My Shop Was $1M In Debt: How I Got Out Of It | EP9 | Shop Fix Academy Podcast
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About this episode
$1 million in debt, a full parking lot, and no idea where the money was going.In this episode, Ryan Hillenbrand sits down with Guy Roberts…
Key takeaways
- —Organize your finances daily to understand cash flow.
- —Never fall behind on payroll taxes; they are not your money.
- —Focus on productivity and set clear goals for your team.
- —Invest in coaching and community support for business growth.
- —Always know your numbers to avoid financial pitfalls.
Frequently asked
- What should I do if I'm in significant debt?
- Start by organizing your finances to understand your cash flow. Focus on generating enough revenue to cover your expenses and seek help if needed.
- How can I improve my shop's productivity?
- Set clear daily goals for your team and monitor their performance. Encourage a culture of accountability to ensure everyone is contributing effectively.
- Why is it important to know my numbers?
- Knowing your numbers helps you make informed decisions about your business, avoid financial pitfalls, and ultimately leads to better profitability.
▸Full transcript
I inherited somewhere around $1 million in debt. It was like an interrogation room. I said, well, can I hire a lawyer? She goes, well, yeah, you can hire a lawyer. And I was like, well, how much time can I have? And she goes, I'll give you 7 days. And the money was just always there until the IRS agent shows up at the door and says, I need a check for $160 grand or I'm going to shut you down.
This is going to be fire, as the kids say. Lit. Hey everyone, welcome to the ShopFix Academy podcast. My name is Guy Roberts. With Michael Rosenberger, the Bird. Good morning, Guy. Good morning, sir. How are you? Again, it is— oh, it is morning. It's mid-morning. Yes, I'm still morning. Awesome. Cool. Again, this, this podcast is about giving away more value than other companies charge for.
And speaking of value, we have a massive wealth of information. Mr. Ryan Hillebrand. Hello, gentlemen. All the way from Kentucky. That's where, that's where we're from. Not Cincinnati. It's not Cincinnati. Yeah. Okay. We're the South Side. South Side. Yeah. Yeah. Your journey has been remarkable over the years, and I mean, we could probably do 15 episodes of, of Ryan Hildebrand's life. We've been doing it long enough.
Yeah, I'm good at what I do because I used to be really bad at what I do. Yeah. Yeah. Oh, I like that. That's awesome. That's good. Let's dive right in. So you were in a massive amount of debt. Yeah. Now you're not, correct? For the listeners out there, I'm a, I'm a shop owner that's in a massive amount of debt. I— the debt is just eating away at all my cash flow.
What are the steps you can take to get out of debt? Wow. I mean, I think the— I think the first thing you have to do is you have to organize your finances. I think a lot of people don't have any idea on if they're cash positive or cash negative. And the way that, uh, the way that we did it, just the, the, just the, the general anybody can do it, is we had a whiteboard.
We actually had a window on a door in the office. And every day we would basically tally up how much money we had coming in from the repairs and how much money we had to have going out for bills, payroll, what, what nut we had to cover that week, any of that kind of stuff. And so we hustled and we worked and we got everything done so that we could always cover our nut every day.
Um, I think that that's the biggest, you know, that, that, that's the biggest thing for somebody that's surviving that doesn't have time to get their books in order, that, you know, maybe they don't have a P&L, they don't can't do the math on the bank account, whatever it is. It's just cash in, cash out. You got to do what you got to do to make yourself, you know, cash flow and, and get positive.
So, so you mentioned they got to cover their nut. Like, what, what is that? If you've got employees, you have payroll to cover. Okay. Um, you have to— have to— must— I feel taxes coming. The taxes. You got to pay taxes. You got to pay taxes. What taxes? What taxes? 941 payroll taxes. 940, 941. Okay, so state and federal payroll taxes. All right, absolute must-do that.
Don't ever get behind on 941. It's not— I feel like there's a story there. Pass it through. There's a story there. It's not one that I'm excited about, but there's a story there. Yeah, I mean, you know, years ago, um, I, I came out of college in early mid-2000s, so this would have been 2007, maybe sometime around that. And so Uh, I ended up working for my dad again, which was kind of the thing I went to college to avoid.
Your dad owned a— he owns an auto repair shop. Just one? Okay. Kind of in our town. He'd been in business for 40 years, since 1972. Wow. And, uh, you know, he got up and worked every day. I mean, it just, you know, small town, knew everybody. We worked on farm equipment, we did everything, you know. And so, um, I wouldn't say that my dad didn't have a financial regimen.
My mom did a lot of the books. And so It was probably kind of time that my mom started pulling out of the business and kind of retiring. My parents are quite a bit older than I am. So we had a bookkeeper and, you know, I was just kind of coming back into the business and my dad's kind of— we probably got into around 2011, I'd say or so.
I kind of started doing the advising and running the business and some stuff. And we had a bookkeeper and the way we always did it was that the bookkeeper handled all of the stuff. And, you know, my dad just ran the business and I was starting to run the business. Just making, you know, decisions and stuff. And he asked questions like, hey, do we got money to pay this bill?
Hey, we need to do this. Hey, we need to buy this piece of equipment. Hey, we need to do this. Right. And the money was just always there. It's like magic. Yeah. Yeah. Until, uh, yeah, until the IRS agent shows up at the door and says, I need a check for $160 grand or I'm going to shut you down. How old were you?
I don't even know if I had kids yet. So this was a bit, I mean, this was, you know, 11-ish years ago. Like I said, I'm good at what I do because I used to be bad at what I do. You don't, you don't know what you don't know when you get into business and you're starting out and stuff. And if you have a you know, a CPA or a bookkeeper or something, like, you could— they could just be like, yeah, hey, by the way, we've covered payroll, everything's good.
You take them at their word. Well, our, our bookkeeper was not paying our payroll taxes. The, the 941s? Correct. 940s. Oops. Had no idea. For how long? Uh, better part of a year. Wow. Yeah. How much was that, do you think? Between— between— I think it was between— it was somewhere around $160,000, I think. Was about where it ended up. And then when you figure penalties and all of the other stuff, like it got up there, which is super easy to do because the IRS doesn't immediately yell at you.
Well, the thing that people, I think, like it's easy to abuse because the taxpayer system is a volunteer system. Yeah, right. But 941s is the bad one. Yeah. Like you can, you can, you can get by with, you know, income tax and some of that kind of stuff and you can make payments and those kind of things. 941s is not your money.
This is money that you took out of your employees' account, you know, your employees' paychecks. And you know, they, it's, it's their money that they, they're paying to the government. And the government doesn't mess around when you're robbing Peter to pay Paul. Yes. When it's you directly, if you owe income tax or something like that, 'cause you made money, that's one thing.
941s, not your money. Never was in the first place. Mm-hmm. So I mean, they're not bankruptable. You're personally liable. For the trust fund portion, which is the company match for the Social Security and the Medicare. Um, and they're, you know, they will work with you. So I, I will say this, like, if somebody is sitting here and goes, well, I'm in debt or I'm in tax trouble, like, I don't know what to do.
And it's like, well, you, you need to reach out and you need to get help because the IRS doesn't want you to go out of business. They want you to pay taxes in perpetuity because that's how, you know, that's how the system works. So there, there's opportunities to be had to, to be worked with, but You have to stay current and all that kind of stuff.
And so, yeah, it was super frustrating. So showed up at the door and says, we need $160,000 today or I'm closing you down. And I was like, what are my options? You know? And they're, they're not friendly. They're not, but they're not buddies with you, right? We went out and got a loan and, you know, basically showed up with a $72,000 check because I think that's all we could go to the bank and get.
A loan against some stock or some stuff along those lines. Okay. Um, showed up with a check, met at their office, like got put in a room. All of a sudden, person comes in. It was like an interrogation, like, room. And I said, well, can I hire a lawyer? And she goes, well, yeah, you can hire a lawyer. And I was like, how much time can I have?
And she goes, I'll give you 7 days to respond back to me with a lawyer. So went out and hired a lawyer. Um, tried to do an offer in compromise because at the time business was not financially sound. And so the, the, we tried to hire a lawyer, tried to do all that kind of stuff. The lawyer was great, tried to do an offer in compromise, but didn't work because they don't count, like they don't count paper.
So like depreciation, because we, we had used depreciation to show a loss. Sure. We actually had like a $30,000 positive year. So they, that's what they use to decide what your payment, what your repayment is going to be like your payment schedule. So yeah, we effectively got on a payment schedule and And then, um, it was off to the races trying to figure out how to pay down the debt.
Plus, by the way, like you've got the IRS barking at you. You have a business which has debt. We had tow trucks, we had paint booth, we had all kinds of stuff. So sure. I inherited somewhere around $1 million in debt for this business that was effectively, uh, in the, in the red. And your mom had exited. She was the bookkeeper. My mom had exited.
She had had some health problems, so she'd gotten out of the business and my dad was just kind of getting older. And I mean, you know, on his way to an exit. I mean, he's in his, you know, 70s, early 70s. So yeah. And none of this was disclosed to you? It was just— I don't really know that my, like, parents probably didn't know either.
Parents didn't know either. Yeah, we operated in scarcity my whole life. So at this point now, you've, you've got tax payments to make, you've got employees to pay. So what is your plan moving forward? Like, when did you figure it out? Like, when did you— how did you put piece it together to climb out? The only reason why I did it— I, I'll tell you this, man, like, this is how hard it is.
I would have given up if it was me, but I was fighting technically somebody else's battle. It's somebody that I like more, you know, a lot, which would be my dad and my mom. I didn't want them to lose anything. Yeah, right. We have a farm and stuff like that. If it was just me, if it was like my house or my farm or something, I'd have been like, I'd packed it in.
I could tell you that in hindsight. I don't think I would have made it through. Wow. So it took being motivated to save somebody else else to be able to get out of it. So, you know, there's days where, you know, I would just— I just remember sitting on the edge of the bed and I was just telling myself like, well, man, like, you can give up and you're done, or you can go in, you can try to fight today, and maybe you have a chance.
You probably would say I know numbers pretty well. I'm pretty on top of numbers. I'm on numbers because I did it every day, all day, on a window with a dry erase marker for as long as I could until we got out of it. So you knew every single day going into the day, we have to generate this much revenue, this much GP dollars, gross profit dollars, to survive till tomorrow?
Yep, 100%. So I knew exactly how much revenue I had to have for everything. I knew every balance of every bill that I was creating. I was paying— I paid cash for every part that came in the door. So like, I like when I say paid cash, like there was no— it was like, I'm not, I'm not going to put this on credit because I got— what I did was I got scared because I was like, I don't know what debts are out there.
And, you know, I add to that, well, it was great because we went to the 941s and then I start going through there. We hadn't paid sales tax either. Yeah. So, you know, you've got the state of Kentucky sales tax that you had to pay off. Plus you've got these 941s and stuff. So all of a sudden that $160,000 is $250,000. And so it was just like every door I uncovered was more debt, more debt, more debt.
And it was just hidden debt that somebody just said, yes, everything's good. And then one day they showed up and it was like, oh, it's not good. I jumped on the grenade for it because I mean, like, you know, they interview you and they have to find somebody to hold accountable. And like, I'm not going to— I was going to throw my parents under the bus.
They honestly didn't have anything to do with it. They hired an employee that they had trusted to handle these things and there's no accountability and that stuff happens. So, um, but yeah, man, we were off of a whiteboard running the dollars and all of the numbers all day, every day. If you don't know your numbers, don't— if you don't want to know your numbers, don't get in business.
Like, please do yourself a favor. You will someday be in a very bad spot if you're not willing to know your numbers. Otherwise, you're— you got lucky as hell. Do you, do you think it's, it's, um, a shop owner that just wants to ignore it and it's just this pile. They know it's a mess and it's easier to just like put a blanket over that and like, I'll get to that someday.
Like, why do you think owners don't invest into the numbers? Well, they don't know. I mean, you know, these guys, a lot of shop owners are former technicians or still are technicians and they're good at fixing cars. And I understand that they can read lab scopes and, you know, do all this kind of stuff. But ultimately, um, you know, people don't want to do the job that they don't want to do.
And so we didn't go to school to be finance majors, but you know what, if you're going to be in business, you better have a pretty good hold on your finances. Um, if you don't know if you're making money or not, like, I mean, it can go by in the blink of an eye. And the larger you scale, the faster it comes and goes.
Yeah. I mean, you know, like the life of the business doesn't get easier because, you know, the stress— you couldn't make a $5,000 payroll. Yeah, well, now I've got a $60,000 payroll. It's— and that's weekly, you know. And it's like, that's a ton of money you've got going out, you know, with taxes and everything. And then you're like, you know, that makes $120K in 941s look kind of like peanuts when you're writing $200K checks to pay off a credit card on the month and stuff.
So, um, it's not for the faint of heart. You— and you have to know your numbers because, uh, you can waste— you just lose money like crazy the bigger you get. And, and here's what I would say, this: you— most people run a business and they're like, oh, I'm making money, I'm running out of my bank account, well, I've got money to do this, I can go buy this, or I can go buy this, or, well, you know what, we could subscribe to this, or we can go do this.
And all of a sudden all that stuff starts piling up, and then they don't make any money and starts going south just because like they got a lot of fat. So You got to know where— you got to know where you're fat, you got to know where you're lean, you got to know where the opportunity is, you got to know all the things.
So finance is the most important thing in business, bar none. Leadership helps, but like, you got to know your finances. Mountain of debt, going every day, you know the number you got to make. What operation things did you take, or what steps did you take? Or, um, Adam Preiser came into the picture at some point. He was your coach for ShopFix. Yes.
Uh, what year was that? '17, '18, I think. Okay. And so Adam Preiser came into the picture. What advice— like, did a coach help you dig out of that spot? I was pretty much on the tail end of like the debt, um, spiral, uh, when I, when I found ShopFix and joined ShopFix. And so we were doing okay. We were, we were, we were like making money finally.
Okay. We were paying bills and we were paying off the debt and stuff, so Making money, paying off debt. That's the crazy thing you don't realize. Like when you— if you're, if you're not a math major out there, if you pay off debt, you still have to pay taxes on that money that you don't have because that's positive income, right? So if I have $100,000 on a credit card or if I have $100,000 and, you know, whatever, a loan and I pay that off, well, that's income, positive income, right?
You know, the balance sheet is not an expense. I mean, you can expense some of the things, but most of that, most of the balance sheet stuff comes from depreciation. Yeah, right. A lot of people think, well, I just paid money out. I didn't make any money. No, it doesn't work like that. The tax code's a little bit different. So, um, so what, you know what, operationally, what did we do?
Well, we had most of our guys that were on, um, who were on, uh, salary. Okay. Okay. So no matter how many hours they turned, they were getting paid the same amount. Right. But I will say this, during that period of time, one of the things we really focused on was productivity. And because I was there, and, and I would give myself credit, like, I've always been good with people.
So one of the things we really focused on was productivity. And when we started putting goals about how much we had to get done each day, productivity went up. And honestly, a big part of us, like, paying it off was we had technicians that were turning 50 hours a week that were getting paid for 40. Wow. So that was huge, huge, because, I mean, you know, we had guys that were didn't pay $38 an hour hourly, but their effective pay rate was below $30.
So that, that crushes it for you. Yeah, right. Um, so yeah, I mean, like I said, we just— I'm, I'm— I had enough charisma to be able to make deals with everybody, like the parts houses. Like, I'll pay you $250 a week on whatever I owe you, and I'll pay cash for everything that comes in. And then once you get me below $20 grand Yeah, we'll, we'll be here, right?
They're like, all right, well, you guys, you know, and as long as I made the payments, they were good. Like, they— people are willing to work with you. So, um, production, productivity had to go up. So product— so we had 3, I think we had 3, maybe 4 guys that were really crushing it. We got rid of some bad guys and had to get guys in there that could, that could turn hours.
So we got rid of 2 guys, got 2 guys in there could really haul. Um, so that was a big part of it. And so we went from doing you know, $70,000. I think that December we did like $72,000 as a company. This would have been towing, body shop, car shop, and everything to started like pushing $220 grand. So, um, revenue increase, sales increase was a huge part of it.
Um, yeah, man, just started, just started inspecting, inspecting. Like, we didn't— we weren't doing any of it, man. Like all the little, all the little things that you should be doing on it. Yeah, great inspection. Those, yeah, CVIs, right? 3 shop picks, right? Yeah, the inspection was the first thing, and that's still to this day like the thing that I preach more than anything.
If you're struggling, if you're inspecting the chain of business, you start with the inspection link. Yeah. And then go from there. So you're on an upward trajectory. So what, at what point did you decide, let's, let's try this coaching thing again? Because you had tried it once before. Oh yeah, I met Aaron at, uh, up in, uh, Chicago for a ratchet Wrench Conference.
Yeah. So, you know, he's like, hey, come down to— where are you from? This is Cincinnati. He's like, come down and come down to Tennessee. And so came down to Tennessee, had an awesome time. No one would be a part of this. Um, it's crazy. It was just like nothing I'd ever seen before. I've been to conferences and stuff, and a lot of conferences were just, you know, puffing your chest out, proving how good you are and all that kind of stuff.
And I, I'm— and I, you know, I admired a lot of these guys who were up there speaking. I was like, man, how did they become successful? Because I've just gotten maybe halfway through going through the struggle, and I'm just like, I want to be like that one day. Sure. You know, maybe there's still plenty of ego there, even though I was getting kicked in the teeth every day.
There's plenty of ego there, but I wanted to— I wanted to be like that, and I wanted to be a part of that. And ShopFix was totally different. Why did you want to be a part of it? Like, what was different about it? What, what made you want to belong to— Well, I wasn't crushing on my— Crushing it. Yeah, you had a trajectory, but I had a lot of pieces in place.
And Aaron told me, he's like, he's like, dude, you were like the driest ember. All I had to do was light a match to you and went nuts. I was like, that's awesome. So Shop Fix— so I, I'd learned all of the things, but I didn't know how to do it and implement it. And like, Adam, like, Adam organized it for me, like, piece by piece.
And it was just like everything just started clicking. Like, doing a Fix My Shop, like, broke my mind because, like, I knew I had to mark up my parts. I knew I had to, like, make money on labor. I knew that there was some portion of that I had to And then we did a Fix My Shop and it was like, okay, 25% of my revenue needs to be parts.
Okay. I need 30% of my labor rate is what I need to make sure that my guys are having. Okay. And then these guys are talking about this thing called effective labor rate and all this stuff. And you're sitting there going like, oh, okay. So I've just been like playing, you know, Rain Man or the Google hunting on the window for like the last 3 years.
And so we're on a whiteboard and I'm like, this is my jam. And I saw it one time. And so we went through and did— I remember in our tribe time we did like 4 or 5 and like, I'm like, I'm sitting there like feverishly and David Murray's like, dude, slow down. What is wrong with you? Like, I had to fix my shops done after the first one.
Just like boom, boom, boom, boom. He needs to do this. He needs to do this. He needs to do that. So I'm fixing other people's shop. Meanwhile, my stuff's like still kind of burning down. So, but I'm like fixing other people's shop in the room. And I was like, I knew I had it. I knew I had it. And so I don't even know if I remember another thing from that conference because I just was like blinders, like, I want to go home and I want to do this right now.
And I think I actually tried to leave the conference early just to go home because like I got so like mesmerized by that moment. I didn't want to do— I didn't want to go listen to talks. I didn't want to do anything else. I wanted to go home and I wanted to get like stuff done because it was like the biggest breakthrough ever.
Like somebody had finally organized the numbers for me. Oh, so I swear, like, it was like just being in the dark. Like, nobody had anything for me to help me. People give you advice all the time. Hang in there. Yeah. You know, wow, I just double my parts. Or, you know, uh, well, everybody else is about $100 labor rate, so, you know, just as long as you keep it around there, you'll probably be all right.
And, uh, well, man, when you're playing everybody else's game, what you don't realize is everyone else is struggling. Yes. Yeah. Yes. Especially shop owners. Yep. That was the biggest part. Like, that was the biggest, like, aha moment. I was comparing myself to everybody else in my town and you know what? They were all sucking it up too. Yeah. It's crazy. What were some of the highlights of those numbers that, like, jumped out at you?
Do you remember those? Oh, 25% on parts. I realized we were not marking our parts up nearly at all. Okay. Um, the, the labor portion of it really jumped out. That was probably the big thing that made us decide to go flat rate or start trying to recruit people that were willing to go flat rate. Okay. Because you do have guys that can turn over 40 hours and it's efficient and it's a benefit to the business.
But for the vast majority of the people who are on salary don't turn. So we got guys that are 25, 30, 32. So, you know, I'm trying to squeeze every piece of juice out of that orange. And so that was a huge part of it. So I know I need to get my tech costs down to like 15%. Okay. To this day, we do about 17%.
I try to pay my guys a little bit extra just to try competitively and stuff. So 17% is our goal now. Okay, but I need to get my tech cost down to 15%. Um, Aaron went through that P&L where he does, you know, uh, 25% parts, 15% labor, 40% overhead. And realistically, like, 30% of it is overhead and 10% of it, or 11% of it, is front of house, right?
And then he went, you know, he would always go through and broke it, break it down. I think you started at some point, you know, you started teaching some of that stuff. And, um, you know, we started going with like rent and marketing 13%. And so all I needed was somebody to tell me where I was supposed to be and I can go get it done.
That was it. So the goal numbers. Yeah. Goal numbers, goal percentages. Hey, you want to, you want to grow in marketing? 8%. You want to, you want to maintain 5% and you, you know, you want to put it on like hard maintenance, 3% of your revenue. So all I needed somebody to do was tell me what percent of my revenue I should be spending on all of these things or where my costs should be.
And I went and just made it happen. Just played the math because I knew I could manipulate the numbers to make the math work out to what I needed to be. That's so cool. So, um, and then, you know, just start— then you— gross profit per hour is a good metric. Like, you can't really make it a goal unless you're going to intentionally manipulate GP per hour, but it's a tremendous metric to know if your shop is profitable or not based off of what we know.
Sure. Yeah. Um, you know, across the board and stuff. So $300 gross sales per hour and $150+ gross profit per hour was kind of what the goal was. And so knew we had to get there. Yeah. Here's the positive side of what going through this did. Number one, it probably made me the most loyal human being that you'll ever meet. Yes. Um, because people were loyal to me and I did everything that I could to reward them.
And I just always felt like, like that was a karma that I needed to put in the world. I have to be loyal to people and I have to, I have to do that. Number two, it made me awesome with numbers, crushed it with numbers, um, which ultimately led to me being able to, um, I feel like be a, a pretty decent coach over the years.
Um, and so, you know, and it just, it just led to so many more opportunities. It made me a tremendous business owner. And I always say this, like Carl Jung, the philosopher, um, he's got a saying, it says, in order for a tree to touch heaven, its roots must touch hell. And like, I don't know if I firmly believe anything more because I really felt like we were, we were out, we were down and out.
Like, I just, there was, there's not a lot of hope. And, uh, we just kept working and keeping faith and just kept chipping away. And hey, every once in a while, um, you know, something would fall through the cracks, right? Uh, you know, I'd be late. I'd be, I'd be an hour late on a 9:41 payment or something like that. So eventually we just automated all that kind of stuff.
But do I want to go through it again? No. Am I glad in hindsight? Hell yeah. Like, it made it— it, like, it made— it made me. Oh, that goes right to the— what Aaron always used to say, never trust a leader without a limp. Yeah. There's a lot of things that you went through that, man, are eerily similar that I think about.
Oh yeah, when we went through our stuff. And, uh, so, so much the same there. Such a parallel story. Um, yeah, so it was— it's all— it actually, like, kind of makes me tear up a little bit just because, like, I don't look back on it with fond memories. Sure. And I honestly, this is probably the first time I think I've ever discussed it in detail.
Like, I don't think that I've ever gone into detail with anybody with this story. I don't like telling the story. Yeah, I really don't. Like, it does a lot of the optimism and the different things that I've been through, the way that I kind of operate. It all comes from, you know, it was all kind of built by that. So I would tell people this, if they're, if they're struggling, if they've got a massive amount of debt, Um, if they're, if they're trying to get out of it, man, that mountain looks as high as you can climb.
And the first thing you have to do is figure out a way to get cash flow positive. So your cash coming in has to meet or exceed your cash going out. Can I stop you right there? Yep. I think the first thing that they have to do is find the purpose to get through it all. You make a fine quizz. You had a why.
You had a chip, you had a why. You were gonna protect your parents' name. Right. You were gonna protect the farm. You were gonna protect who they were. And that chip was your purpose that made you go through all the hard things. Yeah. And do all the things. Oh yeah. But you first have to find your purpose. Mm-hmm. And like, You have to have a purpose because I'll tell you this, bankruptcy is easy.
Yeah. Don't do this if you don't have a purpose or why. Yeah. I wouldn't get in business if you don't have a purpose or why anyways. But if you're going to fight, you got to have a pretty clear understanding of what you're doing it for. And, you know, kids, family, any of that kind of stuff. I mean, it works out well. So first thing you got to do is you got to get cash flow positive.
And then the second thing you got to do is you, you have to, you have to be able to see it long enough term that what you're doing is sustainable. Because if you're the person who's completely solely reliant on making it cash flow positive, that burnout usually leads to, you know, mental health issues and a lot of stuff like that. You have to create a system or a business that like you got to have a couple of employees that, hey man, they turn you like 50 hours a week on average or 40 hours a week on average, whatever it is.
Sure. They can't be— you can't have guys that turn you like 60 one week and then don't show up for a week, or they only turn 20 for 2 weeks and then they're all over. Like you cannot If you're going to get out of debt, you cannot run a business that is constantly misfiring. You have to have a— it doesn't— it doesn't have to run at 10,000 RPM.
Sure. But it can't sputter. It cannot spit and sputter because that spitting and sputter just puts you right back into the debt snowball. Yeah. And so, you know, when you like— you don't want to get to a point where like everything's going good and then the day before payroll everything falls apart because you don't have reliable employees and then you don't make payroll and the reliable employees you do you could have, well, they're going to go somewhere else because they want a paycheck and you couldn't get it for them.
Yeah, right. So you got to figure out a way to get cash flow positive, and you got to build a business that you can run in second gear, but it has to stay in second gear. It doesn't go to first. You don't hit the brakes, you don't hit the gas. It's not all over the place, not herky-jerky. So cash flow positive, be the most— make, make your business as consistent as you possibly can, and be the most consistent person that you possibly can.
Because I showed up and I'll say this, I never— I didn't, you know, flip my gourd. I didn't— I like emotionally, I was always right here. Um, if we had a good day, okay. If we had a bad day, okay. There was never— there was no wave or any of that kind of stuff. Yeah. So, and then, and you know, it's just you had to show up with that confidence to give everybody else the confidence as well, right?
Every single day. You can't celebrate a little win even though you really want to because it It doesn't, it's not right. Like, hey guys, we got a $3,000 sale. This is awesome. You know, we just sold 3 grand on this car. Like, this is going to put us over our mark for this week. That's, you know, that's amazing stuff because like you become beholden to the money.
And you know what the win is, is like your people are like, have your back and they're like, they're performing and stuff. So, you know, and then when you have a bad day, you got, you can't go like hang your head and stuff because people feed off of you. You're the leader. And so, Um, you just have to be consistent and you just have to, you just have to work forward.
And I think those are— it's kind of funny because I don't really think people focus in on those things. If you're all over the place, your business is not going to be consistent. It's going to miss fire. Absolutely. If you're, if you're, if you get high and you get, and you get in a bad mood and you start yelling at people, it creates a volatile environment.
This guy jumps off, that guy jumps off, this guy decides, hey, I don't want to do this anymore. So you're, you're basically just, you're just Okay. You're pulling spark or you're pulling fuel away from the business and creating that misfire. And it's a struggle. So if you want to get out of any scenario, consistency, cashflow positivity, I know it sounds simple. Those 2 things are not.
I would tell my kids all the time, I'm like, you know why I got good at sports and business and all that kind of stuff? And they're like, why? I'm like, cause I'm always trying to teach them. I said, I never thought I couldn't. And so every time I saw somebody doing something, I never thought I couldn't do it too. I'm not saying I'm going to go try to ski through a revolving door, right?
But like, as far as legitimate stuff, like seeing somebody learn numbers or be in business or do some of those types of things, it's like in baseball. Like, I saw a guy hit a home run and I'm like, I never thought I couldn't hit a home run. So I worked hard to hit a home run, you know? And so, um, so that's just the way it was in business.
So I basically just started like emulating people and just, just copying. And, uh, because I never thought— I was like, oh, this guy can do it, I can do it. And it wasn't out of disrespect for that person. I wasn't saying like the person was stupid or I was smarter. It was just like, well, if he can do it, I can do it.
Yeah. So, um, I think it was like the Like Mike commercial in the '90s. Anything you can do, I can do better. Yeah, be like Mike. And, uh, so that was it, man. So I just started like copying and pasting and just— I thought I could do it and I never thought I couldn't do it. And it turns out I still have not proved myself wrong.
So it's so cool. So, so this, this powerful community, especially our Light, uh, community, a Light program. Yeah. Um, so the shop owners are just, you know, they don't have a lot of time and they, they just, they get the group coaching and they get around the environment and you have a whole community that we provide that's, that's online. You can interact with them.
We have coaches that come on and you get teaching from, from group coaching. So all of this community aspect drives you forward a lot because you see, and that hope is driven time after time. Like, you hear stories and you steer— you hear these stories and go, oh, maybe I can, maybe I can. Well, let me tell you this. People say, oh, I'm busy during the day, so I have to join this program, or I have to join that program, or I have to have this scheduled in the evening, or that kind of stuff.
My best coaching calls came in the middle of the day because I could walk right back into my store and do the thing that I just committed as I was going to do. Wow. Right. And if I had that idea at night, it probably didn't get done tomorrow. It might get done in the future. But you automatically have— you automatically have this buffer of procrastination from I can't go in and have a conversation with my team at 8:00 at night.
Sure. I got to wait till in the morning, but I could get off the phone and I could go have a conversation right now. I get off the phone and I made a decision to let somebody go. I could go walk in there and I could let them go right now. I didn't have to wait days for it. Sometimes the best thing you can do when you're in the firefight is close the door to your office, sit down and tell everybody you're going to be untouchable for an hour.
Sure. And get on a phone call and focus on what you need to focus on right in the middle of the day. Wow. Um, and you know, and it's like, as we talked about it, like I didn't, I didn't have the ability to join like a light program, which I would have 100% done. Like immediately. Sure. Um, because again, I was paying, you know, I was struggling to pay $1,800.
And, and, you know, Light's significantly— probably the most affordable program in the coaching space. Yes. Um, and it's crazy because you get what you get out of it. It's like insane. Yep. Um, but yeah, man, I mean, all of the basics, all that kind of stuff. I mean, you did— you— if I would have had that, yeah. I mean, I literally grew my shop $100,000 in the first month.
Well, that's my point. Like, with the Light program, just watching the videos, and, and I never realized what you just said. I would lock myself in the office and watch a video during lunch. I'd be eating a sandwich, and then you'd go out and do it, and then I would go out and do the thing. If I had had a program like Light, just, you know, the law of compounding interest that started me back in the early 2010s, whatever.
Oh wow. The amount, the amount of money I would have now That'd be crazy. Yeah, I mean, and that, you know, that money would be making more money. It'd be interesting and stuff. So Ryan, what an amazing story. Million dollars in debt, worked your way through that. So proud of you. So proud of all that you're giving back to ShopFix. You are leading, like, you are now a lead coach and you're coaching all the other coaches and you're leading and you're driving and you're, your influence is changing thousands and thousands of lives, and we could not do this without you.
I'm super pumped, uh, through everything that you've, you've done, all the work you put in. Super proud of you, man. Thank you so much for all you do. You'll look back in this and you're going to change this industry. Like, Ryan Hillebrand's mark on this industry is going to be massive.
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It's Lucas Underwood from the Changing the Industry podcast and L&M Performance here in Blowing Rock, North Carolina. I am joined today by the one, the only, Mr. Cecil Bullard. We're gonna be talking about car count versus profit. Cecil, how are you today, buddy? Cecil Bullard: I'm doing fantastic as usual, Lucas. Lucas Underwood: Very good. Very good. So Cecil, one of the, one of the things I'll never forget, I taught a class at a industry event one time, and I had been in another class where the person was talking about do whatever it takes to get them in the door, and they'd been in a shop, and they were in their own shop, and the, the advisor had turned down a car at 4:00 in the afternoon that came in for a coupon oil change and wanted to wait. And so she chased the person back out into the parking lot and said, "No, no, no, no, no, we'll get you in. We'll make it work. I'm gonna pull a technician off something else. I'm gonna put them on this," and fired an advisor over it. And I've, I'd been in that class, and I'm talking about that in this training, and that person was sitting in the back of the class and I didn't see Cecil Bullard: him. Yeah. Lucas Underwood: And, and the thing that I said about it was this, is I said, "Listen, one of the most impactful things that I've ever experienced was being on the other side of an experience like that as an advisor, as a technician, what it feels like to feel that kind of pressure and why we shouldn't do that to our people And so I know there's been a massive movement, movement in the industry that's pushing people to say yes to every car that comes in the door. Doesn't matter what it is, just more cars, more cars, more cars, more cars. And I have had a very, very different experience than that. I am someone who has experienced a higher ARO with less stress and less pressure on our people, a better experience for the client, and I have found that that works best for me. And I'm not saying it works best for every organization, but I wanted to dig in with you and talk a little bit about this. Are you a say yes to every car man, or are you a balanced car count and balanced ARO man? Help me understand. Cecil Bullard: I think there's a, I think there's both, frankly. Um- Okay ... it, it has to make common sense, and I think you're really talking about two different things. So first of all- Yeah ... you know, before you fire someone for not doing what you want, does the person really understand what you want, right? Yeah. I mean, is that, is that well defined? Did the guy know that no matter what, I have to bring that car in? Uh, you know, so at 4:00, your service advisor made a decision. He'd made promises to other customers that they would have their cars. Yeah. And instead, now you're jumping in the middle of that and you're saying, "Well, I'm gonna fire this guy because he turned down a, a discount oil change or whatever." Yeah. Maybe a dis- and it- maybe a dis- you know, the guys, the discount oil change guys would say, "Well, yeah, but we do discount oil changes 'cause it leads to other sales." Lucas Underwood: Right. Cecil Bullard: But so that's one thing, you know? I- I- is the person who works at your counter... Um, I, I was in, uh, North Carolina. You saw me last week. I was on the road- Yeah ... for four da- after one of my meetings, and this happens a lot, one of the kids came up, young guy, uh, looked like he was about 14, but he was probably in his 20s, and he's like, "I'm a third generation. My dad runs the shop, but, but you know, my dad, he's getting in the middle of everything. It's really hard." And, and, uh, I, I always say you work for someone, they write you a check- You have to make a decision about what you're willing to put up with or not put up with, right? For sure. As an, as an employee, right? Lucas Underwood: Yep. Cecil Bullard: And so when you decide that I, I wanna work here and I wanna take the check, i- in a way you also decide I'm gonna follow the rules of the company, whatever those are. Yeah. Whether Cecil agrees with them or Lucas agrees with them or, or whatever. None of that really matters. What matters is that the person that's writing you a check is, is basically saying, "This is how I wanna do it," right? Lucas Underwood: Right. Cecil Bullard: And, you know, behind the scenes, we can have all the arguments we want. We can sit down and go, "I don't think that's correct." Um, a- a- but until the owner changes their mind about how we do this, then you gotta do- That's how business Lucas Underwood: runs ... Cecil Bullard: you gotta do how, what the owner wants. And so if that employee got terminated legitimately because- Yeah he knew better, then I'm, I'm fine with that. I, I, I think we have a craziness in our industry. I think we've all lost our minds because You know, you, you look at car count, car count. I mean, that's everybody's... That's like the mantra, right? More cars, more cars. I'll make money if I have more cars. Yeah. Well, that's, that's not necessarily true. It's never been true, frankly. Lucas Underwood: Right. Cecil Bullard: Right. You know, we have these shops. I mean, I can't tell you how many times, you know, having done seminars in the industry for well over 20 years and, and, and worked with automotive- thousands of automotive shops, we have these shops that come in, they're doing $2 million a year worth of business and losing money. Lucas Underwood: Yeah. Cecil Bullard: And, and so... And we also have shops, frankly, that are doing, you know, uh, 700,000 and losing money, and, and I'm pretty sure there's shops out there doing 10 million and losing money. Yeah. Uh, there's a balance and there's a way to run your business that is successful, right? Yep. Lucas Underwood: Absolutely. 100%. So- And, and look, h- I, I'm gonna, I'm gonna take a play directly from the Cecil Bullard playbook, okay? Hey- I'm gonna pull the play straight out of the playbook because you said something that I think we need to address right here and right now, okay? We Cecil Bullard: lost our minds in our industry? Lucas Underwood: Well, I mean, you would've had to have had one to have lost it, okay? You have to have something to lose it. So, I, the industry in that sense, we're in trouble. But, you know, th- this brings up something that's completely off-topic and, and I'm just gonna ask you what you think about it. There's all these technicians who are really upset right now, right? They're, they're very disgruntled, and it's primarily in the dealership space, right? You know I make these videos and they come out- Yeah every single Tuesday, Thursday, Saturday and Sunday. Yeah. And these videos come out, and all these dealership guys get so upset and so mad because they think that I'm talking about the dealership space. And I keep saying to them, like, you set the terms for what you're willing to accept in that, that job, in that role as an employee, and if you don't like the job, for God's sakes, leave. Cecil Bullard: Yeah, there's- And if Lucas Underwood: everybody leaves- Cecil Bullard: There's so many... There, I mean, you know, I, I think if you got a thousand shop owners in a room and you said, "How many of you need a good technician in your shop?" You know, 999 hands would go up, right? Yeah. Um, the, the... And, and yet we have these techs that are so miserable in their lives, in their sh- in the shop that they're at, and the, bec- the owner doesn't pay me, doesn't appreciate me, doesn't whatever, or she doesn't- Yeah or whatever. Okay, Lucas Underwood: cool. Why Cecil Bullard: are you there? Go somewhere else. Right. I mean, holy, holy crap. Um, yeah. I'm with you, man. I mean- I am like, uh... And I was t- I talk about the level of incompetence you're willing to accept. I, I do that- Yeah ... with owners because, you know, nobody's gonna be Cecil, right? Yeah. And by the way, in Cecil's head, in my brain, I think I do it right all the time. Right. Yeah. I mean, there's a piece of me that knows that's not true, right? But we're all a little- Sure ... insane in some ways, and we think that, you know, we, we know how to do things, and we think that our way is the right way. And, and, but as an owner, I'm gonna work twice as hard as pretty much anybody else, you know? Yeah. If it... I, I was talking to one of our, um, our marketing people. I, I used to print our workbooks, and I used to write our workbooks, and I used to edit our workbooks. Yeah. And, excuse me. I don't, I don't do that now, but I was, I was talking to her and I said, "You know, I used to be here at 2:00 in the morning-" Lucas Underwood: Yeah Cecil Bullard: printing workbooks because I had a class the next day that I needed the workbooks for- Uh ... and putting them together. 100%. And now I'm really glad I don't have to do that. Lucas Underwood: But- We, you know, we got a, we got a review the other day b- at the family business, and it said, "The owner was in there serving food." And I wanted to reply and say, "Yeah, because, like, I gotta do whatever I gotta do." 'Cause Cecil Bullard: everybody quit, and, and I'm in trouble, and I c- I'm the only one. Otherwise, I wouldn't be there. Lucas Underwood: Right. I've gotta do what I gotta do, right? Yeah. Like, this is how we're gonna survive. And, and I, uh... What is it that old Dutch always says? Like, "I'm paying for the blessings of tomorrow with the sacrifices of today." Of today. Whatever it takes. But Cecil Bullard: we a- you know, a- and so you, you create the level of incompetence. And I would say from an owner's point or a manager's point, you say, "Okay, in that position, I'm willing to accept 3% warranty," right? Yeah. So I've got a tech, I'm willing to accept 35 hours a week as a, okay, that's, like, you, you, you hit 35, you're, you're still in my good graces. You- Lucas Underwood: Right ... Cecil Bullard: you only have 3% warranty, you're still in my good graces. But, but also employees have to do the same thing. I mean, you have to decide, what am I willing to put up with? Am I willing to put up with- Yeah ... crappy pay? Well, if you do, and you take the check, and you keep taking the check- Lucas Underwood: Ain't Cecil Bullard: nothing gonna change then shut up. Right? Right. I mean, stop bitching about it. And we're, we're a, an interesting industry. Like you said, maybe we never had a mind, but- Lucas Underwood: Yeah ... Cecil Bullard: you know, we, we, we constantly eat our tails, you know? Yeah. We constantly bitch and bitch and bitch, and, and we don't W- I don't even think we fully understand. So, you know, I'm pretty sure if, um, if, uh, uh, Aaron Stokes was still alive and, and we had Aaron on this, Aaron would be saying, "Yeah, you say yes, and you say yes because of this, this, and this," right? Yeah. Because that was w- that's one of their philosophies, was that yes philosophy. And on the same time, I would be saying Yeah, but sometimes you gotta say no. Yeah. Because you've already made promises to other customers because you're pulling a guy off of a $5,000 job that he could finish up- Lucas Underwood: For a $29 Cecil Bullard: oil change ... and you're gonna have him do a, an oil change where you're gonna lose $35. Lucas Underwood: Yeah. Cecil Bullard: And then he's gotta come back to the $5,000 job, and he's gotta get his head back in the game. So now you've increased the odds of, of mistakes happening, comebacks, et cetera. And so I think there's a point where you say to the customer, "Look, you know, we, we would love to do that oil change for you, absolutely. Only I can't do it tonight, right now, because my techs are all tied up on other jobs, and we've made promises to customers." Absolutely. "And I'm pretty sure if you were one of those customers who I made a promise to, you would not want me pulling the tech off of your car to do someone else's- To, to do that ... service or whatever it is, right?" I, I think- And it's not even about a $29 oil change. If it was a $300 oil change, I still wouldn't pull my guy off of a $5,000 job- Yeah at 4:00 to do that oil change. Lucas Underwood: I, I think it's easy, right? Like, so, so my vision of leadership is, is my job is to create a awesome environment for my internal customers, my employees. Right. And, and currently I'm not in the shop that much, so it is my managers' job to create an amazing experience for them, and then they in turn create an amazing experience. The desired outcome is a safely and properly repaired automobile for our consumer that is safe and reliable for them and their families. Or that, that's what we're trying to accomplish, and we have the guardrails which say, "Here is the, the metrics of profitability that we expect, and so you guys stay within these guardrails. Here's where you're going. This is the roadmap. This is what we want." You saw the roadmap. Well- I've, I've got it on the whiteboard, right? Cecil Bullard: Yeah. And so- And you're also not, you're not setting yourself up for success here, right? I'm, I'm bringing a, a $29 oil change. So I'm working with, uh, big old tire guys, uh, not, not the big company, but a guy who owns three locations. Yeah. And we're doing free tire rotations and free brake inspections. Yeah. We're doing hundreds of them. You know what we're selling? Probably Lucas Underwood: nothing. Nothing, Cecil Bullard: right? Lucas Underwood: Right. Cecil Bullard: Because we're so busy doing the tire rotations and brake inspections, we forget to look at the car. We don't have time to get to the Lucas Underwood: actual work Cecil Bullard: that they could approve. We, we forget to estimate the work and, and we don't have time to have a conversation with the customer. Yeah. And so I'm, I'm literally going... I said, "Why, why do you guys do free brake, uh, you know, inspections, free tire rotations?" Yeah. He said, "So we can look at the car." Well, you forgot that- Does it matter if you're not getting the end of it? somewhere along the... Yeah. So now I'm gonna bring this, this oil change in, and we'll get to that question in just a second, but I, I just have to make the point. I'm gonna bring this guy in at 4:00. It's a waiter, you know? Yeah. Uh, we're gonna service the car, and if I have a good technician do a good inspection, we're 35, 45, 50 minutes in. So now we're pushing 5:00 Then we will find stuff on this car that needs to be talked about. Customer may not buy it, but it needs to be talked about. The whole reason I'm doing the cheap oil change is to get the guy in so I can look at the car and try to sell him the things that he really needs, right? Lucas Underwood: Yeah. Cecil Bullard: Except now it's close to 5:00. Is that customer gonna sit for another 15, 20 minutes while- Lucas Underwood: Yeah ... Cecil Bullard: my service advisor estimates the work, and then is he gonna sit for another 15 or 20 minutes with my service advisor after that to discuss what he needs- In- ... so that he can make a good decision? Lucas Underwood: In this instance, the, the, their theory was is like just, just find one thing wrong with the car that will make them leave it, and then do an inspection and provide the inspection later. I didn't feel like that was very kosher. Cecil Bullard: It's not my, it's not the way that I would- Lucas Underwood: No, I didn't feel like Cecil Bullard: it ... I would approach it. And it's certainly, it's certainly not the way that I would teach. I don't wanna have three phone calls with you, right? Yeah. Or three meetings. I don't wanna find one thing and say, "Oh my God, your, y- you know, your oil leak is coming out of the, the whatever timing cover so badly, we've gotta do your timing cover, and it's gonna cost X, Y, Z." And you go, "Okay, you know, I've seen the leaks. Do it." Yeah. And then you leave And then I go, "Oh, and now we've had time to check the car over, so here's another $5,000 worth of crap." Right. I don't wanna have that. I wanna have one conversation. I don't wanna have three or two, right? Right. I may have two because when we get in the middle of stuff, uh- Yeah we may find something- My vein's gonna have to- ... that are related that, that we can't see at that point in time with a basic inspection. But I certainly don't wanna have three conversations. And- Lucas Underwood: Yeah ... Cecil Bullard: and I think you're, um... Everything is i- with a client is about how does that client feel about us, right? Lucas Underwood: Yeah. Cecil Bullard: And that experience with us. And, and so by telling him yes, I made him feel good, okay? So yeah. Tell him, any, anytime you tell someone, "No, I, I really can't do that," if that's all you say, you're in trouble, right? Lucas Underwood: Yeah. Cecil Bullard: Or no. Uh, nobody wants to hear no, right? Yeah. "Oh, my gosh, I would love to do that for you right now, but unfortunately there's just not enough time, and if we did it right now, we wouldn't do you a justice. We wouldn't be able to-" Yeah "... inspect the car. We wouldn't be able to tell you about what's going on with the car. You would not have the information you need to make intelligent decisions, and my whole job is making sure that you have the information you need to make the right decisions about Lucas Underwood: your car." Is advising you, being your advocate. Cecil Bullard: That, that's what I do, right? Yeah. And so this, this yes mentality and this car count thing of just driving as many cars through. We... I watch... I'm a numbers guy. You, y- everyone in the industry kinda knows, you know? Cecil understands the numbers or thinks he does. And- Yeah and I watch shops drive car count, and as they drive car count, I watch sales go down. I watch- Yep ... average repair- Yes ... orders go down. I watch mistakes go up. Employee satisfaction Lucas Underwood: go down. Cecil Bullard: Yeah. The whole nine yards. Employees are, are running around- Yep ... like chickens with their head cut off. Yep. There's a lot more inefficiencies that, that happen in the business. Yeah. And so if you, if you run a shop and you really pay attention, you'll learn where your sweet spots are, right? Yeah. Where does the shop make m- the most money? Where does the shop create the most happy clients? Where does the shop create the best average repair order? You know? Yeah. Those things that matter to me. And then where does the shop create the most profit? Because y- I, I have to, I have to be profitable here i, in the short term, and frankly, in the long term. Yeah. Otherwise, I, I have to go work f- For somebody else, and I'm not employable Lucas Underwood: Right. I, I'm the same way, and I, I think it's important, right? O- one of the things that I'm bad for doing is painting with a broad brush. Yeah. If you own, own a tire store, right? And, and you can turn hundreds of tires a day, that, that's a different model than what we're discussing. We're not talking about a high volume just tire store or something like that. That's a very different model. But even then, these same practices work in that tire store the same way they work in, in a mechanical shop. Cecil Bullard: And- Most of, most of the tire guys that I know are- Mm-hmm ... probably doing 50% tires, 50% um- Mechanical ... at least. Yeah. I mean, I know there's some that are 70% tires, 30% service, but I don't know of- Yeah ... any tires, uh, other than maybe discount tires, that are only doing tires. Just tires. Yeah And not getting into any of the service at all. Um- Lucas Underwood: Well, you know, I, I thought, I was, I've talked with Mark Ponz a lot. Brilliant, brilliant businessman, right? And, and one of the things that I always learned from Mark was, was, "Hey, watch the way we do tire business," and then we kinda shift gears in the mechanical business. You have to. It runs a little bit differently, right? Cecil Bullard: It's a different business, right. Lucas Underwood: And so you've got your tire team that's out here just nailing the tires out, and that's what they do every single day. And, and I've, I've, because of ASEA, I've had some amazing opportunities to work with some of the best tire men in the entire country. Cecil Bullard: Yeah. Lucas Underwood: And, and I always, I was the guy saying like, "You can't make it with tires." How do you make it? And then I meet Mark Ponz and I'm like, "Whoof. He did more than make it with tires." Cecil Bullard: Holy smokes, you can make a lot of money with tires. Yes. But- Lucas Underwood: Yes ... Cecil Bullard: it's a different margin, it's a different business. Lucas Underwood: Yeah. And it, it's ran differently. Cecil Bullard: Yeah. Lucas Underwood: And so, you know, I found my sweet spot to be three cars a day per tech, somewhere between $900 and $1,100 on my ARO. That, that's my sweet spot. That's where we run. That's where things work. We get too much higher than that, we start getting into very complex jobs. And, and listen, I talk to a lot of shop owners, "I got a $3,000 ARO. That's too high." And they're like, "What are you talking about that's too high?" Well, Cecil Bullard: if, if you're a diesel shop, it's not. For sure. If you're a European shop, you're pushing the edge. But- For Lucas Underwood: sure ... Cecil Bullard: but if you're a general repair shop, it's, it's too high, right? Lucas Underwood: Exactly. It means you're Cecil Bullard: doing engines and transmissions all day. It also means you're doing a lot of heavy duty work. Engine repair. And if you're doing a lot of heavy duty work, the margins and the matrixes that- You currently would have in place normally that would be taught to you will never work for your business- Yeah to make the profit you need. Lucas Underwood: Exactly. Right. You're 100% right. You're 100% right. And, and I think that's why, you know, it's like when I talk to folks about coaching with the Institute, I'm always saying, "Listen, there is no cookie cutter model that fits every shop." Like, this is a- I think there, Cecil Bullard: I think there is, frankly. I mean, if you say, "I'm a tire store," there's a model that works best. Yeah. If you say, "I'm a- I don't Lucas Underwood: disagree ... Cecil Bullard: I'm a discount store-" I don't disagree with that ... there's, there's a model that works best. Yeah. But, you know, I was... A- and again, I, I have never run a discount store, so I've never done- Yeah ... a cheap oil change or anything cheap. Or frankly- Right ... I'm, I never, when I was running shops, I never was a discounter. So- Yeah ... I don't understand that model. And I know some guys, however, that run really discount. Yeah. I've known some guys in my life. And, and their model works for them, only their techs are usually, uh, pretty transient because- Yeah they're just- Discount model, that's it ... they're not paying them enough, and they're running too many cars through, and that's, their service advisors can be somewhat transient in that business, and their customers can be somewhat transient in that business. Yeah. So the other part of that is if I'm running a discount model, I have to keep really hounding- Yeah marketing. Tha- those are the guys that are also saying you need to send out 10,000 to 40,000 mailers every month so you can bring- Yeah ... these oil changes in, so you can do enough business to- Here- ... you know, to be profitable. Lucas Underwood: Here, here's my thing, though, okay? When, when we look at the numbers, right? When we look at the financials, because I talk to Eric Jordan all the time at Geisen. Cecil Bullard: Yeah, yeah. Lucas Underwood: And I'm like, "Dude, I... You know where I was at, I didn't have clean numbers." I, I ran through a, a spell where we didn't have good bookkeeping and, and our numbers were a mess. Cecil Bullard: Yeah. Lucas Underwood: And it's impossible to run a business without good clean numbers, right? And so what I'm saying, though, Cecil, is that without good clean numbers, without good clean data, there is no model that's gonna work. And I think that when they have good numbers, that GP number that you have to hit every single month to pay the bill- Cecil Bullard: Yeah ... Lucas Underwood: what, what the shop down the street's charging- They don't, they don't- ... is irrelevant to you. Cecil Bullard: Yeah. They also- Lucas Underwood: What you have to make is what you have to make. Cecil Bullard: If you don't have clean numbers, you make mistakes. Yeah. And you make bad decisions. So, you know, imagine- I've made bad Lucas Underwood: decisions with clean numbers, Cecil. Cecil Bullard: Yeah. Right, yeah. But, but, you know, imagine that we brought a new car in or a, you know- Yeah ... a four-year-old whatever, and we didn't have a scanner, and we couldn't get the data- Yeah ... out of the car, and so now what are we doing? Now, now it's the, you know, well, I, I, based on my experience, I think, or- Lucas Underwood: Yeah ... Cecil Bullard: you know, my tech is saying, "Let's- Yeah ... place re- let's rep- replace these six parts. Maybe that's gonna solve the problem." Yeah. I, I don't wanna be that company. I wanna be the company that says, "I know exactly what's going on with your, with your business, and- Yeah these are the three or the five things that we can do that will really improve your business and- Yeah ... put more money in your bottom line, create more happy, happier employees, happier- uh, clients, et cetera. For sure. Um, we do have a question. Let's- Yeah. Kyle ... let's get to the question. 2020, Kyle. I know that this is supposed to be ask me questions, so, and I've al- I have kinda read the question, but I'll let you read it. I read it myself, so. Yeah. " Lucas Underwood: I'm a mobile programming and testing company netting 8% currently." Now, Kyle is a, a fairly new company, very proud of him, doing awesome things. "My GP's 55% per RO, but my car count is only about 10 per week, so two a day. Should my next step be more investment into marketing or jump into coaching to maximize what I currently have?" Cecil, what do you think? Cecil Bullard: Well, I would, I, I, I would lean on the coaching side, and here's why. Lucas Underwood: Yeah. Y- Cecil Bullard: you're supposed to be making net 20, and your gross profit is off by, uh, what is that? 12, 14 points. Yeah. I mean, I need 62 to 64% GP. Lucas Underwood: Yep. Cecil Bullard: And I need to know where that's missing. For sure. And what I have to do to get that. So you can bring more cars in at this point, and you'll st- and, and if you maintain a, a net eight, you're just gonna... If you wanna make tw- you know, the 200 K you told- A higher Lucas Underwood: net eight. Cecil Bullard: I wanna make, I don't know, I wanna make $200,000. At 8%, $200,000 is an awful lot of cars to work on, an awful, awful lot of places to make mistakes, and a lo- awful lot of liability. Yeah. At 20%, you know, $200,000 is a lot less cars, it's a lot less liability, and a lot less places to make mistakes. I- So for me, I, I'm, I might do both. It, it would depend on, you know... I mean, 8%, if you're doing, you know, 10,000 a month, okay, I'm making 8%, that's, in my opinion, that ain't enough to survive. You know, if you're doing 100,000, you might do both. You might, you know, get coaching, improve your margins, figure out where your business is going wrong, and then while you're doing that, you might improve car count and put a few more, you know, butts in seats so that I can make 20% on more people instead of 8%. Lucas Underwood: So here, here's my perspective, okay? So, so thing number one for me here Is that you're exactly right, and my reasoning's a little bit different. I would want to fix my net and I would want to fix my gross profit- Gross Cecil Bullard: profit ... Lucas Underwood: first before I started stacking more clients in the door, because now I'm gonna have more attrition because I'm changing my model midstream as opposed to narrowing down and polishing my model right now and getting my model right before I start presenting it to more people, right? Well, then- So, so I can set the expectation early. Cecil Bullard: Yeah. And if you, if you do that, you'll have happier clients that will continue- Yeah ... to use you and come back. And- Lucas Underwood: I Cecil Bullard: agree ... this is a mo- mobile programming guy, so his client is probably not, uh, like the end user. This m- he may be working with more shops. I mean, there's- Yep definitely more information I'd need in order to- For sure ... evaluate him. And, and he is- These are the five Lucas Underwood: things ... he's working with a lot of shops. Right. Cecil Bullard: Yeah. And, Lucas Underwood: and I think he's doing some mobile diag too. Cecil Bullard: Yeah. Lucas Underwood: But so here- But you're- ... here's the next question to that though, right? Okay. Because I think there's a lot of mobile diag guys out there, there's a lot of mobile techs out there, and, and that does lead us to that next question is, hey- Like I, I'm not... If I do a DVI, how am I gonna upsell something? Because I'm really just coming out to do the diag and program the vehicle. Cecil Bullard: Well, in, if I'm working with other shops, I'm not doing a DVI. We're, we, we are just there to fill a, a place. That's why- Yeah ... I never liked, like, uh, being the alignment guy for the 10 shops around me. Um- Yeah ... because when the car comes in, I see things that- Lucas Underwood: Wasted Cecil Bullard: opportunities ... that the customer should be talking. We, w- we need, I, I feel like- Yeah ... oh, my God, why aren't they telling the customer that, you know, your upper control arm bushings are falling out of the car, and- Lucas Underwood: Yeah ... Cecil Bullard: you c- I can't even align it, right? It, I, uh, uh, but it, I have different roles in, in different places. And, and if I am coming out to do programming and I'm the, I'm at the end user, the, you know, the client who owns the car, and I do a DVI, I might have an opportunity to sell additional stuff. But do I have the tools with me? You know, do I have the parts there? You know, do I have the equipment? Can I do it wherever I'm at, or do I have a place where I can take it and do it? I mean, there's a lot of additional questions and information, you know, depending on the model that you wanna build, right? I- And- Lucas Underwood: Yeah. I- ... Cecil Bullard: I don't think you should run three different models. I think you need to find the model that's gonna work the best for you, and that's the model that you wanna run, and you wanna run it as, a- as, as well as it can be run. Right? Lucas Underwood: I, I don't know anything about the mobile business, and I'm not gonna pretend to. But I, I think if it were me, right, what I would be doing is I'd be working with professional shops, and I'd say, "Hey, what I'll do, you guys get the cars you need programmed lined up. You get everything you need. In other words, do you have multiple cars that are gonna need programming? Do you have things? Try and get those all scheduled on a day for me. I'll come out, and I'll get the repairs made if you need me to do repairs. Whatever. I'll get diags done. But get me a day's worth of work," right? Cecil Bullard: Yeah, yeah, yeah, because I can't be moving around. I'm losing- Exactly ... my time, and time has to be billable no matter what. So either I gotta- Exactly ... charge... If, if I'm, if I'm working with five shops in a day- And I'm traveling around I have to shop Lucas Underwood: to shop, I spend as much Cecil Bullard: time and gas money Lucas Underwood: moving Cecil Bullard: Am I charging enough? Yeah, do, am I charging enough to cover the vehicle, the, the expenses- Yeah ... the, the gas, the rent, the, uh, excuse me, the utilities, the payment, whatever, uh- Yeah you know, or... Utilities, holy smokes. You know, I bet I'm, I'm thinking one thing, and it c- what comes out of my mouth is something else sometimes. Um- Lucas Underwood: We're used to it, Stace, so it's fine. Cecil Bullard: Yeah, it's all right. Guy's losing his mind. Um- You Lucas Underwood: never had one ... Cecil Bullard: and never had one in the first place. Um, but am I charging enough? And- Yeah ... and by the way, if I'm going to one shop and I'm gonna be there all day, that cost, uh, can be less for that shop than if I'm going to five shops. If I'm going to five shops- Yeah ... I have to cover all the traveling time and all the expenses that go with it. I've gotta charge more, otherwise I only make 8% or I only make 3% or whatever. I don't make my 20%, and I need my 20%. Lucas Underwood: I, I, I think, you know, to summarize basically where we've gone with this is, is like, the, the base numbers, the 55 and the 8%, are not fixed by increasing car count. Mm-hmm. So we fix those numbers first. Cecil Bullard: Yep. Lucas Underwood: And then, like, we, we get some of that dialed in, and we get the model dialed in, we get the efficiency dialed in, and then we work on marketing to bring more in if we need it at that point. But that's, I, I, that's how I would take it. Yeah. Cecil Bullard: So imagine you were, say, building houses, and you weren't charging enough, plus you maybe weren't building the house in a correct manner. All right? Yeah. So, and I, I build more houses, I create more liability- Lucas Underwood: Yeah ... Cecil Bullard: that la- later I may have to go back and fix, repair, whatever. Um, I think you always wanna fix the model first. And, and there- Sure ... is a point, you know, hey, I'm a guy. I, I wanna start a business. I don't know what I don't know. Uh, I'm gonna get in there, and I'm gonna work my butt off and, and all of that, but there's a point in that where you have to say to yourself, "I want this to run well- Yeah and I want this, you know, I want... And so I need to know what it really takes to run it well, because I don't wanna work, you know, 12 hours a day, uh, in order to make the money I need to take care of my family or to- Yeah ... you know, take..." So yeah, I, I mean- A- and that, back to the... Okay, so I hope we answered that well enough, Kyle- Yeah, I think so and thank you so much. Thank you so much for that, that question. Um, and, uh, you know, back to this yes mentality, I told you I'm, I'm of both worlds, so I don't wanna tell a customer no, no matter what. Yeah. I, I really don't. But sometimes I have to say, "Yes, but..." Right? Lucas Underwood: Right. " Cecil Bullard: Yeah, we'd absolutely love to take care of that for you. However," right, "this is the situation." Uh, I always try to, um, to create some, uh, empathy, uh- Yeah ... around what's, what's going on in my world. Yeah. And, and by the way, if I get a guy that comes in who's really pissed off because at 4:00 I can't stop everything and change his oil- This is Lucas Underwood: somebody I want in my shop. Cecil Bullard: Yeah, and is that the guy I wanna work with? Yeah. And the answer is no. N- for me, the answer is- Lucas Underwood: Yeah ... Cecil Bullard: uh, uh, unequivocally no. Lucas Underwood: So, so many of these shop owners, okay, and, and I'm gonna be really blunt here, and I'm not talking about the Institute. You blunt? Wait a minute. Yeah, I know, right? I'm not talking about the Institute when I say what I'm gonna say, okay? Cecil Bullard: Okay. Lucas Underwood: But so many of these shop owners, they go to a class somewhere, and somebody gives them these ideas of what to do. Now, listen, I, I've been this guy. I've been disconnected from the front counter. I've been disconnected from the base, and I go to a class, and this person recommends... And, and I'm gonna tell you, why do you think coaches have got such a bad name? There's, there is a coach that, that if you go on TikTok and search his name, it's technicians cussing him. Like, every TikTok video is people just cussing this guy out, right? And it, it's, it's that they have become so disconnected from what it's like to do the job. Now listen- I think what happens is, is that owner has been struggling for a long time. I've told you about this in my personal life before, that I spent so many years fighting and just climbing and trying to get things right and dealing with the stress and the upset client and all the things, that the minute somebody was willing to walk in that front door and take that pressure off of me, I'm like, "Here you go. It's yours. Take it. Do whatever you want with it. I don't care." Right? Cecil Bullard: Like- Well, would you... I mean, if you're gonna listen to someone- Yeah ... give you advice, right? Lucas Underwood: Yeah. Cecil Bullard: Um, uh, you know, uh, am I going to do some research on that person or that company- Lucas Underwood: Absolutely ... Cecil Bullard: and, and find out- Lucas Underwood: Absolutely ... Cecil Bullard: you know, you know, what their clients are, are saying and, and, you know, where did that person get his education? You know- For sure ... what, what's the, where's the- Lucas Underwood: What's Cecil Bullard: their experience? Uh, as they said in What Are the Bona Fides, right? You know- Yeah ... um, uh, in, in whatever movie- Right ... I can't remember the title to, but, um, i- or are, are you just, uh... At one of our events, and again, I'm gonna be brutal but not name their name. Lucas Underwood: Right. Cecil Bullard: You know, last year, um, chose speakers based on the title of their thing. Lucas Underwood: Yeah. Cecil Bullard: And, and they got a- Never Lucas Underwood: actually inspected the class or anything. Cecil Bullard: They got a lot of complaints. Uh, uh- Yeah ... and I heard a lot of feedback from people saying, "Wow, I, you know, in 20 minutes I walked out of that class." Yeah. And, and so do you wanna ha- I, I'm not saying we don't wanna have new people in the industry, 'cause we do. We wanna bring new people in, but do you wanna have people that, that have no bona fides, no, no qualifications? Just, they're just basically- Well- The, the thing I hate about the internet is they're able to say, "I'm the expert on this," and all of a sudden- Exactly everybody believes they're the expert on this- 100%. Lucas Underwood: 100% ... Cecil Bullard: even though they don't have the experience. They don't- Well- ... have the, the basic knowledge to really- E- ... be the expert. Lucas Underwood: Here's my beef though, right, is like they, they can come in and say whatever they want and, and it's, it's like a lot of what's being taught in the industry right now has consequences that, that we're not paying for yet. And I believe there were a lot of things taught over the past however many years that we're paying for the consequences right now, right? Like, there's a lot of things that we're paying for that were done years ago, and this is just how the industry works, and now we're paying the price for it. We don't have any techs, and all of these problems and all this stuff's coming up, right? And so when I... I guess what I was saying about, like, they're teaching these things, but they've never been on that side of the counter. And so it's like the shop owner comes back and says, "Hey guys, we're gonna start doing this." Well, let me ask you, Mr. Shop Owner, how many years has it been since you've sat on that front counter? How many years has it been since you were the one getting the butt chewing because you did something that was shady or was... Right? Like, have you disconnected yourself from the, the experience? Have you disconnected yourself from the consumer, the advisor, the technician? So I'm gonna- Because many of the guys we teach- Cecil Bullard: Yeah Lucas Underwood: were technicians, they were advisors. And- Cecil Bullard: Yeah, but I'm gonna, I'm gonna, I'm gonna kick you in the teeth here. Lucas Underwood: Okay. I like it. Do it. Cecil Bullard: Just because you sat on the front c- on the front counter- Lucas Underwood: Mm-hmm ... Cecil Bullard: doesn't mean that you learned anything. Lucas Underwood: Of course. Cecil Bullard: So, so I think, um, like having a technician who becomes a service advisor, I would rather have a service advisor who was never a technician. Yeah, I- And I know a lot of shop owners are gonna go, "Man, you're crazy, Cecil." But there's bad habits that you learn as a tech- Yes, absolutely ... that are great habits when you're a tech, but when you're a salesperson, service advisor- They're terrible ... they're not good habits, right? Lucas Underwood: Yeah. Cecil Bullard: And, and so that's one thing. One thing is, okay, so you did it for 20 years. So what, right? And, and I know, you know, that's some of my bona fides. I used... You know, I- Yeah ... I did this. This is... I've, I've, I've run business, been successful, et cetera. I, I believe I've learned a lot of things that, that maybe many shop owners don't really know and understand. Here's, here's the other part of this. There are things that need to be taught to a tech that a service advisor should not be taught. Yeah. There are things that a service advisor needs to know that a tech shouldn't know, and, and there are things that a manager needs to know that are different than a service advisor, and there are things that an owner needs to know that are a, a lot different, and not all of those will, you will learn by being on the counter or by running the business, right? For Lucas Underwood: sure. Cecil Bullard: And, and listen- We... I've got guys that has, have been doing this for 30 years. I see them all the time. They come up and they're like, "Yes, I've been, I've had a shop for 30 years" and, and their business is worth $150,000 all in. And they, and they have no money. Right? A- and but they've been working at this for 30 years. Lucas Underwood: We've always done it this way. Yeah. But, but here's my point, though, is, is where I'm going with this is a little bit different. Where I'm going with this is it's been so long since you've sat on that front counter, and your policies and procedures are causing problems for the front counter that you don't even see. Cecil Bullard: I, I cannot use my policies and procedures when I was running a shop 15 years ago for a shop today. Yeah. Exactly. Lucas Underwood: Um- Cecil Bullard: Exactly ... and, and we don't teach that, you know? Lucas Underwood: Yeah. Cecil Bullard: It might be a good place for you to start, because you can see what a policy and procedure should, should look like. Lucas Underwood: Yeah. Cecil Bullard: But to take my policy, even my sche- the way I scheduled- Lucas Underwood: Yeah, Cecil Bullard: completely different um, uh, today, I think it's a bit different, right? I, i- it has to be modified. But- And that, another thing you want your coach to be is somewhat flexible on certain things, because- Yeah ... if they're not, they're gonna teach you what they learned 25 years ago, right? And- Well, Lucas Underwood: I, I mean, I guess my point in that, though, is let, let's, let's go back to the example given, okay? Of, hey, we're gonna have this situation where we bring this car in, and they've got a coupon, so we just wanna get the car in to convert it into a car that we can turn into a higher ARO, right? Now, I've got an advisor who's at the end of the day. Yeah. They're trying to make all of their telephone calls, they're trying to update all of their clients, they're trying to get everything cleaned up. Cecil Bullard: Once finished the 15 tickets that are going on- Exactly ... they get the money in the bank, et cetera. Lucas Underwood: Trying to make sure- Right ... the shop looks good, trying to get everybody wound down. They're, they're in the end of the day. They're phasing it out. They're getting ready to bookend the day. Plan tomorrow, right? Cecil Bullard: Right. Lucas Underwood: And now I've got a technician who's in the middle of a job, he's got an hour left, and I'm going back and I'm saying, "Hey, I need you to stop what you're doing. I need you to inspect this car. I need you to do an oil change right now. I need you to pull this thing in right now." And plus you're asking the advisor to go to that client, write an estimate for something simple, something that needs to be dealt with right now. It's a big deal to get the car to stay, and now I'm arranging a ride for this person, right? So the- Now you wanna talk about disgruntled, think about how that disrupts every single person in the shop's day. I've disrupted a porter, I've disrupted an advisor, I've disrupted a client, I've disrupted a technician. Cecil Bullard: I've disrupted my profits. Yes. I've disrupted my, my workflow. Lucas Underwood: Absolutely. Cecil Bullard: You know, one of the biggest, one of the biggest expenses in the automotive industry, the biggest cost and, and where we're losing the most money is that we do not have good workflow. Yeah. So the productivity issue, and we have a... Because of that we have a lot of techs complaining 'cause they can't get paid. If they're on flat rate and we don't have productivity, and it is the fault of the business because of our flow, um, then they got a, they got a legitimate complaint, right? Lucas Underwood: Yeah. Cecil Bullard: And, and what we're doing, I have a class called Stack the Deck, and what we're doing is stacking the deck against us. Yeah. We're not stacking it in our favor, Lucas Underwood: right? Right. Cecil Bullard: And so we're doing... By, by bringing that car in at the, at the last minute, we're doing everyone a disservice. Everybody. Lucas Underwood: Yeah. Cecil Bullard: The, the client, the car, the service advisor, the tech that's gonna have to be pulled off, and, and we're creating kind of hatt- havoc and, and bad attitudes. Lucas Underwood: Chaos. Yeah. Cecil Bullard: And, and if we create, you know, bad attitude and havoc in our, and chaos in our business, then what are our results gonna be? Lucas Underwood: Yeah. Cecil Bullard: Okay? Exactly. And you can beat guys only so long. You know, you, you can- Yeah ... be a forceful manager and, and use the whip or the, you know, the, the prod or whatever only so long when guys say, "Uh, no more of this." It is not a long-term strategy for running a good business that's gonna last long-term and be profitable long-term. It's just not a good strategy. Lucas Underwood: Yeah. Yeah. I think you're exactly right, and, and I think that that's where it comes back to me that, that if I build a workflow That is prioritizing profit over the car count, right? Because I, I don't believe in the, the high car count numbers. I- now let me tell you something. I, I had an epiphany a few years back because I was in three bays. You've seen the shop. Cecil Bullard: Mm-hmm. Lucas Underwood: I was in three bays, and it didn't take a lot- With Cecil Bullard: no ceiling. I mean, nine feet- Yeah ... or eight and a half feet or whatever. Yep. Yeah. Lucas Underwood: It didn't take that much to fill that shop, and it didn't take that much to pay that shop's bills. Cecil Bullard: Yeah. Lucas Underwood: And then you've seen the new shop, and I, I, I'm, I don't even have to tell you, it takes a lot to pay its bills, right? Cecil Bullard: Yes, sir. Lucas Underwood: And so I have a whole new appreciation for people who try and drive car count. Like I get it. I get it. Cecil Bullard: I had a... In the, in the class, I had a, a guy come up and he's like, "Hey, I'm just, I'm just me, and, uh, what should I do now?" And I'm like, "Well, first of all, I, I don't know enough information." Yeah. "But second of all, when it's just you in one bay, you're gonna have the least expense, but you're gonna make the most money." It's gonna be hard because, you know, you gotta be the service advisor. You gotta, you know, when you've gotta answer the phone- Yeah ... you have Lucas Underwood: to stop what you're doing- Maybe you can stack Cecil Bullard: that bank account full like that ... blah, blah, blah. But you, you can. Yeah. I also have to... Kent made a comment that, um, it requires you to hold the stick. Somebody has to hold the stick. Yeah. And my answer is, "It doesn't require me to hold the stick. It requires the stick to be held- Yeah ... and held by somebody that, that knows what, what they're holding and knows what they need to do, right?" Yeah. Flying a plane, I don't wanna put my, you know, uh, 13-year-old grandson flying a plane. He's no experience. I put the stick in his hand, we're probably in trouble. You know, I want, I want a pilot, I want Dutch at the- Lucas Underwood: Exactly ... Cecil Bullard: you know, behind the wheel, right? Lucas Underwood: Well, you know, it's funny you say that because I was getting ready to bring him up. I, I was talking to him years ago. I was really frustrated about the way the shop was going, and he said, "Son, let me tell you something" He said, "When I worked for the airline," he said, "it does not matter who flies that plane or who does what on that plane." He said, "Because I was the left seat captain, that was my job." He said, "I could let anybody I wanted fly the plane. For God's sakes, I could let a passenger fly it." Cecil Bullard: Yeah, but he- "But I Lucas Underwood: could give them- Cecil Bullard: But he's responsible ultimately for what happens on that plane ... Lucas Underwood: I could give them all the authority in the world- Yeah to fly the plane, but ultimately it was still my responsibility." Good luck. And I said, "What does that have to do with me?" He said, "You're letting a bunch of bimbos fly your plane." Yeah. Cecil Bullard: People who don't know. Lucas Underwood: Like- Cecil Bullard: That's like, that's like- You know? It's like- ... going to coaching and, and going to classes- Yeah with people who, who have a nice internet presence who don't really have the, the experience or the knowledge to really help you out. Lucas Underwood: Yeah, 100%. Cecil Bullard: You know? And, and, and- I, I see these, some of these new coaches come on and they say things and I'm like, "Well, that sounds really pretty, but-" Lucas Underwood: Yeah ... Cecil Bullard: you know, it i- i- it's not meaningful or impactful. It just sounds pretty. Lucas Underwood: Right. Okay, we've got a question here. Um, Steve from Wasp Automotive: "My question is how do you decide when adding capacity, another tech, actually helps profit versus creating more chaos?" Been there, done that. It's all in the numbers. It's all in your financials. Ha- I, what do you say, Cecil? What Cecil Bullard: do you- I think, um, I think you look at your business and you say to yourself, uh, you know, like, "I've got three techs. I have one service advisor. I'm probably... My flow is now starting to get affected because one service advisor, three techs." Lucas Underwood: That's Cecil Bullard: for sure. Uh, and 11, 12 cars a day, maybe 15 if you're running a lower ARO model, and that service advisor can't talk to all those people, answer all those phones, deal with everything that's happening and make that happen. So you say to yourself- Yeah ... "Okay, um, I'm gonna add a fourth, uh, uh, tech," before you really have your service advisor stuff really set up. So, you know, I'm, if I'm adding a fourth tech, I'm, I'm certainly probably at that point adding a second service advisor. And if you're, if you're willing, if you have your systems and processes down and your shop is efficient, the, if you have a, a decent ARO, if you, if you know your inspection process and your sales process is good, then let's add a tech. But if you're, if you're adding a tech because you feel like we're, we're stacked too deep and I can't get the work out, then y- y- Yeah ... it's not the tech you need, it's the process you need. Lucas Underwood: So- Right? ... w- what I do in my shop, okay, let me give you a rundown of how I do my daily planning, my weekly planning. Yeah. Is I'm monitoring how much work we have in the shop at any given time. So I know how many hours and I know how many dollars I have in the shop, and I'm saying, "Okay, I know what my typical sales per build hour are, and does that line up with the financial model we've put in place for the shop?" And so if I'm consistently at that number, I can take my hours and I can say, my technicians should be able to turn eight hours a day. There's gonna be days they're a little bit less, there's gonna be days they're a little bit more, but if I have X number of hours and it gives me a runway, because I view this like my runway, right? Like, how far can I go? And I run this shop somewhere between five and seven days out, is, is typically where it falls, right? Yeah. I wanna have between new appointments coming in, right, because I know my average hours per repair order, new appointments coming in versus the work that I have here right now. How much work would that give me, right? And a lot of guys come back and say, "How could you judge what a new appointment's gonna be?" Because it's my average hours per repair order. That's what we always run. It doesn't go up and down hours. It goes up and down five, 10, 15 minutes. It goes up, down .1, .2. It's not a huge swing. Cecil Bullard: Yeah. Lucas Underwood: And so now I'm looking at the shop and I'm saying, "Okay- If that is the case and I have this much work and I'm billing this much, is the work getting done? No, it's not. Okay, well now I have an efficiency problem in the shop. Cecil Bullard: Maybe. Maybe- Okay, the work... Go ahead. Maybe it's an efficiency problem in the shop. Maybe it's a, I have too many clients and I need another tech, right? So- Lucas Underwood: Well, I guess, I guess what I'm saying though is if, if I'm in that situation, right? So if I've got that number and my number is, is each tech should be able to do eight hours a day, and I am not moving that number through the shop, and I go and I look and I find out, hey, I got four hours per day per tech, that's an efficiency problem. And by the way, that's a- Adding another tech Cecil Bullard: will not fix that problem don't hire another tech. Yeah, because now you're gonna have- Unless you- Now you're gonna have five guys doing three hours- Doing four hours a day ... or whatever. So yeah. And, and all the marketing, all the money you've spent on that and everything else- Yep ... is just gonna go by the Lucas Underwood: wayside. 100%. So- But I'm gonna maximize what I have, I guess is my point. I'm, I'm, I, it, it's ran by the numbers. There's a formula. I Cecil Bullard: think, I think if you're smart, you're always maximizing what you have. And so- Yeah ... um, you know, you're, the question that I ask every day is, is why not, right? W- why- Yeah ... aren't we? Why, why, why isn't the institute growing faster? Why are we not, uh, signing up more people? Why are we, you know, whatever, whatever it is. Because the answer to that question is the answer I need to, in order to really move my head- Yeah ... right? Lucas Underwood: Yeah. Cecil Bullard: Sure. And, and so if you're, if you're saying, you know, I've got, um, six hours of productivity out of my s- out of my techs- And now I'm gonna hire another tech because I have too many cars. Well, m- maybe your price isn't high enough to, you know- Yeah ... maybe your price needs to be a little higher. Uh, so th- that's a way that you might manage car count. So we're booked three weeks out. Well, booked three weeks out is, is not okay, and what, what often happens is I, I have customers come in today, and they were scheduled for whatever, and then we found $4,000 worth of stuff they need, and they wanna buy it- Get bumped I said, "I can't, I can't do it today." Lucas Underwood: Yeah. Cecil Bullard: So they get bumped a week and a half out, two weeks out. And then the other problem is if I'm, if I'm scheduling that way, and, and I have new people that are, that I'm... They don't know who I am. Yeah. So they're calling for a first time. I need to get those people in either today or tomorrow. Yeah. I cannot- If you wanna retain that ... schedule those people. Yeah. Otherwise, that money I spent is wasted money. Yeah. And, and so, you know, there, again, there's these balancing and tipping points in your business that if you really understand the business and you're watching the numbers as, as Ken says, you know, if you know where you're going and you're, you know, you got s- your hand on the stick, and you got the data that you need- Yeah then all of a sudden, I'm making better decisions, and so I know what to do when I need to do it. And then- For sure. Lucas Underwood: Absolutely ... I Cecil Bullard: think, I think everybody should have mentors or coaches. Uh, y- you know, mentors, uh, uh, many of... Some of those are paid because you, that's what you hired them for. Yeah. And they might be your coach, and some of those are not. I mean, you know, I'll, I'll call you occasionally for something and say, "Hey, Lucas, what do you think about this?" Because- For sure ... frankly, I look at you in s- some areas as that guy where I can call you and get some good information. Right. Um, and, a- a- I just think we have so many people in our industry that they just don't know enough about the business and how- Yeah the business runs to make the best decisions, and so they keep running into the wall. Lucas Underwood: They were really good at fixing cars, and they were really good at maybe selling service. Cecil Bullard: Yeah. Lucas Underwood: But they weren't good at running the business that fixes cars and sells service. Cecil Bullard: Well, Lucas Underwood: how many- There's a d- there's a difference. Cecil Bullard: Yeah. And then, you know, how, how about how do I manage these people? I mean, I can't tell you how many times I've heard, "Well, my guys won't do good inspections," or, "They won't take-" "... 20 pictures of the car," or whatever. Ah. And, and, and I'm, I'm like, part of me is, is flabbergasted, right? Yeah. Part of me is like, how, how do you have people that won't do what you need them to do, and you keep writing them a check every, every week- Yeah right, or every two weeks? And, and then part of me is, is angry, like- Lucas Underwood: Yeah ... Cecil Bullard: are you, are you really that dumb that you, you can't figure this out, and, and manage people, and make sure that you're getting, you know, what you need out of your staff? And, and so I, the... I'm always two people in my head, you know? I'm just always. But they keep doing the same thing over and over. Yeah. And they keep thinking they're gonna get different results. Lucas Underwood: You know- Cecil Bullard: It's insanity ... Lucas Underwood: here, here's what stands out to me, because you know I've been working at the other end dealing with- Mm-hmm ... with much younger employees, right? Cecil Bullard: Yep. Lucas Underwood: And I had one a while back come up to me and said, "I really appreciate you holding me accountable." And I said, "What are you talking about?" And they said, "Nobody has ever said to me, 'Why didn't you accomplish this thing?'" And they just acted like I was gonna be upset or was gonna be mad if somebody came and said, "What about?" And they said, "The problem was is I never knew if I was winning or losing. And so I need somebody to tell me I'm doing good or I'm not doing good- Yeah so I understand where I need to go, but that's not happening anywhere else I've been." And see- Cecil Bullard: Well, it doesn't... In most places it does not happen, my friend. Lucas Underwood: Yeah. Cecil Bullard: And so- Lucas Underwood: Exactly ... Cecil Bullard: you know, we, we don't have goals. I'll, I'll go into a shop and say, "Well, what are your goals for your techs? How do they win," right? "Well, uh, they do a lot of work and they don't have any comebacks." Well, first of all, not having any comebacks is ridiculous because you can't work on cars without having a comeback. Lucas Underwood: You figure that Cecil Bullard: one out, buddy. Second of all, what's a lot? What's a lot of work, right? I mean- Yeah ... a lot of work is, is 10 hours a day. I mean- Yeah ... uh, people need... If you hold people accountable, if they understand, if you're fair, meaning- Yeah ... they know what their target is, they know what they have to do, and then you hold them accountable, they're very happy. They're happier than they can ever be. Yeah. It's the people that don't have any direction, that don't know if they're winning, you know, every two years, every three years they move to another shop hoping that they can find that thing that they don't have, and the thing that they don't have is goals, targets, accountability, and winning. I mean, those are the things you absolutely have to have to be a happy human being, right? Lucas Underwood: Yeah. Cecil Bullard: If not, it wears at you and it wears at you until what you do is you go online and you just bitch, right? Lucas Underwood: Yeah. Cecil Bullard: And, and so we got a lot of online complaining going on. Lucas Underwood: Yep. Cecil Bullard: Um- Lucas Underwood: The, the quickest way to a depressing life is unmet expectations. Yeah. And the only human being capable of setting your expectations is you. Is Cecil Bullard: that right? Well, and that's the other thing I think we all... You know, I, I always say, um, managers need to manage, meaning- Lucas Underwood: Yeah ... Cecil Bullard: you know, you... When I was a tech, I kept track of every hour I billed, okay? Now, the reason I was keeping track of every hour I billed was not because I d- I thought my company was gonna not pay me for it. The reason I kept track of every hour was because every day was a competition against yesterday. Lucas Underwood: Yeah. Cecil Bullard: So if I did seven hours yesterday, today I wanna do eight. And, you know, I, I, I'm competing against myself. In, in a way, part of my life has been managing myself because if somebody else- Yeah ... doesn't create the expectations for me, I create the expectations. Lucas Underwood: Amen. Cecil Bullard: Because I need the- The dopamine or whatever that comes from being successful. Lucas Underwood: Amen, Cecil Bullard: buddy. Uh, if not, at the end of the day, you watch me. I'm sitting watching TV doing this because- That's it ... I wasn't successful today, right? I di- I didn't- Yeah ... make anything happen. Lucas Underwood: Kent says, "Complaining can make the problem feel bigger it is to the point it feels insurmountable." Um, I- Cecil Bullard: Yeah, it happens all, all, all the time in this, in this industry ... Lucas Underwood: somebody told me one time that human beings can be in love with their problems. They can make their problems their identity, and so I think that Cecil Bullard: that's- Well, think, think about this. As a technician, I'm a problem solver. Lucas Underwood: Yeah. Cecil Bullard: Right? And problems are brought to me all day long, but all of a sudden- Yeah I become a salesperson or I become a manager, sol- creating problems so that I have problems to solve, right? Lucas Underwood: Amen. Cecil Bullard: And, you know, don't get me wrong, you'll... A- as a salesperson you'll have plenty of problems to solve. As a manager you'll have ple- plenty of problems to solve, but we have a lot of people in, in the industry that are creating their own nightmares- Lucas Underwood: Yes Cecil Bullard: and then they're living in them, and then they're complaining about them. Yeah. And, and, and my mind is like, "Okay, fix it." Lucas Underwood: Right? Exactly. Exactly. Cecil Bullard: It might not be easy. It might not be quick, but fix it. Stop doing what you're doing today. Start learning how to do something just a little bit different and, and because you keep going the same way, you keep getting the same thing. Lucas Underwood: That's exactly right. If you continue to do the same thing and expect different results, that is the definition- Is Cecil Bullard: insanity ... of Lucas Underwood: insanity. Cecil Bullard: Yes, sir. Lucas Underwood: Cecil, thank you for being here today. Cecil Bullard: Yes, sir. Well, thank you. I love these things. And- Yes, sir ... uh, thank you for those of you that participated and, uh, and asked questions, and we'll be back again soon I'm sure. Lucas Underwood: That's it. Well, I guess another month and we'll be back Cecil Bullard: here. Another month, and we'll make your head Lucas Underwood: hurt one more time. Another AMA. Yeah. Waiting to hear y'all's questions. Cecil, see you next time, buddy. Cecil Bullard: Love you, brother. Lucas Underwood: Love you, brother.
Ep 169: How They Doubled Revenue With Fewer People with Brian Moak
Ep 109 - Becca & Tony Zanders | The Truth About Selling Your Auto Repair Shop
Tekmetric transformed my shop. Plain and simple. Want that for yours? Touch HERETurnkey Marketing takes the stress of doing something I'm not good at off my plate. And gives it to someone who is. Click HERE for more.47 Consultants brings your shop’s story to life on social media, helping Carfix engage 60,000 people in Raleigh in just a few weeks. See what 47 Consultants can do for your shop, and tell them Big Daddy Mike sent you!Elite Worldwide's Ignite 2027 is coming up in February and NOW is the time to sign up. It's happening in Vegas February 4-6 and it will be the best 3 days of your shops year when you attend. Save $100 when you use code CONFESSIONS HEREWhen I used the maintenance tool for the fist time with Detect Auto, my mind was blown. My advisors had the same reaction - and then SO MUCH MORE TIME. Learn more about Detect Auto and book a free demo now!In this episode, Mike Allen sits down with Tony and Becca Zanders to discuss the realities of selling an auto repair shop and what it takes to leave behind more than just a paycheck. They share the story of building Heritage Auto Repair from the ground up before selling it to a longtime employee, explaining why preserving their legacy mattered more than chasing the highest offer. The conversation explores private equity, succession planning, burnout, and the emotional challenges many owners face after selling their business. Tony and Becca also offer practical advice for increasing your shop's value, building systems that outlast you, and creating an exit strategy that aligns with your long-term goals.Timestamps:00:00 Legacy vs. Payday: The Truth About Selling Your Shop 01:00 Meet Tony & Becca Zanders: Building Heritage Auto Repair Together 04:41 From Backyard Garage to One of Idaho's Top Repair Shops 07:00 Selling to an Employee Instead of the Highest Bidder 08:20 Private Equity, High Multiples & Internal Buyouts 10:42 Questions Every Shop Owner Should Ask Before Selling 12:14 Don't Wait Until Burnout: The Three Keys to a Healthy Exit 16:07 Defining Your "Why" Before You Sell 17:44 Choosing the Right Successor and Passing the Baton 21:14 The Emotional Reality of Staying On After the Sale 23:24 Losing Your Identity After Selling Your Business 24:18 Empowering Employees to Increase Shop Value 27:13 The D6 Elements: Building a Sale-Ready Business 35:16 How to Start Planning Your Exit—Even If You're Late 37:03 The Biggest Mistakes That Destroy Shop Value 39:40 Why Strong Processes Matter—Even After the Sale 44:02 Vegas Food Recommendations & Planning for AAPEX
AutoShop Ministries Episode 3 - From Technician to CEO: Pace, Purpose, and Long-Term Success
Joe Adams and Chaplain Devontae Tidwell discuss why endurance beats speed in leadership and business. Using scripture & practical examples, they explain how steady, sustainable effort builds lasting success. They challenge listeners to slow down, set a sustainable pace, and ask whether today’s choices will still be good eight years from now—emphasizing discipline, patience, and long-term planning.