Ep 109 - Becca & Tony Zanders | The Truth About Selling Your Auto Repair Shop

0:00If you're selling simply because you need more money, your only option is to sell it to the highest bidder. But if, like most of us, if you've built a business that you have a heritage, a legacy-mindedness into, when you've built it correctly, the why of why you're selling is to pass it on. That changes the game. You can choose then who you sell it to.

0:25The 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 of a Shop Owner, presented by TechMetric, the best software in the history of ever.

0:57If 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. That part of being a shop owner gets old really quick. TechMetric is built to take some of that off your plate. It brings your 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.

1:24Your 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. See how it works at tekmetric.com. That's T-E-K-M-E-T-R-I-C.com, or tap the link in the show notes. ASTA Expo 2026 coming at you September 24th, 25th, and 26th, just around the corner. If you've been hiding under a rock and you don't know what that is, it is only the very best networking, training, and trade show event in the country, or at least east of the Mississippi.

1:59So I believe that you need to be there. It's bigger every year. It's better every year. And to top it all off, Confessions of a Shop Owner is hosting the hospitality suite for the 2nd consecutive year. If you hadn't heard, it was the best freaking hospitality suite in the history of the automotive industry, hands down, no doubt. And if you also haven't heard, we are giving tickets away to the expo this year.

2:21The podcast is, thanks to the generosity of our sponsors. Astausa.org to learn more and to buy tickets. Be there or be square, dog. All right. So here we are. I've got a couple of guests that I'm meeting for the first time today, but I'm super excited about because I've read some background and we've been talking for a few minutes, just a little bit about your history.

2:43And I think you've got a great story to tell for our listeners. And I'm looking forward to meeting you at Apex in Vegas. Right around the corner. Gosh, it's almost here. Um, so real quickly, Tony, Becca, if y'all could do me a favor and just kind of introduce yourselves to our listeners, and then we'll dive right in from there. Is that all right?

3:02Yeah, absolutely. You want to go first then? Sure. I'm Becca Zanders, and Mike, thank you for having us on the show today. Uh, I am— my pleasure. Yeah, I am first of all mom of 4 kids and also a grandma. All our kids are out of the house and a dog named Huckleberry. And we owned a shop for 22 years. We're very passionate about the automotive repair industry and the broader adjacent markets.

3:34And I'm a certified exit planning advisor. So what I especially love in the consulting and coaching world is getting owners to grow and to exit in a way that they can harvest the most wealth out of their business while accomplishing their personal and their business goals. That's awesome. And I, I love having that conversation. So I'm going to want to come back and spend a lot of time on that if we can.

4:06Tony, what's a little bit about your background? Perfect. Well, I like to joke that I'm the arm candy to Trophy husband. Yeah, yeah. So the, uh, the, the background, the history is, uh, I, as a, as a young, young kid, uh, I found I had a pretty good aptitude to work on cars. Um, my dad was a house painter and I hated that.

4:31And so he, uh, he told me, if you don't find a job this summer, when I was, you know, 14, if you don't find a job this summer, you're working for me. So I went and as quick as I could found a job. Ended up, ended up, and I love my dad, ended up working in a shop in Boise, Idaho, and found that I really had a good knack for it.

4:56Pursued that, went to trade school, worked for a couple of different shops, and finally we realized that the way we wanted to do business wasn't being done. In, you know, in the larger shop environment. And so we put up a shop in our backyard, started working on cars, and, uh, and grew like a, you know, started growing like it was in a, on a rocket ship, you know.

5:23And we very quickly, uh, found our position, found our, found our footing in Meridian, Idaho, and, and excelled to, uh, you know, one of the best shops in the area for years on, on end. And so that's kind of the, kind of the background and history. And so you guys met up over automotive repair, much like the way I met my wife.

5:47And y'all worked together in the business. My wife was a customer at my dad's shop when I was a service advisor. And I did a— it's actually a pretty cringy story on how I Now I tried to strike up a conversation because I wasn't even her service advisor. My buddy was helping her out, but I wanted to ask her out on a date.

6:11Um, and she was in the lobby, uh, reading a book, waiting for service while, uh, her car was being serviced. And we had a little water cooler over there, so I went over there to get a little cup of water. Hey, what are you reading? And, um, I think it was The Red Tent is what she was reading. So this had to be like 2005.

6:30Um, and I said, well, you know, I haven't read that book, but I read books too. And she looked at me and she went, I'm really happy for you. Clearly she's smarter than I am. So I did the walk of shame back over to the service advisor counter and the guys were all making fun of me for being such a loser. Uh, but eventually we struck up a conversation over book recommendations and, uh, the rest is history.

6:59So, um, nice. But anyway, um, I love that. But anyway, well, so my deal is Becca, her, uh, the youth pastor at our church, uh, when she was in youth group sold her a car, just a miserable old worn-out car. Datsun B210. Yeah, 19— what was it, '74? '74. Yeah, Datsun B210, two-tone. It was mustard yellow and rust. Like real rust. They all were bad.

7:29They all were. So yeah, but he called me one day because he knew I was a mechanic, said, hey, you know, I got this young girl in my youth group that has this car. Could you, uh, could you help her out? Could you take care of her? And, you know, and I don't think he ever called me back and told me to stop taking care of her.

7:45So she's sitting right here, and now she takes care of you, and you've become the arm candy. Yes, that's right. That's true. I will tell you, um, you should never ever ever think that it's a good idea to drive a car that the youth pastor is getting rid of. Yeah, because the youth pastor's car is always a train wreck. Yeah, pretty much.

8:07Yeah, it was $250. Yeah, and worth every penny, right? Um, all right, so you guys meet up, you, you, uh, hit it off. You get married, you end up owning a shop together for over 20 years. Is that right? 22 years. What was the name of the shop? Heritage Auto Repair. Is it— does it still exist, or when you sold, has it been rebranded?

8:34We, we, uh, we had built such a worthwhile and stable business, we sold it to one of our employees, our manager, who'd been with us for about 7 years. And it was, he chose to maintain the integrity of the business, which it was what it was built on. And in the transition, we actually handed him an engraved baton and handed off the heritage that we had built.

9:03But yeah, it still exists as its own entity as Heritage Auto Repair. That's awesome. So, you know, I think for, decades, it was a super common theme for owners to transition ownership of the business to a key employee or to a child. Um, and, and that was the exit plan, right? And there are all sorts of creative ways to facilitate that transition with profit share, or, you know, we can go into that for sure at length.

9:38But I think the elephant in the room now is that it's getting harder and harder for key employees to purchase businesses where they've worked for an extended period of time because the multiples have gotten so high and the valuations have gotten so high because of all the private equity money coming in, right? Um, are you guys seeing the same thing now? Yes, yes.

10:00And I just, I always tell people, be careful who you get into bed with. You know, you know your private equity group. We've seen people greatly regret it. Statistically, 75% of business owners regret selling their business, and it usually has nothing to do with money. So it has everything to do with we as people were made for purpose, right? And why did we build this business to begin with?

10:29And where are we going next? Is that well-defined? And what do we want that business to look like? And if you look at a community, the glue of most communities is the entrepreneurs there. The people that are willing to sponsor the baseball teams, the people that are giving to the food bank. We as an auto repair shop, we picked a couple of things that we were passionate about.

10:54We did single moms oil change days because I was raised by a single mom. One year we had 300 Uh, people at our Single Moms Oil Change Day. We had food trucks, we had jump houses, we had kids. Um, the college comes and helps, parking lot attendants. It got a little crazy, but those are the things that small businesses do for a community.

11:19And if you are a purpose-driven owner, you are going to make a difference in your community that nobody else can make except somebody who's willing to pick up that vision, pick up that baton and do the same thing. And a private equity group is beholden to their investors. Well, somebody coming in with a vision to do what you're doing will continue making that community impact and they will continue taking care of your employees the same way.

11:53So I like to say part of what we do for a business owner is changing the outcome. For not only the owners themselves, but for their organization and for the communities they serve. And is it wrong to sell to a private equity group? And are all private equity groups evil? A lot of people think that. I don't. I've seen it go well.

12:16I've seen it not go well. We had a private equity group courting us that a lot of our peers had sold to, and we probably could have gotten more money, but for us, it wasn't our end goal. You know what drives me crazy is scrolling my social feed, and obviously I follow a ton of shops like a lot of you do, and you see the exact same image, generic photo, generic holiday post, or whatever it might be across 40 or 50 shops around the country because none of them have unique to their business material.

12:49That's not building a brand. Nobody's ever won a customer with a generic Labor Day social media post, right? Look, I've personally been watching 47 and what they've been doing for Greg Buckley at Buckley's Auto Care in Delaware, and I'm super impressed. That's exactly why I've made the choice to sign up with them myself in my business, because I want to dominate the community here in Raleigh just like the other clients of theirs are doing, like Greg is doing in Delaware.

13:14If you want your shop to stand out, go to 47consultants.com/confessions. It's 47consultants.com/confessions. Tell them Big Daddy Mike sent you. And sorry guys, they're not going to do any free diag for you. Hey guys, Carrie 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.

13:40We 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. We 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.

14:07And then we also get their physical address and we start sending banner ads and display ads to every single device in that house. It 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 Direct Track Marketing.

14:38I gotcha. Well, what do you say to those owners who you know, would like to maintain the relationship with the community and the culture that they've built within their business to support their people. And they're looking at an exit and they might be able to get a 1.5 or 2.5 multiple. And then equity comes in and they want to offer a 4.5 or a 5 times multiple.

15:06And you see that with like ones and twos and threesies. It's the giant multiples are with the you know, kind of the little regional areas with 10, 15 stores, that kind of thing, right? Um, is it just a, it's a judgment call? You've got to decide what's more important, the bucks or the, or, you know, the, what you leave behind culture-wise? There's a couple of things that I would say.

15:27One is the old way of exiting your business is to wait until you're 65 and decide you're burned out, you're finished, and you need to sell. Or you throw your kid the keys on your way into the grave. Yeah, yeah, yeah. Or you get surprised one day by an offer from a PE company or a strategic buyer, and on a whim, you sell your company.

15:53None of those are the best practice for today. We've seen it fail. People do not walk away happy in those type of situations. So what I would say to a business owner is don't look at what— don't wait until the day of the sale and say, wow, I can get 5 times from this person and only 3.5 from this person. Instead, build your business to sell it.

16:20And I like to say we align 3 legs of a stool. One of those is you personally as a leader. Where are you at and where are you going? Healthy leaders have healthy transitions. And I can, I can say I've seen this many times. I have a client that called me, they had gone through an exit planning process, they thought they were ready to sell, and then they decided not to.

16:50Really what came out was that they had had a death in the workplace, and they were so traumatized by it, they were just ready to give up, and that is not a great reason to sell. Never sell under a big cloud. Never make a huge decision under a big cloud. Wait till that cloud passes. So they did and they decided to grow.

17:13They were selling for the wrong reasons, but never— really make sure that you're in a healthy spot. Don't sell in crisis. Don't sell in burnout just because you're burned out. Sell because you're ready and you have somewhere else to go. That's the first thing. Secondly, are you personally financially ready to sell? And I bring this up in this conversation about multiples because 80 to 90% of a business owner's wealth is usually tied up in their business.

17:49And really, as you're building, as you're growing profit, as you're growing value, taking that value out of your business and building multiple streams of income is it allows you choices later. It's not all of your wealth is not locked in your business. So a good exit includes personal financial health, personal leadership health, and then the last leg of the stool that gets focused on usually exclusively, but should not be, is your organizational health.

18:29Are you really ready to transfer? And can you get a top multiple? But dealing with those other 2 legs of this stool long before the multiple question comes up gives you lots more options on who you're going to sell to, how you're going to sell, on picking a buyer and incentivizing them like you talked about with There's all kinds of strategies. We don't have time to go into that today, but you build your business from day one to have the exit of your choosing at the time of your choosing and to be a healthy leader and to be healthy financially.

19:08So that makes all the difference for the owner. Let me weigh in on this, Mike. And one of the things that we see all the time are business owners coming forward and saying, hey, I want to sell my business. And the simple question, why, just puts them in chaos because they've never really thought why. The challenge with the multiple issue, you know, the private equity and the sell it to your son, you know, there is different income that comes out of those various strategies, right?

19:39You know, there's ways to get more money out of your business. But the reason— or sorry, the question of why are you selling suddenly becomes the most important question. Because if you're selling simply because you need more money, your only option is to sell it to the highest bidder, right? If that's the reason you're selling is you need more money. But if, like most of us, if you've built a business that you have, you know, a heritage, a legacy-mindedness into, you want this business to continue in the way that you built it.

20:13I've had, I don't know how many, I can't tell you how many shop owners I've talked to that won't let go of the reins of their business because they want it to be just the way they run it, which isn't wrong. I've got no question, I've got no problems with that, but the challenge is that it's, it's not a transferable entity and they're stuck, right?

20:33But if they have built something with legacy in mind, then they actually are selling— when they come to sell, they're selling for legacy, not for money. And when you've built it correctly, like Bekah is describing, and you put all the ingredients in place and you built it correctly and you established your net worth and you figured out what you need, when you've built it correctly, the why of why you're selling is to pass it on.

21:00That changes the game. You can choose then who you sell it to. We look back at our— the sale of our business, and the business has continued to grow. It's very, very profitable business. We could have maintained that business and made more money. We could have held onto it and sold it to a different buyer for more money. But the reason we sold was not for the money.

21:26We sold it and we got good money out of it, but we sold because we were passing on the, what we called Heritage, which is the name of the business, of our business. We passed that on just to the next person. And we built it all along so that it could be passed on. That's awesome. So, um, and Tony, you said that for a while, uh, you were a facilitator of a 20 group with one of the major coaching organizations.

21:52Is that right? Yeah. And so you've probably, uh, even before the business that the two of you have now, uh, witnessed a lot of exit plans and transitions and that kind of thing. One of the things that I see happen fairly often, or I hear about happening fairly often, is there's a sale to a third-party entity, not a key employee, not a community member, and there's a holdback and the boss has to stay there for a year or 2 years or however long now as an employee.

22:27And a big portion or a chunk of that buyout is tied to that employment period. And very rarely do I hear that that works out well for the seller. Has that been y'all's shared experience as well as you've walked through these deals? Sorry, Mike. We were sitting in a situation with an open window and the neighbor decided now is a great time to fire up the blower.

22:55So let me step away from this conversation for half a second, close this window, and we'll try that again. Yeah. Sorry about that, Mike. That's okay. While we're waiting for Tony, I think he will want to weigh in on that. Back to the last question, I just wanted to say we do not advocate that you should undersell your business. We got fair market value for ours.

23:21Could we have gotten more? Yes. I'm not advocating that you should be unwise with your largest asset, and I just had a client that came to me in 2024 thought their business was worth $4 million selling to a buddy and ended up selling. We're expecting an LOI in the $10 to $12 million range. And they thought they were going to sell to their buddy for $4 million.

23:47And so knowing what you're worth and selling for a fair price, it's important. You built it. So I didn't want it to sound like it didn't matter. Just give it away to your favorite employee. Yeah, no, don't do that. You don't need to. Uh, all right, so, um, my question was about, um, and I don't know what the proper term, term is, um, but it's about, uh, you know, when you're selling to large buying groups, sometimes they ask that the selling owner, uh, stay back as an employee, as a managing employee, for a period of time, and a portion of the purchase agreement is tied to that employment agreement for X number of months or

24:30years or whatever it might be. And I've not heard of many instances where the man or the woman who was the owner and operator of the business for the last 20 years executes effectively as an employee all of a sudden for the length of time needed for that final check. Has that been your experience as well, uh, kind of walking others through these engagements?

24:56Yes, in general, that's what statistics say. It's very hard to go from being an owner to being an employee. I will say that there is one, and I'm not going to say the name, private equity group that, that people I hear are having really good experiences with, but they're committed to keeping the name, keeping the culture. Keeping the community intact. They have a way different approach.

25:24And that's why I say I'm not in the camp that all private equity is evil. And they do employ that type of deals where they leave owners on for a period of time. But it— you really have to know who you're selling to, take the time to do your due diligence, to look up people that have sold to them, to ask questions, to know who you're getting into bed with.

25:51It's statistically, again, 75% of owners regret selling and it has nothing to do with the paycheck. What do you think it does have to do with primarily? I think it has to do with the health of the leader. Are they healthy? Is their identity so tied up in their business that once that business is gone, nothing else matters? Like, we are not our business.

26:20You don't walk through a cemetery and see owner of Mike's Auto, right? We don't, you don't see that, that at the end of your life, nobody's gonna care what business you owned. They're gonna care about the person you were. And we as owners that have lost ourselves in the chaos of running a business and the stress of owning a business, and sometimes in the pride of success, so tie our own identity to the things we're doing that we forget about what really matters.

26:55And I think that is one of the number one things that causes a lot of stress when people leave their business and exit. The second thing is if they have a wealth gap, you know, they think with $1 million, one of the things we say is you have to know your 3 gaps. You have to know, do you have a wealth gap?

27:17And that's what you have right now in wealth and what you need to ultimately retire. If you don't know that number and you're shooting in the dark and you sell your business and you end up just having to get a job, it's miserable. It's miserable for the owner. Yeah, I'm unemployable at this point. So Yeah, if I can't, if I can't, if I can't get what I need to never work again, uh, I'm probably just gonna have to keep the shop forever.

27:48I'm gonna, yeah, I'm gonna be that guy who just, uh, I hand the shop over to, uh, to the kids as I'm on the way to hospice. So it's probably not a super healthy viewpoint. No, not entirely. But you know, the, the thing that I, that I coach my clients on is to move away from being that it's all about me mentality and instead shift to how can I empower the people around me to accomplish the things that they need to accomplish in their life?

28:23One of the things we did in our shop and I was just in our— so we sold our business and we still own the property. And so we still have an ongoing engagement relationship with the owners of the new, you know, the new owners of the business. Right. I walked into the building a week or so ago, and in the break room, there still exists the board that I put up years ago with the goals of the individual employees written on the board.

28:55What are they trying to accomplish? Right. And so we built a mission around if the employees are not healthy and accomplishing their goals, then we as a team are not going to be healthy and accomplish our goals. And then me as a leader, I've failed, right? And so it had nothing to do with fixing more cars and making more money. It's about empowering the people around me to accomplish the things that they need to accomplish so that we as a team can reach the level of success we're trying to reach, right?

29:25And so when you think about it from that perspective, it's no longer about running the business efficiently, and, you know, none of these things or unimportant, but it's not about running the business efficiently and getting the right amount of cars in. It's not about all the details and the KPIs. It's about what can I as the owner do to empower the people that, that are my team members, you know, my shop family.

29:50How can I empower them to be all that they're meant to be, right? And so now I'm no longer the boss or the owner. I'm the head coach of a winning team. And I'm leading them to a victory where they get the glory, right? What's in it for me? It's great, great deal of satisfaction. And at the end of the day, I actually get a pretty good paycheck out of it, right?

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30:41You'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.

31:05Hey guys, I'm here again to talk to you about another awesome feature from the guys over at Detect Auto. I've been talking to you about Detect Auto for over a year at this point. You know that I'm a huge fan, but they keep rolling out new features, they keep adding value, and the latest one that they've built is they've built an internal chat system that goes along with the software, and it's Like if you've ever used Slack or another tool like Slack, it's very similar in format to that in that every time you open a repair order, it's going to create a new channel within their internal chat system specific to that repair order that

31:39includes the people that need to be a part of that repair order's communications, be that technician, service advisor, shop foreman, dispatch, whatever. You know, you set the rules for that. The cool thing is that it also archives those chat histories and those comm histories. So in the future, you can come back and you can see all of the comms that have been had internally about Miss Jones's Subaru, even any, any of the chat about that customer specifically.

32:05So it's just a really neat tool to one, have clearly siloed internal comms, and also to archive them and save them historically so that you can find them again in the future. I know that I've had issues in the past where we can't remember what was said about or what the comms were internally about vehicle X. And you go back into your— we use Slack— into your Slack thread and it's thousands of messages ago.

32:30This eliminates that problem. So it's just one more tool that the team at Detect Auto are putting in place to help streamline your business, make you more efficient, help you serve your customers faster and more effectively. If you want to learn more about Detect Auto and the other awesome features they have, Just check the link in the show notes. Tell them I sent you.

32:52Yeah, Mike, what do you think most people were thinking, most shop owners, when Tony talked about the goals of the employees? Well, you know, I, I had a conversation yesterday actually with a shop owner who I, who I really respect a lot. And, uh, I'm not going to say who, just in case he doesn't want to, want to share this, but he sits down and has goal conversations with every one of his employees.

33:15Every year. And last year, he sat down with a relatively new hire technician and he said, what do you want to be doing 1 year from today? And the technician's goal was to be putting an offer on a house in a year. And so they talked about his current income level. They talked about the type of house that we would want. They looked at what the prices on those houses were and what the down payment on one of those houses would be.

33:41And they talked about how many additional hours he would need per week to be able to earn enough money, to be able to save enough to make the down payment. And then they talked about what training he needed to increase his skills to be able to generate those hours and what tools he needed. And they laid out a road, a pathway to getting— and then they checked in once a month on how many hours did you get per week this month?

34:06How are you ahead or behind goal? And, and a year later, the dude was putting an offer on a house. I'm like, bro, that's incredible. You know, that is— I mean, not only did he ask him for his dream, he then sat beside him and laid out a pathway to, to recognize that dream. Um, you know, a goal without, without a plan is a dream, right?

34:26So, uh, they set the goal and then they made the plan and then they followed the plan and were accountable to it. And so that gave me chills just hearing him tell that story. I was like, man, Yeah, my shitty boss. Well, not to interrupt Becca, but there's an awful lot of us that are, you know, and Becca joked earlier about being an expert in any given field is making every mistake possible.

34:51And we've probably done, you know, almost every mistake you can make in this. I've done it wrong, right? And I learned how to do it right and I learned how to lead my team and I learned So many things. I learned how to be a better boss, and this satisfaction from that was so great. When I did hand over the reins, it wasn't, oh, now what am I going to do with my life?

35:13It was, man, I'm so excited that I accomplished what I was— I built somebody that could take the reins and run with it, right? You know, and they were— they had a lot of raw materials. I didn't build them from scratch, but, you know, I empowered somebody to take the reins and run with it, and that was the biggest win. That's awesome.

35:33Hey, so tell me, guys, how did D6— what is D6? And D6 Elements is your business now. Tell me how you came to that name and then tell me a little bit about that business, if you don't mind. Sure. You want me to start? Sure. The funny thing is, is the D6 stands for Develop 6 Elements. We realized there's 6 critical, crucial strategic elements that any business needs to have or have functioning in order for the business to flow correctly.

36:12And when we first like modeled this out, I actually drew it in a circle like a wheel and I joked that if you take any one of these elements out, it's like a flat tire. Right? And suddenly you're trying to roll, roll, roll, stop, roll, roll, roll, stop. And so the 6 elements, and we've sort of, you know, refined and built it out and finally realized there are 6 specific things.

36:38And it always starts with purpose. If they're— it's a— what is it they call it? An alliteration. Everything starts with the same letter. Purpose. Begin with your purpose. What are you— where are you going? What is the purpose? Why are you in business? What are you trying to accomplish? Your purpose, right? And then it goes to your product. Do you know your market?

36:57Do you know what you're doing? Do you know, have you perfected what you're selling or what service you're providing? Do you know exactly, do you know what your competition is facing? You know, what are you, what is going on in the marketplace? Do you know, you know, understand your product, okay? And then you go to people. People have, People are people. One of the mission statements in our business was provide exceptional service to every person.

37:26And every single time I would recite that mission statement to our employees, I would remind them that it does not say customer because customer is a transactional word. And we have to have transactions. That's what business is for. But we're dealing with people. We're dealing with people and we have to personalize how we engage with them and personalize what we're doing and understand them, them as a person.

37:54So we have the people on the business side, we have the people on the other side of the business, the ones that bring in their keys and their wallets, right? Those are still people. And so we really focused on the entirety of the people element of the business. So that's the first 3. Well, then you have, uh, you have the, the, the— what am I missing?

38:15Sorry, people, I got the planning. You have to have a strategic— Becca, Becca, always, we always forget that because you get going down that list. It's like, wait, where was the next one? Planning. Um, what is your strategy? What is your plan? How are you going to accomplish that? You know, like, I love the, this, uh, the story of this shop owner that grabbed his employee and put together a plan with him, right?

38:37That's planning. You've got to have a plan. The plan has to be clear. It has to be well written out. It has to be understood. You have to have clarity. You know, you've got to have a plan. You can't just show up every day and turn the key in the door and expect everything to work, right? I mean, many times it does because you've learned how to operate your business, but is that really all there is to it?

39:04No, there has to be a plan. Yeah. Have you ever read The One Thing, the book The One Thing? I have not. No. Um, Jay and Dawn Papazian, I believe is their name. They are awesome family-owned, like business-oriented couple. And they talk about doing your annual retreat for your business and for your family. And for you personally, as a healthy leader, what does that look like?

39:34And Tony and I regularly practice that. And I think we all have a marketing plan. We might have a strategic plan. We might have a 5-year plan, but getting it down to a process where you're really looking at those 3 legs of the stool, personal health, financial health, organizational health. And also looking at your employees, your team members, you know, where are they going?

40:04Can I help them get there? What, how do we build our culture? That planning piece is so important. And then the last 2 are process and performance. So there's a, that's where we see failure, right? Most, most businesses, they know why they started their business. They have their people, they have their product. They do some planning, but are you really able to execute what you planned?

40:32Or 3 years later, are you going, I still want another location? So this is like a really big conversation. And so you guys, Becca, you're teaching a class on this very subject, uh, at Apex. Is that right? So, um, exit planning. Yes. Okay. Uh, and that's going to be, uh, it's on the 5th. Uh, I've just got— I just pulled up the Apex website here.

41:01Um, I'm going to be there and I'm trying to figure out if I can get out of the recording booth long enough to come in and, uh, take the class because, um, one of the things that's important to me, like the earliest that I would possibly exit my business is after my youngest child is out of school completely. Right. And so that's still a ways away.

41:20But let's say if she's going to be out of school in 7 years, I probably need to start preparing for that exit like 7 years ago, but in earnest, at least 3 years in advance, do you think? Or like day one? The best time to plan is day one when you start your business. The second best plan is— Well, I'm 20 years late.

41:42Sorry. Yeah. 20 years early. So start, start today. Start planning today. And there's so much you can do. Most people don't realize that 80% of their business value is built in 4 intangible capitals. We've touched on a lot of those today in our conversation, but it's the human capital, building your team, your customer capital, structural capital. Do you really have the infrastructure to deliver and to transfer your business to an a new person, and social capital, which is what you and Tony were talking about, that the culture that you're creating.

42:24And in an appraisal, they look at all that, and it really reflects in your value and in the value and the multiples that you're able to get at the end of the day. I know that one of the services you offer is business valuation and kind of guidance on how to maximize valuation, right? What are one or two of the most common things you see that owners are doing that destroy value in their business?

42:53Okay, with a caveat, I do not have my CVA. I'm not a certified valuation analysis. I can pull comparisons much like a realtor can pull comparisons of previous sales. Um, I do work with companies to know what their value is, and depending on their situation, sometimes we use a CVA and sometimes we just look at comparisons. Um, gotcha. The couple things that you can do to kill your business is one, not have an exit plan, because 50% of U.S.

43:29businesses are affected by what we call the 5 Ds. Death, divorce, disability, distress, or disagreement with a partner. And we've had this happen to a client of ours. He died, he didn't have a partnership agreement, no one had his power of attorney. They sold his business for the, the whatever the assets were worth on a secondary market, and he got none of that 90% of his wealth that was trapped in his business.

44:01So the first thing you can do is de-risk by having an exit plan. Have a plan so that if something happens, your business is still transferable and your family can inherit the wealth. Secondly is get owner independent, and that is way different than being owner Oh, what is the word? When you're disconnected, owner disconnected, you need to be connected to your business and you need to be leading the business where it goes, but you do not have to be there 40 hours a week.

44:40And a business that's the, that is completely dependent on the owner is not going to value well. Those are the top 2, a few others, customer concentration, Don't have too much concentration in one fleet account or a few fleet accounts. Not having transferable processes. I was working with a shop this week. They said, oh yeah, we have a process for onboarding employees.

45:11We have an interview. Yeah, it's all in your head. Yeah, nothing written. And I think to Becca's point, Mike, that's, that's one of the biggest things that we see business owners, they've built a great business using their knowledge and their engagement, and but when they go to sell it, it's worthless because they have not— there's nothing written down, there's nothing transferable like Becca just mentioned, there's nothing transferable.

45:37And so now you have, unless I hire you, I don't have anything, right? And that's many business owners tied into that, you know, that question you asked earlier, uh, you know, engaging in that, uh, after-sale agreement to, to work, uh, they get stuck there because there's nothing to transfer. I wonder if I have a great process manual for how, how to do business in my business, right?

46:06And I'm relatively, um, I'm not required personally for day-to-day operations and success, right? That's what you always say. You got to write your process manual and you've got to, you know, train yourself out of a job, uh, to get, you know, better valuations. Um, but let's say Main Street comes in, or Sun, or whoever, I don't know, one of these big groups, and they buy me up.

46:29They're going to give a better multiple if the business doesn't rely on me every day and I have all the processes written out and everything else. But they don't even use my processes. They come in and they throw my processes away and they put theirs in. Has been what I've been seeing and reading. So I don't understand how that works, why that works.

46:48Yeah, it's, it's a barometer on the overall health of the leader and the business. Okay. It's if nobody wants to buy a business that's in complete chaos and has no processes and no, you know, it's what are the roots of the plant? I gotcha. That makes sense. A business owner at Apex last year, actually it was at SEMA. We were speaking at SEMA and met with the business owner and they lived in Arizona.

47:20The business was in California. They had no processes, nothing, and they wanted to get rid of it. They just wanted it off their back. And the transition, the transaction cost and the debt that they were carrying, they would have been upside down. And we simply said the right thing for you to do is start building out the processes regardless, you know, and it really doesn't matter if somebody buys business and they want to do their own thing, that's fine.

47:46But it's worth something because you put processes in place and, and built a successful or stable business, right? This shop owner had nothing and they were so upside down that they could— they couldn't even sell it. And we said, stop, go build some processes, make this thing function correctly, and in 2 years you probably can sell it for a profit. Instead of selling it to get out from under it and then still being in debt.

48:13Yeah, yeah, yeah, I get it. It makes sense. It's just, I have a friend who used to be in my 20 group, and he, uh, he built out an incredible online process map and procedures for everything, and it was searchable. It was like a database on how to do his business. Like, hey, we're out of oil change stickers. You could search oil change stickers and it would come up with the account number and the phone number and You know, yeah, the main door spring just broke, you know.

48:44I mean, it was incredible, right? And it helped him get a much bigger number to sell his business, uh, and they trashed it all like 2 months in and went to their system. And, and, and you could tell that it hurt him because he was like, I put so much time and effort into that incredible resource and they're just like, whatever. That's part of that 75% of business owners that regret selling has nothing to do with the money he got, right?

49:15Sold for the right reasons to the right people at the right time. To be fair, I think he is very happy right now, but that is the point of frustration. Good for him, you know. But, but yeah, it does hurt. It does hurt to put all that work into it and see it. Yeah. You know, Turned off. Somebody call your baby ugly, right?

49:37So, oh yeah, yeah. So, uh, you guys have been, uh, you guys have been heavily involved with, uh, Auto Care Association for a long time, right? Among others, I think reading on the website, Women in Auto Care, NAPA BDG, um, Auto Care Association, um, the list keeps going on. You guys are super well plugged in. But I have a very important question, and I always hit the most hard-hitting questions come in late in the episode.

50:11But where do I gotta eat in Vegas? You guys have been going to SEMA and Apex all these years. Where can I not miss the best meal in Vegas? You know, we had last year when we were speaking at the SEMA show, our best meal actually, believe it or not, was a chain. It was P.F. Chang's. We had some of the best food at P.F.

50:32Chang's, you know, and it was like we walked to it and it was wonderful. This is very disappointing. I have celiac disease, so I was just diagnosed a couple years ago, so I actually just get a condo with a kitchen and do most of my own food. Man, you can have like steak though, right? Yeah, it's just a lot of restaurants cross-intolerant.

50:57Contaminate. There is an awesome breakfast place. I can't remember the name of it, but you can't miss it. It's right across from— across the street from the fountains at Bellagio. It's right underneath the Paris. It's awesome. Oh, sounds— so there's a breakfast place down the way, um, kind of in that dead spot. It's like the something fireside. No. Uh, oh my gosh, this is so embarrassing.

51:21My wife and I go every time we're in town, but Amanda hasn't been able to travel with me for the last several years, so I haven't been able to go. But all right. Well, so what you're saying is you guys are going to whip up an incredible dinner in the apartment that you rent for SEMA and all of our listeners for Apex.

51:40Yeah. Okay. Apex. Yep, yep, yep. Well, awesome, guys. Thank you so much for taking the time to come on with me, and I appreciate it. Sorry about your neighbor and the leaf blower, but it is, you know, it's always fine. Yeah, thank you, Mike. Um, I will see you no later than November 5th at 9:30 AM. Yep. Looking forward to it, guys.

52:09Talk to you soon. Yeah, see you. Hope to see you then. Hey, thanks a lot, 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. I'm your host, Mike Allen, here to remind you that even the pros screw Screw it up sometimes, so why not laugh a little bit, learn a little bit, and maybe have another drink?

52:26You 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. The 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.

52:49I'll see you on the next episode. Let's be honest, in this business, everything needs your attention all at once. A customer's waiting on an update, a vehicle's ready for pickup, there's a payment question at the counter, the phone's ringing, another estimate needs approval. Everybody needs something and it all seems to hit at the same time. That's why having everything in one place matters.

53:20Techmetric brings your shop management, your payment processing, and your marketing all together in one platform so you're not bouncing back and forth between systems and losing time chasing updates. It keeps your team aligned and gives your customers a better experience from drop-off to checkout. Learn more at techmetric.com, tap the link in the show notes, or scan the QR code below.