. One is the retail or replacement cost. That’s for insurance purposes. Sometimes insurance companies need an appraisal or the person in charge of the estate or the collection needs an appraisal in case a Waldo Canyon fire came through and burned their house down. If there was a robbery, more likely a theft so they need a value for replacement cost. Probably the vast majority of our appraisals are what we call “Fair wholesale appraisers.” What would you get if you were selling that $20 gold piece, your Krugerrand, your set of Lincoln cents? We’d go through that appraisal also.
For a lot of the folks, I don’t think as they look at the front of your building they have an idea of the number of people here. For leadership, the marketing and how you get everybody motivated in a sales process, let’s talk a little bit about it. When you first started, how many people were here?
It started with just my father. We moved to Colorado. He was a curator at the American Numismatic Association, which is the world’s largest coin club and they have a fantastic museum over there. If you’re a coin collector, that’s a thrill of a lifetime. You get to play like a kid in the candy store. That’s why he moved to Colorado. He got laid off in a mass layoff with the Numismatic Association in 1983. He looked around and said he didn’t want to go back to the corporate world, the insurance industry. He said, “What do I do?” He loved coins. He started the coin shop with his own collection. I was in college at the time. I graduated. He had grown a little bit at that point. He offered me a part-time job to work with him. I was always interested in coins even as a child. It was natural to go into it. I thought I would work with him until I could find a real job.
It’s been since 1984 and I’m still looking for that real job. In the meantime, we grew from that, my father, myself and then another employee. I bought my father out years ago. Now, he’s an hourly employee of mine. He still works. He’s 87. He’s got the institutional knowledge. That’s one of those things still of value. I don’t think age is important for collectors. We get kids that are collecting that are nine or ten or people that are World War II veterans that come in that are collecting. There’s no age on that. We’re up to eighteen employees now. Everything from the front end of the shop, which is our retail showroom where we buy collections and we also sell up there gold and silver, also bullion. We have a backend which is our wholesale department. We have a website where we mainly sell certified coins and then we also have an active eBay department where we have a couple of people that are full-time eBayers.
How do you right size your organization? You were talking about some of your philosophy about how you grew your employee base.
I’ve always been a conservative person. Number one, I’m averse to debt. I don’t like to owe a lot of people a lot of money and especially the banks. I’ve tried to pay for it as you go along. I’ve looked at it and tried to evaluate whether that employee is going to bring in money. Something like an eBay side, that person you have to justify what you’re selling. Are they bringing in money? A case like a bookkeeper, they’re not bringing in money. Your IT professional is not bringing in money. Your salesforce is bringing in money. The people that are buying the items, remarketing them up and repackaging them, shipping off either wholesale or retail, those are the people that are going to be making you the money. You have to look at it. We’d been a slow growth but we keep adding employees here and there and then replacing ones. It’s a changing market. We have to keep up with the current market conditions.
As you go through this business, there’s a certain culture that’s associated with the business you’re in. How do you not only observe historical culture but also take and adapt the company like the eBay foray that you’re doing?
That’s being conscious and watching what’s happening around the world. You have to be observant. I go to conventions throughout the world. I was at a convention in Berlin and seeing what’s happening over there and how the Europeans are doing it, how the Asians are doing it and where the market is going. The online side is an expanding and growing area. How do you take advantage of the online side of the business? How can you retail on online? That’s the biggest challenge. eBay is a different version. eBay is obviously an online auction. You put it up there and sell it for whatever it’s going to bring. Whereas if it’s your website, you can control the pricing, you can control the items you put on there and usually it’s the higher quality material that you’re more interested in finding the right collector for it.
For some of the people out there and going like, “I might have a need to come and see you about an old coin collection I’d like to insure,” or any number of those things, what should they do to pursue those objectives with you? What should they see or experience when they come through your front door?
The first thing they should do is probably organize it and have an idea of what they have. A lot of people bring in a tub of stuff with no idea what they have. That’s fine if they have no interest and they want to dump it. A knowledgeable person is always going to feel better about the process. If you know you have a father’s collection of silver dollars, let’s use that as an example, Morgan dollars. If he was an avid collector and collected by every date, mint, mark and condition, most likely they’re going to be much more valuable. There are three types of collections that people have. There’s the true collector, the guy that was out there. I use guy because the majority of collectors are men, but there are quite a few women too. The person went out there and they wanted to fill their silver dollar collection. They bought every Carson City, every Philadelphia, every San Francisco and every Denver Mint. They bought all of the dates and mint marks. They had a good eye and they bought them by the condition. Those are going to be generally fairly valuable coins.A knowledgeable person is always going to feel better about the process. Click To Tweet
There’s the other that is more of the accumulator. We see a lot of the person that was somebody that was a child of the depression and they didn’t trust banks implicitly. They saved every silver dime, every silver quarter, every silver half dollar they could. They saved wheat pennies, and maybe they bought a gold coin here or two along the way. Those are going to have value too and it could be just a silver. You hoped that they got lucky and got something of value in there. There’s the last is the hoarder that saved everything, and they save bicentennial quarters, bicentennial half dollars, Susan B. Anthony dollars and stuff. We have a lot of that. We give a lot of stuff back and say, “Deposit this at your bank. There’s no collector base for this.” These are worth double face value and these are worth ten times face value. This one coin, this is your key. This is your three-legged buffalo that’s worth $850. That’s what we’re always hoping for.
They come in and I’m assuming they’ll make an appointment.
I’d say probably about a third make an appointment and probably two-thirds walk in.
Somebody greets them and they say, “I have this collection.” There’s the process they go through and you go, “You have something, nothing or somewhere in between.”
We sort it out. Luckily, this is probably the best thing to do when I took this from my father is we did fully computerize everything in 2012. It updates the spot price of gold instantaneously and the price of silver. We have all of those values and put them in the computer system. Whether it’s a 1973 proof set that’s worth $4 or a modern silver eagle with $16.50 or a one-ounce gold eagle worth $1,292 and it puts it all in there and it does all the adding up and everything there. The only real requirement is you have to be at least age 21 and we do have to fill out a police report. Everything is reported to the police in case it was stolen. It goes through a company called LeadsOnline, which all the police departments throughout the United States get. They can monitor if you are a prime suspect in a crime or something to that effect.
In my opinion the coin business had a stuffy stage, stolid type reputation. Innovation has arrived in your industry. What did you do to incorporate, promote or foster innovation in your business?
I’d like to think that by going overseas and seeing some of these foreign men, I try to pay attention to what they’re doing and who they’re gearing their clients. They have large marketing departments, whether it’s The Royal Mint in England or the Royal Canadian Mint in Canada or Deutsche Mint. They look at who they are marketing to or the United States Mint. They’re gearing it towards younger people. They are looking for a new collector. How do they bring collectors in? They’re making material, whether it’s proof silver eagles, proof cents or commemoratives for whatever event, World War I, and they’re gearing their commemoratives for that. We have to follow what the mints are doing, which are the producers in our industries, we’re the secondary market and then follow what they’re doing and try to copycat a little bit what they’re doing. They’re good at what they do, these foreign mints. They have the map of massive marketing departments and there are millions of collectors throughout the world. We piggyback a little bit on top of what they do.
Of the things I would have thought of, I wouldn’t have thought of a marketing department for a mint. It’s not in my vocabulary, that’s cool to know. For you going from the first generation, the second generation and you got to watch your dad build a business, then you bought the business for him. If you were to talk about the best thing you do in your management insights, what would that be?
I wasn’t trained to be a business owner or trained to be a business manager. I worked my way into it. Ours is more of a family business. I treat all our employees like family. I like to be as flexible as possible with all of them. My management style is I’m hands-on. I work on the coins. I help customers out upfront and a lot of what we do is stories. It’s not just a coin. A coin is a coin and it has X value, but a lot of times the coin has much more value if there’s a pedigree or something on it that makes the coin more interesting. It’s not just that item. I’ve always been a manager that relies on my key employees. I’ve two people that have been here both many years and the internet side. I let them do what they need to do, but at the same time we have a meeting so we’re all on the same page. We have weekly meetings to make sure we’re all focused on the same goals.
We talked a little bit about the human resource side of the house and how that contributes to the success and so on. You had an insight that many would probably love to hear.
I had a business consultant come in and give me some advice. I was a little skeptical about him having to come in, but I thought why not? I paid a little bit of money. I had him come in and evaluate our business. He came out with a thing that I don’t like the management or the human resource side. I enjoy the coins, the stories, the history and the money aspect of it. The human resource side is the part I enjoy the least. He said, “Why don’t you get rid of that?” I hired a management company that does my human resource side. I still do the hiring, but they will give us direction on how to do the hiring. They’ll give us candidates.
They take care of the payroll, the 401(k), the retirement plan, all of those things that is important to do. I don’t want to spend all my time on the computer, doing paperwork and compliance issues whether it’s 1099s or Form 8300s. There are many forms and paperwork that is involved. That’s also something I’m not making money. If I’m doing paperwork and filling out 401(k) reports, that’s detrimental to the business. I would rather pay somebody else to do that and that’s what I did. It’s made life much easier. I use a company here in Colorado called ERC, which is Employer’s Resources of Colorado and they take care of my human resources portion of the business, and it’s been a blessing to me.
Know what you do best and know where your money comes from. Delegate what you hate or are not good at or don’t contribute to the bottom line. Looking at the business, there’s been an evolution of what you do and there’s some level of creativity that you brought to the table here. If you were to say what’s the key component or the most important creative approach that you take your business, what would that be?
I would say probably the biggest thing after I bought from my dad several years ago, my father luckily did step back. He said, “You bought this,” and he relinquished control and he allowed me to make decisions. We were only six employees at the time. He let me make the decisions. We were not computerized at all at the time because he’s the generation that didn’t do that. We got into the eBay and the other aspects, the computers, but we also changed our whole marketing. Back in the day, we marketed through Yellow Pages or the newspaper.
Do you want to have a grip on that too?
We still do small Yellow Page ads, but that’s more for the small rural communities where they don’t have high internet speed, where there are some older retirement communities. We went in a new direction and probably the most interesting thing we did was we started television commercials. We are on the local news. We do Monday through Friday in two of the stations. We have a precious metals report, gold, silver and platinum prices. One of the stations also puts the stock prices on there so it blends the gold with the stock market because everyone else is not doing anything like that. We also do a series of commercials where we’re always running two commercials simultaneously. We update them. For a long time, it was ship your mail into the gold or ship your gold to companies far off somewhere, put it in a package and send those to them and get a check back.
There were a lot of the gold buyers that were coming into town. We were trying to look for ways of going against those. Luckily, we got in the market before them and we paid more than they did. We advertise and the television made my daughter a little celebrity. It raised the profile of our business. The main thing is we always run two commercials all the time. One is a branding commercial. That’s basically who we are, what we are and how long we’ve been in business. We’ve always done a version of that. We update it. The other commercial is something usually what is most relevant at the time, which has been in the past buying collections. What we buy, what are we interested in, gold or silver, flatware sets, scrap gold and things to that effect. We’ve done a series of commercials and I find them to be highly effective.
It’s nice to know that you have a return on investment for the branding effort.
The other is on the internet. How do you advertise on the internet? There are many people that are always trying to take your money here and there and you have to sit back and evaluate. Do you want to go with Yelp? Do you want to go with Yellow Pages? How do you do that? You have to do your own analysis based upon you doing Google clicks. Are you getting pay-per-click? How were you doing that and which is your best return for investments? That’s what varies a lot by a business. Our hint for the television as we always advertise on two of the three major channels between ABC, CBS and NBC. Do two of the three and always keep one in the wings wanting. You’ll switch over and you’ll add one and take one off.
In thinking about the heart of your business and growth, you’re an entrepreneur. For a person that’s either starting a business, taking over a second generation business, what hints would you offer them if they were taking on that role for the first time?
I’d try to be as active in the community as you can, whether it’s Rotary Clubs or Sertoma Club. Get into some community activism of some sort, whatever interests you. We have local coin clubs. I’m an advisor of the Numismatic Association. Get involved somehow with that, but probably one of the other best things I ever did was when we changed banks, I got to know some of the bankers. To have a friend in the banking industry where you can call up and run some questions by them and not as a business question but as a friend. The bankers, I’ve been lucky I’ve had some great bankers and one in particular at FirstBank and he’s a friend. He gives me good advice. The other is through some of the clubs I’m a member with, I’ve met some good attorney friends. Bouncing attorney advice, “I’m doing this. Is this okay?” They’ll say, “That’s no problem.” Good basic advice from professionals in other businesses.
It’s simple but not necessarily easy because it takes time.
When we joined FirstBank, it was a toss-up between FirstBank and Western National Bank. I picked FirstBank because they had one person rather than a couple of people that were a tag team. It turned out the best choice. That other bank has changed a couple of times. Those people are no longer there. The bank vice president I deal with it at the time has moved up to the president. We even see each other on a periodic basis. It’s nice to be able to have in a casual climate and in a friendly way. I’m sure he wants to know what’s going on in my business, but I’m also picking his brain about interest rates and overall what’s happening in the banking industry.
People probably have a misconception about what you do or your role as an entrepreneur. What would you say the biggest misconception is about you here?
It’s probably that we just buy and sell coins. A lot of people think I’m the coin guy. There’s nothing wrong with that because I like being used as the expert as the coin, whether it’s jewelers or estate companies. They come to me and ask me about coins because that’s what I do and I’m glad to do it, but we do much more than that. I don’t know if that’s a misconception. Majority of coin shops, if you go to coin stores across the nation, most of them are small mom and pop operations. They’re basically collectors that decided they want to get into the business almost as my father did. I started a business without having any business experience or business knowledge and they are unprepared for running day-to-day operations of the business. Whether it’s your phone service, your Yellow Page ads, your trash service, your lease if you’re leasing the building or your security systems. There are many different areas to get into that are time hogs.
A lot of people think they can start a business and they start a business. There’s much more to it. The other thing is you have to be passionate about business. If you don’t like ice cream, you shouldn’t own a Baskin-Robbins. If you don’t like coins, you better not be in a coin shop. If you like automobiles, maybe you should be an auto dealer. It depends on what you like. I’ve been blessed because I grew up collecting coins and my father allowed me and he hired me. It was probably his early version of a succession plan, even though I don’t think he planned about it at the time because he was in his late 50s when he opened up the shop. I don’t think he was thinking about retirement at the time, but I’m thinking about the succession. How do I or any of my children going to be taking over the business?
My oldest daughter has got a good job in a company called Epic Systems in Madison, Wisconsin and she has no interest in the coins. My middle daughter is graduating from The University of Colorado, and I’m going to see whether she gets a job right away. If not, I’m going to try to hire her as a part-time employee and see if I can maybe get her interested. She has worked a little bit. She had been on some of our commercials, but she’s also worked part-time in the shop. I might get her in there. My son is getting ready to start college and he’s one of those computer nerds. He likes sitting and looking at screens all day long. I’m hoping I can get him to be interested in numismatics or the coins. It’s been good business. It gives me a lot of freedom and I’m hoping that one of the two children might be interested.
It’s obvious that your passion for this business drives your motivation. How do you take in and get that same level of motivation through your employees where they stay motivated in this business?There is so much more to starting a business to be successful in it for a long time. Click To Tweet
That’s always a tricky one. Number one, you have to get the right people and to have that basic interest or their personality. There’s almost a collecting gene that you either have the gene or you don’t have the gene. It’s hard to teach people to be a collector of whatever it is. One of my main key employees, Chad, he was an employee at the Numismatic Association. He was an intern. We interviewed him and he had the basic interest and basic knowledge. We hired him away from the Numismatic Association and he’s been here for many years. I hired someone who was working at a mattress company. It’s not always about their knowledge before they’re here or their level of expertise because a lot of that we could train. Sometimes it’s easier to train somebody that doesn’t have numismatic experience than we’ve hired collectors and sometimes they’re too interested in looking at the coins rather than doing our process.
We do have meetings and we have some giveaways. I try to treat everybody with as much respect, but everyone has their own role whether it’s working upfront buying collections, wholesaling at the back, eBay or shipping. There are different roles especially in the frontend of the shop. You have to both buy and sell. There’s a lot of overlap. I’m always watching and say if they get busy upfront, I’m sure to run up there and help out. If they have a question about the authenticity of a 1909 S VDB, I want them to run by me. It’s a rare penny. It’s probably worth about $1,000. Unfortunately, the Chinese are counterfeiting a lot of them and they’re sold all over places like Alibaba.
There are fake silver bars and gold bars. There’s a lot of fake stuff out there. I don’t want to pay $1,000 for a penny that turns out it’s worth a nickel. If it’s a high-value item, myself or Chad, we’re going to go up there to double check to make sure it is authentic. The last thing I want to do is sell something fake also. Luckily, there are some legislation’s gone through and they’re starting to crack down on a lot of the counterfeiters. The 1909 S VDB was the 1909 penny, the first year of Lincoln cent was minted in San Francisco, hence the S and then the VDB is the designers’ initials on the back. They took them off shortly after that because they thought it was too prominent. They thought he was being a little bit gaudy by putting his initials and by taking off right away there was only a few hundred thousand minted on there. For a penny, it’s worth $1,000. I want to make sure it’s a real coin.
As you get up on a typical day. You come to the office and you got to go, “We’re going to hit it again.” Particularly after you’ve been doing it so long. What’s that habit or personal self-talk that you use that keeps you going, keeps everybody focused and pointed? What do you do?
It’s like a daily treasure hunt. I don’t know what’s going to come in. I had a lady initially brought a whole bunch of cool Greek and Roman coins in that she had got from years ago. I’m going through it and I was excited because there’s nice Athenian tetradrachm from Athenian, obviously it’s from Greece from about 400 BC and in nice condition. It was cool to see. It’s not the same thing every day. I don’t know what’s going to come in. I bought a cool Mormon $5 gold piece, which was a gold coin struck in 1849 in Salt Lake City from California Gold. It’s the wonder of what’s going to come in. Getting everybody else motivated, it’s more of a job for them because they’re getting paid by the hour. We try to make it as fun as we can. We try to have potlucks and we make sure everybody’s treated with respect. Luckily, all the people get along well.
It’s on the whole hiring process. When we brought the guy in and let them walk around, we showed him to everybody. It’s almost like kicking the tires on a car and see how they got along. Before we did the hire, we asked the employees, “What do you think of him?” They thought he was nice. Everyone needs to know their position. I don’t have any one motivational tip because we’re not into sales. We have no quotas or anything else. We don’t have to hit X number of new. I just need to make sure that people are following the system we have in the computer and that they’re competent at what they do and we overlook what they’re doing.
With the adoption of social media across every business platform. What do you see in the social media space? How do you use social media inside your company?
We started a few years ago, but then we backed out. We had some computer issues and we had some people leave on the computer side. We had to reorganize that a little bit. We use LinkedIn. Personally, we use Facebook for the store. There are online reviews. The most important for a business is to have good online reviews. I always was feeling shy in the past, but we don’t feel as shy anymore because it’s almost commonplace to ask someone to give us a good review. Go online. If you could spend a few minutes and give us a review. To ask for a review is the more important that people realize. You can’t wait for everybody to do it, especially if they had a good time. The whole key for us is we want people to walk out whether they had a coin they thought was worth $1,000.
A lot of times we have to tell them their rare coin is worth a nickel that they have that 1943 steel penny that they read that was worth $50,000. We say, “No, that’s the ‘43 copper penny. Yours is only worth a nickel.” We want to make sure they walk out not disappointed and not upset that they learned something. They walk out going, “I know why it’s only worth a nickel and why it’s not worth $50,000.” We need to educate everybody that comes in because sometimes we even make collectors that people come in to sell stuff they end up not selling it. They end up liking it because they know what they’re buying or what they were going to sell. They walk out with it and I have no problem with that either because we developed another collector, which helps down the road.
With that being said, how do people find you on social media?
What’s your website for the company?
It’s HallenbeckCoinGallery.com. We got more active social media when I was the President of the Numismatic Association. I was doing lots of traveling and I was doing updates whether I was in a conference in Germany to Italy or Bali. I got away from that. I should probably get back to it again. It’s many things going on. It’s hard to get the time, especially I like working on the coin. A couple of hours have passed and I’ve been working on coins. Sometimes it’s hard to focus on some of those things and social media, which is necessary, but it’s underserved me. I need to focus on it more. I want to do it. I want to start doing even little YouTube video clips. It’s important to do.
You have the knowledge passed on from the first generation, you have all of your experience and being with the Numismatic Association. You have all this experience and it’s all trapped between your ears. You think about how you memorialize some part of that institutional knowledge that resides there and you think about for successive generations because sometimes to you it goes away.
The Numismatic Association interviewed myself and my father for an hour-and-a-half long of what they called The Legacy Series, which in every major convention they’ll pull a person out, they interviewed them and they put it on YouTube. There are a lot of people that realize whether it’s your father, your brother or yourself that if you can sit down with an interview and talk about whatever your expertise is. Put it on the internet then it’s going to be there for a long time.
Part of the reason I do this is I lost my father and he was in the Pacific in World War II in the Navy. I wasn’t much interested in the combat stuff. I was interested in, “How’d you get food on board? How’d you get a letter from home?” Some of this stuff he tells me. He had a romance with a fruit cocktail until he ate another tin can full of it and then his romance ended at that point.
That’s where the Numismatic Association’s been good. They’ve been going back with interviewing a lot of the famous people. “Going back, tell us your first convention in 1954. What was that like?” All the guys are in fedoras, coats and smoking cigars. It was a different time, but it’s some of those experiences. With my grandfather, he died when I was a child. My dad tells the stories, but they’re not from him. If you can video, it’s important to go out with everybody.
My grandfather was a gold miner both in Nome and in Columbia. I never got to talk to him. That story is patched together at best.
Going back to the coin aspect of it, it’s not always about the coin itself. It’s about the story behind the coin. That’s where we always told people, “If this was your grandfather’s $20 gold piece, write it down in a snippet. Who is this?” It’s like we see old photographs in the States that there’s no writing on it. You don’t know if that’s aunt Martha or who that is and it ends up getting lost in history. If somebody had written on there 1907 Martha Smith, New York, then they would have known who it is and they would have been able to preserve that. With the coins, if you can say, “This is my great grandfather. He carried this through World War I as his lucky charm.” Put that down on. That’s going to mean something to your kids or your grandkids down the road. Otherwise, it’s just a silver dollar.
Have you ever heard of the Flying Five?
I’ve heard of it. What is it?
It’s two twos and a one. It was my father’s first paycheck in the Navy and he has a $2 bill, which I still have and it has the name of everybody that was in his unit.
We call those short snorters. That was popular in World War II. Let’s say the original person was stationed in Pearl Harbor as their training or maybe they were in Kentucky and they moved to Pearl Harbor. Everywhere they went, they would take a note, sign all their buddies or quite often the commander and then they would tape them together. Some of those are six or eight feet long.
They called it the Flying Five. That was the paycheck. I’ve got one of his. He said, “I never want to be broke, so I always carry the $2.” That was his deal. It’s the story.
It’s about, “How can you document it? That’s the most important thing. That does go a long way for the value of a lot of things, not just coins but other materials, whether it’s paintings. It has meaning to your family.
As you go through here and many business owners we talked to have a favorite quote. Is there one that resonates with you?
I’m a historical person. One of my favorite people is Ben Franklin. With Poor Richard’s Almanack, he had a gazillion quotes and it’s great. I wrote my favorite two down, one was, “Well done is better than well said.” That was one of his. I’ve always been a hands-on person. I always think lead by example is some of those. The other of my favorite one is, “By failing to prepare, you are preparing to fail.” Those were my two business ones. There are lots of beer quotes and other things that Ben Franklin said, but those are my two favorite business quotes.
It’s not what you say, it is what you do, which is the current version. Your kids, they watch what you do all the time.You have to be passionate about your business. Click To Tweet
That’s where employees see you working diligently and when we do have downtimes, they’re usually catching up on something. They’re refilling the supplies, they’re redoing orders.
If you’re walking down the hall and there’s something on the floor. You picked it up like every other business owner on the planet. Do you get to do it all?
My dad taught me that when there was only three of us. You take out the trash. You wash the dishes, and you clean the cases with the glass cleaner and you vacuum it. As we got bigger, we have cleaning services that come in and do a lot of those things anymore that are the more mundane things. It depends on what you like. I still like washing my car at home. I find that a relaxing thing. I would like to go out on a sunny day in the summer and wash my car. Could I go through a carwash and spend $10? Yes, but I like doing it.
If you were to offer your best advice maybe or business intelligence to a small business or startup. You’re getting ready to build your business and then at some point you’re going to exit that business. You’re the second generation in this business, what advice might you offer for those people to think about building the business for transition or transition issues?
That’s one I’ve been thinking about as you reach a certain age. I’ve been doing this for over half of my life which has been basically in the coin business and this building. As I’m looking at transitioning out, I figure I’ve got ten more years, something like that, I don’t know exactly, but somewhere in that range. What makes it easier to transition? I’d say that as a process, I’ve been to a couple of different meetings and a couple of different seminars where people tell you some of the ways to how you would transition out. How do you prepare the business? A lot of it is thinking about it yourself. I had never sat down and seriously thought about, “How am I going to transition the business?”
What is the value of the business? Is the value of the business inventories, your name, your location, a combination of all those things? Are you going to sell it to a national broker that has to bring in somebody that buys your business? Are you going to be a part-time person training the person? Is it going to be a son or a daughter and you’re going to gift it to them? Are you going to let them buy into it? How are you going to do it? I don’t know if there’s one other advice other than start seriously thinking about it and going to maybe some seminars, listening to some podcasts or reading some books about transitioning out. Every business is unique because ours is extremely inventory heavy. A good chunk of the value of the business is inventory. Where there are a lot of businesses that they have no inventory, the inventory is not relevant part, it’s the client lists, the contacts and the other things. I would say determine the type of your business, what it is and then seriously look at it.
Understand the value drivers for your industry. If you were to look at your industry and go, have there been other shops like yours? Have they sold? I don’t even know if that’s information that you could glean, but it would be useful to know.
Unfortunately, most of them are smaller mom and pop shops. Number one, they don’t have a large inventory. They don’t have a large employee base. The two reasons I hear is the owner died and they closed it down. The family sold off the inventory and it’s gone. It’s a total liquidation. There’s another one that one of the guys died and the brothers of the deceased owner, they gifted the shop to the two part-time employees, but they had no inventory. They gifted them, basically a shell of a shop with the cases, with the name, with the phone bill, with the advertising costs and said, “You take over,” but the brothers got zero out of it. They took it but these guys have been struggling because they underestimated how much inventory or how many resources. If someone comes in and wants to sell twenty Krugerrands, you better have $26,000 available to write him a check. If they say you can’t buy it, then they’re going to go, “You can’t buy twenty Krugerrands?” The last three that have closed down in Colorado Springs have liquidated.
It’s certainly an indicator of failure to plan.
One of them was a hobbyist. One guy did it because he was semi-retired and wanted something to do. It was more of a hobby than a business. There are some of those, but a lot of the smaller hobby shops across the country, whether it’s sports cards, stamps, a lot of collectibles have gone downhill. Luckily, coins are one of the ones that have survived through the recession vigorously. The coins have not fallen off like some of the other collectibles. There’s a lot that unfortunately that’s worth $0.10 on the dollar. I hate to blame anything on Millennials, but I like to say the Millennials have changed the world in a lot of different areas.
My wife likes antiques. From what I see, Millennials shun antiques to some part and they’re more interested in something else. They get tired of stumbling over mom and dad’s antiques.
Even the way they build a house. I was talking to a home builder. They don’t build houses with formal dining rooms anymore. Therefore, you don’t have a place to put your China buffet. Therefore, you don’t have your Hummels and your glassware. The idea of a Sterling silver set and a regular flatware set. The idea of your everyday China plus a special China or a crystal and glassware doesn’t resonate. I don’t know if that’s even Millennials that are changing norms.
I suspect it’s cyclical.
With the antiques, the question is can you ship it on the internet? The antique shop itself has even changed. Coins luckily because they’re small and compact, there’s certification, authenticity is guaranteed. It’s much more of perceived value. Everyone knows a $20 gold piece is valuable, whereas you don’t know about a lot of stamps. Unfortunately, stamps are one that has taken a hit. I don’t see a real cycle coming back in the near future because you look at the kids out there.
You look at some of the stamps of the ‘30s and ‘20s are countries that aren’t here anymore and they were stunning. I inherited some stamps, you look at them and you go, “That’s not a collectible.”
My son who’s eighteen, they don’t write letters. Tell a kid why you collect a stamp. It’s a self-adhesive stamp that says, “Forever,” on it. You put it on there, “Why am I supposed to collect this?” It doesn’t resonate with the younger generation. That’s something with the Philatelic Society and they’ve got to concentrate on it. The average age demographically of the American Numismatic Association is male, the mid-60s and making $250,000 a year or something. You look at those demographics, generally the older white guy. How do you break into that?
We see a lot of kids coming into our industry that is collecting and that’s whether it’s boy scouts or other things, and there are probably twelve to twenty, you see a lot of collectors. They go to college, get married, raise their kids and then you see a lot coming back in their late 40s, mid-40s on, but there’s a gap of those 20, 30. That’s when you’re raising a family, you’re buying your house, you’re focusing on your career. It’s more people that are my age that suddenly go, “My last kid is out of the house. I’m an empty nester and I can take vacations when I want. I can collect what I want. I have more available income.”
That’s what a lot of the collecting clients that we see. That’s like the website when we put on a $1,000 coin or a $5,000 coin. Most things are between $300 to $3,000 on our website. The average person that collects it is typically a middle-aged male. I’m a history buff. I love history. I like even reading historical fictions. Everyone likes reading about different things. Some people like reading about golf. Some people read historical fictions and I like being able to put when I’m reading about Julius Caesar and they think, “I can have a Denarius from Julius Caesar,” and they fit together well.
It’s a real treat to be able to spend some time with you and get to understand your business. For the people out there, it doesn’t matter where you are in the country because you’re online as well. If you have an interest or a question about what you have in the way of a coin, the only mistake you can make is by not reaching out and saying hello. I appreciate your insights.
Thank you very much for having me on. I’m thrilled that you invited me on this. It’s a novel. It’s the first time I’ve done this. I hope I did okay.
You did great.
It’s been a lot of fun.
Thanks so much.
- Hallenbeck Coin Gallery
- American Numismatic Association
- The Royal Mint
- Royal Canadian Mint
- United States Mint
- Employer’s Resources of Colorado
- Yellow Pages
- Epic Systems
- Facebook – Hallenbeck Coin Gallery’s page
- Tom Hallenbeck – LinkedIn
- Poor Richard’s Almanack
About Tom Hallenbeck
Tom Hallenbeck initially started working at Hallenbeck Coin Gallery in the fall of 1985 after graduating from the University of Colorado in Boulder with a Bachelor of Arts degree from the School of Economics, shortly after Ken Hallenbeck founded the company in 1983. Even before starting a career in numismatics, Tom had been an avid collector since he was first able to read and attended coin club meetings and coin shows with his father (Ken Hallenbeck) back in Fort Wayne, Indiana.
After joining Hallenbeck Coin Gallery, Tom focused on grading and authentication of US coins. Aided by having located our coin store just 2 blocks from the headquarters of the world’s largest coin club, the American Numismatic Association Tom took advantage of having the largest numismatic circulating library just a stones throw away. First taking a “US Coin Grading” class offer by the ANA in the summer of 1986, then followed by US coin authentication, Tom has now been an instructor of coin grading classes at the annual “ANA summer seminar” continuously for over 20 years. Tom is the recipient of numerous awards including the ANA’s “Medal of Merit”, “Presidential Award”, “Glen Smedley Award” and “Goodfellow Award”, additionally Tom was presented the “Numismatic Ambassador” award by Numismatic News.
Tom also followed Ken Hallenbeck’s footsteps, not only by following him in his coin business and purchasing the Hallenbeck Coin Gallery from his father in the summer of 2001, but by also being the only father and son to be elected to the ANA Board of Governors, Vice-President and then President. Ken was elected President of the American Numismatic Association in 1991 and Tom was elected to the Presidency of the ANA in 2011.
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