Episode 268 - Mastering Shop Management and Technician Relations in Today’s Auto Industry

0:02Hey folks, David here, and I'd like to thank you for joining us for the Changing the Industry podcast. Lucas and I started this podcast with the goal of capturing the frank and open conversations you typically have at industry events. Those conversations cover the challenges we face in our business and lives, as well as difficult repairs, new products and services, and everything in between.

0:26We hoped that these recordings would spur our listeners to enact the change they'd like to see in their own lives and businesses. That's also why we've partnered with the Institute for Automotive Business Excellence. My first management class was with Cecil Bullard, and his genuine passion for helping others in an honest and ethical manner permeates his entire organization. And if you need some of the Institute's help, they have a special offer for our listeners.

1:00Click the link in the show notes and get signed up for a free business analysis. They'll go over your current situation and give you advice on your next steps. And they have everything from free resources and online classes to peer groups, one-on-one coaching, and specific help for MSOs. So don't miss out on this great offer. Click the link in the show notes.

1:26And now on to the podcast. That's it. That's it. That sounded hostile. No, I'm just playing, man. Austin, I miss you so much. Now he's backpedaling. Hold on now. Hold on now. So I walk into my BNI group this morning, right? I walk into my BNI group and I thought It said closed meeting on the sheet and I'm like, well, that's weird.

1:50We never have a closed meeting. And so that we go through our normal thing. And then, uh, and then everybody just started yelling at each other, just cuss words flying back and forth. F you, you stepped on me. You don't do this to a woman. I can't believe you said this. And I'm just sitting there like, what in the hell did I just walk into?

2:13What is going on? I had no idea any of this was brewing in the background. Apparently, we're— you're in a B&I group, you're only supposed to be in the B&I group. You're not supposed to be in any other industry, uh, exclusive group. So I'm the only repair shop in my group. No other repair shop can join my group. Yeah. And you're not supposed to go to a competing industry-exclusive networking group.

2:42That's what you're not supposed to— that's a rule apparently, I don't know. And the idea is like, if you've got a roofer in the group, like, which roofer do you, do you send the referral to? Because you're in the BNI group and you're in this other group that's also industry exclusive, and you got a roofer in that other group and you got a roofer in this group.

3:00So who do you send it to? And the idea is you're supposed to send it to the BNI person, but if you're in two different groups Like, who do you send it to? And I get that, that makes sense. I get the loyalty thing. Yeah, okay, whatever. Well, apparently all these people had been joining this competing group I didn't know existed. I don't know, whatever.

3:23They had been joining this other group, so they were going to two different meetings in two different groups that were double dip industry exclusive. And one guy had been going to One guy had been going to this thing for like 5 years and nobody had said anything. And then somebody else decided they were going to do the same thing and she got called out.

3:46And then, so then in front of everybody, she gets called out and she's like, this is bullshit. This is some teenage shit. I don't know why this is getting brought up. And, and then somebody— this is a Kansas City thing, bro. Dude, I had no idea any of this was going on. These people were acting like children all over the place. Of them.

4:06And apparently somebody had beef with somebody else that they were stepping in and doing. It was the plumber in the group. The plumber was upset that the handyman was doing plumbing work. And they're like, we're the plumber. Like, why aren't you sending that to us? You need to tell the handyman not to do the plumbing. And the president of the group, instead of going, hey, Uh, I'll handle this, and pulling the plumber and the handyman aside and going, hey, get this hashed out.

4:39He's like, hey, I'll deal with this when I deal with this, like, get off my back about it. And that pissed off the plumber, and then the plumber apparently approached the president, and then they got into it. He then accused her of screaming at him. She accused him of stepping on her, like she was— he was gonna like throw hands. These are all— I'm just curious, like, you didn't video any of this?

5:02You didn't like grab a camera and think this would make great social media? I was live texting the whole thing to my wife and I'm like, I don't know what the hell I stepped into. This is insane, man. This is supposed to be a business meeting, a professional business meeting. So one thing I can't handle is if there's like some sort of like beef or whatever, like if I have some sort of quarrel with you, um, and then I decide to not say anything and just hold that in over the course of like a 6-month, year-long period.

5:37And then, right, you know, that finally all just explodes all at once 2, 3 years down the road. And this person or group of people might not even know that they wronged you, man. And one of my issues, almost to a fault, like if there's some sort of problem, like I cannot rest until we find a resolution. Like with my employees, and everyone says, oh, Austin, you're beating a dead horse, whatever.

6:03Like, no, if I have an issue with the way that you're operating or the way that you're conducting business, like, I literally just can't let it go until I know that you know that I know and we have some sort of, you know, resolution. Yeah, dude, I'm with you. And like, I, I, look, I, I have been the people pleaser. I've put off like upsetting people for a long time.

6:26And this mess that all the other stuff I've got going on in life, I'm like, okay, I'm done with this. I see exactly where this gets you. This is shit. This is complete shit. I don't like it. What you're both doing wrong is that you care. Yeah. I just let it go. Like if, if somebody did something wrong to me, like first off, I assigned it to It wasn't malicious.

6:53It was just, it was a misunderstanding. It was incompetence. It was whatever, whatever, whatever, whatever. You just let it go. If you find out it was malicious, you're like, oh, okay. I'm just going to stay away from that person. I'm not going to go bring it up with them. Like, what's that going to do? I don't care that much because you're weak, David.

7:10No, I just, I don't get that. I don't think you understand. But like, yeah, I'm not going to change that person. I'm not going to change you. Like, I'm not sure. I am. I'm gonna reconfigure their face. But there's two— there's two scenarios. There's two scenarios, right? You have times to care and times to not care, because, you know, that you have, um, you have people that will change or people that won't change.

7:37Like, for example, if I have an employee that is doing some sort of shitbag behavior, right, and I bring it up to him, you know, a good employee is going to you know, fix that, nip it in the bud, whatever. But if I see that that employee, you know, is constantly, you know, making the same mistakes even after we've had a verbal discussion about it, at that point, hey, you do you, man.

7:59Hey, that's all good, man. You want to go home early? No problem. And then they act fucking surprised when a new toolbox rolls in, you know. But dude, I tried getting this hashed out. You didn't want to listen, so, you know, you gave me no other alternative at that point. An employee is different though. Yeah, employee is different. Yeah, yeah. Well, I mean, that's what I'm saying, David, is that, that like in a case where it doesn't impact you at all, right?

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9:16So if you're using PartsTech already, start sharing that referral link. And if you haven't signed up for PartsTech yet, what are you waiting for? Click on the link in the description or go to partstech.com/podcast. That's partstech.com/podcast. Hey, one more thing. If you find out that your shop management system doesn't integrate with PartsTech, it's time to upgrade. David and I use what we believe to be the very best system on the market, Shopware.

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10:03Like, we're settling on a house this week where we're, we're selling the house and, and the dude that was supposed to be buying it was doing shady shit, right? And that deal fell through, but he was trying to manipulate, he was trying to play games that impacted us. And so eventually I just had to be like, hey dude, I don't really care that it hurts your feelings, get the fuck out, right?

10:23And so like when it impacts me, when it impacts my family, nah, I'm done playing games and being the nice guy right now. I will drop a shot across the bow. I'll indicate like, hey, I'm frustrated, I'm irritated. But if you get me to the point that like it comes to my family, my family's business, the well-being of my family, the well-being of my business, and you— nah, dude, I'm done, right?

10:49Like, I just— I'm not doing it anymore because I don't know that so much. You're like involved in stuff though. See, that's the difference. Like, you, you've got community stuff going on. You like— you're doing business with more than one person at a time. Like, it, it and, and like involved business dealings, like you're in business with that other person. Like, I don't do any of that.

11:10That's what I'm saying. Like, I just stay away in general from everyone. We're not exactly sure that you do anything at all, to be honest with you. Well, that's what I'm saying. Look, if you just stay the hell away from people, uh, you don't get like involved in any of this and it doesn't turn into this whole like blowup thing. And if it does, you just stay away from you.

11:28Like, okay, I'm just not going to do business with you anymore. Because it turns out you're a shitbag. I'm sorry. I mean, I see that. I see that. But like the very first, right? Like I go back to the very first technician, like actual technician that I had hired and man, like dude was super toxic. Dude was a giant pain in the butt.

11:48And I, somebody in ASOG got raked over the coals and I'd been talking to this person about a particular situation he had. And what the deal was is the shop was not performing. And he's like, hey, I've put policies so my guys get paid more, so the shop gets, you know, appropriately billed. It's like a custom shop. And so they don't, they don't work like a typical repair shop with a build hour and that kind of thing.

12:11It's like, hey, we work on the vehicle till it's fixed. They gave us a budget. We have to document how many hours we spend on it. And they, he just could not get it to work no matter what he did. And I'm talking to him and it's like, dude, The problem is one technician. I'm telling you, like, based on what you're saying, somebody's in the shop keeping this process from being implemented.

12:31They're going from person to person to person something because there's a reason, because the process makes sense, the process works, the process is good for everybody. Why wouldn't everybody just follow it? It's simple. It's easy. Like, why would you not do this? And so I said, hey, you need to start figuring out and start asking questions. Turns out it was one technician.

12:49And I'm like, dude, what was he doing? He was going from person to person saying, you shouldn't do that, he's going to cut your pay, he's going to this. And at the end of the day, I think it was a technician who was super lazy. He wasn't performing well, he wasn't billing the hours. Everybody else was working their tail off while he was sitting on his butt and he wasn't actually clocking hours.

13:09So if he clocked hours on a job, they were going to look at it and say, nothing's been done. Like, what are you doing? Or you don't have the ability, or whatever it is. It was going to out him. But instead everybody else listened to him and they were like, yeah, he must be right. Like he's been here a long time and he's a master tech and he's all these things.

13:26And so dude goes and fires him. And then ASOG, like of all the things, ASOG used to be, hey, you need to fire that employee right now. You got to get rid of the toxicity. You got to get rid of the employee. The employee's the problem. And now all these people are like, no, it's not the employee's fault. It's your fault. Nobody can make up their damn minds.

13:44Like they just want to blame somebody for the problems, I guess. But I don't even, you know, and I mean like Austin, it to your point, like, hey, I'm sorry, but this isn't working, go home. I love firing people, bro. I love firing the cancer. Like, you have so many technicians that think they're just like the best thing in the world and the shop's not even gonna, uh, keep operating without you.

14:05And I love it, dude, because when I get to that point where I realize like there's no breaking through to this person and, you know, that they're not gonna— they're not gonna follow the process no matter what I do, I love that. Because I just get to be so nice to them. I get to be so nice while I find their replacement.

14:21Yeah, though, if I gotta fire somebody, I screwed up. That was not the right hire. Like, I did a— like, I gotta take a step back. I hate firing people so much because it's not even like I'm gonna hurt this person's feelings. Like, yeah, I'm gonna— I'm gonna screw this person's life up. All of a sudden they're not gonna have a job, they have family, they got kids, yada yada yada, all that.

14:43It's not even that. It's the, where in the hell did I make a mistake? Like, did I not see this in the interview? Did I not see this in the first 90 days? Did they tell me something I'd missed? Did I not ask the right questions? Like, where in the process of me hiring this person did I make the mistake that this person now has to be fired?

15:04Now, trial and error, baby. Trial and error. I mean, yeah, you just bring them on. Where are you finding these people? So that's lit, dude. So let's, let's, can we all do like an introduction on each other and then maybe we could circle back around to this question? Cause I think this is really, I don't know anything about you guys. I don't know where you're from.

15:23Let's do an introduction. Can we do that? We just roll, dude. We just flow. Well, I want to get, I want to know you. I want to get to know you guys, man. No, I promise you don't. Yes, I do. Terrible. Most people are trying to get away from us. You guys are trying to take me to the bedroom and you haven't even, you know, took me out to dinner yet.

15:40That's David. David takes everybody to the bedroom. It's just how he rolls, man. I'm not that kind of girl, man. He's getting buffed. You know how you like to fire people? Just take him to the bedroom. I like to give people the third degree on a podcast where we haven't even introduced each other. That's how you go and fire people. Me, I get people on the podcast and then I give them the third degree.

16:04You got to get that energy out. You would just fire people. Hey, this is my first podcast. I can't go first. Somebody else has to go first. This is my first time on a podcast. Okay, that's Lucas. You're on the Changing the Industry podcast, and what we talk about is the industry and the problems that are present in the industry, and we break them down and we have real discussions about it, right?

16:25We don't filter it because we saw a lot of shows and we talked to a lot of people where it was all filtered, it was all bullshit, and it was all like trying to make you feel good about things, but it wasn't real life. It wasn't like it was being in the shop. And so the podcast started because we used to go to these trade shows, right?

16:39And we would go to the trade shows and we would sit around at dinner and we'd sit around at the bar and we'd talk about business. And we realized that those conversations were super valuable because, like, we were hearing real-world experiences, what you had been through. One guy says, hey, I just fire them right off, I don't put up with it. One guy says, hey, I must have made a mistake if I do that.

16:57One guy says, hey, I'm trying to learn from both of you, you know what I'm saying? And so we started having these discussions, and then COVID happened. And so all of a sudden there's no events, there's nobody to talk to, there's no way to get involved and have those hard discussions. And David and I kind of had been talking a lot anyway, and we sat down and we decided, hey, let's have some hard discussions about the industry.

17:18Let's start doing a podcast. I had my kind of— my journey was, is like I had a shop, it was a giant effing mess. It was doing like $14,000 a month in sales. It was me. I was the service advisor, I was the technician, I was the diag guy, I was the cleanup guy, I was the porter. I was everything, right? Quick, quick, quick.

17:38We're going on 7 minutes here. I like it. I like it. Keep going, Lucas. You know, but also you got to remember what makes the podcast work. You got to remember over here is a lot of listening. Whoever's listening to this is going to be 250 episodes deep. And so they've heard this story 250 times. How many more times do we need to hear the story, Lucas?

18:01We don't need— his name is Lucas. David, he's from North Carolina. David, he lives in the mountains. How big is your shop now, Lucas? After it started in 3 bays, it's 10 now. How many techs you got? I got 4. Hell yeah, brother. Yep, $50,000 a month is— or $50,000 a week is what we target for. $200,000 a month is really what we shoot for.

18:24That's what we— I want to do $50,000 a month. That'd be great. We, we're moving— like, we, when we moved, we knew that we would have to grow into this space and capture more clients and capture more ability. We have capacity for the fifth tech right now, but we're not running a fifth tech right now. We're far more interested in the right people in the shop than we are just people in the shop.

18:43I have tried that. I tried to go a little more aggressive model at one point, and it made me feel super icky, and I'm just not about that. I want to fix cars. I want to fix cars right, and I want to create a cool experience for my guests. And so that's what I would do. Can I ask you a question, Lucas?

18:58Why is it that he can pull off the mustache and I couldn't? Is it the hair? It's because you look like one of those firefighters from, um, what was the band that did YMCA? I'm just being honest with you. The Village People? Yeah. You know, he has no idea who the Village People is. He looks like he's 22. But he might. I'm just saying you look like the cowboy from the Village People with the mustache.

19:21That was for you guys. Yeah, I appreciate that. All right, David. All right, you guys want me to go next? No, hey, let's let David go so you can hear what a piece of— anyway, uh, and then we'll, we'll ask you. David, share who you are. I own a shop in Kansas and I hate it. There you go. He hates shop ownership, dude.

19:43It's the worst thing ever. He hates it. Now, if you need creatine He's got the best creatine on the market. He does have the best creatine on the market. So if you're, if you're into exercise, if you're into like health and things like that, David's got it going on there. I won't, I won't deny that. As far as a shop, until I get bored.

20:03Yeah, I wouldn't take any advice from him as a shop owner because it's shit. If you want advice from David, how many techs you got, David, and how big is your shop? I have, uh 4 bays and, uh, 4 techs and, uh, shop manager and then assistant. But what about the other shop? Does that not count? Does the bay in the other shop not count?

20:26I have an ADAS bay location. I have 2 buildings. The other building is a money pit. I just, I throw money into it and it goes away. I love ADAS, man. I did ADAS for like a year and a half. I worked for a company called W&M. Out of South Carolina here, and we were a mobile ADAS company. So we went to all the body shops in the area and did ADAS calibrations, airbag programming, all that stuff.

20:53I'm super into like the really nerdy stuff. Like we have OE software for like pretty much every Japanese and domestic make and model, and I learned how to do all that shit whenever I was with that ADAS company. I, I think we're going all OE tooling at some point anyway. Like, I'm to the point right now, like, most everything we do, we need OE tooling at one point or another anyway.

21:19Um, there's some that I'm not that interested in going OE tooling, like Subaru stuff like that. I don't do enough of it to worry about it. But like BMW, Mercedes is not something I'm gonna go spend that kind of money on. I have another way to access OE tooling for it. But like Volkswagen, Chrysler, Ford, all of that is OE Tooling. Yeah, Chrysler's the worst with all the secured gateway crap.

21:44Um, Nissan, Infiniti, just went steps. Yeah, it's not too bad. The tokens, that's just the most annoying part, dude, because they make you change your password every 30 days and you got to log in to 5 different places to buy the tokens and actually do the programming. I mean, I think they intentionally make it as hard as possible just as like a You know, just to kind of piss on the independent shops, but what can you do?

22:07You'd be, you'd be surprised. It's because the OE has to buy the software from this one company and then they have to then outsource X and Y to this other company. And then they have to outsource Z and something else to this other company. So there's like, there's like 7 or 8 layers of companies and the whole time Stellantis is just like, we're letting them deal with it and we don't care.

22:29Yeah, it is what it is. And every step of the way somebody wants their dollar, so they're like, hey, you got to pay here, and then hey, you got to pay here, and hey, you got to pay. But like, for YTech, buying subs. Yeah, but like, for YTech, the thing I don't understand, why do I need like 4 different softwares? Just, there are 4 different tokens just to program a TCM because you got to get like the tech authority, the programming, like the, you know, like you literally have to buy 3 or 4 different items before they'll actually let you program that TCM.

22:59I I don't think that's Stellantis. I think— We're finally getting into a good roll and here comes Lucas interrupting the episode. Folks, now you know exactly why I hire Shop Marketing Pros to do my shop marketing. It's that I am spastic and all over the place and I lack consistency. But here's the thing, that doesn't work in marketing. You see, marketing takes 30, 60, sometimes 90 days to be effective.

23:27And I was all over the place with my marketing. There was no consistency at all. Caused these waves in my business because I was so inconsistent. And that's why I am so happy to refer Shop Marketing Pros. They bring consistency. They are true professionals. I'm going to encourage you, go down to the link below and get your free digital marketing inspection. Just like we do digital vehicle evaluations for automobiles, they're doing the same thing about your marketing, and they will help you get your business turned around.

24:03Thank you. Yeah, they are. Source it to like some other company. I think that there were, there were systems set up behind the scenes that intentionally favored certain organizations so they could make a lot of money. Um, I don't know that they're making that much money. That process. And I don't care about the cost because I just pass it on to the customer.

24:25But like, just make it more convenient, you know what I mean? Dude, I'm telling you, make it easy on me. It's been my big thing. I've told them over and over again, I'm like, hey, I know we have OE OneStop Connect, right? Like, I get that, but that doesn't do what I want. I want to understand how much is it going to cost me to program this car, right?

24:43Like, if I buy your tool I want to know how much your tool is. I want to know how much your subscription is. I want a clear pathway of how much is it going to cost me to access and program this car, do whatever I need to do with this car, right? And I've been on to them, like all of the manufacturers, over and over again, like, hey dude, we need a clear pathway so we can understand.

25:03But they don't like playing with each other. And so because of that, there's no clear documentation anywhere, and every manufacturer changes so frequently, and it's so different from person to person or manufacturer to manufacturer Like there's not one website that tells you exactly what you're going to pay. That, that's been a beef that I've had for a long time. Yeah. But like just when everyone switched to OBD2, you know, why can't we all use the same diagnostic software?

25:28Um, but you know, all the manufacturers just get paid, but it all goes, I don't know, maybe I'm living in a fantasy world, but you know, what can you do? If you want some insight on there, you go to ETI Tool Tech. Yeah, it's, it's every spring. And I guess, isn't there a fall one too? There is, but that's more of like the manufacturer.

25:48We're, we're invited to SEMA Tech Garage and the, the Detroit one for MEMA. Uh, those are more like tech level and more like really high-end kind of manufacturer, and they, they're really particular about who they let in. They want full members at those, and so that's really expensive because it's like you have to prove you're a tool company or prove you're a manufacturer to get into those.

26:10But Tool Tech itself does have shop trainer and, uh, uh, like advocate levels. So, so like if you want— that's the kind of stuff, like if you want to know what tools coming, for instance, I think Eric just told me the other day Launch is picking up 3 or 4 manufacturers now, and Launch is going to handle 3 or 4 different manufacturers directly.

26:29Um, and so I, I think that there's a lot of of things like that that are happening, some moves that are happening in that direction. If you want to learn about those things, you got to be a member of ETI and go to ToolTech, right? Like, it is, it is a lot. You go to ETI ToolTech, you'll get the back— you'll get the behind the scenes.

26:45It's like, why is this the way it is? Well, you get to talk to the people who actually built it or have it the way it is, and you can ask them directly and they'll tell you. They're like, well, we don't actually do any of this, we outsource it. You guys are talking about ATI, like the automotive tech? No, ETI ToolTech. Equipment and Tool Institute, Tool Tech.

27:06So it started like, dude, it started back in the '40s, right? And so it is the connection between the OE manufacturers and the tool companies. That's all that organization does. I mean, it does a lot of other stuff too, but it, it is the— if you have an aftermarket scan tool or you have an aftermarket tool, it doesn't even have to be a scan tool.

27:24Like, let's say that you, you have a transmission flush machine and you have connectors that connect you to the front where it goes into the cooler, right? Those connections, when a new car comes out, it might have a new connection on it. The only way to know what that connection is is from the manufacturer. So ETI is the one who provides that information from the manufacturers.

27:47They have these like these meetings where the manufacturers and the tool companies sit down, and so it's like, hey, I want to spend an hour with GM. So they put GM in a room and Snap-on in a room, and they sit down, they talk, and they negotiate like, hey, here's what I need from you to be able to build my tool. Does that make sense?

28:03Yes, sir. Yeah, and so that, that's how, that's how every tool that you've got on the market right now, that's how they get their information. Some have reverse engineered it, which was not a good look for a lot of reasons, but that's, that's kind of where all of the— yeah, they're either getting it direct from the manufacturer, the actual information from the manufacturer, or they're stealing.

28:24What, what are you guys running? Are you guys for like programming, like module programming and stuff, are you guys running an aftermarket tool or are you just using a laptop and a pass-through and using the OE software? We— it depends on what it is for us. All of it. Yeah, for us, like, a large majority of what we do right now is OE with a pass-through.

28:46And so we've got multiple different pass-throughs based on what we're working on. Um, and so it really just depends on what it is. For the most part, I'm using OE software. But now I'm not the one in the shop anymore doing it. Eric's the one who does all of it now. And so it's, it really just depends on the vehicle, um, and what's required.

29:07We have a few remote services too. Yeah, SOD. We'll do SOD through iScanner. We'll do SOD through, um, what's the other one, Eric? Or, uh, is it the Diag Guys or whatever? Are you guys talking about like the Aztek type devices where you plug in and someone remotes into the car? Yes, IScan has— yeah, they have a tool that you can do that with.

29:29So if you've got a manufacturer, that's really what we use it for, is we get a manufacturer that comes in that we don't— we just don't mess with. Maybe like a Porsche or something like that that comes in. Mercedes, we see one once a year. Or yeah, Benz, a higher-end Benz, and it's something that can't be done through an Autel or whatever.

29:49Then you got a test that you can't access and it's $40,000 to buy. Yeah. Right. Yeah. And then, then you hook up the iScan to it and you hook it up. And so the only reason I don't like stuff like that, like the only one I have experience with is Aztek and like you got to call and make an appointment, set the appointment 4 hours in advance.

30:09And then you can finally, like, I'll like in that time I could just figure out how to download the OE software and just kind of figure it out myself. But on some manufacturers, like, you know, Volkswagen, you need a $20,000 piece of equipment just to kind of hook up to the car. And, um, our shop only works on, you know, domestics and Asian imports.

30:27We don't do any of the European stuff. So I'm sure that is kind of a different level when it comes to the programming and, and all that jazz. Well, so here's the thing. Aztek was built for something very different, right? And, and we— I think Chris Chesney's been on the show and he's talked about like when he, when he first went into Aztek and started working for them, And Ben, one of our other friends, works for Aztek too.

30:51When they went into that, it was very much a collision-focused, and there wasn't much mechanical focus, right? It was all collision-focused. It was about the logging process, pre and post scans, shit like that. Collision shop, if insurance is going to pay you, I have to document A, B, C, and D, right? And it has to be by the book. Yeah. Whereas like for many of the mechanical shops, like you can call up iScan and get an answer in 30 minutes or an hour.

31:19Yeah, right. In the most— in most cases, there's a very few specific cars, like newer higher-end cars, where the test plan is built into the data itself in the scan tool that we will have to use them to obtain the testing routine that we need. If I don't have that OE tool, like BMW though, I mean, we've got ISTA. Volkswagen, we've got ODIS, right?

31:42Like, I don't need them for that, but specifically Mercedes if I need Mercedes, that data is in the tool in some cases. So I'll call them and get the data or have them send me data from the car, and then we'll work through a test plan after that. Most of what we're doing with them though is just they're accessing the car, programming something, especially when it comes to TRP parts, things like that.

32:05They're navigating those aspects for us so we don't have to learn how to do it. We don't have to learn how to invest the time and the energy into it. It is a faster process. And then the other really positive that I'm sure you remember this, there were BMWs that if like ISTA would require that you program every single module on the car, right?

32:25If you went to do an update, it made you program everything. And they, there were catastrophic failures where like radios would fail out in the programming and it would crash the whole car. And so you would have to work back through bricked modules to get the car fixed. And so many of those providers have the ability to isolate and only program one component or one module through tricks and tips that they've learned over the years.

32:47So that's really beneficial when it comes to them. Does that make sense? Yeah, we're on the same page. What are you doing for, for ADOS at your shop now? Me? So yeah, I don't care, we don't do any body stuff, man. So like, you know, we're strictly a mechanical shop and A lot of the— even a condenser on a Chevy Traverse, you're going to have to do the calibration or a condenser on a Honda CR-V.

33:15We just ran into this the other day. Yeah. So we have a trihedral, like in most cases on the stuff we're working on, at least it's a non-issue. We might have to do a front radar calibration once every 3 or 4 months, to be honest with you. I know that you just send it off to the dealer then in those cases. No, I have a trihedron and the lasers and all that.

33:41Like, I know how to do it, but like most of the time it's a non-issue. Like, for example, right, Toyota Camry, the radar unit mounted on the front bumper, manufacturer states anytime that front bumper comes off, it has to be recalibrated. Oh. Most of the time a customer is not going to want to pay $600 for us to calibrate that radar just to get their AC fixed.

34:07And 95% of the time you go test drive that vehicle, it's going to drive exactly the way it drove before. I mean, the position of the radar unit isn't being disturbed, changed in any sort of way just from removing that front bumper and putting it back on. You're snapping into exactly the same clips. All the screws are in the exact same position.

34:27It is not moving. More than a millimeter or two. So, but what about the liability aspect of that though? Because I mean, like, look at the, look at the John Eagle collision case. And what if, what if you're, are you getting a decline on the ADAS calibration? That might work. I mean, to be honest with you, that's not even something we're talking about with the customer.

34:49That's over most of my customers' heads. And, but I mean, like, there's a liability aspect to that, dude. That's a huge liability. I mean, I don't believe so because like Nissan, for example, right, they don't claim that their, uh, anti-collision avoidance system is going to prevent collisions. When you look at the fine print, it says it's going to reduce the severity, uh, of collisions.

35:16So, you know, if that was the case, all these people would be suing manufacturers. Hey, I got in a front-end collision and your radar unit didn't go off. That, that never happens. That, that's never a lawsuit. They're suing collision shops and the insurance companies are covering it up. So we know that, like, Chris Chesney brought that up in a meeting a while back and he said, if you knew the number of cases— because why, why would the insurance company not want the cases that have been settled to come out?

35:44Why would they be trying to settle them out of court? Why would they be trying to keep it quiet? Well, because then if the consumer is educated and knows about calibration it costs the insurance company more and it has to be a standardized calibration, right? And so like we know that MEMA and the others are working on the, the, um, SAE is working on a standardized language for ADAS calibrations, right?

36:08Ben's on the, the committee for that. But, but the question then becomes if, if we're, if we're looking at that from that standpoint and we know that those shops are being sued We know that insurance companies have been sued for that, right? It still comes back to that John Eagle Collision case, right? The insurance company told them— my understanding is the insurance company told that collision shop, no, we don't want it fixed like that, we want it fixed like this.

36:38Okay, well, wouldn't you think that the insurance company would hold the liability for it? That ain't what happened. It almost put John Eagle Collision out of business, cost them millions of dollars. Massive millions of dollars. Somebody went to jail over it, right? But the insurance company is the one who asked for it. So I guess that's my only fear is like, if I'm, if I'm not following service procedure to the nines— now you're right, what's the probability?

37:02I think the probability is extremely low, but I wouldn't feel comfortable with that. Now if I got a decline on it and say, hey, this is a required process according to the manufacturer, it's going to add $700 to the ticket and they decline it. Yeah. Yeah. Then you have the line in Shopware. You at least have the line in Shopware saying customer declined because they're the one that hit the decline button.

37:22It wasn't you that, and you, of course, this is a required, you put that in the notes. This is a required process of the, uh, from the manufacturer, part of the repair process, calibrate front radar sensors since we took the front bumper off and they declined that button. You're free and clear. You made it in the notes saying that this is required.

37:43Clear though, that— see, that, that's the thing is because what does the judge say? The judge says you're the professional. We're the professional, but we, we full— it's not our money. We fully inform the customer. Yeah, I, I, I agree with David. At that point then, I can't, I can't let loose, like, loose, uh, ball joints out of my shop ever because this is dangerous.

38:03Yeah, but if the customer declines that, hey, this ball joint is dangerous, you're going to die, decline or approve and they decline, then I'm free and clear. It's like, dude, I can't do anything about it. Yeah. And if you put it in the notes, but to not tell the customer at all. Yeah. And then here's the thing. It's not that it's going to, it's yeah.

38:22It's not that it's going to prevent the accident. It's that it's a millimeter off. It thinks it sees something, but because it's veered all over to the right, just slightly and a millimeter in front of the bumper. Is 150 feet, a mile down the road, and it sees something there that it shouldn't see at all. It slams on the brakes and then somebody plows into the bus or something hits the, hits me from behind because the car thought it saw something slammed on the brakes much harder than I would.

38:56And the person behind me was following a little too close and they smash into me and somebody dies. Now, who are they going to go after? Well, they probably don't go after you, but if you've got umbrella insurance, they'll go after your umbrella insurance. They're going to go after your garage liability, your garage keeper's liability insurance. So then you just got your insurances dropped because they're just going to drop you.

39:17They're going to like, hey, we're going to pay this out and then we're not going to be customers. Yeah, we're dunces. Yeah, we're dunces with you. Then you can't get insurance anymore. You got to pay like triple, quadruple. And then, um, If you've got any kind of actual assets, they'll come after you for that as well. They're going to try to rake you is what they're— yeah, it just takes one time.

39:36And it's not— again, it's not that the car isn't stopping when it's supposed to. It's that it stops when it's not supposed to. And then an accident happens. I agree. No, you guys, you guys are correct. In shopware, just dude, you just got to like— yeah, just make your line. Yeah, that's it. Like, no, I have them hit the no button, especially if it's in the R&R procedure that like the front radar unit needs to be calibrated, then that needs to be on the estimate.

40:04And, um, you know, and Austin, here's another point of that, and this came up a while back. Um, we, we've talked about this multiple times. We were on a panel and, and so they looked up in aftermarket service information, a shop owner said, hey, my technician says it just says remove and replace the front bumper. It doesn't say anything about that. And then everybody in the room, like, because it's full of professionals who do the calibrations, who make the tools that calibrate the cars, who are the manufacturers of the cars, and everybody's like, uh-oh.

40:35And then you click on the, the next link and it takes you down into bumper removal, and then within that it has the calibration requirements. Yeah. And then you even have to click another hyperlink to get into that. And so I, I think that the information can often be so buried that it makes it very difficult. Now, like, AllData and Mitchell have done a really good job with making the ADAS matrix across the top so you can click the button and it tells you if that requires a calibration.

41:01The alignments have too. I mean, I think the alignments are what eat me up because it's like, hey, it requires a calibration if I align the car. Now explain that to a client that it's going to be $600 on top of that because I have to do a calibration, you know? Like, that shoots me in the foot and it makes me look like a jackass to the client.

41:19I agree. And that's like, I— you could really get carried away with this shit, man. Like, and that's not only with ADAS but with like a lot of different repairs where, you know, the manufacturer says to do it one way, but like real world kind of tells you that you could do it a different way. I'm the kind of guy where I'm always gonna do what's best for my customer and kind of err on their side.

41:49But I, I think where I'm doing it wrong is kind of not disclosing that information and being 100% transparent. Like, hey, technically I'm supposed to calibrate your front radar unit after we do this alignment, and it's going to cost you $700. We test drove the vehicle after we did the alignment and it's driving completely fine. However, there's a chance that the system may work properly.

42:15So just, you know, let me know what you want to do, basically. That way you're kind of releasing the liability but also letting the customer know, like, hey, 90% of the time you're going to be fine, right? Yeah, I wouldn't tell them that though. Yeah, yeah, but like, I would just say per OE requirements, this is what's required. But you could lead them in that direction without exposing yourself.

42:41At that point, they could— somebody could interpret that you're trying to talk them out of it, or that you're, you're downplaying the severity of it. You're 100% right. You're 100% right. Uh, control arms on a Toyota Highlander or the Camry, the OE, the spec on the OE, the, the process on the OE is to remove the engine, to pull the whole subframe, everything gets dropped down out of the car, and then you take the control arms out, and then you put the new control arms in, and the whole thing goes back in.

43:09It's a 13+ hour job, but you can do it in 3.5 hours if you just jack it up a little bit, slip out the bolts, slip the new ones in, control arm goes in, 3.5 hours and you're out the door. 100% doable. It doesn't cause any, uh, safety issues or anything like that with the vehicle. The repair is 100%. There's no cutting into the body or any nonsense like that.

43:31I've seen some people do that on some, um, some repairs where they cut into the subframe. And they're like, hey, I'm just gonna put a little notch in the subframe, or I'm gonna hit it with a hammer here, just bend it so I can get this thing out. It's like, dude, that's not the correct way to do it. But the only difference between that, which we've done a thousand times, and these ADAS calibrations is that it's now a safety component of the vehicle.

43:55Yeah. And it's just like the, we had a guy named Ken Miller on the podcast and he talked about a 2024 CR-V. This was crazy. 2024 CR-V comes in, they had taken it to a different shop. His shop requires a pre and post inspection of all of the safety systems on the vehicle. Okay, that's what the manufacturer calls for, by the way.

44:19And that's, yeah, and that's part of the process that you're supposed to do this, that, and the other. Okay, well, they had taken it to a different shop. The insurance company didn't pay for replacement of all these components. So to turn off the seat belt lights They had put in resistors to turn the seatbelt light off. Is the seatbelt still going to work?

44:37Yes. Is the light still going off? No, those weren't because they cut the locks out of them. Well, yeah, the seatbelt was still going to like, you know, work and pull down and retract and stuff like that. It just wasn't— the squib wasn't going to go off in an accident to lock the seatbelt in place and keep you from slamming into the airbag.

44:55But nobody knew and the lights were off. There were no codes in the car, and it wasn't until the guy inspected it that he said, oh crap, what is going on here? Yeah, and they had almost— the techs had almost convinced him like, hey, we don't need to do this and charge them for this, like the car is brand new. And he's like, nope, nope, nope.

45:13Yeah, barely had any miles on it, right? And it was a, it was a very minor impact that the car was in, and so nobody would have questioned whether or not it was safe or not, right? Yeah. And I don't think that the squib had even gone off or whatever, it was just the seatbelt light was on, so they just turned the seatbelt light off, that's all it was.

45:29But like on older, like 2010 and up Hondas, there were a few years in there that if the seatbelt squib went off, not only did you have to replace the seatbelt squib, but the ABS module had a component in there that would pop and you have to replace the entire module on top of all of the airbag or all of the squibs that had gone off.

45:53So like, can you, get around all of that and just tell them like, hey, everything's still gonna work. Do you need all this? Probably not. But there's a big difference between not calibrating an ADAS module and doing a modification to a vehicle to make an airbag light go off. I mean, yeah, I, I agree that that's totally— and the Hondas in particular, man, those front radar units are pretty funky because you got the four little legs and all the adjustment points on it.

46:24Um, but the majority of the time those aren't mounted to the actual bumper itself. They're mounted to the, uh, the front crash bar. So those don't need to be calibrated at all unless they're in some sort of front-end collision or, you know, you make adjustments to the suspension. Um, yeah. You know, it's really interesting. So there was that court case that got shared in one of the groups.

46:47It was like an hour long and everybody said that judge was sensible. It was a civil suit. It was like a small claims deal, right? And it was like an hour. The turbos on the Ford. Yeah, we need to do a react on that one. We need to. But here's what's interesting. So many, so many didn't like wrong things. Oh, I know, but, but everybody's like, see, it's not that big of a deal.

47:10It's not that big of a deal. But, but think about this. It was small claims and they were, they were going for a small amount of money and there were no attorneys involved and there was no insurance company involved. Buddy, if somebody gets hurt, the ambulance chasers pile up and the insurance companies pile up. And you want to talk about an effing mess, right?

47:31Like, I've watched it, I've seen what happens, man. It's unbelievable how much money they'll pour into— not— they'll pour millions of dollars into saying it wasn't our fault, right? We shouldn't have to pay for this. It's unbelievable. Hey, Austin, We're 43 minutes in, 44 minutes in now. You've not introduced yourself yet, so, uh, why don't you tell us who you are, dude?

47:55All right. I don't even know. So I'm Austin, um, live in South Carolina. I've worked in— I live in Columbia, South Carolina, so right, right in the middle, the capital city. Um, yes sir. I love South Carolina. I think it's beautiful. Started off as a lube tech at a shop called Lugoff Toyota when I was 18, back in 2018, and, uh, worked there for a little bit.

48:22Kind of bounced around dealerships as a technician. Uh, eventually started as a service writer, um, at a Hyundai dealership. Worked there for about 2-3 years, um, and then I bought my shop back in November of 2024. Uh, it was formerly Hilliard Automotive, open since 1991. We just recently changed it to Cartelli Automotive 2 weeks ago. We did business as the old, you know, name for about a year and a half.

48:57Got 4 technicians, risk manager. I pretty much just help out up front now and I'm not turning any wrenches. I was turning a lot of wrenches when I first kind of started. Um, I had big problems with, you know, technicians for the first 9 months or so. I got burnt by a lot of technicians. I was having to go in the shop and do brake jobs myself when we were shorthanded.

49:23And, um, I finally got a really, really good team of techs back there, man. And I'm super proud of my guys and I'm super proud of the team that, you know, we've put together because I got nothing but dogs back there, man. And those guys will— I love that. Those guys will do anything for me. And I love them, man. So let me ask you this.

49:43You— so first of all, I'm curious about the purchase process because there's so many techs who are saying, I want to buy a shop, I want to buy a shop, I want to buy a shop. Walk us through the purchase process. How did you go about buying this shop? Yeah, man. So I hated working for the dealership, dude. I hated being on commission.

50:00I hated— I hated just being a salesman. I hated being a commission technician. I was really good at it. My last year at the dealership, I made like $180,000 as a service writer, but I just hated being subjugated by another man. And I'm just like not the kind of person that is just like a good worker, you know. I'm not a good employee.

50:26Um, so I've known that I wanted to kind of do my own thing for a while. Um, I met a guy through my Bible study named Mike, super into real estate, owns a dealership. He kind of really got me going. He's like, hey, Austin, you're really smart, dude. You should just kind of do your own thing. I'm like, man, my daddy's not rich.

50:48I don't have $1 million. I can't just do my own thing. And he's like, neither was I, blah, blah, blah. So I basically just started looking for shops that were for sale, went in there to talk to them, got in touch with different banks and stuff, got turned down by a bunch of banks. Finally found the right deal and the right bank.

51:12We ended up doing an SBA 7 loan. On an SBA 7, you can use a seller note as equity injection towards the deal. So basically, instead of me having to put 10% down, the seller just wrote me a 10% seller note. So I was able to acquire this place, got the business and the real estate, and literally only had to put like $10,000 down.

51:37Which was really cool. And they also gave me $75,000 in working capital, um, which luckily I didn't have to use at all. But, uh, it ended up being a really good deal, man. It took me about 2 years total to kind of find the right deal, find the right bank, and then finally close and, you know, get the keys basically. So it sounds like the owner was really supportive of the process then.

52:04Right, because that's what we encourage all techs to do if they want to go start a business is, hey, go work with an existing owner, learn about the business, develop in the business, you know, build a relationship with that owner and see if they want to sell the business, right? Now it sounds like you went in and found a shop and, and bought it, but it still sounds like they worked with you and they were kind of looking for that exit strategy or that exit plan.

52:26Is that accurate? Yeah, um, a lot of A lot of automotive shop owners aren't good businessmen, you know what I mean? Um, so the majority of them are past their retirement age, they're kind of lost a little bit, and they don't really know how to sell a business. You know, a lot of them might be working with a business broker, whatever. Um, a lot of them might have had their shop on in the market for year, 2 years, and they're getting really frustrated with, you know, the, the acquisition process.

53:05Um, so that is a good, um, it gives you a lot of leverage as a buyer because a lot of times they're just really frustrated and ready to get out. So they are going to be willing to, you know, seller finance a portion of that deal in most cases. Yeah, for sure. That's awesome, man. Now, did any techs stay? Because you said that there— it was bumpy there at first with the techs.

53:29Did any of the techs stay with you? Yeah, so when I initially took over, they had 2 technicians and, you know, a service writer. Um, the service writer quit on me 2 to 3 days in. Um, cool, no problem. I ran the front by myself for about 2 weeks, and I brought in one of my guys from my existing network. Um, one of the technicians was a severe alcoholic, and I tried to make it work with him.

54:00Uh, this was actually one of my major flaws whenever I first got into business. I tried to give everyone the benefit of the doubt. I tried to work with people. I, I really tried to kind of put myself in their shoes and just try to give them a shot. And I just got completely burnt and destroyed because I tried doing that. I got taken advantage of and basically walked all over for about the first 6 months.

54:27But I learned quick. So they both ended up not working here anymore. I cycled through a lot of technicians and I finally found that really good team, man. I've worked with 2 of my technicians at previous jobs. Um, and found another guy, just, you know, friend of another technician. And fourth guy, same kind of deal, man, just kind of got referred. He got referred to me from, you know, someone in my existing network.

55:00So let me ask, what type of issues— I know you said you had some, some alcoholism issues with one technician. You started cycling through those techs. What was the cause for the cycling? Was it they were coming in and they were saying how great they were and they weren't doing so good? Or was it like, what was the reason for the cycling?

55:20Um, just, it's a little bit different for everybody, but I really only have like 2 or 3 rules. Uh, come to work on time. While you're at work, I need you to work and just be honest with me. Um, That's really about it, man. I don't work well with older technicians for some reason. I just never have had success with guys in their 40s and 50s.

55:49I'm 25 years old. You know, when I took the shop over, I was 24. I think a lot of people have a problem with me because I am half their age. And, you know, maybe they're a little bit jaded because they never, you know, did more with their career and they just kind of have an issue with me you know, being their boss.

56:09Cool, this ain't the right shop for you, you know what I mean? Um, for sure, a lot of technicians have issues with coming to work and being here on time. No, I need you here reliably, um, every single day at the time that you're supposed to be here. Um, the policy that we have for technicians, you know, they have to turn at least 100 and 35 hours a month, which ends up working out to like 6.5 hours a day.

56:39Um, if you're late once, cool. If you're late twice, you no longer are eligible for your bonus. If you don't hit that 135, you're not eligible for your bonus. And if you have more than a 3% comeback rate, you're not eligible for your bonus. Um, but if you do hit all those 3 things, you get a fat bonus at the end of the month.

57:00That's been the best way I've found to kind of enforce the rules and make sure everyone's doing what they're supposed to do. Um, it incentivizes turning a bunch of hours, but it also de-incentivizes half-assing repairs because you have the comeback clause in there. Um, and you also got to be here. You got to be present to win. So yeah. Now, how are you paying?

57:22Flat rate? Are you paying hourly? How are you set up? I pay hourly with the bonus at the end of the month. Nice. Nice. Now let me ask, how did you learn about these numbers? Because a lot of shop owners, you know, technicians turn shop owners. They didn't know, and they've never learned some of these strategies you just laid out. That's a fairly advanced strategy.

57:40Where did you learn the strategy? I invented it. But, um, I mean, dude, being in business is really easy. You know, you really just have to make more money than you spend, and at that point you're a successful business. Um, Tom Lucas, what's wrong with you? Yeah. So, I mean, I kind of just crunched the numbers, you know, these are my fixed expenses.

58:07I want to be able to profit this much. This is where I need to be for my profit to be here. And that's the cool thing about being in business, man. You literally get to set how much money you make every month, you know, because you know what your fixed prices are going to be. You know what, you know, your bonus. Expenses are going to be and all that stuff.

58:28So if you just structure everyone's pay plan where they need to make you this much to hit their bonus, I mean, you literally get to set your net profit, which is really neat. And that's what I love about being a business owner, man. Yeah, absolutely. I, dude, I really resonate with the younger thing, right? Because, um, my first technician that was super toxic and I held on to too long was an older gentleman, and he, dude, he just could not respect me.

58:57He just could not do it. He could not stand it. And, and I think you're right, like, looking back on it now, dude was super jaded. He was so angry that I had an opportunity that he never got. And, you know, he had had a business and it blew up and it went bankrupt, but it was in a different field. But he had been, you know, working at all these dealerships, and here he is at 60-some years old or 50-some years old, and he's angry.

59:21He's mad because he never had that opportunity. Now I have guys that are older for me working now, but it's not like, like we're close. We don't have that type of relationship and it works out. I think that part of it is, is that leadership capability that over time you develop and you learn. And I also think that some of those older guys, like when you start to learn, hey dude, dude's already toxic, dude's already jaded.

59:44There's no reason for me to continue to engage with this individual. He's got to go. You know, when you learn that, like, you, you rule them out so quick. It— you pick up on it in the interview after a while because you see the symptoms of it, you know. And those are the guys that bring the whole shop down, man. I mean, you're just so negative and nobody wants to be around you, and all you're doing is just talking shit about the company all day long, man.

1:00:07Like, you gotta go, brother. I need my technicians happy. I go in there, I chop it up, I joke around with those guys. I love walking back in the shop and just hanging out with my guys, man. And I just walk in the shop, I hear zip, zip, zip, zip, zip, zip. That's my favorite sound, man, because that's just, you know, I know everybody in there is working, they're all happy.

1:00:26And I take care of my guys. Like, for example, I got two guys that, you know, they had their one-year anniversary around the same time. I bought them both shotguns, man. I'm like, hey, hey, that's awesome. Yeah, here's some shotguns, guys. Let's go. What kind of shotgun are we talking about? I gotta know. I might want a job, who knows. I bought one of them a Mossberg, and the other was a It was, uh, what's the Italian shotgun?

1:00:50The, uh, uh, Beretta. I got a Beretta and a Mossberg, one for each of them, and then we went and shot clays that weekend. Yeah, I mean, like, those are my— those are my guys, man. Like, I literally can ask any technician in that shop anything and they will do it for me. I— if I ask them to dig a hole, they will dig me a hole because they know I got their backs, and I, I know They have mine.

1:01:14There's nothing worse. Yeah, I, I refuse to have someone on my team that I just feel like they don't like me or they're like out to get me or like whatever, dude. Like, go away. Like, I don't want you here. You're not my friend, you know? You've done that, man. Yeah, been there, done that. So I guess the closing question I need to ask you is, are you going to be at the ASTA Expo this year?

1:01:36I don't even know what that is. You're right down the road. I don't even know. That's my problem, man. I'm like a hermit. I'm by myself here. I'm young. I don't like— will you You guys need to be like my— I'm like 2 hours away, 3 hours away. You guys need to be like, take me under your wings, you know, like adopt me.

1:01:53So every year, uh, there is a show in Raleigh, North Carolina called the ASTA Expo. It is phenomenal. It is all about networking. It's all about engagement. It's all about training. We've got a big trade show. We've got lots of really cool stuff going on. We'll be recording there. We record there every year.. And man, the best part of it is we all sit around the bar and we all sit and we talk shop and we talk about the hard things we've been through.

1:02:22We talk about the good things we've been through and we learn from other people's mistakes and lessons so we can pick up on it. So I don't have to suffer through it. Now, look, I'm not gonna lie to you. I suffered the F through it for a long time. I made a fool of myself trying to suffer through it. And then once I got just a little bit of knowledge, You know what I'm saying?

1:02:41Like, I got just a little bit from some of these people, things started to take off, and I was able to grow and develop. And, and like, when— so in the 3 bays, right, we had, uh, 3 bays. One was a 7-foot ceiling, and they were all in separate places. We were doing $125,000 a month by the time it was said and done.

1:02:58And so it was, it was like just that little bit of knowledge, that little bit of perspective. Rick White was my first business coach, and he brought me a lot of knowledge. Now I'm with the Institute, and they're bringing me knowledge of where I'm at now. Right. And like, I guess that's the biggest thing for me is like, as I've grown and developed, you're still very much in the infancy stage of business.

1:03:17And like, what works for you right now is not the same advice and the same tools and the same knowledge you're going to need in 5 years. And that won't be the same knowledge you need in 10 years or 15 years or 20. Like, because as you grow and develop, your mind, your thought process, where you're going, what you believe, what you want to be and what you want to have is going to change.

1:03:36And so like every bit through that step, I've like found the mentors and found the people to have in my life that pick me up and say, all right, you've made it to here, now you go here. It's like, um, the family business thing and, and the, the shop, right? Like they're two separate businesses. Family business is not auto repair. And my dad's ran that family business for a number of years, and he's done it the old school mountain math way.

1:04:00He's ran it by the seat of his pants. And the shop— I have to learn this mountain math. Yeah, you get rich on mountain math, let me tell you, Austin. Yeah, you just wake up, you're like, hey, this business is doing 80% gross. Yeah, I just show up and turn the lights on. That's mountain math right there. That's mountain math for you.

1:04:19And so here's what's interesting is like, as we've developed, as we've grown, I'm, I'm now hiring Kaizen, which is a CPA firm just for kind of like auto repair shops. I'm like, hey, I need you guys to do my bookkeeping. I need you guys to do my accounting. I need you guys to be my financial advisors and give me direction about where this business is going, because the business has gotten too big for my ability to manage the financials, right?

1:04:44Like, it was one thing when I was having to pay the bills for a shop that did $1 million a year. It's another thing to be paying the bills for a shop that does $2 million a year and keep up with all the bills and keep up with all the money that's moving and all the specifics and managing all of these things, right?

1:04:59So the CPA that served me well at $14,000 a month did not serve me at $125,000. And then the CPA that served me well at $125,000 a month is not serving me well at $200,000 a month. And it's not because they're a bad person or a bad CPA. They're fantastic. The problem is, is that the business is a larger and a much more complex machine.

1:05:22And so the one piece of advice I would give you is, as you develop and grow, make sure you have the people that are for the season of your life in your life. Right, and understand that I've shifted seasons. I'm in a different season now. I need to be moving forward. And, and look, I know what you're gonna say, okay? Like, at your age, I would have said the same thing, buddy.

1:05:42I don't, I don't have any intentions of retiring. I'm gonna run this thing until I can't run it anymore. I'm not, I'm not worried about that. And I'm going to tell you right now, like, the Austin that's sitting here today is not the Austin that's going to be sitting here 20 years from now. The Austin that's going to be sitting here 20 years from now is going to have a completely different belief system.

1:06:00It's not even 20 years, dude. It's going to be— he's going to turn 31 and go, what the fuck was I thinking when I was 26? I'm not kidding, dude. I'm telling you, you're gonna hit 31 and you're gonna be like, what the fuck? And then whatever your priorities are right now, yeah, your— whatever your priorities are right now, they're going to be completely different in just 5 years from now.

1:06:19It's wildly different. Like, you swing in this completely different direction and you're like, I need to do this now. This is not what I want to do anymore. And so just understand that. Yeah. Just get yourself set up for it. That's what he's saying. Yeah. Yeah. Have the right people in your life. Have the right people who can point that out and know and can see that and that have seen it.

1:06:39Right. Like Cecil Bullard is my business coach and he's with the Institute. And so Cecil says, Lucas, I have seen so many people that went from, I'm never going to retire, I'm going to work as a technician, this is what I want to do. And then they become the service advisor. I'm never going to stop being the service advisor. I want to be here.

1:06:55And then they become the manager. I'm going to be the manager forever. And then he's like, I've watched the transitions of thousands of people's lives develop into one day they look up at 45 and say, where do I want to be? What do I want? And so find somebody that's experienced those transitions over the years that can help you build a plan and an idea of how to prepare for that next stage.

1:07:20Does that make sense? I'm with you. If you sat— I'm just telling you right now, if you sat down with a business coach and they crunched your numbers with Fortex and whatever your account is. Yeah, because that, that's— they're gonna, they're gonna give you— throw some fucking retarded-ass number at you, and you're gonna go, who's— what's possible? That's not possible. And then they're gonna go, the hell it's not.

1:07:42I've been doing this for 30-plus years. I have other shops doing this. I don't know why you're not doing it. You think you're 80% optimized? Looks like you're 40% optimized. And then they're going to give you a list of shit to do, and then you're going to spend the next 3 to 5 years trying to perfect it and hit these crazy ass numbers.

1:07:59And then you'll hit them because you seem to have the drive to hit them. And then you're, and at that point, then, then you're going to be printing crazy money and you're going to be going, I made $350,000 this year. I don't know what the hell to do with these taxes. And then, and then, and then they're going to go, well, we need to talk about tax shelters.

1:08:19And then you're going to start shifting your focus on putting the money into tax shelters. And then you're going to start shifting your money on optimizing that, getting it ready for selling if you ever decide you want to. And somebody is going to approach you with retarded money and then you're going to go, yeah, I'll take that and run. Or you don't.

1:08:38Yeah. That's key. Yeah. Don't do that. Yeah. Not 18 ATI. It's going to cost you $20,000 plus. It's going to cost you $20,000 a year. But the way you need to look at it is it's just like you would an employee. You're paying an employee $80,000 a year, but the guy's making you a quarter million. So like, you don't look at it going, oh, this is going to cost me $80,000.

1:09:00It's like, no, I'm investing $80,000 to get quarter million back. You got to look at it the same way as a business coach. They're— at the end of the day, they're an employee. And if they— you're paying them X amount of money, you should see this much of a return. If after 6 months you're doing everything that— and this is usually the key because typically the people that don't get any results from business coaches, because they're just not doing what they're— yeah, they're not doing what they're supposed to be doing.

1:09:24But if you, if you are putting in the work and the steps, then you go and say, yeah, I, I spent $25,000 this year on a business coach, but I made another $200,000 that I thought I wasn't going to be able to make, way more than I thought I was going to, than, than what, uh, I imagined would would get a return on this.

1:09:46So you, you need to look at it as an employee, and the minute that employee isn't giving you what you need, you— I mean, just like you were saying, you fire them. Yeah. Hey, this isn't working. They'll, they'll steer you in that direction. I mean, some of that stuff you got to learn. I mean, they'll steal your steer— yeah, they'll steer you in the right direction.

1:10:03Like, like, we have Shop Marketing Pros for our marketing. They'll help you with your marketing stuff. Uh, you know, the, the Institute's got several coaches, so they're going to match someone personality-wise. Yeah, I don't know, they just made him the CEO. I don't know if he's still coaching people or not. There's somebody who works for the Institute. Oh my goodness, he would love Aaron.

1:10:25You're like Aaron Jr. Exact energy. He's Aaron Jr. And dude, I'm telling you what, this cat is fire, man. He's my manager's coach and he is like he just hits the mark. He just— he gets it. He's on fire. He loves it. He's fired up. He enjoys coming to work every day. He enjoys working in the shop. He started from the ground up, dude.

1:10:47If you can get Aaron to coach you, you two are so similar, and your energy is almost matched perfectly with Aaron. Yeah, that— if you could get set up with him, I'm gonna tell you right now, the dude would change your life, right? Like, you would look up tomorrow and be like, holy crap, I just— I can't even believe this is where I'm at.

1:11:04Because like, if the two of you locked and got going in a direction, man, he changed your life. I have no doubt. How many bays do you have? So here's the thing. A bay right now, bare minimum, that most people will tell you is worth $40,000 a month, $45,000 a month, somewhere in there. That's the bare minimum a bay should turn a month.

1:11:26Right. And so that kind of gives you an idea of the bottom of the barrel. Right. The way you figure that out is you just take your labor rate, effective labor rate, you multiply it by 1.85, and that's your parts-to-labor ratio. And then you take that number and you say, hey, how many technicians do I have? I got 4 techs. Okay, so now I've got 4 techs.

1:11:50How many hours do I want them to bill a day? Let's say it's 8. And that gives you your potential for your shop right now. And then you've got to look at your financial side and say, okay, What's my gross profit? I can tell you right now, you go search on Google and you say, how much gross profit does a small business need to survive?

1:12:06The number's 60%, right? The bare minimum it needs to survive is 60%. I saw a P&L yesterday from a shop, 38.4%, and they're trying to sell the shop for like $850,000. You can't, you can't survive like that. You've got to make more money. You got to be 60%. Some people say 70%, but the point is, is like, hey, now I can optimize my numbers and get myself to 60% gross profit.

1:12:29Own your P&L, not in your shop management software. Okay, 60% on the P&L. That's where it lives, and that's where it, you know, listen, if you don't, if you don't have a good bookkeeper and it's not broke out labor, parts, labor, parts, right, labor income, parts income, fee income, sublet income, labor cost, parts cost, if it's not broken out in that way, you get on the phone with Eric Jorn from Kaizen.

1:12:54You call him up and say, hey, Hey, do my bookkeeping and do my accounting. I need you to set me up for success. And like, dude, I'm telling you, I sat down with him the other day and he went through the numbers and he's like, okay, I need you to move this over here and this money goes over here and you need to set this up like this.

1:13:07And hey, you got this HSA over here. This money doesn't need to go there. This needs to go over here like this. And you need to do this for your employees. And now all that together, it's going to save you about $150,000 a year. What? I didn't even know I was wasting that, right? Like you got to have the professionals in your corner.

1:13:24You know what I'm saying? You gotta have that. But, but that gives you a rough idea. Now look, it's like the Institute. Michael Smith is, is the mergers and acquisitions expert for the Institute. Labor and labor. Yep, yep. And then net is after expenses. That includes the technician, does not include the advisor, not the service. And so what that's going to give you is, is that, that's your gross profit.

1:13:47Basically gross profit is the percentage, like if you look at it from a percentage standpoint The percentage of the total price that's profit, right? And so if you look at that and you're below that 60% mark, small meaningful adjustments that are done strategically are going to get your number up there. And then like I said, look, you say, okay, well, wait a minute, 4 bays, 5 bays is not going to get me where I want to be.

1:14:13I'm going to need more revenue, right? Okay. So then you talk to somebody like Michael Smith. Who's an expert in mergers and acquisitions, hey, I need to buy more shops. Because like, if you're looking at long term, hey, 50 years from now I want to be a billionaire, okay, how do I do that? Well, I need multiple shops and I need a strategy and I need to be able to make something that somebody would one day want to buy, right?

1:14:36Michael Smith is the guy who puts that together for you and says, here's what this looks like, here's what a, here's what a, a venture capital or private equity group would buy. And here's what makes it worth money. Here's what you have to do. And so having those people in your life building that game plan for you, because see, me and you, we're really good at fixing cars and we're really good at dealing with clients.

1:14:58But I never learned how to work in a multibillion-dollar business. I never learned how to do accounting for a $2 million business, right? I need to hire professionals that get me there because I don't have the time to learn that and run my business. See, I spent all the time trying to do all of it at one point. Same thing with the marketing too.

1:15:16Yeah, absolutely. Shot Marketing Pros, buddy. Call them up. And it doesn't hurt to have a second set of eyes on it. It doesn't hurt to just, you know, like he's talking about talking to Eric Thorne, just have him review it because you'd be surprised. You're like, I think I've got it set up. And then he comes back and he's like, yeah, these are the changes I would make.

1:15:36And you're like, this is completely upending everything we're doing. It's like, well, this is the way the automotive industry should have their stuff set up. Yeah. Where the other CPAs set it up. Like a normal— like a restaurant, you know, that a completely different, uh, business model. Yeah. And, and look, one of the things that I need to mention about that, and, and David and I have been talking about this recently, I'd hired a bookkeeper and I thought she was doing a pretty good job, right?

1:16:03I go in and I look at the profit and loss statement, I look at the balance sheet, everything looks okay, right? And then here comes Eric, and Eric says, now hold up just a minute. I'm concerned because this is here. I'm concerned because there's these journal entries here. What are these? Hey, I'm concerned because over here on the cash flow statement, it looks like money's moving, but it's not.

1:16:25All of this is piled up in one spot. Why is this happening? And I'm like, why does it— like, all the numbers are on the P&L. Why does it matter, Lucas? Because you can't see where your money's going. You can't understand what's happening in the business. You don't understand the health of the business. What you're looking at is your expenses. But if you don't have cash flow and if you're tight on money and you can't pay your bills, we don't have any resources to go back and understand what's happening and why it's moving like it's moving.

1:16:53And plus, if you want me to save you $150,000 on your taxes while you still have 20% net profit, I've got to have clean numbers to work with so I can clearly lay this out and clearly create a plan. And if I don't know where the money's at and I don't know where the money's going, I can't do that for you. My very first business coach, you want to know what he said to me?

1:17:13It blew me away. And he tells people this all the time. He said, if you're waiting on your accountant to tell you your business is in trouble, your business was in trouble a long time ago. Because accountants are not business professionals, okay? They're tax liability professionals. Your accountant's job is not to make sure your business is profitable and healthy. Your accountant's job is to make sure that you don't have any more tax liability than you have to.

1:17:36And they're not business management professionals. So you go talk to somebody like an Eric Jorn at Kaizen. Eric is a business management professional that has CPAs and has bookkeepers and has all these other people underneath him that make sure it works. And then on top of that, like, you talk about loving your techs, dude, I love my staff. Like, they are, they are literally part of my family.

1:17:55I hear people talk all the time, oh, they're toxic if they say they're part of the family. No, we fight like cats and dogs and we fucking hate each other part of the time. I just want to preface that by saying that's the kind of family I'm talking about. I care about them very much, and I want what's best for them. And so when Eric comes to me and he says, hey dude, you're not paying them the right way, there's adjustments that need to be made, hey, you're giving them a stipend, there's a better way to give them a stipend, it's going to be tax-free, it's not fair that you're taxing them on the stipend,

1:18:23you need to do this and this and this to set your employees up for success, hey I don't like the way this is ran. This is not what's best for them in the long run. You can help them by doing this, right? I would have never known that. And my account is just like, okay, I have a flat rate book and I charge this much to do the taxes.

1:18:42And if I do this many, you know, returns in this amount of time, I make this much money. What happens to flat rate techs? Tell me. I mean, you were a flat rate tech. What happens? Do they put the effort in all the time? Do they cut corners from time to time? Yep. You smell what I'm stepping in then, right? Is that the kind of accountant I want reviewing my numbers?

1:19:02No, I want some— I want a bulldog on my numbers. I want a bulldog going down my numbers saying, no, I need to make this adjustment. No, I need to get every single party here as much as I can get them. That's my job. And that's what Kaizen is for you. Okay. We'll end it there. Yeah. Hey, hey. Thank you for listening to the Changing the Industry podcast.

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