Profit Panel pt.2 : Unlocking Massive Net with P&L Secrets - Bonus Zoom Episode 8

0:00Good morning, Glenn Piccolo here with Adams Automotive bringing you another episode of MasterTech to Millionaire presented by AutoShop Answers. Man, today we've got another great podcast coming to you. We've got the Profit Panel Episode 2, same group on the line this morning. We got Charlie Zlatko, we've got Lynn Massengill, we've got JJ Montt. Man, this is gonna be great. We didn't have enough time to cover it all last week, so we're gonna get back into it today.

0:27So Thank you guys so much for listening. Let's dive in. Man, we're running it back this morning. Profit Panel episode 2. Last week, we just couldn't get it all in. We had so much, you know, just, you know, great information that we were able to get out, but I just felt like it, you know, really fell short because just there's so much more to unpack.

0:50We talked about Lynn and Auto Hospitality. We talked about Charlie and his Rust— you know, the shops with rust, because we hear that all the time, that you can't do this in my market. We talked about JJ and his record-breaking net profit month, which was absolutely fire, $234,000 in net. We talked about net profits higher than, you know, what gross sales were a couple years ago.

1:18And then we talked about the threshold of pain, the customer's threshold of pain when it comes to labor rate and I think that's super important, you know, because you really have to find that customer threshold of pain or you're really leaving money, you know, you're really leaving money out there on the table that you need to be able to continue to grow your business, to take care of your people that ultimately take care of the customer.

1:40But it's important that the team understands, you know, the profitability because remember, they think you make 6 times more than you actually do. Make. And so if you don't share that with them, they don't understand exactly what the business is doing. I'll give you a good example. This week I was at a shop and we were doing some training and a technician walked up to me and it wasn't my shop, it was our Woodlands location.

2:12And a technician came up to me and he said, hey, look, he goes, hey, at your shop, do you ever, like if you have to make a deal with a customer, Do you ever like lower the price on parts or do you just lower the labor? And I said, well, it really just depends. You know, we'll make adjustments typically in both ways and we'll talk to a technician and say, hey man, is there something you can do to help me out on this?

2:36You know, like, you know, I know you can get this job done, you know, obviously faster than book time. Is there anything you can do to help me out? Because we're just trying to save the deal. Like at the end of the day, I've got to save the deal. He's like, you know, you can just adjust your labor rate. You're like, you don't have to actually take any time away.

2:49You can just, you know, you know, you can just go and adjust the labor rate and that will adjust the price. And so, you know, I was listening to him and I was like, well, he doesn't understand. At the end of the day, it's just you're taking the profit away from somewhere. Okay. And so we don't want to take time away from our technicians, obviously.

3:07But we sell, you know, we sell these jobs and there's times where we have to maybe match a competitor or something along those lines and we have to make an adjustment and we'll talk to our technicians. It's kind of like shopping. Shop in parts, sometimes you have to kind of shop that labor. So if they understand that and they understand like open book financials and they understand about your business, I think you're going to have a lot less pushback when they understand that, right?

3:34And what really goes into running a business. So this morning I wanted to— so of course on the line, Charlie Zlatko's JJ Montt, Lynn Massengill, superstars, and just get to pick the brains of these, you know, just incredible owner operators. And so this morning I wanted to start with Lynn. We talked a little bit about, you know, auto hospitality and how that's changed his business, which it does, saying yes and obviously taking great care of the customer.

4:05But on the profitability side, you know, I'd really like to know like, You know, what did you do like from a profitability side besides on the revenue side, like to really grow that profitability? Yeah, to really grow that profitability, when I first began coming to Auto Shop Answers and took the first accounting class, that's when I knew that, hey, we have this huge opportunity here.

4:31My gross profit was out of whack. So Todd said, hey, we've gotta get this to 62, 62.5%. And so that was the first goal of mine, was get my gross profit in line, get the team on board, let's make adjustments where we need to, get our parts pricing right, get our labor set right, sell the right jobs, and push that GP higher.

4:56So that was the very first thing that we worked on. We were down around the 51, 52% when I started, and now just as we refined and improved, we're running 64%, 65% GP. And so that was the thing that grew my profit the fastest at Premier for sure. Yeah, it's super important that you run a high gross profit and there's a lot of shops out there that do run that 50%.

5:26And remember, it's okay for us to be profitable and make money. That's how we're going to continue to exist to be able to serve the customer. We have to have a good, healthy business to be able to be there to even honor of that warranty. How many, um, how many shops out there, um, you know, have a great warranty and then they're not in business in a year from now or 2 years from now?

5:46It happens all the time. And so you got to be able to run good gross margin to end up putting net to the bottom line. And, you know, the thing about it is there's just certain jobs that you can get really good gross profit on, and there's certain jobs that, that just aren't, right? Like Our Woodland store runs, you know, 62, 63% gross profit and they're a tire store, right?

6:13They sell tires. People are like, oh my gosh, how could you run such high margin on, you know, on the tire store? Well, you remember you have to be able to take the good with the bad and you have to be able to have those super high GP jobs so that you can afford to do the lower GP job, which you have to do.

6:31There's just certain parts that you can't mark up, right? Like, there's just certain parts you just can't— you can't sell a transmission that you buy from the dealership, you know, at 3 times what you bought it for, like you would maybe a set of spark plugs or something like that. And so you have to be able to take the good with the bad.

6:47So you're gonna have those low margin items. A lot of people look at it and they say, wow, look, I'm making this much money on the job. That's where the open book financials comes in. Oh, I'm making this much money on the job. But like Charlie said last week, start calculating all the percentages that are going to come out of there, start calculating the uniforms, the rent, the taxes, the 401, the insurance, the coffee, the paper, and then all of a sudden it's like, oh wow, I didn't make, I didn't make nearly as much as I thought I would.

7:16So advisors knowing that's super important as well because they see the gross profit, but they may not understand what that's going to result in net once you strip away all of your general and administrative fees that are tied into every single job. So great point on that. So you go from a 50 to a 62, 63, 64, whatever that is. And well, one, that drives your sales.

7:41Number two, because obviously higher GP is going to be, you know, higher sales. And then all of a sudden you're putting, you know, like big, big net to the bottom line. So that's huge. Tarlie, You know, I remember several years ago when you kind of took over P&Ls, right? And what, so what was that like before, right? Before you kind of got involved in P&Ls, like what was your thoughts on the P&L?

8:09And I think you had a little bit of fear that, not fear, but just like maybe a little intimidated by the numbers or? Not even that. What it was, I had no idea what a P&L was. I really just ran my business from my checkbook. So if there was money in the bank, I guess things were good. And if there was no money in the bank, I guess things were bad.

8:29But this is not how business works. And I have a feeling I'm probably speaking to a lot of people right now who've all been there. Because I think starting out, unless you know, unless somebody taught you about P&Ls and accounting, then you have no idea what to look for. So, you know, in the P&L, and I think we spoke about it a few months ago in one of the episodes here that you have a great month getting a lot of money in.

8:55Now what happens is, you know, as soon as the statements start coming in, a lot of that money is going to go to pay the bills, right? So you cannot manage your life or your business from your checkbook because you might say, oh, I have an X amount of dollars in the checkbook, honey, sure, let's go on vacation. 'Oh, let's go do this,' but that's not your money.

9:20That money is about to go out. So you need to run and learn the P&L. And, uh, when I first also, you know, I had an accountant earlier on that wasn't good, and we're gonna leave it at that. We're not gonna go into details. Thankfully now we use Nick, and that's actually the story how we end up with Nick. Um, Todd was asking for a P&L, and he was never giving me P&Ls, this accountant.

9:45The business was still kind of small then and still wasn't getting P&Ls. And then kept asking and finally we get one from 6 months ago and really he hands it to Todd and Todd looks at it and threw it away. He's like, what is this? I could have done better if I did it with crayons. So there was an accounting issue there.

10:08Then that's again the story how we ended up with Nick. We wanted a professional that can take over the business. But you need to learn at least the basics of how a P&L works. You need to teach your people how gross profit works. There's so many triggers you can pull. Now on the G&A side, there's only so many things you can pull, right?

10:31And some businesses, you can run a very lean business. If you don't want to have loaner cars, if you don't want to have coffee in your waiting area, If you don't want to have air conditioning in your office, you can run a pretty lean P&L and you'll be able to make more money percentage-wise with less sales. But if you do want to provide all hospitality, it does cost more money.

10:59It is more expensive, but you are going to get better quality customers. You're going to get more loyal customers. You're going to be able to recruit better people. And you can still charge more money to be able to have a strong P&L and very profitable. So that's where we're at versus running it very lean. So the way I landed, very quick story before I pass on the ball, the way I learned P&L, I was sitting with Todd and we finally got professionally done P&Ls going over it and there was distractions in the shop.

11:35So he says, let's go, we're gonna leave here. Went to my house, we went in the basement, have a table there, we sit down, and that's where he taught me. He took my hand, line by line, he taught me how P&Ls work. And it's very simple. I mean, once you understand it, it really is very simple. On the top line you have your parts and labor, then you get your gross profit, and then below is all your expenses.

11:58You deduct all your expenses and what's left is your profit. So it is a very simple process, but you do have to understand it and then you have to understand what can you squeeze, you know, is your credit card fees right, your insurance bills right. There's a lot of negotiating stuff that goes through. Also, when you review your P&L, it almost— I look at it a little different now.

12:20It tells me the story of how well we did last month. It's almost like going back and watching the Super Bowl on replay, right? And really every line item tells a story, what happened here. So if we have, let's say, a customer satisfaction, $1,000 back, what happened there? That's a bad play. We dropped the ball somewhere. Let's figure out what happened. Let's fix that.

12:44So P&L isn't just about numbers. It will teach you operations too. So I look at P&Ls a little bit different than probably a lot of people right now. Yeah. And one thing you said there is you are reviewing your P&L so you see how you did last month. And I've talked to a lot of shop owners when I talk about P&Ls, they don't have one, okay?

13:05And they're 4, 5, 6 months behind on P&Ls. I've talked to, you know, people that I've recruited that get paid off of a P&L, and they said they're still waiting on a bonus 'cause the P&L's not done, and it's been several months since the store closed out the month. And so you've gotta get it fast because if you don't get it fast, well, I mean, you don't know what it is, right?

13:28And so, you know, our goal is to have that, you know, on or before the 15th. And the goal is to actually have it even faster. Like, you know, now with what Mack Keys is implementing, you know, the goal is to have it even faster. But you have to have a dialed-in team to be able to manage your money. And so it's just like an advisor or a GM or a technician.

13:48It's like you have to go find A players. And do they cost you more? Yes, they cost more. It is going to cost you more to have Nick on your team than whoever your previous, you know, accountant was or bookkeeper was. But the difference in what, number one, they can, you know, help you to generate by way of awareness, by having a P&L done fast, by having accurate numbers.

14:11And then like we talked about before, right, there's, there's bookkeepers out there that are stealing. They're stealing from people. Okay. And so if you're not knowing If you don't know your numbers, it's very easy for a bookkeeper to manipulate those numbers because that's their world. And so they could literally manipulate numbers on a P&L and give you a P&L that's not accurate.

14:35And meanwhile, they're taking money off the top. And you might be thinking, man, we're profitable. Hey, we're doing great. We're making money. But how much money are you actually making versus what's getting turned off the top? And Todd's caught that. Many, many times in this business by teaching people how to understand and know their numbers. So there's so many things, Glenn, on the P&L.

15:00Again, oh man, the more you talk about it, we can talk about this all day. Again, so if you work in the shop, you can say, let's say the P&L is not ready on time, right? And you can start blaming the bookkeeping department very easy, isn't it? If the operations is dialed in, If all your parts are accounted for, if all the repairs are done, uh, if everything is reported properly, the technician then in his hours, like all these items happen properly in the shop, then the accounting team can move faster.

15:32If the operations in the shop is not dialed in, guess what? That slows down bookkeeping. They have a lot of questions. They're not in the shop, right? So they have a lot of questions that need to be answered. So it's very easy for people to blame other people, but I feel like everything we do is about teamwork. Like really everything we do is about teamwork.

15:53If everybody plays ball and they do their part, then things run smoother. Like you said, right now we have Matt Keys, he's implementing some great systems now and AI is really helping out. We're going to be able to close our P&Ls before the 10th now, I mean between the 5th and the 10th of the month, which is absolutely insane. Phenomenal, but it takes a lot of work and a lot of discipline to have the team so tight.

16:19You know what, Charlie, if I can, I don't know if Glenn is still— let me just tag into that. Glenn, if I can just add something to that, which is critical, man. I don't think people realize how important the accounting and the fraud prevention class is because it's so funny. My story is very similar to Charlie's. Like when I kind of, when I met with Key2Key and met with Todd and all of that, you know, I was doing my own books, you know, all my stuff was just, you know, just kind of wacky and really all over the place.

16:54And I didn't really know exactly how much money I was actually making. You know, I really had no clue. So I was just pretty much just functioning and just grinding, right? But when I took that accounting class in Toronto, you remember it was like a tornado or something in Houston. Oh, I remember that. No AC. You remember that? Yeah. But that goes to show you, like, even the commitment that Todd and everybody Auto Shop has, man, is like, it doesn't matter if a hurricane or tornado's coming in, man, we're still going to get this information out, man.

17:29So it was so critical. So I learned a model of what it should actually look like. And Charlie, you just mentioned about how a lot of times if you're not conscious or what have you, you can actually start blaming other people for your issues. And that's one thing as operators we definitely got to stay away from and take accountability for the condition and the state of our operation.

17:57So that's the thing that I really got at the Accounting First, you know, program, that session, oh my God, it opened my eyes to what the actual model should look like. Okay, so I'm talking all the way down to what chart of what accounts we should have in the chart of accounts. Okay, just, just simple stuff. Okay, simple stuff. How, when you talk about, Charlie, how to, how to, you know, how we get to that 62, and Lynn, how we talk about how to get to that 62.5%.

18:25Okay, I never even knew that. Okay, so I was down, I think at that time, same thing with you, Lynn, like 50%, maybe 49%, and didn't even know, um, what, how that, you know, affected my business, what that actually meant, you know, how did we even get there and how do we even change that, you know. So the Accounting First program, man, it opened my eyes to the actual model.

18:48Okay, so now for me, I'm not the most creative guy in the world by any stretch of the imagination, but if I can see what it's supposed to look like, If I can see what it's supposed to be, then I have a model that I can start to try to duplicate and replicate, you know, and then you start dialing it in. And for me, it was a process, Glenn.

19:11It took a while for me to kind of get my stuff cleaned up, but I had homework now, and now I accepted responsibility for making my books be good, you know, making them correct, making them be auditable. And I leave with this is like Todd said something that was so critical, life-changing to me, changed my whole perspective. He said that every dollar that you can put to the bottom line is worth $20.

19:43I was like, okay, I was like, okay, that's, that's cool, man. I said, all right. Uh, but it didn't really, it didn't really set in until, like, even though I mentally understood what he was saying, but that thing got into my soul. And that meant that, like, Man, my book's got to be super duper tight and kind of like what Charlie said, which is critical.

20:04It kind of evolves from you just getting a sheet of paper together with your numbers on it to actually how to operate your business. You know what I'm saying? It shows you what's what and this and all that. And then how, you know, it's like a scorecard of what you're doing and you need to get hammers in there. You need to get people that can sell.

20:27You need people in there that can make sure they deliver that world-class best, you know, experience to customers so you can get to that 62.5%. That's how you do it. So having a model and being able to kind of ascribe to that, oh my God, it's life-changing, man. Oh yeah, I agree, JJ. Accounting First is so far. The very first one I did, I was the only person that showed up to that class, so I was one-on-one with Todd.

20:53And so we hit the basics, and then he said, can I teach you Todd math now? And so that was that. You can sell every dollar of your net for a multiple at some point. And that was a defining moment. And that is so important. And like, this is generational for sure. And I have never been to Accounting First Class, but I mean, you always see light bulbs going off.

21:19Like everyone walks out of there changed in some way or another or with a better idea or, oh my gosh, I've been doing this wrong for 10 years, 15 years, 20 years. And just to go back and start making making those changes and then counting your money or someone else's. And then guess what? Once you're measuring everything, accounting for every dollar, looking at everything, that net just continues to grow.

21:46Yeah, it's amazing. He, you know, he taught us that a long time ago. I think, you know, he'll tell you his father-in-law taught him that a long time ago. Every dollar that you make, if, you know, if you take it and spend it, you know, or if you take it, you know, what it costs you versus what it, what it is, if it is back in the business as profit, and how much you can sell it for.

22:10And, you know, we've talked to plenty of, you know, business owners that are trying to, you know, take— I'll give you a good example— cash. You know, we've heard that, and that's something— that's a red flag. You got to watch out closely for that. You know, owners that are just trying to take cash so they can take the cash and avoid paying taxes on the cash, but don't realize that that money, that if it goes into the business and it's a profit in their business that it is worth so much more than what they're actually saving on taxes.

22:41They don't understand that. They'll take the cash out of their business. And one, that's just obviously super bad optics for your team. And we've seen that out there where owners are coming, taking cash out of the business, taking cash out, taking the deposits and things like that, like taking them themselves. And that's just bad business, right? It's got to be super clean.

23:05He teaches us about audited financials, right? I mean, if you're going to sell your business one day, man, you need to be able to have audited financials, which means that your books have to be clean. They have to be very dialed, right? Because, one, what is that going to make you on a multiple having audited financials versus not having audited financials? Well, that will factor in 100% into your multiple, right?

23:30Somebody, if they're going to come buy you one day, well, if you have the infrastructure there, right, that factors into your, to your multiple. If you have audited financials, that will factor into your multiple. So saving somebody, saving money on a bookkeeper, okay. I mean, let's say you save $50,000 annually on a bookkeeper for maybe a superstar versus just an average, you know, accountant or bookkeeper.

23:59What is that $50,000 a year difference costing you on a multiple? If that time comes and you're going to sell your business, it's insane money that people leave on the table by trying to save and get somebody at a deal. And it's at every single level. It's accounting, it's sales, it's technicians. It's the same thing across the board. A players in all departments is a It's a non-negotiable and you know the difference.

24:31You know, you absolutely will know the difference. So yeah, dude, that's crazy. Yeah. Can I jump in there? Yes. I have a couple notes on both aspects here. So first of all, the cash, right? What you said, I don't want people to miss it. If you're an owner and you're taking cash out of the drawer, Or if a customer comes in and says, oh, I'm going to give you cash if you do it for X amount of dollars versus the price you gave me.

25:02That is like such bad optics. First of all, it's bad optics for your employees because you're now setting an example of what they can do. So what are they doing behind your back when you're not there? Could somebody come in and cash out a car? Let's say I'm working the counter, Glenn, and I work for you today. And, and I'm cashing out a customer and it was a $1,200 ticket, right?

25:25And you are off. Now, that guy can pay me cash and maybe he paid me fully and I can put $1,000 in the register and I can say, you know what, Glenn, this guy was really complaining about the price on the counter, so, uh, you know, I had to give him a deal and it's now $1,000. You're not going to question, you're going to be like, okay, I understand.

25:46And now I stole from the business. So you see, it starts with the top by setting an example. So you cannot do that. And then once you understand the multiples and the value, trying to make those cash deals, it's actually costing you so much more money. You're thinking, "Oh, I'm going to get cash." Some people, I have seen it, I've been around the business for a long time.

26:10Some people will say, "Oh, I'm going to do this. I'm going to hide the cash. I'm not going to report it to the government. I don't need to pay tax." Well, you don't need to pay tax, but your multiple is so many times more than what the tax is. So you're actually stealing from your family now. You're stealing from your kids and your generational wealth that you're trying to build.

26:30So understanding the multiple method, Todd method we're talking about, is so fundamental and crucial to understand it because every action you do will be different. Yeah, and you're teaching, like you said, you're teaching your team. And so part of getting these superstars on your team is like they have to be able to see growth. They have to be able to, like, if you get the top A players, okay, the top A players in the business are not people that are just going to come in and be superstars for you in that position forever and ever and ever.

27:07Okay. They want to see growth. These are people that want to either run a shop, own a shop, just really accelerate their career. And so you have to be able to show them a path to be able to do that, okay? It's like if you have somebody on your team and they have these dreams and goals to just win and have generational wealth and you don't provide an environment for them to do that, well, guess what?

27:30You're not going to be able to hold on to those people. They're going to go off and they're going to go find that opportunity somewhere else or go do something on their own. Now, if you are teaching them business and teaching them entrepreneurship and teaching them how to run a business, okay, and you are teaching them the right way to do it, and they see that you do it with integrity, and they see that you can win doing it with integrity, and they see that there is a path, well then all of a sudden you don't have a, uh, you don't have an employee that's just running a shift anymore.

28:00Todd talks about that all the time. Like, if you leave our company, you're just going to run a shift out there somewhere, right? You're going to run a shift. And so here it's not running a shift. It's— you're learning business every single day. You're learning entrepreneurship. You are learning the things that you're going to need, whether it be with this company or if you ever do go out on your own.

28:20You are learning the things that you need to know to be able to be successful doing it. And just— there are— there's just nobody's teaching that out there, right? I mean, I haven't heard— not in our space. I mean, I just don't know any, you know, you know, automotive platforms that are teaching people business at the level that we teach business. Most of them are managing from the top down, managing from spreadsheets rather than being in the trenches with your team.

28:51So I wanna talk about being in the trenches, like in the trenches with your team. How, JJ, how does being in the trenches with your team help to manage your profitability? Oh, big time, Glenn. And it is actually like one of the most important things because like when you're in the trenches, okay, and not necessarily, you know, kind of away from the business, you're actually in there, you feel the pulse and you know the rhythm of what's what, you know.

29:22And particularly if you're connected to and you understand like your numbers, like you know that the energy in the place, the rhythm of the store is directly tied to what you're going to see at the end of the month on the P&L. But it has such a great impact because it kind of reverberates throughout the whole business. So if I'm on the floor racking cars, PMIing cars, gloving up, test driving cars, bringing cars in, opening hood, checking lights, and we're doing all that, then everybody else follows suit.

29:58You don't any problem with anybody doing anything because they see the main person racking cars, pressure testing, pulling calipers back, doing videos. So nobody has any excuse. And it just contributes to the overall culture, which literally impacts the bottom line. We were talking earlier, you were saying something earlier about technicians or something accepting or something kind of, uh, talking about the price or something like that on a job or something like that, man, we have, like, anybody who runs this concept, like, has the nicest technicians in the world.

30:38And they could have been rough techs at their last place, but when they come into, you know, a shop that's running key-to-key for real, for real, oh my God, like, they want to help out. They don't care. So if you got to work a deal, whatever, and you say, hey, look, do me a favor, man, can you take a, uh, a 2 on— can you do a 2 hours on this one?

31:00And it calls for like a 2:7 or something like that. They have no problem because it's unlimited hours. You see what I'm saying? So they're able to work with you on anything. However, you know, you pay them, you take care of them, and they just love it. Okay, so how could you kind of like deny that somebody, the operator being down in the trenches, like say for example, Charlie, okay?

31:26Go up to Charlie's place, Charlie's in there doing all this and all that. I'm like, okay, okay, okay, this guy's a maniac. I love it. Let me, I gotta model that, you know what I'm saying? I love it. So, but Charlie's super duper profitable. Charlie has great, great business. He's functioning. Everybody in his shop is like just fantastic, super duper helpful. So Glenn, to answer your question, how does it actually help the bottom line.

31:52It's everything. Now, some people say, how do you do that if you got 4 stores, 10 stores, or whatever? It's the same thing. You hire amazing people, right? And you just have people that have your same spirit, the same spirit that you have, and they're the ambassador of the key-to-key concept in that shop, and it's just going to happen. And it's so important to really understand it like that.

32:18You will have— it does have a major impact. So if you're down there, you're looking at every every car. You're not letting stuff slide. You're not, man, we're doing PMI challenges. You understand that every single car matters. Every single car, every single customer matters. Speed of service. You see, when people are incentivized and people understand that everything matters, they're in tune to what's going on.

32:47If there's a cap to what they're making, if there's a cap to, um, to, to their salary or just, just a ceiling. A lot of people just are not motivated, you know. A lot of people are just not motivated. You have to incentivize people, man, to, to make sure they perform. It's just like in the NFL. There's really no cap. They got bonuses for this, that.

33:07If you get 10, 10 catches, you're gonna have this. If you have this many yards, you're gonna have this. If we make the playoffs, you're gonna get this bonus, et cetera, et cetera. And then like high-level people love that stuff. A lot of times people don't really Like the high-level performers, they don't want just safety or a fallback plan. No, man, they're trying to push the envelope.

33:29And that's what being in the trenches with your wrenches is, man. It's an energy, it's a mindset, and the P&L at the end of the month, it just happens. It happens because you're driving it. Man, Tenzey, you hit so many points. And Glenn, this thing goes far beyond just the P&L and the money, man. Being able to hire, recruit, and, uh, what you call it, retain great people, it's amazing.

33:58So first of all, like I said, we cannot emphasize it enough. I have said this over and over. A lot of people come to Keith O'Keefe, and then the accounting class, there's barely a handful of people, which is absolutely insane because All you work all month, you work all year, and all the money is sitting in that accounting class and the fraud prevention.

34:21And there's a couple of things there. You have to hire great people. You have to keep them honest. You have to keep honest people honest, right? But you also have to be an honest person. Can I say a very quick story? Because this, I bet you this happens out there, you know, hopefully not to a big concern, but it does happen. You have to be a flawless business that nobody has anything to point back at you.

34:48So about a year ago, I think myself, Todd, and Bill, we went to Arizona. We were invited from Grant Cardone and Brandon Dawson. They had a conference going on. It was about 700 people in the room. And Grant is a big personality. He's like a Todd, right? He walks around the crowd, he works the crowd. And they're talking about firing people. He's like, does anybody have somebody they need to fire today?

35:13And I think it was a Sunday. A bunch of people raised their hand. He walks up to this guy who was very close to him. He's like, man, call him and fire him now. The guy's like, I can't do it. I can't do it. And he's like, man, you call him and tell him I fired him. He says, he's going to at least have a story to tell.

35:29He's going to say, I was fired from Greg Cardone. And the crowd is laughing. The crowd is laughing, right? So, but after a while, after Grant keeps pushing this guy, the guy wouldn't do it. So Grant turns to him and he says, "What does he have on you? What does that employee have on you that you are so afraid to fire him because you're going to get exposed next?"

35:54So make sure your business is so clean, pristine. And that's why I keep saying the examples you said, are crucial because you don't want anybody to have anything on you. You don't want your customers, you don't want your employees, you don't want anybody. And you sleep better at night, I promise you that. And you're able to attract better talent because good talent is looking for a good place to go work.

36:17Yes, absolutely. Find the right people, make it a great place to work, give them a financial stake in the outcome of the business, and train them. They have to have a financial stake in the deal. Otherwise, it will be just a job. It'll be a shift. They'll be coming and working a shift, and then you know how it is in our industry, right?

36:37People can't hang on to people. They just go shop to shop to shop. We see it all the time. They're chasing— A lot of people out there, they're chasing the next $10,000 a year or $20,000 a year or whatever that is, or a technician chasing that next $5 an hour or a sign-on bonus. And it's like, in the grand scheme of things, that is such a small ball.

36:59Right? It's like when you look at the big picture, okay, it is so small chasing that short-term, you know, dollar or annual salary or whatever it is. It's so short-term. And when you can understand that, look, I've got to build my personal stock value, right? My goal is I've got to be the absolute best I can be. I've got to be a gotta-have in this industry.

37:25I've got to be a gotta-have in this business. And then all of a sudden you're not chasing $10,000, $20,000. People are chasing you just to be in the room. And so like, what do you want to do? Do you want to be an employee or do you want to be a leader in the industry? Because everybody has that opportunity, like, to go and be a leader in this industry, right?

37:47And you guys are just a perfect example of that. It's like, you know, like, what would somebody pay for JJ to come work in their store for a week? You know, it's like that, you know, like, Charlie, gosh, dude, you know what somebody would pay Charlie to come and work in their store? You know what I've been offered to go work a weekend in somebody's store to go work for the weekend and run our concept, okay?

38:15You know, now I can't do that 'cause we have a business to run, right? But it just shows you the value, right? Of like, okay, this is what we're doing. This is what we have to offer. This is what our concept will do. And then all of a sudden it's like, That's what you— that's where you want to be. Not chasing a little bit of money here, a little bit of money there.

38:36You want to just go all in with this concept and you want to learn what we're teaching. It's the right way. It is a perfected business model. There is no doubt about it. And it will absolutely change, change your life. So anyway, any final thoughts, team, before we wrap this up? We're about to head into Take Five this morning, like every morning.

39:02Anything to add? Anything to throw in there? Final thoughts? You have to learn your numbers, find the right mentor and the right system, which we already have, so you don't need to look any further. And just do right. Like everything you do, just do right. That's my message. Just do right. Doing the right thing is always the right thing. Go ahead, JJ.

39:23No, I was going to say that's exactly right. Like being profitable is not luck. It's not by chance. It's a deliberate, intentional effort that goes into many things to make you, to make your business profitable. When you're profitable, oh my gosh, everything is different. It's weird. It's like when you're profitable, it just seems like you smile a little bit more. You know, you're laughing, you're having fun.

39:54Everything changes. Everything changes. You know, and just to go back for one second, like, you know how when you're talking about taking the cash or shop owners taking cash and all that, man, I just want to reiterate it again. Let's say, for example, and Charlie may mention about, you know, $1,000 cash, the owner pocketing that. $1,000 cash, if you take it out because you're trying to avoid the taxes, costs you $20,000.

40:24Just think, every time I think of a number to the bottom line, I think times 20. So $20 is actually $400. It's a lot. Yeah, it's crazy. It's crazy. So like, it's, uh, you just got to be disciplined and you have to get around people like Charlie, like Glenn, like Todd, like Lynn, you know, uh, Mike Quinn, you know, Bill Broussard, who helped me, uh, become way more profitable by pointing out a lot of stuff operationally as well as on my, uh, P&L statements.

40:55Oh my God, I mean, forever indebted to these guys, man. Like, to just show you show you the way. Don't be embarrassed. You know, any owner out there, I tell you, when we were down there, Glenn, I was literally trying to hide my financials. Like when I went to the accounting firm, they were like, all right, pull your financials out. And I was like, oh God, you know, I was trying to slide them under my laptop and all that, you know.

41:17But if you're not embarrassed or ashamed and you take accountability, okay, this is where I am today, this is where I am, but I'm the dude, I'm the guy, And I'm going to take accountability and responsibility. I'm going to start making the changes I need operationally so this sheet of paper will change. And my God, it will change. But Zay Zay, you went from being embarrassed to being number one.

41:41Say what? Here we go, baby. What'd you say? I said you went from being embarrassed to now you're being proud to share. Oh yeah, it's amazing, man. It's amazing. It's amazing. Thank you. And Glenn, and Glenn, and Glenn Trout, I can't thank you guys enough. You guys have led the way, man. You guys are the ones that's teaching hardcore, man, and we just soaking it up over here.

42:02So thank you guys, man. Millions. Let's go. Well, hey guys, that's our time today. So thank you all. This was a blast as always. And let's get ready to rock this day. Everybody have an awesome, awesome day. Boom. Let's go. Boom. Let's go. For more information, reach out to Todd Westerland at 925-980-8012 or visit autoshopanswers.com. Get more information about key-to-key callbacks, courtside VIP Rack Attack Day where you spend a full day in the trenches with our teams.

42:39We have leadership classes, an AI academy, accounting first, fraud and prevention, as well as auto tech training. We are literally your one-stop shop. Please don't hesitate, reach out to Todd Westerland, 925-980-8012.