Ep 83 - Hunt Demarest | How to Actually Make Money in Auto Repair

About this episode

If you're like me and aren't good at marketing, don't do it on your own. Let the experts handle it. Touch HERE for more on Turnkey Marketing.Tekmetric transformed my shop. Plain and simple. Want that for yours? Touch HERE When I used the maintenance tool for the fist time with Detect Auto, my mind was blown. My advisors had the same reaction - and then SO MUCH MORE TIME. Learn more about Detect Auto and book a free demo now!For years I thought I could handle the hiring process on my own. But, after far too many bad hires, it was clear I needed help. Promotive came through for me with a rock star hire in just a few days and I couldn't be happier. Swallow your pride and bring in Promotive for that open position you have at your shop today. You can thank me later. Learn more HERE AI for Shop Owners: Open the Hood of the Future is happening June 12-13 at Carfix in Raleigh, NC. Use AI to your advantage! Register HEREHunt Demarest is a CPA with Paar, Melis, and Associates. Today, he joins Mike to talk shop financials, tax credits, and private equity. Hunt breaks down why consistent improvement—just 3% better each quarter—is more sustainable than chasing explosive growth. He offers a candid warning about risky investments, sharing his own hard lesson with a too-good-to-be-true real estate scheme. Finally, Hunt dives into the rise of private equity buying up repair shops, explaining how that's driving up valuations and changing the market for owners looking to sell. Timestamps:00:00 Incremental improvement beats unrealistic growth—why 3% better every quarter wins01:10 Teaching personal finance at Vision 2026 (and why accountants don’t read your Social Security statements)02:07 The truth about R&D tax credits and audit nightmares03:44 What you must ask before taking any credit—defending yourself at audit time05:03 Hunt’s background: how he got into auto repair accounting08:08 Will AI replace your bookkeeper or CPA? Real talk, not hype10:32 Why shop owners need to understand financial statements & what current ratio means for your cash12:18 Managing AR, cash flow, and the case for paying vendors weekly14:43 Shop profitability: 8 months out of 12 is the norm, not the exception15:43 Trends: The scale and extremes of shop margins have changed MASSIVELY17:21 Labor rates at $386/hr and what actually drives profit18:54 The 20% net profit “gold standard”—and who really gets there19:34 Why comparing owner compensation plus net income tells the real story21:26 What’s the average net profit for shops? (Spoiler: it’s better than you think)22:15 Beware public “industry average” surveys—actual profits vs. reported tax returns23:01 Why working with an industry-specialized CPA beats a generic accountant every time24:14 The inner circle: who should be on your financial “advisory board”25:00 The most common (and WRONG) beliefs about shop accounting29:53 Hunt’s biggest personal mistake: the $25k investment gone wrong (and what to learn from it)32:10 Private equity: what’s happening, who’s buying, and what it means for YOUR exit36:10 Should you sell now? How PE offers stack up vs. passing to family37:06 Why PE doesn’t care about your P&L—sometimes it’s all about your customer count38:02 Final thoughts, lessons learned, and why even the pros get it wrong sometimes