Stop Running Your Shop Like A Charity

0:00Grainger knows when you're a procurement manager for an office park, you're not managing one building, you're managing all of them. And to stay ahead, you need to see through walls and around corners. Lights about to fail, filters ready to clog, HVAC on its last leg. If you wait until something breaks, you're already behind. Count on Grainger for quality products, easy reordering, and 24/7 support.

0:23Call 1-800-GRANGER, click grainger.com, or just stop by. Grainger. For the ones who get it done. This is the story of the one. The one who keeps multiple buildings running smoothly day after day. Plumbing that flows, HVAC that hums, cleaning supplies that keep surfaces sparkling. That's why she counts on Grainger. With easy reordering online and 24/7 support, Grainger helps her keep the products she needs on hand.

0:49So shelves stay stocked and buildings stay ready. Call 1-800-GRANGER, click grainger.com, or just stop by. Granger, for the ones who get it done. Welcome back, everybody. Uh, hopefully everybody had a good Memorial Day weekend. I did. I had people over the house, and on Sunday, and it rained all fucking day. People party started at 2, and at 2:01 it started raining, and about 3 o'clock it was cats and fucking dogs.

1:15It was okay, it was still about 70 degrees out. And probably about 5 o'clock, all the little kids were like, will you take the COVID off the pool? So I had to pump— I got an automatic cover, so I had to pump all the water off. There's quite a bit of water on there. Then little guys went in there and swam with blue lips.

1:31I mean, it's heated. Kids are crazy. There's no way as an adult you'd be getting in the pool like that, but kids are like, let's swim in that all day. 82 degrees the pool was, and it was steaming, and the little kids are like getting out and shivering. I'm like, yeah, these guys got guts. There's no way I'd do it. Lincoln got in, and Mia and everybody, I think.

1:48Yeah, Lincoln dove in and had Elias in there and stuff, and it was like, wow, all the other little kids were on the steps, you know. It's kind of cool. I mean, it was so cold outside, the air of the wind. Yeah, we had the fireplace going out there for people. It's like, well, but everybody seemed to have a good time. There's no food left, so I think there's like 80-some Sloppy Joes eaten.

2:09Holy shit. Yeah, there's a lot of people, a lot of food. Wow. Yeah, everybody brings something, you know how that goes. Yeah, everybody just ate, so it was a good time. And, uh, kind of started back to work and then we're like, oh shit, we haven't done an episode. So something I came up with this week, this is for Isaac, one of my clients.

2:28We had a conversation with his accountant. He's on a cash basis for his accounting. There's a thing called cash basis or accrual basis accounting. I want to kind of go just touch on that today and I want to talk about why People just don't get how important the numbers are. I mean, I preach this from episode, what, 5 on. Somehow or another, I talk about you have to know your numbers.

2:52Okay. Having your shop management program on the front end, pricing stuff the right way is only part of it. People just don't seem to get it. You could be doing great on the front end, but your overhead and everything is too high on the back end. It eats all that profit up like we talked about in the P&L and you're doing, you're working your butt off every day, but you're losing money because you don't know what your net is.

3:13Well, the net is, is what we get to keep after everything's paid. And then they talk about this, you know, well, I have no money. Yeah, that's because everybody— it shows what you made, but you didn't collect your money. I got some clients that, you know, they're just— they're not really good at collecting their money. Well, you got to be really good at collecting your money.

3:30Now, from what I understand, another one of my clients was telling me that, you know, after 60 days, like, some of these companies, bigger companies, they're like, we're not paying you, you should have freaking billed us. And I say to these guys, like, what the fuck are you doing? You're doing all the work, you're buying the parts, and you don't have time to write a fucking bill?

3:45There's Several of my clients are like, tell me you have to write your fucking bills. I can't say fucking enough. Like last week's episode, I listened to it. That was pretty passionate. And I was like, huh, pretty amazing that I say fuck so much. But apparently I'm a passionate guy. So we're going to try to clean it up today. Dude, I love the passionate conversations.

4:06I think some of these have been the best episodes. Yeah. And that's just me. They say highly intelligent people swear a lot. Yeah. Yeah. Yeah. I don't know if I'm highly intelligent, but I swear a lot. So today we're just going to simplify it. We're just going to go through just a really quick— I got like 4 pages of explaining that. And then I want to kind of get into why it's important with metrics, know what's going on in your business, how we need to plan for the future, plan for slow times.

4:33You know, I've been seeing guys on TikTok, you know, hey, I'm really slow all of a sudden. You know, the oil prices and the diesel fuel prices are really affecting my business. People aren't, you know, moving, they're not driving. So therefore they're not fixing their vehicles. You know, it's like an unexpected expense. Increase on a lot of these families. So now guess what?

4:53You know, the car oil change or whatever might have to wait. So all the shops are slowing down. What happens when the shops slow down? The money's not coming in and you weren't making any money in the first place because you didn't know your numbers. Then you have nothing in your savings account. Like I've talked about, take 10% of your weekly gross and pop into your savings account.

5:09If you absolutely have to have it back to pay some bills, take it back, but try to act like it's not there and it'll build up. So when a rainy day comes, what if you have money in the savings account, you get a little bit slow, You can kind of feed some of it into your company without having to borrow money. But a lot of these guys don't do it.

5:25Their ideas are like, well, I'll just go get a loan from the bank or I'll go get a high-interest loan or I'll start putting everything on my credit cards. That's not the answer, guys. You know, if you have to, obviously do it, but you should probably start planning for this stuff like I'm saying. That way, when you hit the slow times, you have money in your savings account and you're self-sustaining.

5:45Well, because you can talk about the gas prices, but it could be anything. It could be COVID, it could be, you know, whatever fluctuation. You can't control the slow times. In a lot of cases. Right. And one of my things I've done over the years as I became more and more successful in our business, I've gotten to the point now personally where I am the lines of credit if we ever need it for the companies.

6:03I have savings account, but if we go through the savings account, I have enough money personally that I can say, hey, I can loan my company money to make it through a tough time. God, hopefully it doesn't happen. You know, during COVID we didn't close. We work on fire apparatuses and a lot of different stuff. So we never closed. My guys didn't want to stay home either.

6:22So everybody around us closed. Everybody's— was actually a good thing. Yeah. So we didn't work anymore. We didn't raise our prices. We didn't do anything. We just did more work. You know, we did a different type of work, I should say. Right. The gravy lickers were all closed down. So we got break jobs and everything. Right. So anyway, so today I want to simplify something that confuses a lot of business owners.

6:45The difference between a cash accounting and accrual accounting. Okay. Simple. Cash accounting is when anything, any money moves. Money comes in, money goes out, it's accounted for. Expense goes out, money comes in, right? Income. Uh, it tracks the money when it actually moves. That's like this, like I just said that, meaning when the money comes into your bank account or the money leaves your bank account, that's it.

7:08It's tracked. Okay. So if a customer pays you, the income counts today. If your vendor— if you pay your vendor, the expense counts today. Simple as that, right? A lot of smaller businesses use this method because it's easy to understand. Basically, they can look at their bank account, see what's going on at all times, right? But I'm not going to go ahead on the pages, but what ends up happening, it's a lot harder to check the metrics.

7:34And I'm going to explain why here in a minute to see what's going on in your business. A lot smaller businesses use this method because it's easy to understand. And honestly, many businesses under $1 million or so a year, especially like service businesses like the cash accounting, it works pretty well in the beginning. But as you start to scale out, I'm going to tell you why the problems become readily apparent that it's not going to work for you.

7:59Okay. Because early on, many business owners are— they're interested, you know, you're new, you're a service business, you're worried about making payroll, you're paying your bills, you're keeping the cash in the bank and surviving, right? Yeah. So you're sitting there trying to do all this stuff. Okay. Your service business, you're brand new. I got 5 refrigerators to go fix this week. That's $500.

8:19That means my payroll is $200. I have $300 left to pay for the expenses. Whatever's left, that's what I get to keep type of thing, right? Simple. That's how pretty much how simple it is on me just parroting it down, right? So cash accounting feels natural because you're basically watching the checking account, like I just said, right? And for smaller operations, that could work fine for a while.

8:39But as the business grows and things start to changing, now you have problems that come up with this. And this is what I was trying to tell one of my clients' accountants yesterday. And this is where this whole thing came from. It caused— it becomes— it caused problems in the business being a cash— on a cash basis. And I'm going to show you why.

8:58Customers start paying late. Okay. You have fleet accounts. That's a big one. Fleet accounts want terms, right? Yeah. Your accounts receivable, your vendor bills. Your inventory, your larger repair orders, you start paying for all this stuff, paying for labor and all that stuff. What happens if they don't pay right away? It could skew your months because you do all this work in, say, March.

9:18So you look like you had a really kick-ass month. The money went out of your account. The money went out of your account. You really did good on an operational basis, but you never got paid till April. So March, it looks like, holy shit, all the money went out of the bank. Then April, all the money came back. So it doesn't flow.

9:33They don't talk to each other, basically. Now, with accrual, it's the same way, but you have an accounting that you can kind of go through and follow it along. Okay. You could look like March was a really shitty month and you're like, oh my God, what are we doing on April? We're stars in April. Yeah, exactly. That's it. Because you got paid, right?

9:50Your inventory, you start keeping more and more inventory. You got to remember, you're a refrigerator repair company. You have a credit card. I go over to Jason Tracy's house. I fix the— I just say I fix the refrigerator. I go to the— I need the parts. I go to the refrigerator parts store, pick up the parts, put them on the credit card, get the money from Jason Tracy.

10:11The bill's $200. I paid $100 in parts. Jason Tracy made $50. The company keeps $50. That's how simple it is, really. But can you see how when it gets bigger, you have Glendale or Auto Value or Napa coming in your door 15 times a day? You're going to swipe your credit card 15 times a day. It just kind of— then your credit card bill, it's just it's a little bit easier to have kind of accounts, you know, as you get bigger.

10:35And that's why you kind of want to do accrual. That way at the end of the month you can see what you owe and you kind of get, you know, a bigger picture. Yeah. Uh, you know, and jobs are crossing over from month to month and into another month are cause of problem. Now the cash accounting starts creating problems because it can distort how the business is actually performing.

10:54You can't really see it. Kind of gets distorted if you got having in one month and collecting in the other, you're paying and stuff like that. So let's say your shop does a huge— I already went ahead, but here's a huge repair in March, right? The technicians do the work in March, the vehicle leaves in March, right? But the customer doesn't pay until April.

11:13I just literally said this, right? With the cash accounting, March looks terrible because no cash came in yet. Then April suddenly looks amazing because the money finally shows up. You know what I mean? Yep. But operationally, the shop actually performed well in March. Yep. Grainger knows when you're a procurement manager for an office park, you're not managing one building, you're managing all of them.

11:35And to stay ahead, you need to see through walls and around corners. Lights about to fail, filters ready to clog, HVAC on its last leg. If you wait until something breaks, you're already behind. Count on Grainger. For quality products, easy reordering, and 24/7 support. Call 1-800-Granger, click granger.com, or just stop by. Granger, for the ones who get it done. Hey sweetie, your mother showed me this Carvana thing for selling the car.

12:03I'm gonna give it a try. Wish me luck. Me again. I put in the license plate, it gave me an offer. Unbelievable. Okay, I accepted the offer. They're picking it up Tuesday from the driveway. I haven't even left my chair. It's done. The car is gone. I'm holding a check. Anyway, Carvana, give it a whirl. Love ya. So good, you'll want to leave a voicemail about it.

12:24Sell your car today on Carvana. Pickup fees may apply. So that's where accrual accounting comes in. Accrual accounting records the work when the work actually happens, not when the cash actually moves. Remember, the cash actually comes into your bank account or as an expense leaves your bank account. That's what it only records when it moves. Yeah, that's why I want to say the word moves.

12:45I want to be very clear. Anytime something happens in your bank account, in a cash expense or income, that's when it's recorded. So if the repair is completed in March and the sale belongs in March, that gives you a much more accurate picture of the business performance because everything's— well, let's use the word closed. Yeah. Which we all know, and I've talked about it before in here, that in our business you just sometimes cannot close everything in one month.

13:09You'll have carryover work. Right? Yeah. But you try to keep it to a minimum. But in our business, sometimes it happens and it goes over, right? But it gives you a much more accurate picture of performance. Okay. So that's when, you know, reality was— I guess that's when reality sets in, when you start to see what you're actually doing per month. You know, I personally like the net.

13:34As we all know, I'm not an accountant. That's why I'm reading off this so I don't misspeak. Okay. I'm not a CPA. By any means, but I'm self-taught and, you know, I've always been accrual. So the cash thing was new to me. I'm like, ah, I need to really look into this because, you know, I'm a consultant, but I'm not a CPA.

13:50Oh yeah. I know how to run businesses, but I'm not a CPA. Right. I have CPAs that I hire to work for, does do my stuff. Right. Maria, you know, but we do our own bookkeeping. Me and my wife do, you know, so, and this becomes really important when you start looking at your income statement, which income statement, P&L, it's kind of a universal word depending who's talking about it.

14:11In what world, I should say, right? Or, you know, or what people, most people call their P&L. Your P&L is supposed to tell you, are you profitable? Are your margins healthy? Is your labor improving? Is, are your parts profitable? And remember when I talked about your shop management program, at the end you get a gross profit, right? It's just gross profit. Same as the top of your P&L sheets with your cost of goods sold.

14:38You get your gross profit, your cost of goods sold, and then we're going to kind of match, right? So that's stuff you really want to look at as a business owner. With the cash, it's a little bit harder because you get the income statement, as they call it. You have to kind of do the checking in on stuff like that. It's a little bit harder.

14:56It could be— they could vary. So you might not be where you should— you think you are because stuff happens with cash. I mean, it's a true picture, right? It's easier to manage. But for performance tracking and really drilling down on the numbers, you know, it's not. Yeah. So is your business getting stronger or weaker? You know, that's something, you know, but if your numbers are cash-based, those reports can become very misleading.

15:21You know, one month looks incredible and next month looks terrible. I mean, okay, let's just take the, the numbers part of this out. Let's talk about it from a business owner stress point. Okay. A guy who really doesn't know his numbers. Calls his accountant because he doesn't know his numbers. And he says, I don't have no money in my bank. And they're like, oh my God, what happened in March?

15:41You spent all this money. And what happened? I don't know. Well, the bank statement's not out yet. So we're not going to, the accountant's not going to look at the bank statement in March and see that the guy spent all this money. And wait a second, where's the, what kind of money did you collect? Right. Then all of a sudden, you know, April comes along.

16:022 weeks into April, the guy pays and all of a sudden, oh, we're rich again. The bank account just went back up. So it might take a little bit of time for the accountant to figure all this out because of the cash basis. So it's kind of interesting. I mean, once again, I'm not an accountant. I'm going to say this again, 100 fucking times, 101, but these guys that call their accountant and say, how am I doing my business?

16:25The accountant doesn't know. Your accountant doesn't know. If you're calling your accountant and say, how am I doing? Or do I need to spend money? Or do I need to do this and stuff like that? This is a problem, guys. And I called my accountant yesterday after I got off the phone with this other accountant and I said, hey, let me run this stuff by you.

16:42And we got talking. She's like, Kevin, you have to understand something. People don't know their numbers like you do. She's like, and it's not just your business. She's like, just in every business. These business owners are putting out fires all day. They're running around like maniacs. It's chaos in their business. Because they don't have operating procedures, they don't have the right people in place, whatever you want to say.

17:04They don't know their numbers, so they count on us to tell them what their numbers are. She's like, I can do it, because my— obviously we had Maria on here, she's awesome, she's freaking— when I talk to her on the phone and say, what about this, I could hear her tick with her calculator and she gives me answers. She's smart, she's like a forensic CPA.

17:20Yeah, I love how she talked about like putting the forensics of TJ's books together and like all this stuff, right? And she's very sharp at it, okay? So Absolutely. I call her and say, hey, I'm getting ready to do this strategically from a tax standpoint. How should I handle this? And she'll say, no, that's not a good idea, or you're looking at this wrong, or you're wrong on this, blah, blah, blah.

17:39But at the end of the day, I have my nuts and bolts. I kind of know where my numbers are. We go to the office, her office, she'll start telling me and I'll start spitting them out and I'll be within a few thousand dollars. We'll be within a few thousand dollars of each other, which is just rounding and stuff like that. And she always laughs.

17:52She's like, you really, really do eat, breathe, and sleep this stuff. I worry about it all the time. I want to make sure my businesses are healthy. There's families that depend on me. Yeah, it's just not me and my family. Yeah. In my house and my— okay, I have other families. I have my— I have employees that have young kids now and stuff like that.

18:10I take my job very seriously as a business owner. Yes, I want to make money. Absolutely. That's the first and foremost thought in my head every day. Money, money, money, money, money. But I want to make sure there's enough money so I could pay my bills, pay my employees, take care of warranty situations and all that. In order to do that, I have to know what The money I'm making, it all comes back down to the numbers.

18:32They do not lie. The numbers do not lie. If you have good numbers, garbage in, garbage out, but we have good numbers going in, good numbers coming out. I think it's so important to translate what the money does, because it's not just like the greed of like, oh, I want more money, want more money. It's the more money to pay your people well, to give your people a high quality of life, to have healthy businesses, to like, it's, it's, it's going to causes.

18:54It's the money. I think you said this before, the money has a name to it. Yeah, absolutely. Every dollar has a name and has a use. We always make sure of that, you know. Um, you know, so that's why accrual accounting becomes much better for performance tracking, because now you can actually monitor your gross profit, your labor margins, your parts margins, your sales trends, your technician productivity, which is done on the front end.

19:19But you know, you could do it in your cost of goods sold. Also, you know, what these guys produce, I guess not in the cost of goods sold, what these guys are producing or not producing. And your operating performance, you know, um, your gross profit is done right here. I will say on your front end, that's where you have to set it up in your shop management program at the front desk.

19:38It's not the QuickBooks job to make sure that's right. It's QuickBooks' job, I believe, to check your shop management program. Okay. So you can start watching your labor margins, your parts margins, all that stuff. On the front end, but then you come through, you can start looking at your sales trends year to year and stuff like that. Technician productivity is done on the Shop Management program.

19:59So really this particular section of it, I don't really necessarily agree with 100%, but operating performance and your net profit in your accounting program, whether it's QuickBooks, whatever, is very important because if there's a minus in front of it, you have to look and say, okay, why is there a minus in front of it? Okay, that's a big deal because you can't be necessarily losing money.

20:24Yeah. You know, and you got to remember with your P&L sheets, if you're looking, if you do a year to date from, say, January 1st to end of April, because we're not closed out in May, you can see the trends. You can say, okay, wait a second here. I know last month it was my net profit was this. What happened? Why did it drop down?

20:43Like April, I had a bad month. Just like everybody has, and my net profit was down year to date. So I caught that. Yeah. Yeah. And that's the stuff I think that needs to be monitored. Obviously, I know why it went down. I'm completely— it is what it is. Sometimes you just, you just don't have a ton of sales that month or stuff happened or whatever.

21:04Like it's been slow because of the oil and the gas and everything like that. And this time of the year is usually, you know, kids are getting ready to get out of school and, you know, everybody's excited about Memorial Day. So there's a lot of different things that play in it because let's face it, Nowadays, I don't know if you've noticed it, people are now taking off the day before the holiday, like the Friday before Memorial Day.

21:23Like nobody was working. I'm like, why the fuck is nobody working? Like ever since COVID like people really realize— stretch their holidays. They stretch their— they realize that taking time off is more important. Yeah. Yeah. You know, that's why we have these different companies that popped up, you know, the DoorDashes, the Instacart, whatever, these booms or whatever. And these people can set their own schedule.

21:42So now they're having to enjoy their time off, which I think people are starting to understand that, you know, life is short. Take time off. And I think COVID, that was one good thing. That was a great thing out of COVID Absolutely. You know, and you know, so it's just, instead of watching your cash bounce around month to month, like you do on cash now, you know, it doesn't mean that your cash isn't important.

22:03Cash flow is extremely important. We all know that, right? You could actually be profitable and still run out of cash if your customers don't pay enough or fast enough, right? That's with accrual or your expenses get too high. This is where it comes in again, guys. You're doing really good on the front end. Everything's perfect. Everything's— all your margins are great, right?

22:24Everything looks good. Your costs look good. Look. So then you go to the center of the P&L sheet we talked about and your overhead's so high it kills all that profit, all that profit, all that profit. We put a new car payment on there. We did this. We went on vacation. Whatever. And all of a sudden we doop, doop, doop, doop, and there's a minus at that net.

22:41Then you do that 3 or 4 months in a row, then people don't pay you, you run out of money. And that doesn't matter if you're cash or accrual. It means you're running out of money because you're not charging enough and your overhead's too high. Okay. But obviously somebody not paying you is a much bigger deal. If you pay for everything, you would take a loss on a job, right?

23:00Yeah. Because every job we have figured out, okay, it costs us X amount of money to do this job. We have to make X amount of money. On this job to pay our overhead, right? If we don't ever collect that money, we lose money. Then it translates to going— we don't make negative, right? You know, I had a client say, you know, I did all these sales, I don't have no money.

23:19I said, yes you do. It shows right there you have the money. Guess where it's at? In everybody else's fucking bank account, because you will not bill them. And I cannot stress to you guys enough, and you know who I'm talking about, the guy knows who I'm talking about. You need to start writing bills because if you don't collect the money, you might as well stay home.

23:36Why put yourself through all the hassle? Go buy your auto parts from the auto parts store. Make— they make money. Guess what they send you every month? A bill, right? Your gas company, your electrical company, your insurance company, every company you do business with, what do they do? They send you a bill. They send you a bill. So why would you not send somebody else a bill to collect your money to pay your bills?

23:58It makes zero sense. You cannot be that busy not to pay your fricking— write your customers an invoice. And to your point, when you have like fleet companies and stuff like that and businesses, they want terms. There are people that already don't want to pay you, right? If you're lackadaisical about collecting your payment, yeah, they will not pay you. Absolutely. They'll be happy to not pay you.

24:17Like we talked about, some of these big ballers now, 60 days, you're done, we're not paying you. That's dead money to them. So, and how could you not pay or write somebody an invoice for 60 days after you're done with the job. Yeah, I know my shop, when you get done with the job, you get a bill. Yeah, here is the end result, sir, the invoice, you know.

24:37So to the point where you tell people like, I want to get paid just as much as you want your vehicle back. I tell people that too. So smart, smart, so smart business owners watch both. They watch cash flow, they also watch, you know, accrual-based performance, because they tell you two different things. Cash tells you where the money is. Accrual tells you how the business is actually performing.

25:01If you really stop and think about it, we have to know where the cash is. And you've heard me talk about this before. Back in the day when we had a lot of fleet accounts that were on terms, since over the years I've weaned them out, I only have 3 or 4. I do not give terms. I'm not a fucking bank. But I have a few customers that have been with me a long time that I trust and I give them terms.

25:23What happens if all my bills are due and I'm owed $80,000? That's, that right there is a little bit of a cash flow problem because I have the money. It's just not where I want it to be at that particular moment. Yep. I used to tell my wife, I said, when we, when we were kind of weaning out, I said, we have the money.

25:43It's just, we just don't have the money where we want it right now. It's coming. These people will pay us. So, you know, that's where, you know, cash tells you where the money is, you know what I'm saying? Cash flow and all that stuff. Uh, accrual tells you how the business is performing. Cause we have a rec— remember, we have everything that went happened through the months.

26:01We have an accrual accounting system, you know, and once, you know, a business starts growing, accrual accounting usually becomes better tool for truly understanding the health of the company. Company because you're not— you think about it, you're bouncing back and forth and stuff like that. Now, just on a side note, I think it's an IRS Form 3315 to switch your status from cash to accrual or back and forth.

26:23It just popped into my head. Don't ask me why, but that's an important note because how do you make that change? Yeah, you would talk to your accountant and stuff like that. So hopefully this helps you guys with the difference. Uh, you know, cash accounting is simple and works fine for many smaller businesses, service types of business like we talked about, refrigerator repair, small repair shops, stuff like that.

26:43But accrual accounting gives you a clearer picture of real business performance as the company grows. That's pretty much where I'm at on that. I just wanted to talk about that. So let's talk about the numbers and why a lot of these business owners rely on their accountants. And I'm not sure that's necessarily a great idea. It's kind of like me standing behind a wall and trying to, to articulate to you what's going on in my business.

27:12They see the numbers, but let's just use a cash system to start. I'm doing all this work and everything's going on, but I'm not billing on the— at my end. So I'm collecting a little bit of money, but I'm not really billing my customers. So I'm not collecting all the money. Okay. Accrual, or cash does not matter if I don't write the invoice.

27:40Yeah, yep, because you're not collecting that money anyways. It's not even hopeful money, right? So basically what I'm doing, no matter what I do, the numbers are going to be wrong because I'm buying the parts, I'm paying the labor, but I'm never writing the invoice. Oh my God, isn't that crazy? That's crazy that there's like so many people, and it's not just one person, there's so many people that are just not writing their invoices.

28:00Yeah, and it's That was like one of the things I really found shocking when I got into the consulting, coaching, whatever you want to call it nowadays, new words. The invoices don't get written to these customers. How can you be so lackadaisical that you do not even frickin' write an invoice? You give people your money. Listen to me, people. You're literally working for free.

28:24If you're not giving them the invoice when they walk out, chances are it's going to go a week or two down the road. And I guarantee if you're not writing the invoice, that means you're all the parts and all the labor and everything that happened on that bill was shitty in the first place. So you're already giving money away because it's not all captured on the invoice because it's not fresh in your mind.

28:41It's no difference when my wife goes on vacation or she's at Florida for the 2 weeks that she goes or at a time and stuff happens. She comes back at the end of June and she starts talking about what happened in May. What is this in May? I have to go back and research it. Yeah. Okay. 9 times out of 10, I could pretty much tell her right off the rip if it's something that was a little bit weird.

29:00I know it in my mind already. Um, but everything is such a fucking mess in your shop, you can't write an invoice. That means the parts weren't— all the parts weren't captured, all the oils weren't captured. Okay, what if the guy does a $30,000 job and you leave it sitting there and he gets fired and he never put the oil in it, he put on the antifreeze, whatever, you paid for it all, it never even hit the invoice.

29:24And on top of it, you're not even writing the invoice. Okay, there's so many problems involved in this whole thing that most shop owners just don't get. And then it all translates down to, I can't afford to pay you anymore, you know, Mr. Mechanic. I'm gonna put everybody on flat rate. That way, you know, they only get paid for what they produce.

29:43Okay, there's— and then they never even pay, they never even collect the money. So then they run into money problems and they don't pay their people on time. And then they do this and they're so— they just think about The snowball that starts happening, it's just getting bigger and bigger as we keep talking. And it all comes down to there's no discipline as a business owner.

30:03A lot of these shop owners have to run out in their shop and act like fucking psychopaths and help everybody do their job. They can't do their job. So there's going to be some hard truths being told here. If you're a shop owner, you need to run your shop. You need to work on your business, not in your business. Okay? The numbers don't lie.

30:22You have to know your numbers. If you don't know how to know your numbers or you don't— I don't know how to read your numbers, look at your numbers. Go to your accountant. Sit down with your accountant once a month. Pay the money. But guess what? I can't pay the money because I don't even know how to fucking write a bill. So I have no money to pay the accountant because I can't write a bill.

30:40Okay? You say there's this great mechanic. You're a business owner now. You were a mechanic. You said, I'm going to start a shop. So you start a shop. You could fix the shit out of trucks. You're one of the best guys around, right? But you can't write an invoice. You cannot even articulate it to paper to get paid, or your priorities are so fucked up you'd rather just hurry up and fix Jason's truck because Bob's truck's there and Fred's truck there, and they're all my buddies.

31:03They're your buddies only till you give them a fucking invoice. They love you because guess how good their business runs? Because they don't have truck repair costs because you never bill them. Think about it. And then it goes 2 or 3 months down the road, and then you miss all this shit. You don't know what really happened in that job. Then they start questioning you.

31:19It's always amazing. They have a million and one fucking questions. When you give them the invoice 2 months later. Why did we really do this? Why did we do that? What happened here? You can't even remember because you've worked on 100 trucks since. And then you're probably discounting now at this point because you have— you can't back it up. You have no confidence on it, right?

31:37And then these guys— hear me now— these guys on social media are going, we're really slow, so what I'm doing is I'm discounting my works. I'm saying 20% off on this, 20% off on that. 20%. How are you giving 20% off on anything, or 10%, or 5%, when you don't even know how much your freaking gross is? You don't even know how to bill.

31:56You don't even know how to write a bill. Not to mention, you're gonna give 20% off on a fucking bill you're not even gonna write. Why don't you give 100% off? Just be forthright. Just be free. Just be free. You get a repair, you get a repair. Yeah, it's fair. Like, and I'm not saying every shop owner doesn't write a bill, but I've come across a few that don't write bills and they have this mental thing like you don't think your customers will be your friends if you invoice them.

32:21Well, and you said something about like now you can't pay your employees in the mindset that you can't take care of your people, but you don't want to offend your customers by sending them a bill. And I had this client that went through my bootcamp and she literally gave a piece of equipment to a customer on a promise that they were going to pay for it.

32:40And this piece of equipment was $3,500 and then they just ghosted her.. And so she came to bootcamp all upset and crying because she had to pay $3,500 out of her own pocket and she couldn't pay her own mortgage. And I'm like, how does that feel that you can't feed your kids? How does that feel that you can't pay the bills and you can't, you know, protect your kids, but your customers out there with a free piece of equipment, take care of your home, take care of your people.

33:04And you know, like if, if you're not taking care of your people inside that building, then like, what are you even doing? I know a company right now that is doing pretty shitty, and it's not in the auto repair business. They're giving 60 days of terms on their equipment to get people to buy it. These fucking people have college degrees, they have titles like CFO, okay, all this stuff, but they're not understanding.

33:31They're giving 60-day terms and they're having cash flow problems paying their bills on the other end, and they're They're paying for this equipment, they're building this equipment, they're doing all this stuff, and they're giving 60-day terms on this shit to get the sales, to keep their numbers up. But they have a cash flow problem over there. How could that even be? Yeah.

33:49Okay. They got more fucking degrees than a thermometer, but they can't even figure this shit out. Here I am, a little fucking pipsqueak in the cog of life, okay, doing what I do. And I've sat there and tortured myself to the point where I'm my worst own enemy. Hear me now. I am my worst own enemy. I see one little thing. It's like, you ever see a dog that gets a little itch and they just keep scratching and it gets raw and before it's a bloody fucking spot?

34:12That's me. Okay. I see a problem and I start scratching and start looking at it and dissecting it and looking here, looking here. What happened here? And I go back to the very beginning and I have it figured all out. Okay. Most guys don't even have time to do that, but I beat myself to death over the years. Okay. Everybody's like, oh yeah, you're a business owner.

34:32It's easy. I work 24 hours a day, 7 days a week. If I am not thinking about it laying in bed, I'm fucking having dreams about work. Okay? And anybody that's a business owner says, oh, it's not okay. Is the stress worth the reward? For me, yes. But it's taken me many years to get to where I'm at. Okay? Am I arrogant sounding?

34:51Yeah, I probably do sound arrogant to some of these losers online. And I'm saying some of these losers online that say, I can't believe this guy always talks about this stuff. Okay, and then some guy said, I wouldn't take advice how to take a shit from you. I said, I wouldn't give a loser fucking advice. I wouldn't let you consult me on taking a shit.

35:06I said, well, I wouldn't consult a loser. Okay, because anybody who does not find value in some of the things I say, maybe not all of them, maybe it doesn't hit with you or resonate with you. Yeah, but maybe you're not their personality, but like to say that you're wrong is stupid, right? Um, you know, there's things that some other influencers say online I agree with, I don't agree with.

35:25Um, I don't fricking get on there and bust their balls all the time. I did at the very beginning. But you know what it does? It's just not worth it. So I really don't care about their opinion. And like Dave Ramsey says, would you take criticism from somebody you wouldn't take advice from? Okay. And I always look at it this way, like, I don't take advice from people less successful than me.

35:43Can I learn something from somebody? Absolutely. But I'm sure not going to take a guy's advice on, you know, running my business and stuff like that when he's already done bankruptcy 4 times. And there's guys out there that are always willing to give you advice. Yeah. Yeah. There's a guy. That you could read the thing, and he never answered me. He's in Michigan.

35:59Actually, let me see if I could pull it up because I told him he's 100% wrong. Um, I think these are the— I think these are great learning. Let's see here, it's thinking. You know, Facebook's been slow lately. Slow, yeah. Uh, messages. Inbox. Here he is. Dean. Dean Gaffner is his name. I'm talking about charging storage. He says, on the other hand, on the other end, if you're in an accident, they will only cover 4 days of storage.

36:48Anything more the auto owner is responsible for. And I put wrong in all caps. He said, what's wrong? I said, you saying only if they only cover 4 days. They have done it to us twice in my buddy's shop on 4 occasions. So, so, so I'm not wrong. Sorry, I'm reading it just a little bit miscue. Yeah, you can make it a blank.

37:13You can't make a blanket statement. When it happened to you and your buddy. That doesn't mean it happens to everybody. Sounds like to me you don't know how to run a body shop or don't know how to run a business. He's like, wow, that's pretty ballsy. I said, why, thank you. He said, pretty easy to hide behind your screen. You must be a keyboard warrior, my friend.

37:33I said, you commented on my post with misinformation. Trust me, I'm not hiding behind my keyboard. He said, I know two people that have had it done is some misinformation. I'm sure, uh, I didn't miss it when they screwed over their customer. Now I'm reading what he says. That's right. Yeah, yeah, yeah. Okay. Well, I just got 70 days storage on one.

37:56This is me. Also 7 days on another. I see you're in Michigan. Stop by Motor City Truck Collision. I'll show you the invoices and I'll help you write up your— is in order to show you how to collect on storage fees. He said only State Farm has done it. I'm not sure if the other ones have. Wait a second, up above you said nobody.

38:17Yeah, okay. I said State Farm just paid me, uh, $900, 9 days of storage. Here's the invoice. I sent them pictures. Yeah, okay. I said, so here's a State Farm job, stop by. Guess what? He read the last one, never answered me. Okay, I have no problem freaking arguing with somebody when they talk their bullshit like that. That's what's wrong with all this.

38:40It's really funny when they say that you're a keyboard warrior hiding behind the screen because you pick up the phone and call people. Yeah, I pick up the phone and call. If I had his phone number, I would have called him. He's in Michigan. He's in two of the Facebook groups. I know he's in Michigan. Stop by. If I'm a keyboard warrior, stop by.

38:55Let's talk it out. I'll show you what I'm talking about and I'll show you you're wrong. Now, would State Farm screw you if you let them? Absolutely. But I don't let them. Here it is, like, stop talking shit. Like, I'm not a keyboard warrior. I stand behind what I do and what I say. Yeah, if I'm wrong, I'm wrong. Call me out.

39:14I mean, Jesus Christ, how much do people call us out online? It was funny because I saw the comment, the message come through that said, you're ballsy. And then I went back and read what you said, and I'm like, what's he like? Where was he so offended? I didn't understand because you were just pointing out to him where he was wrong. Yeah, I'm not going to sit here and argue with people.

39:31I'm not going to sit there and let them just say the shit and it's wrong, and then all of a sudden everybody's like— everybody stops even trying to charge State Farm more than 4 days, and then State Farm wins. Exactly. Come on, Dean. Yeah, wake the fuck up. And you're putting out the content for the reason— for a reason. It's not just— just to help people understand the information.

39:48Yeah. And you know what, going over to running a shop and on the body shop part of it. We do emails only now is our policy, back and forth to the insurance companies with the customer involved in it. Because we just had one that was here 101 days and their storage bill was 101 days when they totaled it. They freaked out. We busted down the timeline.

40:12They— I said, we— Jim went through and he said, do you realize 51 days before anything happened was on you? The vehicle is towed in unannounced. We said, we'll do an estimate. They said, nope, we have to send our people out to do an estimate. They sent a 12-year-old kid out to take pictures that was pissing his pants. We tried to talk to him.

40:29I just got to take pictures. He took all the pictures, took it back to somebody. We get this half-cocked estimate and we finally got the check 51 days later. We worked on the vehicle. It's— we pulled it in 5 days later. It sat for 2 weeks because we got busy doing other stuff. We had parts delivery problems and stuff like that. So then we called them and said, hey, we found more stuff wrong.

40:54And then we said we need a supplement. They said it's a total loss. So between all that, it was 101 days. So we billed them for 101 days. And he said, well, wait a second here with the timeline, you this, you that. I said, oh, fine, you say we wasted 21 days. We argued. He said we wasted all the time. But once we laid out who was who.

41:12We were, we were responsible for 21 days. So we took 21 days off that 101, said, here you go, you owe us the rest. Guess what? They paid. Okay. When you can prove the timeline is on them, how can they argue? How can they argue with it? Now, I have heard that. I have heard that they'll bring you the title and say, here, have the fucking thing, or send the title to you and dump it on you, or just dump it on you and never even pick it up.

41:36I have heard insurance companies doing that to people. Huh. So, but on a side note, but let's go back to these guys that aren't writing invoices and they do write the invoice, but they don't charge enough money 'cause they don't want to upset the customer by it's too expensive. Let me tell you something, guys. Everything's become really, really expensive. Ridiculously, the Isuzu dealer by us is $238 an hour now.

41:56We're $217 an hour. You know, we do medium and light trucks and stuff like that. We get that for pickup trucks and everything like that. So are you gonna lose all your customers 'cause your labor rate's high? You might lose the right customers. The good customers will stay with you. People that find value in your quality work. Yeah, yeah. Your professionalism, your warranties and stuff like that.

42:16You might not be appealing to the broke people, but who wants to work for broke people? Broke people bring their own set of problems. Yeah. Am I being arrogant? Goddamn right. Because I don't want to work on broke people's shit because I'm the guys that I've gotten in fights with over the years. Hey, you need Kingpins, ball joints, or tie rods, you know, shocks, this.

42:33And they start screaming, yelling at you because they spent all their money. On their brand new Jaguar because they're a business owner and they roll up to look at their truck and their brand new car and they're telling you they can't afford to fix their truck or DOT their truck, but they're driving a brand new Jaguar. And this has happened over years, over years, over years.

42:47BMW. These guys walk in, they're dripping Rolex watches, the whole nine yards, right? And they don't have money to fix their truck. That happens all the time. So them are the guys, you know, that you don't really want as customers anyway. They're a liability. Yeah, yeah, yeah. You know, chances are they're going to try to dick you around on paying you. And stuff like that.

43:06And that's where it led into us getting deposits, you know, half down on stuff like that. So, you know, it helps with cash flow and all this stuff on these bigger truck jobs too. On some of these big jobs, it helps with cash flow. It's fixed the cash flow problem. But going back to the key thing here, we have to start at the front of the office and the shop management program like I talked about, writing the invoice, making sure the numbers are correct, then, you know, doing the job.

43:32Make sure we capture all the parts on repair order, then send it back up to the front when the job is done, and then bill the customer. Then after we bill the customer, we get paid, and then we go back to the back office after the end of the month, or, you know, every 3 months or every other month, how you read your P&L and say, okay, how am I doing?

43:48Mm-hmm. And guys are just not doing that. And I'm telling you guys, you have to start paying attention to your numbers. If not, you're literally in a mud slick. You're just spinning your tires. You're going nowhere. And the faster you press your gas, what does it do to your vehicle? It makes it more and more tired, right? It wears it out. That's what you're doing to your body.

44:08Do you want to end this being in this business as a shop owner, not taking the time to figure out your numbers and being broke and say, man, I had my own business my whole life. Now I have to live on $1,600 a month Social Security because I never did anything and I've never been able to keep an employee because I never would do retirement.

44:24I never did a a healthcare program. I never did any of this stuff. So I, it's me, me, me. I took, you know, I'm making $80,000 a year out of my business and I'm doing $1 million or $1.2 million a year. Okay, go work for somebody. Yeah. If you cannot make money and treat your people good or even take the time to learn your numbers, I'm not even saying you need to be the level I'm at because I have, you know, I have 4 or 5 different things going on, right?

44:52I, with my personality, I like to know what's going on. I don't want to take, you know, anybody else's word for what's going on in my business. So I figure it out. Now, sometimes it gets a little above me, so I'll call Maria and be like, hey, what's— what does this exactly mean on my tax return? And she'll explain it to me, right?

45:07And I'm not— once again, I'm not a CPA. Yeah. So I don't feel stupid calling her. Yeah. Yeah. Right. Yeah. So I'm at the level of these other shop owners. Maybe there's other guys, other shop owners, I'm sure above me, right? But in my companies, I make sure I watch the numbers and I watch what's going on. Like, my insurance has gone up substantially.

45:25There's a meeting with my insurance guy next week. Like, dude, you cannot raise my insurance as much as you did my health insurance, okay? I'm gonna have to start shopping you if it goes up again next year when we renew. This is ridiculous, okay? But then you start looking at the trends that they're doing it to everybody. Yeah. So you have to start moving stuff to keep your overhead down.

45:44But how do you even know that if you don't look at last year's P&L and this year's P&L to see where the increases are? You know, because increases usually come the first, second month of the year, right? Yeah. So you can go back last year and say, okay, I want to do a, you know, side-by-side P&L sheet with percentage of income. So it'll show you your percentages and like, oh shit, that just went up.

46:04You know, that translates to real dollars, right? If I'm doing the same amount of sales, but all of a sudden That went up, that went up, that went up. What happens to that net we talked about? The P&L goes down, right? And the reason I'm repeating this, guys, is because you guys not knowing your numbers, this is all happening right before your eyes and you're wondering why your bank account shrinking to pay your bills every month, but you're doing the same amount of numbers.

46:27There's only a couple of things that could be happening. If your numbers are staying the same, meaning your sales are the same, what's killing it? Yeah. Yeah. Your overhead went up. You know, I like these guys that just want to throw another service advisor in the fucking mix. Like, you know, I don't think my techs are producing enough, I'm gonna throw another service advisor in there and have another service advisor.

46:46That's a fucking direct add-on to the freaking middle of your P&L sheet. That comes right off your bottom line. So you better figure out how are we going to offset this $100,000 or $80,000 or whatever a year right off. You know, it's kind of like that I talked about in The ONE Thing, you know, The guy goes to his accountant. This was like a fricking meme in the, I think it was Crain's Detroit Business or whatever.

47:09You know, the guy has his P&L sheet and his accountant's there. He's like, I didn't make no money this year. You know, I'm broke. Look at my P&L sheet. It's at zero. I didn't make no money, you know? And they're like, well, where did you figure this out? He's like, I figured out at my lake house, my company lake house up at, you know, you know, and you know, and oh really?

47:26You went to your company lake? Yeah. You know, I drove my company convertible up there. You know, he's not realizing that all this shit he's buying out of the company, anything an owner takes out of the company is profit. It comes, you know what I'm saying? So he buys a car, he buys a house, he buys this, he does this, he pays people to go like, that's all you're taking out of your, your, your company.

47:45That's all profit. That'd be all an add back if you were selling your company to private equity. Like you're taking all this money and then you're like, we're not making any money. My guys aren't working fast enough. No. Everything stayed the same. But look at this line right here. Lake house, car, like, you know what I mean? Gas, all that stuff comes out.

48:04So you have to take that into consideration when you're not making— you keep saying, well, a lot of these guys say, well, I don't make any money. Well, then you look at their house and you look at their car, you look at this and you're like, you're not making any money. How are you paying for all this? Well, my company pays for my brand new platinum truck.

48:19That was $120,000. Like, well, wait a second here. You know, you do, you know, you are making money. Yeah. There's called the, you know, what is it? PUCC, personal use of a company car. You should be being taxed on that. That's all the stuff an accountant needs to keep track of, a good accountant. So when the IRS comes, if they ever do, God forbid, wait a second, that company truck, how much you drive it?

48:42Oh, I drive it 100% for work. Well, wait a second. You just told me you drove it back and forth home. That's not working. That's going to the soccer game on the weekend is not working. Like I talk about all this stuff to try to get people to think about, you know, all the money and where it goes and it all matters and it all can kill a company.

49:02But the main thing will kill a company. I guarantee you 110%, go ahead and do not write your customer an invoice. You will kill your company if you're doing all the work and not invoicing for it. You're doing it for free. You are now a charity. Congratulations. You and the Salvation Army, right? How do you convert to be a nonprofit? Yeah, right.

49:27Even the nonprofits pay their CEOs off. They say nonprofits— there's a misconception they're not making money, they just spend it. They just, they spend it in most of the time not physically great places, right? They go there and they got a freaking, you know, food, food spread every day at freaking lunchtime. They're nonprofits. Profit and selling it. We've all been to them nonprofit organization golf outings.

49:45They're giving everybody gold fricking presidential Rolexes. We're nonprofit, you know, you know, it's like, holy shit. But you know, um, a lot of these, and you know, it's not just our business talking to my accountant. It's a lot of businesses that are like this, that, you know, these guys just kill it. And in closing, I'll tell you the most dangerous type of business owner is third generation statistically.

50:09Grandpa built it. Dad worked with Grandpa. Yeah. Okay. So Dad kind of knows. Then Junior comes along. It's the new world. You don't really need to work that hard. You don't need to do this. You don't need to do that. And then he starts spending more than that company's bringing in. He then all of a sudden, you know, I've seen it happen before.

50:27Then they jack up their prices to offset their, their lifestyle, their lavish lifestyle. Yep. You know, well, it's like the guy you bought the house from, you know, when, when mom's paying the bills and all those kind of things, do you really care or know, understand work ethic? Everything's things just kind of handed to support your lifestyle and you have this lifestyle, you don't go and like think about how to— like the last episode, if you don't understand your personal finances, you're not going to all of a sudden understand your business finances.

50:52No, 100%. And I— and a lot of shop owners can understand this. How many of you guys notice when a technician buys his own tool, he'll get all done with it, he'll fucking wipe it off, he'll polish it, he'll set it back in his drawer, Then there's your specialty shop tool. That motherfucker's laying over in the corner when he got done with it and he'll get to it when he's done.

51:12It's not theirs, they didn't pay for it. There's no pain that came along with buying that specialty tool. And I'm not saying every technician, but a lot of 'em, right? There was pain associated with them maybe buying that wrench set and they paying $10 a week. And so they wanna take care of it 'cause that $10 a week is over. So they don't wanna keep going.

51:29I'm just using an example, right? I can remember them days, you know? People just don't respect what they don't earn. It's just the way it is, you know. Uh, I, I'm listening to a really good book right now. Um, I, well, I just got a 1 to 2 hour booking request from the studio. Oh, hell yeah. Um, I wanted to pull this book up because this is a— okay, anybody heard of Dale Carnegie?

51:55Oh yeah, that guy was a fucking genius. Yeah, that guy, his books are amazing. I have all of them. I listen to them all the time. Just because you— How to Stop Worrying and Start Living: Time-Tested Methods for Conquering Worry. This book is insanely good. Uh, it's long as shit too. Uh, this one, I've seen it. Uh, dude, it's— I bet you it's a— what, there's 2 hours and 29 minutes left.

52:21I'm halfway through it. Wow. I listen to them in my truck when I'm driving because that way I just— amazing book. It teaches you about all kinds of different stuff, about people not liking you, your enemies. It's just all— it's fantastic. I listened to Dale Carnegie's sales book, How to Win Friends and Influence People. That was the first book I read. Amazing book.

52:41And I use a lot of his sales tactics. Yep. I always have. Yep. Ever since I read that book, I mean, the guy's a genius. And another book— these are guys, I think these are books you guys all need to read. My library's stupid big. I listen to so many books. Um, another one is The Body Language book. This guy's an ex-FBI.

53:03Oh, yeah, yeah, yeah. Body. He's an ex-profiler for the FBI. Yep. This is The Power of Body Language. Ex-FBI agent Joe Navarro. This book is fucking amazing. I use that in a lot of sales meetings and stuff like that when I'm dealing with customers, watching their microexpressions. And I could literally, after I read this book so much, I could literally tell my wife I'm like, look at them people over there.

53:26That lady and her husband or boyfriend are in a fight. She's like, no, they're not. I'm like, watch, look at his legs. And I would point out all the different things. You have to listen to this book. Yeah. And all of a sudden they would start getting agitated, so you could tell they're fighting. I'm like, literally, that, that's how good that book was.

53:38That is awesome. Like, when people recall memories when they're lying, the way they look a certain way, they look to the left versus the— like, amazing. Yeah, like your eye rolls. Yeah, yeah, yeah, yeah. You could watch— people all have micro telltales when they're lying to you. You could always, always tell. And it's, it's interesting. Yeah. And I listen to a lot of these books and a lot of these books help me.

53:55I'll find a topic that I don't know about or I'm having a struggle with. And one of the things I do is I worry, you know, I worry about just like every other business owner. Let's be completely 100% honest. When you're kicking ass and your business is doing well, you're up here. I'm the best motherfucking guy at running a business. I know, look at my— do this shit with my hands.

54:15It gets slow. Yeah. And things start to get a little bit weird. Is my pricing too high? Am I doing this? Are my mechanics— that it— then all of a sudden you have this, you have this. So your life is like this. Yeah. You know, and stress is a bigger killer than pretty much anything in middle-aged men. We all get a little chunky, you know, we don't take care of ourselves.

54:36You either turn to alcohol and alcohol is better than obviously dying of stress. Alcohol is a stress reliever. Why is alcohol everywhere? I'm not saying you should drink and stuff like that, but alcohol is universal stress reliever. Yeah. Why do people go and do it? How many TV shows we watch at the end where they sit there and they have a cognac or a whiskey?

54:55Yeah. Yep. It's very common. Yeah, it's very common, you know. And I think being a business owner is very stressful, you know, and I think that it's under these technicians, these crybaby technicians that get on TikTok and all that stuff and sit there and go, yeah, yeah, this fucking people, these fucking business owners do this and do that. You cannot paint people with the same brush.

55:17You cannot paint everybody with the same brush. There's good shop owners and there's bad shop owners, just like there's good technicians and bad technicians. But these guys want to paint everybody with the same brush and they act like the problems aren't real. Yeah. Okay. We're dealing— I'm dealing with my problems. You go deal with your problems. Oh, yeah. If you want to trade problems, you'll have to get bigger, right?

55:34But you're— if you're at the top like I do, do the problems I deal with. There's nobody equipped to deal with the problems in my company that I do. Yeah. Now what I've learned is I take other people's perspective and I don't cut them off thinking I know what they're going to say. When I pull Jason in an office or Jim in office, they say, here's our problems, this is what I've identified, what is your take on it?

55:56I want to hear what they have to say. I ask my wife, okay, a lot of times. A lot of times I get told how to do it, how I'm doing it wrong. But I, I sometimes I want to hear her perspective. A lot of times she's in HR, so she's pretty good at looking at stuff different. She points stuff out to me and I don't want to fucking admit it sometimes.

56:13Goddamn, she's spot on, you know what I'm saying? So I do take— this book solidified what I'm saying. It says sometimes you need to take your advisors around you and listen to what they have to say, weigh it all together with your problems, and come up with a solution. Maybe your solution is not 100% accurate because you're narrowed down on the problem.

56:34You're so fixated, you're not seeing the landscape around you. Ask other people, which is true because, you know, I'll give you an example. Jason Spencer, I just think this is hilarious. Probably about 2 years ago, we put a 6.0 back in a truck and it wouldn't start. It didn't have a crank signal. He's like, what the fuck? They're over— him and Jim are over there messing.

56:54He's like, did you check the— yeah, I checked the fucking wires are good. You know, and I walk over there and they've been working out for 2 hours and I look down and I pick it up. Well, sometime or another, somebody had butt connected the harness for the crank sensor. So you got 2 here that go down the crank sensor and 2 here that go over to the FICOM.

57:13They hook these 2 together and these 2 together. They weren't paying attention when he put it back. Jason wasn't paying attention, man. So they're cranking. I'm like, so I go, the wires? Are the wires hooked up? Yeah, the wires are hooked up. I picked up, I go, yeah, to each other. We all busted out laughing. They caught it, hook it, truck fired up.

57:31But my point to that story was they were over there so close to it. They were so sure that they checked everything. They were so narrowed in on it. I walked there and go, hey guys. Easy solution. And we all laughed. We all still laugh about it. Yep. He brought it up the other day. He's like, yeah, it's like hooking Frank wires together.

57:46But my point to that was he was so close to the problem. It just took an outside voice to go, hey, what about that? Yeah. Well, you think about like when you're in an argument, you get into an argument and you've got the emotions flowing. And then after the argument, you're like, oh, I should have said this, or I should have said that, or I should have— it's because the emotions make you dumb.

58:04And like when you're in your business and you're emotional and you're like in it, like you're, you're, you're in the, you're frustrated because this truck won't fire up. Your, your, your emotional intelligence is down. Your intelligence is down. You're missing things. When you calm down and you're not emotional, you can see clearly when you come in not being him. Yeah. And I just said, "Fick off, bitch."

58:23Not emotional. "Fick off and just hook to the PCM to get cranks." Whatever. You know what I'm saying? Yep. So I misspoke there a minute ago, but my point is you're 100% right. It's like you get so close to the problem, you can't see. It's like getting close to this microphone. You know, it's just like you can't see. And, you know, I think the everyday grind wears people down and you gotta realize there's a lot more going on nowadays.

58:44You know, guys are worried about, like, one of the things I was talking to a guy about, I go, "Why are you worried about parts markup?" He goes, well, what if they go on Amazon and look up the part? I go, are you buying the part from Amazon? He goes, no. I go, it's a different part. I go, do you realize there's different brands of white paint?

59:00White paint is not white paint. If I go to Walmart and buy white paint, is this the same paint I buy from— white paint I buy from Sherwin-Williams? No. There's a quality difference. Yep. I said, not to mention there's a warranty. You're marking up that part so when it breaks or if it breaks, you could get the vehicle towed back. You could repair it.

59:18Like, There's a lot built into our price, our insurance, our— there's a lot of things built in. There has to be value. And this is where the professional buyer— look for the professional buyer and blow off the knuckleheads. That's what Mike Lee used to say at Management Success. Look for the professional customers, blow off the knuckleheads. And the knuckleheads are usually the guys that don't know their numbers.

59:39They're completely 100% broke in these trucking companies. They have no money. Their truck's a piece of shit. And the way I look at it is a truck is a savings account. You buy a truck brand new, the savings account's full. If you keep replenishing that savings account, guess what? It stays full, right? Or it stays up there. But what happens if you take your bank account, your savings account, and you take money out of it for 5 years?

1:00:00Say there's $100,000, you take every day, you take money out. After 5 years, what happens? It's gone. It's gone. It's no different than a vehicle. You have to maintain them. But the problem is, if you're running a trucking company and you have the white Navigator and you have— or you have the Jaguar and you have this, you have that, Your truck's rolling around on 6 bald tires and no DOT because you take every month a dollar out of your company because you don't even know how much you're supposed to be charging in your company 'cause you don't know your numbers.

1:00:26I don't know how many different ways I could say this. I'm choosing, you know, and it's no different than the shop life. It's no different, or owning a shop is no different than owning a refrigerator repair shop, a TV repair shop, which have gone by the wayside. Now they just buy a new TV. TV repair shops. Yeah, no, we had a TV go out a few years ago and we called up Best Buy to see if they'd fix it.

1:00:46Yeah. The Geek Squad or whatever, and the guy was like, you know what, it's, it's cheaper to buy a new TV these days than to even come and fix it. Like, okay, right? So, you know, in closing, my thought with these guys, with you guys, is, um, if you don't know your numbers, get a competent CPA to help you learn them, or have a meeting with them and say, hey, here's my numbers, let's— how am I doing?

1:01:12Let's break this down to see where I'm at. You know, a good CPA can say, okay, your cost of goods sold your profit, your gross profit's too low. And this is why you need to raise it up so they can do a calculation, say, hey, your labor rate needs to be this. Now, in closing, guys, you heard me say this probably one time that I called around and checked labor rates in a guy's neighborhood.

1:01:31And that was TJ because he just not believe that we need to raise his labor rate, right? Yep. Your overhead dictates your labor rate, guys. Hear me here. So if everybody in your town is $110 an hour and you go to a CPA and you figure out your overhead and stuff like that, and she says you need to be at $130 an hour, you better figure out how to shrink your overhead or charge $130 or charge $130 an hour to frickin' do it.

1:01:57If not, you can't even sustain being in business, you know? And that's, that's, that's kind of the nuts and bolts of it, you know, as far as that goes. So did I say fuck a lot less? Uh, it was a lot less, but it was good. I love it. I love the passion. I, I know this probably leads into another episode. I don't think you can answer this this as you're, as you're ending the episode, but I'm glad you ended it this way because it's been on my mind through this conversation because you've referred back a couple times, get a competent CPA, get a good CPA.

1:02:24Um, but I know you've, you've went through the experience of having a CPA that, you know, burn you. We've shared that story. Um, and it seems like most of the consulting clients you have, when you start talking to their CPAs, you're finding out they're not competent. And this, again, this is probably leading into another episode, but What would be your advice and how do people find a competent CPA?

1:02:46You know, I would have to say, you know, a lot of times you could look at the other shops in the area, the really good shops and say, hey, who's your CPA? 'Cause you know, you want a guy that does shops. Yeah. So he already knows the business, right? Like my accounting firm, they are like a service business type orientated accounting firm.

1:03:07So, and I know I had talked to the Macko Man a while ago about, you know, what kind of CPA you saw. We all, the toolmen, use the same CPA. Kind of makes sense, right? Makes sense. You don't go to a fucking guy that, you know, sells airplanes or CPA does airplanes, you know, and then, you know, here's my repair, diesel repair shop.

1:03:24Yep. You know what I'm saying? Yeah, he's trying to figure out your individual business. Right, so, you know, I think experience is a good thing with a CPA for sure. And then, What I realized with these CPAs, they're almost like marketing people, you wanna know the truth. Not all of them, but some of these guys I talk to, they do the very bare minimum and send a bill.

1:03:45And the bill they send, you're like, "Okay, what the hell are you doing with that little amount of money?" Yeah, yeah. You know what I mean? And then, you know, yesterday, you know, like I was talking to one and it's just like, "Oh, QuickBooks is horrible," and stuff like that. And I'm like, "No, is it a training issue?" Then they get all butthurt.

1:04:02If this is the way it's going to go, you know, and I wasn't doing that, but like I talked to my CPA, I said, how's QuickBooks? She says, great for small business. She's like, it's great for guys that want to learn their numbers and stuff like that. Okay. But I will tell you this, Jason, a lot of these business owners are fucking lazy.

1:04:17Yeah. And they're like, oh, I'm so busy. I don't have time to do anything. You're so busy because you run around, you micromanage every fucking aspect of your business. I got one right now that's a micromanager. He set up shit systems. And he runs around, he has to be involved in every fucking decision in his shop. And not to mention he's got like 4 people supporting him and he's still so busy they can't handle it at all.

1:04:37But they're doing the same amount of vehicles through there that we are. Wow. And I have 2 other clients that have to do more vehicles a month than them. But this guy is like, oh, we're so busy, we can't do anything. I just can't. I need more time in the day. It's like, no, you need to get some organization and break your old habits.

1:04:54But until you decide to break your own habits, None of this is going to change. I'm not your fucking daddy. I'm not going to sit there and argue with you. If you call me, you pay me, I'll answer your questions. Yeah, but I can't fucking force you. It's not like I want to hold you down. You can lead a horse to water, but you can't make them drink.

1:05:09That's— I would have to say that's the most frustrating thing about being a consultant. These fucking guys have an excuse for everything. Yeah. And they're like, I'll call you, then they don't call. Or you talk to them, they do this, you know. Jesus Christ, it's just like I feel like their daddy. You know, and I got rid of one, you know, I just basically broke it off amicably because he just wouldn't listen.

1:05:29I had everything ready to go. They just won't listen. Okay, if you hired me to do a job, I'm not going to keep taking your money. I even said I'll give you your money back if that's a big deal, because I'm not going to ever be blamed for fucking somebody. But if I'm giving you advice and you're paying, you're not doing it, I do the work, you owe me.

1:05:44What you do with the systems I set up after I set them up and tell you how to do it, it's on you. Yep. Yep. You know, you said the same thing. You get tired of chasing these people. Ah, no. Well, because like at the end of the day, if you work with people, if they, when they're paying you and they're doing the things, like it feels good because they're growing their business and you've talked about like changing people's lives.

1:06:06Um, but then they go out and they talk, tell other people about you, you know, versus, or you get testimonials or all those kinds of things that grow more business versus like people going out and saying like, oh, I that was a scam, or because it's never their responsibility, it's never their fault. They've always painted like, oh, I paid this guy and that was, that was a mistake, or whatever, you know.

1:06:27How can I have 5 shops that are absolutely kicking ass, they're completely changed their whole everything that was going on in their shop, and you got the 6th one looking at going, yeah, this fucking system doesn't work? Yep. It's his limitation. It's his limitation. What I did to one of my guys yesterday was being a bitch, uh, I said, you know, I said, you want to know who the problem in your life is?

1:06:49And he's like, who? And I did this to him. I turned on my camera and I said, you're the problem in your fucking life until you decide to change it. That's the greatest. I'm going to start doing that to people. You know what the problem is, right? That's amazing. But it's true. It's true. Like, a lot of these guys will not take responsibility.

1:07:07I talked about that last week's episode, which Holy shit, that thing was downloaded a lot. Yeah. Okay, dude, we're catching fire on, uh, Apple. Yeah, amazing. For a lot of people that freaking hate me on my comments, boy, there's sure a lot of people that love me apparently. Yeah. What I think it is, I'm, I talk real and I, and I swear and I talk to— I'm talking to my group of people, you know.

1:07:28I'm offensive to some people, I'm sure of it. I don't— not my people. Yep, right? Yeah, you know. So I think we could probably, you know, look do an episode on CPAs. We should have Maria back, say, hey, you want to maybe do a thing? If she's got time, she's really busy. But like, hey, do you want to do an episode? What do we look for in a CPA?

1:07:46Let's talk about this. Let's break this all down. And she knows our business really well. Yeah, she knows all of our businesses. You know, the only one I don't know, she was really surprised. I'm like, oh, by the way, I started a new business, this LLC, and Repair Shop Reckoning. And look, she's like, Jesus. She's like, when do you sleep? She's like, it's already making money.

1:08:06I'm like, yeah, what do you think, I'm going to open up as a hobby? But you know, it's really interesting though. I would say that TikTok money has taken off again. It's taken off again. Yeah. There's consistency. I, you know, getting 2 posts out a day, I think helps out. But I also think that the content that you're putting out, you're talking really passionately.

1:08:29There's some really, really good actionable stuff. It's dumbasses that are like, I wouldn't pay you to consult taking a shit. Then continue running your life into the ground. You know, it doesn't— who gives a fuck? Like, well, that's why I always tell Lincoln, I said, you know, these people give you a hard time, go look at your bank account. Yeah. And did it change?

1:08:45No. So they don't fucking matter. They're irrelevant. And I had to get past that early on, you know? Yeah. You know, I look at what I do and what I have, and then I look at other people looking at me going, yeah, you're doing this wrong, you're doing that wrong. Well, wait a second, you live with your fucking mom and dad still.

1:08:59Exactly. How do you sleep at night? Next to my hot wife. Like, I don't rip people off, but like, it's just, it's amazing. The people, like, the guy calls me a kibo or warrior because I challenged him. People are, feel like conflict is bad, and conflict is not bad. Like, how do you change and grow unless there's conflict? If you, you get what you have in life based off of your beliefs that you have, and if nobody comes and challenges you on your beliefs, then you just continue living life the way that you are.

1:09:31Isn't it pretty interesting that, um, social media— social media is actually training people that they can't say stuff? Like, us as influencers, YouTube is really bad. They check every fucking— you sent me those 3 videos that I had. I'm like, what? Yeah, they basically— they freaking— oh, this video is okay. This— like, if you say anything, argue back with anybody, they freaking get on you.

1:09:55Oh yeah, it's like, wait a second, He can call me all these names and I said something back and all of a sudden I'm a problem. Isn't that crazy? It's crazy. Yeah, TikTok and YouTube are bad. Facebook's lightened up a lot. Yeah, Facebook has lightened up a lot, but you're right, TikTok, you can't— if people are calling you names, you can't say anything back or they'll tear it down or they'll take it down.

1:10:14It's like, whatever, we live in a world of bitches. There's stuff— there's so many times I'm gonna put a description on the post and I'm like, you said something, keyword that's like fuck or something like that. I'm like, I can't put that in the title, they'll ban it, you know? Like, there's like such a good Yeah, but it's pretty interesting. Do you ever see these TikTok videos now?

1:10:31These guys are screaming, fuck this, fuck that, motherfucker. Yeah, they're okay. It seems there's shit you see on TikTok sometimes, like, how did this get out there? But then our shit is pulled off. Isn't it crazy? Like, you see the sex scenes, and I'm not even like— I'm not even making this up. There's like a girl bent over and a guy's behind her.

1:10:46You could totally tell what he's doing to her. Yeah, grunt. Everybody's grunting and everything, and TikTok's okay with that. But you say fuck and they take it down. Or two monkeys fucking, you're like, why do I need to see this? They're like, like, oh, it's okay. It's like— and I'm not even like— I've seen all this shit, like these sex scenes and movies, and I'm like, yeah, you're right.

1:11:04And I say fuck, and they're like, uh, what is wrong with you? I just don't get it. I don't get it. I think they honestly— not to go crazy— I think they're just conditioning everybody to act a certain way, be soft. Yeah, bitch made is what they call it. We should probably get Not Bitch Made shirts for these freaking— oh, the Not Bitch Made would be great.

1:11:21Yeah, because, you know, I just Nobody in my circle that runs with me in any of my companies is a bitch. Bitches don't last. Crybabies don't last. As we could probably tell, I'm just like, yeah, we're not into that shit. You know what I mean? You want to— I just, I don't know. I guess we're men. Yeah, that's the thing. I know.

1:11:40I see your kid on social media. He's a man. Like, he's not a bitch, you know? Like my wife told Lincoln a few— remember when Lincoln started out, the guys were giving him a hard time? Yeah. She said, you know what? You're being a little bitch. Go deal with it. It. Like, seriously, like, that's the way we raise our kids. But they have to learn to deal with adversity.

1:11:56You have to. Everybody's not going to get along with you. Well, in— to go, you like— you talked about the third generation as being the failure. It's because, like, usually the first generation, the dad starts the company, the son sees the dad grinding, he comes along, he's usually a little bit smarter, but he's used to working in the company from a young age.

1:12:12And then he's a little bit smarter with business, and they paid— put a little bit of money into his education or whatever. And then he takes the business to the next level, and then he doesn't want his kid to work like he did and doesn't want to, you know, want us— wants to give his kid things that he didn't have. And like, because he was working at 13 and stuff like that.

1:12:28And so then he spoils the shit out of his kids, gives them all the things, and then has nobody to pass the business down to, or pass the business to a third generation that doesn't have any discipline because they were just given everything. And it's all based on how the parents are parenting. Absolutely. And again, like, it's like the— if in your generation how you parented Lincoln and where Lincoln is at, that's like, that wouldn't happen.

1:12:49It's just all depending on how you, how you raise your kids. Yeah, it's pretty interesting because last night, you know, um, Lincoln messaged me like 9:20. He says, the pool's still open? Like, no, I closed it. He's like, well, I'm coming home to go swim. And I'm like, okay. He got off work at 4 o'clock and he went and did 3 vehicles, him and Mia did.

1:13:10And he was getting— he got home like by about 10 o'clock. He called me, he got home at 10 o'clock. And he— I looked at him this morning like, man, you look tired. He's like, fuck yeah, I'm tired. I did 3 cars last night. But you know, he went and worked basically a double. Yeah. How many kids at that age— he's going to be 20 here June 20th— would have fricking worked that much?

1:13:27They won't. They don't think they even have to. They— it's like they're shocked that you would actually ask them to work an hour overtime. What? Like, we got done when I was growing up. I grew up on a farm. We got done when the work got done. We didn't get done at 5 o'clock. We hung up our gloves. It was like, when the work is done, you're done and you just get used to it.

1:13:49Okay. But you're 100% right. Well, I don't want my kid to have to go through that, you know? Oh, this business is so bad. This is horrible. Yeah. This business has its trials. It's— but it's a lot easier when you're making money. Okay. And Lincoln, he's in the business now. Mm-hmm. For love it or hate it, he's in the business. He wanted to, and I'm not gonna lie to you, and I told you, I've said this before, I was a little bit apprehensive about bringing him in.

1:14:16But he's like, Dad, I wanna be like you. I don't wanna go out there and fix cars, but I could definitely do the business part of it. Will you teach me how to do that? Absolutely. You know, so he's doing good at it. Yeah. If anything, he's learned how to do invoices and sell stuff even better than he did. So, which is huge.

1:14:31Which is huge. You know, he could, you know, there, you know, I don't, He can make his own way in the world. But I know one thing, whatever he does, he'll do great 'cause he works his ass off. He doesn't go in at 10%. It comes down, I think I had this on one of the posts the other day, but doing what others won't now so you can do what others can't later.

1:14:47And I know you've talked about like he's 19. Yeah. 19, he can buy a house, he can do whatever he wants. Yeah. And you know, I would have to say like in our taekwondo school, we had a thing, everybody wants to be a beast till they see what beasts have to do. Yep. Everybody wants to be a Viking to see what Vikings have to do.

1:15:05Like, everyone wants to be a business owner until they have to see what business owners do. But the problem is they don't see where the iceberg is just poking out of the water. They don't see all the stuff below. You ever see that picture? Yeah. And if you listen to last week's podcast, when I talk about this, like, you listen to that podcast, me and Marilyn were listening to it.

1:15:25I made one mistake. She got a Christmas bonus. My mom and dad didn't loan me the money. She corrected me when She listened to the podcast, whatever. It's still— she's like, wait a minute. Yeah. She's like, I got a Christmas bonus that year. I'm like, oh, shit. Yeah, maybe you did. I don't remember that. I thought my mom and dad gave us some money.

1:15:40But you sit there and you listen to that story. It's like, holy shit. Because sometimes you have to say it as I'm saying it. Yeah, the emotion's not there. But when you start listening to yourself tell the story, you start taking yourself to way back land. Yeah. You start thinking about the trials and the tribulations you went through. You're like, holy shit.

1:15:59But what happened? I came out on the other end. That doesn't happen with everybody because a lot of people give up. I've never given up. Difference. That's the difference. So everybody, thanks for watching. Hope you enjoyed the episode.