The Balance Sheet Reality No One Talks About

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0:54Call 888-ADD-DISH or Or visit dish.com today. Welcome to Repair Shop Reckoning: From Chaos to Control. Because too many shops today are running on chaos. Phones ringing, technicians frustrated, front counters overwhelmed, owners buried in problems with nobody to call. Kevin Brown has spent over 30 years in the trenches learning how to take that chaos and turn it into control. Shop owner, operator, consultant, leader through industry shifts, insurance games, bad hires, great hires, and lessons learned the hard way.

1:29This isn't theory. This isn't corporate training fluff. This is real shop experience, unfiltered. On this show, Kevin breaks down what actually works— running profitable shops, front counter control, training technicians, negotiating with insurance companies, building systems that make your shop run instead of burn, and the mistakes that quietly bankrupt shop owners every single day. No corporate scripts, no sugarcoating. And yeah, somebody might get offended.

1:57That's okay. Disney's two doors down. But if you want the truth about this industry, buckle up. This is Repair Shop Reckoning: From Chaos to Control. Let's get started. Welcome back. This week we're going to talk about balance sheets. Who here has heard about a balance sheet? You've heard long-term, short-term, stuff like that. Let me just give you some of the Some of the stuff you're going to hear throughout this thing.

2:23Okay. Short term is anything you're going to do under a year. Your credit card bills, your line of credit. You have to pay it off usually once a year to keep in your covenants for your line of credit or renewal. They want you to pay it off, borrow and pay it off, usually to zero. 90% of the banks, the older ones sometimes don't, but they're coming along because they don't want you to leave money on your line of credit forever.

2:41Right. Stuff like that. Anything that you have to pay within a year. We'll just say that. Anything long-term would be your vehicles, stuff you're making payments on long-term, equipment loans, SBA loans. A lot of guys have these EDIL loans. COVID. They're giving these guys money at 3%. Why wouldn't you? Right? You know, you could take a loan and pay $700 a month at 3% for, you know, the rest of your fucking life, I guess.

3:08You know, pay it off or whatever. You know, the P&L tells you what happened. The budget tells you where you want to go. That's why we have them lined up. Then the balance sheet shows you who owns everything. Does the bank own it? Do you own it? Where's your money? Where's your money going? Is it sticking or is it leaving? So we're going to do this with a $100 bill model once again.

3:31So it could be either 10% or $10. Yeah, it doesn't matter. Obviously, your balance sheet is going to look a whole lot different with a lot more numbers on it and stuff like that. But we're just going to do the simple $100 bill model. This is a long ass episode. I had to work on it for quite a while and change it because it gets confusing.

3:50So I'm going to read it and I'm going to go slow. So my suggestion to you, Jason, if you don't understand it, say, "Kevin, can you explain it again?" And I'll explain it again. Yeah, this is kind of a new concept because this one gets confusing to everybody because I'm going to start saying it's a $100 bill, but I'll say it's $130 and they don't understand.

4:09I'm going to break it down that maybe you bought a truck for $100. Okay. You took a loan out for $100. After 3 years, that truck is worth $50. But the loan, you still owe $80 on it because the loan does not give a shit about the depreciation or about how the truck is devaluizing. Yeah. So then all of a sudden now your $100 is worth $130.

4:34So now you're $30,000 or $20,000 or $20 under your hundreds. You know what I'm saying? You're negative. So it gets really confusing. So I, I went over this several times to try to change it so people understand. The balance sheet is very important 'cause it shows your debt load and everything else. Kind of gives you a picture of where everything is and what you own.

4:53'Cause think about it. If you have a truck that you paid $100 for and you put $10 down on it, you own $10 of that truck. Who owns the rest? The bank. The bank owns the rest of that truck. Yep. People don't think about that. Your equipment. Walk out in your shop and say, who owns all this equipment? Who bought it? Well, my hoist was $100,000 or $100.

5:17I put $10 down. The bank owns $90 of it and I own $10 of it. See what I'm saying? So that $100 only goes so far. When you start loaning all your, you're getting your money from the bank and this and that, you can get negative really quick. You buy a bunch of vehicles, they're depreciating. I'm going to talk about 179, Section 179 versus a one-time depreciation write-off in one year or $20 a year on your $100 purchase.

5:42So I'm going to get into all that stuff. So anything that doesn't sit right with you, just question it because, you know, this is confusing. Yep. I, this is the one that I, one episode I was like, ah, this is a lot of information and this kind of ties it all together. Okay. So repeat myself. P&L tells you what happened last year.

6:03Budget we do. Where we're going to go with last year's numbers. We're going to say, okay, this is what happened last year. This is where we ended up. Let's do a budget to maybe up a little bit our net, right? Then the balance sheet shows you what you actually have and who owns it. Simple as that, right? The balance sheet tells you what you actually have and who owns it.

6:24I just— you understood the bank part of it, right? Most people don't think about that. When you said that, I was like, oh, when you said who owns it, I was like, what do you mean by that? And then you were like, use that hoist example. And I love the $100 example because that really ties it home, the 90 versus 10. So, the $100 bill represents everything your business owns, right?

6:44Well, we're going to break it down so you can actually see your business and who owns stuff in your business or your business, right? I mean, because if you really stop and think about it, a shop— this is just me talking— a shop has a bunch of equipment. But if you took all that equipment out of the shop, out of the working everyday working of that shop and you put it in the parking lot and said, I'm going to have a garage sale.

7:05Hmm. What is that equipment worth? 9 times out of 10, nowhere near close to what you paid for it. That's what you guys need to keep in mind when we're talking about a balance sheet. Stuff gets deflated in value. How many of you guys, picture this, that one piece of equipment where you made a little bit of money and you bought that thing.

7:23Say it's a red vise and you put it over on your toolbox and you bolt that red vise down. 20 years later, you look at that in your mind, that vice is still red. But if you took a picture of that vice, that vice would have no paint on it. It'd have war marks all over it, hammer marks and everything else. Okay?

7:38Is that vice exactly what you paid for it, worth what you paid for that day or that? That's where people get a little bit screwed up in business. There's depreciation, there's devaluizing, the value goes down and stuff, right? So, let's just do this. We have $100. Out of your $100, you have $40 in your bank account. Right? The $40 represents your operating cash, your payroll, your quick terms.

8:02You got to pay your vendors. You got to pay all these people, right? That's the money in your bank account. So is that really your money? This is payroll, your bills. It keeps the doors open, right? So anybody who looks at their bank account and says, I got $40 grand in the bank, fucking A, I'm good to go. How many people over the years have you heard say to you, I run my business by what's in my bank account.

8:25Let's stop and think about that. This is not on the piece of paper. This is me just going off script. That's why we have a script. They go and take— they take a bunch of deposits for jobs, to say they take $40. Let's say they take $40 for deposits. And guess what they do? They look at their bank account, go, holy shit, I got $40 in my bank account.

8:46Let's go spend $40 on this. Well, that money, think about that money was already earmarked for the path, the parts or the parts on them jobs you got to deposit on. Yep. So that money was already earmarked. So think about your balance sheet that way out of that $100. So you gotta be careful, right? So you got $40 cash in the bank for your thing.

9:03Then you have your accounts receivable. Your accounts receivable is work you've already done that people still owe you on. You have $10 there, right? It's a simple way you earned it, but you just don't have it yet. Right. So a lot of companies, I always tell these guys, all these guys, I go, you got to have terms of net 30 and your net has to be net 45 to your people because you have to have that buffer.

9:24Because if you're loaning money, you can't get money in. If a lot of these shops, these heavier truck shops will put a lot of money on the street and they're not a bank. Yeah. And then all of a sudden they're sitting there waiting by the mailbox to get paid. Yeah. So there's a couple of things you can do. You pay by the invoice.

9:39Da da da da da. I'm not going to get into that because we don't want to muddy the waters. All right, so then we have inventory. $10 of stuff you've already paid for, these inventory or prepaid expenses, your rent payment for the next month, your insurance payments are prepaid, right? You get accrual accounts where you're collecting stuff out of people's paychecks for their medical insurance and retirement and stuff like that, right?

10:01Sales tax, stuff like that doesn't go on a balance sheet a lot of the time, depending on how it's all set up in QuickBooks and all that. So what about inventory? Think about this, guys. And a guy asked me today, he said, how much do you keep in inventory? I said, as little as possible at the truck shop. Why is that? I said, because that's money I got to pull out of that $100 and buy it with the hopes I'm going to put it on the shelf and sell it.

10:25So what if I'm not really super profitable because my margins aren't right? Yeah, my profit is low. And I go and say, well, fuck, I got $40 grand in my bank account. My bank, my things doing good, I'm going to take $20,000 of that and I'm going to buy a bunch of inventory and set it on the shelf. You just pulled $20,000 of your operating capital that you really didn't have because you had it for payroll and everything else.

10:45You buy all this inventory, set it on the shelf, it doesn't sell right away, and payroll comes around. You're like, fuck, I don't have no payroll money. So inventory is a very dangerous thing if you're not really good at dealing with it, managing your inventory, turning it over fast. I'm not a fan of having huge inventory. And in my situation, the parts houses are pretty close.

11:04They hotshot it to you. Yeah. So why not have them— why have them have the risk to have it on their shelf? And I don't have to worry about it. Filters and stuff like that. No oil. I keep in stock filters, you know, sundries, they call them, like fuses, wire, butt connectors, batteries, battery cables, shit like that. But I remember at one time we'd have $100,000 worth of frickin inventory.

11:23You know, I probably have that out there outside the door. But how can I have a trailer store if you don't have— would I have inventory? Yeah, yeah, yeah. You know what I'm saying? So that's a whole different animal. Right. So, you know, so your equipment, so then you have your assets, your $40 left, right? We had the $10, the $40, then $10 for accounts receivable, $10 for the stuff you already paid for.

11:44Then we have $40, that's your equipment, truck, shop assets, all that stuff, right? So it's simple. What do I have? Where's it at? And what form is it in? We have that extra $10 right there in the accounts receivable. It's our money. We've already done the work, we just have to wait for the money to come in, right? That could cause a cash flow problem, but we know the money's there, so it's gonna hit the balance sheet, right?

12:08We've done the work, we just gotta wait for the money to come in, right? So that's simple, what form is it in? So all this being said, who owns that $100? When you really stop and think about who owns that $100, let's talk about that, right? Okay, step one is what do I have? Step two is who paid for it? And this is where the balance sheet starts to get real.

12:30This is where I have to start following my notes just to make sure I don't go outta line 'cause I don't wanna give anybody bad information and then everybody online say, "He's wrong, he's a big bad guy and he rips off flat rate techs." So, because when you walk through your shop, like I told you earlier at the very beginning of the thing, and you look at your trucks, your lifts, your tools, your machines and all your equipment and say, "I have all this stuff," and that's true, that's all there, it's all yours, right?

12:56It's all yours as long as you can pay for it. Yeah, yeah, yeah. Right? So the next question is, did I pay for it with my own money? Who owns it? Right? For most shop owners, the answer is no. They didn't pay for it. Okay? Some of what's paid was paid for by you. Some was paid for by who? The bank. Okay, so it's not really yours.

13:18Okay? So that's where step 2, this is where we're trying to show you what's going on. So let's forget the math now here. Actually, it says, so forget the math for a second. Think about, A real simple life example. Let's say you buy a truck for $50, and this is where this gets confusing, guys, if you don't know what you're talking about.

13:37So I'm reading it to make sure I don't screw up or transpose numbers because I have a habit of doing that. So I'm going to slow down. All right. So let's say you buy a truck for $50. All right. You take $10 and you put $10 down on that truck as a down payment. And the bank— the bank finances $40 of it.

13:57Right? So now ask the question, who owns the truck? Well, you own part of it because you put $10 down on the truck, right? And you're the one making the payments, right? But the bank also has a claim to it because they financed most of it, right? So the bank who also has a claim to it is because they financed both. I can't— okay, remember we bought a truck for $50.

14:18I paid $10, they paid $40. Okay. So it's about ownership. If you really stop and think about it, if you really want to break the balance sheet down, you want— you always— the balance sheet, you want to kind of watch owner equity grow, right? As you pay everything down, owner equity grows, right? That means you own more of the stuff. And that's where you have to kind of break this all down.

14:39So who owns the truck? Well, you own part of it because you put money down on it and you're making the payments. And the bank also owns some of it because they have a claim to it because they financed it and they put most of the money down, right? So it's not really about the math, it's about the ownership. Once again, I'm repeating myself 'cause this is a confusing part.

14:56It's about understanding that everything in your shop is either paid for by you or still being paid for by somebody else, is money, the bank, right? You're paying the payments, but they already paid for it. So you're paying them back. That's why balance sheets matter so much. You kind of see where you're at, where your business health is. Because a lot of the shop owners look at what they have and they, they don't stop and think that who actually owns it.

15:22Now I could say in my shop, I can go in there right now. I've been in the business for a long time. I'm not a new shop owner. I pretty much own everything except for the two pieces of equipment because I hadn't taken a bank loan out in a while and I just took a bank loan out. I own all the tire equipment or bank, I'm pretty much almost paid off on it, but I own all the other hoists and stuff.

15:39I paid cash for it. I think a couple of the trucks have financing 'cause I did Section 179 for taxes. I think that's pretty much all I owe. Um, you can make your balance sheet look bad if you buy a bunch of cars for all your kids and all that stuff, and you're making payments. You know what I mean? Cause that ends up going to long-term, long-term debt, you know?

16:01So short-term debt, it's a simple model to say, we say $30 of short-term debt. Short-term debt is stuff that is due soon. Usually, like I said, at the very beginning, it's your, you got to pay your vendors, uh, parts vendors you have not paid yet, your credit cards, your lines of credit that you have to pay off, stuff like that. Your Edison, you write that short-term debt, it goes in, you, you owe it, right?

16:20This stuff that affects you, that affects your cash right now. The short-term stuff. Think about that $40. Remember I said that the guy that has $40,000 or $40 in his bank account, he's like, look at all the money I have. I run my business on my bank account. Wait a second there, buddy. Go look at your balance sheet. You owe Visa, you owe O'Reilly's, you owe fricking Auto Value, all these people.

16:43So you start taking them bills out of that. $40, all of a sudden you fricking have $3 left in there. That's your short-term, that's your cash in the bank. So you kind of got to protect it, right? Um, a lot of guys nowadays will use their credit cards to pay for everything. And then at the end of the month, pay it on your credit card.

17:00I'm not a big fan of that because it just seems to me if you guys spread it out, you kind of, something ever happens, you can kind of say, okay, X and Y, it doesn't put you in a big trick bag. If something happens, you owe Visa $60,000. It's a lot easier to pay O'Reilly's. You owe them $10,000. If something was to happen, I'm not advocating, but you say, hey, I'm going to pay you $2,000.

17:18I'm going to pay you— you could kind of spread it around. Yeah. You know, it kind of gives you a little bit of, you know, so that's the stuff that affects your cash flow right now that hits your checking account. This is what affects you, whether payroll feels tight, makes it feel tight. Remember that $40, we got to be careful, right? So that $40 that's in your bank account, you got to remember that's used for short-term money.

17:42That's all the stuff. Now people are saying, well, that's going to happen within a year, but a year or under short-term. I mean, the Edison bill is going to be due next week or next month, right? It's a short-term debt. Yeah. Right. So that's what affects your stress level every day. Think about it. So you go and buy inventory because you think that you want to do X, Y, and Z, and you think it's a great idea to have all these chambers.

18:05Cause you know, Bob from the auto parts stopped by and said, 30, 30 chambers are on sale instead of $50 or $40. You'll give me $4,000 worth. Because I have all this money in my bank account. You buy it all. The auto parts store bill comes a couple of weeks later. Maybe you had a little bit of money in your bank account because you know your numbers really well, but something happened and the bill popped up.

18:23Now all of a sudden you owe all this. That's— you're not getting that back. It's not like you're buying them chambers, putting them on a truck, and the truck gets picked up and you get paid right away. Yeah, they go sit on the shelf. They could be sitting there for a couple of months. Yeah. So that's kind of like you kind of got to be careful with inventory.

18:38Yeah. You know, I was kind of shocked how some of these shops that we go to have so much inventory. I remember going to Tim's and like all the batteries. Yeah. And I've said, how many of them batteries do you sell? Well, guys said you got a deal. I go, fuck, you still have a half a pallet. That's what I was— when you were talking about the deal, like he had the big pallet worth of batteries that had been sitting there.

18:55Yeah. So, you know, this is what causes stress. You know, this is pressure. You know, you got it. You got to keep the money coming in, right? You can't have it going out faster than it's coming in. So you kind of got to kind of work this whole thing. Like you could do things where you could pay your bills twice a month.

19:10A lot of guys have gone to the 1st and the 15th. I've noticed because I talk about them, because if they try to pay it every week, the cash flow is not happening a lot. And let me tell you something, nobody takes into consideration because I'm going to tell you what's happening. The corporations are buying everything now. They're trying to push payment terms out to 60 days.

19:27Okay. 60 days is impossible for businesses our size, guys. Yeah. So my suggestion is you don't even let people frickin' get house accounts with you. You're not a bank. You're a repair shop. You're a little guy. In a little world and you get the big corporations that they can put you out of business because they get into you for $60,000, $80,000, which happens pretty quickly.

19:44And all of a sudden you don't have no money and you go out of business and you have no leverage. They can just say, fuck you. Yeah, yeah. Talk to our legal team. Yeah. You know, so you got to be really careful. Long-term debt. This is where we say the $130,000 is long-term debt. The money is borrowed to build a business over time.

20:03This includes things like your equipment loans, your business or your trucks, your, your SBA loans. Like I talked about the Small Business Association, the, uh, IDL loans that everybody did that you're making payments on them. This is stuff that helped you build a shop. You didn't pay cash for, for everything all at once. You finance growth, you finance the equipment, you finance a truck, you finance the expansion.

20:25Cause a lot of guys don't just say, okay, I'm going to expand. I'm just going to go ahead and jump $300,000. They get a bank loan, they put a roof on, whatever. Yeah. You know, they all do it, right? So long-term debt is not necessarily bad if it's managed right. You can't go out and buy 15 trucks and not be able to make the payment at $1,500 apiece when you don't know how much money you even make.

20:46And this is where you go to the P&L, the deep dive on the P&L, the, you know, the balance or the budget. Now the balance sheet, you know, you kind of got to say, okay, you know, I have to figure all this out. I can't make more payments than I actually have coming in because it's got to come from somewhere. Right? So long-term debt is how shops grow.

21:06There's no doubt about it. A lot of guys took that money that they got, that loan from the SBA, that $150,000, $200,000, they grew, no doubt about it. And it's cheap money. It was at 3%. You can't get 3% money. So hell yes, take that and grow your shop. That might've put the guy the next level. Maybe he needed doors on his shop.

21:23Maybe he needed a new truck, whatever. So he took that $150,000 loan. And he did a shop, blah, blah, blah, blah, blah. But now he's got a payment on that loan, but it's managed, right? If he didn't take more than he could afford, he's going to be okay because he managed it smart, right? To take 3% money when the door company maybe wanted to finance him for 7%.

21:45And then you look at the commercial loan on a pickup truck, they wanted 9% and you got all this money for 3%. You were smart about it. So your payment's $731 on $150,000 at 3% versus, you know, pickup truck, that's going to be $1,800. And then the equipment, the door loan is going to be another, say, $2,000. Right. Look at how much money you managed to save by doing it that way.

22:08That's, that's sensible. Yeah. Right. That's managing your debt. You didn't have the money in your, in your bank account. So you just did that. Makes sense. Right. We have a savings account. We put 10% of our income in every week. Our gross, we take 10% of it, we put it in our bank savings account, and if I need it, I can take it back, right?

22:28But if I pretend it's not there, it builds up. Then I look, oh shit, we got money. Oh, I want to buy a new tire machine. Not a problem. I know I've made it 2 months down the road with that money in the savings account. We're good, right? Yep. So that's on the balance sheet, obviously, right? It's owner equity or whatever you say, how much we own of the business, because that's our money.

22:47So I say, okay, I'm gonna go buy a tire machine. I put it in there. It doesn't become a debt, it becomes an asset. Okay, ta-da, right? But you have to make money to be able to do that. You know, I've backed in and out of my savings account now for probably the last 4 years. COVID, we were so busy. We didn't raise our prices, we didn't gouge anybody, but we did enough work.

23:09We did more work than usual. We got to save a lot of money even after giving everybody raises. Yeah, that's awesome. You know what I mean? At first I didn't know what was going to happen because we always thought it was gloom and doom. So I'm like, hey, you guys might— we might need to take a pay cut if it slows down.

23:22But what ended up happening, everybody closed around us. I'm like, you guys want to close? They're like, fuck no. So we stayed working. We didn't raise our prices, but we just had a lot of work. And all of a sudden we're doing brake jobs and we're doing this and we're doing that. And we did very well. We paid all the guys more money.

23:36We never worked any overtime still, but we put money in our savings account and that gave us a leg up. Being careful with everything, you know what I'm saying? Yep. So let's talk about depreciation, because a lot of people get confused on depreciation on pickup trucks or everything like that. You know, we're going to talk about Section 179, like I talked about at the very beginning.

23:55So let's say we buy a truck for $100, right? So instead of counting the whole $100 at once, accounting spreads the costs out over time. So for the first 5 years of this truck's life, we take $20 off that $100 every year. There's a couple of schools of thought. Number one, the IRS doesn't want you to get fricking huge fricking tax savings right away, but they look at it and say, you're going to use a little bit of this truck for the next 5 years.

24:19So we can depreciate over 5 years. That's depreciation. Now there's other things that we could talk about, Section 179, but you know, for the tax plan, the IRS usually does not want you to take the full tax benefit the first year, because you're going to be using it for several years, like I said. So the simple way of thinking about it, it's an asset you're going to use over time.

24:41So instead of taking the whole $100 up front, you spread it out. What that means each year is you deduct a little bit. So your taxable income goes down just a little bit and you pay a little bit less taxes each year. Okay? Less in taxes each year. Yes, depreciation helps you on your taxes, no doubt about it., but it helps you over time.

25:02Not all at once. Yeah. Cause think about it. You put $100,000 or $100 out, but you're getting it $20 at a time for 5 years back. Yeah. Can't outcrook the crooks. Yeah. Yeah. Yeah. You know, they have this all shit nailed down. Guys are way smarter than me. Yeah. Have it all nailed down. Right. Um, so you do not get all the tax savings on the front.

25:21Now, one important thing to say here, no cash is leaving your bank account when depreciation happens. You're not taking that $20 out of your bank account. It's already in your schedules, right? Your depreciation schedule. This is really important because a lot of people hear expense, they think cash left the business again. It didn't. Remember, it was in your, your depreciation schedule. So you already spent the cash, but you're just getting— you bought a truck, right?

25:45You got a truck for the cash. So the depreciation is an accounting adjustment. It lowers the value of the asset on paper and it gives you some tax benefit over time. So simple one-liner is depreciation is spreading the cost out over time and lowering the value on paper. Yep. Right. Yep. Now there's this thing called Section 179, which is a bunch of rules that you could do a 100% write-off the first year instead of spreading it out over several years.

26:14I'm not going to get into the Section 179 depreciation. It has a lot to do with gross vehicle weight, how many seats, seats, if it has a cargo bed, a lot of different things. Look it up, Section 179. If you need a tax deduction. Now remember, if you buy a $100,000 truck, you're not getting $100,000 off your taxes. Yeah, it's— you're going to be able to deduct your tax rate, you know.

26:35So there's rules around the limits and stuff like that. But once again, Section 179, normal depreciation spread out. Section 179, you can speed it up and take it all the first year you buy it. That's what we did on Cybertruck. We Section 179'd it this year or last year. Okay. Why this matters on the balance sheets. Now let's bring it back. Let's say over time you bought $200 worth of stuff.

26:59Maybe you financed a lot of it and you still owe $160, right? $160. Because those trucks and tools have gotten older, the accounting value on paper now only shows $100. Now remember, started out at $160, right? Now I'm going to say this before I go any further. The financing does not give a shit about the depreciation. So you might owe $300 on that truck still.

27:24So you have $140 lost already. See what I'm saying? I did that like, that's about $300 out of the $300. Yeah. But you know what I'm saying? So this is how you end up with the business. You have $100 of the assets, but $160 in debt is tied to what you bought over time. Do you know what I'm saying? Because it goes down faster than the note.

27:44Yep. And that's how you end up going negative on stuff. You know why these numbers can feel backward if you don't understand depreciation? This is a line that makes it all click. Your equipment loses value, but the loan does not care. This was very eye-opening when I was sitting there researching balance sheets, because I'm going to tell you guys, like, balance sheets is not something I'm strong on, as you could tell..

28:06But this is the next part of the puzzle. So I'll put myself out there. I'll fricking talk about— I obviously know how to read mine. Yeah, but it's like, okay, you start looking at it going, well, look at my balance sheet. This is fucked. Then you have to sit there and keep looking at it. You're like, okay, but mine is by design.

28:25I have vehicles and stuff like that, you know what I mean? If you look at Motor City, their balance sheet's beautiful. You look at the other shops, well, I have vehicles on and stuff like that. You know what I mean? So the equipment loses value, but your loan does not care. I can't say that enough. You know what I mean? You still owe this money and the vehicle is getting used up.

28:42Yeah. So, you know, that's exactly what happens. The asset value goes down on paper. The debt is still there. This is how the business ends up upside down. Think about it. I'm upside down because of some of the cars, my wife's Yukon. Think about that. You paid $90,000 for a 2023 Yukon, just say. Well, GM 6.2s started blowing up all over the place.

29:05Guess what happened to the value of them vehicles? They fucking got cut in half. So say the thing's worth $50,000, I paid $90,000 for it. Do you think the loan just said, oh, let's adjust the loan down by $40,000? No. Nope. You end up negative. You still pay that money, yeah. You still have to pay it. So the thing depreciates faster, or not depreciates, it loses value.

29:25Faster than you fricking the loan. So loan doesn't care. There's no connection. It's not like, you know, my accountant calls you, whoever, GMAC or GM Finance, who are the fucking ally, and goes, hey, just so you know, UConn, Kevin, worth 50. And you think the finance companies let me adjust his loan? Let me adjust it. No, no. And that's what's going on.

29:48And that's, that's a real problem. So what exactly happens is the value goes down on paper, the debt is still there and the business ends up upside down on it. That's just all there is to it, you know? So what's left for you now that we have the simple truth? If you have $100 in assets minus $160 in liabilities, you're negative $60.

30:11Wow. And you really stop to think about it. Now you start to realize where your money's going. So, I mean, if you're making money and you can control everything, your long-term debt's going to go down eventually, right? Your balance sheet might go up and down, but they say usually somewhere in the middle of the vehicle loan, it hits the vehicle value. Have you heard that before?

30:33Yep. Halfway through the note of a loan, it's a 5-year note, you know, 2 and a half years, you usually hit somewhere in that value. Now, I don't know if that's necessarily true nowadays because vehicles are depreciating so fast. And some guys like you own a Tesla, you're fucked to the depreciation. Calculations with the depreciation on my Cybertruck and my Yukon are exactly the same.

30:51Wow. Yeah. Cause GM is the 6-2s, you know, so, you know, this is what negative equity means. That's exactly how I told you to get negative equity. That makes sense. Yeah, absolutely. Okay. Yep. So you can have the cash in the bank. You can be profitable. You could be busy. You could have a full shot and not actually own your business on paper.

31:14You could be taking it all in, everything perfect, and it's going right back out in payments to somebody else. Now, a lot of guys do that by design. A lot of guys will take a building like Grant Cardone. I've heard him say before, what a lot of these guys do is they'll buy an apartment complex, they'll pull all the equity out of it, 100%, they'll go buy another building.

31:36So they're 100% your bank owns that building 100%. They're just pulling the cash flow off it. So I'd imagine their balance sheets look really shitty if they're pulling, pulling, pulling, pulling, pulling, right? Because they don't own anything. Yeah. So what ends up happening when everything starts to dry up? Say COVID happens, they start laying people off like crazy, and all of a sudden, like, okay, all these properties are up for foreclosure.

31:58You've seen it before. Yeah. Yeah. And I'm not a financial wizard when it comes to how all that stuff works, but it's common sense. If you're 100%, you don't own anything. Like I always tell people, like 100% of houses that are paid for never get foreclosed on. And you know, one, people are— most people are one paycheck away of losing everything they own.

32:18They don't have an emergency fund in their bank. And most businesses are the same way, small business, because these guys don't know their numbers. Yeah. You know what I mean? And I don't really necessarily like this whole balance sheet podcast, but it's kind of something we need to talk about. I need to read through it so I don't fuck it up. I mean, I'm going to say this again because you can see how confusing it gets.

32:37Oh, for sure. And this is something like the balance sheet aspect isn't something that I've drawn a dividend, you know, like the P&L and the budgeting and that it all makes it. But balance sheet is a whole other thing. Yeah, it's a whole other animal. A lot of people don't talk about it. Now, if you go to sell your company to private equity, they're going to ask for a couple of things.

32:52But the number of couple of things they always ask for, P&L for last year and your balance sheet. Yeah, they want to see what you're doing on the front end. But where's it going on the back end? Oh shit, this guy's in debt up to his ears. That money's not staying. Well, we know that's not the case with my business because what I pull out of it.

33:06We do the ad backs and stuff. We know exactly what I take, right? So the money's there. Yeah. I didn't go negative at the end of the year. My company— I didn't say, okay, Garrett Auto and Truck Service did X amount of sales and I took $100,000 salary out of it as a business owner. Oh, look, he's $100,000 net underwater. That's not how it worked, right?

33:25Yeah. I was still above the line, so I still wasn't going negative. You know what I'm saying? Because a lot of guys— this is where a lot of guys pull every fucking inch out of their business they can, and their balance sheet's horrible because they're taking all the money. They don't need anything in the company. So, you know, I'm making money, but I still feel broke.

33:43I've got to work a lot and nothing's changing. We talked about that, right? I've got the cash, but I still feel— I don't have the cash. I still feel pressure. Everything's right on the front end. I'm billing everything right. That's all good. My budget's perfect. Why is my bank account empty? The balance sheet will tell you why your bank account's empty. Your long-term, your short-term, everything.

34:08Long-term is the real killer. Think about it. Short-term, you can say, okay, looks like my credit card bill is $20,000 this month. That's going to be a tough one, but we're going to make that work, right? Next month we need to follow the budget or pay attention, whatever, right? So we can, we can manage that short one, right? But the long-term one is over a year.

34:27So what if you have all these vehicles for 5 years? That means you're locked into 5 years. Yeah. Yup. So you gotta be really careful at how, okay, how much long-term debt do I have? You know, a lot of times the answer is sitting right in front of you. The balance sheet is weak. There's too much debt, just like I just said, right?

34:45There's not enough equity. Owner equity is what everything, all the math is done. And that's actually what you own. Yep. Right? Yep. If you have a $100 bill and the bank owns $50 and you own $50, $50 is yours, right? But what ends up happening if everything's 100% financed, like I just said, that these guys do with these things. So the bank owns 100% of everything and it starts depreciating, losing value.

35:11All of a sudden there's a minus. So the first year the bank owns 100% of everything. You paid $100 for it, but that next year it goes down $20. All of a sudden you're negative $20 right away on your P&L sheet because remember, the loan is not connected to the value. Yeah, the loan doesn't go away. It stays on the long term.

35:31This, this shit is like voodoo. If anybody that's listening to this podcast doesn't think to themselves, I'm a little confused, you're a fucking genius. You should come over here and do a podcast. You're going to teach it. I literally have to sit down with some of this shit. I'm telling you, I write the notes out, as you could tell, I kind of go 4 or 5 pages ahead, but I want to make sure I don't misspeak because I'm giving people, in my opinion, life or death information on their business.

35:59Then, you know, the funny thing is, uh, the bookkeeper that I interviewed, she went and looked at my podcast before I even called her. And she said, oh my God, I watched your fucking podcast. I fucking love you. She's like, nobody breaks shit down like that for small business. She's like, you could help some of my other clients. She's like, people don't understand the importance of this stuff.

36:24I go, well, you're a nerd, you like numbers. She's like, damn right. But at the end of the day, if the numbers don't work, the numbers don't work. And a lot of these guys don't even know if the numbers work. Yeah. How could you think about a shop owner? You hear this always over and over again. Hey boss, can I have a raise?

36:40I can't afford it. He's probably not fucking lying. No, he doesn't even know what he has. Yeah, his bank account's like one fricking check away from, you know, being in negative. He doesn't fucking know what he has. Imagine, and we see this all the time with our clients, they don't even have QuickBooks. They look at their bank accounts. What's in their bank account?

37:00Hopefully some money. I've had a couple of them say, well, I try to write these checks and I hope to God they don't fucking bounce. Yeah. Yep. I've seen a lot of these guys. We haven't even got to the bank or to the, uh, a lot of these balance sheets on these guys. I know I got them in the green because they're paying off debt and they're paying their bills and paying off debt.

37:20Right. So inadvertently without QuickBooks, they're paying their imaginary balance sheet off. They don't even have, because if you owe all these people money, right? I owe Napa $100. I owe Autobay, O'Reilly's. I do this and I go through the month. And I'm billing my jobs, I'm bringing money in, but I'm paying my loan payments. Then I'm starting to pay my debt off and starting to go away.

37:39What's happened to the balance sheet, guys? The short-term liabilities, and then he's paying these loans off early. The long-term and the short-term are getting better. Guess what's happened to the owner equity? It's getting better. Inadvertently, even though we don't have a balance sheet, we don't even have QuickBooks yet, I can kind of know, hey, these are all the fricking loans you have out, right?

37:59Yep. I said, okay, if you start paying these up, you're paying all your bills? Yes. You're paying your payroll? Yes. You're paying your taxes? Yes. You paid all your— everything's up to date? Yes. You have extra money in your bank account, right? Yes. What do your bills look for next month? Well, I haven't got them all yet. Well, call the auto parts and ask them.

38:14Well, X, Y, and Z. Okay, well, they're due in 30 days. Right now you have 30 days. How's your workload? Well, I have a ton of work in the shop. So you're going to probably bill $50,000, $60,000? Oh, easy, in the next 30 days, right? We'll just say Boom, pay them loans off. They're gone forever. Don't take no more loans. Keep paying shit off, right?

38:31And the one guy's just about all his shit paid off. He's got one big one. He said within 6 months he should probably be paid off with this big one. Within a year, he thinks he should have everything paid off and start paying off his property. Wow. Talk about freedom. Yep. Just by frickin changing the way he does his billing and runs his shop.

38:50No more work. No more advertising, nothing. Just moving the needles where he needed to be. And guess how many people have complained? Zero. That's happened to 3 different shops. We raised the prices and nobody said a word to the customer, but the customer was scared to raise their prices. He thought he'd lose it. I said, what the fuck does it matter? You say you're 30 days out, you're backed up 30 days and you're scared to raise your prices.

39:12What if you raise your prices 20%? We'll just say it happened. People leave and you do the work for 20% more. The other people don't even matter. Absolutely. You know what I mean? So we talked about there's too much debt, there's not enough equity, there's too much money being pulled out of the companies. The other one, these freaking business owners, I'll take $20,000, I'll put this on a Chloe Receivables and stuff like that.

39:37Now, if you know what you're doing, you have a good account, you should— could strategically pull money out of your account for different Things. I'm not going to get into what I do or how I do it. Cause it's nobody's fucking business. But I, if you have a good accountant and you want to sign it, sign an NDA, there's different things you can do with your tax liabilities personally and corporate business loans to the officers and stuff like that.

40:03But that's a whole nother podcast that we could bring Maria on for. Oh, that'd be amazing. Yeah. You know what I mean? So, or there's too much leverage sitting in your business. Your leverage. You ever hear that term? He's leveraged to death. That means the bank owns everything you fucking have. That's not freedom, boys. No, no, no. You got to make enough money.

40:20And know what I always call it? Outrunning the bear. I was standing at Garrett Auto and Truck today, and that was yesterday, I wasn't there today. And I was looking at the glass block window by the coffee maker. There's 3 glass block windows. I was sitting there thinking about them glass block windows. I'm probably the only guy who knows this story because everybody else is dead.

40:40We had to have a meeting about spending $1,900 to get them glass block put in. Wow. It was a big deal. We had to have a meeting. Like, it was like an hour and a half meeting. Like, where are we going to get $1,900? It needs to be done. There's a water leak leaking in. We can get this guy to do it for $1,900, blah, blah, blah.

40:58The reason I remember the $1,900, it was so— I was thinking to myself, this is fucking ridiculous. We're working fucking 60 hours a week, Saturdays and everything. This fucking guy that owns the place Can't fucking talk about $1,900 like it's the end of the fucking world. I will tell you, this is going to sound arrogant. If something came up for $1,900, I'm like, fucking do it.

41:19I don't even think about it. But times have changed and I make sure I'm profitable and I have money in the savings account and I can do these types of things where I have money on my charge card available however I want to pay for it strategically. You know, one thing is you guys need to take into consideration if you run your business on your credit card right now, 'cause you're just trying to survive.

41:43Don't put— figure out when your statement closes. If your statement closes the first day of the month, don't fucking put $25,000 on it the last day of the month. So when the date next day, the statement closes and all of a sudden it's due in 30 days. If you float it, you can wait till that new statement starts, order the parts, they'll go through that statement and then you have a grace period.

42:07So you can extend that out. That's tricks of the trade. A lot of guys do shit like that. Figuring it out. That's awesome. Just think of doing stuff like that, you know what I mean? So you can get a lot more days. You can use their money for a while, you know? And, you know, my suggestion is people is don't put more on your credit card than you can't pay off.

42:26But if something happens, you put something on your credit card and you can't pay it off, I'm not a big fan of paying the credit card company interest, but sometimes you have to do it to keep your head above water. It's just the way it fucking is. There's financial guys say you're fucking crazy. You do it. Let's face it, we're small business.

42:39Things have changing in our area where a lot of the parts aren't available. So we go online and we can have them the next day. So we use a credit card. It's just the way it is, you know? So that's why the P&L alone is just not enough. The P&L tells you how you performed last year. Ta-da! The budget says this is where we want to go.

42:58We want to aim. This is our plan, right? And here comes the balance sheet. Who owns what? What do I get to keep? You know, I'm not going to get into the real balance sheet, but I hope everybody understands exactly what I was trying to do here. So if you're talking to your managers, advisor, your people in the shop, you can make this really simple.

43:20Not that a lot of you guys are going to even talk about P&L sheets, budgets, or anything to anybody, because a lot of you guys don't. But there's a couple of my clients that want to talk to their guys about what's going on in the front. Yeah, they just don't have QuickBooks set up yet to talk about the back. And quite frankly, guys, you can let your higher-ups know exactly what's going on, but nobody needs to know what's really going on in your business.

43:42Yeah. Okay. Long as they need to know they're getting their paycheck and you're treating them well and you're paying their vacation time and everything else like that. Yeah. You know, you got to be careful about what you show them. Unfortunately, because they don't understand. You know, we had a job here today that we closed out that was a piece of shit from the insurance company.

44:01And we had a meeting about the hourly rates and everything like that, what we actually made on the job. And guess what happened? All my guys knew because they listened to the P&L sheet and everything. Yeah. So I don't have to explain it to my guys. I'm like, you guys, I tell them, you guys all need to listen to my fucking podcast.

44:15I'm fucking— and they do. They like listen to it, which is awesome. Yeah. And you know what? They're like, God, you know, A lot of that shit gets confusing. Like, I know that's why I read off a script a lot of the times, but a lot of times I'm 5 pages ahead of the script. So it's not like I have to read some of this stuff.

44:28There's no doubt about it because it gets confusing. Yeah, you would have to be Einstein to frickin' recite all these pages. But I think people should have an understanding what a balance sheet does now. Who owns what? Owner equity. The bank account or the loan amount does not care what the frickin' vehicle is worth. That loan is going to stay. You're paying that bitch off.

44:47If you took a loan for $100,000, you're paying $100,000 back unless you trade it in and start over. So that's a long-term debt. You're not calling the bank, but it broke down. Yeah. And yeah. Right. You know, so, you know, most shop owners never really look at the balance sheet. If you really stop and think about it, you just said it yourself.

45:03How many times have you really taught balance sheets or talked about balance sheets? Yeah. Not at all. This is like when you said balance sheets, I'm like, okay, I'm excited to kind of go into this. And I, you know, I don't have a company vehicle and some of this stuff, but like even going into the depreciation, like, Figuring that out is interesting.

45:18Yeah. And you know, a lot of the guys, a lot of these guys, these shop owners never really look at the sales. They maybe look at the sales, but they don't look at the profits. They really don't know what they're looking at. Yeah. One good thing is there's a lot of guys on, um, uh, social media that are pretty good. I know that one guy that actually knows his numbers pretty good and he's recited them over, that's N Wright Auto.

45:37So you could tag him. He, he, when he sits there and talks, he's obviously a tool freak. He's got more fucking tools than I cannot believe how much He does tools and stuff like that, like reviews and stuff. That guy's got so many fricking tools. He owns a shop and everything. But when I listen to him talk, there's a guy that knows his numbers.

45:55He doesn't sit there and bullshit. You know, I put myself on a limb talking about some of this stuff. Let's face facts here. I do because I'm not in— I don't have an accounting degree. Yeah, I'm a guy that's self-taught. So am I going to misspeak? Absolutely. Crucify me. But it's worth exactly what you paid for it. Nothing. So get the value you can out of it.

46:13And if you understand it, great. If not, sorry. Call an accountant, have them explain it to you. You know what I mean? But that guy knows his numbers. When you start listening to the percentages and stuff like that. Yeah. You know, then you get the haters. John B, see, that guy always hates on everybody. Even Enright said to me the other day, he's like, yo, keep talking.

46:30John B will be on here. Yeah. You know, you know. But if you don't understand your balance sheet, You don't fully understand your business. So once again, learn to read all this stuff and get with somebody who can show you. And I'd be willing to bet you a lot of the business coaches can't look at a balance sheet because everybody wants to talk about the P&L sheet.

46:51Yeah, that's what happened in the past. Yeah. Yeah. You know, that's something you can't lie about when you're trying to sell your business. They're going to want the P&L sheet for last year and the tax return. Tax return, you can put depreciation back in and all that stuff. You're really good with the P&L sheet, shows you what happened last year. Long as the books aren't cooked, you can do bank statements, tie it all together, blah, blah, blah, blah, blah.

47:10You know, just because it's, you know, just because it's in your shop don't mean you own it, boys. Think about that. You got a big old fat loan on that Mercedes. And what do I always say? Well, guys call me and go, I do this amount of numbers in sales. I always say to myself, what is your net and what do you keep?

47:25A lot of these guys can't answer. They think the main number is the number that matters. Yes, it matters to a certain extent, but would you rather do $1 million and get 1% profit or $500,000 at 30% profit? Do you know what I'm saying? There's a mathematical difference there, guys. Yep. You know, 1% to me would be going out of business or 2% to me would be going out of business.

47:502% to GM is a fuck ton of money. Yep. Right. It's all scale. The scale. Yep. You know what I mean? So, you know, P&L tells you what happened. The budget, once again, we're trying to figure out where we're going next year. This is our plan. This is where we're going to try to hit. The balance sheet tells you what you actually have, what you actually own, what everybody else owns.

48:08You know, I always tell, I always tell, uh, you know, me and Jim always talk about stuff and I'm like, you know, anybody could have payments. They'll give anybody a fucking car. Would you not agree that you can go to the Mercedes dealer right now and get a fucking loan for a fucking 5-star or a G-Wagon or whatever? If you have the income to show, They'll give you a G-Wagon.

48:25Congratulations. You can own it for a month or two till you don't make the fucking payments. Then Bernice, the fucking South Beach Tony, will come and get that bitch. But you know what I mean? That's where businesses get in trouble. You gotta be careful not to leverage yourself too much. And there's finance companies out there that call you. They fucking call my phone nonstop and text me.

48:47We have funds. We have funds. We'll loan you funds. We'll loan you Oh my God, they're desperate to give away their money. Yeah, right up to the point where they get you leveraged and then they fucking take your shit, you know. So sometimes these mechanics don't understand that, you know, the boss man might be leveraged to the point where he can't freaking buy that scan tool you need.

49:05So you guys got to make do with what you got. Maybe it's not his fault, maybe it is his fault, you know. It's a little bit easier when you look at a guy and go, yeah, um, I really can't afford a scan tool, and you're driving an old shitty pickup and you're like, I can't afford a scan tool to enable you to do your job, but look at my new F-350 Platinum Edition.

49:21And by the way, we're taking it across the street to get a lift kit on. It's going to be $5,000. Oh, fucking rims, $7,500. Look at this bitch. But I can't afford that scan tool. So sometimes priorities are fucked up as business owners. Yeah, but what if they knew how to look at all these numbers and go, man, that balance sheet's fucked up.

49:37I'm underwater on X, Y, and Z. I got to literally get rid of this vehicle or this vehicle or pay this loan off before I start taking more debt on in the company. Long-term debt. And let me tell you something, short-term debt can fucking kill you too. If you look at you, you start going out and you're buying stuff on your credit cards and stuff.

49:53You start spending that money faster than it's coming in. You go on vacation with the old family Rooney and you spend $15,000 in Europe. You put it on the company nut, right? And you're not making that much money because you don't know. Yep. So then you're playing games. So we— and no, we're good. Um, so in closing, guys, think about it. If you freaking— if you're leveraged to the hilt, You're not owning, you don't own anything.

50:21The bank owns everything in your shop. So the minute you can't make them payments, that's where the problems come in. So try to keep, try to keep the long-term debt down to a dull roar if you can. You know, like I'm saying, I think I would probably say the biggest ones for shops would be scan tools. They're expensive. And a lot of guys just can't rip a $5,000 check.

50:43Like I will take a $5,000 check out of the, I'll write a check out of the savings account or whatever if I don't have it readily available in my checking account to buy a scan tool. Or tell the Snap-on guy, hey, listen, I'll go ahead and do this, but I want you to put it on a truck account with no frickin'— with no interest.

51:01Don't put it on Snap-on credit, but I'll pay you X amount of dollars a month. A lot of them guys will do it if they know you're a good shop owner. Yeah, yeah, yeah. So all of a sudden you're getting hit. He's selling it, but you're getting it, you know, interest-free. You know, there's ways around not getting killed. Just don't go out there and go, I don't really give a shit.

51:16I need it right now. It doesn't matter if it's 18%. Okay, well, a lot of guys will, that's a write-off. Oh my God, stop, stop. So I have to tell you a story before we close about credit card fees. Because a lady came this week to pick up her motorhome and she was giving Lincoln a hard time. It was Monday. And Phil wasn't there.

51:40And she says, you guys charge credit card fees, you should have it posted. And Lincoln didn't— never read the things. He's nervous. He's fucking only been doing this for 5 months. I was in the back. He didn't come and get me. It says it right on the counter, 3%, blah, blah, blah. And also is in our terms of service they agreed to.

52:01Well, they backed the motorhome into the dirt. Berm at the shop, so plug the trailer hitch with dirt. So the phone rings, it's the lady, and she's like, I'm pretty upset right now, my motorhome door was unlocked. And I wrote a policy on that, guys, just so you know, because it was unlocked. And there's dirt in my trailer hitch and there's a scratch on my bumper.

52:24I said, let me come over. Are you coming over right now? Absolutely, I'll come over right now. So I drive over there, I'm like, absolutely. I can't even tell you how many times this dirt gets plugged in the trailer hitch. It's not a big deal. I cleaned it out. She's like, I want to talk to you about the credit card fees. I said, okay.

52:38She's like, I'm an accountant. I said, oh, cool. I said, you'll understand what I'm about to tell you. She's like, excuse me? She's like, that's a write-off. I said, absolutely, at your tax rate. She's like, what? I go, let me just give you an example. I said, if I have a $10,000 credit card bill, fee bill, And I said, and it's a write-off, would you agree?

52:58So if I do $100,000 in sales and I get $10,000 off tax write-off and credit card fees, right? So it's now $90,000. Would you agree with that? Absolutely. I said, at my tax rate, I take the tax. What do you mean by that? I said, at $10,000 at a 30% tax rate, I would get $3,000 off my tax bill. I would still give the credit card $7,000.

53:19Would you agree with that? She's like, Got mad. I said, how about this? How about I pay— you guys pay the 3% credit card fee, I take the $10,000, so my taxable income goes from $10,000 or $100,000 to $90,000. Guess what? I get to save the $3,000 in taxes. She's like, I'm not going to argue with you. I said, okay. This is hilarious.

53:46You got an accountant and I charge you credit card fees because yeah, guess what? I get to keep that $3,000. I get to write off and I get to keep it and I don't pay 7%. So if you're not charging credit card fees, guys, cause you're scared of your customers getting mad at you, then just tell them to fricking bring cash or write a check.

54:05And if they say, well, I can't, I don't have the money to write a check or a thing. Think about this, guys. I'm going to say this to people. That I always tell the— I always tell my guys this. I said, these people right there, they have plenty of money. They pull up in a Mercedes, they might be making a payment, they have plenty of money, but they're always on vacation.

54:24They just have none they want to give you to fix their car. And that goes back to the thing with the guy that said on one of our posts, which I agree with 100%, they have no problem paying 28% interest to fucking Visa, but they will crush a small business guy for 3%. 3%. The local guy that's trying to make a living, trying to recoup so he could actually stay in business, they're trying to fuck him outta the 3%, but they'll pay Visa, Uncle Visa.

54:46Without a question. Without a question. Yep. All right guys, thanks for watching. Hope you enjoyed it. All right, that's gonna do it for this episode of Repair Shop Reckoning. If this helped you, please make sure to subscribe so you don't miss what's coming next. We drop real conversations, real systems, and real solutions every week. We'll see you back here next time on Repair Shop Reckoning.