Ep 103 - Coaching Call #18 | The BIGGEST Mistake Shop Owners Make

0:00You're at some point in time, it's somewhere in one of your shops, you have a technician that thinks you make $200 an hour. That's why technicians start shops. You know, why am I only making $35 an hour and he's making $150? The original assumption is I'm gonna make all that money. So what you're saying is most shops are born from a place of extreme ignorance.

0:16I think most businesses are born and I mean, it's the whole reason that the E Myth exists, right? It's the entrepreneurial seizure of, and I mean, I can 100% tell you that even with the business experience that I had coming into this, it was a, it was a, profound amount of ignorance and arrogance in the way that I entered into this industry.

0:37The following program features a bunch of doofuses talking about the automotive aftermarket. The stuff we or our guests may say do not necessarily reflect the beliefs of our peers, our sponsors, or any other associations we may have. There may be some spicy language in this show, so if you get your feelings hurt easily, you should probably just move along. So without further ado, here's your host, Mike Allen, with Confessions A Shop Owner, presented by TechMetric.

1:05Simply the best software ever made. So here's the painful truth: a lot of shops are not losing money on some giant mystery. They're losing it in the boring stuff that they keep putting off. Follow-up, declined work, customer communications, making sure people actually come back. None of that is flashy. It's not fun. It's also the stuff that keeps a shop running effectively. TechMetric helps with that by bringing shop management payments and marketing together in one system.

1:33So instead of stuff falling through the cracks because one tool handles one piece and another handles the rest, the whole setup ends up needing constant babysitting. Your team can actually stay at the top of what needs to be done next. That means better follow-through, a better customer experience, and fewer missed opportunities you don't notice until it's too late. Learn more at Techmetric.com.

1:52Use the link in the show notes or scan the QR code on your screen now. Good rainy afternoon to you, Mr. Lofton. How's it going? Uh, doing wonderful, man. Enjoying this rain, actually. It's, uh, not often you hear me say that. Well, if, if those of you who are listening don't know, North Carolina is in the midst of a severe statewide drought, and it is finally starting to look up a little bit.

2:18We've got like a half day of rain last week It was just enough to knock the dust down, and it's raining for real today. And I hope we get 3 or 4 inches, man. It's, it's badly needed. Absolutely. Have you seen, have you seen any images of Falls Lake? Uh, it's dry. I'm sure it is. It's got to be. We've been pretty fortunate.

2:38So we have 3 lakes here in Person County in Roxboro, and the lake levels really haven't been affected that much. Uh, but Everything else, I mean, we're turning brown across the, across the city for sure. Benefit, you don't have to mow a lot when everything's dead, so, you know, that's been kind of nice. Fly a lot further, you know. Do they? I don't know.

3:03I believe you. Oh, because the hard grass, hard ground, right? Yeah, yeah, copy that. Um, so we're recording, uh late June. We're going to talk about May, uh, and I guess we can talk a little bit about how June's going too if you want. But, uh, how are things in the greater Roxboro metropolitan area? Yeah, things are good. Um, you know, we've recently got our new Chick-fil-A up and running here in Roxboro, so we're the number one Chick-fil-A in the state of North Carolina now here in Roxboro.

3:37So I don't, I don't doubt that. It is the Lord's preferred chicken. Chicken, and we have been deprived of it for so long that, uh, the demand is still pushing out into the street even 2 months later. So, so if Chick-fil-A is the Lord's preferred chicken, what is Satan's chicken? Is that, is that Bojangles? Is it Popeyes? Is it Church's Chicken? Church's is Satan's, is the devil's chicken.

4:04I have the best spicy chicken. Who has the best spicy chicken? Anyway, this is probably not the value that our listeners come for. Probably not. But just to answer the question there, if we have to, being that we're from the South, we have to say Bojangles is the best spicy chicken. I would, I would give you that for sure. We actually have a jar of Bojangles seasoning in the kitchen right now.

4:24So yes, never go without. So May was good for us across the stores. Cumulatively, it was the best month of the year so far. Like summer finally got here and it felt like things kind of broke loose a little bit. There was a little bit of nerves about, you know, $4.50 gas, but that didn't really pan out. Yeah, we saw some price increases on oil and there was a lot of fearmongering about synthetic oils are going to become, you know, unobtainable, whatever.

4:58Um, none of that have I seen come to fruition, um, at least not in this market, thankfully. Hopefully I'm not speaking it into existence, but, uh, May was 2 days fewer than April, and, uh, it was the best month of the year across the company. And at the Hillsborough Street store, the one that we report on, it was the best month of the year.

5:20We were, you know, we were down 15% on cars, uh, May over April, uh, but 2 fewer days, so that was a contributing factor, uh, But overall, sales were up, ARO was up significantly. So, um, you got a different advisor in there right now. The advisor who had been there, um, took a job elsewhere closer to home. Um, and, uh, his kind of— he was an advisor assistant/expediter, estimator, that kind of stuff.

5:50He asked to step up and said he could really show us what he was doing, and he's done really well. Um, so You know, anytime you see a dude kind of step into the breach like that and add $100 to ARO overnight, get pretty excited about that. So, um, very happy with that. And, um, you guys seem to be hitting a stride coming into summer proper when NC State University gets out and the students go home.

6:19That typically, you know, this store is a little bit inverted from the standard. Summer is the slow season because the students aren't there. Um, and so, uh, we've seen car count fall off a little bit from the student population, but the local population obviously is still there and is still coming in. And, uh, for him to be increasing sales without students, uh, is pretty great.

6:43So we're very happy with that. Um, well, first off, you know, you've, uh, you guys have had a bit of a you know, a bit of a rough go of it this year, you know, as, as far as the reporting side of things goes. So yeah, it's nice to, nice to check in with you and, and hear some momentum moving in the right direction, and especially on the staffing side, because I know there's been a lot of, a lot of changes in turnover there, especially at the front counter.

7:13So glad to hear that we've got somebody that we, we feel confident about in place over there, and it is, like you said, moving some of those numbers back in the right direction. Because they had been trending, trending negatively for some time. Yeah, I'm, I'm not really sure what played into that. Um, I mean, beyond, you know, lack of management on my part, right?

7:38We've talked about it a fair amount. Um, Stephen has really stepped up with his, uh, you know, uh, regular, consistent phone call editing and RO editing and accountability conversations with the guys. And the new advisor in there is very process-driven. Like, you give him a system and he's going to work that system and follow, follow the system. And that's worked out really well for us.

8:05So all told, feeling pretty good about things. So good. So just to kind of get some, just kind of get some clarity on the numbers there, I know you said ARO is up. What are we up to? For last month? Um, hold please. Don't want to lie to you. It went from $460 to $553, so up 20%, uh, just shy of $100.

8:36Um, and what is tech average quote there? Tech Average Quote's really high, uh, and I think part of that is because we— it was $1,293, and then we plugged in Golden Hour Garage, and, uh, now it's $2,100. So it's gone astronomical, uh, compared to what it was. So I think there are a couple of factors at play there. And I don't know if we talked about this last month or not, um, that not all of the cars were actually getting DVIs when we thought they were.

9:11Right. Um, where are we at with that part of the process now? Well, um, by default, every ticket when it was opened was getting 2 DVIs automatically added to it. One was our findings DVI, the, uh, the ISO, the one thing, and one was the rest of the DVI. Um, and at that store— well, at all the stores, we have ceased that, so they have to be manually added into the ticket so that, uh,, you know, there aren't DVIs being reported that didn't actually happen.

9:41And so if I go into, uh, reporting now, um, you know, so far this month at that store, uh, 84% of DVIs have been— 92% have been sent to the customer and 84% have been opened and viewed by the customer. So, you know, we set the target at 85%. When it was at 50, right? So huge improvement there. Um, and 120, 119 DVIs.

10:16Uh, so it's 94% of repair orders, uh, have a DVI, and 92% of those are being sent to the customer. So I feel pretty good about that now. Um, so let's talk about the good here, and then I want to— not that there's necessarily any bad, but I think that there's some opportunity to continue to keep the momentum rolling in the right direction.

10:45Um, number one, I think your tech average quote's fine. I think the AWR at $2,100— I mean, I know you said that's astronomical. Uh, really what we shoot for at Elite is it's a big jump from where you were for sure. Yeah, yeah, yeah, yeah. Um, but, uh, just for the listeners out there, we try to keep that number somewhere between $1,500 to $2,000, uh, for general auto repair, Asian and domestic.

11:09If you're a specialty shop, Euro, diesel, we're probably going to see that number be quite a bit higher. Um, if you're a really— what is the spread between $1,500 and $2,000? A lot of that's going to be determined on your volume and your mix of maintenance. Yeah. Right. Well, and I think that's the difference that's gotten, and our target is $1,800, uh, is what we've established for the company as our target tech average quote.

11:34Um, and I think the addition of using, um, this remote estimating service, uh, is that they're putting all the overdue maintenance on there. And in the past that wasn't happening and we're not good at selling it. We're, we're better at selling broken stuff than maintenance. So I think that's, I think that's a common problem across the industry, right? I know we sell stuff.

12:03It's easier to sell broke stuff. Hey guys, Kari Lynn with Turnkey Marketing. If you are looking to increase cars and you're looking for the right demographic to go after, you want to get the right people who need auto repair right now. Then give us a call. We have a service called Direct Track and it utilizes AI to find people in your area who are the great demographic that you want to go after, have raised their hand and opted in saying, I need auto repair help right now.

12:30We send them an email. As soon as they open the email, we then get their physical address, follow it up with commercial ads on all their streaming services like Hulu and YouTube and ESPN, Fox News, all those different things. And then we also get their physical address and we start sending banner ads and display ads to every single device in that house.

12:51It has been incredibly effective. It has made shops seem like they're everywhere to those people who need repairs right then. And I mean, I'm telling you guys, the return on investment has been huge. So if you want to increase car count, you want to get great people in the door, give us a call or reach out to us and ask us about DirectTrack marketing.

13:13What's up guys? So if you know me at all, you know that I think I'm pretty awesome at everything, right? But the reality is I get so busy that a lot of things fall by the wayside. And one of the things that I've always really enjoyed is actually the process of hiring and recruiting. But as the business grew and as the podcast has grown, I just don't have time to react quickly like you have to to be competitive in the recruiting market that we have right now.

13:35That's why I've partnered with Promotive. I've used their full-service recruiting process also to great effect for, uh, technicians that were immediate culture fits. That was awesome and useful. But what I'm really excited about is their new tool, Page. If somebody applies to one of my job listings, Page contacts them immediately and has an interview with them. By the time I get the information, I already know if they're worth the time and effort to jump on that applicant quickly or not.

14:01It saved me a ton of time with bad applicants. It's prepped me really well for good applicants. It's just a super effective, super useful, super efficient tool to help me stay on top of my hiring and staffing needs. If you want to learn more about their full-service recruiting process or about their new tool Page, go to info.gopromotive.com/confessions or scan the QR code below.

14:27Um, so we need, we need to come up with some strategies to improve our, our closing percentage a little bit because we have the tech average quote up there where we need it to be, um, or the ADS. What we're— we're still a little bit light on the ARO, but we're seeing a lot of improvement. I'd like to see that grow just a little bit.

14:46I'm sure you would as well. I know when that store was really humming, when we were meeting last year, we were somewhere around 700 to 800, somewhere in that range on the, you know, on the target. Yeah. Yeah. Um, so I'd like to keep climbing in that direction. Again, I want to celebrate the improvement for sure, because there's— that's a big improvement in a short period of time.

15:10I don't know, from a listener standpoint, I don't know if anybody out there has tried to improve their ARO by $100 inside of 30 days, but it's not, it's not an easy task to try to do. Um, so I, I commend him and his efforts, uh, and, and you and Steven for giving him the tools that he needs to be successful there.

15:32But I think the next step is, is how do we, you know, how do we try to push that a little bit further and, and maybe get to that $650 range to start with and then start creeping into $700? Um, because I think you're like, again, I think your discovery side of it is there. We just have to— we got to close on a little bit more of it.

15:55So on the on the closing side, I know he's transitioning from the assistant advisor to the lead advisor. Um, would you say that he still needs some help and training on the, the sales presentation side of things, or do you think he just has specific services that he's good at selling, or what do you think the— No, I think presentation and confidence are definitely areas of opportunity for him, uh, and also overcoming objections, right?

16:25I think Um, and this is anecdotal, right? So if I'm— Stephen would actually be better at answering this question because he's the one that's been listening to the calls. Um, my suspicion is that if he gets it on the first presentation, great. And if he doesn't, there's not a lot of coming back to the well, you know? Um, so, you know, he probably would be— he'd probably be one of the guys that would benefit greatly from like going to the master's program that y'all got coming up in October.

16:57You know, um, that Masters— Eagles is in October. Masters is when, uh, Eagles is coming up. You got STX coming up in August. Masters is going to be in September, September the 10th in Dallas. Okay, I love that y'all are doing that in different parts of the country now and moving around, uh I think that's good. Well, we've, you know, we've obviously identified, you know, one of the biggest barriers for a lot of people is to travel.

17:31And, um, if we move it around and try to shorten that barrier for some people, uh, it's definitely a benefit. Well, like, I think he would benefit from Masters, and frankly, it's been many years since I've been to Eagles., and it's totally new curriculum and rewritten, and I think I'd probably like to go to that. So I think Eagles would be great.

17:59Um, even, even I know Steven went to one, uh, 2 years ago, and there's not a, there's not a shred of it that would be the same that he would, that he would be able to recall from, from that Eagles class that he went to. Um, I think that would be great for either yourself or him to go, and we're starting to see a lot of advisors and technicians, uh, actually starting to come to that as well.

18:22And it's what we've gotten from that out of getting some feedback from shop owners that have sent their team is even though it's a manager-owner course, when you send a lead advisor or you send a lead technician, you know, the problem that we have communicating with the team is a lot of times there's, there's the gap between the employee perception of things and the owner-manager perception of things, right?

18:51And the employee's just never been put in that position before to see things from the other side. So I mean, we all know this, like, you're at some point in time, it's somewhere in one of your shops, you have a technician that thinks you make $200 an hour. Yeah, right. I mean, it just is what it is. That's why technicians start shops, is because why would I give this, you know, why am I only making $35 an hour and he's making $150?

19:15And the, the original assumption is I'm going to make all that money, right? So what you're saying is most shops are born from a place of extreme ignorance. I, I think most businesses are born— and I mean, it's the whole reason that The E-Myth exists, right? It's the entrepreneurial seizure of— and I mean, I can 100% tell you that even, even with the business experience that I had coming into this It was a profound amount of ignorance and arrogance in the way that I entered into this industry.

19:48I thought, man, I'm, you know, I'm gonna go start my own business. I'm already running this business over here, running all the day-to-day operations. This is gonna be so much easier. I'm gonna downsize my responsibilities 'cause I'll only have 5 to 10 employees and I'll never have to show up and do anything and I won't have to travel 'cause it's local. And so on and so forth.

20:09And man, did I get kicked in the teeth with it, you know. So I can't even imagine what it's like for somebody to come into it with zero business experience and zero management leadership experience and then have to try to grow all of that at one time. You know, I think that's a huge underlying reason why you've got all this private money coming in and scooping up all these businesses, because we don't know how to do business.

20:37As an industry. The independent aftermarket is not super good at doing business at first, and the best ones learn, or they seek out training and coaching and learn. Um, but I can't imagine trying to put the pieces together on my own, like doing it on an island. Man, what a disaster that would be for me. Yeah, and so it's— and you're not wrong there, you know what What private equity understands is they understand the math and the numbers of the business, right?

21:07They're, they're P&L, you know, gurus, and they, they understand how to run their expense structure. They understand the basics of their cost, you know, which is going to be parts and people, and they understand how to minimize those costs to the best of their abilities, and they understand how to create a standardized product in some way, shape, or form, right? Where I think in, and I think one of your recent episodes you guys talked a lot about private equity, but there's still a lot of opportunity out there for independent business owners, independent shop owners, because what they're not great at doing, they're not a buy and hold entity.

21:48So yeah, they're looking for an 18 or 24-month flip. Yeah, yeah, you know, they're, they're, they're looking for, you know, 5 to 7 year sunset where they're going to come in They're going to roll up a bunch of, you know, shingles under one roof and, and they're going to pick up the phone and call other places that they already have relationships with to be able to exit at a higher multiple than they paid.

22:11Right. I think that's what— did you listen to the episode we did with, um, Jesse from Mango Automotive? And that's exactly what she's, uh, working towards, right? And she at least admits it openly that that's the goal. But there are lots of other big name players in our space that that's exactly what they're doing, but they're not telling you that's what they're doing.

22:31They're doing it with other pretenses, right? Sure. And I get that, but it's a great way to create incredible generational wealth. And there's, there's no doubt about that. It has, I mean, there are certain people that are going to be listening right now that have, you know, that that's going to have a lot of value to them and private equity is the right move.

22:49I think. You know, but we also heard a lot of fear inside of the industry that, you know, oh, private equity, this large brand is going to be moving in across the street from me. And, you know, by and large, what you see is, is that's not necessarily a problem, right? Their, their vision is so short-sighted on making the 6x multiple, you know, getting a 6x return on their investment over the next 5 to 7 years that they're not worried about the community and being a lasting part of the community.

23:18So the customer experience and the employee experience has diminished to some extent because everything is about how we can maximize return on investment for that 5 to 7 year window. And yeah, and I think if you're a— and if I'm talking out of my ass, just tell me— but I feel like if you're an independent operator and you're not looking to get out of the industry in the next 20 years, this is probably an opportunity to win some community sentiment and be the local guy and be the great employer and scoop up all the best team members from those organizations that are getting bought up.

23:56Because I mean, sure as shit, if there's a group that comes in and buys up a 5 or 6 location chain in the area that's been successful and been, you know, grown from, from the roots in the area, all their best employees' resumes are out there in 6 months. Yep, 100%. Because they fell in love with the small, local, well-run family business, and the next thing you know, uh, it's all corporate and everything.

24:22All the benefits are changing and all the metrics are changing and the pay plans are changing, and they don't have— they can't go talk to the boss anymore because he's, you know, in Chicago or whatever else. Sure. So yeah, and so I think that's a great opportunity. I think it's a great opportunity for our industry. But you know, I mean, you are right, they come in and they understand the foundational, you know, elements of business a lot better than we do.

24:47But that's what we're seeing a lot. We're seeing, you know, like I said, we're seeing shop owners send technicians and service advisors to that. They're getting a different glimpse and it helps put them on the same page when they come back. Like when we go around the room at the end of the class, we ask them, you know, what they got out of the 3 days while they were there.

25:03And it's, I always try to pay really close attention to the guys that are not owners or direct managers just to hear what their feedback is. 'Cause you expect them to just kind of zone out and be bored for the 3 days 'cause they're like, what does this have to do with me? But they get a lot out of the numbers section that we do because it's eye-opening to them to realize how much overhead a shop really has to run.

25:27And you know, hopefully it's a big number, but how little of a percentage the shop owner really gets to keep, right? Because that, that 100% pie gets dwindled down, you know, pretty quick when we start going over all the expenses there. And then, you know, when we cover the how do we, how do we develop a labor rate and how does a technician cost get, you know, get impacted into all of that, it's really eye-opening for them to understand why the labor rates need to be set where they are, why the part pricing needs to get set where it is.

25:57And, and then the communication side of things, um, you know, that we teach on, on the process and implementation side is something that they start to understand a little bit better. So do you think it would be beneficial for someone to come in, like, if they go to that class, they need to have a set of books from their store, right? And they need to know how and how much people are paid at their store so they can do that math?

26:23Or if they're an owner or a manager that is responsible for the numbers then we ask them to bring that because it's— that's, that's part of the takeaway that they get, right? If you're going to send an employee and you don't— and your service advisor technician may not have previewed access to the financials and it may not be applicable to their day-to-day or week-to-week role.

26:43So what we can do in that scenario is we can always give them a sample P&L just to work through the workshops together so they can understand the math behind it and not necessarily have direct access to your you know, your shop's financials if that's not something that's going to be applicable to their role. Because it's more important for us that they understand the concept of it and, and that they, they get to kind of go back through and do the math.

27:07On the manager side of things and on the owner side of things, when we do those workshops and we look at, is your labor rate the right labor rate, and is your, you know, our— is your labor pricing set correctly that's always a huge moment for everybody, you know, because when we do those workshops, that you can start seeing a little bit of panic set in on, you know, on everybody's face.

27:31And, um, you know, we do the calculations, so it's good to have their direct numbers, um, you know, because they're the ones that are actively working with them. And again, on the manager side, it's something that it opens up opens up a large amount of understanding. Because again, when we start talking about effective labor rate, effective labor cost, you know, those are two things that usually your manager is a foreman or a service advisor, right?

28:02Yeah. And they're just looking at shop data in a shop management system. And yeah, that information is not really— I mean, the effective labor rate's in a lot of the shop management systems now, but they're not focused on effective labor rate, really. They're focused on the door rate, and they're looking, you know, at— as far as labor cost goes, they're looking at either what the flat rate cost is or, you know, what the hourly rate is.

28:27Very few shops are really running true flat rate anymore. So even the flat rate shops that we talk to, they're doing flat rate with a guarantee. Flat rate with a guarantee is not flat rate, correct? That's a hybrid pay plan, right? Yeah. So if I have a flat rate technician that has a guarantee of 35 hours and he's barely breaking his guarantee every week, then his effective labor cost to me is more than what his flat rate pay is.

28:52Correct. And that, and that doesn't reflect in the point of sale software because the point of sale software doesn't know his pay plan. That's exactly right. Right. So, and it makes me think we had, uh, We did an episode recently, uh, with Matt Curry, and we cut a little clip out. And in his organization, his highest paid technician made something astronomical last year, like $350,000 or whatever.

29:17And people were losing their mind. He's a liar, that's bullshit, whatever, yada yada yada, without any context, right? And Matt is a bit of a troll, and he enjoyed it. And he, uh, you know, posted the dude's W-2 up there with his name and address, everything redacted. He was like, you know, read and weep, guys. But, um, you know, the point is this dude makes $68 an hour flat rate.

29:39And so if he's getting paid $68 an hour flat rate and he's working 6 days a week and he's a rock and roll unicorn type guy, right? And that's amazing. And this isn't a knock on, this isn't a knock on Matt. Good on him. Um, but he is in one of the highest concentrated commuter areas in the United States. Unlimited cars. And he has, he has unlimited cars and they have unlimited revenue.

30:03That's one of the highest revenue, you know, revenue per square foot in America is right there in Northern Virginia. And they're all commuter drivers that have a 30 to 45 minute commute every single day to get into DC and back. So he's in a phenomenal area. He's got, you know, he's like you said, he's got endless car count. He's got great technicians.

30:23And they've got systems in place that allow those guys to just churn out quality work. Well, if you back into it and, you know, if one of our listeners is like, oh, well, I need to go get a $68 an hour technician and he'll be incredible. Not necessarily. And plus you gotta do the math. What does your labor rate need to be?

30:42If your effective labor rate versus your door rate, if you know how much erosion you have there, What does your effective labor rate need to be to have a dude at $68 an hour and still have the margins you need to still be able to be profitable? Uh, it's gonna be a really big fucking number for most people that is not realistic unless you're in an incredible market like what we were just talking about.

31:05And that's exactly right. So I mean, it's— while I'm super happy for him and all of his employees, that's, you know, and I think the concepts that he puts out there, you know, and the fact that we do need to pay our employees better, I think is I think is all valid, but the reality is that's not going to be— that's not going to be possible in every market.

31:26Great service advisors are not born. They are trained, coached, and developed. That's why Elite Worldwide created the Master Service Advisor Program, an intensive 3-day training happening September 10th through 12th in Dallas, Texas. This class is built for service advisors who want to elevate every part of their performance. From customer communication and relationship building to presenting recommendations with confidence and increasing overall sales right away.

31:51You'll learn proven strategies used by top-performing advisors across the industry while gaining practical tools you can immediately apply in your shop. Whether you're looking to improve your confidence, increase your effectiveness at the counter, or become a stronger leader for your team, this program delivers the training and support to help you succeed. Join us in Dallas this September to take the next step towards becoming a world-class service advisor.

32:15What's up guys? I was just coming to talk to you about one of my favorite, uh, pieces of software that we use in line with TechMetric, that our point of sale system, uh, platform that we're using, and that is Detect Auto. And you've heard me talk about Detect Auto for almost a year at this point. My team loves it. I enjoy it.

32:32It makes life easier. And I just want to talk to you about one of those features, and that is just their maintenance tool. If you know how time-consuming and tiring it can be to go back and search history one by one by one by one to get a picture of a vehicle service history before you make your maintenance recommendations, this is going to save an enormous amount of time.

32:50In 30 seconds or less, it's checking CARFAX service history, it's checking OEM service interval recommendations, and it's checking your own internal customized service interval recommendations. And it combines all that information to give you a picture of the maintenance that has been missed or is not known. On that vehicle and adds those recommendations automatically to your inspection process. With just a couple clicks of buttons, that can be added also directly into your repair order and your estimate.

33:15I think it's a great tool. It's a great time saver. I love it, and I think you will too. You should give it a shot. If you want to find out more, check out the link to Detect Auto in our show notes. You know, unfortunately. Of course. Um, but a version of that is toned down to meet the metrics of your marketplace, right?

33:39Uh, maybe it's not $68, maybe it's $48, maybe it's $38. So I think the real— I think the real, uh, study there is what is he above for that area, you know? So if $68 is what he's paying, is the average rate in that area $50, and he's, you know, 20% plus above the normal area. I think that concept can be applied everywhere, like you said, because we, you know, I would say we're in that same— we're obviously considerably above what our, our target area or what our general area is for what we target our, our technician pay at.

34:15Um, and we're doing that because I'm pulling technicians out of Durham and Granville County, guys out of Raleigh. Yeah, I'm pulling them out of everywhere, and they're— I'm competing with a higher, you know, higher wage, you know, in that market. So we're paying considerably higher than a lot of the other shops in our area are, which forces our labor rate up, right?

34:34Which adds in a whole lot of other challenges, uh, when it comes to the customer experience and the quality of service and the quality of work and all of that that goes along with it. Um, so, you know, there's the raise your rates conversation that's been happening now since COVID you know, really, and somewhat before that. Um,. And while I do, I do agree with and believe that a lot of shops are under, undervalued with what their labor rate is, and I've heard you and Brian talk about it on your show quite a bit.

35:01If you're gonna raise your rates, you also have to raise the value, right? You have to do something better. So if you're raising your rates, are we providing, are we raising the rates cuz we're providing a better team? Are we adding talent to the team? Uh, are we adding processes and procedures that improve the, uh, the customer experience and improve the quality of the work?

35:19That makes the, that makes the value better to the, you know, to the user. Raising your rates just blindly for the sake of making more money is usually a, a short-term feel-good to a long-term detriment. Well, think about it, you know, getting a combo meal at McDonald's 10 years ago was $4 or $5 or whatever it was. And now it's $10 or $11 or whatever it is.

35:51Uh, have they doubled the value that they're bringing? No, but the price has doubled. We all know that some of that is inflation, but it also causes a little butt hurt when it— when you take the kids through the drive-through because you just got done with a soccer game and it's already 8 o'clock and everybody's tired and 5 people getting crap food is $50.

36:14You know, um, you got to make sure that that's not what you're doing to your customers. Sure. And, and so just, I don't know if that's not a well-thought-out example, but I think about that when I, when I eat, because we eat out a fair amount and the cost of eating out has become, uh, shocking sometimes, you know. So Maybe it's, maybe it's all the whiskey and vodka that we have when we eat out.

36:44I don't know, maybe that's doing it. Um, so yeah, I think, I think, I think me going to Eagles is going to be a good thing. And I think one or two of my guys really benefit from going to Masters and kind of polishing those skills a little bit. Um, What would it look like? And maybe this is a conversation for offline, um, and if it is, tell me and we'll just cut it out.

37:12But what would it look like to have a course hosted in Raleigh, um, you know, at my facility? So we've talked about doing some, you know, uh, 3-day courses. So the way that, just for the listeners to understand a little bit better, uh, Masters is our, is our sales training program that Elite puts on. It's a 3-day in-person course, and then it's 6 months of follow-up after that.

37:37So it's a lot of one-on-one coaching and a lot of group coaching as well. Um, so there's a lot of, there's a lot of handholding and accountability, uh, built into that program. Uh, but because of that, it's, it's a lot of lift on, on us internally at Elite. So it limits the, the number of, of those, uh, classes that we can do per year.

37:57Uh, so we have actually talked internally about doing some just 3-day courses without the 6-month follow-ups., to go along with that so we could cycle through, you know, some more people through. And then also, you know, we have, we have service advisors that have been through Masters before that don't necessarily want to go through the 6 months of follow-up afterwards, but they would like to go back to the 3-day section of it.

38:21Um, so it's something that we could entertain for you because we've already, we've already been in the works of having conversations there. We just haven't formalized it out. Uh, but I think that's something that's on our 2027 agenda for sure. Well, that's one of the things that, you know, a bunch of our listeners were able to come out. Um, and, and one of your guys came down for the AI class that Seth taught, and that was, one, it was a lot of fun.

38:46Two, it was great to have a class in the environment that I set with the topic that I set. And I'm like, well, shit, I'm just gonna have if I feel like I need this training in my business, I'm just gonna have it in Raleigh at my shop and invite everybody to come down. And if people want to come, great. And if they don't, then my guys are going to get training, you know.

39:06Um, and Mike, I think you found a great niche for yourself because you're a fantastic host. I do like to throw a party. So, um, that was a good time. So, um, but, uh, no, I think I would love to explore having, uh, you guys, maybe Sabrina, out, uh, to, uh, Raleigh at some point, uh, to have a podcast-hosted event. I think that would be a really great opportunity for our listeners and for my team.

39:38So maybe we'll try to pinpoint that and, and set a time. Um, one of the things we talked about earlier, uh, before we hit record is something that's been, uh, kind of catching my eye, and it's been a conversation on a few of the episodes recently, but that was, uh, EOS, Traction, Rocket Fuel, that whole deal. And that was a topic of conversation at the class, at the AI class a couple weeks ago also.

40:02Um, just finding the, the template and the system that works and that clicks for you, that you can execute on in your business to get some, some procedural methodologies in place because I am the world's worst, as, as Pollack calls it, weapons-grade ADHD. I get really excited about this thing and I get all about it and passionate about it, and then I get 75% of the way there and then I get distracted by this thing and I go over here to that thing and, and I'm focused on that.

40:37So, um, you know, talk to me a little bit about your experience, um, and knowledge of EOS versus other Operational Systems? Sure. So I don't have any, I don't have any direct implementation of EOS experience. I have read Traction, I've read Rocket Fuel. I know several people that have gone through, through our pro service group that you're a part of that are heavily involved in EOS and speak very highly of it.

41:02Internally at Elite, we, we actually are in the process of implementing EOS as well. So I have some, I have some experience with it of the user side of it as being an employee of a business that is implementing EOS. From an actual implementation standpoint of things that are similar, and I think you summed it up pretty well, I think EOS is a great tool.

41:25I think Traction and Rocket Fuel are fantastic books. I think every entrepreneur out there should read those books, understand the concepts of EOS, whether you actually implement it as a formal system or not. I think the concept of it has tremendous merit. For anybody, um, for anybody that wants to learn about it. Where, where my personal belief sits is I think, I think the statement that you made is there's a bunch of different options out there.

41:54The important part is that you have some structure that you follow, because most companies are started by people that have a visionary, you know, they're an idea creator of an individual. Right, which is what makes them a difficult employee, right? So I grew up in a family business with my dad. My dad, insanely intelligent individual, was a high producer at every job that he ever had.

42:22He's a terrible employee because he had all the ideas, right? And in an employment relationship, those ideas oftentimes get, you know, they get put— there's a lid that gets put on them, and that person eventually gets tired of, you know, being, you know, being restrained, and they go start their own deal so they can run their own ideas. However, um, and there's, there's— I think there's other good books that go along with this as well.

42:50Are you familiar with Patrick Lencioni's The Six Working Geniuses? I am not. So I think it's a great book, goes along with the Traction and Rocket Fuel. It's a slightly different concept, but you know, the concept of EOS is the vision, you know, the pairing of a visionary and an integrator, right? So yes, okay, now I see it. Yeah. And Patrick Lencioni's book, The Six Working Geniuses, what he states is, is that everybody typically has there's 6 geniuses that, that you could have in, in the workforce, all right, that exist.

43:326 traits that exist. You have 2 of them that are your personal skill and that you get enjoyment out of and that you have a talent, just a God-given ability to do it well. And then there are 2 that you might have the God-given ability to do it, but you don't really enjoy doing it, right? And then there's 2 that it's just not your gift.

43:53You don't have the— you don't have the ability to do it, and you don't get any joy from it, right? So the idea is, how do we put a team together that fits, you know, fits in the places? So same concept as, you know, visionary integrator, right? So a lot of us at the top have a skill of being that visionary person that we come up with the idea, but we're not a get it across the finish line guy, right?

44:17So there has to be somebody on the team that gets it across the finish line. And there has to be some structure in the organization that allows us to have the cadence and open communication of here's the vision, here are the things that we identified that need to happen for the vision to be successful. And then we have delegated effectively to the right people to take ownership of those tasks to see them through to the finish line., right?

44:46And that's where, that's where people have really gotten the value out of EOS, is it kind of, it puts together a system and a structure that allows, you know, that to happen. And even for us, I mean, I'm, I'm ADHD, I know you are, I think most owners have that, you know. My, my manager, she calls it shiny squirrel syndrome. She's like, good Lord.

45:09So I'll be in the middle of talking to her about something and, you know, something changes and she goes, "Squirrel, that was a squirrel. Stop. We gotta get back to what we were talking about." And so, but number one, so I know we were talking about you having, you know, having some thoughts about maybe implementing EOS and going through that, which I think is great.

45:35What is your intended outcome? Of EOS? I think, like, when I, when I get feedback from my team about what they wish was different within my business, one of the, one of the regular pieces of feedback was, you have lots of great ideas or lots of ideas that you're excited about, whether or not they're great. You know, they specify that they know that I have ideas that I'm excited about.

46:05And there's a lack of follow-through to completion, right? I just don't get it across the goal line because I get distracted. And so because of that, there's this constant trickle of change. Let's try this. Let's try this. Let's try this, which can be good in the right environment, but can be overwhelming without the right support and without seeing the results of completion.

46:31Right. And so change fatigue is a thing in my organization that I've created. And so getting a system in place where we can throw an idea out there, discuss it, make a decision, and then follow it through to fruition or have checkpoints where we're going to be like, this is not working. Get rid of it immediately, and we'll move on to the next thing with certainty.

47:02Um, and being able to, uh, complete a task and implement a new system or close the door on it and move on and not think about it again would be, I think, refreshing for my guys and gals. So, so yeah, I know in the first couple years of owning my shop and just trying to learn the industry, I, I suffered with that greatly, which was, you know, you see something online, you see something on YouTube, or you see another shop owner and you see the system that they're running and you're like, man, we got to do that, right?

47:42That looks cool. And so my question is, you're suffering from an identity crisis, right? Okay, there's no core identity of what your business is and what you want it to be and what the core, you know, what the core system is that truly differentiates you, right? So like, you just, you know, I watched— I feel attacked when you say it like that.

48:08Well, I mean it as a slight attack, but it's— I suffered with it too. I mean, it's just It's what we do, right? We, we see somebody that's doing it better than us and we try to emulate that, and then we struggle with the implementation of it, and then we go, well, that doesn't work. And then we try to, we try to glob onto something else, and then we try to glob onto something else, and then we try to glob, and we're just hoping something sticks, right?

48:33Yeah, for sure. That's absolutely me. And, and the real turning point for me was it was like, man, I got to find something that— I got to find something that I'm in love with, right? I got to find an identity of the business that really you know, that I think is a differentiator that sets us apart, that I believe in, that's our little secret sauce, and, and simplify it all down to that, right?

48:56Because the rest of it— so I mean, if you take a look at a lot of the concepts that are out there that you've been exposed to, they're really simple concepts, right? The— there's nothing overly complex about them, which is why they work. Right? But the reason that they work is the people that are running it are 150% committed to it. They're committed to the simplicity of it, and they don't overcomplicate it, right?

49:22That is absolutely— if you ever go online and you look at a recipe website and you read the reviews of the recipes, it's like, this is Paula Deen's famous fried chicken, or whatever it is, right? All the reviews are like, great, loved it, I changed this. Great, loved it, I changed this. Great, loved it, I changed this. None of those people are fucking Paula Deen.

49:43Right. And so it's funny, like, I went to Houston, I fell in love with AutoShop Answers. I couldn't pull it off. There were things about it that I was never going to do. But the things that I did want to do, I couldn't pull it off because I kept trying to change it. And then, you know, EOS, one of the, one of the people that we were talking about it the other week, he was like, oh, I'm like 80% EOS.

50:06I don't do it all. I change these two things. Uh, but you know, at the same time, I believe in go to training and get, get the things that apply to you and your business and utilize them and ignore the shit that doesn't. Um, so how do you strike the balance there? Yeah, so it's not ignore the stuff that doesn't. It's, again, you need, you need to pull in all this information and then you need to sit down and say, okay, we need it, we need a core mission, vision, and purpose, right?

50:31So one of the things that EOS is really big on is having the long-term vision and then having a midterm, you know, of what that looks like, and then the 1 year of what that looks like. And then, then they break it down into rocks, right, which is your 30, 60, 90s of things that we're going to actually do. So, you know, when I took a look at it, when I started really honing in on what our systems were really going to be that were going to make us unique and You just gotta fully 1,000% commit to it and be 100% in love with it and be passionate about it.

51:08And, and the guys like Matt Curry and Todd and the guys that are selling the model, right, and, and showing and sharing the models, that's what they are, man. I mean, when you listen to Matt talk about his store, he's in love with it, right? He's in love with everything. You know, when they— why do they get 1,000 reviews? Because Matt's in love with getting reviews.

51:27Yeah, for sure, right? Um, you know, speed of service. And you talk about Todd— why are they in love with speed of service? Because Todd's in love with speed of service, right? It's— that's a big part of, you know, what his entrepreneurial identity is, and that's their differentiator. It doesn't necessarily make it the best differentiator in the market. It doesn't make it the only differentiator in the market.

51:50It's the one that— it's the one that they've become passionate about. Which is why it works so well for them, right? So the idea is, is how do you come up with your own system? By and large, most of these systems share a lot of similarities, which you've talked about, you know, on some of your recent episodes as well. I know when you and Adam were talking, um, you know, you kind of share the, the overall concepts of running a shop.

52:15There's only a handful of them, right? There's not that many. So you have to, you have to identify the one that really, you know, speaks to you, speaks, you know, speaks to your customer base, speaks to your team. And then you got to be really dedicated to what that is. Then you have to understand what type of team it takes to run that model, right?

52:35So if I'm a, if I'm a basketball coach and we want to run the triangle, well, the triangle is a proven successful you know, offensive concept inside of basketball. Phil Jackson won a gazillion championships with it with the Bulls and the Lakers. But you have to have a specific team that can run that concept, right? And so you have to put together the team that can do that.

53:00Then it's, you know, then it comes down to putting together some level of structure for yourself as the, as the owner and the operator. And I'll tell you, you know, the, the most impressive person that I've ever, that I've ever personally been around, and I think you'll agree with me, is Jim Murphy here at Elite, uh, when it comes to discipline, you know, individual discipline.

53:23And I was, I was talking to Jim at Ignite this past year, and I was telling him, you know, one of my flaws and weaknesses as a, as an individual even is I'm not a, I'm not a good, I'm not a good connector. And meaning that, I mean, my best friend lives across the street from me, mile and a half away, and we've been friends since we were 5 years old.

53:44Our kids go to school together. We might see each other once every 2 or 3 months. Yeah. And, you know, we might pick up the phone and talk to each other once a month, maybe, right? And so he pulled out, in perfect Jim fashion, he pulled out a printed out spreadsheet that had everybody segmented off and he had 52 weeks of the year.

54:04And he had little check marks, you know, in each one of those boxes for each one of those people about called, you know, and he's got a check if they picked up the phone and he actually talked to them, and X if he called them and they didn't, you know, they didn't answer, and then a circle if he left them a message, you know, kind of deal.

54:20So, um, you know, my, my point is, is that I think a lot of us as business owners, we, we have in some way, shape, or form, we have shiny object syndrome and we get distracted. Just the shiny objects are different for different people, right? For some of us, we gravitate to new systems and new, you know, some of us gravitate to new people, some of us gravitate to new tools and equipment.

54:48But there, at the end of the day, there are systems out there like EOS. There's other things that you can implement that allow us to get control over our natural proclivities and put some discipline into the day and into the week. Because that's really what these systems are designed to do, right? Is to focus us in on what the objective is, what are the steps that need to get done to complete the objective, who is going to be involved in those and who takes ownership of those different activities that need to get done.

55:27And then what are we going to measure to make sure that it's getting done, and when are we going to meet to talk about it, right? Um, and my previous business experience with Strut Masters, we were a manufacturing company, and ISO 9001 certification was a, a big certification that you see all over the side of the road, right? So to be able to get large-scale manufacturing contracts with certain companies, you have to be ISO 9001 compliant, and that was called QMS, which was Quality Management System, which was very similar to the overall structure, the entrepreneurial structure of EOS, but it was just focused around the product.

56:14All right, but it was, you know, identify identify the goal for the product, you know, the quality goal for the product, identify how we're going to measure the quality goal for the product, identify what happens to nonconformities and what do we do when there's a nonconformity, and then who is the team that's going to be involved in it, and then what is our, you know, what is the cadence of when we're going to get together and talk about these things, and then how do we document those things when we get done, right?

56:45So very similar, you know, very similar to EOS or other things that are out there. I don't think that it's so important that we get too wrapped up in endorsing one particular version of it or another, but I think it's incredibly important that we have it. That makes sense. Well, it's, um, at the risk of, of, uh, being cliché, I always say it, you know, You will be a better business owner if you have a business coach.

57:16Not every business coach is right for every business owner, so you need to find the one that is right for you. You need to interview multiples, find the one that's right for you, and use that one and listen to the advice, right? Obviously Elite Pro Service, uh, and Elite Worldwide Coaching is what was right, has been right for me and helped me grow my business.

57:37Um, it goes, it just flows from that, that it would make sense that finding the right operational system and the right processes, uh, to manage your company by— there are lots of opportunities out there. Go find the right one and use it. You'll be better if you use any of them than if you use none of them. So makes sense. I can get behind that.

58:00Yeah. And I mean, the, at the end of the day, the simplest, the simplest way to break all that down is the Elon Musk clarity, right? Elon Musk is the individual— I mean, obviously, he's our first trillionaire, so he's done some things better than anybody else in the history of the world. And if you talk to the other large-scale entrepreneurs that are out there, what they give him credit for is that he is the most disciplined individual in the world about— he has the most clarity of what his mission is.

58:27And he stays 100% in line with what that mission is. And he's able to eliminate noise, you know, from the signal. Right. You know, it's funny you say that, like, that's how I see Jim. Yeah. Yeah. He is. He works his schedule. He's on his schedule. He takes it very— like, I'm, I'm pretty sure that I'm dead to Jim right now. Um, because I had a one-on-one schedule with him like 3 or 4 months ago and like 3 dudes called out, boom, boom, boom, and I found myself on the counter running a store.

59:02And, uh, he texted me like 5 minutes into our one-on-one and I was like, oh shit, uh, and I apologized. And he was like, well noted. It's like, you know, like he's got a very busy schedule and when he carves out time for you, I mean, he takes it very seriously. And I, I fucked up with that. So yeah, and so, and, and I mean, I struggle with that.

59:25That was one of the conversations that I was having with him at a night is he was giving me one of those, you know, you know, those Jim fatherly conversations that he likes to give there, um, because I struggle with that as well. But I think, you know, just personal discipline, um, again, getting back to the business side of it and how it relates to EOS, if you identify the business model that you, you know, that you're, you're in and you're all in on it, then you put together what is the big vision that this business model is going to create for you?

59:55What is the 10-year plan? If we run this business model perfect over the next 10 years, what do we hope to get out of it? What's the objective? And then we're able to back into, you know, once we know that, we're able to back into what has to happen in 3 years and 5 years. What does the team have to be, you know, to be able to run this model?

1:00:13And then when you get to that level of clarity, it's really easy to ask yourself the question, is what I'm getting ready to do helping me get closer to that objective, or is it taking me further away from it? And if it's taking me further away from it, we find a way to not do it or not do it as much. If it's taking me to it, no matter how painful it is, we keep pushing through it, right?

1:00:37Um, but that, that made a world of difference for me and my business. And it, it didn't have to come through something like EOS, but it— if you look at The concepts of it, it's very similar, right? It's identifying the mission, the vision, and the purpose, identifying the team in place that it's going to take to push that mission and vision purpose through, and then what are the steps that, you know, what are the breakpoints in that, you know, in that vision that you have that we can back into to say this is the pathway to get there, right?

1:01:15You've got to have the destination in mind when you're making your decisions, right? Yeah. Yes, you do. Well, yet again, you have impressed me with how well put together and articulate you are and left me feeling bad about myself and what a hot mess I am. So thanks for my monthly flogging. I appreciate you, Matt. So, Mike, we're going to turn it— the self-deprecating, while it's good for your show, It's a cop-out and an excuse.

1:01:46You are smarter than I am. You are more articulate than I am. And you have a very successful business that I've enjoyed getting to know a little bit more. The discipline and falling in love with your business instead of somebody else's business is where I'd like to see you change. 'Cause you have a lot to be proud of. I need to stop lusting over other people's businesses and fall in love with mine.

1:02:12Fall in love with what you got. Did you just pull a Stuart Smalley on me? I'm good enough, I'm smart enough, and doggone it, people like me. So Saturday Night Live from the '90s reference for you children out there. All right, dude, thanks very much. Great conversation. I appreciate you. Absolutely. See you, Mike. Appreciate it. Thanks for listening to Confessions of a Shop Owner, where we lay it all out— the good, the bad, and sometimes the super messed up.

1:02:38I'm your host, Mike Allen, here to remind you that even the pros screw it up sometimes. So why not laugh a little bit, learn a little bit, and maybe have another drink? You got a confession of your own or a topic you'd like me to cover, or do you just want to let me know what an idiot I am? Email mike@confessionsofashopowner.com or call and leave a message.

1:02:55The number is 704-CONFESS. That's 704-266-3377. If you enjoyed this episode, be sure to like, subscribe, or follow. Join us on this crazy journey that is shop ownership. I'll see you on the next episode. If you're still thinking about the shop at 10 PM, you're not alone. You're replaying the day, wondering what got missed, what still needs follow-up, how the numbers look, and whether anything is waiting for you first thing tomorrow morning.

1:03:32That part of being a shop owner gets old really quick. TechMetric is built to take some of that off your plate. It brings you shop management, payments, and marketing together in one place, so you're not piecing things together at the end of the day trying to figure out where everything stands. Your team has what they need to keep things moving, your customer communication doesn't stall out, and you have a clearer picture of how your shop is actually performing.

1:03:56See how it works at techmetric.com. That's T-E-K metric.com or tap the link in the show notes.