The Institute’s Leading Edge Podcast

198 - Overcoming Set Back to Go From Farm Kid to Shop Owner

198 - Overcoming Set Back to Go From Farm Kid to Shop Owner
April 8, 2026 - 00:58:14
Show Summary:
Peter Bailey shares his path from farm life to owning Limitless Garage in Iowa. Early setbacks redirected him from the military and law enforcement into automotive. He built skills through hands on work and formal training while learning leadership in a fast paced shop. His focus on culture and people shaped how he leads today. He started his business in a home shop and grew into a full facility. He believes hiring for character matters more than experience. His story shows grit faith and steady growth.
 
Host(s):
Jimmy Lea, VP of Business Development
 
Guest(s):
Peter Bailey, Founder and Owner of Limitless Garage
Show Highlights:
[00:02:45] – Peter discovered he loved fixing equipment more than working livestock on the farm.
[00:09:20] – His first shop job started with labor before earning the chance to repair vehicles.
[00:13:40] – He learned attention to detail prevents mistakes and builds strong habits.
[00:14:45] – Safety work like brakes and suspension must be done right every time.
[00:19:10] – He pursued leadership after seeing limited growth at his first shop.
[00:28:10] – Running a fast paced oil change business became his leadership training ground.
[00:33:10] – Leadership means building culture that helps people grow and succeed.
[00:38:20] – He left his job and launched Limitless Garage from a shop at home.
[00:42:10] – He faced zoning issues and rejection before securing a commercial location.
[00:47:10] – The technician shortage comes down to culture not pay or skill level.
In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?
Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.
 
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Episode Transcript DisclaimerThis transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.
 
Episode Transcript:
Jimmy Lea: Hello friends. This is Jimmy Lee with the Institute for Automotive Business Excellence, and you are listening to the Leading Edge Podcast. My guest with me today is Peter Bailey. He is the owner and operator of Limitless Garage in Des Moines, Iowa. Peter, how the heck are you, brother?
Peter Bailey: I'm doing well. Thank you for having me on.
How are you?
Jimmy Lea: Oh, fabulous. Thank you very much. It's a beautiful day outside, beautiful day. If we could be outside, it would still be a beautiful day.
Peter Bailey: Is it cold? Where you, where you at?
Jimmy Lea: Uh, yeah, I woke up, it was 19 degrees this morning.
Peter Bailey: Yeah. That's chilly. Yep. It's similar around here.
Jimmy Lea: Yeah. Yeah. Did you guys have snow here this last week?
Peter Bailey: Not this last week. Well, a minimal amount and it didn't stick very long, so it's all gone at this point.
Jimmy Lea: Oh, yeah. Yeah. We had a few inches and it was gone the next day by lunch. Uh, anywhere in the shadows it's still there, but otherwise it's, it's pretty much gone.
Peter Bailey: Yeah, I, we had a small snowstorm, like a little blip come through on Saturday and it was like right as I went to the shop to pick up actually one of, uh, my pieces of equipment to take it back to my home.
And I had my boys with me. And so anyways, it was completely clean, but by the time we got it home, I had to wash again. So that was frustrating, but so good.
Jimmy Lea: So what is a little snowstorm in your book? I'm new to this cold area. I grew up in Las Vegas. I lived in St. George, Utah. I'm a desert rat, so this climate change is new to me.
Peter Bailey: Yep.
Jimmy Lea: What is a small snowstorm in your view?
Peter Bailey: Oh gosh. I mean this, when I, when I was saying with snow, small snowstorm for this, it lasted all of an hour and a half. And it was done. And so the amount of snow left on the ground was, I mean, it was there, everything was white, but at the same time, we're talking like half inch at best.
So it's not much.
Jimmy Lea: No, that's not much at all. You, you barely hit mock three, driving on the street, having the stars come at you like Star Wars.
Peter Bailey: Yeah, it, it was heavy snow like coming down, but the temperature, it was still warm here on Saturday, so we were like 35 degrees or so. So by the time it hit a lot of it was melting anyways.
Jimmy Lea: Yeah. Yeah. That's awesome. That's awesome. Well let, let's talk automotive, let's talk the industry. Let's talk, uh, automotive aftermarket. Want to start Peter, at the beginning? How did you get into this industry?
Peter Bailey: Yeah. Um, so I've been in automotive now for 15 years at this point. Um, I started out actually wanting to go into the military, and so I had gone through like.
All of my testing through my asvab, through my maps and everything in preparation to go into the military, into the Marine Corps, but then was denied at the end due to a heart mur. So no process went through, tried to get a waiver for it, didn't work, and by that time it was like six or eight months of a process and I was like, I'm not doing this again.
I gotta see what plan B is. And Plan B was, I really enjoyed. Automotive. And so I was, um, yeah, I was sucked into there next, so it was going to find a shot to work for and uh, that's where it started. So I worked.
Jimmy Lea: So, so where did you, I mean, how did you get, how was even automotive a plan B for you?
Peter Bailey: That's a good question.
Growing up, um, I grew up on a hobby farm and I really enjoyed tinkering on small things. And now almost
Jimmy Lea: the ranch. Almost the farm,
Peter Bailey: yeah. Almost a farm. Yeah. So like we had small tractors, we had, you know, trucks, stuff like that. Right. Dad still worked his normal eight to five job and everything, but we, we would do everything to bailing hay, you know, and livestock.
And so I enjoyed working on the stuff around the farm and actually, of all people, I was thinking of being a farmer initially. None of my family was. And then one day we're sitting at the supper table and my sister looks at me and I was probably 16 at this point, and she goes, Peter, you don't really enjoy going out and doing all the livestock chores, but what you do seem to enjoy is fixing and maintaining all the equipment debt has.
I said, well, you're right. I hadn't really thought about that, but I do find enjoyment in that. So that kinda sparked from like 16 years old on. Then I was like working in small engine shops, so like lawnmower shops, dirt bikes, stuff like that. All the way up until I turned 18 when I moved out, and that's when the whole Marine Corps thing happened.
And then it's been history since,
Jimmy Lea: right? The Marine Corps thing happened and then didn't happen.
Peter Bailey: Yeah, it's gone.
Jimmy Lea: It's gone. Yeah. Well, and I have a daughter that's a Marine.
Peter Bailey: Oh yeah,
Jimmy Lea: yeah, yeah. So she's in Hawaii right now. Um, and then my grandfather, similar story to you. He, his was not a heart mur. He had shaky knees.
They called him, uh, crazy legs in high school. His knees were really loose. So here he got his draft notice and he was heading off to war. Oh, wow. And he had to report, so he sold his business.
Peter Bailey: Oh, wow.
Jimmy Lea: Showed up. On whatever showed up. And, uh, they, they gave him the physical and by the end of the physical they said, uh, thanks, but no thanks.
Here's your ticket. Uh, you can go, you can leave now, you can
Peter Bailey: go
Jimmy Lea: home.
Peter Bailey: That's terrible. That's a way worse story than mine.
Jimmy Lea: Yeah. So he, he, uh, he had sold his business. He, he went back and, uh, opened up another dry cleaning business, uh, and his wife had a daughter. Like, I mean, he was going off to the war and it was not a good thing.
But anyways, yeah, that, yeah. Lucky for him. He had shaky knees, crazy legs. Okay. So, so on the farm, you're working on everything, you're, you're really enjoying the mechanics of it all. Yeah. Thank heavens for the women in our lives that can look and see and say, Hey, you know what? You really light up when you work on.
Cars, trucks, tractors, lawn mowers.
Peter Bailey: Yep. Yep. You got it.
Jimmy Lea: You're, you're swearing at these animals. What's going on?
Peter Bailey: Just about, yeah, you're actually not too far from that. 'cause even now I got kids that wanna raise animals and we live on a small acreage now, and so like I've got some hard nose. I'm not raising that type of anil and sheep is like at the top of that.
I'm not gonna raise sheep any longer. So anyways, that's the side story. But at the same time, you're right, a hundred percent. I did not enjoy the livestock as much.
Jimmy Lea: Okay, so on the sheep thing, my brother is in Sacramento, California. Cameron Park, he has goats.
Peter Bailey: Oh, okay.
Jimmy Lea: Yeah. And sheep. Not sheep, I guess you can't call him sheep.
Uh, dirty Fred is, is the, the alpha male. And then there's all this, this harem that he has. Uh, and they have all these little baby. The baby goat are so cute. They're absolutely adorable.
Peter Bailey: And that's what everybody likes and they want, right? That's what my wife,
Jimmy Lea: your
Peter Bailey: daughter, right,
Jimmy Lea: until they get bigger. And then you're like, nah, no, we're done.
But he also goes through a phase where he'll raise chickens. So he has, he has 12 or 13 that he keeps for the, the normal for the good. And they lay the Easter eggs, the blues and the greens.
Peter Bailey: Cool. Yeah. Yeah.
Jimmy Lea: But he'll raise these, uh, these, the, the white chickens for the meat, a meat chicken. Um, and, and then they go through a whole food processing thing.
So for you, that's a hard, thou shalt not.
Peter Bailey: No, just certain animals. So don't get me wrong, I will still ra especially, I got kids now, I got four of 'em. So like I'm all about, I want the experiences for them. So we raise chickens, we raise ducks. Uh, my wife is all about that. I have to figure out how to keep everything clean, build it all, and then just maintain it and then she figures out what to put in there.
So yeah, somehow we ended up with 30 chickens and a couple ducks and yeah, it's not a small thing anymore.
Jimmy Lea: Oh, he's not a small thing. Oh, that is so rad. He has a, uh, oh, what does he call it? Uh. Oh, it's like a clucking to, it's a chicken, chicken chickshaw that he can move around the property.
Peter Bailey: Yep.
Jimmy Lea: And he has this, uh, electric fence that goes around with the, the chickshaw and the chickens are scratching the ground and fertilizing the ground and,
Peter Bailey: yeah.
We used to refer to 'em as chicken tractors. You'd move 'em around, you'd pick it up and you pull it. You know, you move 'em around. Yeah.
Jimmy Lea: Yep,
Peter Bailey: yep,
Jimmy Lea: yep.
Peter Bailey: Very familiar. I don't have that for mine, unfortunately. They are confined to, they have a nice outdoor run in pen. It's very large. However, I like my yard as well, and so everything that's going to be kept will be kept nicely, so they would currently stay off of it.
So yes. Well,
Jimmy Lea: there you go. There you go. We'll have to trade chicken stories. Next time we get together, make sure I tell you about Ru Ru from a different brother, Ru Ru Rooster. Yeah, that's a story for another day. So here, working on the tractors, you are working on the farm. The Marines doesn't work out.
Where's the first shop that you step into that you're now cutting your teeth and getting paid? Not just food room and board, but this is real money.
Peter Bailey: Yep. So I started working full-time at a local independent shop here in Des Moines. Um, and I, I actually was in the process of applying for the Marine Corps when I started this job with them.
And I knew I liked automotive enough to be able to get a job in it, depending on how long it took me to get into the Marine Corps. So I took it, moved to Des Moines from Pellas where I grew up. So I moved from Pella to Des Moines, which is about an hour. Yeah. And got a roommate and. We got our first apartment and then I started doing this, um, for 40 hours plus hours a week.
Right. Working automotive. And when I say that it was, take that with a grain of salt because one of my first jobs when I started on site that. Morning. I remember the first day I started the shop owner had me filling the concrete in the parking lot with expansion foam and everything, uh, for all the cracks, expansion joint cracks.
So I filled foam and caulked like all of the cracks in their parking lot with expansion foam and joint sealant and everything. And, um, I was power washing like the outside of the building. I just remember that summer I was very tan and very burnt by the end of it, but I did, that was my intro into this is what I'm gonna do.
And then that escalated into once I not proved myself, but at the same time, once I was able to do this well. Uh, I started going into uh, do oil changes right? Then it starts to go on to, I'm gonna do brake suspension, stuff like that. And in short order then, yes, it kind of just started to fly by at that point in time.
'cause kind of back to the farm thing. My boss figured out pretty quickly, Hey, I can hand Peter a almost anything. 'cause I did everything from the caulking of the expansion joints to, I was fixing tire machines for him to, I rebuilt a carburetor on his 1950 Ford truck that he had out front for show to, like, I was kind of moving through everything at that point in time.
And then at that point he's like, all right, you're gonna start working on cars. Here's what we're gonna do.
Jimmy Lea: Oh, wow. So, and, and it's true. The, the farm boys, they're, they're hard workers. They're smart. They figure it out that there's usually not a manual or a guidebook, but they figure it out, right?
Peter Bailey: Yep, yep.
You got it.
Jimmy Lea: So here you are. He, he's handing you all these jobs to test your, your, your muster to see if you're gonna survive. Are you coming back tomorrow or are you done?
Peter Bailey: Yeah.
Jimmy Lea: And you kept coming back, so
Peter Bailey: Oh, yeah.
Jimmy Lea: Congrats to you for keep coming back. You went from facility maintenance.
Peter Bailey: Yep.
Jimmy Lea: And, and then into the automotive industry.
Peter Bailey: Yep. Yeah.
Jimmy Lea: And, and that's awesome that you did. I mean, what a, what a road in. So here you I, did you have any formal training or is this still all hard knocks?
Peter Bailey: Yeah, I had zero formal training at that point in time. The only closest formal training I would've had would be working in a mower shop on like small, like lawnmower engines.
And I got to work next to a tech that did that. But, so like the fundamentals, but everything else I had learned just from trial and error or watching people or being willing just to talk, go talk to people and ask questions.
Jimmy Lea: Dude, that is, that's amazing. So that is awesome. Alright, so how long are you at this first shop?
Peter Bailey: Yeah, I was there nine years. So I spent a good stint there. Um, and I went from where I told you all the way to by end of year one I was entering into like I could do. Suspension, brake oil changes all your light maintenance and suspension work, um, to alignments. And at that point I was like, Hey, um, I'm ready to dive into this full fledged, like what can I do next?
And then at that point in time, I had found General Motors, their ASEP degree through our local college. And um, at that point I reached out to them and. Wanted to go into the program there. So normally there's a waiting list, at least here in Des Moines. There was a waiting list at that point in time. It was what, 2012 at that point?
Some 2012 or 2013 at that point. And there's normally a waiting list. So I remember going in and meeting with the director of, um, that, of the automotive, um, education there. And he. Walked through everything with me, and at that point I'd worked a year in the shop and this shop was AC Delco affiliated already, so I, I already had the in with that so my shop could sponsor me and I go to school.
So I immediately took up that and started the very next semester and dove in on that two year degree. And then I did my, I did my GM ACEP degree at that point from, and I graduated 2014. That would've been, um, from asap.
Jimmy Lea: Oh, congratulations. That's phenomenal. Yeah. What in, in that first year or in that first two or three years that you were working at this first shop?
Mm-hmm. What's something you learned there that still rings true today, that's advice that you stand tall on, that you learned in that first year?
Peter Bailey: That's a good question. Um, I would say that. The thing that I took away the most was attention to detail on everything that I did. So what really quickly started happening was whether it was pulling apart major repairs or whether it was even minor stuff, everything that went back together, you will. I would catch mistakes before they ever happened.
If I could pay enough attention to detail throughout it as soon as I started just going into, um. Just automated repairs and I'm not thinking about it, then mistakes start to happen. So it was that, along with, I worked next to an older mechanic there and, um, he left during the stint that I was there the whole nine years.
But during the beginning of it, one of the things that rang true to me that he taught me was, um, when working on vehicles, anything that has to do with an, let's say specifically in the engine compartment. If something's messed up in there and it breaks while a customer has it really realistically, one of the worst things that's gonna happen is unfortunately they're stranded on the side of the road, right?
Let's say the engine completely quits and fails. It's not gonna blow up and cause immediate harm. However, they'll have to get off to the side of the road. However, if you're working on suspension, tires, anything like that. You can't mess up, that's like a no go because you've got people's lives at risk at that point in time.
So brake, suspension, tires, anything that has to do with that. So everybody that I have through the shop at this point in time, all my text is basically continuing to ring true with, of like when anything leaves here, it cannot have an issue with any of those components.
Jimmy Lea: Oh, I love that. Yeah. The attention to detail, especially in those critical areas, break shocks, strut.
Tires.
Peter Bailey: Oh yeah.
Jimmy Lea: It is huge. Yeah, absolutely. That's, you don't mess around there. So when, when you have your technicians working on cars and they are, are, are, um, let's see, tightening down a, a tire or wheels onto back onto the car and they use their torque wrench, do you have a second person come over and qc their work to make sure that it's torqued to the right?
Peter Bailey: We have an initial phase where we will do that. So like in the first, depending on the length of the technician being there, within the first six months, like I had a very new technician that we had here that was 18 years old. Everything we called qi, so quality inspections, everything that left and even before we started vehicles, after oil changes, we would qi his work.
So nothing started without oil. Nothing's left an oil filter off. No wheels are not torqued to your point. So we have those put in place, but then a couple of the other, um. Processes that we have in place, especially even for the more knowledgeable techs, including myself, is that if anybody's doing tires, it's a no-go.
You don't ask questions at that point in time. You go come interrupt people at that time. You have to complete that part of the repair before you can move on and do anything. So you can't leave, uh, torque wrench, stuck on a wheel and go do something else. No. You complete that before. So anybody that comes back should have a question in their mind.
Jimmy Lea: Oh, I love it. That's so important. So important. Okay, so you're at this shop for nine years.
Peter Bailey: Yep.
Jimmy Lea: Working your way up. You got your, uh, AC certification.
Peter Bailey: Yep.
Jimmy Lea: Then what, what's next?
Peter Bailey: So through that was GMAC to your point. I did a, my a c exams as well. I worked then for about five, the five years after that, remaining in that shop, and it worked up through heavy repair.
Pulling motors out, transmissions, all the way to then a lot of dag. I ended that, my career stint there with a ton of diag. I was helping to teach some dag in it, um, as well as, um. Help assist in the office as well. So I did a lot then moving into service advising. So I learned how to service right? I learned how to talk to customers in this job.
I learned how to open and close the shop. I learned how to do everything I could while there. And um, I had the opportunity at the end then to kind of talk, discuss with the owner where the shop was headed and what his intentions were and. When I got to the end of that, the stint there, really what just pushed me to end up finding another w another job was that hey, he had his plans for the shop, where they wanted, where he wanted to go, staying in the family.
And I respected that. That was great. Um, it just was, that was the end of my, where I wanted to go with that section of being an automotive tech. I knew that wasn't the end for me, so I needed to find what was next.
Jimmy Lea: Nice. Congrats. I mean, that's, and that's a hard conversation to have with somebody to say, Hey, uh, what's the plan with the shop?
And to find out, um, it's gonna stay in the family. But congrats to you for having that conversation. There's so many that don't.
Peter Bailey: Sure, yeah, that's true. Uh, there's a lot of people that don't. Right. But then at the same time, I don't, nobody wants to overstep their boundaries. So you have to have it in a respectful way, right?
When you're gonna have that conversation. Everything is open, I think, for a question. However, you have to respect the answer you're given. And then that was pretty much my takeaway at that point. It's like, Hey. That's great. You have a plan. I'm, I'm probably not part of this plan, and for that reason, I hopefully respect on both sides and I'm gonna move on.
And my next mission at that point in time was I wanted to enter leadership. Like my ultimate goal was I just wanted to lead. I wanted to know how to lead people. How to make processes, how to get to the next stage. 'cause at that point, actually I was still, I still wasn't interested in owning a shop as much as I was in leading, managing, and, uh, being able to help make calls on a higher level at a shop.
So my next venture or my next stage was anything that had to do with leadership and of all things that I wanted to do initially I took a, like a 180 again and I went to, I want to think about law enforcement. I wanna do law enforcement, or I want to do something that has to do with that. Um, 'cause I wanna learn how to help others, but at the same time lead a different group of people.
And, uh, so I started that venture. I was still at that shop. I let the owner know and he was, he was just fine with it. It was like, Hey, I'm gonna look for my next. Career path and I think it might be in law enforcement. And I spent almost two years, 'cause that was, that would've been a seven year mark for me.
But I spent almost two years trying to get into a law enforcement agency somewhere only to keep getting denied for, and I was never given a reason, to be honest, each time 'cause it's. It can be fairly political, but at the same time, some of it also can be, uh, just the needs of that agency at that time being.
So, like in Des Moines, we've got multiple different departments that I'd end up going to and um, I tried probably four or five. I ended up actually ending that stint of looking. When going through the Border Patrol. So I ended the stint by going through the border patrol's process all the way through being interviewed by Homeland Security, going through multiple polygraphs with them and everything like that.
Um, at the end, again, I was denied for I again, and a reason that I never got a good answer for. Um. I'm a guy that I think likes to follow up, but at the same time I'd call, you know, Hey, gimme some feedback. What can I do differently? 'cause I'm sure this is what I want. And uh, it was very vague, uh, gray areas.
And so I'm a Christian at that point in time. I'm like, there's gotta be something different because I'm getting shut down. There's something out there that has a higher. I have a higher calling for. So,
Jimmy Lea: amen. Amen. And I, I fully agree. I understand. Uh, God is in charge and this is his way of saying, all right, da da Peter, stay here.
Stay here. Wait. Nope. There's gonna be something better. There's gonna be, gotta trust me.
Peter Bailey: Yeah.
Jimmy Lea: And in the moment we're thinking, what the heck? What am I doing wrong?
Peter Bailey: Yep.
Jimmy Lea: How come I'm being denied? I mean, two years is a long time.
Peter Bailey: It was
Jimmy Lea: for you to be going down this path, having a goal, seeking this goal, pursuing the goal, and be denied the goal.
Peter Bailey: Yeah, it felt like eternity, obviously when you're in sitting in it. And I had, I mean, I have the most supportive wife ever. 'cause at that point in time, we had a small kid who was less than a year old, our oldest at this point. And um, anyways, I remember driving to Minnesota with them to go like, Homeland Security, you have to drive.
Like Missouri, they had a headquarters, Minnesota, they had a headquarters. I had to go between those. It's not long drives, like five hours or so, but she'd come with me on some of those. We'd stay overnight in hotels, we'd, we'd do the whole thing and then I'd get. I get knocked down again. It's like, all right, am I gonna do this?
And I try a couple more times until at the end I was like, ah, this is, there's something else. I've gotta try something else.
Jimmy Lea: Wow. Okay. So, so you finally throw up your hands and you say, all right, Lord, you're in charge. I get it. Where do you need me?
Peter Bailey: Yep.
Jimmy Lea: So what's next? You, you're denied by the border patrol?
Peter Bailey: Yeah.
Jimmy Lea: Did they, did they ever say, oh, by the way, it's your heart murmur?
Peter Bailey: No. I, I had so many, so Border Patrol was one of 'em, and I ran into some issues, which I thought was going to be that. Um, but I remember calling in, they. They had at that point in time, they had what they called an expediting program. And it was 90 days compared to six months.
It was done in 90 days. And, but you had to be on the call at that point twenty four seven to do whatever they asked you to do in the next step of the process. And so I immediately elected to do it. Okay. I was like, do it. I'm gonna do whatever you asked. So I remember getting the call at 8:00 PM one night and they're like, Hey, we have an O opening all of a sudden for your medical exam, but you have to be onsite 9:00 AM tomorrow.
And you have to be able to be off. Most of the day. So I call my boss up and I'm like, Hey, I know this is the last minute. Can you make this work? If not, I'm gonna have to find a different way, but they're gonna drop me from this program. And he said, all right, we'll make it work. And I said, all right. So I headed out, I go to this medical exam and they find the same thing.
The heart remember thing, right? And they're like, oh, you haven't had an exam in the past six years on this. We need to have an exam. And so at that point, like I'm talking to this doctor who's doing it, and like, I'm going through all these loopholes. I'm like, have you tried this? Have you thought of this?
Have you done this? I remember leaving the exam office running to my doctor or establishing a new doctor nearby that I had met a couple times, getting a good relationship with him within the course of a couple hours, asking him how quickly can we do another assessment on me? He's like, okay, within 24 hours we can figure this out.
Like. I did an extensive amount of just hopping around all to bring it back to them. I made it through the medical part, but to that point, like the amount of loopholes that I had to jump through just to try to get to the ending where I did it was. Amazing. It was crazy, but it was a lot of just making, it was making friends really quickly and starting to ask for favors.
Jimmy Lea: Oh yeah, for sure. There. Yeah. You're having to make a lot of friends very quickly in that situation.
Peter Bailey: The Border Patrol, I would say that was an interesting one that I got sent on the track of in from the automotive industry. I talked to, I was at Vision Conference in Kansas City and I talked, I remember going to, uh, it was, I went to a class with my boss at that time it was called Robots on the Road, and it was all about autonomous vehicles.
And I talked to that person at the end 'cause they were somehow affiliated with Homeland Security at that point. And I talked to him about my interest and he said, have you thought about border patrol? Because if you went to the coast anywhere and you had to. Be able to, um, inspect vehicles coming in off the coast on ships and stuff.
With your automotive industry, you'd be able to tell if there's anything abnormal in the vehicle, if people are trying to smuggle things, anything like that. And you could be valuable for that. So that sent me down the border patrol thing and I was fully committed to, if they wanted me, I was gonna, I was gonna move, I would go out to whatever coast I needed to to make this work.
But yeah, it was an interesting one.
Jimmy Lea: Yeah. Well, there, there again, you got the maker standing up there saying, whoa, hold on. Peter. Peter, Peter, Peter. Right here, right here, right here. I I, we've got a better path for you. So you going through all of this to get to the point where, what's next?
Peter Bailey: Yeah.
Jimmy Lea: Now what You, you, but you're coming home from the border patrol final denial.
Peter Bailey: Yeah, I went, so I was told no. Um, yeah, there's a backstory behind that, but I was told no, and immediately I remember. We went to church the next Sunday, or two Sundays after that. And I had a guy that I had met a couple times come up to me and he, he was, he's a partner at, um, he is a partner at a business here in town and he does very well.
But anyways, he came up to me and he said, Hey, I know you're in the automotive and I know you had these goals. Um, have you considered reaching out to one of my friends that I know that owns a. He owns, he's in the automotive and he, he was very vague. He's like, he owns, um, a shop here or a couple shops here.
And I know that the son who was one of my employees in the past is looking to come back, be the CEO for this company. And he needs good people. I know. And I remember he, I tell him, yeah, I, I'd be interested. It's an automotive again, but let's do it. I just want something in leadership. And he said, okay. So I remember standing there actually with my family and he is a very charisma guy.
He's, he's awesome. He's all high energy and he is like, Hey, uh, let me take a photo of you guys real quick and I'm gonna shoot a text over to my, my, uh, friend, uh, who's this, who used to be my employee, and I'll see what he says. So he shot a text. Well, within like 24 hours, this guy was texting me and he is like, Hey, can we set up an interview?
Can you send me a resume? And so I remember writing out a resume out resume. Um, I was boarding an airplane when he sent me that. Um, uh. Text message I remember. So I remember sitting on an airplane, typing up my resume, finishing it all, sending it to him, and then meeting with him. And at that point he was coming actually back from the job that he was working in prior to the company his dad owned, which was in automotive.
Well, I met with him and I found out this company, it's quick loop. It is oil changes and it's a local, oh
Jimmy Lea: gosh.
Peter Bailey: Yeah. It's a local company that does oil changes. And I'm like, oh, well. So I sat in this, I sat in this interview with him and we probably spent two and a half hours in an interview as he went through all this stuff with me.
Um, come to find out this. Wasn't any oil change place that I had ever been aware of. Um, and they're in town, they're a local company that's family owned still, and they were, had two stores and they were looking to start their third and they needed a general manager for their third. But this oil change place, Ankeny, which is just up the road from me, their biggest store was there and they would process upwards of 250 cars a day if.
If like during a round holiday season and on normal we'd be, they'd be somewhere around 180 to 200 at that place. So like a ton of volume, like this was not normal. It's crazy. So I went,
Jimmy Lea: that's a lot of oil changes.
Peter Bailey: That's nuts. Tire rotations, they do some fluid services, mostly oil changes. That's their bread and butter.
And I remember thinking about it. Then he said, come out for a day, just work in the shop for a day with, uh, his brother at that time was an ops manager. So I went out and worked with his brother and, um, come to find out, I was like, well, this would be a place I could learn leadership and interviewing skills if I really wanted to, but do I want to do it?
And they shot me an offer, and it was more than I was making at that time, uh, in automotive as a mechanic or anything. And I said, okay, I'm gonna give this a shot. They, their idea was they wanted to put me as a general manager. For their Walkee location, just west of town here. When they opened it, which is their third location, I said, all right, let's do this.
So I signed on with them and I got the most amount of calls I've ever received from all the people in automotive that I knew, like from, I initially told my boss, but it was all because it's like. Forbidden sin to go from automotive repair where we really pride ourselves right. To anything that has to do with quick lube.
'cause quick lube has a terrible wrap to it. You gotta,
Jimmy Lea: oh yeah. They, they skim the top, they take all the gravy. They, they're gonna go in and do the air filters and the windshield wipers and they
Peter Bailey: do shoddy work. Right. And they, they don't tighten drain plugs and you end up with lawsuits and all that sort of stuff.
So I was like, all right.
Jimmy Lea: Yeah.
Peter Bailey: I'm fully aware of this, but if this is what I, if I wanna learn leadership, like I can do it here. I think, 'cause these stores, they would be equipped with about 25 to 28 people per store that you had to be able to lead. So there's quite a few people in the store.
Jimmy Lea: Yeah.
Peter Bailey: Everything from your managers to your assistants to your employees. Um, cut me off if I'm going too long on any of this, so just let me know. But in any case. I started working for them and I started learning to be a general manager. Uh, within about six months, the CEO who had hired me had, was, had joined at that point in time, and he.
Came to the shop that I was working at a couple times and he'd come every week and then eventually he is like, Hey, Peter, I, you've been working, I see your eth work ethic and everything. Would you consider going to lunch with me? And so I went to lunch with him a couple times. And then at that point he, he's like, Hey Peter, you have the automotive knowledge.
You're the subject matter expertise is here. Um, and his brother, who was the ops manager for the whole company at that point in time, stepped down and said, Hey, I'm gonna do something different. And he left the company altogether. And so the CEO comes to me and he goes, Hey Peter, can you, can you be an ops manager?
Do you think you could do this? And I said, well, absolutely. I think I could do this. And I jumped into that fee first. Then at that point, I was in their AIM store. I jumped into ops manager and um. It was like a convergence of all of your leadership changing over in a very, it's a small business, granted, right.
We're under $12 million at this point. Um, but you have like 50 plus people. 'cause we had two stores and everything had hit the fan at one time. I remember. And having to just figure out how do you keep two stores open that are doing roughly. I don't know. Again, we're doing maybe 8 million at that point in time between the two stores.
Okay. How do you keep all of this running and still working while the owner's there? The CEO's there next to you and I'm the ops manager and I'm trying to keep everything pulled together. 'cause at that point we had a general manager and Ames, our ames store, quit ops manager, quit in store manager and it's all 'cause of leadership turnover at that point.
So I'm just, I'm watching all this go down. I'm like, ah, this is making sense. I know why this is happening. People are. Worried about their future. They're frustrated with leadership turnover. What's happened for the past five years is no longer happening. So all this happens, and I remember having a lot of conversations with the CEO, but then just starting to dig into, like, I listened to every podcast on leadership I could find.
I read every book I could find on it, and then I started just talking to people and I. Was there to help try to build it back up. So I stepped in in Ames for a brief amount of time, found a general manager, played that role, found a general manager, put him in the store, trained him in the store, turned down the Ankeny store, did similar thing to there with them.
Um, and I stayed with that company for almost four years. Trying to learn this. And I, I learned it at the end, but that's where I cut my teeth in leadership of I figured out I can work 90 plus hours a week if I need to and I won't die. I know how to try to manage a home life and a business at the same time.
And also I went through some difficult conversations with. Owners and the CEO as well, both of which had come from corporate backgrounds. And I didn't on how to, how do I speak to these people? How do I gain their respect and trust? And at the same time, how can I sit in a room full of owners and CEOs and hold my own and not let everything hit the fan and get flustered?
So it was a great learning experience.
Jimmy Lea: Oh, it sounds like it. I mean, you, that was the, uh, uh, refiner's fire. You stepped right into it and it was on full blast, full furnace. Sounds like you stepped into a, a, a landmine, uh, just from day one. Everything was blowing up right around you.
Peter Bailey: Yeah. Okay,
Jimmy Lea: so I have a question for you.
Peter Bailey: Yep.
Jimmy Lea: What does leadership mean to you? Now that you've been through all this, you've had all these experiences, you've read all these books, you listened to all these podcasts, you've had four years, you're working the corporate, you work in the private. What does leadership mean to you?
Peter Bailey: It is a generalized question.
I mean, that's a super broad question, but at the same time, um. I think leadership takes different appearances depending on the stage that you're at in the company or business and the business's lifespan. But at the same time, just in general, leadership is being able to cultivate culture inside of a business that's going to thrive and people enjoy and they get to the next level, and at the same time you can.
Use the efforts from those people to continue building a business to the next level. Right. But when I was doing this all for this last place and what I'm doing right now, everything is centered around culture at this point. 'cause if I don't get, if I don't have people that are happy to work, that are interested in working, that I can't continue to put push into, I'm lost because I can't do this myself.
Jimmy Lea: Oh, it's so true. It it is so true. And people don't leave a job because it's a bad job. They leave a job because of poor leadership.
Peter Bailey: Yeah. Poor leadership normally, or Yeah. The people that are in leadership, so you're right. Yep.
Jimmy Lea: Poor management. Uh, yeah. That, that's why people are leaving their jobs and, and searching for fulfillment somewhere else.
Peter Bailey: Oh yeah. A hundred percent. Yeah. I agree a hundred percent. Yeah.
Jimmy Lea: So you were there for four years and now you are limitless garage. Yeah. After the, so talk about that transition of going from the, the corporate quick lube into independent auto repair.
Peter Bailey: So by about
Jimmy Lea: back into auto repair.
Peter Bailey: Yeah. By about year middle of year three at this job with oil changing and everything.
Um. I figured out pretty quickly, like once I had established what work ethic I want to have and what we're capable of, once I had experienced that, I'll be honest, once I had experienced that with my wife currently as well, so that she knew like what this took. I mean, there were days that I'd leave at three 15 in the morning and I would not be home until after 11 at night.
I remember days where I would work that extensive of a day and she would figure out, and she'd be more than happy to continue supporting me as her Hu as her husband. And that was groundbreaking for me. So once we had established that we were a team, this is what we wanted to do. And at that point I was like, I, I can make this work.
I can make a business work. 'cause I went from that. Being able to work those hours to being able to. To put people in place, train people in place, and see the progression to get me to work six hours in a day. So it's like, okay, I know how to do this. If I can train in the right areas. And I'll be honest at this point, now that I've gone through it and I'm, I'm not super old by any means, so I have a lot to learn, I'm sure.
But at the same time, once I'd figured out I could do that, um, at this point in my life, like it's not 'cause I don't wanna work. I really do enjoy working, but I still enjoy cars and people and all that sort of stuff. However. I wasn't confident unless I knew that I could make the business successful, even without me, that I could make this work.
So by about middle of year three, I was like, I know I can make this successful without me. And if that's the case, I know how to get there. I want to do it myself now. And that started sparking the conversation with my, with my, um, with the CEO and my boss at that point in time where I was like, 'cause I moved from operations manager then to director of ops right underneath him.
And, um, I started hiring ops managers and general managers and starting to tweak the business in certain areas and processes. And at that point I was like, Hey, I'm ready to do this myself, and I think that this is a good time for me to exit. I've got some great people that are surrounding me and I think that you would be well off without me, but at the same time, respectfully, this is something.
I had the potential and I told him earlier, I had the potential of doing and I'm back to it. And so of course, initially that started a full course press on, let's keep Peter and Yeah, that it's great. It's, it's flattering to be honest, right? Anytime it happens. But at the same time, my mind was made up at that point.
Uh, so I gave, um. Several months notice, a six month notice I started, we started telling people that Peter's leaving and here's who's taking his place in these areas and training and everything to like, I remember the last week, just not really having much to do. 'cause I had trained, at that point in time, I was reviewing, I was making sure everything's happening and it's like.
Let's make this a very easy handoff. Nobody should know that Peter's gone. Um, everything should be handled and when I step out, it's seamless. Um, and I like to hope that that was very close to what happened at the end. So I stepped out and I remember this was May 27th, 2024. Was my last day at that shop, and I remember going home and that was a, oh gosh, it was like a Wednesday or Thursday, I don't remember now.
I remember going home and for the next, then proceeded to be the next three months. All it was was renovating a pole barn on my property to try to get ready to become a shop where I could just start outta my own barn because I wasn't sure. I wasn't sure what my clientele was going to be yet, but I had my vision put in place my LLC at that point.
I had a lot of that stuck out or put together, but I didn't have what I was sure was gonna be limitless garage yet until I had finished that first building. And so I spent the first two or three months finishing the building and opening then officially in July. Well, it wasn't even three months, I guess, right?
I spent all of the Es of May, June, the beginning, parts of July before I opened in July then.
Jimmy Lea: Wow. Wow. Congratulations. And so you, you opened your shop in your barn on the, on the property. And how long were you in there and how many did, did you have employees? How many did you have?
Peter Bailey: I did it all right. It's a, it's a typical business startup, right?
You know, especially in automotive. It's like, I'm gonna do it all. Like I am all my hats. And honestly, at the very beginning, I knew it immediately. I was like, this is not sustainable, but I'm gonna make it happen just to get the cash, just to be able to get to the next spot. So I say that right? We look at May 27th, 2024.
That's not that long ago. I look at where I'm at right now. That's
Jimmy Lea: a heartbeat to go, dude. That's, that's really barely almost, it's almost two years ago, but really you're like a year and a half ago.
Peter Bailey: So now we're sitting, I mean just bringing you up to here, but now I'm sitting in my office here at the shop.
We have a little over 5,000 square foot shop at this point in time. I've got multiple employees. We just built our lounge out and I'm a little love talking to you about them, but. The inception of that, I started at the shop. I started initially, I'll be honest, I live in Mitchellville or right outta Bondy in Iowa.
And I'm like 20 minutes from a metro area. From the metro area. So nobody wants to come out and visit me unless they know me and they just wanna support me. So initially, right off the bat, like I built my Google profile and I just shouted out there, I'm like, everything is free pickup and delivery. I'll come to your house.
I'll pick it up. Just tell me what you got and let's get going. Bye. From July 4th, well, from, it was July 12th. From July 12th until the end of October. By that point, I could not keep up with what I had, and so I hired my first employee at the beginning of November and I remember vetting him, interviewing him.
I was like, this is like, I, at that point, I had interviewed over 300 people and I'd filled like 185 positions at my previous company. I was like, I'm very familiar with this. Let's start my interviews. Start my interviews. Found a guy, guy. He joined me. Um, and we started together in my shop and he was coming out to my shop.
Very close there. That's November. Uh, my neighbor calls me in to the county and says, Hey, there's this guy doing commercial work on a residential area. And I'm, I'm literally out in the middle of nowhere, but I have a fairly close neighbor. He was not happy about it. So then the county shows up at my door, gives me a notice.
I made friends very quickly with the county. Uh, they were great guys at the end. They gave me several months notice to make this happen. Richard was like, 30 days get out. I was like, no, I, I can't do that. Gimme something. So they gave me until January. Um, and so then I just started my, my process of finding a facility to rent and to lease 'cause I didn't have another option, like where do I find something to lease?
So I visited, oh man, half a dozen to a dozen different areas with my real estate agent, which I'm calling up then people from my past employer that I did real estate with. It's like, Hey, help me find a place to lease. And I remember going around to all these, and it's hard to lease for automotive in like a flexible space.
They don't wanna lease to repair, right? 'cause they don't know who you are. You're gonna keep a trash heap. What are you gonna do? So I remember I got shut down again like multiple times. I remember trying to sign leases four to five to six times with these people and that nobody wanted to do it because automotive.
So at the end I got really desperate and I'm like, I'm not stopping unless I've tried everything. I remember talking to people trying to find the owner of these buildings so that I could call them, and I found several of 'em. I called their cell phones. I finally got phone. Left them messages, texted them and said, just call me back because I want a lease.
Your building, and I think you're gonna be really impressed with what I have and I really want to, I wanna buy you over. And I had a couple that called me back. You fast forward until January, December 20, right before Christmas. I signed the lease for this place before I had to be out January 1st.
Jimmy Lea: Oh my gosh.
Peter Bailey: Yep.
Jimmy Lea: Talk about cutting it close, brother. Oh my gosh.
Peter Bailey: I signed the lease and I walked my employee, uh, in here with my wife and his wife actually came as well. I'm like, here's our new shop. I remember holding up the keys and we got a picture of us holding the keys to our shop, and um, I was like, here's where it's gonna happen.
And 5,000 square feet of open space feels like a lot. Initially I was like, I don't know how I'm gonna fill this, but we're gonna fill it together and, uh, uh,
Jimmy Lea: feet, it's full.
Peter Bailey: Oh my gosh, yes. So we start there and then I start with all of kind of, I mean even just what you see here in my office, but then it's logoing and moving everything over and having a moving party, which included all my brothers are coming over with, you know, the farm equipment and everything.
So yank hoists out and to put 'em on flat beds and everything over here and toolboxes. And then, uh, my first employee and I started here and by March of that year I had to find another guy 'cause we were buried again. So March we hired our next guy. Um, and then it happened again. By June, we were destroyed again, and I had to find another guy.
And this time it had to be a service writer. Wow. And I hired a service writer then. Um, and so then by this past November we were bordering that again, but that's kind of where I pulled the. The, the thing in the back pocket where it's like, Hey, I know how to work these hours and I'm concerned about what's January and February gonna be like.
'cause normally it can be slow. So that's when it's just kicking to high gear. And that's where I'm working late nights trying to figure out, 'cause now going into first quarter here, we're looking for another guy. I need a nice, I need a good tech at this point in time to be able to get to get things.
Jimmy Lea: You're going for your third tech.
Peter Bailey: Yeah. Yep.
Jimmy Lea: So does this mean that you, as an owner now, you're able to put down the wrench and go into the office and now work on the business rather than always in the business?
Peter Bailey: Not yet. Yeah.
Jimmy Lea: Not yet. Okay.
Peter Bailey: Not yet.
Jimmy Lea: Keep going.
Peter Bailey: Yeah. So even now I still can't do that a hundred percent.
And. Is by design a lot. And I, like I said, I do enjoy working. Um, I en I enjoy the pieces of it as well, um, in the shop still diagnosing cars. 'cause that was my backbone initially was just, I could diag cars. I, I mean, I was learn, I, I knew scopes, I knew a lot of this stuff and I really enjoyed it. So now it's, it's teaching a lot and getting my guys up to speed of like, Hey, here's what we need to be doing.
Here's how we die at cars. Even if you knew automotive initially, here's what, how I want it done right. Um, in my, in, in my mind, true leadership and delegation and teaching anybody. This is not a one 60 day plan. This is not a 90 day plan. This can be six months to get somebody to where I want them to be at.
'cause by the time I'm done teaching them, I better be very confident that they're gonna do the things that I want the right way. They're gonna have their own style and technique, but at the same time. I'll be honest. Dave Ramsey says it really well. I don't follow necessarily all Dave Ramsey's stuff, but at the same time I think delegation from him.
That booklet is amazing because it does teach you if you have a Ferrari and you, you don't immediately hand the keys to your kid and say, you go take my car and drive. Right? If you want them to be able to drive the car, you start with, they ride in the passenger seat next to you while you drive, right?
Then you move to, hey. You sit on my lap and we'll drive around the block together and I'm gonna teach you how. Then we morph to, I'm gonna sit in the passenger seat while you drive. Then we finally get to the spot where, okay, you can take it for an hour and you drive to finally, okay, I'm confident. Hands you the keys.
Go drive. You got this right. Delegation. It's a, it's a art in my opinion, and it takes time and I'm not rushing through this. So if I'm gonna build it to make it last, it's gonna last. And I've got a, I got a plan to be able to do that.
Jimmy Lea: Oh, congrats. Congrats. So you are deep in the, the neck of, uh, finding a new technician, a, a third technician right now.
Peter Bailey: Yep. Correct.
Jimmy Lea: Nice. So if you're listening. Give, give Peter a call. He's ready for you.
Peter Bailey: Hundred percent. Yeah. We're ready for you. And I think we've got something here that you're not gonna find anywhere else. But um, I think that the piece there of like finding another tech, 'cause all. A lot of, every, a lot of people are hearing right now, right?
We're at a shortage of good techs, right? It's all over the industry. It's been over the industry for a long time. Um, it is the way it is, uh, and all these theories out there of what's causing it, right? Why aren't people wanting to do trades, all that sort of stuff. Um, I think that that gives me a great opportunity, if you're okay with me saying this.
But in my opinion right now, the shortage of automotive attacks, um. In my opinion, it's not because of flat rate, it's not because of pay. It's not because of it's hard work and nobody can learn this. Um, it goes back to leaders and culture a hundred percent. Because if you come into my shop and you look at what I have here, um, if you look at me and where I came from, I played Australian football.
Through college. I'm an avid view musician. I play violin. I played it for 25 years. At this point in time, I have all these things that I really enjoy, but if you, if you get down to the roots of it, it's just basically, I really enjoy a challenge and I enjoy being able to figure things out and cars was a great way to do it.
But if the culture isn't there, I'm not, I'm not staying probably as a tech. I now have like one of my best technicians out here right now that's learning still, and he's a music grad. He came from, he got he, he came from his music degree and getting that to now an automotive and being like one of the best technicians I've ever seen, and it's all because of his attention to detail.
How well he, he, he's designed to read and to be able to absorb information and put it into practice, and he does a phenomenal job at it. And so when I look at like, how am gonna find my next tech, yes, I need, I need an A level tech. But at the same time, I'm very, I'm committed to being able to train that person if I need to.
But right now what I want is the person who has the character traits and qualities that may not even be an automotive. I wanna pull them in because yes, the pay is there. Yes, the hours are there, everything like that. But I got a culture and I've got guys, and I've got a shop that they would be interested in and a vision that I think I could gain their trust on.
Jimmy Lea: Oh, I, I agree. I agree. Yeah. The pay is there, the work is there, the hours are there. And what's awesome and amazing about this, the automotive industry and, and your culture, your culture is so important. It, the, the amazing thing about us in the automotive industry is, uh. The, uh, the, the instant gratification, the, the instant feedback, the instant sense of fulfillment where you took something that was broken, took it apart, put it back together, and now it's fixed.
Peter Bailey: Yeah. Yeah.
Jimmy Lea: That is so fulfilling for so many people. They, they don't even know how fulfilling it is.
Peter Bailey: Yeah. Oh yeah, I a hundred percent. And I mean, yeah, that process along with you, you sprinkle in like just the inherent challenge of finding all those pieces. And it's not an easy process necessarily, but you gotta head on your shoulders and you're willing to think and think outside the box.
Like it is awesome. You can't beat it.
Jimmy Lea: I totally agree. Hey, so when I tell you about Rru the Rooster, we'll talk music backgrounds as well. I'm not from the violin. I'm not orchestra, but I'm from the band.
Peter Bailey: There we go. Oh, I love it. That's
Jimmy Lea: great. Yeah. Pet band, jazz band. Symphonic band. Uh, ensemble band, uh, honor bands.
Yeah. So we'll, we'll have us a jam session.
Peter Bailey: Yeah, exactly. That'd be a blast.
Jimmy Lea: Oh wood Peter. That's awesome. It's amazing. Congrats on your journey. Congrats on creating a culture where people wanna be there.
Peter Bailey: Thank you. Yeah.
Jimmy Lea: And you are you. You are an attraction. People are being attracted to your business.
Yeah. And thanks. Thanks for listening to the Man Upstairs who kept patting you left, patting you right, patting you left, patting you. Right. Keeping you on that straight and narrow. So you could get to this point where Limitless Garage is an icon there in Des Moines, Iowa. People want to come to you, they want to bring their cars to you.
Peter Bailey: Yeah. Oh, absolutely. Yeah. I mean, limitless Garage and even like, you see the logo behind me a little bit and everything like that. But at the same time, um, everything we built, uh. Like we said, I do like cars. I do like a challenge. However, in automotive, in the repair business and in the company that I'm building, um, hospitality and experience is the heart of the shop.
So we've formalized ourselves around being a concierge, automotive repair shop with facility. So everything we do is with. Intention, but to feel, have a high-end luxury feel to it, but still staying within the budget and the, the budget of what people are used to in the automotive industry. So I'm not, I'm not the highest of highs and not the lowest of lows, but at the same time, I'm creating an experience and that I think is what draws a lot of my customers in.
Jimmy Lea: Oh, I love it. Peter, I'll, I'll say that you're not the highest of the highs. You're not the lowest of the lows, but you are the best of the best.
Peter Bailey: You got it. That's, that would be the hope and that'd be the dream as we continue to try to make it happen.
Jimmy Lea: Oh, congratulations bro. That, that's awesome. So what is the future?
Where are you going from here? You've got a service advisor, two techs. You're looking for a third.
Peter Bailey: Yep.
Jimmy Lea: Then what,
Peter Bailey: um, obviously continued, continued growth for the business altogether. Um, I have mapped out. So far, uh, three different phases I'd like the business to go through and I'm, while I'm not willing to share all of where we're headed at the same time, I would say, Hey, uh, the next spots for, uh, or the next stages for us is continuing to, the building we are in right now is a flex space building.
So. We had to do a lot of logoing, a lot of, uh, sign signage and everything like that just to make it feel at least enough for customers to come in here. Um, 'cause it's in, it's a new building. It's built in the last year and a half. So we were the first tenants in it. Um, but this building is also massive. I say massive, but it is fairly large, like it's about 25,000 square feet.
Um, and we have a small bit of it on the end here. So I'd like to continue growing, leasing out more of it as we develop and ramp up into our next several stages. So the continue, I would. This building here, I would like to have about between probably 15 and 20,000 square feet if possible, if I can fill it, um, and be able to continue building out the different, uh, pieces of the business, which is customer care.
So we have customer care and repair, right? For all the cars with li like or limitless garage. Then we've got. We're working on right now, which is all of our fleets. So we've got a fleet program, um, put together and we've started to attract large fleets that are coming in and we're doing all of their, um, we're doing all their repairs and dag and everything on.
And then the next parts are vehicle modifications and detail work. So the goal is Limitless Garage will be a one-stop shop for everything for automotive. Um, and while it may be a pie in the sky at the same time. I can make it happen. It's just a matter of taking bite-size chunks, one at a time.
Jimmy Lea: Oh, congrats man.
Yeah. I love it. Uh, you're gonna build the kingdom, you're gonna optimize this one, and eventually there's gonna be a second and a third, and a fourth and a fifth. I, I see you, I see you building the kingdom, brother. That, that is phenomenal. Congratulations.
Peter Bailey: I appreciate that. Thank you. Yeah.
Jimmy Lea: If you need any help along the way.
Peter Bailey: Oh, I do already.
Jimmy Lea: We would love to help step in and, and help you out with whatever it is you need in your journey. 'cause it's, it's great to have a second set of eyes. A coach. You have a coach. Are you working with anybody right now?
Peter Bailey: Not currently, no. I've not, uh, I've not hired a chef, coach as of yet. I've had multiple people, including yourself and I, I fully believe in having a shop coach.
Don't get me wrong. Um. It's more along the lines of, while I don't know everything, I still have pieces in my mind that I have to build and get to that piece and that limit so that I'm ready for the coach and that I'm like, okay, now I'm ready to take the next step that I'm not quite sure about. Where am I going?
And that is short. That's a short amount of time before I'll be there, so we'll see.
Jimmy Lea: Oh bro. That's awesome. Are you guys head division this year?
Peter Bailey: Yeah. Yeah, we're taking the team division, so we'll be closed for a couple days, but yeah.
Jimmy Lea: We have to make sure that we connect. I'll be there.
Peter Bailey: Oh, absolutely. I love some space.
Jimmy Lea: I'm teaching my final classes on Sunday morning.
Peter Bailey: Okay,
Jimmy Lea: so Peter, we gotta get together. We gotta post up a picture of us being there together at the show.
Peter Bailey: Oh, absolutely. I'll come find you. I mean, while it's a fairly big spot, it's not that big of a place I can,
Jimmy Lea: yeah,
Peter Bailey: probably.
Jimmy Lea: It's not that big. We'll find you brother.
Congratulations. Congratulations. Congratulations. Here you are. Starting out on this journey. What advice would you have for somebody in a similar position to you that is starting their journey and starting their business?
Peter Bailey: So already committed to owning their own business. Okay. Um.
Always find enjoyment in everything you're doing and knowing that it does have a purpose and that you're building something that can be yours a hundred percent. Um, second would be, uh, there is a teetering point between. Supply and demand and you don't wanna upside upset that too far because one side you'll lose customers.
The other side, you lose people. And so you're not gonna wanna make that, you're not gonna wanna be rash on that teeter-totter effect right there. And that's probably one of the hardest things that I struggled through was. Do you hire the tech and hope for the work, or do you have the work and can't do the work, and then you hire the tech and there's a fine line to draw.
So those would be the two things. Third thing would be become obsessed with knowing all of the rules and regulations behind automotive and having your own building, because if I could go back and do it again, I probably would not have started on my property. However, I, I made it through it and I'm gonna do it differently.
Jimmy Lea: And you had to, you had to do what you had to do.
Peter Bailey: Oh yeah, you're right.
Jimmy Lea: Because the results wouldn't be what they are. Had you done anything different? So congratulations, props to you, Peter.
Peter Bailey: Thank you.
Jimmy Lea: I'm very much looking forward to seeing your success and, and being a witness of this awesomeness. Keep going, brother.
Thank you very much.
Peter Bailey: Absolutely. Thank you.

197 - Mastering Shop Communication: Turning Every Call Into Opportunity

197 - Mastering Shop Communication: Turning Every Call Into Opportunity
April 2, 2026 - 00:54:03
Show Summary:
Great communication drives shop success. This conversation shows how call tracking and AI improve performance and consistency. Real examples highlight how better language and tone increase trust and conversions. Coaching becomes easier when teams review calls together. Shops that train consistently build stronger teams and better results.
 
Host(s):
Jimmy Lea, VP of Business Development
 
Guest(s):
Parker Branch, Industry Coach
 
David Boyd, Founder & Ceo CallInbound
Show Highlights:
[00:00:00] – Strong communication improves shop culture and results
[00:05:00] – Call recording builds consistency across service advisors
[00:07:00] – Reviewing calls improves coaching and accountability
[00:09:00] – Using outside calls reduces team defensiveness
[00:10:00] – AI scoring saves time and highlights issues
[00:15:00] – Remove negative words to improve conversations
[00:18:00] – Positive tone increases customer trust and conversions
[00:24:00] – Recordings resolve disputes and protect the shop
[00:29:00] – AI finds missed chances to book appointments
[00:33:00] – Consistent coaching raises performance over time
In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?
Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.
 
Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!
 
Links & Resources: 
Want to learn more? Click Here
Want a complimentary business health report? Click Here
See The Institute's events list: Click Here
Want access to our online classes? Click Here
________________________________________
Unlock the full experience - watch the full webinar on YouTube: https://youtu.be/e694rhmVtfA
Episode Transcript DisclaimerThis transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.
 
Episode Transcript:
Jimmy Lea: Good morning, good afternoon, good evening, or goodnight depending on where you are and where you're joining us from. It may be morning for you. For us, it is still Morning in Ogden, Utah. I'm at the headquarters of International Headquarters for the Institute for Automotive Business Excellence and I am so excited to be here with you for this webinar.
This is to be an act interactive webinar, so find that comments button and go ahead and put in your information where you're joining us from Today. We are gonna have a, an amazing conversation with both. A highly successful shop owner and a supporting technology in this industry that helps move forward shops, that helps us to take the next step and make the next.
Step in improving our shop, our culture, our skills, our sales skills, our relationships. This is gonna be a phenomenal presentation, a phenomenal discussion as we talk about those things that are gonna help you in your shops to make it awesome and amazing. We are stream, live on Streamy Yard. We're streaming live on Streamy Yard.
We're also out there on YouTube and on Facebook. So if you're joining us from any of these locations, now's the time to put in the comments. Let us know where you're joining from. Love to give you a shout out as they come in. We'll pop those up for you. Joining me today is from a skill point and a a software in the industry.
David Boyd with inbound communication. David is awesome. We, I've known David now for many years. We've known each other. David. We even have a picture of a us being twins,
David Boyd: right? The it was a I dunno what you call the wild jacket, right?
Jimmy Lea: Yep.
David Boyd: I'm looking forward to the next time that we'll meet.
Actually just in a month, at the end of the month. I'll see you out in Pennsylvania, so I've gotta get my gear in order for that.
Jimmy Lea: Yeah, get your jacket and get ready for tools. That's the Tools. Trade show conference in Pennsylvania, Hershey, Pennsylvania. It's gonna be amazing. It's gonna be awesome.
Yeah. And our next Mars conference where we took the picture initially. That is gonna be in October, so put that on your calendar as well. If you're wondering where to find the dates, do what I do, and you go to the website and you look it up on, in the events for the Mars conference. Thank you, David.
Thank you for being here. I really appreciate your expertise and your awesomeness here in this industry. Thank you.
David Boyd: It's a pleasure. Thank you, Jimmy.
Jimmy Lea: Joining as well is Parker Branch from Branch Automotive and Diesel. Is that right, Parker? Are you automotive and diesel?
Parker Branch: These days we just DBA as branch automotive.
Jimmy Lea: Branch Automotive,
Parker Branch: yeah.
Jimmy Lea: The most amazing jacket I have ever seen was that vision on Dan. He had a jacket that his logo lit up over the pocket.
Parker a branch Automotive was all across the back of it and it was totally lit up. It was the most amazing jacket. Parker,
David Boyd: did you
Parker Branch: sponsor
David Boyd: his wardrobe that day?
Parker Branch: He is, he's pretty daring and his wife is pretty talented in that area they took it upon themselves. He was excited to bring it out as a surprise to me and everybody else and
David Boyd: love
it.
Parker Branch: My understanding is he can change colors on the. The lighting around the logo and all that fun stuff. He can even make
Jimmy Lea: a pulse.
Parker Branch: Oh, he can make a blink and light up and so he was looking to put some moves on Jimmy.
Jimmy Lea: Yeah. And he did, bro. He was next level. That was some awesome stuff.
I was so impressed. Not only has his wife done that for his jacket, she's also made custom t-shirts for concerts and jackets and hoodies, and they go to the concert and the logo is in response to the beat of the music, how it's flashing and s strobing. Oh my gosh. That's just some next level tech for your jacket.
Pretty crazy. Yeah. That's awesome.
David Boyd: Of all the ways you've impacted our industry, your greatest legacy may just be the jackets.
Jimmy Lea: Hey.
David Boyd: I don't know. Time will tell.
Jimmy Lea: Time will tell. I love it.
Parker Branch: You'll never be forgotten. Everybody knows the crazy hair and the awesome jackets. Love
Jimmy Lea: it. Yeah. Yeah. Oh man.
You guys make me blush. I love it. I love that we are known in the industry and that we're good friends and we support each other in this endeavor, and I think it's just really a great way for us to express ourselves and our creativity and yeah, it's a lot of fun. So on that note, back to Business Parker Branch, you are a highly successful shop owner.
Your shop is doing extremely well. Not only are you a successful shop owner, you are a coach in the industry. You're coaching other shops, and you are a user of inbound communication of which is an awesome program. How do you use this program? How does it. Develop skills with your team, and then maybe even we can talk about how it develops in the culture of your team as well.
But first to, to the team and the skills. What do you see because of phone calls?
Parker Branch: Yeah, it's a great point. When we, years ago when we were trying to improve our conversions, we're getting these leads, the phones are ringing. And we're communicating with our customers. We have, four service advisors at our store here.
And so there's a challenge in that alone, having that many people and trying to keep consistency across all four advisors. And so we needed to be able to hear the conversations. And at that point in time, I didn't have, a phone system that allowed me to go, record or go back and listen and.
I don't remember where I met David, obviously somewhere that I was traveling with the institute as a client and when I discovered what David's product could do with all the recording of the phone. Calls and that it, and quite honestly, his pricing was fantastic for, it was probably an improvement at that point in time for us with better technology.
And so we, we talked with David. I was very impressed with what he had. Know at that. I don't want to get him in trouble. But at that point in time, he literally flew out here and did the installation of our phone system, came over to the house and I think had dinner, or
David Boyd: we had dinner. It was fantastic.
Got beautiful view out there
Parker Branch: and it was like, I was blown away that and I'm sure he may have grown to where he's, got team members coming out, whatever, but he really took the time to make sure we were set up. And it gave us the capability to then start listening to phone calls so that we could go back, listen to calls.
For a lot of people, a lot of us in the industry, one of the things we worry about liability and what conversation was had with a customer. And quite honestly, in the beginning, our use of his product had a lot to do with, he said she's, if a customer was like, oh, that's not what I said geez I'm sorry that there's a misunderstanding.
If you'd I can. Download our phone call and email it over to you and you can listen to it again to see what we talked about. So it was, it protected us in that facet. But back to your point, for the coaching and growth and improvement of our shop and our team and our culture and consistency, we're able to start listening to some calls.
And that was pretty awesome.
Jimmy Lea: That is cool. I like that. You can also listen to the inbound and the outbound with David's program. Yeah. Once upon a time, there was a time where call tracking was only recording the inbounds inbound phone calls, and now. With David's program, we can not only do the inbound, but we can also get the outbound as well.
So
Parker Branch: yeah, the dashboard through, from inbound is fantastic. I'm a lot better at working on a truck when it comes to a computer system than I am on the desktop here, but even myself, his system is so user friendly, the dashboard that I can get in there in less than a minute and search inbound outbound.
What extension, who had the phone call by phone number, whatever you want, you can search through that system and pull it up really easily and quickly. And from there we try to have, we'll have one-on-ones with our service advisors, little privacy and let 'em listen to some calls. We'll do some team exercises as well.
Sometimes, I'm in a gear performance group still, so I'm coached by the Institute, by Jennifer Holbert and in that Gear Performance Group. Occasionally this becomes a subject how, like we hit it from time to time 'cause we need to stay sharp. How are we handling our calls? How are we doing on converting these leads?
All of you are spending a lot of money to make the phone ring with your AdWords campaign, social media, whatever it is. How are they get asking for the appointment, getting 'em in here And they'll coach that even in our group. And so we had a session, oh, I think in the fall. And Jennifer had secret chopped all of our shops multiple times, and she brought those phone calls to our gear performance group meeting.
David Boyd: And for
Parker Branch: Jennifer, and I'll tell you what, it was painful to listen to some of the calls, but that's the reality, and what I learned from that meeting and what I brought back on that specific time. We listened to some of o our other peers from the group. We listened to their calls here at Branch Automotive.
So it wasn't, Hey Jimmy, let's listen to your call and put you on the spot and make you defensive. Or we just said, no let's use David's software. We've already pulled some of these phone calls from other stores. Let's bring 'em in here and have my four advisors critique these other calls.
And it became an exercise. And they bought in and everybody was like, oh, I should have done this, should, so it changed the narrative where it wasn't defensive. Then after that we went through and listened to some of ourselves and our own calls here from branch. And it was it set the tone to make it constructive and fun.
It kept the culture up where we didn't want people to feel like we're beating them up. But that part of it was really cool. Beyond that, David developed his capabilities to have AI scoring and listening to these phone calls and helping give feedback. That's another thing for a shop owner.
Do I have time to listen to hours of phone calls? I should take some time to do that, but yeah, it reduces the stress. Absolutely.
Jimmy Lea: That's John firm busting in there with those comments. Yeah.
Parker Branch: Love it.
Jimmy Lea: Automotive down at Fort Worth.
Parker Branch: For sure. So
Jimmy Lea: thank you. Yeah. The truth, John. Yeah.
Parker Branch: Yeah. Now the ai, we get the, we get a, from the institute, we get an email every day letting us know, here was your metrics today, sales, and all the KPIs that they track.
That comes right out of our dashboard, and I have the team receiving that so everybody on the team can see it. It's not a secret and it helps everybody know how we're doing. Now we get the email from David from Inbound Daily. So that they can look at the AI scores on how phone calls were handled and.
The, it's, there may be some low scores. Sometimes it's a, it's a phone quality the call quality or whatever. It's not our fault, not a phone system issue. It's who's calling in is an issue maybe. But it really, the guys are interested now, so if they see. A lower score on a call.
They're like, what the heck is that? I'm gonna, I'm gonna go have a listen myself. So it encourages your team to investigate for themselves to see how things are going. And then we'll still follow up on that and have at least a monthly lunch and learn where we'll talk about the calls, listen to some calls.
I can't say enough about the tools. I could talk until you guys are sick of listening to me, so I'll stop a minute and let you jump in. But what a tool to make it easier to be better.
Jimmy Lea: Oh, so true. I'm thinking of a shop owner's listening to this right now, and how can they start this conversation?
Maybe they have inbound, maybe they have another phone recording system. Maybe they have no phone recording system whatsoever. How can they start? They could call their competition record the phone call, right? Depending on what state you're in, you wanna check on that. But if you're using it for training purposes, you can record the call.
Record the call of your competition, sit down with your team. And play the call. Let's analyze this phone call. How can they do? What can they do to make it better? And then as a culture, as a team. We're now gonna record our phone calls and this is where you can introduce it, Parker, just like you were saying, with your shop, with your 4, 5, 6 advisors.
I know. Sorry. It's just four. With your four advisors, you're able to listen to each other and can help each other grow. And what a phenomenal program with Jennifer to allow you to listen to other shops. I, that's phenomenal. I love that. I love that. That's very good. And there was another way I was gonna go down another road or the shop owner that's wanting to start with this.
How can they start? That's the way to start,
Parker Branch: right?
Jimmy Lea: And then the second need to make is with David and get signed up for inbound because you would be surprised. It is top quality. Oh, I remember it. Okay. What about this Parker, have you ever coached? No. No. David, this is to you.
David Boyd: Okay.
Jimmy Lea: Inside of your system, we can flag a weak word, a gray word, a word that's not positive, right.
The word, unfortunately.
David Boyd: So that's a great example. And there's so much to unpack with what. Parker talked about the key takeaway for your audience right now and the listener to this webinar. This podcast is normalization. It's important to normalize this aspect of your business, listening to one's own conversation on a recording.
Can really be challenging at the onset. So we wanna normalize that. And how do we do that? We do it by consistently reviewing and maybe moving in with a software expectation, moving more toward training, coaching and development as we normalize the, just the simple act of listening to these call reviews.
When we leverage ai, AI does something really powerful for us, which is takes this heavy burden of time and the time requirement. For Parker or his leadership team and others that have had to deal with this, it takes this burden of time away. You don't have the time. If your shop gets 150 calls in a day, you can't listen to a hundred.
I always joke with owners like, how long does it take to listen to a three minute phone call? 10 minutes
Jimmy Lea: so easily. You gotta add in the time to find the three minute phone call to listen to.
David Boyd: Hey, you have to find it. And then you listen to it. And then you listen to it. Did I hear that? And then now I gotta go and figure out how am I gonna coach?
I'm around this. Forget it. It. This is why historically call training and coaching has not happened unless you have. Mark from the institute and the team that does this, and that's their role in the industry, is to do this right? To sit down, find these calls and train it. But with, within the context of your normal daily operations, how do you normalize this?
Now we can leverage ai and that gets back to your question, Jimmy, which is one of the fun things. And another one of your coaches from the institute had requested this at one point in time, and I think it's phenomenal. He was just getting wrecked by. The use of the word, unfortunately,
love it. Can we just take the UN off of that, right? So we don't wanna lead with a negative, right? We don't wanna lead with no, or can't or don't, or won't or unfortunately these types of things. We don't wanna say, unfortunately, I can't get you in until next Tuesday. Fortunately, I have availability for you at 10:00 AM on Tuesday.
How do I find that in a call that's buried in 50 calls? I have to go listen to each of those one by one no longer, right? You just say, okay, ai, go it. It's certainly much more powerful than finding a key word or a key phrase. It can analyze the context of the conversation, which is where we really get that power and going through the analysis part of this.
But even something simple, just finding that word, saying where are we leading With no and no takes on different words. Can't, don't, won't. These types of things. Yeah. Unfortunately, is another way that we disappoint customers without knowing it.
Jimmy Lea: Yes. Let's finish the story.
Tell us about the shop that flagged the word, unfortunately. What happened there?
David Boyd: So we set it up to identify that word immediately, send an email, and I don't know if it was maybe two examples. And I think we licked that problem. Nice. So it be, so what happens is we create this awareness, right?
Yeah. And this is the power of coaching. It really is because, and I'll say it's it, we've done coaching for a long time as a, as an industry. It's the power of consistency in coaching. Consistency wins. Jimmy Parker you know this in your shop, Jimmy, you're certainly aware of it. Consistency wins.
So when we create this awareness. Now the coaching and training that I'm trying to extend to my service advisor resonates and it creates an awareness. So the next time they go to pick up that phone and field the call, we now have a new awareness. We're creating a new awareness of what is this?
The next one that I'm gonna be sitting down with Parker and talking about is this the next one, that in five minutes my manager or owner's going to have an email. In their inbox that says, whoop, we used the word unfortunately. Hang on a second.
Jimmy Lea: Yeah. The and I think what happens for a lot of people is they don't realize that they're using these mental placeholder words.
They don't realize that they're using the word just, I'm just calling to follow up on your car. No, you're not just justice from justifying. You have to justify your existence. Why did I interrupt this person's day? No. You dropped your car off with us. I'm calling to update you on your Ford F-150.
You don't use the word just, so if we can eliminate those words, we now have a position of strength and of power, and of authority. Because we are in the industry. We are the power and the authority. We can speak with better words and better vocabulary, right?
Parker Branch: Yeah. The good news, Jimmy, I can't wait to tell you how great the software is helping us, and these phone systems make it a pleasure to try. It's that point that we're having these conversations with our customers. They're gonna go where you lead them, and it's to instill that in our service advisors. And help 'em understand. Some of it's like Michael Smith, personal leadership, understanding of human, how we operate.
And if you can train using this tool with your advisors and point out that. Being positive. Hey, the good news is this is what's going on. And here's, we found what your primary concern was. We were able to diagnose that we know what the right course of action is. We want to take care of this, that, and the other thing.
And it's this many dollars. And the good news is when we're done with that, you're gonna be back up and running. So there's no. Unfortunately, oh, this is gonna be expensive. Or, the keeping it positive and energy to David's point about the keyword or yours from that learning of, unfortunately, so I always tell 'em, Hey, remember, energy positivity and they will follow you along that line.
If you come in there and it's negative and, oh, I don't know about this. You've art, you've just, you've spent all this money to make the phone ring. You got 'em on the phone and then you led them down. The poor old, Nope, this isn't so good. So it makes a big difference, just the connotation and the energy and some of those key words.
And using the AI to expedite, sure. None of us have time to spend hours and hours searching through it. But dedicate, pick a day a month to have a lunch and learn and make yourself or your manager have maybe the day before or that morning, spend an hour or two. It's well worth spending some time, at least once a month to prepare.
Then go to the team, Hey, let's do this exercise. I'll buy you some pizza. Whatever you guys want. It's just a great toolbox.
Jimmy Lea: Oh it really is. And to your point, if you're not having company meetings consistently with an outline, with an agenda, then what you're actually holding are company beatings.
Parker Branch: Yeah, and to that point, having, if you're gonna have a meeting at least once a month you certainly should, if not more. And in that once a month meeting for a lot, there may be people out there that listen or watch this podcast that don't know have a safety topic and have a sign, sign-in sheet every time you have a meeting.
And whatever else is gonna be on your topic for that day and keep a log of that safety topic that you talked about, everybody signing in that could qualify you depending on your state and so forth. For a discount on workers' compensation insurance, it does for us.
Jimmy Lea: Oh, that's awesome. Great tip. That's that's great to hear.
Parker. Do you know of any stories, whether it's personal with your own shop or some of those shops that you're coaching? Do you know of a story that involves a phone and a phone conversation that could have gone bad, but actually turned out to be good?
Parker Branch: Oh, that's a tough one. Certainly, I think my little example earlier about he said, she said yes I know there have been a couple of times over the years where there was, it was suggested maybe by a client that.
This wasn't what I agreed to or, that type of situation which that is unfortunate, but we tried to keep it positive and as much as we can be frustrated by that situation, I think when we presented it, we tried to be professional and courteous, but let them know that, in fact I can send the conversation over if you'd like me to, because this is what we had talked about and you had agreed to.
This situation. So I'm not sure how there could be a discrepancy there, but I'd be happy to send a recording of that over and we can look at it together. So certainly if that had escalated, which it didn't thankfully but it had that escalated and put someone into a legal situation, I would advise you to check with David and his team as far as what rules and regulations.
In your state regarding recording phone calls, whether you have to have a message that announces it or whatever. But as long as you've consulted his team, he will make sure you are compliant and have that ability to then have that protection. So I, I hate getting into the examples 'cause none of us wanna have the negativity.
But it's solid if you have an issue and need it.
Jimmy Lea: Yeah,
David Boyd: I have a couple examples that I can expand on that if you have a second, Jimmy.
Jimmy Lea: Yeah.
David Boyd: One of my favorites that I actually use when I'm talking with other shops that are considering call inbound for supporting them in their communication is Institute.
Member that was part of GPG for a lot of years that uses our program. Had a customer come in and ready to check out, right? So they're there to pick up their vehicle. Were presented with their $3,000 bill and they said, $3,000. You told me they'd be $300, and they were convinced. They, they made a convincing statement, shall I say.
And now we know the rest of the story. So the manager there did something that I love and the way that we approach the use of the call recording sometimes we have to be a little bit delicate because we don't want necessarily wanna come across I'm gonna throw this in my customer's face, right?
We still are maintaining a relationship. This manager did something that was beautiful just naturally. Stated, I wasn't part of that conversation that you had with a service advisor. Lemme just go grab the call recording real quick and we'll just check that out. And he said, Hey if that's what we said, we'll stand on that.
And all of a sudden the amnesia cleared and the customer's memory returned and they said, ah, I probably have it wrong. Don't worry about it. They didn't wanna be embarrassed. Sure, because they made the demand. You told me this was $300. So it's, I call it customer accountability. We're not trying to corner somebody or we just wanna say, Hey, I call it the replay booth.
If we need to leverage the replay booth. So this is one of the pieces of a really comprehensive set of best practices about how you handle calls today. Of course, we've spent a lot of time about call, talking about call recording and how important that is and how we use that in reviews and coaching and training.
The metrics the the way that we analyze. Are we even asking people to come in and see us? Are we training our service advisors in this arena? And this is one of a set of best practices that we leverage because we're part of the automotive repair industry. So what's the best time to answer the phone when somebody's calling you?
And how can we use technology digital technology like, like our digital phone system? To ensure that happens as, as high a percentage as possible, that we answer that phone when somebody's calling. And then how do we leverage technology when we're not available? Nights, weekends, holidays?
There are various times Parker does something great at his shop. I don't know all of the details around this, but I think you got a period of time daily that you you go offline, right?
Parker Branch: Correct. For your lunch,
David Boyd: is it
Parker Branch: free your lunch? Yeah, we're closed. We're closed from noon to one.
We shut the phones down from noon to one.
David Boyd: Yeah.
Parker Branch: To give our service advisors a lunch break. But even, during that period of time, every time the phone rings and it goes to voicemail, it generates a, an email that comes into our whole team. If someone calls after hours and leaves a voicemail, it comes in to our whole team.
And we pride ourselves on, if it's during the day. W we see that email, that customer's gonna get a call back within minutes. And if it's, I have it coming to my phone maybe I'm guilty. I don't turn the business completely off. If I see an email come in over the weekend and somebody's hot and there's been a, an issue or something that, that, maybe I'm embarrassed we made a mistake or whatever.
I can see it immediately and I can turn around with his technology that he's helped us set up. I can call from my cell phone and it'll ring out with business's phone number as if I was calling him from the shop. Hey, I'm sorry that you've had this issue, whatever. But just on, in the day-to-day, receiving those emails immediately to see, it transcribes whatever the customer said.
Also has a recording. It's pretty awesome for making sure we're staying on top. I'll, like even the, sometimes the marketing team will look at, the calls that are coming in. They're like, oh, this one got missed or not answered, and I'm like, no, I don't think so. It might have been lunch or after hours, but I can guarantee you that within a short period of time, that person is getting called back because of the technology that David brings in his package.
Jimmy Lea: Yeah. Hey and Ashley, Joe, if you'll expand on this question a little bit, unless David, you read that and go, oh no, I know exactly what she's talking about.
David Boyd: I don't, I was wondering I think I've got about 80% of the question there, so some more would be helpful.
Jimmy Lea: Yeah I think she's saying, we're always so busy.
What happens when the phone call does go to voicemail? What happens?
David Boyd: Oh, yeah.
Jimmy Lea: And Parker's got it set up to where it comes in as an email to him. Are there other options? Are there other things that we can do?
David Boyd: Yeah. And this is the beauty of the age in which we live now, where we can leverage alternatives.
We've been familiar with things like auto attendance for a while. How can we. Try to identify the common things where customers are calling. Do they need to get an appointment scheduled? Let's kick out a text message to them right through the phone system. Can we engage them with a an AI scheduling assistant, and have that tied right into your online scheduling system.
Yes, there are ways that, that even when we can't answer that phone, that we can leverage technology to try to engage our customer. We always wanna do something that is. Forward thinking in the sense that we want to al always help our customers understand that we are the shop they wanna do business with.
Oh, you've anticipated my need in this way. After hours is a real common example, getting their vehicle dropped off. A lot of customers have never done that before, so it's uncomfortable they don't know what to do. We can provide very straightforward information, establish a clear expectation of what to do, when they arrive, what to do with their keys, when are they gonna hear from us.
And then we're leaving them with this idea of, oh, they're, they've really thought of me, right? Getting them connected to a tow service. But then using other aspects of our technology where we can get them scheduled during business hours or after business hours. If we can't handle that call, let's identify if they're calling about needing to schedule an appointment.
Just engage them with that and get that appointment scheduled right through the phone system.
Parker Branch: Yeah, I think follow me answer Ashley's question.
David Boyd: Yep.
Parker Branch: Looking at the AI will let you know if you have that option. It'll let you know if they did request the appointment. So that's part of the scoring.
So again, instead of you having to listen to calls and calls in a lot of time. With the AI tool. And I can tell you I'm probably guilty in a sense that I don't know exactly what cost is associated with what specific part of the program that I have. But I know that of all the things I do I still feel like I'm stealing the service from David because he is so fairly priced.
David Boyd: I'm
Parker Branch: making note here and but yeah, the that AI section of that will give you clues actually really quick. As to which calls maybe to go listen to or, you can pick a few and get in and out of the tool pretty quickly.
David Boyd: We leverage AI to analyze the context of each call. So we want to categorize that, one is this a customer, we don't want to have to bother with vendor calls if it's a parts shop or a parts house or dealership or somebody's calling me.
That doesn't have, it's not a customer engagement. So we can set those aside and then identify as an, an opportunity where there's an appointment or scheduling opportunity. Is it a status call? Depending on your process in your shop. A customer calling for status might be essentially a fail, right?
If they're calling us for the status versus us providing that. So do we wanna identify those status calls? And then also sales calls. In what Parker's talking about in the opportunity or scheduling call analysis, we go through various aspects, right? How did we greet the customer? Did how did we qualify, right?
Did we know who they are, their vehicle information? Did we ask for the appointment? And this is the key. I think that's exactly back to your question. Hey good to see you, Josh. You might be surprised or you might not be surprised to learn that there are various obvious, there are obvious times in a conversation when it would be appropriate to ask the customer to come in and see you.
And there are also times that we failed to do that in the shop. So quickly identifying when those occurrences happen and then be able to. Train and coach and guide against those using them as real life opportunities. Hey, we had this conversation. This would've been a good opportunity to ask the customer to come in and see us.
And then it also helps identify if you've got, some challenges maybe with advisors who are just not getting it that the AI can give you examples where this is important for understanding over time. How many times do we have to repeat this idea of asking for an appointment? I don't mean to get so sidetracked on that, but if an objection arises a hesitation, how did we overcome that?
And then in the in the scheduling and sales call analysis, we have what I affectionately call our customer care composite. How well did the service advisor care for this customer? This is important. It's your brand at stake. Were we professional and enthusiastic? And what was our tone? Were we helpful?
So these things are gauged. What was the follow up and reassurance at the end of this call? How did we sign off? So these are all, this is a very comprehensive analysis that. We leverage AI to do so that you don't have to, it's delivered to you. One other note too, we spent some time talking about maybe the opportunities in these calls.
I hesitate to call them bad calls, but, calls are there, there are things that go well and things where we have learning opportunities really in every call, but where are the good ones and can we identify those calls? Because when we identify a good call. Where really all of the boxes are checked.
Let's sit down and listen to that one and say that thing. Do that one again. Exactly what you did here. 'cause you hit all of the right things. So let's replic replicate the good behavior, the high performance, and then let's identify where we have opportunities in the parts that were missed in calls, and use those for training purposes.
Parker Branch: Yeah. Let's point out the wins in that call. And the things that were great, encourage. From there, and to your point, it's gonna get replicated. We'll have more consistency across the business that we want. So great things.
Jimmy Lea: Yeah. It's so true. And it's awesome to see the progress that these service advisors are making.
The call that they have today, that is their very best call. And you've identified it. You put it up on a pedestal, everybody listens to it. There's even things there that you listen to and you go, ah, you know what? I could have done this better and I could have done this better and I could have done this better.
Let's fast forward a year down the road, listen to that call again, and that will be one of the not best phone calls because now the phone calls skills have improved so dramatically that no longer is the training module for f phone skill. You have a new standard because you have coached and trained
Parker Branch: right
Jimmy Lea: And practiced those skills consistently.
In your company meetings.
Parker Branch: Yeah, I think you just gave me an idea, Jimmy, that in our, in our drive where we have all of our, resources, materials, SOPs, whatever it is, I think there ought to be a folder for some of these calls To that point, some great examples. So let's have a new folder.
Maybe Daniel, we need to have a phone training folder added into our drive so that we can drop some of these. Coachable and celebratory, calls in there to refer back to your point, Jimmy, that's a great idea.
Jimmy Lea: Yeah. This is our best of the best for 2026 and at the beginning of 27, you're gonna listen to those calls and go, wow.
They, I, okay. They were good, but man, we're so much better now.
Parker Branch: We are, we're gonna have to develop a new trophy. We have the big dog trophy here with a we have a Mack truck emblem attached to a piece of trophy board with the big dog placard on it, and Daniel Howells and celebrates someone each month.
We're gonna have to have one of those with a golden phone on it or something.
David Boyd: I've got an extra handset here. I'll paint it gold for you and ship it over.
Parker Branch: Yeah we'll nail that sucker onto a plaque and we'll have to come up with a creative name. That's
Jimmy Lea: great. I love it.
I love it. That's awesome. That's awesome. Hey, and those of you who are listening, if you've got questions, comments, concerns, type 'em in the comment section. Let's ask these guys something's on your mind. Let's ask them and go ask questions. Yeah, put 'em in the comments. David, you were gonna start some
David Boyd: I was gonna say, just it, its important to create normalcy around this.
And have an expectation as the leader of your shop and communicate that expectation so that, I love that phrase, if it's not a meeting, it's a beating. And I think the biggest damage that I've seen is, and it's not intentional. No, no business owner is intentionally beating up their team about this.
But call coaching tends to occur only when a major defect has occurred. Historically. So there is maybe some negative connotation. Maybe your service advisors came from a different shop where they did this and it was not a comfortable experience. So this isn't, we're not gonna sit around the table and hold hands, but we're gonna sit down and we're gonna have conversations consistently, consistency wins in this case.
So we want to quickly identify good opportunities, and I would encourage you, as the leader in your organization when you're doing call reviews. To talk about what went well and where we have opportunity. And any one call has that even a poorly executed call. There's something that went well even if it was just they had a, an uptone sound when they answered or, upbeat sound, that type of a thing.
So identify the positive with the opportunity and, create it. Do this consistently enough that it becomes normal and that we're elevating, together. We're gonna learn together, we're going to the other. Actually, now that I say that make sure that your advisors know the what's in it for me, part of this.
Coaching without an objective is just, it's just talk, right? It's more, we need to have this be more than a conversation, need to understand, look, I want you to do better so that our brand is valued in our community. Our our work is respected in our industry. Customers love us and trust us.
And oh, by the way, at the end of the day, your paycheck probably goes up depending on your comp plan, right? But this is the, what's in it for you, right? We wanna have these familiar relationships with customers. We wanna make sure that our service advisors know, like when you ask for the appointment and the customer comes in, and then they, spend the money.
Whatever your a RO is asking for that appointment could equate to whatever your a RO is, right? And then they. Realize the benefit of that. This is really about painting the full picture. So it's more, so much more than just answering the phone. I think that's where a lot of people start, is like, all these phones are just blowing up, or it's so busy.
I have so many other things that I have to do. Take that breath, calm yourself, brush off the tech that just, chewed you out, whatever it is. And make sure that the person on the other side knows that you Mr. Or Mrs. Customer are the most important person in the world to me right now. You have my undivided attention.
And identify those opportunities when that doesn't happen so that we can elevate that bar for your shop.
Jimmy Lea: Oh, I love that. I love that. Parker, a question for you about your service advisors. How do you train them on these programs? Is it a once a month deal or is it weekly? How do you train your advisors?
Parker Branch: So it's once a month that Daniel, my manager, will actually have a lunch and learn and talk about the phone calls. I think I had, when I mentioned before, I think it resonates like what David was saying. We don't wanna beat them down or only highlight the negative or, the.
Opportunities to make 'em feel like, oh, great, here we go. We're going to, here how bad we did on the phone. And my example early on, just to say it again and make sure the people out there listening can maybe learn from, what we experienced and learn how, if you have peer, if you're in a GPG group with the institute, you have composite partners.
Get some of their phone calls or if you have a coach, ask them to share some coachable phone calls. And we started that when we really started to do a better job of listening and coaching our staff that we have now. We took some outside calls so that they didn't feel attacked, and we listened to some of those calls from our peers that were coachable.
And they really, they got into it. Oh geez. That guy was, he sounded he was upset or somebody just kicked his dog or he didn't want to be there, or, he didn't even ask what the customer's name or, got a phone number or things went well. The customer acknowledged, yeah, sure, that sounds great.
And okay, yeah. Are we gonna ask for a appointment here? Or, just some of that practice upfront and then. We eased into listening to our own calls and and we played a little game where we just said, Hey, each of you has one minute after we've listened to the call, tell me what you think.
Yeah. And we only had, in one meeting we would maybe only have three or four calls. And spent, we'd listened to the call. Stop. Give everybody a minute a piece. Of course, I, you know how much I talk, so I'd get in there and probably break the minute rule, but try to reel it in a little bit.
But it became fun. And pointing out to David's point again, the positivity and the tone and culture of your phone call and how you. Made it relational and upbeat and, oh, hey David, how's it going? What's happening with the airplane? What have you been doing? Let you know. I know him and I know my customer, and if I'm, make some conversation and enjoy that.
And genuinely I'm asking, how are you doing, Jimmy? What's the next Coke gonna look like at the next thing? All right, great. Let's talk about your truck. When can I get you in here? So having that. Positivity. It's unbelievable how much difference that makes in converting that appointment.
And then when they're having a communication, hey the diagnosis is done. We've gone through and done the digital vehicle inspection. We promised you, let's go over this together and talk about it. This is what's going on. That's what's going on. Oh my gosh, how much is that? You know what? Let's just get through the inspection so you know what all is going on with the truck.
Then we'll decide what to do from there. Oh, okay. So again, that positivity, leading the customer is gonna follow you when you treat them that well and as a relationship. So I think that's a lot of this helps us to do that and to go back and listen to how well have we done.
Jimmy Lea: I love that.
Yeah. Tho those,
David Boyd: one more one more facet of that Parker, you had shared that you actually do something that I love and it's somewhat unique, but you're sending the AI insights emails that come to you daily into a shared mailbox. And what do you do with those?
Parker Branch: I encourage the guys to take a look at 'em and Daniel will use those in training.
Yeah. But again, a few years back. I was just going to meetings by myself, going to trade shows by myself.
I guess quite a few years back. And I had one of those moments where I was like, I learn all this stuff and I come back and try to share it. It's not the same as if I include my team.
So I would encourage you no matter what size shop you have to figure out a way to include your employees in it. So to that example, sharing the insights with them daily. Now when, we just came back from vision, we took 13 people to vision. And all of them came back empowered and like excited and stoked and we, let 'em choose their own, topics.
Even some of my technicians wanted to go to leadership type trainings and stuff because they know someday they wanna move up and, have growth potential. It ties together with even this training on the phones and stuff, and send the insights to them to, we send it to our info at Branch Automotive channel and that way everybody in the off, really everybody that has an email can see it.
And it creates that curiosity. If I see, you wanna see if you got a, a grade that you're like, what the heck is that, low, high, whatever. It creates some curiosity. And they might go in and listen to it themselves, and that's pretty fun to when you witness that, they're like doing it on their own.
I think it empowers 'em. Kudos to you for that tool, having that capability to let the individual that's on the phone take a peek and get excited about it.
David Boyd: Definitely I, and I love too that, that you've put it out there in a way like, Hey, this is normal. It's expected, it's, this isn't taboo.
If somebody gets a 50 versus a 90 or something like that, there's a learning opportunity. I think human nature says we're gonna look at that email and go. How did I do? But then the second question is how did the guy sit next to me do? So it it creates this this fun environment. So I like how you've you've leveraged that something that, that we can use ai.
I think this is a great application to ai. We talk about AI in so many facets of our businesses today, right? But we can leverage this to make it easy to access one. Then normalize so that now you've done something too where you've, you get extra credit for this one Parker, but you've you've, allowed your staff, your service advisors to consume that themselves and find those opportunities where they can self-improve.
And it, it happens even outside of the context of the formal training activity around it. It's just normal daily. Hey, we can peek at that email and see how did I do, how did my neighbor do?
Jimmy Lea: Yeah. Yeah. I love it. I love it. You guys, any final words of wisdom? We need to land this plane 'cause we're approaching the hour.
I will put in my shameless plug now and then we'll close it with you, David, and then you, Parker. My shameless plug comes to say, Hey, we're the institute. We coach and train. We train shops to be the best that they can possibly be. Come try us out. There's no long-term contract. We are month to month.
Try it out. I guarantee you will see a difference in your shop right around the three to nine month time period, and usually it's right around six. You will see a difference. The difference also includes are you gonna do your homework, are you gonna do those things that Coach Parker's gonna tell you that you need to implement in your shop?
If you don't do those things, guaranteed it's not gonna work. But if you do, you will see success. You will see it turn at the institute. We have programs for advisors, managers for you as shop owners. We have 20 groups that get together and they'll descend on your shop. Imagine 20 shop owners come into your facility looking at your shop from front curb to back wall.
What do you need to do to improve on your business when they leave? You've got a list of 200 to 300 specific things. That you need to do in your business to take it to that next level. It's absolutely phenomenal. We also have programs that go into legacy. Are you looking at expanding a single location to be the premium location?
Are you looking to expand the kingdom and expand your footprint? You wanna add additional shops to your program? We can help you with that as well. That's with our legacy program. So we, at the institute, we know you need a coach. You know you need a coach. Pick up the phone and give us a call. Let us help you, help yourself, and we can help drive that difference.
David, final words from you, brother.
David Boyd: Thank you. I I echo everything that you just said. I'm a big fan of the institute. I'm a product of the institute as well on the shop side of it. But so thank you for having me on and this conversation. I'm very passionate about communication and coaching and training.
Call Inbound is a business that is really best in class. Digital voice communication, calling bound, makes shops and shop owners champions in communication. We have a whole suite of technology and best practices that we use, not only for call handling and we also leverage AI to help improve.
Performance on your phones, give you lots of data that's important to manage the the behavior and the improvement of your service advisors know how the customer engagement is going and when needed. We have the recording and data available for that customer accountability we talked about.
Jimmy Lea: Love it. Awesome.
Parker Branch: Thank
Jimmy Lea: you.
Parker Branch: Yeah, thanks for having me as well, Jimmy. It's fun for me to be here as a, just a shop owner, a client of the institute doing the coaching one-on-one for some clients for the institute. The institute has made a huge difference in our business and my life and growth.
And I think the institute does a fantastic job of being involved in the industry and networking, meeting all the vendors. Suppliers, partners that are out in our industry and bringing light to the ones that they know can really serve you well. And that's how I met David, was through the institute bringing me, together with him.
So I can't thank you all enough for that. But yeah what a great topic today and thanks for including me.
Jimmy Lea: You're very welcome. You're very welcome, everybody. That's here for to the very end. In the next minutes, you'll wanna pull out your smartphone and scan the QR code.
Set up an appointment to meet with the institute and have a business discussion. Let's talk about your shop, talk about your business. There's probably one or two or three things that my account executives could talk to you about in your shop that if you were to change them immediately, you might make an extra 15, $18,000 next month.
And the answer is yes. I have had that exact thing happen with one of our account executives and a prospect who is now a client of the Institute. So with that, thank you very much. Thank you everybody for being here. My name is Jimmy Lee with the Institute. Thank you to David. Thank you to Parker, and thank you to the Institute.
We'll talk to you again soon. See you next at the next webinar.

196 - Building Modern Collision By Putting Quality Before Cost

196 - Building Modern Collision By Putting Quality Before Cost
April 1, 2026 - 00:54:54
Show Summary:
Micah Storm shares how he grew up in the family business and built the mechanical side alongside collision repair. He explains how he and his brother took over the shop and later expanded into the building next door. The conversation covers insurance challenges customer education and why quality must come before cost. Micah also talks about leadership team culture training and the value of a four day workweek. His approach is simple: take care of people do honest work and keep improving.
 
Host(s):
Jimmy Lea, VP of Business Development
 
Guest(s):
Micah Storm, Owner of Modern Collision Rebuild and Service
Show Highlights:
[00:00:36] – Micah explains how buying the shop next door doubled their mechanical space.
[00:02:29] – Growing up in the business shaped his path but collision work never fit.
[00:04:50] – He returned in 1999 to build the mechanical side of the shop.
[00:07:10] – Micah says customer education is critical when insurance does not cover proper repairs.
[00:09:00] – Pre scans and documentation help determine what damage is accident related.
[00:12:20] – Digital inspections create trust and uncover mechanical work during collision visits.
[00:15:20] – Micah and his brother gradually stepped into leadership before buying the business.
[00:27:15] – A four day workweek improved morale retention and work life balance.
[00:38:00] – Community involvement helped make the shop a trusted local name.
[00:41:00] – Micah says associations training and strong culture are key to long term success.
In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?
Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.
 
Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!
 
Links & Resources: 
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________________________________________
Episode Transcript DisclaimerThis transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.
 
Episode Transcript:
Jimmy Lea: Hello friends. Jimmy Lee here with the Institute for Automotive Business Excellence. You are listening to the Leading Edge podcast. My guest today is Micah Strom. He is on Bainbridge Island in Washington, the great state of Washington. I have been to your shop before Micah. Thank you for being here. How the heck are you, brother?
Micah Storm: I'm great. I'm glad to be.
Jimmy Lea: Exciting. And anybody listening, anytime you get out to Bainbridge Island, you need to go and visit Micah shop. And there's one specific thing you need to look for, and that is the old style gas pump you have out front that has been converted and has an electric charger cord in inside this old glass, the old glass gas pump.
Man, that is so cool.
Micah Storm: It's old meets new.
Jimmy Lea: Old meets new, yeah. A blend of the two coming together. Do that, and that's awesome. I love it. I love it. And quite recently, not to spoil the surprise here, but to rather spoil the surprise, you expanded recently. You expanded your automotive repair side, correct.
Micah Storm: We, we bought the business, the shop right next door. And we've actually been side by side for 50 years and he was retiring and said, you guys wanna buy it? And I'm like, sure let's do it. So we doubled our mechanical space and I said, Bing, it was right next door. It was a no brainer at that point.
Jimmy Lea: Wow that's really cool. Did you buy the building, the property the land and the clients? Did you buy the business or did you just buy the property?
Micah Storm: We bought the property of the building. He actually kept the name but he retired. And so basically all his mechanical clients were typically our collision clients anyway basically we just bought the land in the building and that was what was basically what we paid for.
Jimmy Lea: Yeah, and it makes sense 'cause your clients were his clients already were your clients. You were just expanding the ability to take care of those clients
Micah Storm: Correct place.
Jimmy Lea: Before we get into that, let's jump back into history back in time. 'cause Micah, I know you have a very interesting story of how you got into the automotive industry and how you got into this location where you are.
Modern collision, dude. Talk to me brother. How did you get started in the automotive aftermarket?
Micah Storm: So I grew up in the, obviously I grew up in the business, in the automotive business. My, dad and my parents started the 1974. As a kid I'd be down there sweeping the floors or what have you, and getting outta high school.
I was like I gotta do something. So I'm like I learned. At an early age, I don't like body work. I can't stand standing. That was, we'd go down there standing. It's, I'd spend all day standing box fans and my dad would paint 'em, and I'm like, I, whatever I do, it's not gonna be collision. So I decided to go into the mechanical side.
Got a job at a local shop around backup. I went to school for six months or the year at UTI. And ended up coming back here, getting a job at a local shop. And that's where it started. Worked at several of the shops for a few years. My parents were getting ready, my dad was getting ready to retire and said, Hey, you want to come back?
I'm like sure, but I'm not doing collision works. That's not what I'm gonna do. So he said let's start some mechanical work here. And that was about 90 19 99. And that's when we, our. Mechanical work started at that point. But like I said it's something, I don't know.
I like cars. I like the technology, I like getting my hands dirty. And it's, again, growing up in it, it's it was a natural thing for me. And same with my brother. He's same thing. He is run, he does collision. He likes that side. And I like the mechanical. So honestly, both of us, we both own the business together and it really works well.
Between the two of us.
Jimmy Lea: Oh, that's cool. And so you've just pointed out something that is so ironic you don't like working on the collision side of things, sanding, and I totally agree sanding, forget about it. I'm done. And I know that you are the director or executive director or the board
Micah Storm: C collision chair.
Jimmy Lea: You're the collision chair for CTE
Micah Storm: or yeah. CT CTEI was that's again, that was putting that together and that actually evolved, like we can get into that, but that kind of evolved from my start in the mechanical to where my parents retiring and where I am today. Yeah, but I'm also the collision chair for the Northwest Auto Care,
Jimmy Lea: so Oh, that.
Oh, the irony there. That's hilarious. Yes. Thank you, Micah, that this a whole nother level of friendship between us and the coalition. Oh, the irony. That's awesome. Okay, so back to mom and dad. Mom and dad have the shop and you come back and join it. Are you turning a wrench or are you stepping into the front office?
What did you come back and start doing?
Micah Storm: Came back. We started with, I was doing the service advising, turning wrenches the whole thing. At that point, because it was obviously really small, we just started but we would, offer a inspection when the car came in. We, a free mechanical inspection and upsell a brake job, or they needed an oil change when they came in for body work.
So at the, at that time I was doing. Everything from the service advising, ordering parts, the work, and then closing it out. But it would go in addition to the collision work.
Jimmy Lea: So did mom and dad do, is it based on a lot of insurance work or is this a lot of cash customers?
Micah Storm: It's mainly insurance work.
Okay. So they're on the collision side. Yes. It's. We are not a DRP for any insurance company, which is a direct repair. We work, again, we, we work for the customer, not the insurance company. But ultimately they, they pay your bill on the insurance, right? A check. But they owe to, they owe the shop to fix it and they owe the customer to pay for it.
There are some customer out of pay that has actually changed a lot in the last year. The kinda that landscape of, like I said, if we want to get it, we can get into that, but it's become a lot more customer pay because rates are going up insurance rates and people are going, do I really want to turn this into as a claim and have my rates go up?
So there's a lot more customer pay out of pocket jobs because of that, which is again that's a SO'S
Jimmy Lea: and I witnessed it. I saw it happening 15 years ago when the insurance companies were coming in and buying up all the collision companies. And Yeah, you're not supposed to direct, but they were directing, they were telling people where to go, and they were telling 'em where to tow their vehicle and, oh yeah, you're gonna go to this company over here because that's who our collision company is.
They didn't tell you that. Oh yeah. And by the way, we own it.
Micah Storm: Yeah. They don't, they own the
Jimmy Lea: steering. Steering, that's what it's
called.
Micah Storm: Steering. They, there's an M, it's an MSO, but they don't necessarily own the company, but they have a contract with them that says, we will send you work, but you have to do what we tell you, and this is all we're gonna pay for.
And you gotta accept our rates. You gotta accept discounts, you gotta accept everything. And it's that's not how you run a business.
Jimmy Lea: No. Yes. Thank you. But no. So what do you do in those situations where. I'm bringing in my car because I was in an accident and it wasn't my fault, it was somebody else's.
I'm bringing in my car for the collision side of things and the insurance company says we'll cover $13,000 worth of damage. But it, your quote was $16,000. What do you do in those situations with clients?
Micah Storm: It comes down to educating the customer. Okay, you know what the difference is what we, we'll start by breaking down what aren't they paying for?
Is it rates? Is it particular procedures? Are they paying 50% of something they should be paying all, as far as a procedure, they're only paying half it. Break it down. What is not, or what is, what are they covering and what are they not covering? And then to go to the customer and explain to them.
What the insurances paid for, what the portion they paid for and why we do what we do. The safety behind it, that we use only original equipment parts. We don't use aftermarket parts, and you start explaining that to a customer and they start going I don't want that stuff. The aftermarket stuff in my car.
I want it back how it was. Before the accident. Yeah. And you talk, and not all shops are the same. And you have, it's, you have to educate the customer. 'cause if you don't educate the customer, the difference is the price. And they're gonna look at the, it's why here if it's $3,000 less and you don't tell 'em why your $3,000.
More than the insurance ones do. They're going to obviously choose the lesser price. Yeah. But it comes down, like I said, it's the quality, it's doing it right. It's follow procedures and not having an insurance company dictate how you fix a car.
Jimmy Lea: Okay. So I have a dangerous question. I have a dangerous question.
Micah Storm: Okay.
Jimmy Lea: The question is so I bring my car into you and you write up the estimate, $16,000, they're gonna pay for 13. Have insurance companies gotten to the point where they're asking collision shops to scan vehicles prior to doing any repairs that they're might be a preexisting condition that they're not gonna cover?
Micah Storm: So e every car gets a pre. The manufacturers, the your OE manufacturer require a pre-scan. Sometimes it's an in end process scan and not a post scan. So the insurance companies will pay for it because it is required. It's in, in the position statements that has to happen. But they have contracts with providers that they will only pay a certain amount.
They have a contracted price and that's all they're gonna pay. So even if it costs more to do it, they say that's, this is all we have a con company that will do it for this much, and that's all we're gonna pay. So it's. Again, it comes down to educating what we're doing.
And if they're only gonna cap, if they're gonna say we're gonna pay a portion of it, it's this is what it costs. Here's an invoice for it, and we need to collect that from the customer. 'cause the insurance decides not to cover it.
Jimmy Lea: Okay. What and what is, so if those situations are there where.
There were, and it almost crosses over into like health insurance. That's a preexisting condition. I'm not gonna pay for that. The insurance company, that's what they say.
Micah Storm: Yeah.
Jimmy Lea: Is that a situation then when you go to the client and say, Hey, look, this $3,000 that the insurance company's not gonna cover, this is something you're gonna have to cover, or you're gonna have to decide if you want this work done or not.
Do you do that? Or does it's, is that a thing?
Micah Storm: If it's insurance, or I should say if it's accident related typically they will cover it with proper documentation. It's, they're not gonna cover something that wasn't there prior. And I. And honestly, they shouldn't pay for something that was already there.
You know that's a customer's responsibility at that point. Yeah. But it, let 'em know is, hey, we've got the car in, pulled into the shop, we scanned it, had these codes. There's this issue. We, it's not cover, it's not part of the accident. It's not related, the accident. And it obviously that goes depending on what the code is.
Know. 'cause sometimes you say, this is not part of the accident, but in reality it is because with Can Bus and all the other things that modules that talk to each other, you could have something. The back end takes out a blind spot and it creates a starting issue. We had a Mercedes that did that one time.
Oh
Jimmy Lea: gosh.
Micah Storm: So it's, there's a line, but you still gotta be able, to say if it's not covered by insurance, that's, you're gonna be your portion out of pocket.
Jimmy Lea: And most of these codes have a date timestamp that goes along with it like. I'm thinking like, oh, two sensors. That might've gone out in October and here it is January, and then we have the accident, or it needs a, body repair.
That's an old code.
Micah Storm: Correct. You can either, like the Mode six data will have all the, the mileage. Typically it was set at things like that okay. It's, you gotta use all the, all your tools that you're, at your hands to be able to come up with a timeline and a, where does this fall?
Who's responsibility is this? Yeah. It's our job to tell the insurance, say, Hey, this is what we have, this is what we see.
Jimmy Lea: Yeah.
Micah Storm: Whether they pay for it or not, that's. It's not my call I, but either, either the insurance has got it covered or it goes back to the customer. So
Jimmy Lea: yeah, that's that.
It's not my circus, not my monkey. It's not my problem to solve insurance company client. Here's, here it is, and you figure it out and lemme know.
Micah Storm: Yeah. Provide all the documentation's needed for it so they can Yes. Make their decision.
Jimmy Lea: So are you, do you do a lot of digital vehicle inspections with these on the collision site?
And I know it's not your jam, it's your brother, but.
Micah Storm: So yes. And as far as being my gym, I'm ex, I, my brother does more of the hands-on stuff behind. He likes working on cars. Okay. I deal with all the office stuff and all the business stuff, and I, that's what I love. That's what I love. So I don't have to touch the collision.
Cars, but I like working. Yeah, you're
Jimmy Lea: not sanding anymore, you just buy the sandpaper.
Micah Storm: I'm sand. I'm not sanding. I, but I love working the business side of it. That's, that's really where it comes in. The d d vs. We do on all the mechanical jobs. But we also upsell a complimentary inspection on every body job.
That comes to the door, so our mechanics will inspect it and that has a DVI attached it so we can get pictures and send them the report, give 'em estimates for everything. And upsell some repairs, some mechanical work while the vehicle's there for the collision work.
Jimmy Lea: Oh, I love it. I love it.
Who are you using for your DVI?
Micah Storm: It's through shop wear.
Jimmy Lea: Through shop wear. Phenomenal program. I love the integration of that. Oh man.
Micah Storm: And
Jimmy Lea: there's so much
Micah Storm: to do. We was 2017. We were, we had a regular program and we were, I wanted the DVI with it. I'm like, I can either get an add-on to what we had or do I, find something that has it all together.
And I'm like, I don't want, he said, she said, this works. That's, no, that's their problem. That's their problem. I'm like, I want something that's all in one. And at the time, that's, again, it was shoppers, there was towards the beginning of it, and we've been with them. For many years with, as Caroline had it and all the way to where it is now, so I know it's she sold a year or so back.
Still a great program, so
Jimmy Lea: Oh no. It is. Shop wear is a phenomenal program. I love the DVI, I love the integration of it. And for you, just like you said, it's a one phone call. You don't have to play matchmaker anymore to get two people to talk with each other. It's one phone call. Hey, look, this isn't working.
Figure it out.
Micah Storm: Yeah.
Jimmy Lea: And call me when it's done.
Micah Storm: Yeah.
Jimmy Lea: Oh, that's good. You've 1999 pops calls, you come back to the shop, you start on the automotive maintenance side of things. When does your brother come back or has he always been there? What? What's the story with you and your brother?
Micah Storm: So he's always been there.
He started as right, outta high school in the paint department painting cars. Did that for quite a few years. I went off and did the mechanical stuff 'cause I, we didn't do it at the time and I wasn't gonna learn it there at the shop. I came back, started the mechanical side of the, what we have today, and as time goes on, physical things, I've had two back surgeries, so I stopped working on cars, just physically.
I couldn't do it anymore. It wasn't the. The career was really hard on my body. And so I started getting in more the service advising. So I we hired a mechanic. I turned in just doing the service advising and at the time, my parents were still my, my mom really was the instrument of running a very lean and dialed in shop.
My dad just kind. What do I need to do next? I'll write estimates, I'll go fix cars, whatever. But like I said I worked in the service advising. And then again, as my parents were, my dad retired, my mom was there probably another 10 years. And she is, as she's beginning to step out, she let my brother and I start running it.
At that point, we made decisions we would, she'd sit there. I'm here in case something I don't agree with, I'll tell you, but. Do you guys start making decisions?
Jimmy Lea: Oh, I love it. I love it. So she's really positioning you and taking you and pushing you into that leadership role where you are running the business.
So where is that on the timeline that mom the dad retires. Mom sticks around for another 10 years and when is it that she retires, but still has control of the business? It's just you're in the leadership position.
Micah Storm: I'd say, so my dad retired, probably about 2001 is when he moved back and then started doing, having an enjoying life at at home.
And my mom probably, she stuck around for, she ran it for another five years or so. And then she let us started taking over those decision making and the running of the business. And in 2010 is when we officially bought it from 'em. So she was there till probably about 2008 and then just it's Hey, if you need me I'm at home.
Call me.
Jimmy Lea: Congrats.
Micah Storm: We've let us. Yeah. So it's it's been see 15 years, 16 years now we've had it
Jimmy Lea: oh yeah. No, that's a long road, bro. Congrats. Yeah, man. That is awesome. And mom and dad are they still with us?
Micah Storm: Oh yes. My dad makes garden art. Welds rusty metal together. My mom just loves to travel and grandkids and yeah, so they're doing great.
Jimmy Lea: Oh, man, that is so cool. Congrats to mom and dad. Congrats to you and your brother for stepping in and taking over too. That's very cool. So what does the shop look like today? How many on the collision side, how, what does that look like? And then on the mechanical side, what does that look like?
Text space, cars, that kind of stuff.
Micah Storm: So we have 21 employees right now. 21 team members, including my brother and I. Right now. We have, let's see, one. Five mechanical technicians. We could probably use another one, maybe two for mechanical techs. And then we have three body techs and that my brother really does.
The body is one of the body techs. A painter's helper, a parts guy. Deals, just deals with strictly the parts. We have a detail. Two people in our detail department. 'cause we do clean all the cars that leave the collision side get washed, and cleaned depending on the severity of the repairs and stuff.
Yeah. And then we do, we, so we have two people in the detail department and then we have two service advisors and. Two estimators, a front office receptionist or bookkeeper, office manager. And then she's getting ready to semi-retire. So we have hired somebody else to take over some of those responsibilities.
And then, and then there's me. So that's kinda the layout of how everything you know, as far as the people are concerned. Everything flows really well. As far as the we share the same office for Yeah, the mechanical and the collision shares the same office, the back on the, our upper building the mechanical and then the collisions share the same building space.
Obviously there's different sections in there that we do different things, but it's it's a pretty well oiled, I think, at least I feel it, is to be able to run both businesses in the same spot.
Jimmy Lea: Oh, dude I love it. So anybody who's listening to this right now, if you know somebody who's a technician and they would love to live in one of the most gorgeous places on earth, Bainbridge Island is on the sound side of the peninsula.
There in the very, very northwest tip of the state of Washington. If you're a tech and you'd love to live up in that area, Mike's got a job for you. Just tow your. Toolbox right on over you. You're ready. You're ready. Bring it on. Oh yeah. That is so cool. That is so cool. Congrats on the business, man.
That is very good. Oh man, I have so many questions. I'm gonna, I have to slow down a little bit here. Breathe. Alright, so first question for you is when is it, at what point did you decide automotive is the thing for me? Yes. I understand you didn't want the collision side, but you definitely wanted the mechanical side and you did go to university UTI for a minute.
When is it in that high school career that you said, that's my jam.
Micah Storm: I, that's a good question. I'd have to say. I started doing it because that's what I knew what to do. I Oh, yeah. Messed with my hands. That's, and it's I was in the car business, so it's naturally I stay in the car business 'cause I grew up there. Yeah. I started working on cars.
I, changing oil and at a mechanical shop, I, and I started going, okay, I this stuff. It is it's fun. And, again I guess I kept with it until my. I'd have to say that probably that turning point is when my parents, when they said, Hey, we're gonna sell you internet.
We're we want you, we're gonna retire, eventually. Want you to buy it. Are you interested? And I thought what do I wanna do that, it, it was more of I had the job at the time the career side of things. That's when it started going, okay, maybe this is. It's a great opportunity and it's, this is something I could, continue doing at that point.
I enjoy it. I know what I'm doing. I can, do a good job at it. And I guess that's where it kind of things clicked at that point for me. If I didn't, oh, go. What's that?
Jimmy Lea: You blew me away there. I thought for sure it was gonna be like something in junior high or, yeah, I know you grew up at the shop and you're pushing brooms.
It's in your blood. You bleed oil. I get it. I get it. But you're telling me that it wasn't until you have the opportunity to say, am I, is this for real? Can I do this for the rest of my life? Then you're like. Oh yeah. No, I love this. This is what I really enjoy. Yes. We can make a life out of this.
You and your brother.
Micah Storm: Yeah. Yeah. And that's, yeah, that was kinda the turning point of this. This is it, and here we are today.
Jimmy Lea: Wow. And 2010, that come after the the real estate bubble popped.
And at 2010, it was finally starting to. Inch its way back up into realms of, okay, we can now see an incline coming back and the world is returning to normal again.
Micah Storm: Yeah. It was, it during that time though, every, the, we were busy 'cause everyone's hung out with their cars. They weren't gonna buy new cars. Business was busy for the automotive industry at that time. It was
Jimmy Lea: good.
Micah Storm: It's a recession proof business for the most part. It is, yeah.
Jimmy Lea: It really is.
And I'll tell you, at that point in my life, I was in mortgages. I was a mortgage broker. And I had to figure out what am I gonna do? What do I want to be when I grow up?
It was a hard situation to be in.
Micah Storm: Yeah.
Jimmy Lea: To come outta that. Man,
Micah Storm: Here we are.
Jimmy Lea: And here you are. And here you are thriving to a point where you expand your shop by buying out the the mechanics from below.
Now you've just expanded your footprint. You can take care of customers. Yeah. I love that.
So what's the, what is a misconception that the public has about a collision shop that if you could magic wand it and correct this misconception, what's a misconception that the public has about the collision side?
Micah Storm: The, as far as the public, I think the misconception that they have is that the insurance company is there to take care of 'em and they have their back.
That's they, again, if you don't take it financial advice from somebody that owes you money, and that's where it comes down to is they're looking to get it repaired as cheap as possible and for as little as possible. 'cause that's where they make their money. And, I guess that's my take on that.
That's what
Jimmy Lea: you blew my mind on that. That would, that's a good one, Micah. Thank you. Yeah. Don't take financial advice from somebody that owes you money. That also very wise. Very wise. So what's a misconception that the public has about the maintenance side of the business?
Micah Storm: Probably they, they think it's easier 'cause they look on YouTube and it's done in 10 minutes and in reality it's something might take you, three hours to do, but it looks easy on YouTube.
Jimmy Lea: Oh we oh my God. I just went through this man. I just went through this video after video, I we're watching these videos because we replaced the radio in my wife's car. And I will tell you that I gave up and we took it to a professional. However, it took me two days to finally throw in the towel.
So here's the scenario. I'm watching all these videos and they're like da, and you just, you take out the radio. Pop, and then you disconnect the wires and you see them disconnect one, but there's seven more back there back. They don't even show that. And then they're like, okay, and then you take the new unit and you just plug it back in.
And they plug it back in and, but you don't see 'em plugging them in. You see 'em pushing the radio back in place and it's like a second. This can't be right. You only plugged in four and I've got seven here. Where did these other three go? Oh,
Micah Storm: and then you could then just pop apart. It takes some finesse and finagling a lot of times.
Jimmy Lea: And I'll tell you what I learned from this most recent experience is that the modern vehicles, it's more about the transfer of data than it is transfer of voltage.
So these vehicles today are much more complicated than the old days when it was a carburetor and spark plugs, and you could tune.
Properly tune a vehicle. Modern computers are, is tuning that vehicle constantly, correct?
Micah Storm: Yeah.
Jimmy Lea: Yeah. And just to be able to pull out a radio and put in a new radio? No.
Micah Storm: And certain cars, they, it's considered part of the anti theft and you have to actually take it to, they have to program it and be able to re, to be able.
It's crazy some of the stuff they do now,
Jimmy Lea: I hadn't even considered that. You know what, you're exactly right. This one wasn't that way. What it came down to, after two and a half days worth of research and discovery and phone calls and emails with a company out of it was either Japan or China.
Not exactly which one. Sure which one, but they had pins on their harnesses that the pins from the card did not line up. So they're like just plug it in and it works. I have plugged it in. It does not work.
Oh, shoot, man. That's cool. Okay, so same question on the mechanical side. Did I ask that question? What's the misconception on the mechanical? Oh the YouTube? Yeah, the
Micah Storm: YouTube.
Jimmy Lea: Yeah.
Micah Storm: That's it. It's a it, some cases YouTube actually has, its place at certain times, getting things apart that you can't see in a repair manual, but yet someone on, you can look on YouTube going, Hey, this is how you do it.
But as far as the diagnosing and it's they. Yeah, that, that's, they've kinda lost it there, I think. But there we, YouTube does have its place in the auto repair. I'll say that.
Jimmy Lea: Yes, it does. As does some AI information, but it's not always foolproof. I've been watching Correct. Sherwood down there in Georgia and Florida.
Royalty Automotive. They have some videos there that where Sherwood is asking Ai, asking chat GPT to help diagnose the car. Totally off, totally wrong. One was a super success. One was a bad failure. It was. It was just horrible.
Micah Storm: Yeah.
Jimmy Lea: Yeah. So it's interesting. Okay. Back to you. Enough about them.
Let's talk about you, Micah. Okay. What's your current hours and why did you choose that schedule?
Micah Storm: So we as of today, we do four tens Monday through Thursday 7:00 AM to five 30. And we close for, we just closed the shop down for lunch, locked the doors for a half hour from 12 to 1230. So everybody goes to lunch at once and everybody comes back at once.
Very similar to a doctor's office, but we started that. Transition, I'll call it a transition. During CO when COVID started we get everything in Monday through Thursday. We really didn't have any appointments coming in. We'd just be finishing stuff up on Fridays. Yeah. And so we didn't really have any customers necessarily calling in, 'cause they all knew we were closed on a, or we were closed for taking a, we would take appointments.
But as far as customers coming in, dropping cars off, nobody was coming in the door. It was all, a goal of trying to minimize the amount of contact between people. And we kept that and was it 2022? I think we're like, what about four tens? And to be honest with you, my brother did not want, he's it's not gonna work.
It won't work. It's not gonna work. And after, doing a lot of research, it's let this is here's, people have done it. This, if you wanna try it, but it's not gonna work. Two a month or two months of, he is that's the best thing we ever did. I'm never gonna go back to working five days a week.
So he, but he was the, it was, again, it's that I think we set ourself up during COVID to be able to switch to the four tens, because Fridays were really a. They were a day that really, there was this, there's a lot of work going on in the shop, but nothing, no customer activity, no customer other than maybe a scheduling of phone calls and scheduling, no one is coming in the office.
So it, it really we set it up to where we were able to do that and actually have a pretty seamless transition to going from Monday through Friday to Monday through Thursday schedule. And, in the collision industry, it's not it has not been adopted very well. I don't think some shops are doing it, but not a lot of 'em are.
The mechanical side though, you see a lot of shops switching to the four tenants. And yeah it's a great tool for it know, employee acquisition, retention. Everybody likes a three day weekend, so you can't keep that.
Jimmy Lea: Oh, yeah. Imagine having a three day weekend every weekend. So what about those days where there's a holiday Monday
Micah Storm: We close Monday, we're open.
They got a four day weekend.
Jimmy Lea: Cool. I love that.
Micah Storm: It's. They, they work hard. Our team works hard for our shop, for my brother and I, and again it's okay to give 'em an extra day off and, let them enjoy their, have time. And we just, for Christmas, we just, we close the week at Christmas for our, to our shop.
Just, we close down. Everybody gets, spend time with their family. It's just I, it's. It's part of taking care of your people, and it's,
Jimmy Lea: that's awesome. I'll bet they were shocked that you gave them that full entire week off.
Micah Storm: Yeah. And being four tens also makes it a little bit easier because we usually close Christmas Eve and Christmas Day.
Jimmy Lea: Yeah.
Micah Storm: So when Chris, when Christmas falls in the middle of a week and you're like going, okay, we're only gonna be open two days anyways, and then we're gone for four days or six, five days, and then we're back for two and then off again. It's like, why don't we just close and, give everybody a little more extra rest.
Family time.
Jimmy Lea: Oh, I love it. That's awesome. Yeah. Family time. Yeah. When you're taking care of your people, then your people will take care of you,
Micah Storm: correct? Most definitely.
Jimmy Lea: Oh,
Micah Storm: most definitely. We have our longest term employee there Tim, he's been there 31 years, I think. He's one of the body techs.
Most, a lot of our employees have been there, been with us for at least 10 years. We've got some new addition as far as needing more. New, more people and more employees. But the ones that are there typically are, have been there for a long time. And again, it's just we respect that and appreciate the time they put in, invested in for us.
And it's like I said you gotta give it back,
Jimmy Lea: Oh, for sure. It sounds like you're still the new kid until you've been there for 10 years. Yeah.
Micah Storm: Yeah.
Jimmy Lea: That's awesome. No, that's really cool. Hey on the collision side what are the top three to five numbers that you pay attention to the most so that you know that the shop's going in the right direction? Same question, but on the automotive side as well. But give us the collision side first.
'cause I haven't done much with collision, so this is all new information you're giving me,
Micah Storm: so I'll be a hundred percent honest. I'm not a numbers guy. Oh I, the numbers are important. They give you a snapshot. But ag yes. I know, again, I know some shops, they're driven by the numbers and I, we're not, my brother and I, it's just, you can tell where we're sitting.
You get a good feel for where you're shitting. But again, at the end of the year. What where the, where are the numbers sitting is the reality where it's at. So I don't really look at numbers day to day.
Jimmy Lea: Okay.
Micah Storm: What I look at, is, like I said, I look at capture rate of an estimate.
How many estimates we writing, how many are we getting? If we're not getting the estimates, we're not gonna have the work. They coming in the door. So it, that's, that to me is an important, that's an important number to have. And if, that's, I do every once in a while, glance at the, where are we sitting as far as our, part, how much the, I guess your gross, where that's sitting.
But I don't look at it every day. I probably look at it. Some of them maybe once a week and others once a quarter. It's like I say you run you collect and you get paid for what you do. And I, there's not necessarily a need to be constantly looking at the numbers and seeing where you're at.
Jimmy Lea: Yeah. You can run your business, you can have a pretty good feel of where things are. It sounds like you still have a couple of numbers that you're looking at on the daily that, that gives you a good indication of, Hey, we're in a good spot. But it's not something that you're constantly monitoring on the every five minutes.
Micah Storm: No.
Jimmy Lea: Yeah, no,
Micah Storm: I like again, it's just. I've actually worked at a shop that was a very numbers driven shop. Yeah. And I, it was, it's all about the bottom dollar. And I guess I don't want my team to feel that way. It's about, I want them to know they come to work.
They're there because we trust them. They're good at what they do.
Jimmy Lea: Yeah.
Micah Storm: They get the job done. They do a good job. Yeah. And that's, it's not all about numbers.
Jimmy Lea: Yeah. And Micah, I think if you were to be tracking the numbers on the daily and you were to pay attention to that was your focus of where you were paying attention to the numbers that way.
I don't think. Your employees would feel like the most, the only important thing was the bottom dollar. I think your company, your culture your feel would say, here's the bottom dollar, but a number one, we gotta take care of our customers. We gotta take care of the business because that's what, take care of that bottom number.
I, I think you would still have because you're aware of it. I think your team would be aware of it as well. And it wouldn't be just about the bottom dollar, it'd be about the client, the customer.
Micah Storm: Yeah.
Jimmy Lea: Yeah. Okay. Speaking of clients and customers who is the final sign off on cars before they leave the shop?
Who's your QC?
Micah Storm: So it's actually our does QC is our parts guy. It goes Oh, really? Yes. He, it actually goes to several QCs. So we have our detailers, obviously they're working on it, they're putting their hands on every part of the car when they clean it up for on the collision side. We have our parts guy will actually go over line by line to make sure everything got done on it on the Es, on the repairer.
And it's, it's, we give them, we give our employee or. In this case, the parts guy said, this is what we want. This is what the, this is the quality I want. This is what we want out of it. And give it, make sure he, he understands what we're looking for. That's and he does a good job of it.
He's make sure it's done. I, again, I don't go micromanage and say, you're this and this. It's like I delegate it out. I would rather delegate it. I can only do so much. And I figured by the time it gets through our detail department and it gets through a second check after it's all done it's been looked over very well.
And again, every everybody's aware of what we're looking for, the kind of work we wanna turn out. And if something's not right, they're gonna say something.
Jimmy Lea: So true. So true. I love that you've got multiple people with hands-on looking at the vehicles. I bet you don't have very many com comebacks.
Micah Storm: No, I, they, if their comment's not right, we're gonna take care of it before it, say, Hey we're not happy with it. Do I need to repaint something? Maybe the color doesn't match as close to, we were what we were thinking. It's I'm gonna, I gotta take care of this. Sorry, it's gonna take a little bit longer, but I wanna make sure it's right when it leaves.
Jimmy Lea: Oh, it's so important. Yeah, because when you're in mixing and paint, it oxidizes at different rates. So if you're painting that quarter panel it's oxidized differently, the hood compared to the rest of the vehicle. You gotta make sure it all looks good.
Micah Storm: Especially like today's, you got Tri Trico, you got matte finishes, all these new paints that are coming out.
And sometimes what used looks good inside on in the paint booth under some lights, you put it outside in the sun or something and it's okay, this does not look the same as it did in the shop. That ha that happens. That's just, that's life. That's, you gotta deal with it and take care of it.
Jimmy Lea: Yeah.
Micah Storm: But that. It's, paints have changed over the years. Like I said, a lot of these new colors, they look, they're cool, they look good, but man, they can be a pain to, to make sure it turns out right. So
Jimmy Lea: It's true. It's true. And as a colorblind person, there are things that are obvious to me that are bad color matches, but for a lot of it, I'd be like, yeah, it looks good.
And you'd be like
Micah Storm: No,
Jimmy Lea: we're gonna fix that.
Micah Storm: Yeah.
Jimmy Lea: I think we, they're one out of 12 people is colorblind. Really? Or lefthand might be left-handed. No, I don't remember. I, we went down a rabbit hole the other night, colorblind and left-handed people, and just having a good time. My dad's left-handed.
I'm colorblind.
Micah Storm: Because the best of both worlds.
Jimmy Lea: Yeah, sure. That's it. Let's go with that. I know the people there in the Northwest Bainbridge and up in that area, they're very relationship driven. What is your approach? What do you do to build that trust and communication with your clients up in Bainbridge?
Micah Storm: Be honest, be real. If you make a mistake, own it, take care of it. As, as far as we do a lot with our community we're, we have, I could rattle off all kinds of things that we do with our community. We have a, a. The rotary auction that's up in this area on Bainbridge, just one of the, it's last year we raised over a million dollars in, in, in one day sale of, with a sale.
Oh, 1 million, over a million dollars in one, one day. And it's so we donate to that. We donate our time. If we have garbage pickup we do on the highway sponsor sports teams. We like I said, we do a awful lot. We do a car show four times a year. All the money we raise goes to project backpack.
It helps kids get into school, buy supplies for school. That we, that was, I think we hit, we almost hit $10,000 last this last year. But again, it, being involved with the communities was, is so important. Especially with the the relationships, I, I always say that probably 80% of the businesses or people, actually 80% of the people on Bainbridge Island know who we are.
We may not work in all their cars, but they know the name, they know who we are. They know what we do for our community. They know, that, they can bring their car. Us, we can fix it. And they know some of that's gonna go back into the community. Some of whether it's time or money's gonna go back into the community.
So it's very important to, to be there for them. 'cause it's they're, they write the check, they pay the bills. They, that's you gotta get back to 'em.
Jimmy Lea: Oh, it's it is true. It is true. The relationship, communication is so important. So important, yeah. What's the future of Modern Collision?
Where are you headed to next? Bigger, better, simpler. What are you looking for?
Micah Storm: I'm gonna say better. There's always room for improvement. I don't necessarily think bigger is an answer. Yeah. You don't need to be bigger. If you've streamlined things, it, it can improve flow of the process.
And that can actually getting better at what you do is I think a better way to. Improve and getting bigger. It's, at least that's my input on it. I don't need any more volume to deal with.
Jimmy Lea: Yeah, no, that's true. There's a lot coming through there. Yeah. And I, there, props to you.
You've got a phenomenal company, phenomenal business, great company, great culture. For those who don't know and none of them would know, but unless you're listening to this, Mike and I were set up to do this right before their Christmas lunch. And I said no. Micah, you do you take care of your people first.
And he's no. I can do this. I can do this. Yeah. Okay. I'm calling it, you're not gonna do this. Let's do it in the new year. Let's circle back. So you're taking care of your people super I just props to you, brother. I love what you're doing, man. Keep it up.
Micah Storm: Oh, thank you.
Jimmy Lea: Yeah, you're welcome.
You're, you are welcome. So I, I wanna ask some questions now if I started my business today, questions. And if you were starting your business today, what, knowing what you know now
What advice would you give yourself starting your business today?
Micah Storm: I'd say. Join an association. An automotive association is important and not just joining it, but participate in it.
We've. Yeah, I think it's so important. There's so many, they're networking. The ideas that are created at an association level with some of these events and things like that. That has probably been the number one thing that has helped me in the business. Business side of things and streamlining what we do is the events that I go to through, through the Northwest Autocare.
I guess that would be my number one thing is like I said, is to join it and participate. The more you give to it, the more you're gonna get out of it. There's, that's the so important what is, what else? Is it higher personality? Not talent. You can teach somebody a job, but you can't teach somebody a personality.
And, if you have the wrong person, sure, they may know everything in the world, but if you have the wrong person there, they're gonna, they're gonna tank everybody else. And that's, it I don't mind training people. I'm always willing to, whether they're young and outta high school or they're from a different industry and wanna move into the, into the collision or into the automotive field in general.
I said I don't mind training 'em if they're the right person.
Jimmy Lea: Yeah. Yeah. Oh, I totally agree with that. So second question here. What has been the most expensive mistake you've made in your career? And what would you do differently knowing what you know now? Same situation. What would you do differently?
What's the most expensive mistake and what would you do differently?
Micah Storm: Let's see. Mistake. Living life, you're always making mistakes. The most expensive one, I would say.
That's a good question. I, what do you consider expensive too? What's the most expensive as far as relationship? Most expensive, dollar wise?
Jimmy Lea: Your choice,
Micah Storm: Mike, that, I guess most expensive, the mistake would be probably relationship wise in the industry as far as like with the cu between customers and stuff.
It's being, again, being honest with your customer, own up to your mistakes. You end up starting to. Something doesn't go right, say, Hey, I messed up it, it's, I broke that. I'm sorry, I, I apologize, but I'm gonna take care of it. If you start making excuses and or don't own up to it, it, you'll lose a customer, you'll lose reputation, you'll lose I so much more.
And then, bad news travels fast, especially on an island. It kinda hits Oh yeah,
Jimmy Lea: for sure.
Micah Storm: Hits the edge of the water and comes right back at you, and then hits,
Jimmy Lea: Ricochets. It just bounces all around the island. So what is one of the best investments you ever made in your business? Whether it's training a higher Go ahead.
Micah Storm: I say I'm gonna say the best investment is probably training. If you again, you train you're gonna learn how to either work on something new how to do something better. Again I think training is the best investment. Also s you know, personal training whether it's personalities and how to work with, I liked working with younger kids and helping them.
Understand, especially outta high school, they're trying to figure life out. Not all of 'em had a great maybe not a great upbringing, but I can help them grow and become someone that they, it's become somebody that's. They appreciate where they're at. They like it they're en engaged in society.
One of the kids, one success story we had is one, one of the kids that hired in high school, he washed cars and did stuff like that. But he runs a boat building business now that has, I think, over a hundred employees. They do. So they have government contracts that's like a. It's, he has 60,000 square foot facility he just built for be able to paint.
Again, it's just to watch, teach them when they're young, out in high school and help them grow and understand and see, they may not stay in this industry, but it's rewarding to see where they end up. It's training, it's it's business training, it's personal training. It's, it's that's one of the biggest, I think the best investments.
Jimmy Lea: Oh, I love it. I love it. Alright who should I interview next? Who is someone that you respect in the industry that's doing it the right way, that you think, oh, you know what, Jimmy, you need to do a podcast with this person.
Micah Storm: Oh, Todd Innsworth.
Jimmy Lea: Oh, I'd love to talk to Todd. Do you think he'd do it?
Micah Storm: I'm sure he would. Oh, he's, oh yeah.
Jimmy Lea: Okay.
Micah Storm: Yeah.
Jimmy Lea: I'm gonna tell 'em you, you sent me over. Oh,
Micah Storm: okay.
Jimmy Lea: All right. Lightning round. Here we go quick. Okay. One word answers or one sentence answers. You ready?
Micah Storm: Okay.
Jimmy Lea: One word that describes your shop's culture.
Micah Storm: Team.
Jimmy Lea: Team. Oh, I love it. Your number one daily. KPI. You glance at first. We talked about that, but you don't have numbers that you're looking on the regular,
Micah Storm: I guess capture rate of our estimates.
Jimmy Lea: Yeah. Hardest position to hire? Four.
Micah Storm: I'd say a tech.
Jimmy Lea: And by the, how many texts do you want right now? Two or three?
Micah Storm: Two.
Jimmy Lea: Two.
Micah Storm: Use two.
Jimmy Lea: Give Mike a call. Favorite vehicle to work on?
Micah Storm: Don't laugh, a Volvo two forties. The wagons, the sedans. No way. Yes.
Jimmy Lea: That's hilarious.
Micah Storm: I know those are like back of my hand.
Jimmy Lea: That is awesome.
That's hilarious. What's the car you hate working on the most? Are you secretly dread working on
Micah Storm: Land Rover?
Jimmy Lea: Best tool you've ever bought?
Micah Storm: I'd say software. D The dvs.
Jimmy Lea: Yeah.
Micah Storm: They can pay for themselves.
Jimmy Lea: Oh, totally. Amen brother. Amen. What's a habit that made you a better leader?
Micah Storm: Practicing emotional intelligence. That's, yeah.
Jimmy Lea: Love it. What's a book that shaped how you run your business?
Micah Storm: It's actually probably I gives you two. One is the ideal team player. That's yeah, that's an awesome book for hiring people. I can't tell you enough about that one. The other one I think is, like I said, probably Emotional Intelligence 2.0. Those, the two books?
Jimmy Lea: Yeah. That emotional intelligence one, that, that's a heavy read man.
It. It's intense. It's got a lot of really good information in there. I'm in the middle of reading the emotional intelligence again. Yeah, because I've read it once and now I need to go back and read it again. Biggest time waster in most shops.
Micah Storm: I'd say
probably the biggest time waster. I'm gonna see him. I look employees not getting along. And I, you deal with drama. I think it wastes a lot of time in, in most shops. I think we're lucky at ours. We hire again for the personality, not the talent.
Jimmy Lea: Yeah. Yeah. What is a non-negotiable standard?
You refuse to compromise on
Micah Storm: quality.
Jimmy Lea: Amen, brother. Finish this sentence. The future of the collision and service industry belongs to shops that
Micah Storm: adapt. You have to adapt.
Jimmy Lea: Yeah, you do. You do. It's an ever changing world.
Micah Storm: Yeah.
Jimmy Lea: Ever changing world, man. Awesome. Micah, thank you so much for joining me, brother.
I I really appreciate it.
Micah Storm: Thank you. Appreciate that.

195 - Ask Me Anything: The Questions Every Auto Repair Shop Owner Should Be Asking

195 - The Questions Every Auto Repair Shop Owner Should Be Asking
March 13, 2026 - 00:53:14
Show Summary:
Entrepreneurial drive can turn destructive when shop owners chase ideas without discipline. Impulsive spending and constant pivots create stress at home and in the business. Stability comes from personal responsibility and honest self reflection. Counseling and trusted advisors help owners slow decisions and see problems clearly. Strong routines and clear boundaries create healthier leadership. Long term success requires better communication and the courage to address hard truths.
 
Host(s):
Lucas Underwood, Shop Owner of L&N Performance Auto Repair and Changing the Industry Podcast
Cecil Bullard, Founder of The Institute
 
Show Highlights:
[00:00:36]  – The episode opens with a tough question about destructive cycles in shop ownership.
[00:01:40] – Repeated impulsive decisions and constant pivots are framed as warning signs.
[00:03:15] – Counseling is presented as a strength, not a weakness.
[00:05:27] – Serious debt becomes a key marker of unhealthy behavior.
[00:07:31] – Big purchases need structure, delay, and outside accountability.
[00:10:00] – Routines and systems can reduce stress and prevent bad decisions.
[00:15:12] – Personal responsibility is essential for change and long term stability.
[00:18:12] – Boundaries and better responses can shift unhealthy relationship patterns.
[00:28:12] – Avoiding hard conversations allows damage to keep growing.
[00:38:10] – Calm, fact based conversations build trust and create a path forward.
 
In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?
Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.
 
👉 Unlock the full experience - watch the full webinar on YouTube: https://youtu.be/_vTLf1P2xbM
 
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________________________________________
Episode Transcript DisclaimerThis transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.
 
Episode Transcript:
Lucas Underwood: Welcome, welcome, welcome. Thank you everybody for being here today. I am here with Cecil Bullard. Cecil, how are you buddy?
Cecil Bullard: I'm doing fantastic. Lucas. You know, it's, uh, it's not Friday, but it's, uh, but we're almost there.
Lucas Underwood: Close up, right? We're getting there. Uh, Cecil. Hey, listen, so I got a message last night.
Okay. And it was a little concerning. It was from a dear friend of mine, um, and it was, it was actually from his wife. And, and they're going through some struggles right now. You've been doing this a long time. They're shop owners, and I just want, I've, I've summarized the message. I'm not gonna, uh, expose who they are or anything like that, but I've summarized the message, I've brought it way down.
I have a couple questions that I wanna start with in this episode. We're gonna dive off the deep end in this. Is that okay with you?
Cecil Bullard: Absolutely. I'm ready to go with you.
Lucas Underwood: Okay. In the shop owner world, how do you distinguish between normal entrepreneurial stress and behavior that might signal a deeper mental health issue?
I know of a shop owner who goes through repeated cycles of extreme enthusiasm and big decisions, buying equipment or vehicles, talking about expanding to multiple locations, launching new services like towing or obsessing over competitors. Then shortly after they regret the decision, get discouraged, withdraw, or pivot to something completely different.
Now, Cecil, this is not just once we've seen this cycle. This, this is, we're, we're 10, 15 times deep at this point. The pattern also shows up financially, large, impulsive purchases or debt in leadership difficulty with sticking with a plan. And they, they, they'll say, Hey, we're gonna do this. And they'll, they even have a coach and they'll say, Hey, I'm gonna do this.
We're gonna make this happen. Then it all falls apart and in constantly chasing the next big idea, instead of stabilizing what they're already doing. Right. Like they, they have it together. All they have to do is be there and lead and guide their team and take 'em to the next level. So the first question is, how common is this cycle in the industry?
Cecil Bullard: Well, I, I would tell you, you know, after, I don't know, 27 years or whatever it is of doing this, that, that the cycle's very common. Um, and I don't know. I don't know that it's an industry challenge as opposed to a human being challenge. I used to think there was a normal, like, Hey, maybe I'm normal or I'd like to be normal.
Yeah. And um, the older I get, the more experience I have, the less I think there's a normal. Okay.
Lucas Underwood: Yeah. And so hundred percent.
Cecil Bullard: And so number one, right? Um, entrepreneurial spirit means, uh. I want to do something. I want to do something special. Certainly I've had that entrepreneurial spirit. I'm also, um, a little bit obsessive compulsive and a little bit manic depressive myself, and a lot of the people in my family have these traits.
My mother was way manic depressive.
Yeah.
Cecil Bullard: Um. Even bordering on what, what most people today would call mentally ill. Right. And so, you know, learning to, to deal with that, learning to deal with it in your own self.
Lucas Underwood: Mm-hmm.
Cecil Bullard: And, uh, you know, I would say unfortunately, most of us are kind of blind to it ourselves.
Yeah. 'cause when we're in the, if I'm in the moment, like this new thing that's so exciting and everything
Lucas Underwood: Right.
Cecil Bullard: Everything else goes away. Right.
Lucas Underwood: Yeah.
Cecil Bullard: Um, I could be, I could be called, I mean, my wife could have called you and. Maybe he told you the same thing. Uh,
Lucas Underwood: yeah.
Cecil Bullard: Pattern over years and years and years.
I'm so excited about this new shop and, and I'm gonna do that. And then, and then it gets a little hard and I get distracted. And now I'm over here doing this other new project and this other new project, even the institute, um, if it weren't for other people here that could stay focused on one thing, um, we couldn't be where we are or who we are.
If it was just up to me, 'cause I would be moving around too much.
Lucas Underwood: I resemble that remark. I really do. Yeah. And here's the thing is, you know, I was diagnosed with generalized anxiety and went and spoke with somebody and, and I got really lucky because I found a therapist who I really connected with and, and first of all, I just wanna say like.
I know we're supposed to be big, strong, tough men. There's nothing wrong with going and talking to a therapist. As a matter of fact, I think if you want to be your best version of yourself, that you should do it even if you're perfectly healthy and you don't have any concerns whatsoever. I,
Cecil Bullard: I think that, uh, I don't know, 35 years ago I was, um, the guy that said counseling, no way.
Never for me, not gonna happen. Yeah. You know, blah, blah, blah. Had a problem. My wife, um, was ready to divorce me. Uh, we went to see a counselor. I, I would tell you that is some of the best money I've ever spent in my entire life.
Lucas Underwood: Yes.
Cecil Bullard: Yeah. Uh, learning, learning, learning skills that you don't have. It's like, it's almost like getting a coach, um, you know, for your, for your business.
Okay? You have a coach telling you, Hey, you should raise your labor rate, or you should fix your parts margins, or, here's how you manage people, create process, you know, all of that. In a, in a, um, a situation where I might see someone, a counselor, um, that counselor is probably helping me create strategies for me to deal with the world, right?
Yeah. Because again, I don't, I don't think there's a normal, my mom,
Lucas Underwood: amen.
Cecil Bullard: Was very abusive. My dad was a, a wonderful guy, but not home. He was obsessed with work. And part of that, I think as I've grown older was that I think he didn't want to be home because there was a crazy woman that lived there with his kids and
Lucas Underwood: Yeah.
Cecil Bullard: And uh, what, and back then you didn't divorce. I mean, you know, that was no way. And, um, yeah. And so you have, I don't know, you said something I think's important is, you know, when is it? Normal or, or up to what point. And then when, yeah, and I think, I think if you're getting yourself in serious financial debt.
Yeah. So, you know, and then, Hey Cecil, what's serious finance of debt? Oh, I don't know. A million. Eh,
Lucas Underwood: it's not that much. Well put this way,
Cecil Bullard: but serious. If
Lucas Underwood: it's this way, if it's, we went and bought $140,000 truck. Yeah. We financed it at a very high interest rate, and now we wanna refinance the house.
Cecil Bullard: Yeah.
Lucas Underwood: Because we've also stuck some other financing in that truck too.
Cecil Bullard: Well, and the problem is that you, you, you, you work all your life to. Like pay off the house and all of a sudden you're financing the house because you've gone out and spent money in places that you shouldn't have done. Yeah. Right. And I have people in my life that have spent lots of money, got, got themselves in serious, serious debt.
And I, I mean, don't get me wrong in business, to me, debt kind of comes along with business if you're going to push the envelope and try to do things that other people aren't doing. Right, right. So
Lucas Underwood: yeah, for
Cecil Bullard: sure, for sure. If for sure, if the opportunity came along right now for me to buy. Another company that made sense that, that I thought would be really great for the, for the institute, et cetera.
I, I'd go do it and I'd get in debt to do that.
Lucas Underwood: Right.
Cecil Bullard: But, but I think if you're not, if you're not stopping and spending, you know, 48 hours or maybe even a week, thinking about the consequences and how you're gonna make the payments and what does that really look like, and
Lucas Underwood: yeah. You know, Warren Buffet once said, he said, if somebody wants you to make a decision right now, it's typically in their favor, not yours.
Cecil Bullard: It's a bad decision. Yeah. And it's almost always gonna be a bad decision because
Lucas Underwood: yeah,
Cecil Bullard: you're caught up in the moment. Especially if you have like obsessive compulsive romantic depressive, you know, if you're manic, you'll do almost anything. And then if you're depressive, you'll do almost nothing. Right.
And it's, there's not an InBetween. Right, for
Lucas Underwood: sure.
Cecil Bullard: For sure. The switch is either on or off.
Lucas Underwood: How important. So, so for me personally, right, the, the way that I've mitigated some of the anxiety and some of the other things, now, I'm not gonna lie, and I think you know this, the way that I've really managed my anxiety is I have put so much on my plate.
I don't have time to worry,
Cecil Bullard: to think about anything else, right?
Lucas Underwood: Yeah, yeah. Exactly.
Cecil Bullard: That's, that's what I do.
Lucas Underwood: Yeah. But, but you know, the big things for me were, is that we built systems around my life, right? And standardized systems. Yes or no.
Cecil Bullard: Coping, coping, coping mechanisms. Exactly. Um, so I have, um, I have anxiety, uh, when I'm in big crowds and you would think, oh, well wait a minute.
That's Cecil. He, you know, he, he's there a lot. But you'll see me, um. Accounting, uh, doing different things. Right. And those are coping mechanisms that, that you develop over for sure. Um, a lifetime to, to reduce the amount of stress that you feel under certain situations, right?
Lucas Underwood: Yeah,
Cecil Bullard: absolutely. Um, and, and, and that's another thing that a counselor will help you with, right?
Um, so as an example, I have a shop owner and his wife, and he's a nice guy. I, I, I, I've, I've, I've known him for a hundred years and. I was working with him probably 10 years ago.
Lucas Underwood: Mm-hmm.
Cecil Bullard: And the wife, um, was working with him and he was borderline abusive with her in front of, verbally abusive with her in front of staff, in me, staff meetings, et cetera.
And she, all she did was cry and, and, and leave and shut, you know, run away. And, and, um, I had a talk with her and I said, what can you control? Can you control him? No, you can't. Right? It's, it's up to him to control him. But, but you can control yourself. So what you're currently doing is not getting you what you want.
The kind of behavior. Yeah. How you're treating him, how you're dealing with, sure. What he does somehow is making him feel bigger or better or whatever, instead of the other way around. I said, what if we tried a different behavior? And I think that's what, I think that's what you, you do when you have counseling.
You have a counselor that says, well, yes, you're not able to communicate this way. So. What if you did this instead, right? Yeah. What if your behavior was different? Um, um,
Lucas Underwood: because I, I think that's,
Cecil Bullard: yeah,
Lucas Underwood: I think that's huge. And, and look, here's the other side of that is, is one of the things that I worked on was routine.
My wife has been phenomenal for me for this because it's like when I come home, I put my keys in a certain place. And when I get up in the morning, I know where my keys are. That's, and she, she helped me build those routines that add some, some safety for me. Stability. Does that make sense? In other words?
Cecil Bullard: Yeah.
Lucas Underwood: It's, it's less stress. It's like I just know what to do and it's not something I have to think about. And, and those were things that we worked on and, and building routines in your life that protect you from behaviors. Right. I'm not saying that like you can protect yourself from every behavior in every episode, but you can create routines that help prevent things.
Cecil Bullard: Well, and so if you go around and say spending money
Lucas Underwood: Yeah.
Cecil Bullard: Um, maybe I have some limits that I put on that, that I can't make that decision without talking to two other people. Yeah. Like, uh, uh, I'm gonna talk to my wife if I'm gonna spin. A lot of money. Mm-hmm. I, I'm not, and, and, and by the way, for me, I'm not really asking permission.
I just need her to know what I'm thinking. Yeah. What I'm up to and to give me some counseling around whether or not I'm thinking Right. Or, or not thinking. Right. Yeah, exactly. That outside perspective, I may still do it. Right. And then maybe you have a business, uh, coach or a, or, or a mentor that you also have a con, so you say to yourself, okay, I put ourselves in financial.
Uh, risk too many times. Alright? Yeah. And too many might be twice, right? I mean, you've got, you, you, you work and work and work and you build and build and build. And then all of a sudden, you know, because you're in a manic state, you or you might be depressed. And the way out of it is to go buy $140,000 truck.
Um, right?
Lucas Underwood: Yeah.
Cecil Bullard: And so if you create some rules around that or structure and you say, okay, I can't spend more than 10 grand without, yeah. Going and having a two conversations, one with a, a, you know, a, a, a peer counselor and maybe one with my wife or my spouse, or, you know, whatever that is. Right?
Lucas Underwood: An outside perspective, something to slow the process.
Cecil Bullard: So, yeah, because at very least. If you, you know, if we waited a week and we thought about it and we said, man, I'm paying whatever it is, you know, 18% interest on this thing, 140,000. By the time I'm done, I'm gonna pay $400,000.
Lucas Underwood: Yeah.
Cecil Bullard: Um, is that a smart decision or not? No. It's probably not a smart decision as much as I want that truck.
Uh, the truck I got Will, will do. Right.
Lucas Underwood: Exactly.
Cecil Bullard: A
Lucas Underwood: hundred percent. And
Cecil Bullard: so structure, which again, a counselor, you know, my dad, uh, didn't cry. My dad didn't tell me he loved me, you know, until he was on his deathbed and, and I heard it. Right. Um. As he got older, I think he realized that, you know, real men can cry.
It's okay. Right? Yeah, sure. In fact, maybe we should every once in a while, you know? Yeah. Just to, just to let some of that out. Um, right. But, but I, getting a counselor, if I, if I was doing. I do crazy things all the time. I mean, I think most of the people around me are like, man, that guy is wired. Yeah,
Lucas Underwood: that's what we hired Michael.
Or for, I don't know if you know that or not. Yeah. But
Cecil Bullard: yeah, that's Keep an eye on
Lucas Underwood: me.
Cecil Bullard: No, I think that's Wayne and Kent, the two of them kind.
Lucas Underwood: No, they're the enforcers. Michael's the one that's saying red flags, boys red
Cecil Bullard: flags. Watch out. But, but I think, I think if you understand that, yeah, and, and again, not.
What's normal, right? I mean, if you, if you really wanted to know what's normal, it probably really is someone going out and buying $140,000 truck because they're depressed or because they're upset or because they're not getting out of their relationship what they want or their business what they want.
And that's probably more normal. And so they, but that's also destructive behavior, right? Yeah. And so I think the way you know Lucas is, is my be behavior destructive to me or. Other people around me. Right. Yeah. That's the, maybe that's the judgment call, right?
Lucas Underwood: Yeah. And I, I think in a lot of ways, you know, for, for one, I, I've gotta say this.
Jordan Peterson said something, I was watching one of his videos a while back, and he said, I am a firm believer that about 70% of all the people who come into a clinical psychology practice do not have mental illness, but their life has become so complex they don't know how to manage it. And, and my job is to break that down and help them begin to find tools to navigate through that.
In this case, this individual, every single time we've gotten here. Has come up with a, a reason, an excuse that it's not them. And they begin to place blame on everything around them. And it's all, well, that's, it's this, no, it's this. No, it's this. No, it's this. Instead of taking that ownership.
Cecil Bullard: Well, that's kind of the other thing.
And I, I, I don't, I don't, I think you and I actually kind of had this conversation. It's about taking in our podcast we did last week.
Lucas Underwood: Yeah.
Cecil Bullard: Yeah. Are you taking personal responsibility or not, right? Yes. Am I blaming this on everything else? I mean, here, here's the deal. Uh, as I grew up, my mom was physically, verbally, mentally abusive, right?
I mean, literally for the first 13 years of my life, she told me what a worthless.
Lucas Underwood: Yeah.
Cecil Bullard: X, X, X, XI was every day, many times a day. Right. And, and that was often accompanied with anger. Mm-hmm. Um, being kicked hit with whatever there was. And, um, and so you, you grow up with that and you're like, well, you know, I'm, I got my weird stuff because it's my mom's fault.
Right, right. So I'm gonna let, let me blame my mom. Well, if you blame mom, you can't get, you can't get rid of it. You can't get out of it. Right, right. If it's not, if it's not what you do. Who you are, right? It's someone else's in control or, or something that happened to you 10 years ago. Amen. Now controls your lives.
Amen. Then you, you're stuck. You're trapped.
Lucas Underwood: Exactly. When you own the problem, by God, you own the solution.
Cecil Bullard: Yeah. And you know, I think that that, number one, that might give you a little more frustration, right? Yeah. So why am I feeling like this? Oh, well your mom was mean to you and she told you you were worthless.
Okay, so. But, but you also can, if, if you're, if you can be aware. And if you can say, okay, you know, when was the last time? I mean, my mom's been gone for 10 years now, maybe 12. And, and, um, prior to that, I didn't, you know, for the last 30 years of my life, I really haven't, she hasn't been in my life in the way that she could influence my life on a daily basis.
So, for the, at least the last 30 years, who's had control of my life. Yeah, well, guess what? This is the guy, right? Amen.
Lucas Underwood: So every, if you leave
Cecil Bullard: that
Lucas Underwood: toxic person in your life,
Cecil Bullard: yeah,
Lucas Underwood: hey, that's still your fault, right?
Cecil Bullard: Like, I hate that. And the other thing is like that, but so, so putting it down in, in, in kind of shop owner, uh, uh, you, you asked about like in the shop.
So yeah, I teach classes about management, leadership and sales and, and you know, I'll say, here's what you probably ought to do and yada, yada, yada. And, and. At the end of almost every class, I have someone come up to me and they say, well, my owner won't do this or won't do that, and yet the owner's the one that paid for you to be here.
And so
Lucas Underwood: right.
Cecil Bullard: For me, it's like I have to decide what I'm willing to accept in my life. If I went home and my wife started yelling at me about, you know, what a worthless piece of crap I am. I've look at me, I'm 64 years old and I haven't been financially successful yet, and I'm in debt and, and you know, oh, you're always gone and you're, you know, blah, blah, blah.
I'd get rid of her. I mean, and it's not like I don't love her, right? Yeah. But I can't have that, uh, acidity in my life.
Lucas Underwood: Yeah.
Cecil Bullard: Right. It's not healthy for me. Right. And if I'm not healthy, I can't help other people around me be healthy. Right. A hundred percent. So Kent calls it setting boundaries and Yeah.
Lucas Underwood: You
Cecil Bullard: know, sometimes I think God.
Damn Kent, you have a boundary for everything. But maybe that's the right thing is, is really right. Being very clear about what you need or what you want or, or the boundaries in your life. Right?
Lucas Underwood: Exactly.
Cecil Bullard: And I, yeah, and then, so I had the conversation with the, the wife and I said, well, what if instead of this you did something different instead, just say, instead of crying and, and rushing out and you know, et cetera.
What, what if you said. You know, I don't think that's really appropriate here amongst the employees to have that conversation right now, to be, to, for you to treat me that way. Yeah. And and she did. And guess what?
Lucas Underwood: He stopped.
Cecil Bullard: Yeah. Right. So I, I think. Part of the, for me, I want to have control over my own emotions and my own life.
And that's, that's hard, right? Yeah. And sometimes it's not even possible. I mean, I'll see some weird movie and I'll, it, it'll make me cry. Right. Right. And I don't, I, I don't even know why. Right. Yeah. I'm just like, I. Why am I crying about this is the stupidest thing and here's this, you know, 64-year-old guy sitting there, oh my God, you know, he's dead and blah, blah, blah.
And I'm like, that's not even real. It's just a damn movie. But most of the time, I'm, I go, okay, this is what I'm willing to accept or not willing to accept. And, and when a service advisor comes to me or a manager and says, my owner won't X, Y, Z, right? My, my advice is this, first of all. Figure out do do the pluses of being in that place and, and working for that person.
They outweigh the minuses, right? Because the minuses are gonna be there. I you, you've been, I don't know how long you've been married. Um, I got four kids. I got four kids ranging from, I don't know, 30 to to 40. Right.
Lucas Underwood: Right.
Cecil Bullard: And, and they have given me grief, uh, and pleasure beyond, uh, what I thought I could endure.
I mean, right. You know, happiness, that, that, that is, is overwhelming and pain. That's overwhelming. And do I think that in the next 20 years that's gonna disappear because I, I just want it to No, it it, you ha you're in business. Business is always a challenge. I mean, don't, don't be wrong. There might be days here where nothing goes wrong.
I don't have any clients that are upset or everything's perfect, you know? No, no employees. But you know, the bigger your business gets, the more people you have in your life, the bigger your family gets, the more opportunity to have challenges. Right?
Lucas Underwood: Yeah, absolutely. I, you know, Cecil, the very first business coach I had, I called him one time and I tears in my eyes so upset over all these things that have gone wrong, right?
I said, man, I said, I just want all these problems to go away. And he said, son, you listen to me when all those problems go away, you're dead.
Cecil Bullard: Yeah.
Lucas Underwood: Let's get rid of problems. If we think we're gonna escape the struggle of life, we've lost our minds. Right? Yeah. Like struggle is part of life. Sacrifice and pain is part of life.
We can't just expect that to go away. I think it's, we can work to make it better though.
Cecil Bullard: Yeah. I think it's part of growth though, too. I mean, how do you. How do you experience extreme, um, joy without having experienced extreme sadness? Right. You know, you, you know, you know, family dies and passes away and, and that's challenging, right?
Yeah. I mean, it's extremely challenging. Some people more than others, and. And if I think that's not gonna happen to me, um, I, I am crazy, right? Yeah. I mean, and I for
Lucas Underwood: sure,
Cecil Bullard: I love talking to owners. 'cause I'm like, well, today, this morning I'm talking to a guy and he's got a service advisor and it's a, this person's a problem.
They've literally decided that his pricing's too high and that the community can't afford anything and blah, blah, blah. And his sales have dropped by 40%. I'm like, dude. He's like, yeah, I don't, you wanted this. Yeah, you bought the business. You signed your name to the the lease. You're the one that's responsible.
You have to make decisions, and if you think that you're gonna have a business and never have any paying you. Yeah,
Lucas Underwood: aint, go
Cecil Bullard: ahead. You are, you're gonna be disappointed a lot in your life. It's, yeah, it's, and I don't know. For me, the challenges are things that make it exciting, not necessarily when I'm in the middle of it, and it's the most painful or the most stressful.
Right. But you know, before thinking about, well, man, we could do this or this, and then after thinking about, man, we solved that problem. It's, it's, it's what makes the highs, right?
Lucas Underwood: Yeah, exactly. A hundred percent. So let me ask you about my friend. Um, for one, when does it cross from normal entrepreneurial volatility?
Like, when,
Cecil Bullard: when, when is it? When it's hurting the people around you now, now I, and I don't mean in a sense of, well, my wife's mad at me. Okay.
Lucas Underwood: Right.
Cecil Bullard: My wife has been mad at me a lot. And I'm pretty sure that, you know, I've made some decisions and she's just shaking her head going, I don't know what that idiot's doing this time.
Right. And yeah, but she doesn't, she, she, she's non, she's non-confrontational. Married a woman who's non-confrontational, which for me is probably good. But
Lucas Underwood: you'd have been dead
Cecil Bullard: by now if I'm, if I'm putting my, my family
Lucas Underwood: in
Cecil Bullard: jeopardy at risk. Now, and, and again, there's different risk tolerances. So for me, you know, when I first signed my first house, it was a hundred thousand dollars and I thought it was the end of the world.
My God, I'm gonna, I'm gonna owe forever. And how am I gonna make these a thousand dollars payments? Well, you know, I bought another business. I spent over a million dollars on it, um, and, and most of that debt. And so I think, you know, tolerance of risk is different for different people. But if I'm really putting myself in a position where I'm, I'm accepting 18 or.
25% interest because I just gotta have this right now that is not healthy, right? If I can't recognize that, that's a behavior, that's probably not a good behavior to have, then it's not healthy if, if, if I can't talk to my wife about it and, and have an open conversation that's not healthy. Right. And so I think, I think every, I don't know, most shop owners I know have this entrepreneurial spirit.
And it's different than, than the people that just come to work for you. Right? Right,
Lucas Underwood: right. For
Cecil Bullard: sure. And thank God that we have that, because otherwise there'd be no businesses. There'd only be people that need jobs. Right. And
Lucas Underwood: yeah.
Cecil Bullard: But is it. I don't know. There's harmful relationships, which you have to be careful of too because, uh, I don't, I don't know their situation.
I don't know them like you do. And I don't know if, if, is the wife contributing to this
Lucas Underwood: Yeah.
Cecil Bullard: Or not. Sure. But that's, that's why I need a counselor here. That's why I need to get somebody in the middle.
Lucas Underwood: Yeah.
Cecil Bullard: Who's trained and who, uh, who who can go, that's not healthy. And maybe I go first. Yeah. And then maybe I invite my wife with me down the road once I've figured out that my behavior is not healthy.
Lucas Underwood: You bring up a really valid point is, is in life and in relationships there's casualties, right? Yeah. And, and so I impact my wife, whether I'm mean to or not.
Cecil Bullard: You impact a lot of people, whether you mean to or not, right?
Lucas Underwood: Yeah, exactly. And, and what I say and what I do matters, and sometimes I'm not polished on what I say and sometimes I'm not paying attention to how I'm acting and I'm letting emotion control, you know, I tell people all the time, there is no room for emotion in business.
It doesn't work. I've tried it. Right. Like I, it just does not work for me. And so if, if I am having emotional responses, there's a chance that I impact someone I love and someone I care about. And I don't think that we can have a relationship without negatively impacting that other person at times. I don't think there's a way to avoid that.
Cecil Bullard: Well, yeah. No. No matter what. Yeah. No matter what we, you know, and that's the. Give and take of relationships. I mean, yeah. You know, you and I, I, I've been married for I don't know how many years now, 43. I think we just celebrated our 43rd anniversary and, right. Yeah. Congratulations. Thank you. It, it's been tough, right?
Yeah. I mean, probably harder on her than me. Yeah.
I,
Cecil Bullard: you and I, and you and I have known each other for a long time, and I'm pretty sure that at some point you've probably said, ah, man, that Cecil, I just, you know, I pissed you off at some point, or I said something that you didn't like, or that's where.
That's where understanding the human condition and having some love in your heart and, and some forgiveness in your heart is super important, right? Yeah. I mean, I, I would say in this particular case, I think both, uh, the, both spouses need to look at how they're interacting with each other. Okay. And, and so who knows?
You know, why, why does someone do that and put the family at risk and then wanna mortgage the house? Uh, you know, we, my wife and I, not too long ago, we had a 7,000 square foot house. The kids were gone. Uh, my wife is not as physically able as she used to be, so she can't get down on her knees and clean the bathroom.
And, and I, and I have a hard time doing that. And
Lucas Underwood: yeah.
Cecil Bullard: But I'm also a clean freak, so, so the bathroom's gotta be clean and, and I couldn't keep up the house and I, so I, I put the house on the market and I did tell her, and we had a conversation, but she was very resentful of that. Right. You know, we've lived here for 28 years.
This is my home, and you're selling my home out from under me. And we went to, we went to see a counselor.
Lucas Underwood: Yeah.
Cecil Bullard: And the counselor said, you know, Cecil, why are you doing this? I said, I, I, I can't keep it up. I can't, like, I can't, I can't live in a filthy condition. It's not in me. Right.
Lucas Underwood: Right.
Cecil Bullard: Um, and, and I can't do all of it myself and my wife is not physically able to do that.
We need to be in a more controlled situation. And the counselor looked at my wife and, and said, he's not trying to take away your home. He's trying to create a home that the two of you can live together well, that you can both be comfortable in. And, and so that was. You know, it took a counselor, I think, to help us both, to come to terms with that.
We still sold the house, right? Yeah. And, and we're moving on with our lives, but we can become resentful and we can do all kinds of, um, behaviors that we might not even know we're doing. To prove a point or to create something that we're just unaware of.
Lucas Underwood: How often are these situations caused by our avoidance of hard conversations?
Cecil Bullard: Oh, we don't communicate. That's a real problem. Like we don't talk about things, Hey, I'm feeling like this. Why? Why I'm not supposed to. I'm a man.
Lucas Underwood: Yeah,
Cecil Bullard: right. You, you started this out kinda like, well, yeah, real men don't cry and we don't talk about our feelings and we don't, I mean, I, if I'm disappointed in, in my family or my wife or, or my, even my employees or, or whatever, I'm like, I don't want to have that conversation.
That's not a comfortable conversation. Right.
Lucas Underwood: For sure.
Cecil Bullard: But I think, I think if you don't, if you're not able to have that conversation, then it doesn't get better. It gets worse. Right. So your behavior gets more
Lucas Underwood: coming back to Kent's boundaries, right?
Cecil Bullard: Yeah. Right, right. And Kent's boundary's, like my boundary would probably be further over here and he, but his boundary's here, but he has a very solid boundary.
And Kent gets mad at me 'cause like sometimes I don't have the boundaries that I need. Right. Yeah. He feels like, Hey dad, you're not, you're not you. Why do you put up with this? Why do you let so and so do this to you and whatever? And I'm like, well. You know, I, I am who I am, right? Yeah. And
Lucas Underwood: yeah.
Cecil Bullard: And, uh, which is an imperfect human being.
Who, which is what I'm supposed to be. Yes. You know, working on doing the best I can every single day. And I would go back to am I taking personal accountability, right,
Lucas Underwood: right.
Cecil Bullard: For my actions and the results of my actions. And then am I harming the people around me, right. Yeah. Or not am I adding And, and I can't go through life without creating some harm.
Right, but am I, am I continuously, am I consistently creating harm and danger, uh, in the lives of other people? Who cares if I go broke and I, you know, end up
Lucas Underwood: Yeah.
Cecil Bullard: You know, being homeless, I'll go live on a beach in Hawaii or something, but, but, um, what if I take my family with me, or I take
Lucas Underwood: yes,
Cecil Bullard: my business with me and the people that rely on that?
That's not healthy. Right.
Lucas Underwood: Right. A hundred percent. A hundred percent. So let me ask you this. Now, we, we've isolated that it's not healthy. We, we've determined that something needs to be done, something needs to be said. But in many cases, especially with the shop owners that I've worked with, it's a very difficult conversation.
Very difficult conversation. Mm-hmm. And we have a really hard time getting them to acknowledge this and, and take ownership of this, at least to a degree. Or, or, and, and when I say degree, I'm saying like, Hey, some of this, not all of this, but some of this may actually be your fault and you have to do something to fix it.
Cecil Bullard: Yeah.
Lucas Underwood: And, and listen, I'm the same way. Like you, you, the, I guess it was a month ago, you came to me and said, you need to raise your labor rates. What did I do? I went in and I raised my labor rates while we were on the call. Right. I didn't ask, I didn't question, I didn't do anything. I just did what you said and, and 10 years ago I would've cried for two months about it.
Yeah, right. Like I would've complained. I would've fussed, I would've said that Cecil's an idiot. I would've, right. I would've come up with all these things, but I've recognized to shortened my pathway to growth, I have to take. Immediate action. When someone I trust gives me perspective and feedback, I, and I analyze the situation, right?
I know the data and I say, Hey, listen, I know they're not leading me wrong. I agree with them. It was uncomfortable, but I'm gonna make the decision and if there's a consequence, there's a consequence. This is what I'm doing. And so that takes time to acquire that. In this case, this friend of mine has been doing this for years, right?
Yeah. And never taking it. And it, it, we get better, we get worse, we get better. And I listen. If there's anything that's ever exhausted me about myself in my life, it's the seesaw.
Cecil Bullard: Yeah.
Lucas Underwood: Going up, going up, going up. Oh, back down, back down, back down, back down. Right. I can't like that will wear you out. And so you have to break that cycle.
How do we help them do that, Cecil?
Cecil Bullard: Well, you know, as a, as a coach who often is a counselor, um, I have to build trust with you to a point that if I make a comment or if I say, Hey, we need to do something, that you actually take that seriously. Okay.
Lucas Underwood: Yeah.
Cecil Bullard: And I also have to realize that. I can't just blindly go raise your labor rate.
Right. I mean, yeah,
Lucas Underwood: for sure.
Cecil Bullard: Because for you it's like, for me it's, it's just words I'm saying.
Lucas Underwood: Yeah.
Cecil Bullard: And I, I have a lot of experience to back all that up, but, but for you, it's, it's like, well, what if I do, and what if I lose all my customers? And what if, what if, what if, what if, what if, what if? So I have to build trust with you, and, and what we need to do as human beings is we need to not only find people, but create those relationships of trust with different people in our lives, right?
Mm-hmm. Yeah. So, you know, um. You and I have known each other a very long time. You came to some classes 25 years ago.
Lucas Underwood: Yeah.
Cecil Bullard: They helped you. You went to another coach, he helped you, you, you did some other classes, you know, and at some point we ran into each other and I said, okay, now it's time for you to be my client.
And we've developed, um. I think, uh, not just a friendship, but also a, um, like I trust you and I, I know that what you're doing is, is, is for the, for the best. You are always trying to do what you think is best. And I think that's the other thing, like if we're, if we're sitting around and going, why are they doing that to me?
Oh my God. They're, they're, they're, they're, you know why they always put me in this position. We either have the wrong people in our life or we don't have the right um, attitude.
Lucas Underwood: Right,
Cecil Bullard: right,
Lucas Underwood: right mindset, right perspective.
Cecil Bullard: Yeah. My mindset is, you know, if I have people in my company that, that come here every day and work hard every day and, and love the company and, and espouse the company thing, that if they make a decision, they're not making a decision necessarily that's in their own interest.
They're actually making a decision based on our foundational principles and based on, you know, what they believe to be. Best for the country company. Now, I might not agree with what they're doing,
Lucas Underwood: right,
Cecil Bullard: but if they're doing it in the best intention, right? Yeah. Then, then maybe this, this guy is doing what he's doing because he's really trying to provide for his family.
But, and what he sees is if I have this nice truck, then I'm providing for my family. If I, and by the way, I can refinance the house, I mean, that's no big deal, and I can get a lower interest rate
Lucas Underwood: insecurity.
Cecil Bullard: But the problem is you keep. You keep doing that over and over, and when you get old, you don't have anything of any value left.
Yeah. There's nothing there, right?
Lucas Underwood: Yeah.
Cecil Bullard: And, and so I'm, I'm just, I'm saying you need to, number one, you gotta cultivate relationships of trust in your life, and you, you need to trust somebody. I mean, I, it, it would be very easy for me never to trust anybody. I mean, the, the one person that probably should have loved me the most didn't and didn't have the capacity to do that their entire life.
Lucas Underwood: Yeah.
Cecil Bullard: And, and so, but again, I, somewhere in my thirties, and, and by the way, it took me a long time. I was in my late thirties. I finally said it, it's not me, it's, it was her. And, and so I have to learn how to be me and how to be good with me. Right.
Lucas Underwood: You know? There, there's, you've heard me talk about him many times.
He's passed away now. His name was Tim Kite. Mm-hmm. Um, and he owned Focus three leadership and he did a presentation, um, for Ohio State Football. He was the culture coach for Ohio State Football. And he said something that always stood out to me. He said, love. Is given freely, it's never earned, and trust is earned.
Yeah. And you better not mix those two things up. And he said, how do I gain trust through repeated behaviors? Yeah. You know that I'm gonna do what I say I'm going to do. Right. Well
Cecil Bullard: my,
Lucas Underwood: and I think that,
Cecil Bullard: yeah, go
Lucas Underwood: ahead.
Cecil Bullard: It might be scary too, though, because this, yeah. If this particular person has repeatedly put them in debt and
Lucas Underwood: mm-hmm.
Cecil Bullard: Bought large purchases and et cetera, I'm, I'm not building trust by repeated behavior at this point. I'm actually creating stress and, and other stuff by repeated behavior.
Lucas Underwood: Well, exactly. And, and that's what I was gonna say is, so now we, we take a step back and we say we're in a relationship. We are in a business partnership, right?
Like this is not just about relationships. This is gonna be partnerships too. There's baggage that comes along with this. There, there, there's baggage in a relationship regardless of what kind of relationship it is. That one time Mrs. Smith said this about me and I'm, oh, I'm very sad about it. But we remember those things.
Cecil Bullard: Mm-hmm.
Lucas Underwood: And we have a responsibility of saying, okay, I have to reset the dial here. At some point because I, you know, one of the things about marriage is, is that vow says. This is forever. This is a forever thing.
Cecil Bullard: Yeah. We're
Lucas Underwood: right.
Cecil Bullard: This is not just for a week or until I get tired of looking at
Lucas Underwood: you.
Cecil Bullard: Here's where
Lucas Underwood: it goes.
Goes better or worse. Yeah. And worse can be pretty worse. Right? So
Cecil Bullard: And they've done that.
Lucas Underwood: Yeah. So when we, when we're in these situations, we at some point have to reset the dial. And I, I think as, as business partners and as as folks in relationships and marriages, we've gotta back up and stop and say, Hey, wait just a minute.
One, as being in this relationship, I know there's parts of me that I'm gonna have to sacrifice. I'm gonna have to compromise with you, right? And to build trust, we're gonna have to compromise with one another to get back here. Right? I understand. I've done things that have upset you and you understand that you've done things that have upset me.
And so we have to come back and find a common ground somewhere because the water gets so muddy.
Cecil Bullard: But you, here's, here's. Am I, am I, how am I talking to you? How am I treating you? Yes. How am I approaching you? Because that's the, if my ego is hurt or if I'm mad,
Lucas Underwood: right?
Cecil Bullard: And I come to you and I go, Lucas, dammit, you son of a bitch.
You always X, Y, Z, right?
Lucas Underwood: Yeah.
Cecil Bullard: That's not healthy. That's not good. And by the way, that's never gonna get me what I need.
Lucas Underwood: Yeah.
Cecil Bullard: If, if I come to you and I say, Lucas. I'm really concerned, uh, uh, I'm gonna have a conversation with an employee, right?
Lucas Underwood: Yeah.
Cecil Bullard: I, I have rules around having those conversations. Number one, I need to have proof of the behavior.
Yeah. So if I come to iga, Lucas, I'm concerned about you. Because I've seen this behavior five times and here's five examples of that.
Lucas Underwood: Yes.
Cecil Bullard: And, and you know, when you're having conversation with people, it's a management technique. It's a counseling technique or whatever, you know, um, uh, I've seen this behavior.
Do you recognize that there's a pattern here, right?
Lucas Underwood: Yeah.
Cecil Bullard: Hey, can you see this with me? I see that. Okay, great. Now we're, now we, it's a completely different conversation, and unfortunately we let our hurt and our anger
Lucas Underwood: mm-hmm.
Cecil Bullard: And our disappointment and our egos get in the middle of all this, and we say things and we treat people in a way that's not healthy.
Right?
Lucas Underwood: Yep. A hundred
Cecil Bullard: percent. When I, when I start saying, well, you know. I don't know who I could pick anybody and go, well, you're this and you're this, and you're that. All of a sudden, all I'm doing is putting a big widge between us,
Lucas Underwood: a hundred percent man,
Cecil Bullard: and it's probably gonna create more of the behavior I don't want and not the behavior that I want.
We have to be so careful in our relationships and when we're talking to people, how we approach them and, and what we do.
Lucas Underwood: You know, growing up, and I've told you this before, um, I, I, and I love my daddy to death. Don't get me wrong. I'm not saying anything bad about my daddy. I don't want you to think that, but I remember growing up, if I grabbed a sandwich bag.
And I put a sandwich in that sandwich bag and it was the right size, he would tell me, why'd you use that bag? Because we don't have that many of that bag. Okay. Um, alright. And I would go to a bigger bag and he would say, why'd you use that bag? You shouldn't have used that bag. Too big. It's too big.
Cecil Bullard: Yeah.
Lucas Underwood: And then I'd have got a small bag. It doesn't fit in there. Right. Like that, that, that's how my dad was. And I look back and I recognize my grandmother was very much the same way with him. Right. That's how he was raised and that's how he raised us. And, and I have to be careful about that. But it also created a thing in me that sometimes when my wife says, so.
I, I respond and I'm like, boom, I can't believe you. Right? Like, I get emotional because of my pocket. I, I put
Cecil Bullard: whatever bag I want, you know, I'm an
Lucas Underwood: adult now, and she's right. I bought
Cecil Bullard: those bags,
Lucas Underwood: right? Whatcha talking about? Whoa. Yeah. And so she, she came to me years ago and she said, can you see that I'm on your team?
Can you see that I'm trying to fight the fight that you wanna fight, that we're doing this together? I'm hearing you. I'm not against you. Right? I want, and if you perceive something I'm saying is against you, you're not hearing what I'm saying. If
Cecil Bullard: there isn't a person that in my life that I don't want to see successful, there isn't a shop that I've ever met.
I mean, I have clients that left me and went to other places where I don't think it was the best thing for them, and it hurts me still today. Yeah, I see 'em and I'm like, oh man, and it hurts. And, but you have to, you, you, you, you kind of have to overcome those things and, and move those things forward or put those things in a place that you know how to deal with them, right?
Yeah, absolutely. My dad was, was very critical. You know, same thing, you know, I mean yeah,
Lucas Underwood: it was
Cecil Bullard: the
Lucas Underwood: generation, it was the generation he was raised in. It was,
Cecil Bullard: yeah, if I cleaned it, it wasn't clean enough. If I put it away, I didn't put away the way it was supposed to. If I. If I used it, it, it was probably the wrong thing, right?
Yeah. I, I, I wore my shoes out too fast and I grew too fast, so my pants were too short and, you know, and as a parent, I'm thinking, you know, and by the way, guess what? I've screwed my kids up. Just as much as my parents screwed me.
Lucas Underwood: Yeah.
Cecil Bullard: Right. Yeah. And not, not out of bad intention. Yeah. Just out of, you know, oh, I'm really stressed about work and I come home and things aren't, you know, kids are too loud and I scream at 'em instead of get in there and, you know, enjoy the time together.
Right.
Lucas Underwood: It makes me think of that Zig Ziglar story, Mr. B. Where he said that Tomcat was the only being in that entire equation who could not have changed the outcome of the circumstances. Right. Like sometimes we gotta be the thing that stops it. Sometimes we have to be the one to put the, the foot down and say, no, I'm not gonna continue this.
This is where we're stopping this. Well, it, it's a really great comment over here. I, I wanna read this book because I know we have a few minutes early, so there's really great comment. Um, it's Todd Ainsworth and he says, I think trust is not only an issue in creating the relationship with clients, but independent shop owners.
Are independent by nature, believe that they have a better way due to past experiences and have trouble believing other people, shop owners, coaches, et cetera, want to help them and not gain some sort of, sort of advantage by looking more closely at financials, et cetera. I have seen that time and time again, they, they tend to say, oh, you, no, I'm, I'm, he's out to do something.
There's a reason there. They wouldn't just want to help me for no other reason. Like, there's got to be something there, right? And so I think that's a really great perspective. Thank you, Todd.
Cecil Bullard: So if, if anything is unhealthy, healthy in my life, it's probably the, the driving force to try to change the industry and, and make it a better place for a lot of people.
I mean, because if, if I didn't have that. I would've done a lot of different things and I'd probably be a much wealthier person than I am at this point. Yeah, right. Yeah,
Lucas Underwood: a hundred percent buddy.
Cecil Bullard: Yeah, I That's a great co thank you, Todd, that, that's really a great, a great comment. But again, it's up to us to be as adult as possible and to recognize what's my part in this and, and, and I think, yeah.
We have to get conscious, and that's one of the problems that we're often unconscious about our communication. And we have to get conscious, especially when we have situations. So like if, if, if I have a real problem with my wife or one of my clients or one of my partners here at the institute, I mean, hell, I.
I never had partners. All of a sudden I got partners in the last couple of years and
Right.
Cecil Bullard: And that's not an easy relationship. I had to be very,
Lucas Underwood: you messed up. You went and hired some really, really, really, really
Cecil Bullard: smart, amazing people, smart
Lucas Underwood: partners.
Cecil Bullard: Yes, I did. Actually,
Lucas Underwood: they were very,
Cecil Bullard: well, somebody at one point, I think it was, um, I think it was, um, Covey or somebody who said, uh.
You really wanna surround yourself with people that are smarter than you.
Lucas Underwood: Yeah.
Cecil Bullard: Um, and I, I think you've outdone yourself a few years ago, I've kind of taken much apart. I
Lucas Underwood: you're much smarter
Cecil Bullard: than all of us. Yeah. I mean, I, I, we, we just restructured, um, did a lot of restructuring and I'm signing, I don't know how many pages of legal documents and I'm like.
Man, I'm either, I'm either doing the best thing for myself in the world 'cause I brought the right people in, or I'm gonna end up broken on the streets because I just gave away everything to everybody.
Lucas Underwood: I'm not reading all this. It'll be fine.
Cecil Bullard: No, I read, I read it, but it's, it's not easy to understand. Um, yeah, I, I think.
Y Yeah, but it's not an excuse. We use all these excuses like, like my mom or, or, you know, uh, today I heard, you know, president Trump, uh, the economy and, and the economy's bad. Well, if you're a business owner, you don't get to use excuses.
Lucas Underwood: Amen.
Cecil Bullard: Okay. If you wanna be successful, you have to be aware. You have to be awake, you have to be.
Knowledgeable, you have to be pursuing knowledge and, and finding out that maybe the way you did it for the last 20 years is not the way it needs to be done in the future. If you wanna really be successful. You know, that adage about doing the same thing over and over and getting the same results, right?
Lucas Underwood: Yeah, for
Cecil Bullard: sure. Um, and, and so back to the idea of counseling. There's never anything wrong with, with finding a good counselor. And I think you can do that. You might have to interview two or three, but, and then saying, help us. To communicate. Yeah. Uh, you know, you have, in this case you have a wife who's, who's concerned.
She's probably concerned for her kids, her future, her husband, their business, et cetera. And then you have a husband who is doing semantic behaviors, right?
Lucas Underwood: Yeah.
Cecil Bullard: And those are probably legitimate, meaning there's something behind all that that is, has brought that all forward.
Lucas Underwood: Yeah.
Cecil Bullard: And, but the first thing that really needs to happen.
Is they both need to sit down in a calm situation and say, we need help and find help.
Lucas Underwood: Absolutely right, because we have to realize that we're on the same team.
Cecil Bullard: Yeah. We're all, you know, we, my wife and I that years ago, my wife does so many things that piss me off, and I, I've said it more than once on a, on a, on a podcast and it's, it's, it's harmful for her to hear that.
So don't listen to this part, honey. But, you know, she's, she, she doesn't live her life exactly the way I want, and she's not, she doesn't do this the way I want. She doesn't fold my laundry the way I want. You know, those kind of things. Right. And, and, and so if I look at all the things that she does wrong, I can't be married.
Lucas Underwood: Yeah.
Cecil Bullard: And, and I don't know, 20 years ago I was just this negative guy who just was unhappy all the time. I said I have to change my perspective 'cause the world's not gonna change. My wife, we've been married 43 years, she's not changing tomorrow. She's not gonna wake up tomorrow and go, I'm gonna do all this differently.
Lucas Underwood: You're too hardheaded. Okay, listen. Oh yeah. My wife, she had me trained from the word go. She was right. Okay.
Cecil Bullard: Yeah.
Lucas Underwood: Yeah. She's not wrong ever. It's me. Okay. I just, I have gotten to the point that I accept it. I know it, I acknowledge it, and I just do exactly what she says. And, and believe it or not, my life gets better when I do.
Cecil Bullard: You're a smarter guy than I am.
Lucas Underwood: She's gonna kill me when I get
Cecil Bullard: but kind. This my, because she's like, bullshit. Um, but, but what I had to do was I had to make a conscious choice to not look at. The stuff that doesn't fit, but really mostly to look at the stuff that fits and that works well. And, and you know, I, it is, I, I love talking to my wife at the end of the day and going, here's where the business is at and here's what I'm thinking.
Yeah. And here's why I'm doing this. Me, and I mean, me too. There's anybody else I'd rather have that conversation with. And I've got, I've got Wayne and Michael and Kent and I do have lots of those conversations with them. Shouldn't
Lucas Underwood: hit the same.
Cecil Bullard: I like having the conversation with my wife.
Lucas Underwood: There's something different about, here's where we're going together.
Cecil Bullard: Yeah,
Lucas Underwood: right. Yeah. There's something different about your closest companion and having a conversation with them saying, I'm so excited to do this with you. So my wife hates talking about the business. Yeah. I swear she does. But that of all the things and, and I've had to be very guarded about this, but of all the things that provide me relief.
Being able to share how I feel about the business to her. Yeah. 'cause here's, here's the big thing, right? And, and this was a big thing about counseling for me, Cecil, is even you being as close as we are, there's things that I don't feel comfortable coming and telling you about the business. Now I do, I forced myself through it, but it's not comfortable.
Cecil Bullard: Yeah.
Lucas Underwood: When I went to counseling, I learned what it feels like to truly be vulnerable and say how I feel about something and not worry about being judged. And so I can talk to my wife. Let that out, and that's a big deal for me
Cecil Bullard: and understand from. Our, from our relationship. Um, I'm a coach and, and I'm a coach, and I'm a coach, and I'm a teacher, and it, it's just ingrained in me.
So, and, and because of whatever happened to me in my life and all the experience I've had, I, I, I have a gift or. Whatever to see things that some other people don't all often see and
Lucas Underwood: yeah.
Cecil Bullard: And so when I come to you and I say, Hey Lucas, I need to know this. Or Hey Lucas, I think we need to do this. It's never, we're on the same team.
Yeah. It's always, we're always on the same team. It's never, how do I, how do I get extra money from Lucas or you know, how do I get influence or whatever. It's none of that. It's always. I want you to be successful as much as possible. And I believe to the core of my being, that 99% of what I'm telling you is right and that I might be insane.
I might be on that mental side, right? That, that
Lucas Underwood: Well, good news. I trust you. And so I might be mental too, but like, hey, we'll be, we'll be on the same bus together, so it's okay. Uh,
Cecil Bullard: well, yeah, we, we, we, we have to take accountability for ourselves. We have to look and see are, am I harming? The people around me and, and myself.
Alright.
Lucas Underwood: Amen.
Cecil Bullard: And then we have to be very careful about how we talk to people again, especially if we're on the same team, right? I mean, there are people that I just don't like, and so we're not even gonna talk. I'm not wasting my time with that person. Right? Yeah. And, and I'm not wasting my energy, but the people in my life that I care about, I'm gonna give them everything that I can give them.
Yeah. And, uh, hope that I'm right most of the time and, and, you know, we'll ride this thing out together. I'm always there for 'em.
Lucas Underwood: Amen, buddy. Well, thank you for being here, Cecil. I know we gotta end it a few minutes early. I gotta make it to an accountant's office. Yes sir. You've got stuff you gotta do. I hear that Michael and everybody else has this huge stack of paperwork for you to sign.
Cecil Bullard: They got all kinds of stuff for me.
Lucas Underwood: Something about financing 42 brand new vehicles is all I heard. Yeah. I don't know what it's, I'm just gonna
Cecil Bullard: 40,000 a. No, it's just paperwork.
Lucas Underwood: That's it. It's just paperwork. It's fine.
Cecil Bullard: Yeah,
Lucas Underwood: it's fine. Hey, did they get that auto sign thing set up for you?
Cecil Bullard: Yeah, it's all done.
It's, it's literally, it's buddy, I signed a, I dunno, 47 documents in like 10 minutes. Uh,
Lucas Underwood: that's it. I love it. I love it. Don't know
Cecil Bullard: if they, I read. It's
Lucas Underwood: fine.
Cecil Bullard: Yeah.
Lucas Underwood: Guys, guys, thank you so much for being here. Go ahead, Cecil. I'm sorry.
Cecil Bullard: I, I called Wayne and I was like, Hey Wayne, I'm looking at this stock stuff and, and, uh, it looks to me like this.
But on this other side, it looks like this. And he's like, oh, it's fine. No problem. And I'm like, okay. That's,
Lucas Underwood: don't worry,
Cecil Bullard: don't worry. Yeah. Okay, don't
Lucas Underwood: worry.
Cecil Bullard: There we go. And I told him that, that, that proves how much I trust you. Yeah, I mean these are, and, and you need to foster relationships in your life that you can have people in your life that you know they're on your side and you know they're working with you towards things.
So
Lucas Underwood: amen.
Cecil Bullard: Wrap her up there buddy.
Lucas Underwood: And folks, that's exactly why if you own an auto repair shop, you need to have the institute in your life, especially with all the new great big things that they're doing. Their coaching services have been a life changer for me, and I hope they will be a life changer for you in the very near future.
So you guys, make sure you check out all the institute has to offer and have a great day.
Cecil Bullard: Thank you brother.

194 - The Strategy in Succession: The Story of Oswald Service & Repair

194 - The Strategy in Succession: The Story of Oswald Service & Repair
February 25, 2026 - 00:57:04
Show Summary:
This episode shares how Oswald Service and Repair grew from a 1939 service station into a multi location shop in Idaho Falls. It breaks down the realities of family succession and the damage caused by unclear roles and rushed promotions. The conversation highlights why outside experience can strengthen a returning successor. It also explains how professionalism and stronger HR practices reshaped shop culture. The Oswald Way is presented as the values framework guiding hiring, discipline, and hard ethical decisions. The episode reinforces the need for coaching, clear timelines, and a focus on building long term business value.
 
Host(s):
Michael Smith, Chief Strategy Officer at The Institute
 
Guest(s):
Kevin & Renae Oswald, Owners, Oswald Service & Repair
 
Show Highlights:
[00:01:48] – The business began in 1939 as a classic full service station.
[00:03:10] – A hard truth: the shop could only support one family.
[00:04:00] – Leaving the family business built skills and perspective.
[00:06:10] – Early roles blended selling, wrenching, and managing daily work.
[00:10:20] – A nursing career provided stability during ownership transition.
[00:12:10] – Imposter syndrome hit when stepping into community leadership.
[00:15:35] – Raising professionalism standards changed shop culture and HR.
[00:23:40] – Family succession failed without structure, clarity, and mentoring.
[00:34:05] – A clear exit timeline prevents resentment and legal conflict.
[00:41:55] – The Oswald Way guides ethics, decisions, and team alignment.
 
In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?
Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.
 
👉 Unlock the full experience - watch the full webinar on YouTube: https://youtu.be/LbptEoPXC44
 
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________________________________________
Episode Transcript DisclaimerThis transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.
 
Episode Transcript:
 
Michael Smith: Hi everybody. Thank you for joining us today. It's good to have y'all on board. I'm Michael Smith, chief Strategy Officer here at the Institute. I also have the privilege of running what we call the Legacy Program, and I am pleased to introduce to you today two of my dear friends clients, but friends more than anything who are in the legacy program.
And the topic today that we're gonna talk about is succession. Succession has many terms to it, which I'll describe in a minute. But I wanna welcome Kevin and Renee Oswald again. Two dear friends that I have the privilege of walking beside. Welcome and thank you both for agreeing to come and to share your story with us.
It's a fabulous story.
Kevin Oswald: You're welcome.
Michael Smith: Lots of
Kevin Oswald: it.
Michael Smith: Yeah. It's good to see you both. Thank you. So yeah, we're gonna talk about succession today and we're gonna talk about family businesses and you know, in our industry there were a lot of family rollovers in the business. And I don't know, maybe in the last decade or two that's lightened up a little bit.
I, you have a long, deep, rich history. As a company and as a family, and you are a succession story unfolding. And so we just thought it would be great to just sit and visit a little bit. I said to the Oswalds before we started a family succession can be tender in terms of some hot topics, and they're welcome to tell me.
That's a good question. We're not answering it and we're all good with that too. So we'll just dig in and chat a little bit. Kevin, can you tell us a little bit, because I love the story of you in the industry. But give us the background. What, tell us about your family. How'd you get into it? When, where'd you come from?
How, how did you become a part of this?
Kevin Oswald: Absolutely. So my grandfather started this business in 1939. It was the quintessential old service station where they came out with the bow, tie, the hat, and the bell rang and you ran. And went out there. You pumped the gas, you checked the tires, you, you checked the oil, you washed the windshield.
And that's the type of business that we had. In fact, that service station model served our family up through three generations after my grandfather retired. My. Father took over the business. My father was in the business with my grandfather for about five years. Took over the business from my grandfather.
And I can remember working at the service station when I was in high school. Washing those windshields were kind of the way that I built my biceps. And you know, my father, if you left one bug on that windshield, he made you go back out and do it again. So, you know, the, the service in Oswald's service is something that was instilled in me at a young age.
In 2004, I purchased the business from my father, but there's, there's kind of a backstory to that too. Just shortly after I graduated high school, me and my father were talking and he said, Kevin. This business will only support one family. If you wanna stay, that's fine. I can afford to pay you $8 an hour, but I would recommend you go to school and you do something else for a living.
Kind of my father's nice way of saying I don't want you to be in this industry and get out. So I, I did go to school for a little while. I ended up going to work for 14 years at other independent shops, and at that point in time when my father was ready to talk, retire. I came back into the business, but God, what valuable lessons that I learned.
You know, not staying in the mainstream and doing things my father's way, but able to get out and look at how other shops operate and you know what they do, and bring that knowledge back into the business was something that was just really invaluable to the business.
Michael Smith: Did the three was the third generation business that you bought in the same building?
That your grandpa's was in, or had you guys moved around a little bit. Same building even, right?
Kevin Oswald: No, same exact building. Yep, same building. So it was long about, I believe 2000 I took over in 2004. 2011 is when I built the new shop and we moved from the service station just a block to the north to where our.
Present shop in Idaho Falls sits. And so we got out of the service station model of it. We had some elderly people that especially some elderly ladies that came in and said, Kevin, I've never pumped my gas before and you guys are closing this service station. What do I do? And so they would come in every week to the shop.
I would take them out, I would pump the gas for 'em. And of course I'd probably get a plate of cookies for the effort. And you know, it it, it, it was a good thing. It really was. So, and now we've got a son that is involved in the business. We've got a fourth generation going. I have two locations right now with a third one under construction.
Michael Smith: Oh, beautiful, beautiful. That's a great story. And, and I, I am always intrigued by the story about your father saying, this can only support one family. And so with respect, it's my family. I'm gonna continue to feed and son, please go do something else. Right? And I, I love the integrity in that. I also love the.
In some ways cutting you loose to the world, right? Just like you, I'm not gonna, you're not gonna be under my wing. We can't afford it, he thought, right? But also, you know, you gotta go out and make your own way, which is a beautiful catalyst to have to get up, get out, go try other things. So, Renee, I want to come to you in a second, but I want to finish an aspect of the story.
Not so much where Kevin, but the independence that you worked in, you started as a technician. Right?
Kevin Oswald: Yes.
Michael Smith: And then were you selling at the other independents? Were you store manager somewhere along the way? How, what did you do? How far did you go before you jumped back in as the succeeding owner? For your dad's business.
Okay.
Kevin Oswald: So I first left and went to a a tire store and I kind of ran the alignment and brake shop at this tire store. And so, yeah, I was direct involvement with sales, with the public speaking with customers. And then once the sale was done, I'd, run over to the toolbox, put the car up in the air and take care of the work and get things taken care of.
So that was about seven years at this tire shop. And, you know, the, the tire store this is where I was first introduced to a career path and I, I remember the owner of the tire shop saying, you know. If you do me a good job, I promise I will build you a store and you can manage it. So that was always the thought is I was going to climb up the ladder, I was gonna become a manager in this organization and manage a store.
It came to the point where we started having kids and decided we don't wanna leave Idaho Falls. We love it here and the world is a cold, scary place, so we wanna stay here. And so I ended up leaving there and went to another independent alignment and brake shop in town and ended up managing that for seven years.
Okay, so, and again, the person who owned this alignment shop also owned a body shop in town, and to this day it is still one of the premier body shops to take your vehicle to. I mean, just, attention to detail and everything that is done there. And you know, that's where I learned a lot of that from, you know, my first stop, I learned a lot about business.
My second stop, I learned a lot about customer service and you know, how to take care of the customer and do things right. And then. I, you know, about a year before my father retired, I gave him a year's advance notice and said, I am taking the service station over from my dad. And the transition went well, but again, I mean, things that I learned on those two stops were just so invaluable and just gave me a leg up.
Going back into the family business,
Michael Smith: were you mentored? Carefully by the places that you went and learned or was this sort of deep water OJT in you go figure it out for yourself, or some combination of both.
Kevin Oswald: You know, the first place? No we, we had regular training at the first place that they would bring me in and they would also send me to, so at the first place, no, at the second place it was, you know, here's my vision.
This is the way that I want things done, and I've got a body shop to run, and we'll see you later.
Michael Smith: Keep it going
Kevin Oswald: money
Michael Smith: and
Kevin Oswald: I don't wanna
Michael Smith: hear from
Kevin Oswald: you. Yeah, exactly. And, you know, being able to have the autonomy to do that and, you know, and the trust he had in me was just, oh, just speaks volumes of the man.
I just,
Michael Smith: well, yeah, and, and you, from the standpoint, and I'm not blowing smoke at you from an esteem building standpoint, right? There's nothing like having to figure it out for yourself. And then when it's working, have them come and recognize that and then give you even more leeway. And I talk about confidence building, right?
To get ready to do it on your own, to have that resource available. But to learn to stand without it is, yes, it's a key conversation about succession, especially family succession, like what you guys are working on. So fascinating. So I have more questions, but Renee, will you tell us a little bit. About your involvement in the family business, the Oswald family business.
'cause I know you spent great time in an other industry learning an awful lot, which you've brought back to the independent automotive service world. So tell us a little bit about yourself and you can start back in where you grew up or when you guys met, or first date or whatever, however far back you want to go.
Renae Oswald: Well, what I'll, I'll just add to that is, you know, Kevin talks about being at the service station and. Cleaning the bugs off of the windshield? Well, it was on a well traveled road and so it was there were three boys, three Oswald boys that worked there and so many a time we teenage girls were driving by honking our horns and, you know, so.
Yes, I remember those days fondly and you know, their boys, Kevin did have hair back in the day and
Kevin Oswald: I sported a mullet. That was just, you did. Oh man.
Renae Oswald: Yeah.
Kevin Oswald: Yeah, it was great.
Renae Oswald: So, yes, I mean that, the little service station has a big place in my heart. And I have been along for the ride. Kevin and I were high school sweethearts and so we married a couple years out of high school.
I did pursue another career. I'm a registered nurse, so I really didn't have a lot to do with the business when we took it over. I think the benefit of me having my own career when Kevin purchased the business from his dad was, we were not completely dependent on that income like his parents had been.
You know, it was, it was very much dad had to bring in the bacon or else they weren't going to eat, and so. I gave us a little bit of a landing pad for, for exploration with a new business and trying to figure out how to run a business and but I wasn't really truly too involved. I had my own leadership trajectory in healthcare and.
Kevin and I would, you know, we would work a little bit on, on the service station or the, you know, repair business together, but mostly in a consultive way. Because I had my own thing going until it was very fortunate because in January of 2020 I left healthcare and, you know, what happened in 2020 with COVID.
Yeah, it was timing. And I had, I had started a podcast of which there was one sponsor and it was Oswald Service and Repair. And so it, it was great. I had started getting more involved in the community and really starting to represent our business. So I think if you looked at my involvement in the business now.
It doesn't make any sense, but I'm more the face of Oswald service because I am more present in the community. I am you know, IO oversee our marketing efforts and really anything that is an outward representation of Oswald service. So that's kinda where I got involved. I will say that it was an interesting transition for me because.
WW we were running the business and doing the best we can and doing well. You know, we've, we've had a good business and definitely has done a different level of business than his father's business was for sure. But I walked into the to networking room with all sorts of business operators in eastern Idaho, and I felt like such a fraud because I had been in healthcare for, you know, decades and I did not really know what I was doing.
And I kind of felt like we as business owners. Didn't really know what we were doing. We were just really fortunate that it had worked out well. Clearly we must have known something because it was working well, but we hadn't had that imposter syndrome heavy being in that room with influential individuals in our community.
And so that was a, that was a good lesson for me in the fact that I had had all this confidence in the career that I was in and then making this switch. I felt, you know, like I was right back to having to prove myself and, and feel like I needed to be a member of, of that room. You know? Now I realize none of us know what we're doing.
We're all just doing the best that we can. And it's a, it's a facade. If, if anybody watching this is like, oh, the Oswalds have it together, it is not true. Like we are just figuring it out as we go along and we have great advisors and individuals that we surround ourselves that have helped us to be successful.
So that's what I see as my role. In our business. I am truly, Kevin and I have been on a journey trying to figure this out because it was so his thing, and then I come, you know, in and I'm like, Hey, I'm a part of this too. And for us to really figure out how to be partners has been a struggle for us.
But we are like, I just feel so strongly right now that we are, you know, in sync, in step we're respecting each other's role. And each other's input in this business, and it has very much amplified what we've been able to do, especially over the last five to seven years.
Michael Smith: Yeah. I am so impressed by how you two operate, not only together, but also the company that you run and the leadership position that you've established in the marketplace that you're in.
Renee, I wanna build a little bit on your leadership in healthcare conversation. If, if we can when, when you came over. From healthcare and you looked at our industry, and you're not gonna hurt anybody's feelings if you give us a hard truth or two. What did you learn in healthcare that you looked at, you know, when you got into the family business and looked around, Hey, there's some things I can bring to the table right away that we need in our industry.
What, what, what could you share with the folks that are listening to, to raise the bar a little bit on the way we might see some things that you got to see from outside. What did you, what did you see when you came back?
Renae Oswald: Well, I did work for a big corporation and it was very professional and you know, I, I worked with a lot of very professional individuals and I, I tell you, I really had to.
Adjust when I would come into the shop because we didn't always act very professional and it wasn't so much to our customers, but definitely in the back, you know, in the back shop. It, we took this business over, like Kevin said, in 2004. And I had seen the evolution through, you know, since we got married and, and y'all know it has changed, you know, things that were.
The way that behaviors were in the, in the shop have definitely improved over the years, but I did come in with the perception a little bit. Like it felt very our shop and I was coming from a corporate world where I was like, these are, these just don't always align. And I kind of had to separate myself, well, this is the way man PA works and this is the way corporate works.
And so it was a little bit of a difficult transition to say, no, we couldn't, we can, we can function this way. We don't have to be ong, let individuals behave in a way that is not reflective of professionalism. It's okay to raise that bar and, and, and project something that is really a more professional, more polished.
Organization. So it, it was rough for me and probably as a woman too, because it's not necessarily an environment that is, you know, woman dom dominated. And you know, I came from nursing, which typically is, and so that was also an adjustment for me to I, I didn't feel like I fit in and, and I've, again, it's been a great marriage, not only just because we're married, but in being able to figure out that partnership and.
And how I can have a voice. And Kevin's been really great about allowing me to do that. And, and we have definitely evolved in our behaviors all the way around the shop.
Michael Smith: Yeah, no, and I, and I'm, I'm intrigued by your, you know, healing humans background to come to the healing cars world, right? Where the customer experience the bedside manner, right?
The way we treat you treated patients in the healthcare business, and not necessarily by the healthcare systems, but by the patient care on the ground. Some, some of that translating to, into the on automotive service business about how we love our long-term value, LTV customers too, right? So many lessons.
Renae Oswald: So many parallels too. Mm-hmm. I mean, when I think about Kevin, and I would say this all the time, he would be like, you're lucky because your patients can talk to you. And I'm like, yeah, it's true. I mean, the majority of my patients could tell me what was wrong with them or give me symptoms and all sorts of stuff.
And you all are having to really, you know, work with something that maybe will give you a signal and then you have to, you know, really locate where that problem is. There's a lot of parallels and I think. He, there was a bit of an injustice in the fact that if a physician makes an a, a mistake, well, it's practicing medicine, but if a technician makes a mistake, you know you're crooks and you're all of these other things.
So it is kind of, it was interesting to look at those parallels and how much they paralleled. Now, obviously human life. Has a lot of value. And I'm not trying to say that an sure, you know, engine is the exact same. But there were so many parallels in the fact that we are in a service industry. Our role is to serve our patients or our clients or our customers.
And yeah, tons of parallels throughout that.
Michael Smith: Yeah, and the parallel, and I love this 'cause I about every group I ever speak to, I will say to our industry, this is one of the most difficult small businesses that I've ever seen, and I will frequently reference healthcare as the other one. Right? Human physical systems, mental systems are complex.
Lift the hood on a car. Nowadays, all the computers and the chips is as well. Very complicated businesses. And Renee, you made an interesting point. Physicians practicing that they're practicing medicine. We're not supposed to practice anything. We're supposed to get everything right a hundred percent of the time.
Nothing ever fails when we're done. No parts break on the way out of the dr. I mean, it's just, it's a different perspective of the world. Physicians and nurses are respected professionally. Our industry tends to not be seen at the same level or in the same light. So fascinating. Kevin, what And, and again, we're gonna get to succession.
But I love the sort of the interplay about how you run your business and what you see. Renee walked back in from healthcare. What did she bring as an insider that you saw, you know, your own version of it? What, what did she bring to Oswald that's now there that you guys didn't know you needed, but now it's here.
Right? Tell, tell us a little bit from your angle.
Kevin Oswald: Oh, professionalism. The, the human resource aspect of it. You know back in the day I was practicing cowboy justice. You know I, I remember a technician that upset me and I told him to get the blank outta my shop, and I pushed his. Toolbox out into the parking lot.
And, you know, those are the kind of things that Renee brought in and he, she was just like, you know, cowboy, you can't do that. You, you've gotta rein it in a little bit. There's certain things that we need to do. You know, our program that we go through you know, Idaho is an at will state. We can.
Fire for any cause or just cause I should say. And she brought in a progressive discipline within our organization where, hey, you know, you made this mistake. How can we help you? And being able to use that progressive discipline to help our employees improve. And at the end of the day, if they're not going to improve you know.
I'm sorry, we tried, but this just isn't working out. And I, I don't push their toolboxes outside anymore, but offer to help them move their toolbox or whatever we need to do and go from there. But yeah, you know, it was just shenanigans in the shop, you know, the, the eighties and yeah. And I, I'm gonna author a book someday and it's gonna be entitled, A Thousand Things You Can Do With Break Clean, you know, just, you know, things that you used to do back in the shop and she's a hundred percent right.
You know, it would never fly where she's at. And so, you know, it, it, it, it's fun being able to take the aspect of professionalism and bring into the shop, but. It's also fun to be able to still have that light spirit in the shop, excuse me. And you know, and be able to come to a place where it is fun to work and come to a place where you feel valued.
And that that's everything that she brought right there.
Michael Smith: That's beautiful. Beautiful. And thank you Renee for bringing it to our industry too. Right? There are a lot of good, wonderful players out there, and there's an awful lot of room for us to continue to, to grow and to bring that value back to, to the communities that we, that we all love and serve as best.
We know how. It's great. You mentioned the fourth generation. Can you tell us within the parameters of your comfort zone, tell us about those two boys and what have you told them about the business and how did they both get a little bit into it and how did they look at it and where are they now? And I, fascinating story again to your family privacy comfort level.
What might you share with us? You have a wonderful story.
Kevin Oswald: You know, I think this is something that both Renee and I are gonna talk back and forth about, but you know, the boys were in the business and you know, it was always the dream that they would take the business over and I would retire and we would hold hands and sing kumbaya and head off into the sunset.
And that didn't happen. There were some things, especially with my eldest son that we did not anticipate, we were not prepared for. And you know, I, I take accountability and responsibility for what happened there with him. And I mean, if you wanna expound on that a little bit, Renee.
Renae Oswald: Yeah. I mean, so I guess what I will say is, I'll back up. We never really. Expected either of our boys to be in the business. We were very clear with them as they were growing up. Like, you do not have to do this. This is not what we expect for you to do. We don't, you know, if you walk away from this, that's absolutely fine.
Michael Smith: So not to interrupt you, but just to add to this, like you said to them, we take the weight of the fourth generation off your shoulders. There's no family guilt. There's no family pressure. We're saying to you straight up, if you wanna do something else, you can. If you want to be in you. Absolutely. I love that.
That's such a. Wonderful gift to give to them that you did right to take, to make it an optional choice, not a forced one of, even a subtly forced one.
Renae Oswald: It was a good gift. Although I feel like we took it back later, but
Michael Smith: the story continues,
Renae Oswald: right? Yeah. I mean, so our, both of our boys knew, you know, like that's fine that this doesn't have to be our role.
So our oldest son, actually, he did go to college and he was in his second semester, I think that he was finishing that up. He went on, you know, to like a summer job and it didn't, it was not his fit. So he called us and he said, Hey, can I come? And we, they had worked in the shop during their high school years, so they'd had some, you know, he'd had some exposure to this.
And he is like, this isn't gonna fit for me. Can I come? I wanna come home and I wanna work for you guys. And we were like. Yeah, this is a good business. This is gonna be great. You don't necessarily need college. We can teach you the things that you need to learn here. We're happy to bring you in. And that's where it kind of started.
So it was at that point where we were like, oh, well this really could be fourth generation. And, and then we got kind of sucked into the romantic idea about that. Right? Because here's another fun thing about our story. We have Kevin's grandfather and grandmother mechanic, married to a nurse. We have Kevin's mother and father, mechanic, married to a nurse.
We have, he and I mechanic, married to a nurse and our son. Guess what his. Fiance was studying nursing, right? She was gonna become, she's gonna be a nurse. So we got really sucked into this romantic idea that we had this fourth generation of technician and nurse, and it was all of this. And I think that that also puts some pressure on him.
He, he was fine in the business and, and he was successful in the business. He actually worked more as a service advisor for us. And then we had a transition with our, one of our locations, and we needed a manager tomorrow. And we were like, well, of course that's gonna be our son, because he's the natural heir of all of this.
And so we just, we didn't really ask him. We said, Hey, kid, you are now expected to go run this because it's the natural progression of your trajectory. And so here you are, you've just been deemed a manager. Did we mentor him into that role? No. Did we have a lot of structure for him to be able to step into that role?
No. Were we there holding his hand and really helping him figure out how to do this? Well? No, and he did the very best that he could, but honestly, Michael, I think we fried him. I think that because of our structure, lack of structure, lack of clarity, this kid is. Well, the one that would line up his toys in a row, he needed structure and he needed clarity and we did not provide that for him.
Well, and he was so kind to us, and he stayed around for longer than he should have until it was absolutely detrimental to his mental health, his physical, you know, just everything. He's like, I just don't wanna do this anymore. And you know, I, I do give Kevin and I a lot of kudos 'cause even, you know, at that time we were like.
We could tell it was obvious. We were having performance issues and there were things and we were like, you know what? You're right. And we wanna support you in whatever that next step is. And so he's been able to go and, you know, do something which we just see him blossoming every day 'cause he is so excited about.
So it's fun to be able to see that. And the other bonus to that was when the older brother got out of the way. We've really been able to see the younger son who, who, who, who decided to do this straight out of, you know he, he, out of high school, he was, he was like, yeah, I wanna be in this business.
We've seen him blossom into something that, I mean, we have no worries that this business is gonna be in great hands because
he's
Michael Smith: repressive young man.
Renae Oswald: Yeah, he's gonna do a great job, but only until his brother, you know, it had to be that he kind of stepped out of the way. Before the sun really blossomed.
Michael Smith: Well, you, you guys did what almost everybody does. You get ready to promote somebody who is you. You want them in the new role and we tend to move people into the role and help. They'll figure it out as they go and some of the stuff that we talk about all the time in the legacy program, but also. Us is to make sure that we can think about these career paths and figure out what's next for each individual and try to pre-prepare them, right?
Get them ready before we promote them from being a master of their current position to being an apprentice of the next one. And in the apprenticeship, some people struggle, right? Some people, like you said, need a lot of guidance. Some people love the freedom to do that, but everybody's different in that way.
And so we always tend to do that. And having this. Progression is a possibility in front of people. Gives them something to aim at. It also gives them a chance to feel comfortable that they, you know, you're knocking imposter syndrome components off of them with everything you teach them before they need it.
Then when they step into it, being right next to them and saying, okay, you're on your own but you're not. Right. Each of us has an arm up in battle, if you will. So go do your thing, but you're never gonna be alone right here. These are all ways we can make this easier, but then we only. Do that. If we have time to stop and think about it.
And I love the way you said it. It was like, we needed it. We needed it. Now he's the obvious era apparent. Congratulations, you're promoted now. Go make it work. And then you guys went off and worked on the business and it's like, like somehow genetically he's supposed to know what you all have learned over the course of your lives.
Right? So, and we do this all the time. Everybody does this all the time. And, and even non-family businesses do this all the time. So I, this is a story well, well worn. It's been told a lot. So, but not to go too deep. He's happy now in his next iteration of a, of a, of a, of a, A pathway. Right. So that makes Thanksgivings easier when you all get together, when there's all that business pressures not in the middle of it.
Right. So,
Renae Oswald: well, you know, that's been the good thing I will say about our family is that we have been very open and transparent, you know, through all of this and try to be very honest about, yeah, we realize we own, you know, we kind of set you up to fail and. We own that. And so it really has been able to maintain relationships.
And I am super grateful for that with our boys. It, it did strain their relationship, you know, and working together. And I think that there's some healing left to do there, but for the most part, nobody's os you know, nobody's not talking to each other. And you're right, Thanksgiving is fine and it's.
And it's a good, it's good, but it, I do, I would caution anybody who's listening and contemplating this in their life, and especially if they are that kid that's in their family business, that's like, I don't know if I really wanna be here. Don't, don't wait to have those conversations because I know it's hard.
It's so scary. You don't wanna go to your parents or whoever it is and say, I'm not sure that this is for me. But it has been, like I said, it started taking a toll on his mental health because he was trying to keep it all together when he didn't need to. You know, it, the honesty and just being transparent, the sooner the better, so that either you can, you know, rectify the situation you're in or change.
And again, terrifying 'cause of the unknown, but honestly, watching him now and see how happy he is in what he's doing, I wish that we could have given this to him five years ago.
Michael Smith: Mm-hmm. Well, and that, and you, you, if it happened now, you would. You had to go through this to figure it out. Right? Which is a beautiful thing of you sharing with other people to think about as well.
So tell us about your second son. He stepped up out of the shadows and into the light with his older brother Stepping aside I'm assuming you didn't trust him into general manager role overnight and, and leave him on the flagpole in the wind. Right. That he's taken a different path. So, and again, this is part of.
What we're sharing here is what's different about your second son who, who I think the world of both of them, right? They're both wonderfully young men. And, but tell us about the second one and what you're doing differently given what you've learned. Right. What's the, what's your pathway of support for his succession interest at this point?
Kevin Oswald: Collaboration. That is the biggest thing right there. What I take from Nick is we just assumed. We never asked him what he wanted to do. We just said, here you be the manager of our Rexburg location. See you. Bye. Had we sat down and assessed his hopes and his dreams, figured out what he wanted to do and worked collaboratively, lead with him and get his buy-in on what was going on, I, I think we would've had a different outcome there.
And that's just a mistake we're not going to do with Jacob. You know, we want to be able to have a, a clear. Career path with him. Let him know of my intentions as far as an exit strategy goes. Put a timeline on that so he has something to look forward to. Renee and I have a relative that took over their family business and for years and years.
Dad, when are you gonna sell it, dad? When are you gonna sell it? Well, we'll get around to it. Well, maybe in a couple of years. Well, we'll have to sit down someday and talk about that. And it got to the point where, I mean, things went. To court to try and accelerate this process. And now, you know, it's to the point where the father and the son, they don't even have a relationship anymore.
Yes. I'm so sorry. And, you know, had the father in that instance, been able to give some clarity to the son and get their buy-in on what was going on and together create a plan for succession. I mean, things would've looked much different. Now, I understand as an owner, that's a really hard thing to do because you know, you're talking to a person and me.
Who's not really goal oriented, it's just fly by the seat of your pants and I'll get it done when I get it done. But to be able to have something out there that is in writing that says, okay, in 10 years from now, I plan on taking a step back. Seven years from now, I am going to promote you to you know.
An area manager or something like that, and, and give them a career path, something to look forward to. And then they know when the heck you're gonna get out of the way. And they're, I'm, you know, I, I liken my son to a hunting dog. I mean, he's just sitting there. Buy you wagging his tail and he's looking up at you like, I'm ready to go get that duck.
I'm ready to retrieve this, and I'm just waiting for you to release me so I can go do my job. And, you know, that's, that's what I see with my son and I see myself just being able to say, go and, and just release him and be able to let him run after that duck and retrieve it.
Michael Smith: What a wonderful potential energy.
Device sitting next to you in your son, he is cocked up and ready to go. And what he needs from you is a plan and guidance and patience and mentoring. And also the command. Once in a while, it's like, okay, go get this one. Go get that one, and there's another new experience to be had. It really leans back into a mentoring model, a long-term career development model.
Right, which I know I'm gonna ask you a little bit more about what you're doing organization wide, but this does open that door to the concept that people who work with you are thinking about their lives beyond tomorrow. Right? A lot of 'em show up to do their job today, but it's like, well, what's this gonna turn into a year from now, five from now, 10 from now?
You guys built this beautiful you've expanded, right? You didn't start the business. You took something much smaller than it was. A generation ago and have turned it into something much bigger, much more successful. And you're in growth mode, right? I mean, you're, you're, the systems you're putting in are allowing you to punch the accelerator and make this thing a true legacy company.
Generational wealth building machine, which of course is of interest to the family members that might step in behind you, but there's a lot of learning to do. Not just you guys, also of, of course, but, but the, the generation behind you and not just pushing 'em out there at the end and saying, okay, it's a decade out.
We're done. Good luck with this and wipe your hands to it, getting 'em ready, you know, knocking that imposter syndrome off one bite at a time. So, Renee, I know you grew up in healthcare. There was more of this there. But would you speak not so much from the healthcare perspective, but what, what you see you're bringing into Oswald?
Along these lines, what are you guys building that is gonna make this different for your son and for the, maybe the generation that follows this one too, right? And your family.
Renae Oswald: Yeah. Thanks for that question, Michael. Because I was just thinking as you guys were talking, I, it sounds real easy to, I mean, when we just say it, we'll have a plan and present the plan and, you know, follow this and have some clarity.
But one of the pitfalls that we fell into and, and unfortunately what our first son was a collateral damage kind of was, is that we didn't have our own clarity at all. We didn't know, I mean, we were just following the model that we were kind of shown, you know, like build it and then the, the kid will buy it.
Michael Smith: Yep.
Renae Oswald: And you know, we'll step away and we'll be, landlords, and that may absolutely be what we end up doing. I'm not really, you know, I mean, but we didn't really see. Our vision as being the legacy. Just like you talked about, we did not see that vision we needed to have. It happened to be you in our lives, you know, to help get, help us paint that picture a little clearer.
We were just hitting a brush stroke here and there. And so we had to go back and really understand that for ourselves because there's no way you can teach that or mentor somebody else into that role when you don't have it clear yourself. Absolutely.
Michael Smith: Right.
Renae Oswald: That was probably some of the best work that I think that we've done over the last few years and and where we're going because we have really been able to.
Identify our vision, mission, values, and we have shaped absolutely everything af after what we call the Oswald Way. And it's the list of 10 values that we live by, you know, that includes our mission and vision and who we are and what we're doing, and. I'm telling you, we get off track and when we have to come back, we pull that out and we're like, wait a minute.
We know what the answer is here. It's the Oswald way. Well, we didn't have that. We didn't have that to be able to present to our son five years ago or whatever to be able to say, this is where we're going. Is this the, is this where you wanna be? Is this the path that you wanna go down? So I really feel like we are much more structured in clarity.
And clarity is kindness. If anybody follows Brene Brown, you know, we hear that a lot, but I believe it to my core that clarity is kindness. And sometimes we aren't willing to say the hard things because we think we're protecting people and we're actually causing more harm. We don't have to do it in a cruel way, but truly being clear is kind.
And I see that more and more with our operation. That we still get sucked into some of the ways that we've done stuff. It's easy to do. But we can, we can see that you know, that that guiding principle that's leading us and we can pull ourselves back to that. And so I think going forward, that is what's making the difference for us is.
That we have something that we're working towards. And you know, Kevin talks about not being goal oriented and he really undersells, you know, himself. Maybe he doesn't have a list of 10 things that he's like, yeah, I'm gonna reach these goals. But he's always been very driven in making sure that his, he didn't wanna fail on the third generation.
Right. We didn't want the third generation to be the Oh. You're the statistic where you close the business and you know, we haven't, we have, you know, quadrupled, I would imagine. I think you know what dad was ever able to do and so where it might not be real clearly written, he definitely is a very driven individual and the Oswald Way has really helped give us that guiding principle to continue that trajectory in a way that is very values based.
Michael Smith: Right, so I love that. Renee, Kevin, when you guys have internal conversations with the team, the Oswald Way, how do you use the Oswald Way on a sort of a. Momentary basis, right? It comes up all the time. You go back to the Oswald way a lot. So like when does it come up? How do you use it, the clarity that you have?
Give us an example or two if you wouldn't mind.
Kevin Oswald: Oh, absolutely. It's all the time. You know, you buy a part from the parts house, you put the part on the vehicle, oh, crud that didn't fix it. Do I put the part back in the box and return it as defective or. Is it it? It is what it is. You know we made a mistake and we need to eat this part.
Well, Oswald service you know, we need to eat this part. We had a situation where vehicle came in a long time. And he said that there's a horrible noise coming from the engine and it's not running well. We bring it in and find out it has eight quarts of oil in it and the capacity is four.
And of course, it cavitated and air into the system and it ruined the engine. Well, guess who did the oil change a month and a half before. It was us, but this particular vehicle was still under factory warranty. With Honda, we could have easily said, Hey, let's just drain four quarts out of this thing and tell 'em to take it to Honda, that you know, the engine's bad and it should be under warranty.
And that discussion did come up. But as me and my manager looked at each other in the eye, we just both shook our head and said, we can't do that. I mean, that was an expensive thing that we had to do. But I mean, those are our guiding principles. I mean, if you're gonna talk it, you have to walk it and you have to show people that that's the way that we do business.
And by people I mean your employees. Yep.
Michael Smith: I love that, Kevin. Thank you, Renee. This, this nobility I like to. Use the word in this kind of a scenario as a platform for the Oswald Way, how does that resonate with your community leadership work? You're sitting in community groups with the business leaders of your region, getting to know them.
You operate this way. You have to have their respect. How does, how does this help you guys to, to build local presence and reputation and brand strength? Brand value? Tell us a little bit about that. Because I know coming from the outside, this is very clear for you. Right. And how this works so
Renae Oswald: well. It's actually really fun, Michael, because it's, it's a surprise for people when I start talking to them about this and they're like, you're an automotive repair shop.
I mean, yeah, we are, and we've got our crap together. Excuse my language. But, you know this is the way that we wanna function. And, you know, I mean. When you sit in business meetings, you sit with other business leaders, you hear them talk about mission, vision, values and all of that kinda stuff. But how many of us, and I will say this, coming from the corporation that I was at before, we had beautiful mission, vision values, and we never looked at 'em.
I don't believe that they live by them. And so it's, it's a, it's really, it's a real test for us. And it's a good test for me because I love for somebody to say, well, you're an automotive repair. Why do you have this? And I, you know, you guys are crooks. I can't believe that you would even claim to have this kind of stuff.
I love that kind of challenge because I can say, yeah, we have a responsibility to live up to what we're saying that we're doing, and I want you to test us. And the minute that we're not living up to the Oswald way on our website, we actually, and we actually promote this. Like we publish it and we say, if you ever see us not behave this way, I need you to call us out on this.
I want you to be, you have permission to hold us accountable. If you ever see me functioning this contrary to this in our business, in the community, however we're doing it, I expect you to call me out on it. And so it's been really fun to be able to represent the Oswald Way and to have. I mean, there's probably a point, 1% chance where I'm a little bit worried like, oh gosh, are we really doing this?
But for the most part, we are. And to be able to say, you know, test us. I, and, and I want them to show us if we're not living that way, so that we can improve. And that is what we use it for as our clearing call and our you know, this is now, if we're not living to this. This is how we can improve. So it's fun to use in the community.
It's fun to be a little bit different in the industry. I love it.
Michael Smith: Absolutely, and, and you know, it, it's statistically absolutely true that the masters of every industry are ma more mature, not just age, but experienced people who have higher level social thinking. Than people who are young, immature, and just getting into a job.
And so the more you, we've talked about this a lot internally in the groups that we're in and someti in our time together. The more you walk this out internally and externally, the more you become a beacon in the industry. But that serves you from the standpoint that the very best team members, the greatest leaders, the people who are the masters, who are they?
Some of 'em gave up long ago hoping they would ever find a shop that walks the way you guys walk. And all of a sudden they bump into you and they go, oh, this is weird. Could it be true? I didn't think this industry had a lot of folks that thought that. That way when they find you, you are the great.
Treasure box. They want to take their gem that they are and jump in and be part of it, and it changes everything because when they show up every day and they live it and walk it and breathe it because it's theirs as well, then the customers feel it. And when the customers feel it, the community feels it, and literally it becomes real.
It's a self-fulfilling prophecy when the belief structure becomes real and it's, and you've got it. The Oswald way is the, the flywheel, if you will. You just keep spinning it faster and faster and it has a big, makes a bigger and bigger tornado, a bigger, bigger impact. And you guys are, be doing this beautifully and your son get to the opportunity to walk in and join you.
Nick, on his own path, Jake possibly. Coming alongside, right? To see what, what his his part of this would be and the attunement that you have to him and to his future and his career is absolutely precious. Would any comments on that then? I want to take it one step further and a little bit of time that we have left.
Any thoughts about this with you all? How does that resonate with you? That's your hearts, right?
Renae Oswald: Kev
Kevin Oswald: you know, it's just really kind of romantic to me just to think about having my son in the business, having this fourth generation. And for the longest time when Nick decided to leave the business you know, it. It really kind of hurt because again, as I said earlier, I just thought it was gonna be the three of us going off into the sunset and having to shift.
And you know, it changed my mindset and go, okay, you know, we need to concentrate on Jake. We need to concentrate on his success. We need to make sure that you know, the mistakes that we made with his eldest brother. We try to write that with him, and I, I, I think it's wonderful.
Michael Smith: Mm-hmm. That's beautiful.
Renee, your, your thoughts at this point to share?
Renae Oswald: I think just based off of something that you said about how people in the industry can see it. I, I'm telling you, the team that we have right now is beyond what we ever thought we could have. And we just had an individual that left our organization.
We hired him, you know, it was one of those like, oh, he is gonna produce, he's just this little, you know, and he was a machine. He could absolutely do work and do it fantastically, but, and Kevin can speak to this, he knew he wasn't the right fit, but we thought we can make it work. I don't know why we continue to keep trying to convince ourselves that we can do this.
Right. And of course, he ended up being miserable in our organization. It was not the culture that he wanted. He wanted to be a burner producer. Scorch the earth. I don't care who I, you know, take down in the, in the process. And man, he is an amazing tech for whoever he's working for now. I mean, they're, they're going to get some great work outta him, but what we saw was it was not the right fit.
He, he didn't fit in our culture because of how we behave. And that's okay. That's absolutely okay. But the team that we have now are exactly like you just talked about. We, where have these gems come from? Like we are just so fortunate to be able to have individuals who are not only technically competent and so good at their work, but they are.
Aligned with the Oswald Way and they appreciate what we're trying to build. And we have one individual, bless his heart, who had said yes to a different shop and I'm so sorry to one of our competitors, but then took that back because. They were like, we see where you're going. We wanna be with you. And so we're, we're coming on your training.
And, you know, we didn't offer him anything really different than the other shop did. It's just the vision and the way that we have it organized was what he, that's something he wanted to be a part of. So that's, that's such a compliment.
Michael Smith: Mm-hmm. That's brilliant. And, and I will just say this, to add to what you're saying, it isn't just to leaders in your business, this trickles down from a career development standpoint.
It trickles down in your conversations about performance and about, you know, pay. Everything you guys do is aligned with the Oswald Way, and when you walk it as consistently as you do. And you're giving your, your team something to believe in, right? And what it ends up doing is drawing people who believe in the same thing to join you in what you believe in, and then collectively you're making the difference that you wanna make in the world that you live in, and that that rubs off.
The customers feel it and perspective, new team members feel it, and, and in a odd kind of a way, which works out best in the end. Even people who might be there that don't feel it. Feel it because then they feel maybe this isn't the best place for me. And it gives them clarity about where to go and find their future joy as well.
This is you know, I, it, it plays out very similar to what you're doing every single time and it's, it's an iterative. Process that takes time to get its momentum up. But once it does, it takes on a life of its own. And you guys are building something very noble, something very powerful. And the beauty of having your family walk in behind you is just, I mean, that's just, that's got to be icing on the cake of all of this, which I, I know how you both feel, right?
It's, it's it's almost tear making, right? It's so deep and, and, and beautiful. So listen, thank you both. So much. Anything else you wanna share with our folks before we peel out either of you? Any wishes or anything for them? Any recommendations before we go?
Renae Oswald: I, I would just say we can't thank you enough, Michael, for being our Sherpa through all of this because, you know, we've, we've been with, we've been with coaches for much of our business ownership and they have taken us, every one of them have been so valuable in our lives.
Have taken us different places in different steps in this organization, in, in our organization. And we are, we're with the right individuals now that are taking us to that next step. And so I just highly recommend coaching and mentoring in whatever form you can get that as business owners, it's worth absolutely every penny of your investment.
Michael Smith: Yeah, we couldn't agree more. Thank you, Renee. Thank you for that. Your kind words too. Yes. Kevin, final thoughts for our folks that have joined us?
Kevin Oswald: Yeah, absolutely. I just wanna reiterate what Renee was talking about again, and Michael. Thank you. You know, we always say that we need to work on the business instead of in the business.
Now I'm working on the business and I feel like I am. Now transitioning from working on the business to a new level of working on the value of my business. And so you know, I'm transitioning from the day to day to building value in my business. You know, doing that for, you know, expansion, acquisition working on our culture, working on our pro our processes.
And you know, this is a mindset that I didn't have two years ago. And, thank you, Michael, for you're welcome. Opening my eyes to something else that was out there. And yeah we're going full guns. So
Michael Smith: my privilege to walk beside you. I'm deeply proud of you two, and I love what you're building, so just don't stop, just keep going.
We're watching you, the whole market's watching you. Thank you. And thanks to everybody who came to join us today. We hope there's lots of nuggets here for you. And if you want any more information, we are here. We'd love to chat with you. So Oswald, again, thank you. More power to you. Keep going. Can't wait to see you in the headline.
Love you guys. Bye. Thank you.

193 - Ask Me Anything: Why Most Shops Aren't as Profitable as They Think

193 - Ask Me Anything: Why Most Shops Aren't as Profitable as They Think
February 18, 2026 - 00:58:05
Show Summary:
If your shop shows strong net profit but your bank account feels empty this episode explains why. It defines the gap between paper profit and real cash flow and outlines debt service coverage current ratio and two turnkey rates that reveal true break even. The conversation exposes hidden profit drains such as inaccurate labor costing excess overhead unused subscriptions credit card fees insurance costs and parts leakage. It also examines marketing ROI customer acquisition cost lifetime value and technician utilization. You will leave with a clear plan to protect cash strengthen reserves and make confident financial
 
Host(s):
Kent Bullard, COO of The Institute
 
Guest(s):
Eric Joern, CPA, CM&AA, AAM, KAIZEN CPAs + Advisors
Show Highlights:
[00:02:29] – Why profit on your P and L does not mean cash in the bank
[00:05:54] – How debt service coverage reveals true financial strength
[00:08:26] – Current ratio and short term liabilities explained simply
[00:11:00] – Sales tax mismanagement and the tax squeeze trap
[00:13:45] – Inaccurate labor costing distorts gross profit
[00:16:30] – The two turnkey rates every shop must calculate
[00:20:10] – Marketing ROI customer acquisition cost and lifetime value
[00:33:10] – Subscription creep and IT spending that drains profit
[00:51:00] – Parts leakage and missed charges costing thousands
[00:54:45] – Simple expense audits that uncover hidden cash
 
In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?
Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.
 
👉 Unlock the full experience - watch the full webinar on YouTube: https://youtu.be/MfSztSEzZag
 
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________________________________________
Episode Transcript DisclaimerThis transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.
 
Episode Transcript:
 
Kent Bullard: Hello everybody and welcome to today's Ask Me Anything. Uh, I'm joined with Eric Jorn from Kaizen CPA. Um, I said that right? Correct. Kaizen,
Eric Joern: you, you, you guys got it down.
Kent Bullard: Nailed
Eric Joern: it. I appreciate that. Love it. Love it.
Kent Bullard: To today, we're gonna be talking about why you're not as profitable as you, you think. It. Um, this isn't a MA so as you guys are asking questions in the comments, me and Eric are gonna be paying attention to that and making sure that we get those questions answered.
Kent Bullard: Okay. Um, a few things I want to just touch base on and we'll, we'll re revisit this again, but we have a few things that we've got coming up that we're doing in partnership with Kaizen. Which is we have a financial intensive, which is gonna be going over all of your finances, getting everything set up correctly.
Kent Bullard: Um, here at Institute Headquarters in April on the 23rd through the 20. Fourth, I think it's a two day. Um, you guys can find that on our website at we are the institute.com/events or upcoming events. Um, and check that out. It's gonna be fantastic. Eric, do you wanna speak a little bit to that?
Eric Joern: Yeah, yeah, I'd love to.
Eric Joern: We're we're excited. We have, uh, our whole entire partner group will be there. So you are getting the whole roster of heavy hitters and it, and it is gonna cover finance from A to Z meaning. How does this interpret financials? Your basic p and l and balance sheet, and what information to clean from that?
Eric Joern: All the way to I've exited my business and how do I manage that new wealth that I created through the process and obviously the steps on how to get from A to Z to. That, uh, that wealth creation stage.
Kent Bullard: We've had a lot of people, especially through our, our round tables and through through the institute work that have asked for, you know, something like this and we, we spent a lot of time going through all the items that need to be included in that us as well as, uh, oh, I guess I'm Cecil today.
Eric Joern: Love that.
Kent Bullard: But, uh, to really just define exactly what you guys need in an intensive. So if you, if you're really scrambling with your finances, this is a, this is the intensive. You should, you should attend. Um, and the last thing, and maybe I'll say that for later, let's, let's just jump into some content.
Kent Bullard: Okay? So Eric, I'm gonna ask you why. In your experience with the shops that you worked with, why do you feel that they're not as profitable as they think they are?
Eric Joern: Wow. Do we not only work with around 200 shops ourselves as current clients, we probably talk to another 200 shops every year that, that are not clients.
Eric Joern: So when we're talk, when we're going through the financials, right, that actually one of the biggest questions we get is, I made money on paper, but I have no cash. Right, and profit can be an interesting thing to to think about, right? You can just say, Hey, this is what is on my p and l, and I'm good and happy with it.
Eric Joern: All, but what we don't know is we were hyper leveraged. Meaning we, we used a bunch of loans to buy everything that we needed, or, hey, we're early, you know, we're early on year one, two, or three. We had to go out to the bank, get loans to buy all the equipment to maybe we bought the shop and now we're paying the TE service.
Eric Joern: Well, that, that's not accounted for on the bottom line on your p and l No, that comes out of your profit. So that might be one of the, um, supernatural reasons why you, uh, you might not feel like, Hey, I'm as profitable as the, as the p and l my accountant gave me. Or even worse, the tax return said.
Kent Bullard: I mean, there's a lot of things, there's a lot of things you can look into.
Kent Bullard: You know, I, I've, uh, had a client in the past where, I mean, they were doing about 27% net profit. And so we went through the numbers. We looked at their, their gp, we looked at their parts, we looked at their labor, we looked at their expense controls and everything, and they were a 27%, uh, net operating profit.
Kent Bullard: But like you just said, they were over leveraged. They took a lot of loans. They, they overextended and so their debt repayments every month was like $13,000. So it was eating all of their profits up, let alone being able to set anything aside for taxes or for, you know, being able to, uh, you know. Have, have a, have a cushion, right?
Kent Bullard: I mean, how many shops out there have you worked with that don't have that? You know, three to six months of operating capital.
Eric Joern: Yeah. Build a reserve, right? Pay down debt. Eradicate debt. Build a reserve. Oh, and you gotta pay taxes too, right? So maybe you hit $300,000 of profit on paper and you could be. That profitable performance wise.
Eric Joern: But now we're paying a third Don, uncle Sam. The third goes to debt service and the third is sitting in our savings account. 'cause we had no emergency savings.
Kent Bullard: That's right. And think about that. So if you've, if you've, if you're showing net profitability on paper and you don't have any money, what's gonna happen come tax season?
Eric Joern: Yep. You're gonna, you're gonna get squeezed. I call it a, the tax squeeze.
Kent Bullard: It hurts, it punches you in the face.
Eric Joern: It's uh, it's something that we dealt with a lot. Uh, you know, we've worked with businesses outside of the automotive repair industry. Um, our construction contractor, contracting friends. Right. You guys see 'em in your shops, right?
Eric Joern: They get new trucks pretty, pretty frequently 'cause they don't want to pay tax. Right? So they're buying trucks every year, but they buy 'em on loan and eventually we run out of deductions 'cause we're accelerating. We're super aggressive 'cause we don't wanna pay tax. And now we gotta pay loan payments. But I run out of deductions.
Eric Joern: Next thing you know, I have no cash 'cause I'm using it to pay my my trucks off, but I don't have the tax deduction 'cause I used it or maybe even wasted it in prior years. Now all of a sudden, I don't know where I'm gonna get the cash to pay my taxes. And we see 'em on installment plans for taxes all the time.
Kent Bullard: So, you know, we might be, there might be somebody out there right now who's like, well, I'm not profitable. Yeah. I, you know, so I'm not even showing profit on paper. How do I, uh, and in fact, I'd love to just talk to you about this, about cash flow strategies. How do I know if I'm in a healthy position or not?
Eric Joern: Yeah. We, um, couple things, right? So a, we can put on our banker's lens and a banker's going to look for one and a half to two times what's called debt service coverage ratio. Meaning I'm making enough. Profit and cash flow from my operations to cover my debt. At least one and a half. My debt payments at least one and a half to two times throughout the year.
Eric Joern: So meaning if say, so
Kent Bullard: what's the, Eric, what, what would be the formula for that? How would I know what my ratio is and whether or not I'm, I'm one and a half to two over.
Eric Joern: Yep. So what is, what is your principal portion of your loan payments? So meaning I say I make a $2,000. Per month loan payment of that 1500 pays down my principal 500 is expense on my p and l as interest expense.
Eric Joern: So we have then our net profit at the end of the year. So say that is a hundred thousand and well actually, that that already does, uh, no, it maths out. Nevermind it doesn't. So we have 18,000 that we have in debt service and we have a hundred thousand in profit. Right. We're now covering that debt service.
Eric Joern: Five times it's five and change, but let's just say five times we're covering that. So that means with the profit we can afford to pay our debt payments five times. Good, healthy position to be in. So then
Kent Bullard: you're in a healthy position there. But if you don't, if you're below two
Eric Joern: Yep.
Kent Bullard: How does the bank view that?
Eric Joern: Yeah. Yeah. Two, two, they have to sit in front of a loan committee and make a hard decision. Right. And that you might get some emotional, um, decision making to, to make a debt decision. They might say, eh, we gotta look now at history. What does proforma look like? What do we look at going forward? Um, and we don't want to get into a point where we have, we have the bankers making an emotional decision, right?
Eric Joern: At the end of the day, they gotta get paid and they gotta safely get paid. Right? They're gonna evaluate a risk-based decision. So when we're in one and a half to two, I believe under one and a half is almost a, at least for most lending situations that we, we go to now you can go SBA, there's a lot of other routes you can jump through, but most banks are aren't happy with a one and a half.
Eric Joern: Uh, one and a half is bare bones, bottom line. Um, so we really wanna see that that's leverage,
Kent Bullard: and especially depending on the ba, the bank that you work with. You might not have a great conversation with them because they're not gonna be kind of like a, a smaller bank that is looking at loans like that.
Kent Bullard: They might be large and they wouldn't care. It wouldn't be worth it to them.
Eric Joern: Absolutely. And then they're gonna look at something like a current ratio, right? How many, how much, how much do I have in current assets? So, so now we're moving to a balance sheet, right? Um, which is weird. Most of us don't even look at a balance sheet ever.
Eric Joern: Right? How many shop owners actually know what's on their balance sheet? So,
Kent Bullard: so just to to recap, we have debt service coverage ratio.
Eric Joern: Yep.
Kent Bullard: Right. Okay. And then now you're talking about your current ratio. What's the current ratio?
Eric Joern: Yeah, current ratio. Simple. Simple equation. Current assets divided by current liabilities.
Eric Joern: So, so what does that mean? So say I, you, I have a lot of terms with my parts vendors, right? And at the end of the month, a lot of us as shop owners have been in this position. We haven't, we've kept our, our finger off the pulse and, and next thing you know, we get that parts statement and it's 15,000. We got 10 grand in the bank and our heart c crunches a little bit.
Eric Joern: Well, we have an under one debt service ratio, right? We have less cash than we have. Debt owed to our vendors and Right. And we're talking short term debt, meaning this is, these are things that we have to pay in less than a year. So that's what, a, not even that,
Kent Bullard: but the short term is gonna have a lot higher interest rate on that.
Eric Joern: Exactly. So
Kent Bullard: even you could be making payments and feeling like you're making a dent, but it's not touching the principle
Eric Joern: for credit cards. Right. It's
Kent Bullard: not touching the principle.
Eric Joern: Exactly. So, so, so we wanna see that at least over one. Right. And it, and it really depends on, on what your, um, how much do you, how much.
Eric Joern: Volume to go through. Right. If, if we're constantly churning, if you're just barely over one, well that gets a little scary, right? You, you lose one, you know, something happens. The shop has to shut down for a period of time.
Kent Bullard: You're not gonna have that, that cushion to be able to keep operations up. Yeah.
Kent Bullard: 'cause you don't have it.
Eric Joern: I,
Kent Bullard: I advise, you know, taking some kind of percentage and doing an allocation every single month or every, every, every period where you're gonna be doing your regular rhythm, either the 12th or 25th, whatever, whatever your rhythm is. And just setting aside that money. Just, just 'cause put it in a, in a bank account that you have to physically go to, to pull money out just so that you know that if something happens, it's there.
Kent Bullard: It's not, it's not touched.
Eric Joern: New Shop, our
Kent Bullard: biggest.
Eric Joern: Using that principle.
Kent Bullard: Oh, go ahead. Sorry.
Eric Joern: Eric. New shop. We're new at this, I guess.
Kent Bullard: Yeah.
Eric Joern: Uh, new shop owners, um, one of the biggest things that we see, sales tax debt, because they don't do exactly what you talked about, right? Every 10th, 25th, whatever it may be, we're moving that money over.
Eric Joern: That is, uh, I'll, I'll call that precious cargo, the sales tax money that you collect because it's never really yours. Taking it, handing it off back to the state. You're never, it's not an income, it's not expense.
Kent Bullard: What would you recommend in terms of how, how, how much should I be putting away for that,
Eric Joern: for sales tax?
Eric Joern: Um, well, the great news is you can run a report on your shop management system that tells you exactly how much sales tax you collected. That's the, that's the simplest way to do it. Right. So we we're on Friday or maybe Monday every week. We go and we look and see in our shop management system, we collected, you know, $2,000 in sales tax and we're gonna transfer that money right over into a, an account that we pay our sales tax out of.
Eric Joern: And that way we don't spend it. And, and we're getting into Profit First Concepts. Uh, I actually taught a class on Profit first, I think last week or the week before.
Kent Bullard: Um, it's something I'm, I'm personally really passionate about. I've been doing Profit First myself personally for, you know. A very long time, and it's something that's like a, I also did it in juxtaposition with like, uh, Rami, uh, the automated, like, I'll teach you to be rich.
Kent Bullard: Okay. Yep. Those systems, because like behaviorally, like I am, I'm impulsive, I have a DHD, I have a hard time managing my finances, so I try to create the systems that are automatic that I don't have to touch because as soon as I touch it, I'm gonna break it.
Eric Joern: Yeah.
Kent Bullard: Oh, a hundred percent And I'm gonna ruin something.
Kent Bullard: Um, but for me, I also make sure that there's at least an additional cushion on top of that. Not just, you know, say we took in 2000, but maybe I might have like a, a five to 10% cushion on top of that to say, okay, instead of 2000, we're gonna do $2,200 and move that over.
Eric Joern: Absolutely
Kent Bullard: right, so that you have just a little bit more just in case.
Kent Bullard: 'cause something always happens. Something always comes up.
Eric Joern: And the great news, if the cash is not in your bank account, you're probably not going to spend it.
Kent Bullard: Exactly. You, I don't see it. It doesn't exist.
Eric Joern: Yeah.
Kent Bullard: Right.
Eric Joern: A hundred percent. All right, so, so we talked about cash flow, but now let's talk about, you know, hey, I think I'm.
Eric Joern: Like most shop owners we're probably mostly making our profitability decisions based on our shop management system only, and I think
Kent Bullard: half the conversation there
Eric Joern: ha exactly. I think most of you know why shop owners think they're profitable and then they're really not come from, Hey, we have not captured accurate data inside of our shop management system.
Kent Bullard: That's the other thing is like, you know, I've, I've, I've brought in a few. New clients over the past, you know, one or two months. And we go in there and we're looking at their labor gp, the shop management system says that they're at 70% or around there. And I go, all right, I automatically don't trust that.
Kent Bullard: So let's jump in. And we see that it's not, it's not adding any kind of a, a labor or wage or cost to that in the shop management system.
Eric Joern: Yeah.
Kent Bullard: Which, if we actually ran the numbers, you know, like one of my clients, um. Three weeks ago they were, we were doing the math and it's like, that's the thing. I love it that Wayne says it, the math's got a math.
Kent Bullard: So we look at the math, got a math, we're missing, we're missing $15,000 at the bottom line, but we've got our margins, quote unquote. But when we add back in, we see that, oh, we didn't get a 70% labor gp. Mm-hmm. We got, you know, a lot less than that. Less than 50% or around 50%. And if you were to add that back in, well that's where the money went.
Kent Bullard: That's where your net profitability went. You know, we talk about shooting for that 65% gp so that you have that. But here's the thing, and this is the way I like to think about it. So my GP essentially is for every dollar I bring in, like if I were to bring a dollar in and my GP was at 50%, that's 50 cents on the dollar.
Kent Bullard: I get to pay my expenses with those 50 cents. And so then it comes down to cost controls. And this is where I see a lot of the shops are like, well, I don't, I'm, I'm getting the margin Now. You set your, your parts margin, your labor margins. You're, you're getting a little better about how you, how you estimate the jobs and, and the work and all that, and how we sell it.
Kent Bullard: We get more conversion, but at some point, all of that money doesn't make it to the bottom line. Where do you see a lot of people kind of miss when it comes to expense controls? What are the things that are out of, out of sync or, uh, out of leverage or over leveraged?
Eric Joern: Yeah. Yeah. Well, a lot of what we see is those who, who aren't intentional with their spending.
Eric Joern: So they might be working with a marketing agency. Because somebody told 'em to, right? Hey, you need to spend more on marketing. You need to spend 5% of your sales on marketing. They hear something like that. And I'm using marketing because
Kent Bullard: I'm
guilty.
Kent Bullard: We've said that,
Eric Joern: but with a
Kent Bullard: caveat and an
Eric Joern: Exactly. Yeah. It is.
Eric Joern: Uh, yeah. Five. Go spend 5%. Okay, cool. We're gonna go sponsor my, my, uh, my nephew's baseball program. Um, well, not really good ROI out of it. Theoretically, you could spend, hey, and you know what, and if you spend the same amount on marketing, but it works. It increases sales. Now we have more. We have a lower overhead cost and a higher net income cost.
Eric Joern: So that's why I talk about being intentional with your expenses. Right? What is my ROI on that individual expense? Will it increase labor or will it increase? Um, increase gross profit will increase revenue. And if we can increase revenue, we could start outrunning our other expenses after we pay our technicians and pay for our parts.
Eric Joern: Now we, but a lot of people don't even know what
Kent Bullard: their, what, where that, that first break even is.
Eric Joern: Yep. The turnkey rate. And now you, and you have two questions to answer, right? Yeah. Turnkey rate on your p and l and turnkey rate from a cash flow standpoint, right? Because we started the conversation about talking about debt service, but on my p and l is, is our turnkey rate, right?
Eric Joern: What, what other expenses do I need to pay, but if I ignore my debt service? I, I'm not really hitting the cash net profit that I need to the money that actually will end in the shop, right? 'cause if we're doing planning on profit, right? Ideally we say, okay, we want to hit, uh, and when it comes to profit, I start like, like, I like to talk about dollars and percentage, right?
Eric Joern: Mm-hmm. Percentage says I'm operating efficiently, but dollars are what I can do with that profit.
Kent Bullard: Exactly.
Eric Joern: And if I want to do a build, right? Hey, I, I wanna do an expansion on my shop. And I need to earmark how much, how much, how many dollars did I have? And I, and if I set that and I say, Hey, I want to hit this profit and have this excess profit to, to fund this buildup for next year, but I forgot that, hey, I also need to include my, my loan payments in there.
Eric Joern: I'm gonna come up short of that number because I just did, I did the math, didn't math
Kent Bullard: you, you didn't do a proper burn rate calculation. I know that I'm gonna be spending an additional 5,000 a month for the next eight months. They said it's gonna be four months, I'm gonna double up. 'cause construction usually takes longer than that.
Kent Bullard: Yeah. And instead of 5,000, maybe I'll shoot for 8,000 a month and if, if, if I don't have that 8,000 in, in, you know, uh, my net operating after the fact. Well even then, 'cause you're, again, you were saying paying the debt service off. Right? Mm-hmm. All that debt, all that liability that's gonna eat away at your cash flow.
Eric Joern: You might have the percentage, but you don't have the money, then
Kent Bullard: you don't have the money and the dollars to pay it.
Eric Joern: Yep. Super important to think about that. Um, but now as we're, we're coming through the operating expense section, right, right away I'm going to look at occupancy. What's it cost for me to be in my building, right?
Eric Joern: Because if I'm at 12.5% for that number. Well, I don't have an operating expense problem. I have a revenue problem. That's where my focus needs to be all in on revenue at that point. But if I'm at 4%. My net income's not where it wants to be and my, what my gross profit is. Now we need to start combing through the rest of the expenses.
Kent Bullard: So, so first off, you said marketing and I, I want to caution people. So if we're already having an issue when it comes to revenue. Like overall revenue. One of the worst things we can do is turn off the spigot, so it comes with an asterisk. There's always a few things I look at when it comes to marketing.
Kent Bullard: I'm gonna just go through them really briefly. The first is, are we optimizing every vehicle that's coming in? So 300% rule, good, thorough inspection? Are we estimating all the work that was found and identified, excuse me, identified and determined how those gonna kill me for that? And old hell, at
Eric Joern: least you didn't fumble kaizen.
Kent Bullard: Right. Right. And then, and then the third and the third a hundred percent is that we, that we presented and converted as much as the work as we can. The, the next thing is are we, are we actually following up on that deferred work? 'cause that's another bit of opportunity. Uh, then I look at regular touchpoint with customers.
Kent Bullard: So what is our incoming phone script that would convert more of our best customers? And we address that. What does our check-in process look like? Where we can set expectations and also look at things like, you know, uh, making sure, Hey, where did you find us? So we know what lead source is gonna be most effective.
Kent Bullard: And then at the end, like when we do the customer checkout, we ask for the three RSS review, referral and return appointment. Then we look at. What is our next best step when it comes to marketing our current customers? How many people haven't been in the last six to seven to eight months that we can call and get scheduled an appointment?
Kent Bullard: Do it on slow day action plan.
Yeah.
Kent Bullard: Then not even touching marketing yet. We're gonna go to referrals. Can we ask our customers to get us a referral and go through referral list? And then once we've exhausted a lot of those things, then it can come down to how are we spending our marketing dollars?
Eric Joern: I think people forget about how valuable.
Eric Joern: A customer is once they're in your database, once they exist in your database, what is the cost to get that name inside of your database? You might be surprised it might be a hundred dollars to get that customer in that just that name in your database. So meaning if, if I'm, if, if I. You know, I'm, I'm rushing through and I'm passing on those opportunities and I think you listed it five or six easy opportunities.
Kent Bullard: Oh yeah. And those don't, those don't cost you anything other than time and effort and fixing your processes.
Eric Joern: But if it costs you a hundred dollars to bring this new customer in the door to replace an existing one, right? We're taking that right off, right out of gross profit,
Kent Bullard: right?
Eric Joern: So if you made $300 of gross profit, you really only now have made $200 because of that cost, initial cost of acquisition, you had to pay for
Kent Bullard: the marketing.
Kent Bullard: Yeah,
Eric Joern: you can say, Hey, lifetime value and justify it that way. But I, I don't like doing math calculations to justify, um, improper execution. We can, I love
Kent Bullard: that.
Eric Joern: You can find, well, it's like statistics in general, right? You can find, you can swing the statistics any way you want to justify what you want, want to do.
Eric Joern: But if you do that and you're, at the end of the day, you're not hitting your goals, you're just, you're just giving yourself an excuse. You're not holding yourself accountable too.
Kent Bullard: So, so I wanna go back, 'cause right now we talked about, you know, we're looking at expense control. By the way, those of you who joined us later.
Kent Bullard: In this, uh, live stream, ask questions. We're talking about why you are not as profitable as you think. You know, it looks on paper that you're profitable, but you don't have anything in the bank account. That's what we are conversing about today. Uh, again, joined with Eric Jordan from Kaizen, uh, CPA. The, what I wanna go back to is you said there's two, two turnkey rates that we want to.
Kent Bullard: Pay attention to. What are those specifically? 'cause we, we went into 'em, but I just want to clarify those for everybody out there.
Eric Joern: Yeah. Yeah.
Kent Bullard: The first turnkey rate is what?
Eric Joern: Yeah. What, what is our, our, what is our net income turnkey rate, right? So how much on our p and l does it cost for us to break even? So, so we,
Kent Bullard: right.
Kent Bullard: So that, would that be all expenses plus our. Debt services.
Eric Joern: So I'd do that before debt service, right? 'cause that's the ca, that'll be a cash flow turnkey,
Kent Bullard: right?
Eric Joern: Meaning, meaning we're gonna take that one step further. So, you know, are we operating profit or are we operating at break even, right? Are we charging right margins, et cetera.
Kent Bullard: So, so for those who don't, you know, I'd look at things like, what does it cost me to do? So my cost of goods and services plus my, my expenses, and that could be sales expense, marketing expense, and fixed expenses. Correct.
Eric Joern: Yep. Yeah. What it cost me to be in my building, pay my accountant. I have beautiful to,
Kent Bullard: and so if I were to add that up, that becomes my first benchmark for cash flow.
Kent Bullard: Right? My break even for cash flow.
Eric Joern: Yep. Yep. Let's just say we're in a million dollar shop and that number's 400,000, right? It costs me 400,000 to pay my rent. I pay myself as the, in the peer owner seat. Um, I'm paying my accountant, I'm paying for my shop management system. I'm paying for my marketing agency, et cetera, all those things.
Kent Bullard: So, so at the very least, I have to be doing around $34,000 a month to make that. So that would be my first benchmark to break even. The second turnkey rate is what
Eric Joern: is now we're now we're talking about. Total cash flow. So now we have to factor in what my debt service is, right? What do I have to pay on long, long-term fixed debt?
Eric Joern: So that, that's not gonna include like a credit card unless you're holding credit card long. You, you've accumulated debt on a credit card, you're carrying a balance.
Kent Bullard: I, I'd rather assume people are than aren't. 'cause if you look at, you know, today's statistics, most people have, have, um, that debt.
Eric Joern: And if you're doing that, my suggestion is you're stopping using the credit card.
Kent Bullard: Yeah. Stop and freeze it. Cut it. Yep. Throw it away. Uh, we're, I wouldn't close the account there. Somebody would argue, well, I want to, I want to have my credit, my point liability. How are my points? Liability alone is just either that or set it to automatically pay off every single month, but you still have to account for it.
Kent Bullard: So my second would be, okay, how much do I pay in my debt services monthly?
Eric Joern: Yep. Yep, yep. So what do I have to pay for debt service monthly? So, right, if, if, if, if I'm, if I have that same example and we're at 34,000 and we have another 6,000 a month in, in debt service, now we're at
Kent Bullard: 40,000, then I'm target 40,000
Eric Joern: or
Kent Bullard: 40 a month, I would say, I would even say add another 10 to 15% cushion on top of that so that you can have some kind of a plan to pay some of these debts down a little sooner.
Kent Bullard: Yeah.
Eric Joern: You
Kent Bullard: know, avalanche, snowball method, whatever that is. If we don't plan for it, then the money's not gonna be there for it.
Eric Joern: Start building some reserves
Kent Bullard: or build reserves. Yeah. Set aside 10 to 15% just into an account. And, uh, for me personally, I like to see six months of operating expense, but I had a client they're doing, they'll do about 5 million.
Kent Bullard: Right. And it's like, okay, well they're, they're, they're, how much do keep for, I mean, three months is gonna be, do you know what I mean? So it's
Eric Joern: like that better be in, in a income bearing account, not a, uh, checking account,
Kent Bullard: uh, money market account of some kind. Savings
Eric Joern: account, money market, high yield savings account.
Eric Joern: Those are starting to temper a lot. But I mean, we, we lived in a world where we're getting four or 5% and pretty accessible cash. Um, huge opportunity missed by a lot all the time. It's, it blows my mind. Uh, you, you, you open great business, great business owner, right? You've accumulated $400,000 of cash and you're earning in a traditional savings account, less than a percent of, of return on that money.
Eric Joern: You are probably, it is devaluing as it sits in that savings account.
Kent Bullard: So if I were.
Kent Bullard: To set these benchmarks. I've got 34,000 to hit my cash flow. I've got 40,000 to make sure I'm covering my debt service. Then after that, I can start thinking about what the net profitability is and what I can take home. Right. Exactly. In order to hit whatever that number is. So if I wanna make 200,000, uh, in net profit that I get to take home from my investment, I would have to do that after the fact, after that 34 and that 40,000.
Eric Joern: Yeah. Yeah.
Kent Bullard: Anything beyond that.
Eric Joern: 60, 58, $60,000 a month. And
Kent Bullard: I would say
Eric Joern: right in gross profit. Um, yeah, adding a little cushion. Right. I don't wanna factor a little cushion in there. Yep. And I love adding
Kent Bullard: a little cushion.
Eric Joern: It's smart though. It is smart. 'cause again, we are. We are people who, um, generally use what's available to us.
Eric Joern: And if we Right.
Kent Bullard: So if it's available, then we're gonna use it. Unless we've already set it aside and said, no, we're not gonna touch this, then I can't use it for something that I shouldn't be using it for.
Eric Joern: Yeah. And so if we set our goal at 55, and that's the exact number to hit it, right? We're gonna do as much as we need to to hit the 55.
Kent Bullard: Mm-hmm.
Eric Joern: But if we set it at 58 and we hit 58, and even though that's got a little bit of slack in it, that means. That
Kent Bullard: month has to make up for the month. We didn't hit 55.
Eric Joern: Exactly. Another great point.
Kent Bullard: This, this is something that, you know, just in, in, if we're talking about profitability and revenue and all that, one of the things I, I've seen, it's like, look, we, we are hitting this target for 55%.
Kent Bullard: Let's say it's, let's say it's parts margin. We're gonna hit 55% parts margin. Yeah. And what they'll do is they'll say, well, some of these things are underneath 55%. I can't charge that much. It's gonna be 48, it's gonna be 50, whatever that is. Yeah. And then they have one that might be up near 70. And they go, oh, that's way too much.
Kent Bullard: I'm gonna dial it down to 60. It's like, no, no, no, no. You needed that. You needed that buffer to, to make up the difference so that you hit that average again, it's an average, not like. The benchmark you, we wanna hit above it sometimes and, and below it. We can't help sometimes, but they have to even out to hit that, that number.
Kent Bullard: It's the same thing with our cash flow. You're gonna have months where you're gonna do 60,000, 65,000 revenue, but then you'll have months where you're gonna be a lot closer towards where you don't want to be, where you're starting to out kick your coverage. You're starting to be, dip into your cash reserves.
Kent Bullard: Right.
Eric Joern: What happens in January, February, right when our, our revenues naturally debt. Outta seasonality, uh, all of a sudden maintaining the same rate. Then as you do in June or July when things pick up, that generally doesn't work that well.
Kent Bullard: I, I think oftentimes people forget, most of this is two things like we, like right now we're kind of talking about, a little bit about generating revenue, but it's, but most of this conversation is gonna be about expense controls, and the thing is, you can, you can only go down to zero as much as you can.
Kent Bullard: Right? Yeah. You're gonna hit, you're gonna hit that zero point and go, well, I, I can't go any lower because this is what it costs to rent my building. This is what it costs to, you know, pay these, these softwares and licenses or pay the employees and all that. And so then the question is, what are we doing to increase revenue?
Kent Bullard: Yeah. But let's talk more about our expense control. So one of 'em we talked about was marketing. The second we talked about was occupancy or your rent, or your lease, or your mortgage, whatever that is for the building you're in. What are other areas that we might wanna look at?
Eric Joern: Insurance
Kent Bullard: and how do we know that we're out of, out of whack with that?
Eric Joern: Yeah. Yeah. And it, it is where things get more difficult, right. While it, it's a lot easier to spend time concentrating on gross profit. Right. We, there's millions of benchmarks on what we need to pay for a technician, what we need to get for markup on a part. Um. And how to handle that. And, and it's impactful, right?
Eric Joern: But once we get past that, it starts getting more complex, right? Because insurance, how do you know how much you should pay in insurance? And now you have variabilities around, do we provide health insurance for our employees? Where are we located? Um, have ex location has a significant impact, right? If I'm in, if I have a shop in Florida, my insurance load is gonna be astronomical compared to South Dakota.
Kent Bullard: Yeah. And it's, it's important to have some grain of, you know, um, grain of salt there. You know, that's why we look at, in our gear performance groups, we're looking at comparative data. There. Peer groups are a great way to do it. Yeah. Where's that benchmark and where, how do I compare against that? But that doesn't necessarily mean that that's the end all be all.
Kent Bullard: You might have a benchmark that's gonna be a little higher, like. For instance, I had, I, uh, I had a client and they're kind of in a family situation where they sold the business. They're doing it where they're paying out an employee kind of a rate on that, and they're still kind of working in the business.
Kent Bullard: So it's like, okay, well if we, if we looked at all this, their margins are all where they need to be, okay, but they're not, they're hitting it, you know, five to 7% net profit. And it's because their employment expense is way too high because they have too many bodies for what that business is supposed to do.
Kent Bullard: Yeah. Right. And so it's like, okay, well if this is the situation, they're a C corp, how they're, how they're formulated and everything. So it's like, okay, if that's the situation, then our benchmark for net profit can't be 20%. It's gotta be 30%.
Eric Joern: Yep.
Kent Bullard: And then we work back the numbers from there, and that'll end up making sure that you drop the 20% that you're looking forward to at the end of the year.
Kent Bullard: Like you, it's, we use these benchmarks to make strategic decisions about how, how we control our expenses and how we, how we manage these things. So. Other than occupancy, what are we looking at?
Eric Joern: Yeah, so, so we're looking at, uh, we've looked at occupancy, we've talked about marketing, we've talked about insurance.
Eric Joern: And insurance. You can just go, right, you can go shop rates, um, you know. Uh, even us as a firm, right? We participate in a peer group similar to gear performance groups. Uh, and one of the things that we found was our IT spend was dramatically higher than the rest in our group. And we, we went out and we did some market evaluation.
Eric Joern: We found that, hey, you know what? We agree, uh, and we went and. Found a way to cut that expense pretty dramatically. Um, so as you go through your p and l, right, great exercise. It might not be a, Hey, here's a specific dollar I need to hit, but this might say I'm spending much, much more on this expense than anybody else that's in my peer group.
Eric Joern: I should probably go shop and talk to other providers that can provide this service. And it could be something as small as, you know, I've been using Cintas for uniforms and cleaning carpets and all that fun stuff and you know, maybe I have some. Extra people that are in my shop that have nothing going on, or not, not as much utilization.
Eric Joern: Maybe we buy a washer and dryer and clean our own uniforms. And, and I, I think that's probably a crazy idea. Um, but, you know, it's, it's using that thought and creative exercise to come up with concepts like that.
Kent Bullard: I like looking for the gap. So like if I've got a goal set, okay. And we can use that. Same example, you're talking about 34, 40,000.
Kent Bullard: Let's say our goal is 60,000. We have that gap of 20,000 we gotta make. Yep. Right? And so what I, what I often fear is that people go, okay, well. I'm looking for the one thing that's gonna get the $20,000. I was like, no, no, no. It's, it's a combination of things. So what can I reduce in my, my IT expense? By the way, we did this last year and we cut it, uh, down to a seventh of what it was annually.
Eric Joern: Wow.
Kent Bullard: And that was one of those things where it's like, okay, well we saved that much money. Okay. Uh, now we can look at what do we do to increase our revenue. It might be looking at your average repair order, increasing your inspection process, or, uh, building a better sales presentation or adding, adding more value, or even your marketing can curate the types of people that you're bringing in who are gonna value your business more than those you're currently bringing in.
Kent Bullard: So it's, it's all of those different strategies combined to make the difference of that $20,000 gap. Absolutely. You know, it can't just be, I'm looking for the one thing, it's, I'm gonna have things that are gonna add to it. I'm gonna have things that, that I can take away to make that gap happen.
Eric Joern: Right.
Eric Joern: Yeah. It's,
Kent Bullard: and if we do
Eric Joern: that, that 5,000 cuts right? Is, is the principle of it. I mean, think about your personal spending, right? Amazon has probably created a lot more debt in this in the world. In consumer world, it's possible because it's easy. They made it so easy to buy and you know, Hey, it's $10, it's $15, it's $10, it's $15.
Kent Bullard: Yeah.
Eric Joern: And then you look at the month and you spend $800 on Amazon. Oh gosh. And you're like, what did I buy? How often are we doing that Inside of our shops too, right? Hey,
Kent Bullard: my, my wife a little upset with me recently 'cause we, we ended up, uh, deleting DoorDash.
Eric Joern: Mm-hmm. Oh,
Kent Bullard: that's
Eric Joern: a big
Kent Bullard: one.
Eric Joern: Yeah.
Kent Bullard: But it's like those little things.
Kent Bullard: They, they, you know, raindrops make oceans, man. So we covered marketing, occupancy insurance, it spend, let's do one more. What's one other big area that people tend to miss in their expense controls that are not allowing them to get the net profit they're looking for?
Eric Joern: I mean, so, so we, labor is always a, a sensitive category, right?
Eric Joern: And we oftentimes, when we're talking about chops and we focus on gross profit, we're talking about technician labor, but then there's an all sorts of other labor that falls below the line. Meaning we might be paying our service advisors, so right. Are we paying our service advisors correctly and are they right for the amount of volume that our shop has?
Eric Joern: But maybe we have multiple, uh, maybe we are paying an office manager, we're paying a third party bookkeeper and we're paying a CPA.
Kent Bullard: Maybe we're a little top heavy when it comes to our, you know.
Eric Joern: Financial backend.
Kent Bullard: Exactly. Our management suite or whatever that looks like, right?
Eric Joern: Yeah. Or maybe we have duplicate subscription.
Eric Joern: The subscriptions really is, is where we find it's never big dollars. Right? It's, you know, the a hundred bucks, 200 bucks a month. I can't tell you how many shops we've gone through the GL with them. They say, I thought I canceled that. Or, or, oh, we haven't used that in quite a while. And, you know, maybe it was a one time use, you know, it was a labor guide I needed specific access to, to figure out how to execute a certain repair.
Eric Joern: And it's on an autorenew and, oh yeah, I can, on that subscription.
Kent Bullard: I, well, like we even made a switch recently. Um, well. Mid last year, but we went from Slack to moving to just using Google Chat. We had it. We had the company. We're like, oh, I don't know why we didn't do this before, but I mean, when Slack is 500 bucks a month, 600 bucks a month, 700 bucks a month, depending on how many users you have, that adds up.
Kent Bullard: So what are your software subscriptions that you guys are paying for that you're not actually using?
Eric Joern: And it doesn't have to be, you have to cut the whole software, but sometimes you need to cut user seats. We did the same, we did a similar thing with Adobe.
Kent Bullard: Mm-hmm.
Eric Joern: Um, where we had Adobe it, it bloomed because we thought everybody needed it.
Eric Joern: And then we looked at this, you know, next thing you know, we spent $20,000 in Adobe licenses and we said, oh, something's wrong here. So we went and interviewed the staff and turned out about 10% of the staff used it more than. You know, weekly and we said, Hmm, there's gotta be a better, cheaper alternative.
Eric Joern: And maybe these power users need seats, right? Or, you know, we, we operate on a chat GPT team subscription, and while we could just go and say, everybody needs chat GPT. Now that's great. That costs our firm, I think it's like around another $20,000 a year of every single. Employee got that subscription. Yeah.
Eric Joern: But instead we are asking our team to request it. The why, how often are you gonna use it? Are you using a free version with nonsensitive data first? And you're using that on a regular recurring basis because we want ROI out of that product again. Right. Okay. You're using it regularly. Now how can I measure the noticeable improvement in efficiency?
Eric Joern: And now I can calculate an ROI. Does it make sense for me to spend the money on that? Because, you know, it's
Kent Bullard: something that, just a simple calculation of what's my ROI on this is, it could save a lot of of dollars. Um, one we have a, oh, go ahead Eric.
Eric Joern: No, we, yeah, yeah. One interesting. Oh, and we got a good question here.
Kent Bullard: Yeah, we had a, a question. Sorry. What's, what's the question? Is Todd Ainsworth? So what do you think is a good target percentage for social media presence?
Eric Joern: Wow. That's an, that's a, I wish that was an easy question to answer.
Kent Bullard: That's a really nuanced question. 'cause you're talking about marketing in general.
Kent Bullard: Marketing could be anywhere from five to 10 to 12%, depending on if you're maintaining or growing, at least what we've seen. But for me, it depends on your return. So if you're, if you're getting a five to one return on your dollar spend for social media, then yeah, do keep going. But if you're only, if you're getting a one-to-one, that's something to consider.
Kent Bullard: Maybe, you know, another marketing, uh, campaign or another marketing area, uh, like your Google Ads is getting a much higher, uh. Dollar to dollar ratio. So take the expense from that and put it towards there.
Eric Joern: Yeah, I, I, I avoid generalized p and l percentages when it comes to marketing spend. I, I think you have to dig deeper, right?
Eric Joern: Yeah. So, so what is my cost per acquisition, my lifetime value for that customer? So you need to know your gross profit. My lifetime value. So here's how much revenue I have through the lifetime of that customer. So say my average customer visits me 20 times in their lifetime, whatever it may be, and they spend X amount is my a RO, and here's my X amount gross profit percentage, and here's what I had to pay to acquire that customer.
Eric Joern: Whether it's a social media presence, whether it's a mailer, whether it's whatever it may be. Right, and that that will answer your question individually on that. On that decision
Kent Bullard: I was doing, I was doing the maths. If, if they brought, you know, if our clients came in 20 times in their lifetime, it's $750 average pay order, it's around $15,000.
Kent Bullard: And let's say my cost per acquisition is 50. I dunno, I've seen, I've seen a wide range, some, depending on where people are at, they might have population density, they might have to invest more, but, you know, earn from 50 to 150 for your, your cost per acquisition.
Eric Joern: Mm-hmm.
Kent Bullard: Right.
Eric Joern: That's a pretty good ROI.
Kent Bullard: That's a healthy ROI, it's 500, or like, I had somebody who was doing radio ads and they only got three people in, but it was $1,600
Eric Joern: Yeah,
Kent Bullard: a month for radio ads. That's
Eric Joern: not a good ROI Your lifetime value is, you know, $2,200. Right? And then your gross profit is 50% and then it costs you $500 to acquire a new customer.
Eric Joern: So really lifetime value, you get outta that customer is like, I think that was six 12 or something around that. Uh. That's not gonna pay bills long term for your shop. You're not, you're not gonna be able to have that growth. Um, and, and actually when it comes to percentage, I think what something that's real, something that's really important to pair with your marketing cost is your how much cost to be in my building, right?
Eric Joern: Because if I'm on a, if I'm on an interstate, or I'm in a high dense populated area where, you know, people are Googling, uh, looking for an automotive repair shop, uh. It's gonna be a lot cheaper to bring them in the door than if I am off the beaten path in a more rural area. The cost for me to get somebody in the door might be significantly higher.
Kent Bullard: Well, and I. Frankly, marketing is something I really love because I want to challenge those out there. If you've got a marketing budget, be really creative with it. Mm-hmm. In, in, um, embrace those restrictions. Right. So some, somebody I was working with a little while ago, they had like a, you know, $50 off. Uh, if you spend, you know, X number of dollars with us as a promotion.
Kent Bullard: Okay, well I could be really creative with. $25. Yeah. And have fresh baked cookies that I could be giving to my new customers that come in, or, you know, be more creative with that and donate it to a local, you know, community center that is, you know, really embedded in the, in the community and does good things.
Kent Bullard: And it's like you could be so much more impactful with your dollars than you think. And it doesn't necessarily have to be like a transactional thing. It could be very. Cultural, it could be, you know, a lot of the, the value elements there and reinforce the type of people that you were trying to bring in.
Eric Joern: Yeah. You can host an event to help to show somebody how to do a pre road trip inspection of their vehicle. Something like that, right? Gets 'em in the door, makes 'em think about how important the safety and reliability of that vehicle is long term. So, and who's gonna show up to that, to that event?
Eric Joern: Probably your ICP, your ideal fit customer. That's another whole, whole marketing concept you can go to down a rabbit hole of is who is, who is my ideal fit customer. 'cause I see these questions on the Facebook groups, on the forums, you know? Oh, uh. They don't, they won't like that labor rate or they won't like that part markup.
Eric Joern: And, and my question was put a lot of our own biases on that, I feel our own bias is your, is your ideal fit customer? The person that understands what a labor rate would be for, to go somewhere else for a shop or they looking at, Hey, how much will it cost to get my car operating safely back on the road?
Eric Joern: And what am I willing to pay for it? That's generally your, your ideal fit customer and do they value good service fixing, fixing it right the first time and probably time, right?
Kent Bullard: So, so one of the things I want to touch on right now, Todd, by the way, thank you so much for the question. Those of you out there who have any more questions, me and Eric are watching the chat.
Kent Bullard: We want to answer them live while we have you here. Um, one thing I want to touch on is we can talk about these expense controls all we want, but a lot of shops out there I know are likely struggling with one of the biggest hurdles is visibility. You're telling me, you know, you know, why am I not profitable?
Kent Bullard: I could see this, the numbers in the shop management system, but my p and l's not great.
Eric Joern: Yeah.
Kent Bullard: Here's where I'm gonna recommend, you know, we've been working with Eric and frankly, you guys and your team have done the majority of the work, but put together a kind of a, a chart of accounts program build. So if you guys are really struggling to just get it organized and get it clean so you can see what's going on.
Kent Bullard: Um, Eric now has a service that, uh, we're offering through the institute. Do you wanna talk a little bit about that?
Eric Joern: Yeah. Yeah, a hundred percent. And I'll, I'll talk, I'll open up with something we've, we found, we just finished going through this exercise with somebody, and one of the things we found was through their prior accounting process, they had bought some equipment on lease.
Eric Joern: Well, I said I, I guess I contradict myself. They bought equipment on lease, so when people see a lease, they think I'm paying a monthly, I have a monthly expense that I'm incurring for that. But there's a difference between what's called operating lease and a capital lease. So he had a dollar buyout at the end of the lease, which that means effectively we bought that equipment on a loan.
Eric Joern: Called it a lease, so that's called a capital lease. Well, guess what? In the prior year, if we would've treated it correctly as a capital lease, we could have accelerated all the depreciation, taking it in one year, versus spreading that cost, spreading that out over the lifetime of the payments. There's.
Eric Joern: There's cost benefits, that's a whole nother decision matrix. But our goal is something as simple as that is, Hey, hey, we need to educate you around. That's how you handle this. So you have the opportunity to make that decision, right? If you, if you don't do it right, you no longer have the opportunity to make the decision on how I take that as a deduction, and is it an accurate reflection?
Eric Joern: You know, if I own that at the end of the, at, at the end of the day, I don't think I want that in my lease expense account, right? I, I really want. To know, Hey, I now have an asset that my business owns exactly, and I'm going to look at that much differently than I look at something that I have an ongoing expense for.
Eric Joern: And a bank looks at that differently too.
Kent Bullard: So, so frankly, a lot of you out there might be struggling with, well, I don't know what decision to make because we just don't have the visibility. Yeah. I would urge you, I mean, it's, it's worth the time and the effort to get this done. The, the, the money to spend is, is totally worth it.
Kent Bullard: The return on investment. Think about being able to make a. All the strategic decisions that we've been talking about with good numbers so that you can do the math and actually see what the ROI for, you know, the, the expense controls would gain you in an annual year or even for the lifetime of your business over the years.
Kent Bullard: It, it will save you so much money and earn you even more. Um, and I highly advise, reach out to Eric and Kaizen and, and get that service done for you if you don't have clean books.
Eric Joern: Yeah. Yeah. And I'll walk you through the process really quick of how that, what that looks and feels like because this e.
Eric Joern: Even if you, you don't go this route. Think, just even think this through, right? So we start off and we do a call, we, we have a questionnaire, and then we have a call where we talk through the questionnaire and that questionnaire identifies items in your accounting process that we might feel this becomes gaps.
Eric Joern: Then we're gonna address maybe even some operational things that you're doing inside of the shop that aren't even just on the p and l itself. And then we're gonna make sure that that institute GPG Ready reporting, uh, chart of accounts, is loaded into your QuickBooks file. We're gonna make sure we build a system that.
Eric Joern: Matches your shop management system, back to your books. And obviously we're also gonna coach you around your shop management system on making sure you handle transactions correctly, um, in there so you have accurate reporting, and then we're gonna create you a roadmap on exactly how to replicate that every month.
Eric Joern: And you walk away with essentially a, a built accounting system, um, that you can hand off to your bookkeeper. Uh, or you can, if you're executing it yourself, you can execute it yourself or, um, you know, I, I've, I have a feeling in many cases we're going to, you know, provide enough lift for our, our client to, or our, uh, that person that we're working with that they say, Hey, I don't want to deal with this.
Eric Joern: This is much more complex than I thought. And you guys just keep doing it.
Kent Bullard: And I highly recommend getting it done. You know, whenever we start with a new client. That's, you know, we address things like the urgent needs in care and then the immediate next step is how do we gain visibility? 'cause we can't make good decisions that have lasting, impactful, positive results if we don't know what's going on.
Kent Bullard: And that visibility is massively important. Alright. Um, we're kind of in the, the final minutes here with this, uh. A MA. Anyone out there watching now, if you have any questions about, you know, why you're not as profitable as you think you should be, this is the time to ask them. Uh, you know, I was thinking about this.
Kent Bullard: I was in a manager performance group meeting, um, a little while back, and we were, they were doing an exercise on proficiency. Now proficiency is really just how are we optimizing and utilizing the available hours that we have? And this is in conflict with efficiency. 'cause they're like, my guys are my, my technicians are productive.
Kent Bullard: It's like, no, no, no. Your technicians are efficient. So when they're on the vehicles, they are getting the work done in a very timely and efficient manner. However, you're not utilizing all of the available time that you have in the shop. And that comes down to the shop's workflow, right? Mm-hmm. And we were doing some math in between, you know, uh, the groups here, we found $5 million of, of.
Kent Bullard: Unutilized potential.
Eric Joern: Wow.
Kent Bullard: And it's like, it's like, look, and, and, you know, everyone kind of was like hanging their heads. It's like, oh my gosh, we, we missed a fight. It's like, no, no, no. Look, look at this. This is a good thing. Look at all this opportunity we just found. We just found $5 million. Okay. Then it comes down to just improving your workflow.
Kent Bullard: How do we schedule out? Are we, are we maximizing the technician, um, uh, utilization their time? Are we, are we, uh, setting their day up for success? Are we communicating effectively? Are we managing our parts, ordering effectively, or, you know, all those things that come operationally that if you've got the numbers dialed in, and this is where I'm like, this is a frustration of mine.
Kent Bullard: You're working with somebody and they're like, I need more cards. I need more of this. And it's like, if you. Have a system that is fundamentally broken and you want to dial that engine up to, you know, two, 300% of what it's doing. All you're doing is exacerbating those core fundamental issues that are there in preexisting.
Kent Bullard: And so I wanna optimize before I. Increase personally, that's my, that's my statement.
Eric Joern: The worst thing you could do is have to hire another technician because you've increased car count because we're not efficient or we're not optimizing. We're efficient on the car. We
Kent Bullard: might have in our process. You're stretch, you're stretching the work for three technicians across five technicians, and then you've got those additional to, uh, annual salaries weighing down your expense controls.
Kent Bullard: And so again, there, where's my profitability going while I'm paying? Probably far too much for labor 'cause we just didn't optimize the system. Not that any of those five technicians are doing the wrong things. But if you're gonna have five technicians, let's make sure they can produce the work of five technicians.
Eric Joern: And then the knee jerk reaction is, I got a bad technician. Right? Is the first thing that they think of is, oh, they're a 50% productivity, they're a bad technician. No, always start with you and your process and your system and, and. Are there cases I made the wrong hire or the wrong person's in the wrong C?
Eric Joern: Sure that can exist. I'm just gonna
Kent Bullard: assume that people are doing their best first.
Eric Joern: Exactly. Until you rule out that my systems, processes and procedures are not failing them. You can't put it on the employee.
Kent Bullard: Yeah. So we covered marketing, occupancy insurance, IT spend, I love the IT and software. That one is such a time sink labor, right?
Kent Bullard: Um, and then subscriptions. Anything else? Yeah.
Eric Joern: Now, now I have to think through a, a whole p and l. I mean, we never talk, we never do. You don't have
Kent Bullard: them lay
Eric Joern: laid down in your
Kent Bullard: head. Man,
Eric Joern: we, we, uh, we never really talk about parts. Um, and we talk about parts. Gross profit, which is largely managed the shop management system.
Eric Joern: Um. Parts Leakage to me is probably one of the largest expenses that we see that are, that are outside of, I guess, the initial gross profit measurement.
Kent Bullard: So, so let's talk about parts leakage for a second.
Eric Joern: Yep.
Kent Bullard: What is parts leakage?
Eric Joern: What is parts leakage? So, so normally people think about it as, Hey, um, people are stealing from me.
Eric Joern: Usually not the case, but sometimes the case. Uh, but maybe we're not charging for parts, right? Or, Hey, this is too much work for me to tag this on an ro. Um. And, you know, let's talk about a, a, a drain plug gasket, right? Let's say we do 300 oil changes and drain plug gasket costs us 25 cents and we forex it on our, uh, pricing matrix.
Eric Joern: That's a dollar per car. Um. Times 400 cars. It's $400 a month. It's five grand a year right there. And that's just, and I, trust me, I hear, uh, it's not worth me doing that. And I think it's
Kent Bullard: 5,000 bucks.
Eric Joern: That's $5,000. And then you $5. Five grand. I mean, that's a nice, that's a pretty decent vacation. Um, you know, you have those personal goals, Hey, $5,000.
Eric Joern: If you, uh, you know, let's just say your cost of customer acquisition is 20%, right? That's, that is now. A hundred thousand dollars in new revenue if my math, maths,
Kent Bullard: yeah. If we're, if we're not, if we're not ordering the correct part or a, you know, maybe a cheaper part, we're gonna end up paying warranty on that.
Kent Bullard: Or we're able to eat the cost there. Are we not managing our core properly? Right.
Eric Joern: Core return process? Are we not doing a statement reconciliation? Are we not comparing our parts usage report back to all the parts that are tagged on a repair order? I mean, uh, it
Kent Bullard: just, that can save you, that can save you so much money in the long run because you've got all this, this, um.
Kent Bullard: Inventory that essentially isn't being leveraged the way that it should be. Same with the labor inventory. We're not, we're not utilizing it as best as we can.
Eric Joern: Yeah. It's, and again, it's leaking, right? It, it's not, we're not mis generally, we're not mispricing, we're not, we're just, we're just letting stuff drift, right?
Eric Joern: We're, we, we, we haven't sharpened our processes, systems, and procedures to account for all these things. I mean, I'm working, we're working with the three location CHOP group, and we did, uh. If, I don't wanna call it an audit 'cause we didn't do an official audit, uh, but we did an analysis of, of their parts spend versus their parts usage inside of their shop management system.
Eric Joern: And we found a hundred thousand dollars gap across three stores in a 12 month period. Um, you know, and then we've narrowed it down to, hey, what we've pur my parts purchase is logged in. My shop management system accounts for 50% of that, and then the other percent just is not accounted for at all.
Kent Bullard: This is what drives me a little nuts is like, it's not like you're, a lot of the stuff that we're talking about, it's money that's already there.
Kent Bullard: It's, this is stuff that's already in the shop. It's not doing any access, it's just being a little more, um, judicious with what we're doing. Right. I'd love to take a moment here, just those of you who've been watching the live. Just to talk about some of these categories. I'd love to know in the comments where you feel, uh, or where you think you could probably do a bit of expense control.
Kent Bullard: So those categories are marketing, occupancy, insurance. I'm gonna, I'm gonna put it, spend and subscriptions together. That makes sense. Uh, labor. And I don't mean tech wages, I mean, you know, payroll,
Eric Joern: overhead,
Kent Bullard: overhead,
Eric Joern: labor.
Kent Bullard: And uh, and the last would be. Uh, parts leakage. Where do you guys feel that you could save some dollars there?
Kent Bullard: Lemme know in the comments.
Eric Joern: Oh, yep.
Kent Bullard: Sorry. Go ahead.
Eric Joern: I, I, I might, while people are, are punching that in the comments, um, another overhead expense and, and again, doesn't move the needle, but everybody can do it and it's a very easy thing to go shop your card. Credit card processing fees.
Kent Bullard: Oh my gosh, yes.
Eric Joern: And you know, I, I know there's a whole dynamic now around, uh, should I pass that onto my customer at this point or not?
Eric Joern: What, what's your take on that?
Kent Bullard: I, you know. He, here's the, here's the thick of it. If, if I wanna make the 20% for fair profit, my, my consumer's gonna pay for all of that. Yeah. Regardless, either it's gonna be loaded here or loaded there. It's gonna be in my, in my labor, in my parts. It's gonna be, it's gonna be somewhere.
Kent Bullard: I think if you're talking about eating the, the credit card processing fees, just, just make sure you're, you're compensating it somewhere else. And frankly, I'd rather have a consistent experience for all of my customers, so I just eat that. But, but make sure it's calculated somewhere else. It's a better customer experience, right?
Kent Bullard: Mm-hmm. If it, if it's negligible where it is, then look at the customer experience.
Eric Joern: Yeah.
Kent Bullard: Okay. And then the last bit of that is. Um, I mean, think about the savings. If you're processing a million dollars in a year and you can save a half a percent on, on credit card fees, how much is that?
Eric Joern: There's your, there's your, there's your $5,000 vacation again.
Kent Bullard: Yeah, it's a lot of money. It adds up. Um, so we're at, we're just at the end here. I did wanna say, um, you know, we're doing the institute's doing a, a launch live stream on, uh, Monday. That's gonna be 1:00 PM Mountain Time, 2:00 PM Central. We'd love for you guys to tune in. We're giving away, uh, some fun prizes and we're doing the launch of the Odd Academy, going into some details, there's some training, and we'd love for all of you to be a part of that.
Kent Bullard: Um. Eric, this has been fantastic. Uh, those of you out there who, who are curious about our financial intensive will post, you know, in the follow up here, some information there as well as the chart of accounts services or, I, I don't know what we're exactly calling that, but getting your books cleaned up.
Kent Bullard: Um, you guys do a fantastic job. So check out, uh, Kaizen CPAs for that. Any final comments on this?
Eric Joern: Uh, hey. Everybody should walk away from this, this meeting right now. Go, go look at your general ledger, start looking at those expenses that you're paying for. What don't I need, right? Am I in too big of a QuickBooks subscription?
Eric Joern: Am I using, did I pay for HR services in my payroll processor that I'm not using? All these things you, if you spend some time going through it, I bet you'll find probably that $5,000 vacation today.
Kent Bullard: Awesome. Eric, thank you so much for joining me. Those of you out there, uh. We're, are we hanging out for a little bit?
Kent Bullard: No. Uh, follow up. We'll post the recording of this later. Uh, thank you all for being here, and we'll see you on the next one.
Eric Joern: Thanks everyone.

191 - Ask Me Anything: How to Set a Labor Rate That Actually Reflects Your Value

191 - Ask Me Anything: How to Set a Labor Rate That Actually Reflects Your Value
February 11, 2026 - 01:05:37
Show Summary:
This AMA explains how to price labor fairly and profitably. Lucas and Cecil break down why book time often misses real world steps and shop friction. They argue shops should charge for full value, not fear being the highest priced option. The episode covers building confident service advisors through financial literacy and clear scripting. They outline how to defend diagnostic fees by separating testing from code scanning. They warn against routine discounts and show how underpricing destroys reserves and stability. The conversation closes with practical math for labor rates, technician pay, and productivity.
 
Host(s):
Lucas Underwood, Shop Owner of L&N Performance Auto Repair and Changing the Industry Podcast
 
Guest(s):
Cecil Bullard, Founder of The Institute
 
Show Highlights:
[00:01:00] – Book time versus rate changes debate[00:02:10] – Why book time ignores real work[00:04:00] – Customers pay for all inefficiencies[00:05:30] – Stop selling transparency and time talk[00:10:40] – Advisor confidence starts with numbers[00:14:15] – Sell diagnostics as cost saving testing[00:22:00] – Labor rates lag inflation and reality[00:36:55] – Discounts can bankrupt your shop fast[00:42:30] – Slow times need calls and scheduling[00:58:10] – Pay plans must reward productivity
 
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Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.
 
👉 Unlock the full experience - watch the full webinar on YouTube: https://youtu.be/O0tKJR3Lxv8
 
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________________________________________
Episode Transcript DisclaimerThis transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.
 
Episode Transcript:
Lucas Underwood: Oh, we wanna thank you for being here, everybody. I hope y'all are doing fantastic. I am so excited to be here. My name is Lucas Underwood with Changing the Industry podcast, and Ellen, in performance here in Blowing Rock, North Carolina. I am joined by the one, the only Cecil Bullard, and we're gonna be talking about labor rates today.
Lucas Underwood: Cecil, buddy, how you doing?
Cecil Bullard: I'm doing great. Yeah, I'm doing great. Luke
Lucas Underwood: Cecil, man, I'm telling you what, I'm so excited for this because this morning a question came up about exactly this. It was like to the t some of the stuff that Yeah, absolutely. Some of the stuff we've been talking about, some of the things we were saying, Hey, we need to cover this in today's webinar, a MA.
Lucas Underwood: And so my buddy Dan asked a question, and Dan, for those of you who don't know him, he is probably one of the most solid shop owners you could ever meet. Absolute standup guy. And he threw out a question that stirred up a lot of emotion, right? And there's a lot of perspectives on this and Dan shared his perspective.
Lucas Underwood: I don't think there's anything wrong with Dan's perspective, Cecil, but I wanna talk about it and I wanna break this down because I have a different perspective than Dan does. So is it okay if I read you this post real quick?
Cecil Bullard: Oh please.
Lucas Underwood: Alright, sounds good. Dan says, if we're using the manufacturer, labor guide is the baseline, but then automatically adding 20 to 25%.
Lucas Underwood: To every job because the guide is wrong, aren't we? Basically saying we don't trust the system we claim to follow. If you need 25% more revenue, why not just raise your labor rate, 200 to two 50? Same money, way cleaner, way more transparent. The guide should set time. Your rate should set value. And I'm not saying every job is the same.
Lucas Underwood: Older vehicle, rust belt stuff, diesel trucks, specialty work, those absolutely justify different labor rates or categories. Charge more for harder work all day long. That makes sense. But changing the rate is honest. Changing the time feels like we're gaming the book. If we all say we use a standard, then we should actually use the standard.
Lucas Underwood: Otherwise, it undermines our credibility as an industry. Seems simpler. Just to price your hour correctly and leave the book time alone. Now Cecil, I wanna share my perspective first. As a shop owner, right? I've, I have worked with a number of manufacturers and folks from the manufacturers over the years, and I understand how book hour is calculated and from what I have gathered and I've not seen the process.
Lucas Underwood: I'm not saying this is a hundred percent accurate, but from what I've seen of the process, they take a vehicle that is a new vehicle, they put it into a shop and they lay out the tools required for the job. They lay the part out in front of the technician and he changes that part three times. And after the third time it's changed.
Lucas Underwood: They average that time out between each one. He gets a coffee break, gets to sit down for a few minutes rest, and then go back and do the job again. They average that time out. That doesn't count for pulling the car in. It doesn't count for test driving the car when you get done. It doesn't count for riding up the ticket and putting the documentation in.
Lucas Underwood: And so I believe in my shop, if I'm gonna pay my guys based on some type of production based pay system, that depends on hours. It's only fair to add time for those things because the book doesn't account for that. And so that's what I shared with him. And I also personally believe that those labor rates, we should have variables based on the skill level associated with each one.
Lucas Underwood: So I think he's right about that. See someone, when you hear that post, what do you think? Make
Cecil Bullard: a couple of things. First of all, when Labor, eight times the way that you described it were decided and how they're decided even today, they don't account for all the things that the technician does. I call those things brown bananas.
Cecil Bullard: Okay. I tell the banana story, people have heard it, but my grocery store's gonna buy 5,000 bananas today. Yeah. And this week. And they're gonna sell, they're not gonna sell 5,000. Some of those bananas are gonna get eaten. If you wa, if you've ever been through your grocery store and you see a banana peel up in the milk section in the back, somebody ate a banana as they were walking around.
Cecil Bullard: And they basically ripped the grocery store off for a banana. And then some of the bananas are gonna go, they're gonna get brown. And people don't like brown bananas, so they don't buy 'em, and they end up getting thrown away or used in banana nut bread or whatever. But you have to pay for the brown bananas.
Cecil Bullard: And it's something I don't think we understand in this industry is that it doesn't matter the inefficiencies in my business, the customer has to pay for all inefficiencies, all brown bananas, everything. So number one. It, the book was done a very specific way. And by the way, the manufacturers have always multiplied the book time by 1.5 to two.
Cecil Bullard: Yeah. And we're now getting to about three, right? 1.3. And is that honest or dishonest? Let me cover that. Number one, I'm gonna do what it takes. That's legal, moral, and ethical to put 20% net in the bottom of my business. All right? And some of the things I'm gonna do, I'm not gonna be transparent.
Cecil Bullard: This whole idea of transparency, are you gotta be shitting me, right? I'm sorry, I just said a word. I probably shouldn't, but, okay.
Lucas Underwood: Sorry, Ken's not watching. It'll be fine.
Cecil Bullard: Do you wanna be, do you want to go into a restaurant that has transparency? No, I've worked
Lucas Underwood: on the other side of that.
Cecil Bullard: Okay. And so let's just stop talking about transparency. Like we have to tell the customer everything and be just upfront about everything, number one, I don't want to I don't know. I think I'm a very moral, very I have a real good sense of morality and all of that. Even my company has like a three and a half page statement about all that, just to be clear that we don't make mistakes in that area.
Cecil Bullard: But I'm sorry, I'm not gonna be completely a hundred percent transparent with you. Lucas, I'm sorry. I can't do that, right? Yeah, because I don't iage
Lucas Underwood: want you to there know there's how many sausage is
Cecil Bullard: made that occasionally there's rats in the back or cockroaches or, that I trimmed the green parts of the meat off and only kept the good parts of the meat so that you could have it right.
Cecil Bullard: Whatever. I don't want you to know that. Okay. And number two, why would I ever talk to a client about the time on a job?
Lucas Underwood: Yeah. I,
Cecil Bullard: other than I'm gonna need the car for two, two days.
Lucas Underwood: Yeah.
Lucas Underwood: Now are there some states that mandate it or are there some states that require
Cecil Bullard: it? No, not that I know of at this point.
Cecil Bullard: It doesn't matter. In California and certainly Utah I believe New York Washington State, these are not Utah, but the others are very much for the consumer and less for the business. Utah's more business oriented, less consumer oriented. But in those states, the law basically says that what you have to do is you have to let the customer know what you'll be doing and what the costs will be by before you do the, as they authorize the work.
Cecil Bullard: They have to authorize that. So even in Utah like even my shop, they won't tell me the whole cost. And which drives me nuts. 'cause I think you should be really upfront with your client, look, we're gonna do these three things, and when you come in, the bill's gonna be $2,100. And so now how do we help you go about your day?
Cecil Bullard: Do you need a car? Do you need a loaner car? Do can you, are you all right without one? What can I do for you? Assume close, redirect assume close redirect. And, but I'm never telling a customer about the time. I'm not saying, oh, by the way by the book, this is two hours and we're gonna charge you, $240.
Cecil Bullard: Oh, wait a minute. That's $120 an hour. There's a shop down the street that says they're $95 an hour. There'll, there will always be somebody down the street. And playing games about it all too, which I hate. We've got a prominent guy. He's got his own podcast. He talks about free diagnostic all the time.
Cecil Bullard: Except it ain't free.
Lucas Underwood: Yeah. Yeah.
Cecil Bullard: You want to talk about, excuse me, deceptive. Tell your clients they're getting free diagnostic and then just charge every other client an extra seven or eight or $9 an hour Yeah. To cover that expense
Lucas Underwood: Or charge free, say you're doing free diagnostics. Re do a code scan and start changing parts.
Lucas Underwood: Right?
Cecil Bullard: Yeah. And by the way, that's not what's best for the client.
Lucas Underwood: Yeah,
Cecil Bullard: right.
Lucas Underwood: You're percent right. You're a hundred percent. And that's my thing too, is like my whole drive, everything is about serving the client at a high level. Yeah. And I'm with you. I don't share the time and some of the things that came up, like last night we were talking about another post that came up and there was a post where somebody had just searched on Google, how much time does it call for to replace this?
Lucas Underwood: And it gave them the book time for a specific job. And I think this creates more of a divide. When you start getting just a book or below book, I think it creates more of a di divide between the technician and the shop. It creates more of a divide between the technicians and the industry and they're looking at it, especially if they're paid flat rate or some type of hybrid system, and they're saying, Hey dude, I'm getting taken advantage of here,
Cecil Bullard: but if I have
Lucas Underwood: a, this isn't right.
Cecil Bullard: If I have an hourly rate and it's your hourly rate, it's 36 bucks an hour, $32 an hour, whatever it is, then if I ask you to take the trash out, you take the trash out. 'cause I'm paying you, right? I'm the manager, owner, whatever. Or if I ask you to clean your bay, or if I ask you to, I don't know, help with a car or something, you just do it.
Cecil Bullard: Because you're already paid. If you're in a hybrid system, which is 60% of your pay comes as a, as an hourly rate, and 40% comes. Now when I'm asking you to do extra stuff, it's gonna hurt you financially. It's gonna affect you financially. And so that starts to create that divide. Yeah. So in my shop, when I charged 1.3 on the labor, I gave my tech credit for 1.3 because that's what I realistically felt that the tech should have with the paperwork and with the test drive and the verification.
Cecil Bullard: Yeah, absolutely. And all that kind of stuff. And that helped me have good productivity, helped my techs feel good about themselves, which meant that they actually, Maslow we can't, if we don't feel like we're gonna pay our bills, if we don't feel like, if we feel like we're being cheated, et cetera, we can't think about how do I do that job better?
Cecil Bullard: How you know God Exactly.
Lucas Underwood: A
Cecil Bullard: hundred
Lucas Underwood: percent,
Cecil Bullard: et cetera. The
Lucas Underwood: base needs have to be met.
Cecil Bullard: Yeah.
Lucas Underwood: And I'm a hundred percent with you now. We've got an incoming question. Kirti, I do wanna say this. We talk about in the industry I just give a price for the repair. I don't talk about labor charge or parts or anything like that.
Lucas Underwood: I just talk about repairing the vehicle. Here's the price to repair the vehicle. Cecil Chad's got this question, says, thank you guys for doing this to help us out. I have a service advisor who is well intentioned, but doesn't sell with confidence. I've spent years a few years with formal training and I don't know how to get her to sell with more confidence.
Lucas Underwood: Any suggestions? I'll tell you, Chad, from my perspective. I think it's a lot about them understanding why we're doing what we're doing. So many employees do not understand the financials of the business. And Cecil and I had a talk about my advisor just the other day, or my shop manager, about the importance of her understanding the numbers.
Lucas Underwood: She's got to understand the numbers to see the value in what we do and to have confidence in what she's telling her clients. And so if she can't look at that and understand, hey, we're not making all of that, we're not keeping that money, yes, that's expensive, but if she can't see why it's expensive, that's a problem.
Lucas Underwood: Cecil, what do you think? I,
Cecil Bullard: I also think a good service advisor has a disconnect button.
Cecil Bullard: It's not my car. I didn't, yeah, I didn't buy it. I didn't build it, I didn't drive it. I didn't break it. It's not my, it's not wallet. You can't sell in
Lucas Underwood: their
Cecil Bullard: wallet. It's not my wallet.
Lucas Underwood: Yeah.
Cecil Bullard: And so I have to disconnect myself from how I feel about spending money on my car.
Cecil Bullard: Yeah. I hate, I would hate being the shop that Cecil takes his car to because I know what good customer service is, and I know when it's not. And I also know when someone's jing my chain.
Lucas Underwood: Yeah.
Cecil Bullard: And and I also know when a service advisor's not confident in what they're telling you they're doing.
Cecil Bullard: I listened to phone calls. I just had a meeting with a service advisor a couple days ago, and I listened to two phone calls and I'm about ready to shoot myself. To have to listen to that. There were pauses, there was ums and ahs. There was the tech says blah, blah, blah. There was, very much a lack of confidence.
Cecil Bullard: And you're not gonna sell that way.
Lucas Underwood: No.
Cecil Bullard: You have to disconnect your personal thoughts of what I might do on my car. And by the way, my car, you've seen mine, my car is perfect. It's gonna be taken care of. And it doesn't matter to me what it costs. It's gonna be what it is. Still. I feel so bad
Lucas Underwood: for those Ford service advisors.
Lucas Underwood: Something
Cecil Bullard: Yeah. That have to deal with me.
Lucas Underwood: Yeah. I couldn't imagine
Cecil Bullard: still. And I'm like, Hey you, you told me you were gonna call me at one. It's two 30. I haven't, I'm having a call from you. What the hell? That's it. And oh, I'm sorry, Cecil. But if you can't help them understand the whys and they can't put two and two together.
Lucas Underwood: Yeah.
Cecil Bullard: This is probably also a person that's struggling with their own finances. With making money. They've never made any real money. They can't imagine Yeah. Paying $3,000 to have their car repaired because 3000 would, they wouldn't be able to pay their rent. They'd be kicked outta their apartment or their house, whatever.
Cecil Bullard: Absolutely. And man you have to, I don't know. You, I would say you have to have a disconnect button that you say, it's not my $3,000. It's not my, it's not my concern. I had a client recently say, Hey Cece, you've talked about financing that every shop should probably have some financing.
Cecil Bullard: So I've looked into all the financing. It's 24 to 30%. I said, yeah. Yeah. It's unfortunate that people put themselves in a position where they have to spend 24% to finance the repairs on their car, but it's not my fault. Yeah. I just, need to be able to take care of their car.
Lucas Underwood: I, I had an experience years ago and I had an advisor here that was very much in the same boat.
Lucas Underwood: And I'll never forget, I had an older gentleman that came in and when he came in, I was talking to him and I, the advisor's standing there and he's in his seventies, he's retired. And I said, Hey, can you tell him how it is that you can afford the repairs on your vehicle? And he said son, he said, my dad told me when I was very young, he said, the minute that you can have an IRA and you can start putting money in that IRAI want you to put money in it, I never want you to stop.
Lucas Underwood: And he said, so I started at $60, then I went to a hundred dollars, and then I went to $200 and I maxed it out. And he said, I got to the point, I maxed that out. And he said, I stopped putting money in it when I was 60 some years old. And he said, now I've got six and a half million dollars in the bank. And he said, look, I'm just telling you that, you can live like this as long as you're smart with your money.
Lucas Underwood: The. Folks that are on that front counter, if they've not been smart with their money, it impacts their perspective. They can't see clearly if they're not making enough money they can't see clearly. And the other thing, I'll tell you, I learned this a long time ago. Send your service advisors to another shop and let them buy a service at another shop and see what that experience is like.
Cecil Bullard: Yeah. '
Lucas Underwood: cause you're gonna find out what your value is real quick.
Cecil Bullard: I like to go to a quick lube like a Jiffy Lube once a year, just, and then I take it to the shop and have the oil changed and checked and all that, but I like to go have
Lucas Underwood: plugs, not sideways.
Cecil Bullard: Yeah. I like to go have the experience because it helps me understand the difference of, yeah.
Cecil Bullard: What a real experience is and what it isn't. I, let me add on this. This particular service advisor if they understand the numbers and I've gone through why the shop needs to make 20% and how that's really not 20% when it's all said and done. 'cause I have to pay taxes and I have to invest in the company in order to make sure everybody gets what they need.
Cecil Bullard: And I have to provide medical and dental and 4 0 1 ks Yeah. And all that kind of stuff today in this. And at the same time, we have all of these techs bitching about not getting paid enough, which I agree with him a hundred percent. And I still have a service advisor that cannot or will not sell with confidence.
Cecil Bullard: I've got a problem. Yeah. I've got a real problem and probably after two years it's not gonna change. Yeah. And maybe there's another, maybe the job of CSI, where it's like making phone calls and doing some marketing and tracking some numbers for me is a great job for that person.
Cecil Bullard: But selling at the service counter, one of the toughest jobs I've had in my entire life
Lucas Underwood: Yeah.
Cecil Bullard: Is not for everybody.
Lucas Underwood: Yeah, you're exactly right. And I'm gonna tell you, I know this is a little bit off topic, but I've done it with technicians and I've done it with service advisors and I've tried and tried to make it work.
Lucas Underwood: And I've got people who really dislike me because
Cecil Bullard: Yeah.
Lucas Underwood: I let it go for too long and it's I wanna be a technician. I'm a good technician. I'm gonna be a technician. No, you're not.
Cecil Bullard: But you also have to think, you have to think about this too. Frankly, I'm not responsible for only one person.
Lucas Underwood: Yeah.
Cecil Bullard: When I own the shop, I'm responsible for everybody that works for me and their families. And if I have one person, that was a
Lucas Underwood: hard one for me.
Cecil Bullard: Yeah, that was a hard, I have one. If I have one person that's screwing it up, whether that's my service advisor or a tech or I don't know, whoever gets up to me to take care of that, because it's not fair to everybody else.
Cecil Bullard: If my service advisor can't sell with confidence and I'm gonna have a lower average repair order, I'm gonna have lower productivity, which means I can't pay my tax as much as I should. Probably can't pay my service advisor as much as I should, and I'm not gonna take home the money that I should. So my family's gonna be affected.
Cecil Bullard: And and it is, it's not right.
Lucas Underwood: What the problem is that we always get attached to those people and we believe. They're also attached to us and feel the same type of loyalty we feel to them. And I think the manager situation I went through last year is a perfect example of that.
Lucas Underwood: I held on too long, we talked about it, we went over it over and over again. You told me from the word go, I don't know if this is the right person then, Aaron told me, I don't know if this is the right person. I think there are a
Cecil Bullard: couple of times where I told you we need to get rid of this person.
Lucas Underwood: Yeah. Period. Oh yeah. And I knew And you knew. I knew. And I was telling you I knew.
Cecil Bullard: Yeah.
Lucas Underwood: But I'm still paying the effects of that right now. I, we just had January and February. So this big ice storm comes through.
Cecil Bullard: Yeah. Terrible.
Lucas Underwood: And 'cause we're up in the mountains, it was like four inches of sleet and then it rained on it, and then it froze.
Lucas Underwood: Solid. They were taking equipment, trying to dig the ice up and you can't get the ice up.
Cecil Bullard: Yeah.
Lucas Underwood: And so it's finally melting now and cars are flooding in the shop, but we went through four weeks where cars could not get here. They couldn't get out.
Cecil Bullard: Yeah.
Lucas Underwood: And so like it completely zonked the shop of all of its money.
Cecil Bullard: So here's another reason to charge what you need to, because not only do I, I need three months worth of operating capital in the bank.
Lucas Underwood: But here's
Cecil Bullard: the thing. If I wanna have a safe, secure business, I need three months worth of operating capital in the bank. And if I don't charge enough, I can't have that.
Lucas Underwood: That's where I'm going with this, is that, that the reason I didn't have it is because I kept somebody that was not the right fit for the shop. Yeah. And it zonked the funds back last year because they kept making bad decisions.
Cecil Bullard: Yeah.
Lucas Underwood: And so at the end of the day. I go and I terminate that person.
Lucas Underwood: And you know what they did? I said, dude, I don't really care. It's fine. Like, why are you upset? Why are you bothered by this? Yeah. It's just a, it's just business. I don't care. Just a job.
Cecil Bullard: Whatever job. Who cares?
Lucas Underwood: And I'm over here dude, I've been over here like suffering and beating myself up for months.
Lucas Underwood: This, and you're telling me you don't care
Cecil Bullard: for
Lucas Underwood: months? Yeah. And so we gotta be careful where we show that loyalty to and,
Cecil Bullard: I think, I think that we need to be loyal. I always say I'm willing to do anything for my employees except their job. I, as long as you're doing your job and I need to define what that is and the results I want, and do that well, yeah.
Cecil Bullard: Then I'm as loyal as anybody could be. I'll take money outta my pocket. To help you out. Yeah. And I know you will, and I know most owners that I know will do that.
Lucas Underwood: Yeah.
Cecil Bullard: But if you're not doing your job, if you're not being loyal to me and to the company. I just had a whole thing about company men and company people.
Cecil Bullard: When you have a manager that you pay a salary to and a decent salary, that person needs to be on the side of the company. And by the way I would say the same thing with the service advisor. If we've set our prices the way we've set them, whether and whether or not we're we raised our labor rate 30%, or we put a 1.3 on our labor, yeah.
Cecil Bullard: Times, whichever, however we did it, and the price is the price, then the person that's a loyal person to the company has no problem telling the customer that's the price.
Lucas Underwood: Yeah.
Cecil Bullard: Otherwise, you're not loyal to the company. You're loyal to whatever your fears, your whatever and what can the client do to you?
Cecil Bullard: That's the other thing. I've never been hurt by any client that I didn't allow them to hurt me. Yeah. So you at the service counter, you can't hurt me. You you can't. And. Do I care? Yeah. I kind of care. I want you to buy, I want you to be happy. I want you to be our client, but if you're not, I'm done.
Cecil Bullard: Yeah. I don't have any more time or energy for that because the 85% of the people that want to bring their car to my shop, I need it for them.
Lucas Underwood: Yeah,
Cecil Bullard: right.
Lucas Underwood: You're exactly right. You're exactly right. And man, I'm telling you, it's just like these service advisors who go in and adjust the numbers, and it's dude I gave you a threshold.
Lucas Underwood: I gave you the numbers. You can't just keep lowering every job.
Cecil Bullard: I'll Yeah, I'll choke you out.
Lucas Underwood: Yeah.
Cecil Bullard: I have to make ano I we have to make a certain, some points here.
Lucas Underwood: Yeah.
Cecil Bullard: All right. Now in 1980, my shop was $70 an hour. Palm Springs, California. Yeah. And I don't know what the average was in 1980, but it was probably close to that.
Cecil Bullard: And I took that $70 an hour and I raised it by 3%. Up to the year 20 25, 20 26. Right now, there would not be a shop in the United States under $264 an hour.
Lucas Underwood: Yeah. If you had done that, just
Cecil Bullard: followed inflation. If you'd just done it 3%, which is just normal inflation.
Lucas Underwood: Yeah.
Cecil Bullard: Forget the fact that in 1980 I didn't have half the regulations, my insurance costs a lot less my, all kinds of things.
Cecil Bullard: Even HR stuff. I never worried about being sued until a few years ago. And now it's like I can't, we had a guy that we let go white guy over 55. By the way, that's a protected class. I'm not supposed to terminate that person. It's, things have changed so dramatically and there's so much liability now that we didn't have in 1980.
Cecil Bullard: I can't even, Ima, at 2 64, it's. Still not enough. And I know what people are gonna say, you're half the people out there are gonna go wait a minute. See? So there's a guy in my neighborhood that is still at $65 an hour.
Lucas Underwood: Yeah. So what,
Cecil Bullard: right? Let him be 65. Let him take all the crap and all the cheap customers, and all the people that, that wanna buy, I don't know, Walmart parts or white labeled crap parts and put 'em on their car and Yeah.
Cecil Bullard: And let 'em be that. So what should we be? I believe it or not, I have a shop right now, it's about $320 an hour and I'm really happy about that. But my, our average shop in the United States for the Institute probably right now is Pushin in the one eighties, one nineties.
Lucas Underwood: Yeah.
Cecil Bullard: Now the last,
Lucas Underwood: and we just raised mine again.
Lucas Underwood: We just came up a little bit more. Yeah.
Cecil Bullard: And the last survey that was done, I think it, it was either tech metric or it was parts the parts guys.
Lucas Underwood: Yeah, parts
Cecil Bullard: two. The average was like 1 26. In the United States. So how do you pay a tech a, a master tech who's gotta buy tools and who, who's gonna bust their knuckles and work their butt off?
Cecil Bullard: How do you pay them 30 bucks an hour?
Cecil Bullard: And have a happy master tech and charge 126 and still make the profit that you need.
Lucas Underwood: Yeah.
Cecil Bullard: And by the way, 26,
Lucas Underwood: I tell people all the time that there has to be money, right? Yeah. I have these meetings with these techs and I'm like, Hey. And I do the same thing with my guys.
Lucas Underwood: Hey,
Cecil Bullard: yeah,
Lucas Underwood: I get that you wanna make more money, but we have to have production. There has to be production there.
Cecil Bullard: Yeah. We've
Lucas Underwood: got another question coming in.
Cecil Bullard: Yeah. Production's a thing that kills us in our,
Lucas Underwood: yeah. Ab it is in our profitability. It absolutely is. Yeah. Oh, very cool. I know this bunch right here.
Lucas Underwood: Good afternoon guys. If most other shops in our areas charge little to no diagnostic fees, we charge higher than our labor rate. How can we help clients understand the value of testing? Oh, buddy. I just tell 'em like, Hey, go over there. They can do the testing and they can fix it, and when they don't fix it, you can bring it to me and I'll get it right for you.
Lucas Underwood: Especially on the diesels. I have no problem with that. Cecil, the way I've always done this is I have always been very transparent about it. I know you don't necessarily like the word transparent, but I've always explained to them this is the most advanced part of our job, and in this town we're known for doing the most advanced testing.
Lucas Underwood: Of anybody up here. We have lots of very high-end equipment that allows us to do this. Have lots of subscriptions, lots of OE tools, and we have the equipment that the manufacturer has to work on your vehicle here in shop. And so we have very highly trained staff. Now, what I'm gonna explain to you is that a lot of these shops aren't actually doing what you think they are.
Lucas Underwood: They'll say that they're doing diagnostics, but really what they're doing is a code scan. And a code scan is simply that code's like a zip code. You put that on an envelope, drop it in the mailbox. It might get it to the right town, but it's not gonna get it to your door. It just gives us an area that the problem exists in.
Lucas Underwood: And so a lot of shops take that and they use that to try and sell additional parts. We don't do that here and that's why I charge you more for testing so I can be upfront and clear with you. And that way we don't go broke trying to figure out what's wrong with your car. We actually get to the bottom of what's wrong with your car.
Lucas Underwood: And so I think a transparent conversation that sense is what's worked best for us. What about you, Cecil? What do you think?
Cecil Bullard: They're moving my camera around.
Lucas Underwood: I know, right? I'm
Cecil Bullard: busy
Lucas Underwood: now.
Cecil Bullard: So the I have a script that I have used for years and years, lucas, the least expensive way to fix a vehicle and take care of a vehicle is to have a technician that knows and understands that vehicle.
Cecil Bullard: Do a proper diagnostic.
Lucas Underwood: Yeah.
Cecil Bullard: So that we know what's wrong and we can make intelligent decisions about that service or repair, and so that we don't put parts and do things on the car that aren't necessary.
Lucas Underwood: Yep.
Cecil Bullard: It will save the average customer thousands and thousands of dollars over the life of their vehicle if they have a proper diagnostic done.
Cecil Bullard: And I've had people go what if it is the, thermostat. If it is the thermostat as your cousin told you, then at the very least we will know. Not only that we verified that was the problem, but we'll also know if that was caused by something else. And we'll know that when we fix the thermostat that the car will be in, the vehicle will be in great shape.
Lucas Underwood: Do you know how to shut 'em down? You know how to stop 'em dead in their tracks? No. You say, Hey, listen, I've got this. I've got this thing that I do in this situation. We can do it together if you'd like. And they say, what? And I say, Hey, call 'em up. Put 'em on speaker phone and let's ask them if it doesn't fix the car
Cecil Bullard: now.
Lucas Underwood: Are they going to pay you back for the repair or make the proper repair if it doesn't fix it? Because I am.
Cecil Bullard: Yeah.
Lucas Underwood: And they say, huh? I said, yeah, just give 'em a call and ask Hey, if that's not the correct diagnosis, are they gonna give you your money back for the parts? Are they gonna pay for the labor?
Cecil Bullard: I would love it if it doesn't fix the
Lucas Underwood: car.
Cecil Bullard: If the, from the pet boys in the auto zones. If the if, it was like, oh, so I'm gonna buy this part. I'm gonna take it to a shop, or I'm gonna tell the shop that you coded my car and you told me. And if that, if I take it to the shop and they do this work and it doesn't fix it, are you gonna pay my bill?
Cecil Bullard: Right.
Lucas Underwood: Yeah, exactly. You gonna,
Cecil Bullard: the,
Lucas Underwood: oh they, you wanna see that, you wanna see 'em scramble a little bit and I've got shops around me who brag about how cheap they are and they brag about all this stuff. And one of the things that I've dealt with over all these years, being in the industry and doing the podcast and talking to all these people is this extreme fear.
Lucas Underwood: Being more expensive than somebody else. And I tell 'em that it's like they couldn't imagine, oh my gosh, I charge more than someone else. And I ask 'em, I'm like, Hey, let's just be really transparent about this. Did you buy the cheapest TV in Walmart? Because they still sell a 14 inch black and white tv.
Lucas Underwood: And they said, no, I wouldn't want that. Okay. Did you buy the cheapest car? No. Did you buy the cheapest pair shoes? The could the you
Cecil Bullard: had, yeah.
Lucas Underwood: Yeah.
Lucas Underwood: Exactly. No, we don't. We don't. That's not how we make decisions. It's not just about price. It's about value. And I think what shops miss is that they don't see their own value.
Lucas Underwood: They don't dig into their own value and understand it. They've never been to another shop to experience it because they've been working on their own stuff.
Cecil Bullard: This is and there's also this false expectation with your technicians that, the book time is two hours and I'm gonna charge two hours.
Cecil Bullard: 'cause the book time must be the law. That's what the other shop's gonna do. They're gonna look at the book time. And so I'm comparing myself, like I wanna be comparative to them price wise and then we expect our technicians to get it done in 1.5 so that we can actually make a living. Or if we're gonna take time off of a job, we take it off in the tech doesn't get the time or the credit for the time, even though it should be the time.
Cecil Bullard: There's no wonder that we're having such a conversation with the techs that is not a good conversation.
Lucas Underwood: Yeah,
Cecil Bullard: because we're, we want to be the cheapest guy in town who wants to be the cheapest guy in town. As you were talking, I'm thinking to myself, the shops that, that I've had. I probably work with 3000 shops if I do the math.
Cecil Bullard: In my career I've owned five total. I've ran another six or seven, but I've actually worked with, as a coach and a consultant about 3000. And do you know that the shops that are the most consistent, the shops that are the most profitable, the shops that have the highest customer satisfaction ratings Yep.
Cecil Bullard: Are also the most expensive shops for sure. They're not the cheapest shops. And so how do you put that together in your brain and say, I still want to be the cheapest guy in town.
Lucas Underwood: Yeah.
Lucas Underwood: It doesn't listen my parents I think you've been here, have you been to the shop before? Have you ever been
Cecil Bullard: here?
Cecil Bullard: I have never been to the shop, no.
Lucas Underwood: Okay. So I've been closed. Where the shop, right? Where the shop's at? We used to have these rental cabins and there were nine of them. And then for years, right? I was young when we put 'em in. I was 15, 16 years old, maybe 17 years old when we put these cabins in. And for years my parents ran them for 99 a night.
Lucas Underwood: Now, these were log cabins, actual log cabins, and they had a one bedroom. They had like a living room and a bathroom, and then they had a full kitchen, right? Really nice little cabins. And they were set up at an angle, and yeah, they were close to each other. But motel rooms up here were going for 2 65 a night.
Cecil Bullard: And so why were your cabins like 300 a night? Creates
Lucas Underwood: value
Cecil Bullard: too.
Lucas Underwood: And so the occupancy rate stayed in the twenties, thirties and forties. Now, my parents they loved people, right? Like they loved giving back. They loved taking care of people. The majority of what they did was to be good to people.
Lucas Underwood: And that was their reward. It wasn't the profit. And so I respect what they did. I'm not saying anything bad, but we raised the rates. Occupancy went up. Yep. And so we were asking people questions. We were saying, Hey, you said you've been up here for all these years. Why haven't you stayed here before?
Lucas Underwood: And they said, we thought something was wrong with them. Too cheap. They were way too cheap.
Cecil Bullard: Yeah.
Lucas Underwood: I've had a couple people come out and say, Hey you told me to raise my rates and it put me out of business. Let me tell you something. If you don't bring the value, if you are not providing a good service, if you're not fixing the car, if you're not calling them back, if you're not taking care of them, yeah.
Lucas Underwood: You probably don't wanna raise your rates that high because I would, you're selling exactly what you're worth. So be careful. If you're not bringing value,
Cecil Bullard: I would almost guarantee you, I don't know I might put money on it, that any shop today could raise their rates by. $15, 20 bucks an hour,
Lucas Underwood: nobody even
Cecil Bullard: know.
Cecil Bullard: And nobody would even know. Not one customer. The only people that would be nervous about it is whoever's talking to your clients.
Lucas Underwood: Yeah.
Cecil Bullard: And you know why? Because over the last 25 years, I've seen shop after shop go up sometimes much more than I thought. I had a shop go like 56 bucks. I was at a diesel thing thoroughbred diesel show,
Lucas Underwood: strive to th or strive to.
Cecil Bullard: And one of our clients, yeah. And one of our clients was there. Yeah. And I said do I have any clients in the audience? Because I don't always know every client we have now. 'cause I don't work with everybody. And guy stood up young young young guy, and I said what was your lab rate when you came to the institute and how long have you, and he said, been with the institute about a year from the last diesel show.
Cecil Bullard: And he said, my liberate was, I think $93, $92 an hour. And I said, okay. And what is your lib rate today? He said, we're $197 an hour. He'd gone up a hundred bucks in a year. Now, by the way, the next question was, how many clients did you lose? He said probably a couple, but he said, but the people we lost were the people that we could never make any money off of.
Cecil Bullard: They always give us trouble, never happy,
Lucas Underwood: no matter what
Cecil Bullard: you did. They were the ones we didn't want. Yeah.
Lucas Underwood: Yep.
Cecil Bullard: And you're like, you think about that, let's say they had three technicians and they were 70% productive. That's 21 hours, that's okay. Let's say 18 hours a day times a hundred dollars, right?
Cecil Bullard: Yep. Times X many days. And that's profit coming in and, okay, so maybe I'm not greedy about money, but wouldn't it be nice to give my people a 20% raise? Yeah. And make sure I had three months worth operating capital in the bank. And so the weather wouldn't affect me
Lucas Underwood: Here. Here's the thing is it's just like this.
Lucas Underwood: I, I told a good friend of mine, Tobin and Tobin and I have been friends for years, and I told Tobin a while back when we met, I said, you have got to get these rates up. $65 an hour is not gonna cut it. I promise. I see your rent, I see your financials. I know what you're doing. I've been there like, you've gotta get the rate up.
Lucas Underwood: And he looked at me, we were at Outback in blowing rock, North Carolina, and he said, Lucas, if I raise my rates, everybody's gonna leave. And I said, Tobin, it ain't gonna matter 'cause you're gonna be outta business anyway. If you don't, I said, you're either gonna go outta business because you didn't raise your rates, or you're gonna go outta business because you lost your clients, or you're gonna find out this is gonna work.
Cecil Bullard: Yeah.
Lucas Underwood: And so today, we talked to him the other day and he said, man, he said, if you hadn't told me that, he said, I'd been outta business. And I said, look, if somebody hadn't told me that I'd be outta business. Right?
Cecil Bullard: Yeah.
Lucas Underwood: It's, I can't. And that's what this group, and that's what the institute, and that's what this podcast is all about, is hey, there's a lot of people out here that don't know this, and they're walking in fear because they don't know any better.
Lucas Underwood: And so we're about bringing the knowledge.
Cecil Bullard: Do you know how many shops? I would tell you that more than half the shops that we have worked with. So more than more than 1500 shops. If they had not raised their rates, if they had not fixed their parts margins, put a matrix in place. If they had not, worked on their systems and processes, they wouldn't be here today.
Cecil Bullard: 1500 shops, right? Yeah. Would not be here today because they, I can't tell you how many guys I beat 'em and they come up and they gimme a hug or they, shake my hand and they're like, cec. Oh my God, you saved my life. You saved my company. Yeah, you saved my family, blah, blah, blah.
Cecil Bullard: And it's very rewarding to have that and to do that. But man, what about the other? Two, the ones we've not reached yet, two shops out there, which we just can't seem to reach.
Lucas Underwood: Yep. All
Cecil Bullard: we got. Our next question, do you think we need to do? Okay, go ahead, get the next question.
Lucas Underwood: All right. What is your opinion on veteran military or senior citizen discounts?
Lucas Underwood: Now look, I'm gonna tell you something. Now that I'm in the shop, or not in the shop as much, it doesn't happen as much. But when I was in the shop, you know what I did? I grabbed that, their wallet, and I took the money outta that wallet and I walked around the front counter and I pulled that cash outta my wallet and I laid down and paid what I wanted to give them for a discount right there on the front counter.
Lucas Underwood: And you wanna talk about making an impact, sir, I appreciate your service and what you did for our country. You provided me the opportunity to be here and do what I do. Thank you. Now, not only does it make an impact with them, but it makes an impact with you because I have seen so many shops discount themselves to poverty.
Lucas Underwood: Literal poverty.
Cecil Bullard: Yeah. I had I had a shop, a new shop probably two months ago, come on that I'm coaching and they made about $1,200 in that month. They discounted over 12,000. Okay. And you're going what was your discount? We have a AAA discount. We have a senior discount. We have a military veteran discount.
Cecil Bullard: And so literally, and we have crap rates. And by the way, so we weren't making anything anyway. And so if you want to, corporates, corporations, big corporations understand this.
Lucas Underwood: Yeah.
Cecil Bullard: Small business does not. When you walk into Walmart and there's a discount item and you're gonna save 20 bucks on that thing, they're getting in your wallet somewhere to make up for that 20 bucks.
Cecil Bullard: You, period.
Lucas Underwood: You're exactly right.
Cecil Bullard: Period. Because if they don't make the profit they need to then their stockholders sell the stock, the stocks worth nothing, and the company goes bankrupt and we don't Yeah,
Lucas Underwood: they got that product on a discount they got. Yeah. There was somewhere they still made their margins.
Lucas Underwood: Right.
Cecil Bullard: So if you routinely want to give away 10% to say veterans or old people, and by the way, I'm now in that, I get that, those discounts.
Lucas Underwood: See, so you know that 20 years ago you got into that category, right?
Cecil Bullard: Yeah. Yeah. Shut up. So anyway yeah, scissor used to do it at 55 and I used to like, there was a scissor.
Cecil Bullard: Here it is gone. I wonder why. But I used to like Sizzler and they would be, look at my hair and I've been white for I don't know, 30 years now. Yeah. They would look at my hair and they'd go, oh, we're gonna give you the senior discount. I was probably 42 at the time. If you're gonna discount 10%, you have to raise your rates by more than 10% because you're talking about parts and labor that I'm discounting.
Cecil Bullard: Yeah. I'm not just discounting the labor. So I can't raise my labor rate 10% and go, okay, that's good for a 10% discount. 'cause the parts, I'm actually discounting the parts also. Yeah. So I probably have to go up around 20% on my labor rate in order to make up for the parts and the, or at least probably.
Cecil Bullard: 18% on my labor rate and to make up for the parts if I'm gonna give 10% discounts away.
Lucas Underwood: Yeah. And you absolutely have to put stock in that discount. You can't just drop that money and say I just took it off the repair order need. I
Cecil Bullard: just took it off my
Lucas Underwood: wallet. You need way to track it.
Cecil Bullard: Right?
Lucas Underwood: Yeah.
Cecil Bullard: I just took it outta my wallet.
Cecil Bullard: And that's the killer too, is it's,
Lucas Underwood: yeah.
Cecil Bullard: You're better off. I'm, I might've been the one that told you this, but go down to the bank and get some 20 fresh, crisp $20 bills and when you're ready to discount, whoop out a couple twenties, hand it over to the customer, say, I wanna help you today. 'Cause you're old or because you're a veteran, or because it's just one of those days.
Cecil Bullard: And watch those $20 bills disappear. And then tell me how often you're gonna do that.
Lucas Underwood: My buddy John that runs a diesel shop down in Morganton, North Carolina, he and I were talking a while back and I said, I was explaining this process to him and he said, but Lucas, if I do that, I won't have any money.
Lucas Underwood: And I said, that's my point because you don't have any money now, but you're giving it away. Yeah. So how do you feel okay about this
Cecil Bullard: now? So I
Lucas Underwood: won't be able to pay my bills
Cecil Bullard: in our shop. We, when we added features, we added price. So when we gave loaner cars out, we went up four bucks an hour. When we watched every car, we went up $4 an hour.
Cecil Bullard: We calculated our costs, we doubled what that was gonna be. We raised our labor rates. Yeah. And in that shop we we made a profit. And when we made a profit, we said to ourselves, we want give back. So we set aside a budget, $30,000 a year goes to and we went down to one of the local churches that Pat talked to the pastor, and we said, we know you have people in your community that need help.
Cecil Bullard: We are willing to help. We'll either you pay for the parts and we'll do the labor up to $30,000 a year or, yeah. We'll pay for both up to 30,000 until the money's gone. Yeah. And the pastor wanted to pay for the parts and we took care of the labor, but we kept track of it. And when we were done with 30 grand, we were done.
Cecil Bullard: 'cause that's what we set aside based on the profit that we were making. The thing about it is people want to give and give. We all do. I think we're all, I think in general, humanity wants to give, they want to take care of people, they want to feel good about their relationships.
Cecil Bullard: And the problem is you can't give what you don't have. Yeah. So if I don't have any empathy, sympathy, because I'm just worn out, and then I can't give, if I don't have any time because I'm working 90 hours a week, I can't, not only can I not give to my people at church, but I can't give to my own family.
Cecil Bullard: Right?
Lucas Underwood: Yep.
Cecil Bullard: And if there's no money, I can't give to my clients, I can't give to my family, I can't give to anybody.
Lucas Underwood: It can be addictive. It can be a crutch. Yeah. And so I see so many people use it as a crutch. They get a, they get afraid and they begin, like they start discounting to make that client happy.
Lucas Underwood: The client gets used to saying, Hey, can I get a discount? Next thing you know, you've built a pattern and it's really hard to break that pattern. I just don't believe in doing discounts. Yeah. Yeah. So my advice would be, would just pay for repair, filing?
Cecil Bullard: No, no discounts. Just, and I never discounted and I don't discount today.
Cecil Bullard: Don't get me wrong. We do some stuff here at the institute, but it's not me. It's the younger people who are like, oh, we're gonna do this Ferd and we're gonna give a timeframe. Thanks St. Stu.
Lucas Underwood: Man. How many times have I told you about that stew guy? You gotta
Cecil Bullard: watch. Shoot 'em both, both him and Kent at the same time.
Lucas Underwood: Now look I am doing a little bit of discounts, but I'm also working really hard to try and get the car count up for this shot. And
Cecil Bullard: if a calculated discounts too. Yeah. If they're calculated, if I know that I'm making the money somewhere else, yeah. If I know that I'm gonna have a certain average of ator and I can make that up, then I'm ha I'm okay with that.
Lucas Underwood: But hey, this
Cecil Bullard: next question, once you start the pattern, it's the pattern.
Lucas Underwood: It, yeah. It's hard to break that pattern, buddy. Yeah. It's hard to break that pattern. The next question is, what are some marketing strategies for slower times? We're already doing Google Ads website, et cetera. Now listen, I can tell you about slow times.
Lucas Underwood: This shop that typically sees nine to 12 cars a day for the three or four weeks after this storm saw like one car a week. Yeah. And like we've got a 8 73 Bobcat that we push the parking lot with sometimes. Cecil I backed it out of the shop the other day and I got out of the bobcat and I was getting ready to go in and grab myself a drink and all this stuff, and I start to step off the machine and it felt like it moved funny.
Lucas Underwood: So I put my hand on the machine and I could take this 13,000 pound machine and push it around the parking lot with my hands with no ice force at all on it. Said, I think I'm gonna get back in the machine before it slides off and it's something, right? Yeah. It was so slick. And we shouldn't have wanted our clients to be out the mistake that we made, I'm gonna tell you something about this because this is important to the slow day strategy.
Lucas Underwood: The mistake we made is that right before the holidays, the staff didn't want to disappoint any clients. And so what they did was, is they began to back us down as far as reserves go. Yeah. They were trying to get everything finished to make everybody happy, so they didn't have their car sitting here over a holiday, and it killed our reserves.
Lucas Underwood: And so then when it did slow down. We didn't have any reserve stuff to work on and it impacted we continually load the lot up and keep things here. And even if it means some people and like we're listening to them, we're talking to them. There's a great scene in the show, the Bear on fx, and in it, it's a lady and she's organizing the kitchen and it's this really fine dining restaurant.
Lucas Underwood: And she said, this table likes to eat slow and they're in no hurry. This table will fuss if it's slow. We need to hurry this, rush this slow this, take this to this table, do this with this table. If you don't have someone managing your workflow in a way that they can understand what's coming in and going out and the customer expectations and then using those expectations to the shop's advantage, you're missing out because that's where true revenue and auto repair comes from.
Lucas Underwood: And so I'm gonna tell you right now i's one thing you can do when you get slow and you need cars right now. And that's called pick up the phone and start calling 'em.
Cecil Bullard: Yep.
Lucas Underwood: Plain and simple. Yep. That's the one thing that will work.
Cecil Bullard: Let me talk about two or three strategies here. Number one, when you're busy, don't stop marketing.
Cecil Bullard: Yes. Don't slow it down. Nothing. Keep, okay, keep my budget's tight. See? So
Lucas Underwood: I gotta cut all my marketing out.
Cecil Bullard: Yeah. Number two, are you booking the customer's next appointment? You wanna create consistency in your business. Book the next appointment. And you know what, some people are gonna say no, some people aren't gonna show up.
Cecil Bullard: But what if you could get three or four cards booked out every day for the next six months that would actually show up? What would that do for your consistency of car count?
Lucas Underwood: It's back to the Tobin thing, right? I asked him, yeah. Hey would you rather just go outta business?
Lucas Underwood: Would you rather not be able to pay your bills than ask them or would you rather be afraid of asking them? Would you? Yeah.
Cecil Bullard: And by the way, don't ask 'em, just tell 'em they have an appointment. It you're the person that's supposed to be taking care of their car. Tell them how they're gonna take care of their car.
Cecil Bullard: It's a strategy, right? And then do you have a referral program? Are you asking for referrals? Are you doing, is this a part of your everyday life? Does every customer that walks in your door get asked for a referral? Yeah. There, there's just these little things and then there's the 20 calls process, what you're talking about.
Cecil Bullard: Get on people that, that didn't show up for their appointment. Get on the phone. People that had work that didn't do that work get on the phone. I call it 20 calls. 'cause in my shop we were slow. We, my service advisors made 20 phone calls. Were three appointments. When they made three appointments, they have to make no more phone calls.
Cecil Bullard: All done.
Lucas Underwood: Here's the thing is I I will use chat GPT here and there for fun stuff and I don't like, I don't want my brain to turn to mush, so I still try to use my brain, still try to be on
Cecil Bullard: top of it.
Lucas Underwood: Yeah. But I was dropping things in chat GBTA while back, not at this recent slowdown, but the one before it where it just lightened up a little bit.
Lucas Underwood: And so I was putting some data into chat GPT because I have found that it sees patterns that I miss.
Cecil Bullard: Yeah.
Lucas Underwood: And it's obvious patterns. And it's very much like hiring the institute to coach you in your business because you see things and your coaches see things from a different perspective.
Lucas Underwood: And so it, it's easier for you to catch something because you're not just used to it. That's not just the way it's been. Yeah. And so I put our customer data into chat, GPT, and it brought up this really interesting fact and it said, I. If you acquired or if you reignited, or I can't remember the word it used basically shook up
Cecil Bullard: 10% or
Lucas Underwood: whatever.
Lucas Underwood: It's the client base from six to 18 months. Yeah. The ones that have not been here in six to 18 months, if you shook up 5% of them, you would have two months of work.
Cecil Bullard: Yeah.
Lucas Underwood: And I'm like, huh, I hadn't thought about it like that. So customer, guess what? We're gonna make some telephone calls.
Cecil Bullard: Customer retention management
Lucas Underwood: yeah,
Cecil Bullard: booking appointments, 20 calls, phone calls. There, there are multiple strategies to ramp up as fast as I can ramp up. But
Cecil Bullard: Yeah, don't stop your marketing ever.
Lucas Underwood: Now, something else, and I'm sure that you know this, but something else that I have learned, me, I use shop wear and I have got the analytics and shop wear laid out really well.
Lucas Underwood: I and Cecil, I take my hours per RO and I take my revenue and I've got a little bit of an algorithm that I've built in Excel and I use that and I say, okay, if I can take three jobs a day, three and a half hours per ro, how many jobs do I have? If this is the number, my average repair order's about 1100 bucks, what's my car count be, need to be, exactly what does my car count need to be and where am I?
Lucas Underwood: How many days of work do I have on what's sitting in the shop right now? And how many do I have coming in
Cecil Bullard: on
Lucas Underwood: appointments, knowing that some of those may not show, knowing that some of those may not turn into those bigger tickets
Cecil Bullard: we're
Lucas Underwood: using.
Cecil Bullard: But if you're keeping track of the data, you can actually anticipate a
Cecil Bullard: 12% loss or whatever.
Lucas Underwood: Exactly. Whatever
Cecil Bullard: that loss is.
Lucas Underwood: Exactly. And see that's what we do is we're tracking the averages and so we're paying attention to that. Yeah. Now, my algorithm, the way I've got it built out is, Hey, listen, if I get to sub seven days of work, you're getting on the telephone and you're making telephone calls.
Cecil Bullard: Yeah.
Lucas Underwood: If I get,
Cecil Bullard: yeah. It's a red light.
Lucas Underwood: Exactly. If I get to, 14 days, we're backing out a little bit, trying to give ourselves some breathing room, but I'm bouncing the shop based on the data that's available. Yeah. So many people try to run their shops based off of what's in here and up here they base it on emotion.
Lucas Underwood: Yeah. You
Cecil Bullard: stop, there's facts, there's information. Yeah. You have to stop. That's that. Somebody asked me the other day, said, Cecil. If you only had, if it was one thing, what's the one thing that you gotta tell people? Run your shop like a business. Understand the numbers. Yeah. And what they're telling you.
Cecil Bullard: You do that and you'll make so much. Oh, I'm much money. You'll have so much more consistency, et cetera. The problem you have in the industry is we have a lot of great guys. They're wonderful techs, et cetera. Men and women. They're just not great business people.
Lucas Underwood: Yep.
Lucas Underwood: Go ahead.
Cecil Bullard: When I started a business I wasn't a great business person, but I got news for you, man.
Cecil Bullard: I learned, I got mentors, I hired people, I did whatever it took to get good at this business. I want to be the best at this business of anybody. And I continue to learn today because to me, that's everything's
Lucas Underwood: Cecil. I'm not afraid to tell the story of what happened with the family business. Like it was not ran like a business.
Lucas Underwood: The business was turned over to another family member and because it wasn't ran like a business, the accountant really wasn't watching it. The bookkeeper was stealing money. The person who was running the business was stealing money. The person who was working in the business was stealing money. We're talking about $3 million.
Cecil Bullard: Yeah. Millions.
Lucas Underwood: We're talking about millions of dollars
Cecil Bullard: I have seen and all of this shop that the same really millions of dollars over time going away.
Lucas Underwood: And all of this happened when my father was taking care of my terminally ill mother and had no bandwidth to take care of
Cecil Bullard: attention was away.
Lucas Underwood: Yeah. And here's the thing about it is if systems had been in place and it had been ran like a business before that this wouldn't have happened,
Cecil Bullard: flags would've came up and people would've attention would've been drawn.
Lucas Underwood: And to all the shop owners in this room listening and to all the folks who come back and listen later.
Lucas Underwood: My dad didn't think that my mom was gonna get cancer. My dad didn't think that he was gonna be away from the business. My dad didn't think those people would steal from him because they were some of his closest allies.
Cecil Bullard: Yeah.
Lucas Underwood: Yet they did
Cecil Bullard: well. And I don't think you, I don't think you can live your life going, oh my God, my wife might get cancer.
Cecil Bullard: Of
Lucas Underwood: course you
Cecil Bullard: can. Or man, everybody around me is gonna steal from me if I'm not paying attention. But I think you, you live your life. I understand the business. I understand this exactly as well as it can be. Understood. Exactly. So if my wife gets cancer or if someone starts hundred percent from me, that I'm very aware of that and I can take care of that very quickly.
Lucas Underwood: And that is exactly what I'm trying to say, seasonal to the T, is that if it had been ran like a business all along. Then it wouldn't have been a scramble to try and figure it out. He didn't have the bandwidth to run it at a, as a business when that happened. He didn't have the bandwidth to babysit
it
Cecil Bullard: and fix and he didn't set it up that way because he didn't know how to set it up that way.
Cecil Bullard: Or he probably would have the thing now. Absolutely.
Lucas Underwood: A hundred percent.
Cecil Bullard: There. There are so many resources. The Yeah we're announcing a new learning thing. Auto Academy. It's gonna be fantastic. Yeah. But even our YouTube, your YouTube, there's so many resources. If you really want to know the numbers, I've done multiple things about the numbers of the business.
Cecil Bullard: Yeah. And I know you have two and we've done it together and Yes. They're just out there. Just take some time to dig up that stuff. Yeah. And pay attention. Exactly.
Lucas Underwood: And look,
Cecil Bullard: it can be the difference between retiring with. $3,500 a month from your social security and nothing else, or retiring with six and a half million dollars in the bank and $3,500 a month from your social security.
Cecil Bullard: Yeah.
Lucas Underwood: Yeah, you're exactly right. You're exactly right. And here's the thing and I think this is where so many shop owners miss it. Cecil, I loved pulling out an oscilloscope and using my deductive reasoning skills. To work on a car. It was my favorite thing. Yep. Yeah,
Cecil Bullard: it's fantastic.
Lucas Underwood: And to see that problem be solved and to make it through it and it work and the customer's happy and the car runs like it's supposed to, I fell in love with that process.
Cecil Bullard: Yep.
Lucas Underwood: And it took me years to fall in love with the same process of learning what screw to adjust and what number and what KPI to check and how to do it to make the business do that too.
Lucas Underwood: You can fall in love with the management of your business the same way you fell in love with working on the car or doing the diagnostics or whatever it is. Just because you don't know right now, doesn't mean you can't learn and you can't figure it out. You're not,
Cecil Bullard: you're not stuck loving only one thing in your life.
Cecil Bullard: Yeah. At least hopefully because, you. For me it was a very hard change to go from being a tech to being a service advisor. And there was some depression involved because I wasn't fixing cars and fixing cars was like crack cocaine. It was just like, yeah,
Lucas Underwood: me too.
Cecil Bullard: I had to learn that selling was now my crack cocaine and getting people's confidence in controlling the conversation and learning how to be really good at that.
Cecil Bullard: And then I went to become, oh, I'm now I'm gonna manage a business or I'm gonna own a business. It's a whole nother, it's different skill sets, but you can be just as in love with that, as you can be in love with anything else.
Lucas Underwood: You're exactly right. And here's the thing is I think for me, like I had built my importance of fixing that car, right?
Lucas Underwood: How many shop owners have you seen that you have a really hard time getting them to let go of the back of shop process or the front counter process? They need to be in control of it. And they will self-sabotage. To make sure they remain in control of it and they don't even realize they're doing it.
Lucas Underwood: And they're like, happens all this doesn't work. People can't figure this out.
Cecil Bullard: Yeah.
Lucas Underwood: And the thing is like they, they get their self worth and their value from doing that. And I am learning, okay? And Michael Smith has been a big help with this, but I am learning
Cecil Bullard: guy.
Lucas Underwood: He is, I'm learning like, Hey, Lucas your vision's been shortsighted and if you want to have meaning and value and you wanna feel like you have purpose in life, teach the other people that work for you.
Lucas Underwood: How to do the things that you did, so then you can move on to bigger and better things and impact more people.
Cecil Bullard: And you can, as I said, you can't give somebody something you don't have. So if you have a business that's limited by you, then you only have so much to give. If you have a business that runs like a business where you can grow it and you can bring people in and train people and stuff, now you can affect a lot more lives.
Cecil Bullard: Absolutely. And the other thing is, at the end of the day, there's gonna be a day for all of us, like it or not, where we're like, okay, either I'm getting so old that I can't do what I used to do and so I can't fix cars. And the legacy that you're gonna leave, the legacy that you're gonna leave is what the knowledge that you give and the help that you give to other people to be successful, that's what's gonna be there.
Cecil Bullard: You can't,
Lucas Underwood: yeah.
Cecil Bullard: Yeah. So to me, like for the institute, how many people can I help? How much?
Lucas Underwood: Yes.
Cecil Bullard: When I had the brain tumor last year or the, yeah, last year. It, you don't know what's gonna happen and what are you thinking about and have I done enough here? Have I changed enough lives, et cetera.
Cecil Bullard: Sure. And it was really nice. I got a lot of people that were very supportive. I got a lot of people that said, Hey, Cecil, I just wanted you to know, you've just, you've really changed my life and a lot of the people's lives and my company. And I still like today I am like, okay, how many more lives can we change right before the game's up?
Cecil Bullard: How many lives can we change? And it's not, for me, it's not about the money, it's about helping as many people understand the machine so that they can really make the machine run well.
Lucas Underwood: You're absolutely right. And I'm just gonna be completely honest with you. I don't think I've ever told you this, when all that was going on I sent Kent an email and I said, I am really worried about this.
Lucas Underwood: I'm really concerned. I really need Cecil to pull through with this. And he said, I really appreciate that. And I said, good, because it was his turn to buy dinner.
Cecil Bullard: There you go. That's right. I'm saying like, come on, Nancy. He's, he owes me a steak and a good glass of whiskey. Are you kidding? Oh no. I feel like he's
Lucas Underwood: trying to skip out on the bill.
Lucas Underwood: What is going
Cecil Bullard: on
Lucas Underwood: here?
Cecil Bullard: No. Yeah that's wonderful. Hey, one, one more thing. Yeah. Before I know we're at the end.
Lucas Underwood: Yeah.
Cecil Bullard: There, there is some math around setting your labor rate. So there's a couple of things. Number one, if it's me and I, now, I don't say everybody should.
Cecil Bullard: I, now it's if it's me or this is what I would do if somebody around me was 200 bucks an hour, I'm gonna be two 20. I'm always gonna be the most expensive guy in town. And so I'm not calling around to find the cheapest guy and try to be close to him or below him. Yeah. I'm actually calling around to find the most expensive guy and I wanna be a little more expensive than him because I have, I really feel like I have that value.
Cecil Bullard: So if the labor rates in your area are, if the dealership's two 50 and you're working on those cars. Why would you be less than two 50? Yeah. Okay. I'm
Lucas Underwood: sorry. But dealerships are less skilled than independent shops. Did I say that out loud?
Cecil Bullard: I know that. And by the way, the consumer believes that to be true too for the last five years.
Cecil Bullard: Yeah,
Lucas Underwood: exactly.
Cecil Bullard: So the other thing about that is I can afford to pay up to 40% of my effective labor rate. So whatever your posted rate is, that doesn't mean anything. What do you really get per hour? And that is a calculation of labor dollars brought in a time period times labor hours that were billed, right?
Cecil Bullard: Yeah. And so you may say I'm see something $180 an hour, but my effective labor rate's only 140. Alright? Yeah. And so I can't base my, what I pay my tech on 180. I have to base my tech on what I pay at 140. Because that's what I'm getting paid and can pay. And
Lucas Underwood: you have to take into account production.
Lucas Underwood: You can't
Cecil Bullard: just, yeah. And I, yeah. And and that's why when we build these performance enhanced pay plans, they pay more when they're productive and less when they're not productive. So that we hold margin throughout, right? Yeah. Yeah. And but I can afford to pay up to 40% loaded, meaning FICA few to workers' comp, all the expenses that I would expense.
Cecil Bullard: So if I'm $150 an hour, I can pay $60 an hour to my best tech in that shop. And then I gotta back that off about $12. So I really have about 48 that I can pay. And if I wanna build it I'm probably gonna take 30 to 32 or 35, give them a base based on the clock, and then I'm gonna build 14 or 15 into a bonus structure.
Cecil Bullard: And by the way, at that point, I can actually pay more because when they get above 40 hours. And if I'm using a 1.3 matrix, I should have some people that can do more than 40 hours a week. And if I do that and I get above that, any money that comes in, I have higher margins. So I can actually afford to pay more than, yep, that $60, I could probably go to 64 loaded or 65 loaded.
Cecil Bullard: If they are productive and if they're not productive, if they're 70% like the rest of the industry, I can't even afford to pay 60 now. I've got to be down in the forties.
Lucas Underwood: Yeah, exactly.
Cecil Bullard: A hundred percent. So I just wanted that kind of to be out there. And I know we have a labor rate calculator. And I don't have an example of it here.
Cecil Bullard: I'm not, I didn't I got here and I was like, oh, did they? But I'm more happy we had a webinar.
Lucas Underwood: Oh,
Cecil Bullard: Yeah. Some days, I more than happy to whoever wants that if they hit Raleigh, who, what are they gonna, where are they gonna go?
Lucas Underwood: I think they can email it to info at the institute.com.
Cecil Bullard: Info@theinstitute.com. We are sure. The institute
Lucas Underwood: dot
Cecil Bullard: com's on the Yeah, we are the institute.com info.
Lucas Underwood: Yep.
Cecil Bullard: And we'll make sure, and it'll be on the screen here. Yeah.
Lucas Underwood: Got it.
Cecil Bullard: I think we're at that time, buddy, as much
Lucas Underwood: as, yeah, we were at that time six minutes ago, but I was just gonna let you talk as long as you wanted to talk.
Lucas Underwood: Cecil folks.
Cecil Bullard: There you go.
Lucas Underwood: Thank you so much for being here, and thank you for being part of what's changing the industry. We all believe in making the industry a better place for not just shop owners, but technicians, service advisors, and the consumer. So thank you for being part of what's changing it.
Lucas Underwood: Thank you to the institute for putting this on, and we look forward to seeing you guys real soon.

192 - Standing at the Crossroads featuring Brian Bates, EAS Tire and Auto

192 - Standing at the Crossroads featuring Brian Bates, EAS Tire and Auto
February 9, 2025 - 01:42:25
 
Show Summary:
Service, leadership, and purpose sit at the center of Brian Bates’ journey. A military veteran and president of EAS Tire and Auto in Denver, Brian shares how his path from technician to multi-location owner was shaped by mentorship, values-based leadership, and a deep belief that business exists to serve people first.
This episode of Leading Edge: Standing at the Crossroads explores what it takes to scale without losing your soul. Brian reflects on building culture before growth, hiring for character, creating opportunity for others, and why fixing cars was never the end goal, only the entry point. From nearly running out of cash to leading a rapidly growing organization, he breaks down the leadership shifts required to move from survival, to success, to significance.
At its core, this conversation is about legacy. Not store count, revenue, or titles, but the lasting impact a leader leaves on people, families, teams, and communities through principled decisions and servant leadership.
Thinking about the legacy you are building as a shop owner or leader? Meet with Michael Smith to start a leadership and legacy strategy conversation: https://theinstitute.zohobookings.com/#/Executive-Owner-Strategy-Session
 
Host(s):
Kent Bullard, COO of The Institute
Michael Smith, Chief Strategy Officer at The Institute
 
Guest(s):
Brian Bates, owenr of EAS Tire and Auto
 
Show Highlights:
[00:02:54] - Brian Bates shares how the auto industry started as a practical move to provide for his family, then became something bigger.
[00:05:38] - A strong mentor helped turn leadership theory into real-world skill through daily application.
[00:11:34] - Brian Bates says fixing cars was “a ticket to the dance,” but the real work is serving people.
[00:12:21] - The shift from “building my lifestyle” to “removing obstacles for others” became Brian Bates’ definition of leadership.
[00:16:10] - The turning point came when the question changed from “how much more can I take?” to “how far can I take this?”
[00:23:00] - Culture stopped being chaos once purpose and values were defined clearly enough to attract the right people.
[00:29:18] - Big growth goals felt outrageous at first, then got outpaced by momentum and opportunity.
[00:49:15] - Values-based accountability replaces rules with ownership, and misfits often choose to exit on their own.
[01:23:37] - Brian Bates breaks down success as survival, success, and significance, then explains what it looks like to leave without the business collapsing.
 
In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?
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Episode Transcript DisclaimerThis transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.
 
Episode Transcript:
Kent Bullard: Hello everybody and welcome to the Institute's Leading Edge Crossroads podcast where we examine the decisions that professionals make that define careers that shape industries that inspire thought leadership and ultimately build lasting legacies. I'm Kent Bullard and I'm joined here with my esteemed colleague, Michael Hertzberg Smith.
Kent Bullard: And today we're privileged to be speaking with Brian Bates of EAS Tire and Auto. You're the president there out of Denver. Today's guest, Brian Bates is a proud fourth generation Colorado native and an accomplished entrepreneur with a rich history of service and dedication. After graduating from Golden High School in 1991, Brian followed his family's tradition of military service joining the army and serving honorably until 1996.
Kent Bullard: During this time in Germany, he and his wife Rondi welcome their son, the first of two children who would become your greatest pride. Right. Right. Brian transitioned into the automotive industry balancing work as a technician at Planet Honda and earning a degree in business management from Metro State University of Denver in 2000.
Kent Bullard: With an A SCL one Master Technician Certification and an a M designation, he quickly rose to prominence in the field. In 2004, he took the leap to entrepreneurship opening his first shop in Columbine Hills. Today he is the owner of 12 Thriving Shops and a founding partner of Straightaway Tire and Auto.
Kent Bullard: Formed in 2023 with Michael Smith's help, and alongside four of your closest friends. Recognize for your excellence. Brian's shops were awarded the number one Napa auto Care Center in the nation in 2018. Beyond his professional success, he treasures his roles as a family man recently celebrating the birth of his first grandchild, Tatum Duke, in October, 2024.
Kent Bullard: When not working, Brian enjoys snow skiing, boating, wake boarding, and four-wheeling, inviting the adventurous spirit of his Colorado roots. We're thrilled to have Brian Bates share his remarkable journey and insights with us today on the Institute's leading Edge Crossroads podcast. Welcome, Brian.
Brian Bates: All right.
Brian Bates: Thank you. Thanks for having me on, Ken. Good seeing you again, Michael. You too, my friend.
Kent Bullard: I love it. Listeners as we go through the topics today, the shared experience from Brian, if you have any questions or comments about this content, please go down in the comments and ask your questions. That's the whole point of this podcast.
Kent Bullard: We also ask if you do enjoy what you hear, please like and share so that others can benefit from this conversation as well. And of course, you can find more information about the institute at We are the institute.com. So Brian, I wanna start off, you know, what originally drew you into the industry and what inspired you to commit to it?
Brian Bates: Well, you know, the first thing that drew me to the industry was the ability, the opportunity to provide for my family after getting outta the military and while I was going to pursue my degree at Metro State. The, the idea that I could make decent money and work during the day was very inviting at the time.
Brian Bates: I, you know, most of my options were in the restaurant industry or some, you know, retail industry that, you know, would be odd hours, odd days, that sort of thing. So that was the original draw. And then after being in it for a few years, I was just really drawn by the people, you know, the customers the ownership of the dealership, the store manager, my colleagues that I was working with on a day-to-day basis.
Brian Bates: And just really had a good time working and in the trenches and just doing all the rolling up the sleeves, getting dirty and filling. At the end of the day, like I'd really accomplished something and watching my pay increase as my knowledge increased, being able to invest in myself with technical expertise, with experience, the challenge of.
Brian Bates: Figuring out what's going on with a car or beating flat rate time and making, you know, more money as a result. So, and again, working with other people and as I grew in the dealership, I became a mentor and had several apprentices working for me throughout the years. And that was also rewarding and exciting to see them grow and to be able to share my knowledge with them and help them experience the same sort of success that I was able to, and the same opportunities that I was able to, I got into the industry.
Brian Bates: So that, that was my initial draw to the industry and then it just kind of took off from there.
Michael Smith: Well, you had a positive mentor relationship at the dealership, if I remember the original stories. Could you tell us a little bit about that positive mentor in your life and how it kind of got you started and kind of a thought process about how to be in this industry?
Brian Bates: Yeah. So it, it really was an unintentional situation, but I just can't think of a better luck of the draw or a better situation just by, you know, happenstance for me or anybody in any industry really. I I was going to, to school, getting my degree going to night school mostly. I had some day classes, but most of them were night.
Brian Bates: And so as I moved up in the ranks, I was able to really utilize a lot of that knowledge that I was learning at the dealer or at school. At the dealership as I was working on it, especially since I was getting a degree in management, which is mainly people once I realized that my a degree in management wasn't all about accounting and spreadsheets and you know, crunching numbers and whatnot and I realized that it was all about leadership and organizational behavior, you know, motivating people and all those fun things that we kinda talk about on a daily basis.
Brian Bates: That's what really. Gave me a passion for getting a degree in management. And so I was fortunate to have the dealership, the service manager at the dealership who ended up being the fixed operation manager, as the dealership grew. He was very passionate about leadership and just about the industry and mentoring and helping people.
Brian Bates: And so as I was learning all the stuff I was learning at school, I was able to really talk with him and have that second sort of education and mentorship. That was the application of the knowledge. You know, not knowledge isn't alone, isn't power. The application of the knowledge is really where the power comes in.
Brian Bates: And so the ability to really apply all that knowledge as I was growing and learning and working at the dealership, and then to multiply that with a mentor that really could help me make sense of what, you know, what. What to do in certain situations and kind of how the world works and how to, like you said, Michael, how to be and the important things about just work in general, but especially the automotive industry.
Brian Bates: That was that, that was just so powerful in my career that that, like I said, I just can't imagine that I could have been in a better situation than that.
Michael Smith: So many, I'm sorry. So many of us have these leadership experiences where we get. Into leaders, being leaders ourselves. And we look back and, well, I don't wanna do this and I don't wanna do that.
Michael Smith: Oh my gosh. When I'm a leader, I'm not gonna do that. And I'm just pleased you and I talked, Ben, known each other for quite a while and I know who, how that mentor meant a lot to you and how you were able to walk outta that experience with those memories and with those perspectives. And to some extent have it be a little bit of your leadership foundation as you came out into your own.
Michael Smith: And I just I loved it. That's why I just asked, I know that's, to have a positive start. Like that's a great building, building block start. Right. So
Kent Bullard: we've been Absolutely,
Michael Smith: yeah.
Kent Bullard: We've been having kind of this internal conversation outside the podcast, I mean, today just about application. And I'm curious to know, what do you think was the driving factor or the inspiration for you to take what you were learning and to apply it?
Kent Bullard: What got you to apply that knowledge?
Brian Bates: Well, a little bit of it was just being forced into they say necessity is a mother of invention, right? So I think it's the same about the application of knowledge is is, you know, the necessity of it. But you know, I started at the dealership just ripping plastic off of new vehicles and you know, getting 'em ready for the front line and which is really the, you know, as far as the service department, that's about the entry IST level, if that's a word in the dealership.
Brian Bates: And so went from there to being, you know, they started letting me work on vehicles and then worked my way into a line technician position. And then eventually after a couple years, I was a team leader. And then after a few more years I moved into a shop foreman position. So. It again, just kind of followed in line with where I was at school.
Brian Bates: After getting through my general studies after a couple years, I was actually moving into that leadership position and taking some of those basic management classes and you know, I also, while I was in the military, I was a sergeant, so had taken quite a bit of leadership classes in the military as well.
Brian Bates: So wasn't a stranger to leadership at all. But it just, you know, continued on as I was going into management. And, you know, a lot of that real instinctive leadership that you have in the military, which really is, you know, a lot of self preservation based and based on you know, the preservation of your colleagues and the people beside you and above you and, you know, that you're serving.
Brian Bates: So, all of that again, just is that building upon, you know, a foundation upon another foundation that really got me to the point where I was applying what I learned and again, my passion people, you know, probably not so much recently just because, you know, I've seen more as the business owner versus the car guy.
Brian Bates: But a lot of people used to ask me, Hey, you know, what kind of cars do you have? What cars do you love? What do you love about working on cars? And I mean, the answer to that is honestly I really don't have a passion to work on cars. That was just what gave me a ticket to the dance, was that I could work on cars and make money.
Brian Bates: And while I was mastering and learning more about how to run the shop how to lead people, how to be, you know, the best leader and the kind of leader that leader that people will follow and that I can inspire other people to to follow the purpose and the drive and where we're going as a company and where I'm, you know, wanting to go as a, as an individual in this field.
Brian Bates: And it being my career is you know, and that is all dependent on helping other people get where they want to go, right? I mean, this isn't I think some people feel like being in business or being a business owner is that everybody serves your your whim and that the business is there to serve your lifestyle.
Brian Bates: And I don't agree with that. I think that the purpose of being a business owner is that you have the ability to really have a significant impact on other people's lives and to help them get where they want to go. And the more you're able to do that a higher level and at, you know, a larger scale, then then you benefit from it, right?
Brian Bates: But you know that's a result. That's not the purpose. It's a, you know, a benefit or a result of what you're doing. And the purpose really is that you're, you know, you're helping other people get where they want to go so that you can, you know, get where you want to go and that's where you move from.
Brian Bates: Being a rank and file person to being a leader is that you're dependent on the results of the people that are on your team, right? The people you serve, people that you're saying, Hey, you know, I'm here to remove obstacles outta your way so that you can do what you want to or what what you're looking to do that I can help you get where you want go.
Brian Bates: Right. Versus, Hey, you know, I need you to do these items so that I can elevate myself to the next position or to a higher level. I mean, I think that's really old school thinking. So
Kent Bullard: I'm curious to know, going back to the early days, was it a cycle of, a consistent cycle of learning, applying and then seeing the results, you know, learn, apply, result, or were there key moments in the beginning part of your journey that got you focused on like memories that it's like, I distinctly remember this happened and I was like, I wanna pursue management, or I wanna pursue leadership.
Brian Bates: So, you know, that's a pretty loaded question, right? Because what's going through my mind is, and I say loaded meaning complex, right? Is that what's going through my mind is that there in, you know, my experience, there's that process, but it's not one dimensional, it's multidimensional. When you start you're thinking about, as a father, you know, you go through that, where do I want to be?
Brian Bates: How am I gonna get there? Here's the plan. Execute, then, you know, what are the results? And that can be in several different aspects. Just in, you know, as being a father or, you know, you know, be, you know, in, in your financial, knowledge and in your career. And, you know, Michael Smith does a a great exercise in one of his leadership classes about the Wheel of Life, you know, and there's all those spokes in the wheel of life.
Brian Bates: And so I think that's, that cycle is is, like I said, just multi-layer, multi-dimensional, and each one is kind of at a different phase at any given time. The as far as my career goes, I think again, that there's different things that kind of that, that I look at, Hey, this is where I wanna be. Maybe that could be, you know, one layer would be pay, another layer would be, you know, where I am as a technician, you know, my skill level as a technician, where I am in the company as far as, you know, the level of my position, right?
Brian Bates: Compared to other people in the company. So, you know, to answer your question. As far as my career I think that it was something that just kind of started building on itself. Right. And you know, John Maxwell talks about this in his, in one of his books. I think probably several of his books, a lot of 'em have the same thing, but they that at some point, I think in our careers, we go from this point of like, how far do I have to go?
Brian Bates: How much work do I have to do to attain success? And then that's kind of that input of energy. Right. And your. You're kind of feeling like you're exhausted and there's times where you know, you might feel like giving up or, you know, you might have to take a break, that sort of thing.
Brian Bates: And that to me is that input of energy you're constantly putting a ton of energy in. And in my career, at least at some point, those scales sort of tipped where you get more energy out of it than what you're putting into it. And you move to this instead of, how much do I have to do in order to reach success?
Brian Bates: I'm thinking, how far can I take this? And and just, you know, those victories give you more energy and you start really, you wake up saying, you know, Hey look, you know, you're excited to go to work. I had a friend, I was at the gym and told him, Hey, I've got a hard stop.
Brian Bates: I think it was six 30 I had to leave. And he goes, oh, do you have to go to work at that time? And I just looked at him and said, no, I get to go to work. Like, you know, I'm excited. I have a hard stop because I gotta get this, you know, this project going, and I'm excited to get there. And no, I don't have to.
Brian Bates: I have the opportunity and the privilege to go do this. So, but, you know, it's not always like that. And so over time I just felt like I could see that energy and the return on my investment just start to kind of build sort of the snowball. And then it started, you know, I started.
Brian Bates: Getting like that glimpse of, Hey, look, this is kind of fun. There's a lot of pain involved, but you know, every once in a while something's fun, right? And then then over time it's like, you know, this is about half pain, half fun. And then at this point in my career, I think is there's, you know, some moments of stress or frustration, but.
Brian Bates: By large, just a lot of fun and excitement and and something that again I wake up and I'm excited to, to get in and get going on the day and see, you know, what the day has in store for me.
Kent Bullard: I'm somewhat a little relieved that you have the same thoughts that a lot of us do in that Wow, today sucks a little bit.
Kent Bullard: And it's gonna be hard and it's challenging. And, you know, you said, you talked about the thought of giving up and the thought of, you know, maybe I need to take a break. But also I think I, I can appreciate that you more so have this con can continuous, iterative process of how am I continually moving forward or getting better until you hit that tipping point.
Kent Bullard: And I wanna talk about what that looked like for you. A little later on when you did hit that tipping point, what did it feel like? What did it look like? But more so I'm curious to go back to again, the struggle. So when you first started your business what were some of the most challenging obstacles that you faced and what do you think you did that helped you overcome those challenges?
Brian Bates: Well, I would say by far the largest challenge or obstacle that I faced was myself. You know, I mean, and I say that because if I knew now or back then what I know now, then I feel like I could have accomplished a ton more, a ton faster. So my frustrations. We're largely surrounded by people because that's the biggest challenge.
Brian Bates: I feel like most people in this industry, and I feel like just in business in general, right, when you're in the people business some people are, you know, in say the aeronautics business or you know, engineering or, you know, most business does serve people in some sort of a capacity, but I feel like the automotive.
Brian Bates: Industry is largely there to serve people, right? That, that's really the focus and people that understand that people are the focus. It's not cars. We, you know, we fix cars as a as part of our job. That's what we do. But really the focus is people. And and that's our job is to serve our customers, to serve the community, to serve our team members because.
Brian Bates: You know, in the end the further they get in life and the further we can help them accomplish what they're looking to accomplish, whether it's to have a reliable vehicle that they can depend on without breaking the bank and a place they can trust, or whether it's a place they can go to work and earn a good living and reach the potential that they deserve in life.
Brian Bates: That, that's really what the fact that when I said earlier that fixing cars just gave me a ticket to the dance, you know, the dance is the people, you know, fixing cars is not the dance. You know, if you can do, if you can fix the cars, then you know then you get a play out on the playground with everyone else.
Brian Bates: But if you can't fix cars, or if you can't work well and sell be a good advisor on the front counter, you know, be a good manager, that sort of thing, then then you don't get a play in where all the action is. So, so, what was your question
Michael Smith: again? So, just for fun. No I'll build on this when I, just for fun, when I met you. Many years ago you had three stores and you had four leaders around you. One was kind of a general manager and there were three store managers. And you were talking before about, gee, if I knew then what I know now, right.
Michael Smith: That those guys didn't really like each other and they didn't work very well together and there wasn't a lot of teamwork going on and they kind of had different agendas and you tried to go help and they did their own thing after you left and all kinds of crazy stuff like that. Just for fun, looking back, w what, knowing now what, you know, years later 'cause there'd be a lot of people that may be listening to this, that are living the life now that I'm just described, that you were living then what did, what would you have taken back and from today to that time to start with what were the things that you've learned that would've been useful then when it was a little messy with leadership and the people around you?
Brian Bates: You know, I would say the biggest thing that I learned. Having purpose being principle based having values as a company, operating principles, and how powerful that is to attract the sort of people that aren't dysfunctional, like what you talked about. Michael? I'd love to tell that story about how you and I met.
Brian Bates: If,
Michael Smith: yeah,
Brian Bates: That's just fine. You go for it. Well, we, you know, Michael and I met you know, just kind of make a long story short, he was an advisor that was helping consult with a group of other people. And I really needed to understand how to increase revenue and increase profitability, all those things that most business owners think about to some degree or another.
Brian Bates: Right? I mean, you know, you can't do this if you don't have the revenue and the expense structure figured out. And Michael was one of the first people to talk to me and he said, Hey, look, you really need to get your mission, your purpose put together and really work on your culture of the business, whatnot.
Brian Bates: It's, you know, fairly dysfunctional and it's creating a lot of problems and obstacles in your business. And I said, yeah I get that. Let me figure out how to sell more work first and then generate that revenue and then we'll get to the culture thing later. And and so we you know, Michael was very persistent and said, Hey, are you ready to start working on your culture and really, you know, taking your business to the next level?
Brian Bates: And as I started really analyzing what was going on in my business, I started realizing that it was all my frustrations were born out of, you know, just problems in the culture. And the culture was being dictated by some of the people that I hired. And, you know, I was, I was definitely never denied that the culture was all mine.
Brian Bates: You know, I owned it good and bad. And so I finally, sCU to Michael's, you know, suggestions of, Hey, let's work on it. Let's work on it. Said, yeah, you know what, you're right Michael. Let's work on this. And we just started creating a vision for the company that created a vacuum and drew people into this idea that we created.
Brian Bates: And I created it with the help of Michael and in collaboration with the rest of the team that was there at the time. And anybody that we hired afterwards, we were very clear that, hey, this is who we are as a company and these are the values that we hold important, and this is our purpose as a company and this is the mission that we're on.
Brian Bates: And if you're if you're excited about that, I think you'll fit really well into the team. If you're not, then I wouldn't. Accept a position here, right? Because we just know it's better off to, if people don't believe in teamwork or growth or servant being a servant to to other people or being a professional in this industry, those are four core values.
Brian Bates: Then then they probably won't work out. Those are the things that some of those people that were dysfunctional when Michael and I met those are the people that didn't work out, and it's because they didn't have those values. They didn't believe in teamwork. Like, like Michael said, they were backstabbing each other and they didn't believe in growing and being professional and and really caring about their customers and their teammates and the vendors and and really serving them and understanding that the result of increased revenue in general is a result of how well you serve people and care about them versus.
Brian Bates: Saying, Hey, let's manipulate people in order to generate revenue, which is you know, very shortsighted and lacks a ton of integrity, right? Has a bunch of problems associated with that. So, Michael I remember you asked me when we first started out, Hey, what do you wanna be doing in two years?
Brian Bates: And I said, well, I want to this was 2018. I said, well, I want to either build a company up to a place where I can sell it and get out of the industry because I was pretty burnt out. Or I said, I want to either be having fun and ready to continue to grow this business to to, to the highest, you know, potential that I can.
Brian Bates: And the more we got into it, the more I realized that they were really one and the same. Right? Businesses that are very attractive have great cultures. They have high revenue. They they're they're fun. They're they're functional, meaning that they're not passive aggressive. They're they're active and collaborative and and they feed they, you know, get energy from the the business itself.
Brian Bates: And once I out all the components that go into that, and much the same as kind of seeing that glimpse of leadership and there's a lot of pain and a little bit of, Hey, that was fun. You know, I wanna do it again. The same thing happened with the business over the years. And then it became something that, you know, over, you know, the next two years that Michael helped me build to the point where we were saying, Hey, look, this is a lot of fun.
Brian Bates: Let's you know, we're building something special here. And we could see people being drawn to the business and just kind of jumping on our crusade and saying, Hey, you know, we're gonna, we're gonna build something special here. And we made some predictions that were very bold. I believe we said we were going to get to 10 stores by 2025.
Brian Bates: We're at actually that bio is just a about a year outdated. We've got 14 stores right now. We're we're under LOI for another seven locations that will close by the end of probably the middle of January. And then we've got two more locations that we've got lined up for probably a February close.
Brian Bates: So we'll be somewhere around 23, 24 stores here by the end of the second, or the first quarter in 2025. And I think we predicted 25 stores by 2030 was in our mission statement. And that
Michael Smith: felt big at the time. Remember? That was like, wow, that's just
Brian Bates: so
Michael Smith: big and so far out.
Kent Bullard: It
Brian Bates: doesn't seem like it was a
Kent Bullard: big enough goal.
Michael Smith: Little did you know.
Brian Bates: Well, no, it wasn't. And you know, the funny part about it was everybody thought we were just crazy. They're just, you know, and as those that had a little bit of faith started seeing, oh wow this is really you know, moving in the right direction. And then we started acquiring a couple stores and then, you know, there was another.
Brian Bates: You know, people work for opportunity. They, they need money, right? They wanna be paid fairly, but the main reason the, especially the rock stars and unicorns are on your team is for the opportunity to see that, Hey, I've got the opportunity to compete for a position or to grow within the company based on my merits.
Brian Bates: They don't, you know, rock stars and unicorns don't expect entitlement, but they do expect to be paid for their talent and their efforts. And that involves having the opportunity to do that, right? I mean, if all we have is a position as a GS and there's a master tech that wants to join our team, you know, if there's not that opportunity, then he's not gonna join our team.
Brian Bates: Right? But, you know, if that master tech. Position is available and they say, Hey, I wanna move into management. And, you know, maybe being an area manager and learning the ropes here and possibly starting my own business. And if that opportunity is there and they see it then they wanna be on your team.
Brian Bates: If they see that, hey, this shop has been a three bay shop for the last 50 years and no sign of growing, no potential, then you know, they, you could pay them what they're looking to make. You know, the true unicorns aren't gonna wanna work there.
Michael Smith: Well, one of my, one of my favorite stories that, that you've told is that when you guys bought an a shutdown building and you put your brand on the front while you were getting ready to launch you started taking proactive phone calls from masters that were driving back and forth on their way to work.
Michael Smith: They saw the sign, you guys had your reputation in the market, and that they'd call and say, Hey, I'm a master tech. I'm a master service advisor. I'm a top end store manager, and when you guys start interviewing, I wanna be on the list. And it's such an interesting story because the industry is like, well, how are we gonna find good talent?
Michael Smith: And it's like, well, if you set this up right, they all they have to do is drive by the sign. Right. It's just an interesting you know, result that you guys have experienced. So,
Brian Bates: congratulations. Yeah. No, it does.
Congratulations
Michael Smith: feed on
Brian Bates: itself. And that, that is one of the you know, we have a little over a hundred employees or team members right now.
Brian Bates: And when we get done with this acquisition of seven locations, we'll have somewhere around 150. And it's a big question, Hey, I've got six people in my store and it's extremely challenging to keep my store staffed. How do you do it with 150? And it's, to me, it's relative that the larger you grow, the more opportunity is there.
Brian Bates: And so you do attract, if your culture is right, you do attract the right kind of people. Now there's other stores that, you know, we probably all know of a group, a chain of stores or something where. They're a large organization and they're struggling to keep good team members and their bays are empty, the parking lot's empty, that sort of thing.
Brian Bates: And it does work both ways, right? It's not a given that if you're just, if you just scale your company, that you know people are gonna be attracted to you, you still have to do the work. Right. You still have to, you have to scale
Michael Smith: it the right way. You have to scale it
Brian Bates: the right way.
Kent Bullard: Absolutely. So, I'm I wanna go back a little bit because you talked about the people that are saying, well, you know, I've got the three bay shop.
Kent Bullard: This is where I'm at. I'm, you know, at what point in your journey did you hit that crossroad? You see, I got the title there. Yeah, you got the crossroad in there. In there. When did you hit that crossroad? When you considered a future beyond the current business you had.
Brian Bates: So the question being when I was just at a single store and I considered a business beyond that.
Brian Bates: So bigger
Kent Bullard: than just the single location? Yeah. When did you decide to go big?
Brian Bates: What
Kent Bullard: happened? Right?
Brian Bates: Like, yeah. You know, that was a matter of just realizing. That I had people on my team that had bigger ambitions than to just work at a single location. Our first location was a four bay converted gas station.
Brian Bates: You know, had been a two bay gas station. The owner before me had added on a couple more lifts or a couple more bays, and I realized that if if I didn't give more opportunities, I was going to le lose people. And it was just going to be difficult to hold onto good, solid people. So. I found a, another store that had closed down during the 2008 recession, and we signed a lease on that building and started hiring more people.
Brian Bates: And the people that were at the first location, they were very excited that we were growing. I realized that our customers you know, something that I didn't expect, but the customers were really excited to see us growing too. You know, they, people like doing business with a winning, winning team.
Brian Bates: And so when they see that you're growing and that you're becoming, you know, larger or you know, you're having increased success as time goes on, there's a sense of comfort there, I think from your customers to know that, hey, they must be doing well. They must be doing a good job. I'm at the right place.
Brian Bates: And so they did get excited about and I think everybody. Well, well, not everybody. A lot of people like to see people win that if they understand small business that it's very risky. It's it's extremely grueling. You know, we almost went out of business a couple years after I bought the the shop.
Brian Bates: We were down to our last few thousand dollars and at the beginning of January, one year, which is not the time to, you know, be short on cash flow. And we just, we had the best January we'd ever had. We only had a January, one January to base that off of, but it was a really good January compared to that one.
Brian Bates: And we were able to put some money in in the bank and start building up our cash reserve again. So I think people understand how difficult it is and they they admire and respect when somebody is actually. Making progress so that I started seeing the the exponential traction of having a second location.
Brian Bates: I was able to attract more customers and more team members. And so, I had a conversation with John ler and Dan Gilley at the time, and they had told me from experience, Hey. If you go to two locations, you should plan to go to three locations because most people never stay at two locations.
Brian Bates: There are some, but most people either go from one to two to one, or they go from one to two to three, and you know, they may stay at three or they may move forward, but two locations is just twice as much work. 'cause you don't have the ability to have a layer of middle management there as an area manager and work on some of the stuff that.
Brian Bates: The business, you know, you know, it just so happens that running the business ends up being a full-time job at some point. So you just, you need to have people there to work on keeping everything going, the processes and working with the team members and whatnot. Helping them solve problems, solving their issues for them as they're bringing up, you know, challenges that they're faced with.
Brian Bates: So, so yeah. Then, you know, two businesses just, you know, I knew that I was gonna go to three, and then when I got to three, I met Michael and I was, you know, trying to run three individual businesses. And Michael was pretty quick to point out that, hey, we need to run a single business here, not three individuals.
Brian Bates: And then helped me find a find my, my business partner bill kind of a mutual friend, or Michael was a mutual friend of Bill and mine. And so, you know, bill and I hit it off and we both believed in the same things, had the same values and whatnot. And bill helped me run it as a single business versus three separate ones.
Brian Bates: And then that's really when things started taking off was just. Bringing all those components together and building a cohesive business versus multiplying, you know, the work we were able to multiply and scale the business versus just adding more and more tasks to our day. Well,
Michael Smith: you two together are a fantastic combination because you were by, by defensiveness, I suppose, having to work in the business quite a bit.
Michael Smith: And then when Bill showed up, he was fully capable from a background of 30 store overview. Right. Kind of a, he had a big background when he sat down, he said, give it to me. I'll run it. You go out and work on the business and I'll work in it. And you guys are a fabulous combination that way because he's a machine running it from within and you've done extraordinary things from the outside of your business working in, you know, from the outside.
Michael Smith: And it's been a, it's been a powerful combination. You two and that's scale allowed you to do that, right? You two then scaled up and then you could put talent around you and the talent that would aspire for growth came to you and the people who didn't want to grow left you and you replaced them with people who wanted to grow.
Michael Smith: And it sort of takes on a life of its own and Right, right. And it'd be great if you would share a little bit about that life of its own and the leaders that you can attract now versus the ones that left that didn't wanna be part of this. Right. Because you guys recruit and hire in a different way than most folks do.
Michael Smith: What you and Bill do at the beginning is different than what most people do. It'd be awesome if you would just share a little bit of a snippet of that about what you're able to do with what you've built.
Brian Bates: I I feel real fortunate that I was able to connect with somebody like Bill that is extremely talented and wise and and has the shares the same values and principles that I do.
Brian Bates: The other part of that though is that kind of going back to what we were talking about, really putting that defining that foundation of who are we as a business and what are our values and our mission and our purpose. That's really what Drew Bill to me, right? I mean, he had an offer to go work at the headquarters of Advanced Auto Parts, and he was ready to accept that offer, move to North Carolina.
Brian Bates: And
Michael Smith: yeah, not to interrupt you, but that was my conversation with him. I said wait. Freaking on the plane. I got one more guy you need to talk to before you decide to fly outta town. Right. And that was you guys getting together and connecting on your dreams or your visions together.
Michael Smith: Right. Which I just wanna throw that in. There was, he was one foot out the door on the way to Raleigh at that point. Interesting.
Brian Bates: Yeah. Yeah. Absolutely. And so, so, so I'd say I'm fortunate on one side, you know, there's, there is a little bit of luck involved there, but you know, those kind of people I think are around us.
Brian Bates: But if they're not attracted or you don't have something to attract them to your business, then you will never know. Right. You know, they'll either not reveal themselves as a unicorn and open up or. You'll know their unicorn and be frustrated that they don't want to take a job. And truly that's what you're trying to sell them is a job versus a career and an opportunity that you'll be frustrated that they're walking away and going somewhere else.
Brian Bates: I'm attracted to something else. So with with Bill coming on board I did express my passion for leadership and to grow the company and to run a business that we could look at and be very proud of. And all the principles that we wanted to build that business on are, you know, our purpose is, you know, very simple.
Brian Bates: It's a little bit more defined on our purpose statement, but it's just about making other people's lives better. And if we can fix a car or if we can help, a team member or be involved in the community and just use our position and our skills as auto repair professionals to make other people's lives better.
Brian Bates: Then the result is that we get rewarded with with more profits. However that just allows us to, gives us the power to grow our families and you know, to create this sort of a legacy that we wanna create. In the end, I, you know, I don't think anybody in in the right frame of mind, meaning that is doing this for the right reasons or business for the right reasons.
Brian Bates: Really if they are, looks at it and says, Hey, look, if I can, if I can manipulate people to do the right thing or help other people, then I can buy that Lear jet or that this is going to be one of those businesses where I'm going to be, you know, a multi-billionaire, that sort of thing.
Brian Bates: I mean, you know, is it possible? Maybe, but I think most people are just looking at it like, Hey, you know, if I do a solid business, I can earn a good living and, you know, retire someday and put, you know, my kids through school and live in a comfortable house. And. That's where it comes back to, you really need to, you know, once you define the higher purpose of working on cars, then a lot of that just, you know, it takes care of itself, right?
Brian Bates: You don't have to say, how do I, you know, how do I generate more sales? What's the sales program that, you know, the sales training I need to put my advisors in and, you know, the technicians and whatnot, and you're trying to manage personalities and you just feel like you're, you know, managing a three ring circus.
Brian Bates: So, so when it does come to finding that person that you're looking for, again, your biggest challenge is in your own in your own mirror of saying, what kind of business are, am I passionate about defining that business and then finding those people that wanna join in on that. Yep.
Michael Smith: And the beauty of it is that when you get that team built and you guys are walking out, the purpose of the character that the loyal brand ambassador customers that are meaning based, they're chasing meaning to find you guys, and they come for auto repair and they leave with a meaning connection.
Michael Smith: Their motivation internally is to come back to you again because you're talking their language. And those are the people that will build these long-term covenant relationships that are really, you know, the future profitability of the industry is knowing how to serve that top end client. And they come because of who you've demonstrated that you actually are.
Michael Smith: And it's just a super powerful, you're right, it takes care of itself in the end, right? Once you make that commitment, build the culture, get the rock stars, walk it out. In real life, those customers come and they're sticky. They'll stay forever. Right. They're
Brian Bates: great customers. So, so one of part of your question was how do we hire what's the process that we use to hire and that is the process is we I kind of joke around with our managers because we do a little bit of a two step process where we'll interview at a higher level for that candidate, and then we will have the managers really look into the technical capacity of the candidate.
Brian Bates: And we're, as we're developing our managers, we're developing them so that they can also hire for that higher or interview for that higher level. But really what we try to do is just. When we're interviewing for the character side of things, we're looking for, are these candidates, are they humble?
Brian Bates: Are they hungry, and are they smart? You know, and emotionally smart, meaning that they work well with other people and do they hold the values that we hold very high. And once we check those boxes, then we say, okay, now can you do the job that we're hiring you for? So in, in short, I just. Tell our managers, you know, if they don't understand that process, that we're just trying to make sure that we don't get any psycho killers into the, you know, trying to eliminate those, you know, murders from our from our shop.
Brian Bates: And
Michael Smith: but it is genius. It's genius because you and Bill spend your time making sure that the cultural fit is there and that you're hiring champions and these people are the real deal. And then when the time comes that they've passed that level of test, which it's a rarefied crowd that can join you at the level that you guys have chosen to live, then whether they can fix cars or sell at the front desk, lots of people can fix cars and sell at the front desk and don't fit your culture model.
Michael Smith: So it makes a lot of sense that's where you guys put your time is making sure you're hiring family and it's very powerful.
Brian Bates: And so I, I kind of say the ax murder tongue in cheek, but really they're not killing people, but they're killing the culture, right? I mean, they bring an ax in and they start swinging at your culture and it destroys your culture.
Brian Bates: And the beauty of. When you hire based on values and principles and purpose and whatnot, when you have the conversation, like one of our principles our values is teamwork and an operating principle is to be on time. Right? And the reason for that is your team is depending on you. I depend on, as a technician I would depend on an advisor to be there to take care of the customer so that I have work to work on or cars to work on, right?
Brian Bates: And as an advisor, they're depending on you to show up so that when they're taking care of the customers, that they can give the customer what they came in for. So instead of saying, Hey, the rules are to, you gotta be here, ready to work at eight o'clock, and if you don't follow those rules, we're gonna let you go.
Brian Bates: The conversation is, Hey, when we hired you, you expressed to me that you have a strong belief and you hold teamwork at a very high. Value and what you're doing when you don't show up on time is you're letting your team down. So, you know, is there something that's getting in the way of, you know, I mean, if you've got, you know, childcare duties and, you know, things get hung up or whatnot, then that's understandable.
Brian Bates: But if somebody just isn't motivated to get to work on time and and they just cannot. And it happens to all of us, right? Where it's this 23-year-old technician that for some reason can't make it to work before eight 15, no matter what you say. And even if you have these conversations and say, Hey, look you believe, you said you believe in teamwork, but you're violating that principle on a regular basis.
Brian Bates: So what is it? Is it that you don't believe in teamwork or that you know, you do believe in teamwork, but you're just, you know, violating your own personal value. And if that's the case, like you should rethink, you know, do you really believe in teamwork? And if you do, you should stay true to yourself on that.
Brian Bates: And the beauty of this is that, I can tell you just on that conversation alone, right? Just somebody that won't come into work or can't make it to work on time. And when you sit down and you talk to 'em and say, Hey, look, this is all about teamwork. Not a rule that if you break the rule, I'm the boss and you better do it.
Brian Bates: Or you're fired, right? But it's, Hey, we're building a team here and you're letting us down. And I've got a responsibility to everybody else on the team to make sure that people are coming, that, that are all the people that are joining our team also hold those values very highly. So, you've consistently demonstrated you can't make it to work before eight 15.
Brian Bates: You violated this over and even though you realize you're violating it, like, do you really fit in here? I mean, what you tell me, is this really where you should be? Like how and sometimes. And a lot of times, honestly, you know, and those are different con conversations based on whether they're violating different values.
Brian Bates: A lot of times they say, you know what I, I really don't feel like this is where I need to be. And you just say, well, what are you gonna do? And I'm gonna go find somewhere else to work. That's probably what I would suggest. Right? Yeah. And I can't tell you how many times I've had that conversation with people and they just self eliminate.
Brian Bates: Right. But it does give them the opportunity to leave on their own terms versus feeling like you unjustifiably fired them because of some arbitrary rule that really doesn't matter.
Michael Smith: Well, and Brian, to use language, Kent and I were talking about earlier today, you have set up a redemptive culture and you have redemptive conversations with people.
Michael Smith: And if they choose not to redeem, right? Not to challenge themselves and say, Hey, I'm living outside of my belief structure and I'm okay with that. I think I'll take that somewhere else. Then they're own, they're in charge of their own remedial solution to that, right? As you say, they self dismiss and you're like, well, can I help you?
Michael Smith: You know, I'll give you a good work referral. I can't give you a good cultural referral, but I'll give you a good work referral. Can I help you? Right, right. And it's just, it's a completely different. Expectations set. You're not in contest with them anymore. You're not pushing them to show up on time.
Michael Smith: They start either doing it because it becomes important to them, or they decide they don't care. And then they pick it up, take it somewhere
Brian Bates: else, right? And we've had,
Michael Smith: yeah,
Brian Bates: plenty of those conversations as well, right? Is, Hey, do you realize you're violating this principle that you know, on the surface have told me that you hold a very highly, and they go, you know what, I hadn't thought about it that way, but you're right.
Brian Bates: And I need to get my act together. And you know that also solves the problem when they look at it and it's just, it's about running a principle values-based organization versus a rules-based positional organization that is very ative, right? Hey, do it this way, or Get out
Michael Smith: well, and that.
Michael Smith: That very moment is very psychologically sticky, right? When somebody comes to a conclusion that you're helping them to become a better person and they actually make that decision for themselves, they appreciate that from you and they appreciate you, and that makes 'em stickier as an employee, right?
Michael Smith: They're less likely to pick up and go somewhere
Kent Bullard: else. It's very powerful. Who wouldn't wanna work for somebody that is driving that? I mean, you're people first. You know, one of the, one of the first things that made you kind of look at pursuing being better is that you were the obstacle. You changed your own perception first, and then you looked at, well, in order to take care of the people that I'm serving, they need more opportunity.
Kent Bullard: And so the reason you bought another business was to serve others. I mean, your whole drive is to help people. And who wouldn't want to be a part of that? How attractive is that to work for somebody whose sole purpose is to serve you, to make you the best possible version of yourself?
Brian Bates: Right.
Brian Bates: And that's the fundamental concept of a servant leader, right. Is, and that's exactly what I want to be known for, is somebody that came in and helped other people and was, you know, interested in their, personally, interested in their success, not interested in manipulating somebody for my personal success of building, you know, some accounts, you know, a cash account or whatnot.
Michael Smith: Well, and the beauty of it is they work harder for you. They produce more, they do it partially for themselves, partially to be part of a championship team, partially to make you proud of. Which is a beautiful relationship, and you end up getting more productivity out of them. Right? It, the productivity follows this self instead of chasing it.
Michael Smith: It's a self-fulfilling prophecy.
Kent Bullard: So, so you're building this legacy and you are actively building a lasting legacy. What are the, what elements are most important for you to leave both personally and professionally through your company?
Brian Bates: Leave? Like, when I leave the industry
Michael Smith: or
Kent Bullard: Yeah. The legacy. Leave this earth or whatever leaving looks like to you.
Michael Smith: Let's start with leaving the industry. Yeah. Let's, or leaving the company. Maybe stay in the industry, right? Let's back it off at death a little bit, right? So,
Brian Bates: yeah. Yeah. No. You know, bill does a good job at teaching a class the five levels of leadership. And one of the exercises at the end of that class is to write your own, your own obituary, right? And it can be just a career obituary or whatever you wanna, but it is, you know, like, what do you want people to say about you? And I always joke around that I've never heard an accountant give an obituary in my life, right? It's like, you know, and pull out the net worth statement as well.
Brian Bates: You know, he had these loans, but you know, he also had this money in the bank and, you know, well, we should all be so proud of Joe. You know, he was worth $800,000 when he passed away. And you know, there's the benefactors right there, Susie, and you know, Michael, or you know what, whatnot. But but you know, it's true, right?
Brian Bates: Is, you know, you want to turn around five years from now or 10 or 20 or 30 and say, man, that was really cool what I did, and not have regrets. Know that you're gonna make mistakes, but not regret you know, and to me, regretting is not trying or not, chasing or aiming for a noble purpose versus you know, things, right, or just, you know, some cash account.
Brian Bates: I think Sam Walton, he was on his deathbed and somebody asked him his thoughts as he was he was, you know, terminally ill. And he said, you know, I'm I got it all wrong. I mean, here's a guy who's a billionaire. And he said, you know, my, my wife doesn't like me. My daughter doesn't really know who I am.
Brian Bates: I don't know my daughter, and I'm one of the wealthiest people in the world. I messed up and, and those are things that, you know, experiences that, you know, are cautionary tales where you say, Hey, what are the important things? Well, you know, I wanna be known as someone who was there and that, you know, had a balanced involvement in my family, right?
Brian Bates: That I wasn't, you know, so involved at being a part of their life that I'd neglected giving them, you know, the security of, you know, you know, a good education and, you know, and living in a safe neighborhood and all those things that come with earning a good living, but not so much that, you know, that pursuit that, that I'm known as the workaholic that, you know, how proud are we of dad?
Brian Bates: We don't know who he is, but man, he worked his tail to the bone and look at all the things that we have as a result. So, you know, I wanna be known as a good, you know, father and husband and grandfather and and, you know, my parents are still alive, so, you know, definitely I think they would say I'm I turned out pretty good as a son and I, you know, spend a lot of time with them, which they, you know, appreciate more than anything.
Brian Bates: My my career, I wanted to be known as somebody that helped people get where they wanted to go. That, you know, provided a place that, that could, you know, really be proud of what they did for a living that they could be proud of the organization that they worked for and that they that they admired.
Brian Bates: You know, me as a as a, you know, person that, you know, stood for, good and principles had cared probably more than, you know, people thought I should care about people in the company. And, you know, that's easy to say. There's times where I think, you know, to me, I know I'm probably in, in the right place when people are saying, yeah, you know what, that person doesn't deserve to to be in this company, hasn't done something to, you know, like a capital, hey, that, you know, sin of they stole or they, you know, devalued a customer or something like that.
Brian Bates: But just, yeah, you know what, they don't have their stuff together. But you know, Brian. Gave them more grace than they deserved. And I want to be known as somebody who probably expected more than other people thought was possible. Right. And you know, I think, you know, we probably, you know, earned that reputation for sure, you know, amongst a lot of people is that, you know, five years ago they would've said, Hey, it's not possible to do the sort of things that we've done in the last five years.
Brian Bates: And I'm sure they're saying some of that about the next five years. Although we might have a little more credibility than we did five years ago,
Michael Smith: well fi three stores to 31 in a short period of time. It's quite a testimony. So, you know, that's quite a legacy in the business. You're, you guys are building, do
Kent Bullard: you, do you find, oh, sorry, go ahead, Brian.
Brian Bates: Oh no, I was just gonna say, you know, to your point about the number of stores I think I would be disappointed if I had two stores and they weren't. They weren't the sort of stores I could be proud of versus you know, having 31 stores. You know, to me it'd be, is it something you can be proud of?
Brian Bates: Because I do feel like there are, you know, organizations or, you know, individuals that are going out there and just saying, you know, Hey, look at all. I mean, it's like comparing belt buckles out at the rodeo, you know? I mean, we built scale. We built scale, but it was ugly look. Yeah, exactly right.
Brian Bates: Yeah. Yeah. And it and it all boils down when you look at those ugly stories, they always boiled down to how did it impact people? And the stories that people admire are the ones who are like, man, that company grew and, you know, they, we had fun, or their employees had a good time, they earned a good living.
Brian Bates: They, you know, they built something special that everybody admired and just, you know, were in awe about, you know, based on all those, you know, the, you know, Christmas parties and the community involvements and the the ability to, you know, help customers, you know, how good their, you know, their customer, their hospitality and their technical expertise, all those sorts of things, right?
Brian Bates: Those are the things where you look at it and you go, wow, man, that's a powerful organization, whether it's three stores or 50 stores, right? It could be three stores of, oh my gosh, that place is, I've heard that's a nightmare to work there. They're just abusive to their employees and all those ugly things.
Brian Bates: And so, again, to, to the point of our purpose and mission statement the purpose is to make people's lives better. And the mission is to do it at the largest scale possible, while still serving our purpose of making people's lives better. If at some point we're not making people's lives better, or we're, you know, doing, you know, like the scale is tipped of, Hey, you know, we're probably making more lives worse than we are better at that point, it's a failure, right.
Michael Smith: But I'm gonna, I'm gonna just recognize what you said. That's phenomenal. You're gonna do it right first, according to your definition of Right. And then scale is multiplication on the back end. But if you can't multiply doing it right, you're not gonna multiply. Right. You have it in order and your soul, which is beautiful.
Kent Bullard: I think that answered my question I was gonna ask, 'cause I can see that there's probably some people out there that think, you know, the only way that these people are able to scale and grow these platforms, these organizations is large, is because they took, you know, shortcuts or they lied or they cheated and did these things.
Kent Bullard: How do you feel or what are your thoughts on maintaining your values and principles as you scale? And I think you somewhat answered that, but I mean, what would you tell the people out there that who might be skeptic about, you know, well, I have to sell my soul in order to be able to attain something like this.
Brian Bates: I would go back to diving into your values, right? And really looking at this and saying the money and the growth as a result of doing the right thing. Doing the right thing doesn't result in, or, and making a bunch of money doesn't result in, now we can do the right thing. It, you know, that has to come first.
Brian Bates: So, and people have to define what that is for them. I you know, I'm not saying that, hey, you know, that purpose that I've defined for our company is the only true path. I've talked to a lot of business owners and they've got a lot of different purposes. And again, when we start talking about talking to team members and saying, Hey.
Brian Bates: Do you really feel like you fit in here? It doesn't mean that person is just a throwaway and you know that they'll never fit in anywhere. It's just, hey, you gotta find a place where you fit in that they believe in, you know, that gives you passion and that, you know, you get energy to, you know, make it to work at eight o'clock or whatnot.
Brian Bates: I had a technician, a shop foreman years ago, and he said, he was gonna leave me because he wanted to go work for another company that that were the technicians were extremely competitive and, you know, basically to the point of being cutthroat. But that was where he thrived. He just loved the competition of, Hey, I want to, you know, work by myself.
Brian Bates: I don't want to, you know, have lateral support to, you know, be there for my fellow technician. I just wanna bring my cars in, do my work, and show everybody that. I'm the best. And he called it a shark tank, right? He said, Hey, look, that place is a shark tank. And this whole, like, me helping other people out and being a shop foreman just has really taken a lot of my time and it's really like, I'm not happy
Kent Bullard: Having listened to your value and your purpose and everything you've talked about, you know, throughout this podcast, it's now glaringly obvious of like how selfish of a mentality that is in per once you have that perspective to say, well, he just wanted to carry about himself and no one else.
Kent Bullard: And obviously that person is gonna work themselves out of your organization because you are so driven on helping others. And that takes. You know, relationships that takes connection, that takes effort for someone else's benefit, which is almost the exact opposite of
Michael Smith: it. Well, and the team, it's completely selfless.
Michael Smith: The team will help you purge too, right? Right. I mean, once you get a team of people who are working as a team and some lone stars over there, star or not they're not gonna put up with that for very long. They're either gonna expect them to step into the team and contribute, or the team's gonna start to push 'em out the front door, so
Brian Bates: Right.
Brian Bates: Or they'll attract other people that are cutthroat. Right. I mean, those are the only people that will stick around. And yeah and we knew it was gonna be painful, but when he explained it to me that way, I thought, I'm gonna lose a lot of money. But I'm not gonna talk this guy out of leaving. I, you know, I mean, that, that's the last thing I, you know, the I can't make an argument to him.
Brian Bates: That was going to get him to stay. Because the only argument would be, Hey look, let's change the culture of this company. And you know, I'll get technicians next to you that are competitive as well and let's just see you guys, you know, fight over the work and you know, cut each other's throats
Michael Smith: well, and you're right, the alternative is they stay and then they're kind of a cancer.
Michael Smith: And then you know, you don't deal with them and other people can't figure out why you don't deal with them. And then now there's a cultural problem because you believe in teamwork, but you're not building teamwork and you're letting the star sit in the corner and be difficult. And if this toxic thing forms and it, we talk a little bit like cancer in the body and it's like, are you better off letting the cancer remove itself or cutting it out and sending that.
Michael Smith: Terribly painful, high performer, right? And it's like watching the money walk out the front door. But what you replace them with is somebody who fits and the team tightens up and helps each other more, and they more than replace themselves. It's just hard to watch that high producer walk out the front door and wish you could change it.
Michael Smith: It's like there goes the money in the short run, Rick,
Brian Bates: If you've been in this industry long enough, you've had, and this guy really wasn't a prima donna. I mean, he really tried to do this. He just came to the realization that he was trying to be somebody who he wasn't, and he needed to go work somewhere else.
Brian Bates: And I agreed with him. And I still see I saw him probably a couple weeks ago at a party that you know, was being held by a friend of mine that, you know, worked on our team and invited me to his birthday party. But still now, I mean, I still like the guy. He just he isn't a fit, right?
Brian Bates: I mean, he is. Great technician. And and he was trying to be somebody that he wasn't he didn't become toxic, anything like that. It was just one of those things where I just looked at it and said, man, these guys are hard to find and this is gonna hurt. But but at any rate, you know, that's, I think when you look at people, back to your point, Michael, when you said, Hey, look, we're not gonna give you a character reference, but we give you a reference when somebody leaves the team.
Brian Bates: You know, somebody, so if he was asking for a reference to a company that said, Hey, you know, we hire sharks. I would be like, man, this guy is perfect, too unique. He's gonna fit this, he's a great
Kent Bullard: way, he's gonna fit right in. And it's not, and it's not to disparage him in any sense. You know, I said selfish, but really you've got, if you've got two purposes or two, you know, directional ideologies and you're starting to split those, I mean, that, that's gonna cause friction in where you're going.
Kent Bullard: And really what you're looking for is that unification of purpose. Right. Not to say that his purpose is bad or negative or anything, because I could see good businesses being built off of that. Well, we are competitive at being the best. And that's what it looks like, right?
Brian Bates: Yep. Well, that's one of the first, times I listen to Mike speak. He talked about the Evergreen study in Harvard, and they is that is the Evergreen study, right? Oh yeah. The Evergreen
Michael Smith: project. Evergreen study, absolutely. Yep.
Brian Bates: Yep. And they they talked about alignment principle alignment, and that if the people on your team are not aligned with your values, then they're not a good fit.
Brian Bates: And when you truly get that synergy, it's when people align with your values and, you know, then you start building this culture that's based on, you know, those values and principles and purpose and whatnot. And that's really where you start, you know, picking up momentum. And again, it just, you know, that, that was probably, you know, in, at that phase of my business, when I needed to go from three and beyond stores, that was a defining moment for me.
Brian Bates: Was realizing that, hey, I'm hiring people based on their technical ability and they're coming in and it's completely dysfunctional because they don't all believe the same values. And and I was, you know, just running around, putting fires out and, you know, dealing with, you know, Michael said, you know, I would, you know, go in and try to fix something and leave, and somebody was undermining me in a conversation by the water cooler.
Brian Bates: And I mean, that sort of stuff you know, is very destructive. It's, you know, triangulation. I mean, you know, I know a lot more now than I did back then, and I can recognize it very quickly now and just say, Hey, this person needs to understand what they're doing is destructive. And when they understand that if they continue to do it, that person is gone.
Brian Bates: I don't care if that's our lead technician at the shop or not. We've, we have hired people based on gossip. Good technicians too. But we refuse to let technicians of any level come in and divide our team by gossiping and you know, talking smack about other people, we let 'em know we, we give them, you know, more warnings than we probably should, but in the end, if they're just hell bent on gossiping and disparaging other team members or myself, or, you know, leadership or the company in general, then you know, hey, you know, let me give you a reference to our competition.
Brian Bates: You can go do that there,
Michael Smith: as I've heard you say, you promote them to customers, so
Brian Bates: Yeah. Give them, release them to the industry so.
Kent Bullard: I love that. I love to kind of step into somewhat of a lightning round here. Okay. This has been a phenomenal conversation, but I wanna jump into a lightning round.
Kent Bullard: All right. Just a few questions and we'll dive into those. First question, what's a piece of advice that you once received that you now find invaluable?
Brian Bates: Invaluable? I would like to give two, two pieces of advice. One was when I was in high school, I wanted to be a veterinarian, and I interviewed as part of a class, kind of, you know, career day project.
Brian Bates: We were, we spent a day with a professional that we, you know, aspired to be. And I asked our local veterinarian who we'd been bringing our animals to for years. So it kind of, you know, formed a relationship with them. Some questions and one of I forget the question that I asked, but one of his answers was, you need to learn to love learning.
Brian Bates: And he just, you know, and that has always stuck with me that and I feel like the flip side of that, that he was cautioning me against was don't become complacent and stop growing. And, you know, stop learning that, you know, you will reach a high level of success if you really enjoy learning.
Brian Bates: Not just do it because it's a chore, but just really love the whole idea of learning. And you know, and I try to. The other day I was at the grocery store and I saw a pomegranate and I'm like, like, I've never bought a pomegranate before. What the heck is, you know, how do you eat a pomegranate? I don't know.
Brian Bates: And so I took it home and I couldn't really find any good answers on YouTube, or I just cut it and I threw it in a juicer and it tasted terrible. And I realized that it's just the seeds, right? It's like nobody eats the pomegranate and they just eat the seeds. And when I figured that out, I was like, oh, they're pretty good.
Brian Bates: I don't know if they're worth the effort of digging 'em out, but they're pretty good once you get 'em separated. But those are the sort of things, I mean, just small things all the way to like, how do, I mean, we're in we're in sponsored by investors in a larger group that that we formed with five other businesses that came outta the institute and or for others rather, but.
Brian Bates: Like, how do we operate and grow this to a I mean, I've read books about growing the business to a billion dollar a year business. And and it's possible, you know, I mean, we could we're we're certainly in those sort of circles that can help us grow to where we could be, you know.
Brian Bates: Billion dollar a year business. So, so to me that, that's the first set of piece of advice is no matter where I've been, I've always just like known that there's something else to learn and I wanna learn it and have fun at it. Like the pomegranate thing was a kind of a pain in the butt. I made a big mess, but it was like, it was just fun learning about pomegranates.
Brian Bates: Right. And then the second set of advice was when I was getting my degree, I had not yet committed to the fact that I was going to be in the automotive industry for my career. And I was talking to my mentor at the dealership, his name was Chuck, and he's from Texas. And he'd had a very interesting career.
Brian Bates: He had worked on cars as a young man and then had a. Then went into the business of selling satellites when the satellites in the eighties used to be these huge, you know, dishes that took up, you know, a quarter of your yard in the backyard. And and then he, you know, he he did some other some other, you know, things here and there, but he kept getting pulled back into the automotive industry and and then just found a passion for it eventually.
Brian Bates: And he said, you know, as I was talking about some of the options that I could do, as, as you know, I was getting close to getting my degree, he said excuse me. He said, you know, Brian, let me give you some advice. You're a car guy, you'll always be a car guy. And the sooner that you accept that, the more successful you'll be.
Brian Bates: If you try to get out of this industry, you'll realize that this industry. Has a lot more opportunity than most anything you'll find outside of this industry. And you're very talented in this industry. So save yourself the trouble and put your head down and make the most of this opportunity and it'll treat you well.
Brian Bates: And and he was right. You know, I think that the automotive industry is, it's always just been a solid industry with tons of opportunity and something that I think a lot of people look at all of the, you know, the pain that is, that can come out of this industry and it can cloud. The opportunity and the the good things that are in this industry that that you can't find anywhere else.
Brian Bates: Or if you do it might come with, you know, a lot of baggage that, you know, really drowns it out as well. So, so those are the two bits of advice. Great
Kent Bullard: advice, kind of, kind of making the most outta the opportunity that's already there right in front of you. Right. Make your own grass green.
Brian Bates: Yeah.
Kent Bullard: Picking
Brian Bates: your
Kent Bullard: purpose.
Brian Bates: Well, and there's the saying, right? The grass is green where you water it. And so, and you know, no matter where you go, there you are, that the challenges are usually in the mirror, right? The reason you're probably not happy is because, you know, the person in the mirror.
Brian Bates: It's not because of your situation or lack of opportunity, you know, you know, opportunity to do something that you have passion over whatnot. It's just like the way you're looking at things or the way you're approaching things, that's where your frustration is born from those areas, not.
Brian Bates: Because there's I'm gonna say this. You may or may not leave it in your podcast, but I read a book and there's this book that I, or this quote that I read and I memorized it because it was like, man, that is, that's just sums up so much. But it was written, I think in the late 18 hundreds by an English guy, and he said the fountain of content must spring from within because he who has such little knowledge of human natures to try to change anyone's disposition other than his own, will end his life in fruitless efforts and multiply that which he proposes to remove.
Brian Bates: And it's like, absolutely. It's such a powerful quote. I mean, it's, man, I read it in that book. Mm-hmm. And I was just like. Man, I've gotta memorize that because it's so true. You can't go around trying to change other people. And that happiness comes from, you know, from inside. It doesn't come from everything outside.
Brian Bates: It comes from within you. And it's about your perspective and how you view things. And seeing the glass is half full and deciding that you're going to be positive and that you're gonna bring energy and be in a fountain, not a drain. All those things, right? And if you try to, you know, go around by finding happiness, by changing other people, all you're going to do is make things worse and end your life, you know, waste your life.
Brian Bates: And make things worse. Right. So, anyways, that that's one of my favorite quotes. I love
Kent Bullard: that.
Brian Bates: My favorite quote and,
Kent Bullard: you know, learn to love learning. I wrote from pomegranates to private equity, you know, second lightning round question, you know, question lightning round.
Brian Bates: I don't know if I'm making it lightning for you, for a crock pot round.
Kent Bullard: How do you define success today and how has that definition shifted over time?
Brian Bates: Wow. You know, we Michael and I, as we were working on changing our culture, I read a book and this guy is saying, or he had asserted something in the book that everybody goes through. Phases in their life. And there's three main phases, and that is survival, success, and significance.
Brian Bates: And I think in each one of those phases, there's a success right there. There's a defining or definition of success. So when I first started in my business, the success was I'm surviving. And and you know that I was proud of that, right? I mean, but if I had gone 20 years and people said, Hey, how are you doing in business?
Brian Bates: Well, we survived another year. I. I wouldn't define that as success, but in that first phase, you know, those first two or three years, survival was a level of success. And then success, right? That's the, hey, we're growing, we're, you know, we're making good, you know, revenue, able to buy, you know, a nicer car than I had before.
Brian Bates: You know, take some nice vacations, that sort of thing. Able to employ, you know, people and give them opportunity and help customers. And we're known as the one of the top shops in the area to bring your vehicle. I mean, we've, we're gaining that reputation. So all those things, defining success as a small business.
Brian Bates: And it was like, wow, man, this is great. So when we achieved that, that was to me that was success. I would define that as success. And now, you know. We're in this significance phase where we say, okay, we obviously know how to survive and we know how to be successful. And you can't just disregard those two things and say, Hey, you know, we're going to now move into significance.
Brian Bates: They just, you know, they're at odds with each other for one, but you still, you have to build upon, you can't just, you know, walk through and then di discard that phase as you're going through. So at any rate, you know, knowing that we're very successful and we know what a successful, how a successful business should run and maintaining that success.
Brian Bates: And then also moving into using that success as a way to be significant in a lot of aspects of you know, the industry and in the community and my personal life and, you know, professional life and friends and, you know, just that whole wheel of life. That's really how I would define, you know, success moving forward.
Brian Bates: Right? And at some point you know, everybody exits their career either, you know, horizontally or vertically. I'm hoping, you know, vertically is is how I exit. But you know, when we get through or I get through to the point where I say, you know, Hey I was successful in this significant phase, I feel like it'll be that.
Brian Bates: I was able to develop people to run the business and to have the opportunity to run that bus, you know, the business, whatever, you know, phase it's in when I decide to to walk away. And that the business continues on and that, you know, there's a there's a tempered emotion that comes out of it.
Brian Bates: One, one of not, you know, I don't want a an emotion of, thank God that metal fart finally moved on. Right. You know, it's a, he should have moved on years ago. But I don't want people to go, oh my gosh, how are we gonna survive without him? Right? I want that level of success to be, man. He accomplished a lot of great things and did so much and prepared us.
Brian Bates: And gave us so much, you know, opportunity to grow and to learn and to be successful in this industry. And I wanna accomplish those sorts of things. And, you know, not these exact same things, but those sorts of things in my career that I can look back on and say, well, I'm really proud of that.
Brian Bates: And that people will say that, you know, he did a good job in this industry and added a lot of value to it. So that's, you know, I mean, when I look at legacy and success, to me it, it has some somewhat of that feel, right? I mean, as I'm going through, it starts, you know, forming and shape, you know, becoming a certain shape and color and light as.
Brian Bates: The more I go into, you know, my career, I always look at, you know, my life or my career, whatever is this blank canvas and you know. Bob Ross used to be that guy on PBS that had the big hair. And my mom loved to be happy Little
Michael Smith: picture, right?
Brian Bates: Yeah. And he would make a mistake. It's like, oh, there's a happy little mistake.
Brian Bates: And then all of a sudden it's like, holy cow, man, that like, it looks like he meant to put it in there even though he's, oops. And who knows if he did it on accident or or did it on purpose to try to make it look like an accident. But there's a lot of accidents that I've made in my life that I look back on.
Brian Bates: It's like, man, I'm glad I made that accident. And that just paints a that, that's that, you know, rock that's, you know, that looked like initially, boy that's a mistake. Oops. Didn't you know it was supposed to be a bush And, you know, I didn't do it right now. Looks like a rock. And now, you know, you build this painting around there and then, you know, you look at the finished painting, you go, man, that mistake, you know, looks like it was meant to be.
Brian Bates: Right. So,
Michael Smith: well, I'll
Brian Bates: say those are if
Michael Smith: you let me speak just for a second into your significance comment. You, as long as I've known you have been focused on. Deriving meaning and putting meaning in front of what you're doing and bringing people along with you. And I'll say it, a hundred employees, I'm gonna guess that if they're all reasonably stable and you don't have any more of those cowboys or cowgirls out there trying to do their own thing, that's 101 multiplication of what you've got in your hand.
Michael Smith: Now, of leaders and team members who are meaning driven they're focused on significance in the work that they do and the contribution that you guys make to your customers and to your communities, and that, that multiplication model is profound, right? It's not just about success taking home a paycheck or survival, whew, we survived another day.
Michael Smith: Right? You guys are in a different level than most businesses, period. And in our industry, it's an extraordinary. Level and you're multiplying. The bigger you guys get, the more people you bring with you that fit, that, the more they're empowered to walk out. Whether you go out and I hope you go out vertical or yeah, vertical.
Michael Smith: I wanna go out that way too, right? Let's go out and do something on the backside together. But you know, when you're out of it and those people are still in it and they're still making a contribution, that they're not making a survival contribution anymore, they're not making a success. They're in the meaning zone.
Michael Smith: They're in the significant zone, and they've got a hundred and 150 or more people out there spreading meaning. In the world. And that's really a profound legacy that we're talking about here. That's a huge contribution that you guys have made and what's important to you. I just, I didn't want that to go by without really telling you how powerful I think that is.
Michael Smith: So
Brian Bates: it's extremely powerful and I think if anybody people were to take one thing out of this podcast, I would say that's, I mean, if you're looking for the secret that's a huge part of it. If it's not the secret it's a huge part of it. The power of saying, Hey, it's not about money. It's about the, what the money represents.
Brian Bates: The money represents what we're doing. And the more we do the right thing, the more people pay us to do it right. They patronize our business. They support us and and they buy more from us which allows us to continue to grow. Whereas I, you know, I hear like we just, we hired a gal. She's actually, it's interesting.
Brian Bates: We were looking at the recruiting component and we decided rather than hire a recruiter to bring more people in, let's look at where the holes are in our bucket and let's seal those up and make it, you know, as a stable, a bucket as possible. Meaning that instead of seeing our bucket and saying, we've got a lot of holes in the bucket and we're leaking water, everybody has turnover in their company.
Brian Bates: Right? I feel like our turnover is pretty low, but I still feel like, Hey, you know, we could do a better job. There's people that you know, have probably left or that, you know, we've we've, you know, parted ways with that. Probably it was because of what we were doing, not or our environment or something that we weren't doing was the reason why they left.
Brian Bates: And so we hired a what we labeled our team development manager and that person. Comes in and has career discussions with our team members make sure that they're onboarded properly, they understand all the purpose of the business and all those things that right now it's becoming difficult for us to really, you know, make sure that there, there's a solid foundation there.
Brian Bates: So as we saw that starting to kind of wobble, we said, Hey, we need to hire somebody who's dedicated. It means so much that we dedicated somebody to say. This is, you know, where, you know what the company stands for. Make sure that they understand the values and that they align with those values. And now, where do you want to go in this career?
Brian Bates: Where do you want to go in this company? Let's bring our, you know, our training resources, everything into your, you know, to you so that you can grow as a person in a profession and what roadblocks are in your way. And give 'em the feedback to those managers, those leaders that are there to serve and to remove roadblocks so that people can perform at their highest level.
Brian Bates: So, at any rate the the idea that we're chasing money, the person that we hired said that they left a company because they were they were focused on making money. They were moving towards a very sales organized or sales centric culture instead of a people culture. And and we we agree with the philosophy that we're in the hospitality industry, right?
Brian Bates: And that's not just hospitality for our customers, but also for people on the team. And what hospitality means is just that experience, that full experience, not just the transaction. Like you can go to Motel six and get a bed and a shower and all those things, right? Or you can go to the Ritz Carlton or the Four Seasons.
Brian Bates: There's a super big difference in, in the price that you will pay, but people pay it for the experience, the hospitality. And not that we're looking to, you know, blow people away and overdo it with our hospitality. But we also want to know that, hey, look, the hospitality is extremely important.
Brian Bates: And so for us, and I think as you grow any business grows more and more. If you start really focusing on those numbers, then you will have people that will become discouraged about that and say, Hey, look, this is all about the money. All they care about is the money. And if you let that creep into your business you're in for trouble.
Brian Bates: Because the people that stay know, you know, they will have decided that the way to get recognized in this company is to make more money for the company and generate revenue. And so we we constantly, I don't think you can say it enough. It's not, it's like saying, you know, I love you in a marriage.
Brian Bates: You know, you don't just say, Hey, I love you. When you get married and then say, if anything changes, I'll let you know. You know, just know once a year on your
Michael Smith: anniversary
Brian Bates: one more time. Right. But it's it's the same thing about the revenue is a representation of the experience that the customer has.
Brian Bates: And part of that experience is connecting with a customer and understanding them and having them feel like they're cared for and they're not just a number, and you're not just, you know, targeting their wallet, you're targeting, you know, their needs as a customer and serving them. So when we celebrate a record month or you know, a great day or you know, a, you know, any sort of achievement or whatnot, we always recognize the behavior that goes into that.
Brian Bates: Right? It's like, Hey, this is a result. You know, the stats here the score at the end of a football game is representative of how they played the game and we're not. You know, we're, when teams take the field, they know they have to put points on the board in order to score, but they also know how they have to come together as a team and the actions that it takes in order to score those points.
Brian Bates: Otherwise they'd be. Going to the hardware store to get a ladder to climb up to the scoreboard to start, you know, putting points on the board, right? And so it's not about putting points on the board, it's what those points represent. And that's the the thing that makes people admire games and admire the people that win at those games is what it takes, the work and the effort that it takes to win that game.
Brian Bates: So, so at any rate, you know, again, if people take anything away from this podcast I hope they, they realize that's the key, right? Is the power of having that purpose and understanding that this is the reason why we're in business and it's something more noble than, you know, fixing cars and being the best repair shop in town.
Brian Bates: I mean, that's, it should be something that inspires the higher level that you develop that purpose and create it, and then reinforce it and bring other people onto your crusade. The higher level people you get, you don't get the people that are like, Hey, I just want to be the best and I wanna work in a shark tank and you know, we're gonna be the best shop and I'm gonna be the best person in the best shop you want to be.
Brian Bates: Hey, you know, and if that's what you want, then that's that's fine. But for us. That purpose of, you know, making other people's lives better and growing our influence and growing the company based on doing that at, you know, a larger and larger level is something that has has been really fun for us.
Michael Smith: Well, I'll tell you, you know, you you're walk and talk and testimony is that you guys are building a skyscraper and you're gonna have 31 floors on it here soon, and there's more in the pipeline behind that, right. As an idea. And every rockstar you bring in is another iron steel pillar. That you put in the ground at the foundation and the fact that you've doubled down on your investment by having the focus be their intake and their cultural alignment and their development and the strengthening of them.
Michael Smith: It's almost like you're getting these giant rockstar pillars and then you're deep, you're embedding them deep in concrete, and the stronger your foundation comes of this stuff, the more floors you can put on it, the more floors you can put on it. And it's, I mean, the you're investing in what you believe in and it's a beautiful thing to watch it succeed and grow and get stronger and taller and higher.
Michael Smith: And it's impressive indeed. You can see it from a long way away at this point. A lot of people watching you. So congratulations. You guys are killing it.
Kent Bullard: Yeah. Brian, this has been such a fulfilling. Conversation just jam packed with value. You kinda answered my final question, which is what message would you leave for somebody who is pursuing to do what you are doing?
Kent Bullard: And I think, you know, I wrote down here do what inspires. I think that's something you said and I think that speaks to everything that you've discussed today. And I just, I truly want to thank you from the bottom of my heart for sharing this with just me on a personal level. I've got a lot out of this and definitely spoken to some parts of myself.
Kent Bullard: So I thank you very much for that. Yeah,
Brian Bates: I I love sharing and helping, helping people. But I also think that gives me the or at least opens the door to learn from other people. And and the one thing that I always loved about going to the the bot or the peer groups the gear groups that you guys have is just getting with other owners and just knowing that it could be the guy that opened his shop two weeks ago, or the guy that has been running a shop for 40 years, but they're, I was gonna learn something from somebody.
Brian Bates: Right? And and I just always, I learned, well, I hadn't always learned, but through my experience, I learned that you just don't discount anybody that has anything to say or whatnot because everybody's has their own experience. And whether they're running a John Deere shop out in the middle of, you know, Kansas, or they're running some, you know, high euro shop in the middle of San Francisco, there's a, you know, there's something that they know that will help you in your business, right?
Brian Bates: I mean, if they're successful in business, it's not because they don't know what they're doing. They've figured something out that probably will help me to bring value to the people that are working in our stores, right? So it's it's, I don't know. Like I said, that's the passion that I developed with just business.
Brian Bates: And it doesn't matter whether you're running a. Plumbing business or you know, you know, medical supply business or whatnot. It's all about leadership and, you know, really serving other people through those principles because everything rises and falls in leadership. I mean, it, you know, you can see it time and time again where you go into a location that's struggling and this place lacks leadership.
Brian Bates: Or you go into a place that you know is struggling and then you put the right leader in there and it just takes off almost on day one and you go, yeah, that's the power of leadership. Right. So,
Kent Bullard: well, Brian, thank you so much for the time. Those of you who have been listening, again, if you have any questions or comments about the stuff we covered today, if you'd like to learn more again, comments below and you can find more information at, we are the institute.com.
Kent Bullard: Brian, thank you so much.
Michael Smith: Thank you my friend.
Kent Bullard: President of ESA Tire and Auto. It's been a pleasure.
Brian Bates: Yeah, it's a pleasure's been mine. Thank you guys for having me on.
Michael Smith: Take care, my friend. Yep.
 

190 - Ask Me Anything: What Your P&L Is Really Telling You: Reading Your P&L Without the BS

190 -Ask Me Anything: What Your P&L Is Really Telling You: Reading Your P&L Without the BS
February 04, 2026 - 01:02:24
 
Show Summary:
Cecil Bullard and Eric Joern break down why most shop P&Ls are confusing unreliable and overloaded with noise. They explain how inconsistent accounting practices distort margins and decision making, and why clean consistent structure matters more than perfect numbers. The discussion covers matching income to costs using accrual principles reducing unnecessary detail and using trends to spot real problems. This episode gives shop owners a clearer way to read their financials with confidence and control.
 
Host(s):
Cecil Bullard, Founder of The Institute
 
Guest:
Eric Joern, CPA, CM&AA, AAM, KAIZEN CPAs + Advisors
Show Highlights:
[00:00:02] – Why profit and loss statements matter for shop owners
[00:01:02] – Accurate P&Ls are rare and usually misunderstood
[00:02:22] – Accounting opinions create confusion and inconsistent reporting
[00:05:33] – Frankenstein P&Ls make performance comparisons impossible
[00:06:49] – Structure income and costs to clearly see gross profit
[00:10:33] – Long P&Ls cause decision fatigue and hide key issues
[00:14:15] – Misclassified wages distort margins and financial reality
[00:19:30] – Inventory purchases should not destroy monthly profitability
[00:26:19] – Every part and car needs accountability to prevent losses
[00:45:54] – Clean current financials matter more than fixing the past
 
In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?
Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.
 
👉 Unlock the full experience - watch the full webinar on YouTube: https://youtu.be/J-qbi8HoMLE
Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!
 
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Episode Transcript DisclaimerThis transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.
 
Episode Transcript:
 
00:00:02:02 - 00:00:13:11Cecil BullardWelcome to ask Me Anything. Today I have, with me, Eric Joern. If I, if I mispronounced it. Eric, just correct me.
00:00:13:14 - 00:00:14:12Eric JoernYou got it.
00:00:14:14 - 00:00:42:25Cecil BullardFrom Kaizen, CPA. They do. Accounting. And, you have an awful lot of our clients. Yep. Which many of those we have recommended because accounting is so bad out there. So. So you guys do a good job. Yeah. So today we're going to we're going to start out kind of by talking about profit loss, profit loss statements and why they might be important.
00:00:42:25 - 00:01:02:05Cecil BullardAnd, of course, if you're out there, and you would like to ask a question or if you have any kind of a question at all, you want to do that, please put it in the comments. Rawley will be taking care of that for us. And, making sure we get those questions so we can get him answer.
00:01:02:07 - 00:01:26:20Cecil BullardLet me let me start out here, Eric. I always make this kind of comment I have seen, I don't know, 10,000 pals in my life. And, and, I can count on one hand the number of pals that I've seen that are actually accurate. Well done. And give us the information we need, at least in the beginning.
00:01:26:22 - 00:01:39:26Cecil BullardYeah. What? Why? Why is it so? I don't know, why is it so bad out there where there's so much inaccuracy and so much confusion around the profit and loss statement?
00:01:39:28 - 00:02:01:10Eric JoernYeah. You know, sometimes sometimes we have that we have that same question. But when we think about it right, there's a lot of moving pieces to generate a good financial statement. So first you have to have the right systems and processes set up. Then you have to have a you have the owner side or whoever's getting the data, collecting the data, doing the things right.
00:02:01:10 - 00:02:21:29Eric JoernSo is my shop management system accurate? How am I paying my bills? How am I running payroll? Am I using the right payroll software? Are those things happening correctly? When I'm collecting things right, do I or how often do I go to the bank and deposit cash and checks and do things like that? There's all these input factors that go into an accounting hub.
00:02:22:01 - 00:02:48:18Eric JoernAnd then across that there are all sorts of different theories on accounting, right. Accounting really isn't black and white, right. Our job is to show economic reality for that business. So we need to show what actually is happening. Well that's opinionated right. And that's why, you know, the institute has a specific way that they like to look at a PNL versus maybe, you know, Joe Schmo, CPA on the street.
00:02:48:19 - 00:02:55:08Eric JoernRight. And and probably their goal is what's the easiest way for me to file tax return? And, you know.
00:02:55:08 - 00:03:19:01Cecil BullardYou know that. Oh go ahead. I think that that. So first of all, you're making it seem like it's very complicated, very hard. I don't I don't see it that way myself. So that that might be somewhere where I disagree with you. My my accountant. You know, we have a CFO in the company. And, you know, if we had an outside of B, you guys.
00:03:19:03 - 00:03:55:26Cecil BullardBut, they are tied into our bank accounts. So they see payments coming and going. They're tied into our credit cards, so they see payments coming and going. So all deposits are kind of recorded through the bank account. All, all outgoing moneys go through one account or another. And as well as credit. And then once we, once we determine what the PNL needs to be set up like, and we create, what we chart of accounts for that.
00:03:55:28 - 00:04:17:08Cecil BullardExactly. Then it it seems to be like it's not overly complicated at that point. Right? And I would agree with you that I don't think I would disagree in the, in the fact that the numbers are going to say what the numbers say. I don't I don't think that we can like say, okay, well, that that number is not what I want.
00:04:17:08 - 00:04:46:12Cecil BullardSo I'm going to go see if I can find another number. But, but certainly the institute likes to look at the finances differently than maybe, some of it's running, I don't know, a shoe store would look at their finances. And so that is probably challenging for you guys in the fact that you have, you know, different types of companies you work with that, you know, might look a little different than they might be for automotive.
00:04:46:15 - 00:05:05:29Eric JoernYeah. And there's a lot of noise, right? So, so if you go out, you know, you go out into the Facebook groups and say, how should I have my pal there going to somebody's going to give them one direction and then they're going to go to their accountant, they're going to get a different direction, and then they're going to go to the institute or their coaching company, and they're going to get a different direction.
00:05:06:01 - 00:05:16:26Eric JoernAnd all that noise makes it really hard for them to, you know, what do I exactly do? Right. I, I need services or cost of goods.
00:05:16:28 - 00:05:18:00Cecil BullardAt the.
00:05:18:02 - 00:05:19:19Eric JoernRoad. My wage.
00:05:19:21 - 00:05:20:22Cecil BullardIs.
00:05:20:24 - 00:05:26:20Eric JoernRight. So I need to set up like this or that. We see.
00:05:26:20 - 00:05:33:00Cecil BullardA lot of that noise that is causing issues. And so we actually see sometimes, when their financial statements.
00:05:33:04 - 00:05:56:01Eric JoernAlmost Frankenstein, I'd say, meaning they brought in areas from different, different avenues and they put it all together. They said, oh, I like this idea. I'm going to implement this. I like this idea. I'm going to implement it this way. And then half of it's right here and half of it's here. And one of the things that we always say is, I'd rather have a financial statement that's consistently wrong than sometimes right.
00:05:56:03 - 00:06:14:16Eric JoernAnd I know that's a weird comment to make, but think about it. We're always measuring performance based on relativity, right? Did I improve from this from this prior measurement point? Well, if I'm constantly changing how I measure, I'm never going to have a relative measurement.
00:06:14:19 - 00:06:49:04Cecil BullardBut that's also probably one of the more difficult things for you guys is that, you know, whenever we we've changed accounting a couple of times in our business, you know, in the unknown, 15 years or so we've been in business, we've gone through, I think we're on our third different accounting. And every time it's like, well, we want to use QuickBooks and I want to use sage, and, and so we, we want to reset up and, and so if I'm not set up correctly in the first place, then I come in and I go, okay, I want to get set up this way.
00:06:49:06 - 00:07:23:29Cecil BullardI might be getting different numbers are looking at different numbers than I had previously. Which got a good challenge, right? Absolutely. At the Institute for automotive, the way that I learned it was I want to have, as my income, any income source that I have that's over, say, 2% of what I do in business. So if I'm if I'm selling, if 10% of my business is tires, I want to have a tire income separated out from labor income and parts income.
00:07:23:29 - 00:07:53:03Cecil BullardAnd then if there's a sublet income, I want to have sublet. And if there's, if I'm doing something like, some states we've got smog or we've got, safety, I want to I want to bring that income different because those things have different margins that I want to be able to look at. And so I want to have a relatively, I don't know, maybe 7 or 8 category sales taxes in there, but it's a pass through.
00:07:53:03 - 00:08:16:27Cecil BullardSo, but it still has to be accounted for in income. And then underneath that, and I think you have an example of a PNL that we can kind of pull apart here. But underneath that I want to have the same categories, as my variable expense. And, and that way I can see what my gross profit is.
00:08:17:00 - 00:08:28:04Cecil BullardAnd I'm trying to make sure that my parts profit is right, that my labor profit is right, that my sublet profit is right. So that at the end I have the right gross profit.
00:08:28:06 - 00:08:48:07Eric JoernExactly right. I mean, if we want to step back and say, hey, our our core framework for a good chart of accounts on a PNL is going to be I'm if I have a sales category, I should only have a corresponding cost of goods category for that. So if I had a sales category and I have no cost of goods, right.
00:08:48:07 - 00:09:12:16Eric JoernIs that truly a a operational revenue item, or is that maybe what we call other income? Right. Miscellaneous income that, you know, for instance, if we have an investment account, right, and we're getting capital gains and dividends and fun things like that, we're not going to report that. Or maybe I sell, maybe I, you know, customer doesn't pay their bill and I keep their car and then I resell that.
00:09:12:18 - 00:09:14:15Eric JoernWell, the gain that I.
00:09:14:18 - 00:09:25:13Cecil BullardWouldn't you handle that as, more on the balance sheet and then bring that in under the net profit as a additional income or a, additional loss or whatever.
00:09:25:13 - 00:09:47:06Eric JoernUnder exactly non-operating, gain or loss on the sale of, of something. Right. And it kind of goes back to your 2%. Right? If it's not greater than 2%. We're creating distractions by adding that up into sales. And that's really one of the things that I like to focus on is, is we'll see a piano. And I mean, you've reviewed 10,000, right?
00:09:47:06 - 00:09:51:21Eric JoernI believe that's considered mastery when you, when you, when you hit 10,000.
00:09:51:27 - 00:09:53:21Cecil BullardYeah.
00:09:53:23 - 00:10:16:17Eric JoernAnd what we see is, what ends up happening is there's a lot of noise added to a piano. And what I call by noises. We have accounts and we have all these accounts added and all these things which in one respect, I understand. Right. I want to know if if you know, somebody is charging me more than they charged me the month before, do I think my piano per vendor should be per vendor to review that?
00:10:16:17 - 00:10:21:04Eric JoernAbsolutely not. Right. Because then we start missing the big picture. I'll go.
00:10:21:04 - 00:10:33:07Cecil BullardInto, I can't imagine, like, looking at all that data. Yeah. I mean, it would be there would be no way to really bring it all together and try to figure it out.
00:10:33:09 - 00:10:51:15Eric JoernI'm an accountant. This is what I do for a living. And if I'm looking at a piano that's 5 or 10 pages long, I'm lost. I'm burned out through part of it because you can only process some, Jeff Bezos, I think it was once said, if I can come in and make three good decisions in a day, that's a great day.
00:10:51:18 - 00:10:55:04Cecil BullardYeah, I don't I don't think I disagree with that at all.
00:10:55:06 - 00:11:14:29Eric JoernAnd if you can look at a if you if you're looking at it and I think about it on the same, same way with your piano, right. If, if it's 5 or 10 pages long and it has all this detail on it. Right, making a determination on each individual account, is it almost like a decision and you're going to get fatigued after so many of them.
00:11:15:01 - 00:11:45:12Cecil BullardBut you have a, you have a, an expanded piano and you have a, I don't know, simplified a simplified piano, which is usually a page and a half to two and a half pages at the most to simplify this. Great. And, that's how I want to kind of see my business. I mean, I want to see my business in chunks, you know, what what was my income was my direct expense for that.
00:11:45:14 - 00:12:08:19Cecil BullardAnd then what was my net profit? And then what are my different categories? I think in we have a thing called a composite, which is different than a PNL. It takes, point of sale data and PNL data and kind of puts them together and makes the decisions for us. Does the math. Yeah, right. So how much did we lose because we weren't productive?
00:12:08:19 - 00:12:37:06Cecil BullardOh, we lost $17,043 this month, right. What was our average repair order? Oh, it was, know, $1,059.83. So I think that you want to look at your kind of in chunks, I look at I look at the income. Did the income match the income that we our goals and targets. Then I look at the expense.
00:12:37:06 - 00:12:57:20Cecil BullardAnd the only reason I'm really looking at the direct expense is because I want to know profit margins in certain areas, because I'm. I know what the margins ought to be. Right. Yeah. And then then I'm looking at my overall gross profit. Did I, did I, you know, depending on how I, my PNL is set up, is it you know, 64%.
00:12:57:20 - 00:13:20:04Cecil BullardIs it 74%. And, and then I go to the bottom line and I look at net before I go through everything else. Right? Did I make my 20% net profit? Bottom line is that, you know, is that does that make sense? Is that how you do it or is it would you recommend a different way to look at that.
00:13:20:06 - 00:13:53:06Eric JoernYeah. Yeah. No no that's a a great way. And I'll, I'll give you an example. So I will review our QC before our, our client's financials gets out of our onboarding process, which is our creation process for somebodies accounting process system. To our production team IQ. See all those financials. And the other day I was reviewing one and I looked service advisor cost and technician wages were at significantly low margins, or high margins.
00:13:53:08 - 00:14:15:02Eric JoernThe costs were very low. And it made me question, hey, how are they accomplishing this? I think I think tech cost was around 20% of tech labor or, tux labor sales. And the service advisor cost was around 3%. Well, then I go into the operating expense section, and we have some other roles in there, like a shop shop manager and shop foreman.
00:14:15:04 - 00:14:34:18Eric JoernSo that made me ask, go back and ask my team. I said, okay, I know they told you that. That's what these roles are. Now we need to ask the next question, are they in production roles? Right? Is my shop is my shop foreman. Are they are they producing billable labor hours? Because if they are, then they need to be included up in tech wages.
00:14:34:21 - 00:14:56:14Eric JoernAnd same thing with my my store manager. Right. If they're performing a role of a service advisor, well then they need to be included with the service advisor. And all of a sudden when you move those wages up now we're more at realistic category or ratios. Right? Our gross profit looks a little bit more to what I'd expect.
00:14:56:16 - 00:15:16:15Eric JoernAnd and it's a very different skill to look at a financial statement to, to expect what it should be than it is to say, I'm going to put the inputs in. And I think if I put the inputs in, it comes out right. You have to review a financial statement. What's the thinking of what should it look like?
00:15:16:17 - 00:15:38:00Cecil BullardWell, the I think when you've looked at many, right. There's a point where you say to yourself, okay, this is out of whack, right? This that's and that's the my like my fifth step. Once I've looked at my net, then I'm going, okay, what are the expenses look like, and where are we? Out of whack.
00:15:38:00 - 00:16:03:19Cecil BullardRight. If my labor cost is 20% of my labor income, I'm not. I'm either not paying people enough or I'm not accounting for all the income. It's it's somewhere else, right? Exactly. And we we see that all the time. You know, in December, I don't even want to talk about December 11th people, because so much is thrown in different places.
00:16:03:19 - 00:16:05:06Cecil BullardBut we just cleaned.
00:16:05:06 - 00:16:07:08Eric JoernUp the tax return.
00:16:07:10 - 00:16:37:19Cecil BullardYeah. It's amazing to me, sometimes how just how badly it is, and what I'm trying to do is figure out, you know, I need something to compare it to so that I can then go. Okay, we've got a problem here right now. I had a $35,000 charge on one of my account, one of my accounts, and we lost, $31,000, and we had, stellar month as far as sales go.
00:16:37:22 - 00:17:13:06Cecil BullardAnd you're trying to figure out, okay, where did that money go? Right. And there was 35,000 for, I think it was there their tax, their property tax, and it was all dumped in in one month in one pile. And then there was another 20,000 in, owner wages because they, they paid the tax. Right. So you see, either a bonus, or a dividend or whatever into the owner wages and you're like, okay, well, you know, we made $25,000.
00:17:13:08 - 00:17:35:17Cecil BullardWe didn't really lose 34% on this thing. But I think you need, at least for me, when I'm looking at my financials, I need to know that we're profitable. I need to know that we're profitable enough. And I need to be able to point out the two or 3 or 5 areas where we're not hitting the targets the way we need to hit the targets.
00:17:35:22 - 00:18:03:15Cecil BullardAnd so I, I agree with you. I think I, I wouldn't say consistently wrong is better than inconsistent, but I want consistent data and consistent reports. Now here's kind of another thing that I, I like, I like to see my columns, you know, how you have all the here's the categories and then you have here's the income that came in, here's the expense.
00:18:03:18 - 00:18:34:08Cecil BullardI let I also like to see, in there a percentage of what the sales was. So, so with the, the number, I like to see the percentage. And then I like to have a second column right next to it. That is last year this month. So I can compare like like data, with the percentages. And then I like to have a third column, which is the last running three months.
00:18:34:10 - 00:19:06:29Cecil BullardAnd the reason I like the last running three months is because these guys, shop owners, do unusual things with how they record stuff like I might buy $10,000 in oil in one month, and instead of putting it in an in the inventory on the balance sheet and then dealing with it in the PNL, as I take it out of inventory, I just put a $10,000 charge, and it looks like parts margin was completely blown this month when it really wasn't.
00:19:06:29 - 00:19:30:12Cecil BullardSo if I can see a running quarter like three months, it will kind of leverage that average. That stuff out. Do you guys, do you guys recommend that they account for things like $10,000 worth of oil on the balance sheet and not on the PNL? Or how do you recommend that that be done? Yeah.
00:19:30:14 - 00:19:50:22Eric JoernAll right. Deals set up for for parts costing is purchases go to inventory. And when we close a repair order we journal entry the cost into cost of goods. So that's true. True parts costing I mean it's what we we as accountant. Right. And this is what blows my mind. This is what we learned in college at a cost accounting.
00:19:50:24 - 00:20:12:05Eric JoernThat's exactly how they taught us to do cost accounting. But then we go into actuality. And I get it right. If we're filing a tax return and that's it, we're just going to when the money goes out, that's when we're expensing it. When the money comes in, that's when we're recording it as income. But if we're trying to measure actual performance of the business, you have to consider what are the economic realities of that of that month.
00:20:12:07 - 00:20:36:19Eric JoernRight. It's not you know, we bought bulk oil. We're going to use that oil over the next three months. If I expense it all this month, I'm going to make major profits the next two months. So we need to normalize things. And that's why, again, you look at a three month trend because that starts to normalize things. If you look at a one of our favorite reports is, a trailing 12 months, meaning I get to see every single month, every single month for the last 12 months.
00:20:36:19 - 00:20:40:03Eric JoernAnd I have actually an example of this. So we can we can pull off.
00:20:40:03 - 00:20:42:02Cecil BullardAnd yeah, go ahead and pull that up.
00:20:42:04 - 00:21:06:03Eric JoernYeah. Let's pull that up. And let's talk about what the benefits of looking at it this way and now this is more of a hey, I'm finding I'm finding trends that are happening, but also I'm finding, abnormal abnormalities. Right. There might be something that sticks out. So your $30,000 property tax bill should stick out, right. Because it's going to say 00000.
00:21:06:04 - 00:21:08:00Eric JoernThen $30,000.
00:21:08:03 - 00:21:08:14Cecil BullardRight.
00:21:08:14 - 00:21:24:17Eric JoernWell and and then we know, hey the right process for that. That's actually again it goes on to the balance sheet. And I know we're you know, our title of this is reading your panel without the bias. And I think it might be a balance sheet or might just be a fun title, but
00:21:24:19 - 00:21:29:04Cecil BullardIt was probably a fun title.
00:21:29:06 - 00:21:49:07Eric JoernBut again. Right, that payment should really go, you know, depending on how you're, you're paying property taxes, should either be a prepaid or you accrue that throughout the year. And then when that payment comes out, that's it all hits the balance sheet. Right. And again, the balance sheet is our holding place to normalize our financials. Make sure they look consistent month to month.
00:21:49:09 - 00:21:57:04Cecil BullardSo it sounds it sounds to me like you're recommending accrual based accounting and not cash based accounting. Oh much.
00:21:57:07 - 00:22:21:23Eric JoernAbsolutely. And what we like to use the word modified accrual accounting because you know, are we going to say we got an internet bill, right. Largely the same bill every month? Does it make sense in our accounting process to enter the bill? And then at mark the payment or we just post the expense right when we pay it because it's the same bill every single month.
00:22:21:26 - 00:22:42:07Eric JoernWe're going to treat that probably in a cash basis format, because it doesn't materially affect the financials. And it's more practical for a shop owner that's especially that's handling their own books to do it that way. Now, what we want to do is we want to highlight those major expenses and normalize them over time. Well, right. We are going to apply accrual treatments.
00:22:42:07 - 00:22:51:25Eric JoernThe most impactful items on a financial statement because we want as as reliable results on these financial statements as possible.
00:22:51:27 - 00:23:04:09Cecil BullardSo we're looking at, PNL here. All of the names have been changed to protect the innocent. Yeah. What what is right about this?
00:23:04:11 - 00:23:28:12Eric JoernYeah. So they they started going in the right direction. Right. So we got our, we have our parts sales, our labor sales, maybe some. There are some things that kind of get out of hand a little bit. They're in weird categories, right? We got this random $15,000 here. You don't really like seeing all those, you don't like seeing things that are are lonely on the on a rolling pad.
00:23:28:12 - 00:23:29:08Eric JoernAll right, we see.
00:23:29:08 - 00:23:34:14Cecil BullardTwo parts sales categories with the same titles.
00:23:34:16 - 00:23:55:18Eric JoernRight? Yeah, I think it's just a title. Again. Right. It's. Hey, we you know, they made some mistakes. They didn't know what to do with that dollar amount. And then we have. But we do. We have good bones here, right? We have labor sales. We have parts sales. Maybe there's a couple items here. We got subcontractor sales.
00:23:55:21 - 00:24:18:17Eric JoernWe got hazmat. Right. Those are all your your greater than 2% items. And maybe there's some slop in here that whatever. That's slop. Then we got things like your, you know, we talked about December pals, right. Here's, here's all your year end to just clean some things up of course. Probably the tax accountant jumping in there and just making some adjustments so they can file tax return again, I get it.
00:24:18:18 - 00:24:35:25Eric JoernThat's a direction that that needs to happen, right? You don't pay your taxes, you end up going to jail or your business gets shut down. Needs to happen. But it doesn't help us make good decisions about our business. But we have those good bones in there. But, you know, we got all these extra accounts, like parts sold to third party.
00:24:35:25 - 00:24:43:08Eric JoernWe have, you know, are we really measuring that? Any differently than our normal parts sales? If not, that's just noise.
00:24:43:08 - 00:25:02:03Cecil BullardAnd it ought to be a know it ought to be in the parts pile. It's not enough. Yeah. Don't get me wrong. We have, companies that sell online, so let me have 20% of their part sales be online sales, and we're not looking for a 58% margin on online sales though, that we're looking for different margins.
00:25:02:05 - 00:25:16:22Cecil BullardAnd so they will separate online sales. But if you're, you know, occasionally selling some parts to yourself or to your tax, just put it in part sales don't don't divide it out in a separate category. Yeah.
00:25:16:24 - 00:25:34:24Eric JoernExactly. It creates noise. And and there's a way to handle it inside your shop management system. So that way it translates to the, the account, the financials the right way when you do that. I mean, ideally, right, if your technician is buying parts, you know, do we want to write a repair order and, and do it that way?
00:25:34:24 - 00:25:38:24Eric JoernI mean, ideally they just buy either directly from the parts vendor.
00:25:38:26 - 00:26:04:11Cecil BullardOr ideally, but that in reality they're probably not right. They're probably the shop is carrying them at some point often. At least that's my experience. My experience is that the bulk of part sales through shops, the shop is creating a ticket or something, and then charging the tech when they get their paycheck or, you know, once a month or whatever.
00:26:04:14 - 00:26:19:00Cecil BullardAnd certainly, you know, if that's what you're going to do, then you need to be creating a ticket because you need, accountability for the cost and the and what you you know, what you charged and the money that came in.
00:26:19:06 - 00:26:36:18Eric JoernSo, yeah, if it runs through a shop, there should be an arrow on there. Any any car that touches your shop has to have an arrow. Any part that gets purchased through your shop has to have an arrow attached to it. Otherwise you lose accountability. The minute you say there's exceptions to that, you introduce the opportunity for theft.
00:26:36:18 - 00:26:40:23Eric JoernYou waste not and you lose accountability for it.
00:26:40:25 - 00:27:03:09Cecil BullardYeah, invisibility creates, lack of accountability. The other thing is having had an audit or to, you know, if there is, slop or things that are missing, then the IRS gets to make their best guess and, and their best guess is is never in your in your benefit.
00:27:03:11 - 00:27:08:00Eric JoernYeah. And it gets even worse. You start getting into state sales tax audits, right. Yeah.
00:27:08:01 - 00:27:12:03Cecil BullardDid you, did they pay the sales tax on that. Right.
00:27:12:05 - 00:27:35:10Eric JoernSales tax. Use tax. Did they pay it on the right. The minute they find one thing they're they're digging deep right there. They run somewhat like a business. Right. They find some if they don't find any evidence up front, they're going to stop digging pretty fast. They see something. If they see disorganization, slop up front, if they look at a set of financials and it doesn't make sense, they're going to go digging throughout everything.
00:27:35:12 - 00:27:38:12Eric JoernAnd the other thing are the worst.
00:27:38:12 - 00:28:07:15Cecil BullardYeah. And the other thing I think that that the shop owners, the average person probably doesn't understand is that the state sales tax is collecting sales tax from thousands and thousands of businesses. So they have data, and they have data that basically says if you're buying X amount of parts and you're you're in this type of business that you should be paying X amount of sales tax, right, and 100 and if you're, if you're outside of their window, right.
00:28:07:15 - 00:28:14:14Cecil BullardThe, the bell curve that that's an audit or that's a fine. Right. I mean.
00:28:14:16 - 00:28:26:06Eric JoernLiterally they're going to look to triangulate your sales tax returns to your financial statements. Back to the your income tax return. Yeah. So yeah.
00:28:26:08 - 00:28:50:11Cecil BullardThe IRS does the same thing. I mean they have they have data on I don't 200 plus thousand automotive shops that have been filing taxes. Now I would think that that would be really confusing because of how many bad panels I've seen. Right. But they've normalized that data as best they can. And if you're outside their windows, then they're they want to look a lot harder, right?
00:28:50:13 - 00:28:52:19Eric JoernAbsolutely, absolutely.
00:28:52:22 - 00:29:09:26Cecil BullardSo, on that panel that you have, there's an awful lot of, just crap, right? Tech a b c d what? Why, what's that noise there? Right. I mean, yeah.
00:29:09:28 - 00:29:29:23Eric JoernBut it's the right, right thought process. Right? In our cost of goods, we have our labor cost, right? So they have the right idea, they know what they need to measure, and then they added complexity. They added noise to it. Right. We're not making business decisions based on what we're paying that technician on our panel. We're going to look at that costs relativity.
00:29:29:23 - 00:29:38:22Eric JoernAnd then we're going to look at things like, hey, what was that individual's efficiency. That's not a measurement. And you get off your PNL right. You have to use to it.
00:29:38:29 - 00:29:47:23Cecil BullardThat's a different yeah of different data set exempt. So I would only have the payroll category. That's it. And it would just the.
00:29:47:23 - 00:29:48:25Eric JoernOne one item for.
00:29:48:25 - 00:30:17:27Cecil BullardTechnicians. Yeah. And then I like to see the text divide it out an above the line. And then sales below the line. And my management people below the line. And I like to see sales broken out from the rest. And techs broken out. Those three categories are kind of a necessity for me because I'm trying to manage sales cost and tech costs and then fixed expense costs.
00:30:18:00 - 00:30:18:27Cecil BullardRight?
00:30:18:29 - 00:30:40:23Eric JoernAbsolutely. Yeah. I mean, we even have right. More more noise here again. Right, right. Concept shop supplies we have here and we're probably charging shop supplies here as an income line. So we have the income and we have the cost line. That's correct. But then we add things like delivery and tax. So not only do we have you know, we can't make any decisions on those and we don't.
00:30:40:24 - 00:30:45:19Eric JoernRight. That's the cost of acquiring that shop supply. We don't need to break it out. That's creating.
00:30:45:19 - 00:30:59:18Cecil BullardMore work. When they created a category for tax because at 1.3 $10 on. And so now I have a whole new category that creates instead of just throwing it kind of in the pile.
00:30:59:21 - 00:31:18:08Eric JoernYeah. Well, and this is again where I get to the point of there's so much, there's so much noise out, out. And if you go out and you just try to figure this out on your own and you're getting information from there and there and QuickBooks and you're doing this and, you know, now I got my Shopify invoice on here, and here's my cost for my shop supplies.
00:31:18:10 - 00:31:42:21Eric JoernBut then I have my costs for my delivery, my costs for my tax. So I can understand why somebody naturally just says, I'm going to enter it in like that and actually with with wages. One of the funny things, we see it all the time, I don't think in this case it it didn't make sense for it to look like this, but we'll see that the, the wages, the wage cost is actually entered as the net check that goes to the employee.
00:31:42:23 - 00:32:03:03Eric JoernSo right there on their payroll and they're withholding their federal withholding. The IRS is in payroll taxes and their 401 K contributions in retirement. And they only captured the not the net check. And I'm but I'm like no you're paying them. They're choosing to take some of their money that you paid them and give it to those different parties.
00:32:03:06 - 00:32:14:26Eric JoernThat's still just their wage. That's not the net check. But hey, that's what came out of my bank account. Right? So if I go in and I run payroll in QuickBooks, it's going to come through as a net check to my employee.
00:32:14:29 - 00:32:40:15Cecil BullardBut no, that's really I mean, because we have, employees and they're going to we're paying for like and futa and worker's comp and, and worker's comp is not a cost. That is their cost. It's my cost. But ficken futa is at least in part their cost. Yep. Because we're taking money out of their check. And then if we have a for one can we have a for one k here.
00:32:40:15 - 00:33:05:10Cecil BullardSo we take money from your check and we hold on to it. And then we do whatever matching and we pay out like we would like in futa. Yeah. And and so we have to whatever your whole gross check is, that's what needs to be reported. And then the other things that come out that are your costs, we don't really care about.
00:33:05:15 - 00:33:09:07Cecil BullardIt's the things that we pay that we care about as far as the company goes.
00:33:09:09 - 00:33:28:06Eric JoernExactly. And again, right. If you only build your pal based on where the money comes out of the bank, right? The batch that goes directly into your employees accounts, whether it's direct deposit or checks. Right. That's a separate payroll. I mean, you might have something called impounding done. If you're using a payroll provider, that's a whole different story.
00:33:28:06 - 00:33:45:29Eric JoernRight. And then then there's no making sense of how that money happens unless you get a breakdown report from them. But yeah, if you're only following the cash flows, right, you're going to improperly account for and we see that time after time after time again, when those expense ratios don't look right, you know, hey, it's time to dig in.
00:33:45:29 - 00:34:09:18Eric JoernLet's figure out what's the answer. Okay. Yep. We found out that we didn't record payroll, right. Your payroll taxes look super high, right? They should only be. You know what? Seven, maybe 7 to 10% of your total wages paid? Not, you know, 20 to 30% of the total wages paid. Again, understanding those ratios helps you figure out is this even an accurate financial statement?
00:34:09:20 - 00:34:32:04Cecil BullardBut also, I would think that if you had a an audit from the IRS and they came in and they said, well, wait a minute, you you've shown this cost here, you didn't really show the money you pulled out of their account and you put in here. And so now your taxes aren't going to be right. And we're going to audit you and you're going to OS, X, y, z plus.
00:34:32:06 - 00:34:58:00Eric JoernAt the very least, it's going to cause them to start digging. Right. And when they're not, when they start digging, they're end up finding record keeping. That's not proper. And that's, you know, you could be doing everything right. But you I didn't keep these receipts. I didn't do treat this weird thing right. I mean, I think now we have three different ways that meals are taxed depending on who you're eating with and why you're eating a meal.
00:34:58:02 - 00:34:59:00Cecil Bullard
00:34:59:03 - 00:35:10:29Eric JoernSo there's a lot of complexity that was that was built and that's on the tax side of things. Right. That's not even on just your pal, but that hey, now I have one meals account. How do I properly handle that from a tax standpoint.
00:35:11:02 - 00:35:31:20Cecil BullardYeah I have to do two meals two different meals account because often I'm either out traveling and having a meal because I'm out, or I might be with a client having a meeting and a meal is a part of that. We actually have three, because then we also do events where we provide food, which is a different tax category altogether.
00:35:31:20 - 00:35:32:11Cecil BullardSo yeah.
00:35:32:11 - 00:35:49:10Eric JoernAnd shop owners. Right. Hey, hey, we're doing our lunches on Fridays to celebrate the week. And then we do our lunches on Thursdays for training. And then, you know, hey, maybe I took a customer out to eat again. All have now have different tax treatments. It's, it's complexity.
00:35:49:13 - 00:35:56:19Cecil BullardHow many? Not purposes. How many pages is the federal tax code now? Oh.
00:35:56:21 - 00:36:04:01Eric JoernI think I think it travels around the world and something like, 100 times or something like that. If you lay them page by.
00:36:04:01 - 00:36:05:02Cecil BullardThey say.
00:36:05:08 - 00:36:11:25Eric JoernYeah, it's it laps the world so many times I can't remember the exact number, but so let's.
00:36:11:28 - 00:36:30:28Cecil BullardLet's see if we can bring it, make it smaller for shop owners here. What, what? Keep it simple, right? Yep. Make sure and I, we have a sample, like, what do you want to call it?
00:36:30:28 - 00:36:31:29Eric JoernChart of accounts.
00:36:31:29 - 00:36:58:21Cecil BullardOr. Yeah. Yeah. Excuse me. And you've seen ours because I know I've sent it to clients and to you guys, and you guys do a good job of making those things happen for our clients. So keep it simple, right? Because I have the detail I can always print out later if I want to print out detailed to find problems.
00:36:58:24 - 00:37:13:19Cecil BullardAnd then, what do you think's the biggest mistake or the biggest? Top two mistakes that are made by small business owners, trying to do accounting or bookkeeping. Yeah, well.
00:37:13:22 - 00:37:19:03Eric JoernThe number one thing is they don't they don't know what a balance sheet is, and they've never looked at it.
00:37:19:06 - 00:37:46:19Cecil BullardYeah. By the way, I've seen if I've seen 10,000 panels, I've seen 10,000 balance sheets. And I could name on one finger the balance sheets that I've seen that were actually accurate. I have seen so many balance sheets where there's what's this, $150,000 here. Right. And oh, that was something that 25 years ago when we bought the business, that was something we quote unquote depreciated or we did whatever.
00:37:46:22 - 00:38:14:13Cecil BullardAnd it's this, it's this dead or something that's still hanging on and has not been accounted for at all. Yeah. And, and do you think, do you think it's a laziness from the bookkeeper, accountant, accountant person of just like, I'm not going to I'm not going to spend the time to do that because no one's ever going to really look at it, or it doesn't really make any difference.
00:38:14:15 - 00:38:37:06Eric JoernI think there's definitely that. Right. You know? Hey, the the piano has a lot of effect. It has a lot of impact. Meaning that's what's going on my tax return and I'm paying tax on it. It's probably what I'm using to make my business decision. So it's got a lot of impact. Those are two very impactful things. My balance sheet unless I go to a lender right, a lender is maybe going to think you're what's my current ratio.
00:38:37:06 - 00:38:46:00Eric JoernRight. Does my current assets cover my current debt. And then if they're like, hey, why do you have negative, how do you have negative that what is that?
00:38:46:03 - 00:38:49:07Cecil BullardAnd how does that balance sheet not balance. Right.
00:38:49:07 - 00:39:12:29Eric JoernI mean I've seen that a couple times. Right. Fortunately the softwares prevent you from doing that. But we see things on the ballot. Yeah. If a balance sheet is not accurate the PNL cannot be accurate. Right. Because if it's on the balance sheet then it's not on the PNL right. Meaning it cannot be accurate. So in our opinion, that is by far the number one thing is we see pretty panels and we see messy balance sheets.
00:39:12:29 - 00:39:17:14Eric JoernYou know, you say, well, as nice as your pencil looks, it can't be right.
00:39:17:16 - 00:39:35:22Cecil BullardSo we have a question or two. Should I have discounts shown on the PNL? And if I do, should it be split from parts and labor? So if I am discounting, am I taking that money in and then taking that money out as a discount? What's your recommendation?
00:39:35:24 - 00:39:53:15Eric JoernYeah. So the the discount line needs to be, needs to be there. Right. So we're going to show our gross labor sales. We want to know how much we're discounting. Now whether to split it out between labor discount and parts discount. Right. Really depends on your policy. In this case.
00:39:53:15 - 00:40:16:14Cecil BullardYou're trying to if you're trying to look at parts margin, which we want to be 58%, and you're trying to look at labor margin. And as a loaded labor margin, I want that to be around 64%. Then if I don't if I'm in, I'm discounting either all in part or all in labor. Then I'm going to get some funky numbers.
00:40:16:21 - 00:40:37:10Cecil BullardRight? And that's kind of point out to me some, some issues, but it'll be it'll be harder to put your finger on where the problem is. Right? Somebody that's seen a lot of panels and a lot of mistakes made will will get it faster. But for a general shop owner, you're just not going to see it. Yeah.
00:40:37:13 - 00:40:54:16Eric JoernYeah. I mean it really depends on the materiality of how you do it. Right? If I you know, this case, you know, they've issued $2,000 parts discounts through a year. Do I want to keep an extra line item for that. Probably doesn't make sense. Right. We're going to have one discount line because we know and we know how we run our business.
00:40:54:16 - 00:41:00:07Eric JoernWe're going to discount labor. And that's their choice. On how they're doing that. So that's how we're going to measure it.
00:41:00:13 - 00:41:07:27Cecil BullardBut it's also kind of kind of wonder was this really a discount or was this like a bad debt you wrote off. Right. Because of the way it's.
00:41:07:29 - 00:41:08:21Eric JoernHow you handle it in.
00:41:08:25 - 00:41:23:07Cecil BullardSeven months with nothing. And then all of a sudden you got, you know, a couple of months with stuff. And that's a good point. Yeah. I would be going. I'm not even sure that was a discount at this point. Did we account for a bad debt in the wrong place?
00:41:23:10 - 00:41:42:10Eric JoernRight. Yeah. And to me, discounts are a separate issue than parts and labor margin. Right. Because we're measuring parts of the labor margin at our stated, you know, our stated rate. And then we have discounting. Right. Discounting to me is a whole separate thing than pricing. Pricing is what am I setting? What am I selling a labor my labor for?
00:41:42:10 - 00:42:00:25Eric JoernWhat am I selling my parts for? Then I have a discount, right? And I have an allowance, right? We probably set budgets on how much we're willing to discount at each month, and that's how I'm holding my discounts accountable to my team, is based on what budget did I set and and did I? It really doesn't matter which bucket you chose it from at that point, right?
00:42:00:26 - 00:42:15:19Eric JoernBecause that because that all ends up in the same gross profit. But you have to know that these are two, two separate different things because discount rate your labor rates, your labor rate, your parts margin matrixes, your parts matrix discounts is a separate action.
00:42:15:21 - 00:42:41:26Cecil BullardAnd I see shops, that discounted $12,000 and didn't make two. And and you're you just shaking your head. There's there's a question here. Jensen, did you say service wages is not in cost of goods sold? What I said is that I like tech wages, so I don't know what you. If you're calling service wages. I'm not sure what you're saying.
00:42:41:29 - 00:43:16:24Cecil BullardI like the tech wages in a cost of goods sold. But I want the service advisor. My sales cost under and under the line in a, like a fixed kind of in the where the fixed expenses would be separated out a, so, yeah. Got to have got to have clarity around, what you're talking about, but, definitely for mine and for our clients, we want to see the technician wages and, above the line, and above the line, below the line.
00:43:16:26 - 00:43:28:25Cecil BullardSo you have, variable expenses, parts labor, etc., and then you have fixed expenses, and the variables are above the line and fixed or below the line.
00:43:28:27 - 00:43:51:15Eric JoernYep. Yeah. We're we're at a 100% agreement. If you happen to move service advisor up into cost of goods, maybe that's just how you've always done it. How you have your historical data, measured. You know, you just need you know, now, you you've moved the goalpost, right? So if our goal was 65% GP, now it might be 55% GP because we include service advisor.
00:43:51:15 - 00:44:12:20Eric JoernSo you just have to understand the relativity of how you structure it. But again, right. If you were comparing panels in a peer group. Right. We want everybody to do things the same way. So we're measuring apples to apples. The more variability you add into how we measure things and what you're comparing them to. Now all of a sudden you might have incorrect measurements.
00:44:12:22 - 00:44:35:11Cecil BullardAnd it's funny because I ran 20 groups for years and we have quite a few here groups and, and after, I don't know, 15 years, you find out that the one guy is measuring something in a completely absolute different way than somebody else is measuring it. And so you've been comparing this data. They've been in the group for 15 years and you've been comparing data.
00:44:35:13 - 00:44:57:20Cecil BullardAnd then all of a sudden somehow you're having a conversation like, oh yeah, that's this, this and this. And you're like, no, it's really not. So that makes it difficult. That's why we do the composite, data stuff so we can kind of decipher the data a little differently to make the peer group be able to have relative data.
00:44:57:22 - 00:44:58:27Cecil BullardExactly. Yeah.
00:44:59:00 - 00:45:14:08Eric JoernThe data hygiene is so important that, it's a big challenge that we want to. Especially when you come with industry wide data. Right? Is it has not been cleaned up enough as, as it has inside of a reporting composite. Like what you guys have.
00:45:14:11 - 00:45:43:00Cecil BullardSo we we I've recently sent you guys, I don't know, 4 or 5 clients that it's really a mess. I mean, it's just a disaster. And and, do you, you said earlier that, you know, bad data. As long as it's consistent, consistency is probably more important than being 100% accurate. Do you? Would you say, like, bite the bullet, get it cleaned up and start moving forward?
00:45:43:00 - 00:45:54:13Cecil BullardOr would you go back a certain period of time to try and clear that data up? So that you can create a, a broader, view of things?
00:45:54:16 - 00:46:11:06Eric JoernI'm going to give you the the perfect accountant answer. It depends. If I am somebody who is likely to go out and get that in the near term, meaning I'm going to go do an acquisition, I might need to clean up a few years because I'm going I might lose my ability to go get that, if I don't do that.
00:46:11:08 - 00:46:35:24Eric JoernBut for the most part, you know, 80% of the shop owners that come in our door, it's more important that we focus on moving forward than going backwards. So I'd say 80% of the time we might in those cases, we're going to start a brand new file, accounting files use the last file tax return as our starting point and focus really on clean data going forward for the current year.
00:46:35:27 - 00:46:55:10Cecil BullardSo is there any reason that I would say, okay. It's I don't know, it's, August and, we know that our financials are a disaster, and now I'm going to wait until December because that's the quote unquote end of my year.
00:46:55:13 - 00:47:17:09Eric JoernI'd probably go back to January 1st and and bring it, bring it forward through that current year. I might not go back and re clean up, you know, 2025, 2024 or 2023 if especially if we have a tax return filed again, unless. Right, hey, I show losses in those years that doesn't make a whole lot of sense to me.
00:47:17:09 - 00:47:35:20Eric JoernAnd I need to go out and get a loan from a bank, right? We might want to clean that up or hey, I, I have I have people interested in buying my business and we need good historical financial data. But for the most part, the cost of us going back and cleaning up prior years is is too much.
00:47:35:23 - 00:47:42:01Eric JoernIt's too much, and it's a distraction from getting the current information clean and and right moving forward.
00:47:42:03 - 00:48:07:18Cecil BullardBut I would say as, as a coaching consultant, that I don't care if you're 25 or you're 85, and if you own a business, you should have a plan, an out plan. And if I don't have good clean data, at least for three years, I'm not going to get paid for my business the way that I should be paid for my business.
00:48:07:20 - 00:48:32:08Cecil BullardAnd so whatever you're going to do, port in my in my brain, poor accounting, it's it could cost you hundreds of thousands of dollars. Oh, 100 in, in the short term, really, and, and the long and the long term,
00:48:32:11 - 00:48:33:18Eric JoernI just.
00:48:33:20 - 00:48:51:11Cecil BullardYeah. And, I don't know, I get a lot of, I don't know how, how often, but an awful lot of people saying, hey, I want to go buy the shop, or I'm looking at this shop or whatever. So what do you think it's worth? We do this a lot, and I'm like, okay, give me three years worth of profit and loss statements.
00:48:51:11 - 00:49:19:02Cecil BullardGive me that good balance sheet. And, you know, and, let's run some reports out of the point of sale. I'd like to know what the average repair orders and few other pieces of data. And then I can tell you with a three other questions, pretty much within a few dollars of what that business really is worth. But if the data is if I can't get three years, I had a guy in, Northern California go to buy a shop mini, this few years back.
00:49:19:02 - 00:49:51:17Cecil BullardAnd he's like, so I need to look at it. And, supposedly there was a few hundred thousand dollars of cash that was not in the on the panel. And so the business is worth 800,000, but the Pal only supports 200,000. It doesn't support 800,000 because that money can't be accounted for. Yeah. And the, the broker was arguing with me that that 200,000 was legitimate and should be accounted for.
00:49:51:17 - 00:50:12:16Cecil BullardAnd I was saying the bank won't account for it. I can't get a loan for it. So the answer is no. And it also clouds the other data. You know, when you're looking at, say, parts margin or labor margins, and you look at that business, you say, well, man, they're really poor. I know I can make them better because that's what I do for a living.
00:50:12:18 - 00:50:39:05Cecil BullardAnd, so I think there's hidden value in this business, but there isn't really, because it's $200,000 in parts and labor that you pulled off that you paid for, but you pulled it off and took it in its cash. So those margins with that cash in there would have looked a lot better. And what we really found was that there were also all the employees had been paid cash off the books for several years.
00:50:39:08 - 00:50:59:21Cecil BullardBecause the guy I told not to buy the business bought it anyway and overpaid for it anyway. Yeah. And, it's it's scary what you what what really happens? What you really see here absolutely scares the crap out of me sometimes. I think we got a question.
00:50:59:23 - 00:51:05:00Eric JoernSo. Oh. Warranty. Oh, fun. Yes.
00:51:05:03 - 00:51:06:12Cecil BullardGreat question. Go ahead.
00:51:06:14 - 00:51:34:04Eric JoernYeah. No. So this is important that you handle it properly in the shop management system. We don't we don't use the discounting function to handle warranty. Right. Most shop management systems have an ability to call other payment types. So, I'm assuming you're talking about a, an internal warranty, right? We have a comeback repair that we're doing, or we offer a three year, 36 on breaks or, you know, we pay for the brake job, whatever it may be.
00:51:34:06 - 00:51:51:25Eric JoernWe're going to have a a other payment type. So we're going to write up that repair order and we might what we want to do is kind of neutralize that effect on our on our gross profit margin. So we're going to write the parts around costs. We're going to write the labor around costs. So we might have a set rate that we use for what we do.
00:51:51:26 - 00:52:07:06Eric JoernAlso what we do to work on an internal like shop owned vehicle or maybe, hey, me as an owner, I've a my vehicle is owned by the shop. We're going to write those repair orders like that because I still need to pay my technician. I still need to account for the part. So those in need on a repair order.
00:52:07:06 - 00:52:26:26Eric JoernExactly. Now, if I pay my service advisor on gross profit and I say zero out, that repair order, or I discount that repair order, now that's a negative gross profit to my service advisor for something that paid. They're not really accountable for. So we like to neutralize the effect on gross profit.
00:52:26:29 - 00:52:55:01Cecil BullardAnd we actually had multiple warranty categories that we paid out. So we had tech error. We had parts failure, and we had just, you know, give away, and we had warranty legitimate, you know, that brake job, we warranty it for three years. It failed at two years. And we're going to redo the whole thing, as part of the warranty is not anybody's fault.
00:52:55:03 - 00:53:06:05Cecil BullardNot really part's fault? Not really the tech error. Yeah, it's a legitimate warranty. So we had, a minimum of four categories that we could look at.
00:53:06:08 - 00:53:28:27Eric JoernYeah, I like to keep that level of detail at the shop management system level. Maybe when it routes to your pal, you might have one line. Yeah. For all those things that your, I guess, quote unquote eating. Right. Because then we're looking at that, hey, I have a problem now we're going to go back to the source and say, okay, here's my four item break down inside my shop management system, and I'm going to then address, you know, that's a performance problem.
00:53:28:27 - 00:53:31:03Eric JoernSo I'm going to address it from there.
00:53:31:06 - 00:53:50:16Cecil BullardAs a as a consultant. I like to know where the warranty is coming from because then that can focus me in a direction that I can put a solution in place. But as far as the PNL, I just need to know that my overall warranty is below a certain percentage. And so I like to see that.
00:53:50:16 - 00:54:12:03Cecil BullardAnd that's another reason why I like to have the percentages, in the column. And I can tell you even today, the panels I get and I see hundreds every month, most of them don't have the percentages. I even got one last week where it was, December. And then it was the total, but it was only December's total.
00:54:12:03 - 00:54:41:12Cecil BullardSo there were two columns, but it was the same column with no percentages. There's there's no that there was no benefit to a second column. That's just a copy of the first column. Yeah. And, you just wonder why someone isn't paying attention to that. Who probably should, right? Yeah. And is that is that my is that my bookkeeper or my accountant's responsibility to go, hey, these are things that you should be looking at or is that not.
00:54:41:14 - 00:55:01:07Eric JoernSo I will say we've built we've ran into some limitations in the software inside of QuickBooks about being able to generate those reports. What the detail that we like to look at, exactly what you described, where you have like the either a trailing three months or a year to date comparison, along with the single month comparison with the percentages.
00:55:01:09 - 00:55:23:21Eric JoernWell, that's outside of the ability for QuickBooks to generate a report with that much data on it. So we've actually we use another software that that plugs into QuickBooks online, in which we can further customize and build our deliverable with those different reports like that, because we also found that issue of, hey, hey, if we can't add percentages here, you know, you lose some relativity to that.
00:55:23:21 - 00:55:43:14Cecil BullardReport and for me, the financials, I mean, obviously I want to pay my taxes and I don't want to be audited. And if I'm audited, I'd like it to be clean. Yeah. I cannot tell you how many shops we've come in. I had, I can give you, at least one example. Father and son, they owed the IRS 300,000.
00:55:43:14 - 00:56:02:27Cecil BullardAnd I'm looking at their panels and their accountant had been a bookkeeper, had been double accounting income. So the income that they had reported and stated was not the income that they really had. And so when it was all said and done, we kind of, sent it through what I would call a forensic accountant. We cleaned it up.
00:56:03:00 - 00:56:05:20Cecil BullardThey really didn't owe the IRS much.
00:56:05:22 - 00:56:09:10Eric JoernWe only have a three year statute of limitations to to correct that.
00:56:09:12 - 00:56:39:13Cecil BullardYeah. And, which. Yeah. And I've seen that happen a lot of times too, which makes me a little, a little nuts. All right. I think we had, like, a last question. I think we're getting to the end of this thing, credit card processing fees charged, separate line. Yeah, I, I always have credit card processing fees, and there should be a line for it as a cost in a below the line.
00:56:39:15 - 00:57:00:11Eric JoernYeah. So so they're talking if they charge for that. So if they charge for the fees, they pass it along. There's a few different ways to do it. I do think that that's a now an income item. Right. And we might actually bring up the cost or we might even apply the cost against that income, because it's really a pass through at that point.
00:57:00:13 - 00:57:01:03Eric JoernSo we might.
00:57:01:03 - 00:57:03:02Cecil BullardHave interesting philosophy. Yeah.
00:57:03:02 - 00:57:13:08Eric JoernYeah. Yeah. So if we're, if it becomes a pass through because we charge for that credit card fee, you know, we might only record the net additional or cost that we have.
00:57:13:10 - 00:57:26:06Cecil BullardSo you're saying, I'm going to report the $4,000 ticket as an income, but I'm also going to report the, I don't know, $40 that the credit card company is charging me to do that $4,000 ticket.
00:57:26:08 - 00:57:49:21Eric JoernYeah. So if we charge, say, $50 and, you know, our credit card fee and it costs us $40, right, we'd have a net $10 of income and we might report it just as a straight net $10. Again, that's a little bit newer. And we're still trying to understand how that really relates to how we do pricing, how we analyze gross profit, things like that on a financial.
00:57:49:24 - 00:57:57:08Eric JoernI mean, I think maybe the last 12 months is when people have started really adopting. We're going to pass on credit card fees to our customers.
00:57:57:10 - 00:58:22:01Cecil BullardYeah, I see that to it's very I'm seeing it at, the questions coming up more and more. We've never we haven't primarily in the past. But the question is coming up more and more now. All right. Before we before we wrap it all up, we have this financial intensive April the 23rd.
00:58:22:01 - 00:58:24:09Eric Joern2020 third and 24th.
00:58:24:11 - 00:58:29:18Cecil BullardYeah, I think it's 23rd and 24th. It might be 22nd, 23rd, but I'm pretty sure it's the 23rd and 24th. They total.
00:58:29:18 - 00:58:31:00Eric Joern23rd. 24th.
00:58:31:00 - 00:59:00:01Cecil BullardYeah. Okay. And and this we're going to be really teaching the importance of good, accounting. Good bookkeeping. And also, the things from the coaching perspective that you need to look at and what they mean to you and what that so I can look at a PNL and I can say we have a problem with parts the way we market parts.
00:59:00:01 - 00:59:19:20Cecil BullardOr I can look at a panel and say, man, we're not charging enough for our labor, because of the variance between parts and labor as a percentage. And so we're going to be teaching like we're going to get into the the nitty gritty, but without getting into the nitty gritty, it's not going to be an accountant thing where we're going to go through every line and go line by line.
00:59:19:20 - 00:59:42:02Cecil BullardWe're going to we're going to be really teaching the basics in how to really understand your business in a financial model. And you guys are going to participate in that, which is fantastic. I'm excited. We're already have quite a few people that have signed up for that. If you use the QR code here, you can get signed up for that.
00:59:42:02 - 01:00:09:13Cecil BullardIt's a, I don't know. I think it's a, I want to say two day class, but it might be three. I think it's extremely reasonably priced. And, we'd love to see you here in, in Utah for that. And I'm excited about it because this is like, my, my my Jones. Right. This is my this is my crack cocaine is this is the numbers and and and I'm not an accountant by far.
01:00:09:13 - 01:00:15:19Cecil BullardAnd I don't know that I could be, but, understanding the business numbers for me, it's like it's crack.
01:00:15:19 - 01:00:34:23Eric JoernSo you understand the impact it has on that business. Their generation. How it helps their technicians, their employees that work for them. And hey, even the community that that shop participates in, right? A more profitable, better shop is going to really have a better effect on the community as a whole.
01:00:34:25 - 01:00:56:04Cecil BullardAnd I always say there's there's like for the average shop, the typical shop right now is making about 4% net, institute shots, a little over 18. We, we, we vary between 18 and about 22 for our shops. But but about half the stuff that you're going to do to make money to fix that. Pretty simple. The other half's a little more complicated.
01:00:56:04 - 01:01:21:17Cecil BullardAnd you really need to understand your business like it's an engine and you need the right amount of fuel and air and and spark at the right time. And, and if you understand those things, it can make you not just thousands of dollars every year in profit, but it can make you tens of thousands or hundreds of thousands of dollars when you go to get, you know, sell your business or pass it on.
01:01:21:19 - 01:01:49:02Cecil BullardAnd so, yeah, the industry, the institute, you know, better business, better life, better industry. We find that the more profitable the businesses, the better the owner understands it, the better they can manage people. The more money they make, the happier everyone is. And so. Yeah. So, please, consider coming to the financial class and, Eric will do this again.
01:01:49:05 - 01:02:05:25Cecil BullardYep. Here in the near future. And if you do have questions that didn't get answered, pass them in and we'll do our best to get you answers for those, thank you very much for your time today, Eric. Yeah, of course, we love you guys over at Kaizen. And, I hope I pronounced it correctly.
01:02:06:01 - 01:02:07:23Eric JoernI think you got it. I think you got to date.
01:02:07:25 - 01:02:16:01Cecil BullardUs and shoot me. And, thank you for those of you that attended and had questions. Thank you very much. We'll see you next time.
01:02:16:02 - 01:02:18:13Eric JoernThank you so much. Thanks. Thanks, everybody.
 

189 - Standing at the Crossroads featuring Jason Brennan, Fine Tune Auto

189 - Standing at the Crossroads featuring Jason Brennan, Fine Tune Auto
January 27, 2025 - 01:19:04
 
Show Summary:
Curiosity turned into craftsmanship, and craftsmanship turned into leadership. Jason Brennan, owner of Fine Tune Automotive with three locations across Illinois and Northwest Indiana, shares how a lifelong habit of taking things apart evolved into building a scalable, people-centered auto repair business.
This episode of Leading Edge: Standing at the Crossroads dives into the realities of growing from one shop to multiple locations, including the financial discipline, people challenges, leadership mistakes, and mindset shifts required to scale without losing trust or culture. Jason opens up about learning business management the hard way, letting go of day-to-day control, and making pivotal leadership decisions that reshaped his team and company.
From earning trust with technicians, navigating acquisitions, and redefining success beyond store count, this conversation offers honest insight into what it takes to build a business that develops people and leaves a lasting legacy in the automotive repair industry.
Thinking about growth, leadership, or the legacy you are building as a shop owner? Meet with Michael Smith for a leadership and legacy strategy conversation: https://theinstitute.zohobookings.com/#/Executive-Owner-Strategy-Session
 
Host(s):
Kent Bullard, COO of The Institute
Michael Smith, Chief Strategy Officer at The Institute
 
Guest(s):
Jason Brennan, owner of Fine Tune Auto
 
Show Highlights:
[00:01:49] - Jason Brennan says his lifelong habit of taking things apart shaped everything that followed.
[00:03:37] - Jason realized the real reward wasn’t fixing cars, but watching his employees succeed.
[00:05:30] - Jason admits his biggest mistake was assuming technical skill meant business readiness.
[00:06:07] - Jason explains the non-technical skills that changed the trajectory of his company.
[00:08:18] - After 18 years in one shop, Jason shares what finally made expansion feel possible.
[00:13:54] - Jason planned for worst-case scenarios before opening the second location.
[00:19:28] - Jason recounts the day a key manager never showed up, forcing him to step in.
[00:25:46] - A tense shop meeting became the turning point that rebuilt trust and culture.
[00:39:10] - Jason compares acquiring a running shop to changing an airplane engine mid-flight.
[01:15:21] - Jason defines success by the people who grow alongside him.
 
In every business journey, there are defining moments or challenges that build resilience and milestones that fuel growth. We’d love to hear about yours! What lessons, breakthroughs, or pivotal experiences have shaped your path in the automotive industry?
Share your story with us at info@wearetheinstitute.com, and you might be featured in an upcoming episode.
 
👉 Unlock the full experience - watch the full webinar on YouTube: https://youtu.be/xJ4MYecafck
 
Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!
 
Links & Resources: 
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________________________________________
Episode Transcript DisclaimerThis transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at marketing@wearetheinstitute.com.
 
Episode Transcript:
Kent Bullard: Welcome to the Institute's Leading Edge Crossroads podcast, where we examine the decisions, the crucial decisions that professionals make as they shape industries, drive careers, inspire thought leadership, and ultimately build lasting legacies. I'm Kent Bullard and I'm joined with my esteemed colleague Michael Smith.
Kent Bullard: And today we have a wonderful guest, Jason Brennan.
Michael Smith: Hi Jason.
Jason Brennan: Good morning.
Kent Bullard: Jason, would you please introduce yourself?
Jason Brennan: I'm Jason Brennan, owner of Fine Tune Auto. We've got three locations in Northwest Indiana, in Chicago, and I'm happy to be here with you guys.
Kent Bullard: We're very happy to have you. We've got an, I know, a phenomenal discussion ahead of us.
Kent Bullard: Those of you who are listening to this, either on the podcast or if you're looking at our website, if you have questions, I mean, it's very important to us that this is an open dialogue, that we're able to communicate what we talk about in this podcast with a greater audience. So if you have questions, if you have comments, we'd love to see those in the comment section down below.
Kent Bullard: If you do enjoy the content that we cover today, please like and share. 'cause it helps the algorithm and it also helps spread these valuable lessons to a greater audience. Again, we're all about helping the industry and raising the bar for everyone and we thank you for doing that. So let's jump right into the questions then.
Kent Bullard: Let's start with number one. What originally brought you to this industry and what inspired you to commit to this industry?
Jason Brennan: That's a really good question. The things that brought me to the industry were, you know, I came from a background a technician background, and I cannot. Right. I thought about this on the way in this morning because I knew you were gonna ask me a question like that.
Jason Brennan: So I thought, okay what really? Why did I do this? And
Michael Smith: what the heck was I thinking? Right?
Jason Brennan: I cannot remember a time when I wasn't taking something apart, repairing it, or trying to figure out how it worked in my whole entire life. So from a technical perspective or, you know, from a technical background, I think that's where it came from.
Jason Brennan: Just the curiosity about how things worked. I had to know how they worked. I took my toys apart when I was a kid. I think that's a similar story. You probably hear from a lot of a lot of people who started in the industry as technicians. So that was fun to me. It was more fun to take things apart and figure out how they worked than it was to play with them to me.
Jason Brennan: So, so, so that led to. Led me into a career where I could get paid to do that. Only I had to. I was responsible for making sure they worked when I was done at that point. So, you know, and so that's what inspired me to get into the industry was just I wanted a good career and doing something I loved and I knew that I could do that.
Jason Brennan: Fixing cars. And the other part of your question, I think was what caused me to want to stay. What's causing me to stay committed? Why am I committed? You know? I just ended up really loving it. You know, I ended up becoming a shop owner. I ended up starting to shop and you know, it, it, at first it was technical stuff, you know, I was really interested in the cars, doing a lot of diagnostics, building transmissions, whatever, you know, all the technical stuff.
Jason Brennan: And then I evolved into a, I. Into a service advisor and learned how to, you know, learn sales and learn how to communicate well with customers. And I'm still learning how to communicate with people the best that I can. 'Cause that's a, that's almost an art form, I think. But and then I became an owner and I and that's when I really, when one of my commitment really locked in, at first I was just like, man, what did I get myself into here?
Jason Brennan: But then the more I learned, the more I liked it. And what keeps me committed is is being able to be part of and facilitating the success of my employees. That's really the, it's the thing I like the most about it. There's other things that keep me committed, like the, you know, good service we provide to customers.
Jason Brennan: And the fact that I enjoy the actual the. What am I trying to say? The business that we're in I like all the, I like all the aspects of it, you know, the technical aspect and the customer service aspect. It's all fun to me. But the biggest thing is, the biggest thing that keeps me committed is that I can go to work and witness employees succeeding and becoming their best, the best they can be.
Kent Bullard: I, I'm curious 'cause I want to dive a little deeper, you know, to this I took things apart to see how they worked and I had to put 'em back together. You took that approach with toys and then vehicles. Did you bring that same mentality when it came to your business?
Jason Brennan: Oh, that's a real good question. Not at first because I didn't realize I needed to, and that was part of the reason why I struggled for years.
Jason Brennan: I didn't realize I underestimated the maybe even dismissed the, the fact that I needed to have business management knowledge in order successfully run an auto repair shop. I thought I had already learned enough as a technician that I could, well, I could fix cars so I can, I could just run a business automatically.
Jason Brennan: And that wasn't true. So
Michael Smith: what
Jason Brennan: were your,
Michael Smith: what were your biggest surprises? What were your biggest discoveries? Ooh, I don't know enough about that. What were the, what were a handful of topics you discovered?
Jason Brennan: The biggest one I'm still learning the most about, I think is what makes people tick. What do they want and how can I give it to 'em?
Jason Brennan: And how can we communicate that to each other so that we can make that happen? And that, that's something that, that I'm always working. I don't think I'll ever be done working on that, but you know, financial management. Forecasting, budgeting, how to read a p and l and a balance sheet. How to set key performance indicators and monitor them how to and how to affect them to keep where you need 'em to be.
Jason Brennan: All kinds of stuff, you know, that's just, yeah. Good list. Those are the main things, I think. Yeah.
Michael Smith: Thank you. Thank you for sharing that.
Kent Bullard: How long did you see, 'cause obviously you went to multiple locations and you put this focus on, well now deconstructing and putting the business back together to, to see how it worked.
Kent Bullard: How long did you play in that realm of just the single location and did you think that there was, like, that was gonna be it or were you always kind of planning that there was gonna be more than just the one location?
Jason Brennan: At first. When I wrote a I wrote a business plan when I applied for a loan early on in, in our business.
Jason Brennan: And it, it did include a a mission statement that included multiple locations. But I think that was more for, at the time I wasn't sure if I'm not sure I was being ho honest with that mission statement. I put that I wanted to have multiple locations, but I'm not sure if I had the confidence that a that I'd actually be able to do it.
Jason Brennan: I thought it'd be nice, but I wasn't sure if it was gonna happen.
Kent Bullard: It's funny, what we tend to write down tends to come true. Right. So he hadn't intended it.
Michael Smith: See what you did to
Jason Brennan: yourself.
Michael Smith: Right.
Jason Brennan: Maybe it just happened because I wrote it down. I'm not sure, but there you
Michael Smith: go.
Jason Brennan: I forgot what your question was, but,
Kent Bullard: it was, how did, was there a point in time or how long? Oh, because obviously you're working in the one location. Yeah. How long was that your world, like, perspective wise? 18. 18 years. 18 years.
Michael Smith: And what happened to make the second shop momentum start to move? What, what shifted? Now it's time. Now I can do it.
Michael Smith: Right.
Jason Brennan: So I hadn't known anybody who owned multiple locations. And I was in a, in the in the gear performance group, used to be called Bottom Line Impact Group. I was in, in the, in my business group with the institute. And I started some of my colleagues already had multiple locations and some of them had opened a second or third or whatever more locations since I met them.
Jason Brennan: And as I. As I got to learn more about how they, you know, kinda walk with them on that path, so to speak. I kind of, I realized that that, you know, it gave me confidence that I could do it, and it gave me some ideas about how to do it. I was involved in the m and a group with Michael Smith for a while, and I got to see about a lot about how that goes from growth to all the way to exit strategy and everything.
Jason Brennan: That was pretty cool to be able to see that. And anyway, so, so I just kind of observed I observed some of my colleagues doing it and I thought, well, I, there's no reason why I shouldn't do that. And I only had one shop, so I thought and I had gotten it to the point where it ran, for the most part, it could run without me there.
Jason Brennan: I was there most of the time anyway, but. That's just 'cause I like to work, honestly. I, but honestly, I've, those people were so good at doing their jobs that I didn't really need to be there. I almost felt like I was getting in the way sometimes, or I was going to work and just sitting in front of my computer looking for things to do.
Jason Brennan: And I thought, well, you know, it was kinda like I think it's time I knew the general concept of how to do it and I knew it was time to do it because my business could run without me there.
Michael Smith: So you headed southeast from your first location to northwest Indiana, right? What was that? That's a strategic decision.
Michael Smith: What,
Jason Brennan: right.
Michael Smith: How did you process that? How'd you come to that conclusion?
Jason Brennan: Well, the Northwest India, Mar Indiana market has been growing. In the last, I would say the last 10 years it, especially in the last 10 years, the Northwest Indian market has get been getting bigger and population, well, I don't know if it's been getting better population wise, bigger population wise, but I know that the demographics of the people who are moving into Northwest Indiana seem to be the ideal demographics for us.
Jason Brennan: And so I thought, well, it's good demographics. The Northwest Indiana region seems to be generally favorable to, you know, bi business friendly, I should say. They seem to be business friendly over here. So, those are some of the, a couple of the reasons why I chose that area. And, you know, we're in the, where we are in Illinois, we're in Southeastern Cook County.
Jason Brennan: Our Lansing stores in Southeastern Cook County, so we're right in the border. Anyway.
Kent Bullard: I'm curious, just going back to your research, did you work with an a company to find that data to make those decisions? Or was this more of a hunch that you knew the area that you felt as though that's what that area was growing into?
Jason Brennan: I did some research online on my own. I didn't hire any company or anything. Probably would've been a good idea, but I didn't do that. What I did do though was lived in the area for most of my life. So that's, I mean, you know, like I said, we're right in the border. I now live in northwest Indiana.
Jason Brennan: I used to live in Homewood, Illinois. That's just on the other side of the border pretty much. So I had been, I. Just throughout my daily life, you know, I've been, had been around both south suburban Cook County and Northwest Indiana both. And I knew people who had moved there shopped there, you know, all that kind of stuff.
Jason Brennan: So I can kind of kinda get a good feel about what the demographics are in the area by just doing that and then can back, you know, you can back that up with research online.
Kent Bullard: I love that. So was there apprehension? So once you've got the idea in your head, Hey, I think it's time to ex expand and crow things are running really smoothly now, they don't necessarily need me.
Kent Bullard: I think it's time to to move on. What was some of your greatest concerns or fears about taking that next step? Or did you not have any?
Jason Brennan: No, I, it's definitely had some concerns. Anybody that doesn't have any concerns about expanding their business is probably setting themselves up for failure.
Jason Brennan: They, you should always have some concerns, at least, maybe not fears, but, you know, be be careful with it. Yeah, there were financial concerns. I wasn't sure what the, I wasn't sure exactly what the, what how much cash reserves I needed to do it. So I had to put pencil and pencil paper, or I guess keyboard to spreadsheet or whatever you want to say to ed, do some math to figure out what I needed.
Jason Brennan: I had to talk to some other guys in the industry and ask them what they thought I should have in the bank in order to be, in order to not jeopardize my first shop. In the process of expanding in the event that we didn't have the business to make a profit, and, you know how long I basically planned on us losing money for a whole year.
Jason Brennan: I, I could have, I had enough, I'm pretty conservative when it comes to spending and saving and things and the risks I take. So I, you know, I think I had enough cash where I could have lost money for three years at the second store before I decided to pull the trigger on it, just because I wanted to be that stable.
Jason Brennan: I wanted to be very stable. So, because you never know what's gonna happen. So I thought, you know, one of my, one of my concerns or maybe fears, I guess, is well, what happens if we have another recession or something happens in the economy beyond our control and I open my second shop, and then my third, and then my second first store sales and gross profit declines below a level of profitability.
Jason Brennan: Right after I open the second one, I'm losing money at both. That could happen. It didn't happen, thank God, but it could have.
Michael Smith: So you were super well prepared financially and that gave you peace, right. To be able to have mm-hmm. Some of the confidence to do this. You mentioned earlier that the human components, you know, some of your greatest learning has been in that and still kind of the leading edge of what you're building.
Michael Smith: When you made the second acquisition, what were your, what was your thinking going into it with regard to first leadership and team, and second, with regard to customers, and then how did that carry over to further thinking with store three? That unknown human fuzzy stuff, right? How did you handle that?
Jason Brennan: So, so what you're asking is what did I the human aspect things?
Michael Smith: Yeah. Going into it, what you were thinking, then you did it and you learn more. And then what did you take into store three from the second shop that made the third one hopefully a little easier. Yeah, the human stuff, the hard stuff, right?
Michael Smith: The stuff we question, we spent so much time talking about.
Jason Brennan: Well, I knew, yeah, you're right. And I get it. So I knew that it you know, I knew that the, once I knew that once I had a financial formula for success and a business model and SOPs, all that kind of stuff that was repeatable or that should in theory be repeatable in a slightly different market then everything relies on a after that.
Jason Brennan: I think most of the businesses success relies on the ability to attract and retain the people who can execute that business model. So super important. And so knowing that I. Did recruit in advance before I didn't have much time to open the second store. It was a store that was closed for a month already, I believe it was before I, I had found out about it through a friend in the industry and store had been closed for a month already.
Jason Brennan: And I thought, well, it, the value of the bi, the value of the business diminishes. The longer I leave it closed. The more customers who come there and find out it's closed, the less customers I start with. Mm-hmm. When I take over. So
Michael Smith: were there any employees still attached to that closed business or did you have to start from scratch?
Jason Brennan: They, there were none attached. There were no, there was nobody currently working there, but there were two guys who had two technicians who'd already left and found other jobs who really had enjoyed working at the Hobert Indiana shop that I was able to get to come back. And they're still with us.
Jason Brennan: They really liked it. They live in the area. They didn't wanna leave, but the place was closing. So they, you know, they did. And I got 'em both to come back with the help of the old owner. So thanks to Keith Sweeney for that one. He he gave me the connection there and he gave me their phone numbers. I called him, he put in a good word for me.
Jason Brennan: He said, Hey, I think you should talk to this guy. And I got those two guys to come back and they're doing well here. So that was really key. Ha having two good techs to start with was really great. And then I did recruit a store manager and hire a store manager. He accepted my po my offer and we got 'em all onboarded and everything in advance.
Jason Brennan: And then as we were doing facility improvements it took another whole month before we, we actually opened. So, during that month we re, anyway, during that month we recruited him. He didn't show up on his first day of work. So that was something I had experienced before. So it wasn't, you know, I hate to say it, but it wasn't really that shocked.
Jason Brennan: He forgot to
Kent Bullard: mark it on his calendar. That's what, that's really what happened. That didn't set the alarm, didn't have it on his calendar.
Jason Brennan: Yeah. I called him and I said, Hey, where are you? You know, and he goes, well, I decided to stay where I'm at. I forgot to tell you that. Sorry. You know, so, and this guy was a service director at a service manager at a dealership.
Jason Brennan: And they had talked him into staying. Maybe it wasn't the right thing for him. I can't blame him for that, but it would've been nice for me to know that. So anyway, I wrote service and ran the shop for about three months on my own. Before I hired a, before I was able to find a qualified person to come in and train to run the store.
Jason Brennan: And I think, let's see. I ended up having a total of three store managers come in and I had to let him go for various different reasons before I found the guy that is currently our store manager at the Hobert shop. So
Kent Bullard: I have
Jason Brennan: different people issues.
Kent Bullard: I'm curious to know, 'cause I mean it's definitely a different place you're in when you're going, when you're at one location and then moving to three locations.
Kent Bullard: What do you think some of the key mindset shifts you had to make in order to make that happen from just one location to three locations?
Jason Brennan: So one of the key mind mindset shifts I had to make was. Which I believe that I made before I decided to expand beyond one location was that the business needed to not rely on me for, in, in any daily operations aspect.
Jason Brennan: Except maybe phone calls and answering questions. You know, so, so I was just like, I was conservative cash wise to make sure I was prepared. I was also conservative that way. I guess you'd call it conservative too, because I kind of overemphasized that concept and I in the sense that I, you know, proved it to myself by, you know, e even like, like I said earlier, I went to work every day, but then before I opened a second shop and I had already been talking to people, talking to everybody, saying, Hey, I want to, I wanna buy or open a second location if you know anybody look to retire or.
Jason Brennan: Who runs a good shop or whatever let me know send me their number or them my number, connect us. And that was already starting to happen. So before I decided to pull the trigger on anything, I purposely stayed home and worked on house projects, went and did a, you know, even if I was at the store, I might be doing a painting something or fixing a piece of equipment or whatever.
Jason Brennan: And just purposely removing myself from daily operations while keeping the ability to still jump back in if I needed to. And I was actually surprised at how when I conveyed my to my people at the Lansing store, what I was trying to do, I was surprised at their reaction. I shouldn't have been.
Jason Brennan: 'cause they were all really good people. But I thought, well, this is gonna take a while. We're gonna have to work a lot of bugs out. But really, they just stepped up to the plate and did their jobs the best they could. And they had equated to me not it, it didn't take very long. To prove to myself that was, that I was able to not be involved in the daily operation there if I needed to be somewhere else.
Michael Smith: Alright. Thank you for sharing that, that mindset shift, and we've talked about this in this industry over and over about working in versus on the business, and that, that mindset shift you made to put yourself in a position not to be in it and just to be available to work on it, that's a huge cognitive leap given the technical levels that we most come, mostly come into ownership from.
Michael Smith: So thank you for sharing that. That's a huge, that's a huge topic for folks to consider.
Kent Bullard: I think a lot of people don't understand that if you're sitting there, you know, the, being the one that. Cranks the lever. It's really hard to go do that in multiple locations. 'cause now you're not just saying, I've got, okay, I'm just gonna do more.
Kent Bullard: But you literally have to double the amount of work that you're doing at that if you don't change how you're doing it. 'cause your input has to equal a higher output.
Michael Smith: Sure. And it's sort of a compelling, or it's interesting to be the person that they bring all of their, you know, problem solving questions to, Hey boss, can I ask you a question?
Michael Smith: And there's a little ego that goes along with that. Yeah. Why don't you do this? Oh, okay. Thanks. Right. And all of a sudden when you pull yourself out, or, you know, in the process in the middle is, well, what do you think you should do? You know, kind of a thing. All of a sudden you realize they can do it on their own and they actually like doing it on their own and then they're happier doing it on their own.
Michael Smith: And it's like, huh, this worked pretty well. And they're right. You know? Yeah.
Jason Brennan: You're a hundred percent right Michael. And, thinking back. That is something I did. I did ask that question a lot. What do you think we should do here? What do you think the right thing to do is? And that was, that's a good way to, to train people, I think to be more independent is to ask those kinds of questions.
Jason Brennan: And
Michael Smith: the downside to this too, Jason, is later on, they're like, Hey, stop helping me, but I have an idea. Yeah. I don't want to hear it. Right. It's like, okay. Right. That's fine. Just make it work.
Jason Brennan: That could happen. It could, yeah, it could happen too.
Michael Smith: Yeah.
Jason Brennan: I love it.
Michael Smith: I love it.
Jason Brennan: But letting people know there, there was a point in time where I remember I had a, there was a, we had a shop meeting.
Jason Brennan: We were having a shop meeting at the shop in Lansing, and we've been having problems, with that I created with people with technicians thinking I was looking over their shoulder too much and telling 'em how to do their jobs. And they really didn't. They were experienced certified technicians.
Jason Brennan: They didn't need to be told how to do their job. They just needed to be allowed to do their job. But then I felt that I didn't I felt that they didn't want to be held accountable, which was true in some cases. They some of 'em, you know, may maybe didn't want to be held a hundred percent accountable to the outcome of the repairs that they were doing.
Jason Brennan: So I kind of felt like I was stuck. I had it like there was a catch 22 there. I have to get involved because if I don't, then the technician who's doing the repair isn't gonna want to be held accountable to the outcome of the repair. So I just need to make sure it doesn't go wrong. That was the wrong approach.
Jason Brennan: So eventually I figured out what the right approach was, and we had a shop meeting where it was almost like a mutiny, I think, you know, where everybody in the whole shop called me out in public and said you're looking over our shoulder all the time. You're telling us what to do. We don't like that.
Jason Brennan: It's really a, it was almost a toxic environment, I think, because of that kind of thing. And so I, I just said to him, all right, you guys wanna, you know, you're right. I shouldn't be getting involved in these repairs. You know what you're doing. I'm gonna, I'm gonna make you a deal right now. I'm gonna just trust you to do your jobs.
Jason Brennan: But I don't want to be, I don't want to hear I don't want to get any flack about or hear any, you know, I want to hear your opinions, but I don't want to get a bunch of pushback when I try to make a change in the business operationally or growth wise. Or equipment wise or anything that we've already discussed, or maybe it's not your department, so we haven't discussed it, but any of these decisions I make, I just want you guys to trust me to make the right decision.
Jason Brennan: And I'm gonna make mistakes just like you guys do sometimes, but I need you to trust me as your leader to take us to the right direction. And if you can do that for me, then I will trust you to do your jobs and I will hold you accountable to the outcome and you can hold me accountable to the outcome you know, 'cause the outcome.
Jason Brennan: If I don't do things right, I is, you know, outcome. The outcome if you don't do something right, is a, could be a pretty bad situation as far as a car repair goes, or a customer service situation if you're a service advisor. But the outcome. Of, of me making a wrong decision could be really great, or it could be really catastrophic as far as, you know, destroying the whole business or making the business super successful.
Jason Brennan: So believe me, I have a lot, I know that we had that, I have a lot in the line with my decision, so I take 'em seriously. I know you guys too do too. And that's the deal that was the deal we made and that was a turning point in that shop.
Michael Smith: Yeah, I wanna reflect on that, Jason. I don't want that to go by the folks that are listening.
Michael Smith: You made a huge cultural pivot with that meeting. I mean, the idea that you came to conclude that the masters don't want you to tell them what to do, which is absolute psychology, right? It's like we're good at what we do and all we're gonna, when we ask you for help, come give it to us. If we don't leave us alone.
Michael Smith: It's very much of a master's mentality, and the fact that you are willing as a master to give them the grace to have that space and then say to them, this is about trust, and make that a topic culturally. And then they feel trusted and you asked them to give you trust back, and then you developed a brand, you, your relationship pivoted in that meeting.
Michael Smith: You guys adopted a new way of having a relationship together. And I love your reflection. It was a turning point and it's worked out, right? Once you trusted them and they trusted you, they're, they took off and did their jobs and you didn't have to help 'em. You know, the results have shown, right?
Michael Smith: So I, I just didn't want that to go by folks about what a moment that was in the development of your company and what a massively good decision you made to let go boss, right? You let go, you gave it back to him and said, okay, I'm gonna trust you. I will leave you alone. I was trying to help, but I'll leave you alone, let you do your thing.
Michael Smith: And then they ran with it, which is fantastic, right?
Jason Brennan: It's, yeah. Thank you for pointing that out. That 'cause I didn't think of it in terms of mastery back then. I didn't even know anything about that. You know who I can, who I owe that. I had been dealing with those issues for a while, and then it came up in a meeting where I had to deal with it on the spot.
Jason Brennan: But I had been talking to my dad about it. He owned a plumbing company. I helped him build growing up. And and honestly, I, if he's listening, I apologize in advance, dad, if you're listening, but his company had a horrible culture, but it's and it wasn't on purpose. He's a great guy, super nice guy.
Jason Brennan: But it was really a, what we call old school, I guess, you know, and just do your job and I'll do my job and we'll all just be quiet and do our job. That was their cult, their whole entire culture. And that's it. But when I brought to his attention that people had I had the feeling that they were, people were unhappy that I was telling 'em how to do their jobs and get too involved.
Jason Brennan: He said something to me like, well, nobody likes to be told how to do their job. And that. Or guys that are good at what they're doing. Like he was, I think we were talking about plumbers. He said, well, yeah, when I was a plumber, I didn't like people telling me how to do plumbing. That's why I went to code school and all this other stuff.
Jason Brennan: I, I knew what I was doing. Could kind of feel like an insult when you're trying to help somebody. Sometimes to them it could be perceived as an insult.
Michael Smith: Yeah, you're right on. That's exactly what it's perceived as. It's like, don't you, it raises these intuitive natural questions, don't you trust me, first of all, and secondly mm-hmm.
Michael Smith: Do you question my skills? Do you think I can't figure this out if you leave me alone and you're not saying any of that. You're not saying a single one of those things you're actually trying to help. Right. But that's not how it's processed on the receiving end. So gr great conversation and kudos to dad.
Michael Smith: What a great comment. 'cause he is right on Works for plumbers, works for carpenters, works for business people too. I mean, it's white collar, blue collar people. It's human. It's human. Yeah. And it's wonderful story. So thank you for that. That was great. And thanks dad. So
Kent Bullard: I have to commend you on your attention to preparation before you made some of these steps, you know, you you leveraged a lot of your assets, you know, looking at people, looking at the financial aspect of it.
Kent Bullard: What do you think some of your strongest assets were as you were building and expanding, and what were some of the assets you were surprised to discover could be leveraged as you were expanding?
Jason Brennan: Strongest assets and ones I discovered, I guess I would say that honestly the mo, the biggest asset was the people we had in place already because that was what allowed me to even do it at all.
Jason Brennan: I wouldn't be, I wouldn't have been able to expand the business without the people we had there. And I made sure that everybody. That, that, you know, I wouldn't have done it if I didn't feel like everybody who worked for me at the time was somebody I would never wanna replace or lose. And that they would all work as a team to help each other and help me fulfill our mission, you know, or and allow us to expand.
Jason Brennan: So biggest asset, I guess, is the team that we had at the time and still have most of
Jason Brennan: yeah, so, so, and then assets we discovered, I think I had been working since I had been working partially remote before the expansion. Partly outta convenience and partly because, or inefficiency, and partly because I wanted to test my ability to not be there and have the operations run well.
Jason Brennan: I had developed ways of. Ways of not having to be there, ways to work remote. So leveraging technology, you know, zoom like the, like we're doing now, we're on a, we're on an electronic meeting, we're on a Zoom meeting or a podcast, whatever it is. So being able to, you know, being able to work from my car if I had to, or a cell phone or a laptop or whatever remotely.
Jason Brennan: I had sort of already set that up and I didn't realize, I didn't even realize how well that would work until I was at the second store all the time and didn't really need to drive all over the place to bring people, pieces of paper or whatever. So I guess just leveraging the technology that we had in place.
Kent Bullard: I like that you kind of had to think of new ways of doing things and, you know, circumstance. Thankfully kind of pushed you to try some of these new things, but I think it's interesting, you know, as you go to expand, I always talk about input versus output. You know, you wanna be able to change your input so you have a much greater output.
Kent Bullard: Right. And right. That, that is, I think part of the challenge you have to overcome is thinking I'm not gonna, I'm not gonna do two times the work I'm gonna do two times the better choices or better work. So they, you have a much higher outcome. I'm curious to know leveraging those assets and kind of expanding, what was one of the, because you're essentially developing a new way of doing things, right?
Kent Bullard: What was one of the biggest developmental challenges you faced as you shifted into this growth strategy?
Jason Brennan: That's a good one. I guess.
Jason Brennan: Developmental challenges. I don't know if it's a, you know, what you would define as a developmental challenge, but I might just be, I might be developmentally challenged in general. I don't know. But
Kent Bullard: that
is
Kent Bullard: not, I wanna clarify that as now what I'm, then you can go in there if
Michael Smith: you want to, but I wouldn't go there to fire you.
Jason Brennan: Anyway, you know, I went back to work a lot more hours. I had, I'll tell you one thing that was hard, it was that I went from working at one point in my career a hundred hours a week. 'cause I was doing everything the wrong way and had to subsidize my wrong ways of doing things and mistakes with my extra, with extra time personally.
Jason Brennan: And then I then I got used to working like anywhere from like 20 to 30 hours a week. I felt like I was only working 20, 30 hours a week. I was probably working 40 hours a week, but it was not necessarily, you know, not very stressful because I would just make my own schedule and do my own thing and not have a whole lot that I had to commit to.
Jason Brennan: Could have days off whenever I needed to or wanted to without a lot of notice. And then I went back to, for a short period of time, you know, there was like a month of 80 to a hundred hour weeks again.
Michael Smith: Which is interesting too, 'cause you shift, your mindset has shifted away from being in the business, but you make an acquisition and in the case of the way you did the first acquisition or the second shop, right?
Michael Smith: You had to go back into it. You were right back at the front counter again. You're right back into the store management role again, which was, you know.
Jason Brennan: Exactly. And I think the answer to Kent's question is I've never opened a second store and I, it was so long ago that I, that when I started the first one, you know it was kind of a slow organic growth.
Jason Brennan: Thing I started as a tech. It was just me. I had a few piece of equipment and I grew it slowly and it had, I had done that over the course of 18 years, so I didn't have a checklist or anything of what I needed to do. I didn't even remember everything I did. So when I went into opening a second shop, I tried to prepare and make checklists and all that stuff.
Jason Brennan: And I, you know, back to assets, one of the assets I think I biggest assets is colleagues, friends in the business. I got some checklists from them and some advice from them, but I still went, you know, every situation's different though. So when I went into it, you're right, Michael, I was right back into the operation, running the store while I was trying to finish remodeling and stuff.
Jason Brennan: And things didn't go as planned. I wanted to open up right away. I had a really good technician who started before we opened with me. That was an, that was another big asset. He came in and totally, you know, he did, he just, I didn't need to tell him what to do a lot. He just kind of knew how the shop needed to be set up to run for maximum success.
Jason Brennan: So, anyway, him and I were here before we opened and after we opened just nonstop reorganizing facility, improving setting up computer, we were still setting up computers and putting stuff together, you know, after we had already opened. So it was kind of. It was kind of messy the way we did it, but it worked.
Jason Brennan: So,
Michael Smith: yeah you cleaned it up. So let me just go forward now you've got store one, 18 years, store two, intense, quick, open, build it, learn the hard way. Now you go to store three. Just give us a quick overview of was that the best of both worlds? Was did it look like one or two, something brand new? What did you do?
Michael Smith: It was, what did you step in next? Right. So
Jason Brennan: that was, yeah, it was a little it went a little smoother. Okay. It, well, it went a lot smoother actually. Okay. So it was a a purchase from a guy retiring. That one never closed. It's remained open the whole time. That was a little bit of a challenge.
Jason Brennan: That was a different challenge than the one that was already closed. I had a little bit of time to do whatever I could have chosen when to reopen. I was able to choose when to reopen that store. The third one, I came in with better checklists. Better conversations with the current owner and kind of, I felt like I was, I definitely was more prepared.
Jason Brennan: I had a whole plan laid out to how I wanted to do it, but the biggest challenge there was I had never taken over a store that was, you know, running. It's kind of when when people were a would ask me how it was going in the first couple or three weeks or month or whatever, I would say, well, it's it's kinda like trying to change the engine of an airplane that's still in the middle, still in, in the air.
Jason Brennan: You know, it's because it, had they had all paper repair orders. They didn't use computer well, they sort of used computers. They had a secretary that would recreate handwritten repair orders in the computer in Mitchell. So that was kind of weird. The owner would write service in the shop. He had a big long desk in the shop and his desk was standing in front of that desk.
Jason Brennan: That was his job all day in the shop with impact wrenches going and everything. And since we weren't able to close it, or we didn't wanna close it, I should say, for any long period of time, for really any period of time that we, that's how we operated for, you know, I worked with him alongside him and my store manager, myself and my store manager worked alongside him for probably about a month, I would say so.
Jason Brennan: Right. We always, we knew going into it that we're gonna wanna. Implement all of our technology and systems there, but it was almost like we had to run like two systems simultaneously. It was really chaotic because there were repair orders that were all on paper and different, you know, notes highlighted with different colors that we didn't know what they meant and all kinds of crazy stuff.
Jason Brennan: And then we, you know, any new repair orders were started in tech metric. So it was kind of, it was kind of hard because we had all these clipboards with repair orders on 'em, floating around, and we had repair orders in the system, and they are in tech metrics. So we never knew where it was, whether it was, you know, people would, we'd forget.
Jason Brennan: Wa was this one in Tech Metric or is that a handwritten clipboard one and then, or is it maybe both? A little bit of, you know, a little bit of both. Right. It was just. Crazy.
Michael Smith: Did you manage to crazy keep the team through this? Did the team stay? Because that's quite a transition on the fly, right? We did.
Michael Smith: You're changing wings and engines while you're up in the air, and that's stressful on the people that were dialed into the old model too. Right. How'd you do with that? How did, how'd you do it though?
Jason Brennan: It was well, that would've liked to have conversations with the employees before, and I would've pushed harder for that if I had to do it again.
Jason Brennan: If I, or when we do it again before the transaction occurred, right before we bought the place, before we sealed the deal, and a couple things that went wrong, I didn't push hard enough for, 'cause it really would, there would've been no bad effect I don't think if I came in and talked to the employees before the deal was inked and the old owner was afraid to do it.
Jason Brennan: I didn't push him to do it. But I should have pushed a little harder for that. So anyway, how it went is I came in there one day and the owner said, Hey, this is the new owner. I'm selling the place to him, but I'm gonna be around for a while to help make sure transition goes.
Jason Brennan: Okay. And then I met all the guys and talked to him and they were pretty nervous at first, which is to be expected. I think it's understandable. So, I was there every day, so I was able to continually have conversations with them. I made sure I did a, you know, one-on-one intro meeting between me and them.
Jason Brennan: And, so it was, but it was pretty chaotic. 'cause I was doing all that stuff. Trying to answer your question, I kept everybody, we did let one guy go after a while, but we kept everybody from day one. And so,
Michael Smith: so the guy that went was released on your terms? Not them running out the front door.
Michael Smith: Okay. Thank you. Yeah.
Jason Brennan: Right. He was attacked. We used, decided to let 'em go and
Michael Smith: yeah. Not your kind of tech, right? Mm-hmm.
Jason Brennan: Right. Yeah. So, so it so we were dealing with that. I was aware that would be a pretty disastrous if everybody just walked out. Mm-hmm.
Michael Smith: Yeah,
Jason Brennan: somebody, it
Michael Smith: can be
Jason Brennan: somebody else I know in the industry and
Michael Smith: they, I was gonna say, we have a friend that did that Right.
Michael Smith: Day one, nobody was in the shop. It's like, oh, that's not what you all said, but okay. How'd customers move through store two and store three? How did you do both of those transitions? The customer side, you bought an, a dead one that people used to drive by and stop at. Did how, you know, how'd you go back after that market?
Michael Smith: And then how did the owner maybe help you with the second one? What, how did you try to lose as few customers in the third one too? Because this is fascinating case studies, right?
Jason Brennan: It's a good question. So the first acquisition, so our second store, we I drafted a letter kind of an intro letter from me, no, actually it was an intro letter from the old owner.
Jason Brennan: I showed it to him and said, Hey, what do you think about this? And it basically said, Hey thanks for being a customer for, shoot, I think it was 20, 25 years or something. He had the place, maybe 30 even. Thanks for being a customer for years. I just wanna let you introduce you to the new owner. I'm retiring and this the new owner and it had both of our pictures on it.
Jason Brennan: And we used to do some of our own mailers. So that one we did old school, we just, we got the customer list out of the customer out of Mitchell, printed it off put 'em on envelopes and we have a little folding machine. We just printed these things on eight and a half by 11 paper. And it was kind of a, like I said, just an intro, introducing the new owner letter, give him a chance, he's a good guy, blah, blah, blah.
Jason Brennan: And then I had him sign it. He said, yeah, that sounds real good. So he signed it and we folded 'em up, mailed 'em out to all the existing customers and. It worked out really well. We put a coupon in there too. Mm-hmm. You know, so,
Michael Smith: Can I just reflect style wise, that was a very familiar kind of a thing rather than a big old fancy, you know, multicolor shiny advertising looking thing.
Michael Smith: It was a letter, you know, it's a folded letter from the two owners saying, Hey, we care about you guys. Come back, we'll take care of you. Give us a try. I love that. Very familiar. I'm not surprised it worked.
Jason Brennan: Yeah.
Michael Smith: So that's really good.
Jason Brennan: Yeah, it was really well received. People, I was surprised at the response.
Jason Brennan: We didn't track it, but I was here every day and we get a lot of phone calls.
Michael Smith: Fantastic. Fantastic.
Jason Brennan: From that letter.
Michael Smith: Yeah. So the second
Jason Brennan: one, one just, people stopped by. The second one's
Michael Smith: rolling. Oh, I'm sorry, brother. Go ahead. I didn't mean to get in the way, so,
Jason Brennan: yeah. People even stopped by. Yeah. Yeah.
Jason Brennan: They, based on that letter, they came by and said, Hey, I just wanted to meet you. You're the new guy, and. It was kind of cool.
Michael Smith: Yeah,
Jason Brennan: that is cool. So that's, so they just, our normal deployed our normal marketing strategy that we already used at the other store with the same web company. And that took a while to get off the ground.
Jason Brennan: That was something unexpected. I was thinking, well, let's do this, these Google ad words, that's our main new customer acquisition marketing method. And I took it for granted that our Lansing campaign was working real well. And then the guys, they were like, well, congratulations. Yeah, we'll do your campaign for you.
Jason Brennan: But, and then when I asked 'em, well, how long before it. Becomes, you know, reaches max maximum effectiveness. 'cause they had brought up the fact that it takes time to build a Google AdWords campaign. That just doesn't happen overnight. They do research and they do testing and they make changes and then they just repeat that process and they said, oh, well, between three to six months, you know, I'm like, well, I went, oh, that's not good.
Jason Brennan: You know,
Michael Smith: is there
Jason Brennan: any way to make it one to
Michael Smith: two months? Is there,
Jason Brennan: They really did a good job. That's good. That's that. They did, they exceeded expectations. Good. But it did take a while and we did have to do and still are doing mailers. To supplement that. So, and then you're, so go ahead.
Jason Brennan: You were gonna ask a question
Michael Smith: about, oh no, I was just gonna say thank you for all that. That's a rich information base. What did you do differently with the store that was already underway? Now you've got customers that are maybe even the next day driving in to the driveway expecting their carter be repaired by the old owner.
Michael Smith: Right. How'd you, how did you handle that one? It's a different model. So,
Jason Brennan: That one, yeah, it was interesting 'cause there was yeah, the re repairs were in the store never closed. So, you know, I walked in and the secretary, we did have a secretary credit. So I take back what I said earlier. We didn't keep everybody, there was a secretary who actually was kind of becoming the face of the business.
Jason Brennan: She would talk to customers, take their key, receive their keys, give 'em their invoices. The owner would be the one who would talk to about repairs, but she was the one they saw when they came in and picked up their car. So, she decided she didn't like the ownership change and just, I never got to meet her.
Jason Brennan: She just decided she wouldn't come back to work. That's once she found out it was being, well, that's,
Michael Smith: that's tough. That's the face of the business at that point. That's a tough one to lose. So
Jason Brennan: yeah, ki kind of, you know, a lot of the owners or a lot of the customers knew the bill the owner, but a lot of 'em also like the secretary.
Jason Brennan: And so I got a lot of questions about it. Where's the secretary? Where is she? Where is she? And you know, oh, it's too bad she's not here. I like working with her, but I just reassured people, my, myself and the manager I hired to work there, just re reassured people that we would take good care of 'em and.
Michael Smith: Were you sitting at
Jason Brennan: the
Michael Smith: front
Jason Brennan: desk
Michael Smith: at that point? Did you take that role and you were the new face at the front?
Jason Brennan: Well, it was myself and the manager. I hired both and the new manager too.
Michael Smith: Yeah. There you go. Okay.
Jason Brennan: Yeah. Awesome. So,
Michael Smith: yep,
Jason Brennan: we were and he didn't last too long. I ended up but I didn't have to go through four total people, you know, and in Hobert it was, you know, three people, and then the fourth one stuck in the Crown Point store.
Jason Brennan: It was one person, and then the second guy stuck, Hey, the next
Michael Smith: store, it'll be a first time stick. Right? I hope
Jason Brennan: so.
Kent Bullard: I'm curious to know, because a lot of this has to do with managing people, right? So you've got the dynamic of there's people already in existence, they already have relationships with the customers.
Kent Bullard: There, there's also what people do I not have that I do need and I'm curious to know what your thoughts are or what your, needs are when you're looking for people at this point. So you've been through a few different managers. What's one of those, one of the key things you're looking for in a manager as you're expanding and growing?
Kent Bullard: So you're going out to the to the interviewing part of it. What characteristics are you looking for?
Jason Brennan: Well, ideally, that's a good question. I, ideally, I'd like to, you know, unless the fourth store we acquire has a good existing manager, which would be nice if I was gonna have to just hire a new manager, I'd like to promote someone from within my company, one of my assistant managers.
Jason Brennan: I'd like to we run two people on the counter at all of our shops. A manager and an assistant manager. And the assistant managers are supposed to learn to be able to run the store when the manager's not there. So they're. They're gearing up and training to become a manager if they want to.
Jason Brennan: They don't have to, but if they want to and they've gained the skills necessary, then they're able to be promoted. You know, they're definitely gonna be considered for promotion to store manager, either when we acquire a store or somebody else moves to a different store and now they're the manager there.
Jason Brennan: So, you know, that's the first thing I'd do. But if I have to hire if I have to, and I have had to just hire a store manager off the street, that's a good question. I'm not sure if I have the right answer. 'cause it didn't work out in the first shot for me any of the times. But if they've run a store before an auto repair shop before, that'd definitely be a plus.
Jason Brennan: Well,
Kent Bullard: maybe they were, well, I guess so. Another way you could ask this is. What are some of the reasons, and not to get personal, I don't wanna get personal for these people, but what were some of the underlying reasons why that manager didn't work out? Because then you can kind of say, well, okay, that's something I don't want for the next one.
Jason Brennan: I think that some of the reasons they didn't work out is their expectations. Were not, you know, really properly aligned with the reality of the situation. And that could be that could be my fault for not setting the expectation or making them, you know, making it clear to them what the situation was really gonna look like.
Jason Brennan: So the, you know, one guy we had who came in from a dealership had the right personality type, I think, and the right characteristics, but he ultimately I think he expected. This was in the Hobert shop. I, you know, he, I think he expected it to grow a lot faster. He was a little overconfident, I believe, in his ability to grow the store to a level where he'd be making the kind of income that he thought he should make in a short amount of time.
Jason Brennan: And then I think he underestimated just, he just underestimated the amount of work that it was gonna be to help me grow the store from. The level where it was when we bought it, where it needed to be. So,
Michael Smith: got Jason. Jason, can I grab onto a couple things that you said here that are super important.
Michael Smith: Why? And I want to cut some slack for you, for everybody listening to you too. You know, you took the blame, I guess, in a way for expecta expectations setting with him that you could make it more clear what it was really gonna feel like. And I just wanna cut you some slack as your friend, right? And somebody who knows a lot about folks that doing what you're doing, there's more unknown when you buy a new store than you wished.
Michael Smith: There was there, and no matter how prepared you are, how many checklists you have, there's a whole bunch of wrinkles in there that no, no due diligence process can be thorough enough to figure out. And so all of the projections are theoretical. And I'm not trying to, you know, put too much risk in here, but it's not as easy as it looks.
Michael Smith: And, you know, to cut us all some slack, it's difficult to say this is the pathway that we've, you know, we have 90% assurance. It's got you get into it and stuff starts popping and somebody you didn't expect to quits and a whole wave of customers leave for reasons nobody would've ever seen coming and all kinds of crazy stuff like that.
Michael Smith: So I, you know, there's lessons you've learned. I don't want to get by for people. It's in, it's awesome. It's your character that you took the blame for that, but man, is it hard to figure something out that you're doing for the first time with so many moving variables? And that's maybe one of the characteristics I just wanted to catch on the way by was part of the expectations that they might have is that, hey, this is the best we can do.
Michael Smith: To see what we think is gonna happen, but we're gonna have to be flexible. You know, we're gonna have to be resilient and persevere for a few months until we really do figure out how to dial this in. And it may not look like this. Are you okay with that? And if they say yes then at least that you have that door open that they don't get frustrated because it wasn't what I expected it to be.
Michael Smith: Right. Because you kind of set that up in your conversation in the first place. So,
Kent Bullard: and this is where yeah. Humility and grace come into play. You know, Jason, you were talking earlier about the hours that you worked. Right? And just bringing this to this point I wrote, I drew a diagram here.
Kent Bullard: 'cause I was looking at I thought it was interesting you said I worked a hundred hours because I didn't know how to run the, this shop. At that point I didn't have these competencies. And then I finally got it dialed in and I was working less. And then I took on a new challenge and then I ended up working.
Kent Bullard: More again. And I mean, this follows the mastery path, the mastery model a lot. And I think it's the same thing with these managers or the people that you elevate into these positions. You know, if you're hiring from within, is that yeah, there's gonna be things you don't know and it's gonna be difficult and hard and you gotta give some grace to allow for the time and the space to learn those competencies.
Jason Brennan: Yeah. Yeah. Really when we think of what, you know, with what, back to what Michael said for a second actually about setting expectations and the fact that we really don't know we can set, we can set goals or we can talk about a, in an ideal scenario or a likely scenario, but we don't know actually what's gonna happen.
Jason Brennan: Exactly what's gonna happen and how it's gonna look and feel, and, I did do that with the, I did. Now that I think about it, I did tell this guy exactly what you said, you know, or sort of what you said, that we don't know exactly what's gonna happen. It's, you know, might be a little rocky at times.
Jason Brennan: Your base pay is a pay that you told me that you can live on this pay. Well that's good because it might happen for a month, or it might have to be that way for eight months. We don't know how long it's gonna take to grow the store to where you can make more money, you know, your desired pay as opposed to your base pay.
Jason Brennan: And I think this guy was just a little overconfident and, or a little, maybe, just whatever you wanna say. But with that part, one lesson I learned. From that particular guy managing the store was that I, he had been doing well and then he got demotivated when things weren't going the way that he thought they should.
Jason Brennan: We had a really good month and then followed by a really slow month, and that's when he got demotivated. And I actually was, I had been ignoring my Lansing store, which was fine I guess, but really just, they did need me for a few things here and there, and I just couldn't give them any time. So once I got that guy, once that guy got, that manager, got his feet in the ground in her second shop, I ended up, you know, going, once I felt like he had his feet in the ground, I went back to Lansing and spent a bunch of time there repairing some equipment and things like that because I realized we had never, that, I just always did it and we never assigned it to anybody or had any procedures or processes in place for equipment maintenance.
Jason Brennan: And since everybody was. No, nobody wanted to bother me. I found out that I think it was like a, at the six month point of me hardly ever being there, I found out that there's a bunch of broken stuff and that I, that no one was telling me about. So, one of the techs called me, he goes, Hey I hate to bother you, but this thing's broke.
Jason Brennan: I think it was one of the sleds on the alignment rack was broken. And then he said, well, yeah, and by the way, also the tire machine doesn't work right. We have to keep, you know,
Kent Bullard: well
Jason Brennan: we're at it. Here's
Kent Bullard: another thing on list,
Jason Brennan: you know, I was wondering should we call someone to fix this stuff or are you gonna stop by and help us with it or what?
Jason Brennan: And a lot of it just fell apart from lack of maintenance. 'cause I wasn't there and I never put together a shop maintenance checklist or a procedure. So we now have that in all the stores. But I spent like a month. Myself. 'cause I thought I was able to, I really shouldn't have, but I spent like a month fixing and refurbishing replacing stuff and then developing a maintenance checklist and assigning it to people.
Jason Brennan: And then by the time I got back to the hobert shop, the second store, I found out that pretty much the whole time I had been gone, the leadership in the second store, which was the manager, had been super discouraged and even started undermining the company and telling people that he thought, giving people his opinions about where he thought the place was headed, which is nowhere good.
Jason Brennan: And it's not gonna work out here. I don't think this growth plan's gonna work. I'm not, maybe you should. He even told one of my techs that maybe he should start looking for a job elsewhere. This was all happening while I was gone for that mostly gone for that one month period of time. So I walked into it and figured, and luckily I have a part-time guy that works for me who does helps with operations management and recruiting.
Jason Brennan: Max is his name. He's the one who figured he was there more than I was and he clued me in on it and he goes, Hey, when you get back here, we got some problems to deal with. And then one of my techs was already out had already gotten job offers by the time I caught wind that any of this kind of stuff had occurred and we were able to keep 'em.
Jason Brennan: But morale, yeah, close call. Morale was super in the dumpster and I had to come in, myself and Max both had to come in and bring that back up. We had to fire both the manager and the assistant manager. They were kind of cohorts in the, the eing of the shop.
Michael Smith: Mm-hmm.
Jason Brennan: And
Michael Smith: You have so many rich experiences, Jason, and you know a couple, I just wanna catch on the way by.
Michael Smith: As you scaled, you've developed the ability to grow from within. And this idea that people can career path with you and grow and stay and do more and achieve and be recognized and take on more, very much of a human development path that's satisfying to people. And it means that as you do that, you know, the fourth store, the fifth store, the sixth store, you have a capacity not to have to go outside and bring in people that and I'll just say this, don't have the trust in you and the system because they come from the outside.
Michael Smith: And when you groom 'em from the inside and people know your character and trust you in the system and know when something goes wrong that it's gonna get fixed, right? The patience, I mean, the demonstration of this is the patience that your team gave to you in trust, just to not even you know, it's being the beloved type owner that you are.
Michael Smith: They don't wanna let you down. They know you're busy. They don't call. But the other side of that is the fact that, you know, they're not gonna blow their lives up. At some point somebody finally says, okay, maybe we should just call 'em and let 'em know, and then you're running and fix it, right? And again, one more thing is you scale.
Michael Smith: Just these are lessons that you've learned that are magnificent to share. As you continue to scale, you might have somebody other than you as the new store landing receiver, right? Somebody who drops in, who's a super. Internally developed, knows the fine tuned way can go to the new store, make sure the transitions occur, and you're not lost in that system, right?
Michael Smith: Because you're the only guy historically that could do that. But now you have a scalable model where you can have a, an expert follow you through the new transactions. And all of this is just fantastic lessons and stories that you're sharing. And I just wanna catch some of this on the way by you.
Michael Smith: You've really learned a lot in the way you've gone through this. And it's, and thank you for sharing all that. It's great experiences and you've mastered a lot, even in the solutions. The way you've solved them is full of rich culture building concepts too. So thank you for this. Jason. You're, I really like watching you go.
Michael Smith: It's great stuff.
Kent Bullard: So it's, thanks Michael. It's a lot of, evidence of patience and persistence and growth in your leadership. And I think that's where I wanna take the conversation a little bit is to look at, you know, how have you grown as a leader between, you know, your early career and the first location, and then now where you're up to three locations.
Jason Brennan: So could you, I'm sorry, can
Kent Bullard: you repeat that? How has your leader, how do you feel or what are the ways that your leadership has changed or evolved over the years?
Jason Brennan: Oh yeah, man, I'll tell you a lot. It's sometimes I learn by, unfortunately, I'm one of those kind of guys that learns by mistakes a lot.
Jason Brennan: So that's why I have so many of these stories. And I, but you know what when you're a better leader, you make less mistakes like that less of those kinds of mistakes. So I, there was a huge incentive for me to grow as a leader and, one of the, one of the biggest incentives was was just realizing that man when I re, when I realized that a lot of the, a lot of the problems I was having was due to poor, were due to poor leadership.
Jason Brennan: I really wanted to learn. So I started as the kind of, the phases I went through was I started kind of like your traditional old school boss. That was how I viewed leadership. It used to,
Kent Bullard: well,
Jason Brennan: yeah, well, yeah, my dad and people who I'd worked for as a technician, you know, usually, and any of the places I worked, you tried not to talk to the boss.
Jason Brennan: 'cause if you're talking to the boss, that means there was some kind of problem and, you know, it that was the culture I came from. So that was how I led. And it, it used to work. It was just never a good idea. Even if it worked, I don't think it was great. It doesn't work anymore. 'cause we have a technician shortage and for various other reasons, people just they won't put up with that kind of positional leadership mentality anymore and stay working for you.
Jason Brennan: They'll just leave and find somebody else to work for. So I couldn't have continued doing that even if I wanted to, but I'm glad I'm not doing that anymore. So I would just tell people what to do and expect 'em to do it like I would do if I was somebody's employee. And it didn't happen. Then I evolved into more of a, kind of a learning mode and I made a bunch of mistakes there too.
Jason Brennan: I maybe gave people too much slack or became too close friends with 'em, and I was just figuring out how to, how do I. I was thinking to myself, how do I how do I tell people things in a nicer way than just saying, just do this? And I thought that was all it was about was just how I said it to 'em.
Jason Brennan: Maybe they didn't like the way that I said it, or maybe I needed them to ask 'em more nicely or something. And really, that wasn't all that's good to do, but that's not what it was all about either. What it really I think became is, and some of it I went to Michael Smith's leadership intensive a couple of years ago, I think it was, and all the things I'd been experimenting, the style of leadership or style of management that I had been experimenting with, all kind of came together in my mind when I took Michael Smith's class read some books, you know, and among other things.
Jason Brennan: And then kind of understood that people are. People are all different. They might perceive the way that you say things to them in different ways. They're looking for the good employees, or I should say employee ideal employees. They're looking for some kind of career path to mastery. And if we can give that to them and convey that we're giving that to them, and ask them what it, what they, what it is that they actually want out of their career, and align our company's goals with their goals so that we all succeed together, then then they'll, you know, they'll wanna, people want to go to battle for you and do what you need 'em to do when they understand that it's good for everybody.
Jason Brennan: Mm-hmm. Mm-hmm. And,
Michael Smith: and Jason and you and they bring their own energy to it. You're Bri Yeah. They wanna it, they're not, they do it because they wanna do it. Yeah.
Jason Brennan: Not 'cause you told 'em to do
Michael Smith: it. Right. You're not bribing them, you're not threatening them, you're not cajoling them. They come to work with their own motivation because you're all going in the same direction, which is powerful.
Kent Bullard: So I'm cur I wanna know, if you could go back to young Jason before a lot of these challenges and pursuits that you've had what's the one lesson that you would want young Jason to know? Yeah, great question.
Jason Brennan: That's a good question.
Michael Smith: Depends on how far back leadership wise. Yeah. Back in the fifth grade or I'm
Jason Brennan: just, yeah, sorry.
Jason Brennan: If I think back to the beginning of my, the beginning of a business ownership I don't know if there's one, one that I can really. Point to, to say that's the one that would've made my life a lot easier. But there's a few main ones. Don't open a business if you don't, if you don't have any, at least some basic accounting and some business management principles.
Jason Brennan: And don't go into business under capitalize. I would've told myself that, you know, have a business plan, get some industry expertise involved, get some basic basic business management and accounting training that, that, that should have done that first, you know, would've made my life a lot easier.
Jason Brennan: I probably would've shaved I probably realistically could have shaved, you know, seven to 10 years off of the time it's taken to get to the point where we are now. 'cause I think the first seven to 10 years we just spent spinning our wheels and doing the wrong stuff. So,
Kent Bullard: what now at the stage of your personal professional growth, how do you define success?
Jason Brennan: Well, that's, it's a hard one. I I thought about that a lot too recently because I've been thinking, because people always ask me, well, where so you're gonna buy another shop pretty soon or build one? Or, what are you gonna do? And then I tell 'em that my goal is to have 10 by 2030, and still gonna do that.
Jason Brennan: But I, so I start thinking to myself as I'm getting asked these questions, is that my goal is, does that mean I'm successful when I get to 10 stores? Or and am I not successful now because I haven't, you know, in a, I guess the what's that cliche? It's not about the. It's about the journey, not the destination or something.
Jason Brennan: It's kind of a, I've been thinking about that old cliche phrase a lot more lately and thinking that I need to redefine what the, what success means to me. So I'm not exactly sure, but I know it's not, when I hit 10 stores, that's not the definition of success to me anymore. It used to be if you just wanted to say, well, what does it mean to be successful?
Jason Brennan: Well, when I'm done with this plan, then I get to 10 stores, that means I'm successful. Well, that mentality could cause some people to think that they're not successful because they haven't achieved that goal yet. And that's not necessarily the case, probably not the case. But that's the way that I've felt before I, I've had those feelings and I think that comes from.
Jason Brennan: You know, driving myself too hard over the years and maybe being a little too self-critical. So, I'm redefining what success means to me and part of what it means, I know for sure is what I said earlier about facilitating the growth of other people. It's it just makes me happy to see, and I feel successful when I do that.
Jason Brennan: So that's definitely one of the things that defines success in my mind, is that I'm helping other people who achieve their goals and that they are, they're happy to come to work every day. They have a job they like to do, and that's something that I'm helping with, or I'm part a big part of so the number of people I guess I, I guess you could say the more people feel fulfilled in their careers and rise to the top, the more successful I am.
Jason Brennan: That's for sure.
Michael Smith: Great
Kent Bullard: answer.
Michael Smith: Great answer.
Kent Bullard: So I, I want to end with this question. Michael, do you have any other questions?
Michael Smith: No, I was thinking of the last question and how, this is such a segue into that last question.
Kent Bullard: I think we're kind of making our way to this point. You know, what's the legacy that you hope to leave at the end of all of this?
Michael Smith: When all the dust settles, right? Yeah.
Jason Brennan: Well, yeah I've been thinking about that a lot too. When all dust settles and, you know, someday I'm sailing off into the sunset or probably still working on a car, 'cause I like doing that. Whatever I'm doing, whatever that is, whatever it is that I'm doing at the time, I like people to think man, that guy was a really great guy to work for.
Jason Brennan: It's too bad he is not my boss anymore. You know, that's just the general thoughts and feelings I like people to have about me and that. We really built a good thing together and I'd like to see that still continue. I'd like to see that even when I retire someday and pass along the torch to someone else to run the business I'm leaving them with a good, a really good solid foundation for even more growth.
Jason Brennan: And I'd like to see that, that that we don't lose the family aspect, the family feel to our business where, you know, people help each other because they know that's the right thing to do. And by helping each other and helping customers in the process, we make money and everybody's happy.
Jason Brennan: I like to see that kind of thing. Continue.
Michael Smith: Yeah. Let just take
Jason Brennan: Yeah. Pass beyond me.
Michael Smith: Yeah. Follow on question about the company the community legacy impact that the company might leave, what would be a note that you'd like to have the, how does the community see it when you've built it the way you wanted and handed it off to the next steward?
Michael Smith: Right. What would you like them to see when they look at the company?
Jason Brennan: I'd like to see that, I'd like them to view us as a place where they can a place they can trust that they can rely on. And that we're making a positive impact on the community. Not just, we're not just here to be here or to make some money or whatever it is.
Jason Brennan: We're here to that we care about the community. And I would like, so I guess in a nutshell, I would like to leave the. A leave off in a way that. When, let's say whoever takes over for me someday, wants to build a fine tuned auto location in a town that has never had one. They welcome us in with open arms and say, great where do you want to put your shop?
Jason Brennan: That's, we love to have you here. That's how I'd like to be viewed by the community.
Michael Smith: Fantastic. Jason, fantastic. I
Kent Bullard: love that
this
Kent Bullard: has been such a. Phenomenally enriching conversation. Jason, you've shared a ton of experience and I know that there's a lot of people out there listening who have, are either currently dealing with this or they're gonna deal with these issues, thinking about it.
Kent Bullard: And you've given them some reassurance and some insight on how to approach these problems. Thank you so much for being here. Truly. Listeners, if you have questions or comments for us or for Jason, obviously make sure that you join the conversation because we'd love to, to have you a part of this.
Kent Bullard: And ask them down in the comments below. If you enjoyed the content here, please like and share. 'cause it helps the algorithm gets it promoted out there. So again, we spread this information and help uplift the industry. And if you want more information about the institute and what we do you can find that at we are the institute.com.
Kent Bullard: Jason, thank you so much for being here.
Michael Smith: Thank you, Jason. Thank you so much. Thank you guys for having me. It's good to see you, my friend. You're welcome.