Profit Panel: How 3 Shops Put $750K+ to the Bottom Line in One Month - Bonus Zoom Episode 7

Good morning, Glenn Piccolo here with Adams Automotive bringing you another episode of Master Tech to Millionaire presented by Autoshop Answers. Man, today we are kicking off the Profit Panel Series. We are bringing together some of our amazing HPP partners to discuss the transformation in the profit in their businesses and just how much that has changed and what that looks like today versus a couple years ago. It's absolutely life-changing. More importantly, just sharing how this concept works across multiple markets, multiple demographics. It will really change your perception on our industry. It's absolutely incredible. So joining me today, man, we've got the amazing Charlie's Latko's out of Massachusetts.

We've got JJ Mont out of Waldorf, Maryland, and we've got Lynn Massenville out of Tennessee. Man, this is going to be absolutely amazing. Thank you guys so much for joining. Let's dive in. Man, what a great group of people we have on for the Profit Panel, man. We've got Charlie Blacktoes. We've got Lynn Massengill. We've got JJ Mont. And when you talk about the Profit Panel, man, what a perfect group of people to come on this morning and talk. If I add up the record net profits for these three guys out of a total, I guess it'd be a total of five stores.

We're talking about a net profit of $750,000 to the bottom line in one month, by the way, in one month. JJ just had a record net profit. JJ, you on the line? Yes, sir. Yes, sir. what's going on brother let's go record net so record net was in um this is it was two months ago, 236 000 oh 236 000 net you know we're talking a lot about we're talking a lot about um you know there's a lot of training companies out there that are teaching people how to make you know $10,000 that are making no money or moving from $10,000 to $15,000.

And we're literally talking about making more net than you were grossed in before you started. And we have stores that are you making more to the bottom? Are you putting more money to the bottom line than what you were doing in revenue several years ago? Right. Absolutely. Absolutely. Man, it's crazy. It's crazy. And and, you know, another part of it is the market. You know, we hear a lot about the different markets and demographics. And what a perfect group to be able to say, look, let's look at some different demographics, some different markets, because, man, rural Tennessee, Lynn Massengill. You're in rural Tennessee, Lynn, huh? Oh yeah. Yeah.

You get rural very fast when you drive in this from either shop for sure. Yeah. So we, so we'll hear that. We'll hear a man. I'm in a rural area. You can't do that in my market. Uh, we'll hear about, uh, rust when we do our rack attack. I show people how we do the rack attack. We hear that you can't do that with rust.

And we've got obviously rust up in, in boston with charlie and uh some some rust in maryland i would imagine yeah not the outside as much not definitely not as much as charlie but hey man but there's definitely some rust up there is you know looking at all three companies they're you know just different shapes and sizes and they all end up with the same result which is obviously putting big money to the bottom line so i actually want to start with lynn this morning who's doing a million out of two stores i know you i don't know exactly your record i think 1.1 million out of two stores in a month putting big net to the bottom line and going back before you got through or came through, key-to-key, what kind of revenue were you doing?

Yeah, our record before key-to-key was .456 combined for two shots. 456 combined two shops. Um, and now you guys are putting a couple hundred thousand dollars to the bottom line, uh, which is just absolutely incredible. Change your business, change your life. I've seen your, obviously your story and, um, you know, it's just, just so incredible. So what really changed, uh, Lynn for you, I wanted to start with you on this. What really changed, and how'd you get a better kind of understanding of, you know, kind of the numbers and how auto hospitality could really drive big net for you?

Yeah, for us, it was basically, Glenn, just a huge mindset shift because before we were so focused on profit and the car and then all of a sudden we started focusing on people, hospitality, always saying yes and really creating that experience and building the relationships with the customers to add value instead of managing from the bottom line, cutting expenses. We've learned very fast auto hospitality increases value, which pays huge dividends from the customers. And customers will spend, they love you, they will buy from you. And that's really how we got started, focusing on the customer, always saying, yeah, I'm creating that experience and the sales and profits. followed.

Yeah, I mean, a lot of companies, they manage kind of backwards, they manage from the bottom up. And, you know, one thing that we do way different is we manage from a staffing perspective, like I've got to be able to staff my stores for success to be able to provide auto hospitality, so that I can charge accordingly to be able to give the level of service that the customer needs and wants. And the only way I can do that is I have to really, I have to pay good people to do that. And so if I do all those things and then it really doesn't matter what I charge.

If they're getting great service, they don't really care about, you know, what the person down the street is charging. Price actually just becomes, I mean, it's not that it's not an issue, but it's just way less of an issue.

What's true, you know, once you give them a level of service that, you know, just exceeds their expectation which in today's i mean in today's world it doesn't even take much to do that right to to actually exceed their expectation is do it is doing probably what would be considered like subpar or par customer service like 30 40 years ago uh but today it's like completely uh it's completely different and so the bar has been lowered and so it makes it even that much easier and so yeah you hit it there it's like focus on the process the concept first and then the rest will the rest will just take care of itself the number is always the byproduct of amazing service and executing the concept and you guys have obviously done man an incredible job on that.

Charlie what's up there, Got another star in the house. He's not in the office right now. He's still on the take five. Mike Quinn is visiting me today. Oh, Mike Quinn, man. Mike Quinn knows how to put money to the bottom line. He put major money to the bottom line. I mean, last year, 1.2 million to the bottom line out of the Woodland store. A store that was doing $135,000 a month, by the way, back in, I guess, I don't remember what year it is. It flies by so fast. Probably like three years ago, something. Who knows?

Yeah, three years ago, four years ago, whatever it was, when we took over that store, 135 gross sales per month. And now a print, you know, I mean, I think it's record printing. It's 130,000 percent. 157,000, 158,000 record print for the month. Yeah, so like you said, like Jay Jay's story, you know, that store now nets more than it used to gross, which is, it seems to be a very common theme here. Yeah, it's a pretty common theme. So, Charlie, you know, we talk a lot about rust. I always laugh when people talk to me about rust because, man, how could you make profit?

And how could you put big money to the bottom line in a shop that just has all these rusty cars coming in? I mean, how is that possible, man, in your market, man? How can you even do that? So I got to tell you, it's all in your mind, 100% of it. You just have to change your mindset. And not only will have RAST in Boston, and now people listening from the Northeast, they know what I'm talking about. So we actually put the system to the test last week. So Mike and myself flew up to Canada, Torraldo area. And they, you know, they have more RAST. It's heavier up north.

They use way more salt on the roads. So we walked in a store. We do a lot of work for, I mean, most of you guys know we do a lot of work with Midas. And they wanted us to go and train. We had a weekend of key-to-key up in Canada. But what we did on Friday, we rack-attacked in one of their stores out there. And guess what they have? A lot of rust. And it was really a big mindset deal. Because when you talk to people about, like, Glenn, you're a master on flipping calipers. You teach it, I've heard you, you talk about it so many times.

And it's such an easy process, right? Four on the floor when you inspect the car. If there's any questions on the brakes, just flip the car, right? And most people will come up to me in the northern areas and be like, oh, how about us? How about if a bolt breaks? And I say, you know what? How many cars did we do last year, let's say, in the Boston area between the two Pleasant Caratel locations? I think we have like 10,000 cars. And out of those 10,000 cars that I did this process to, what do we damage? Maybe one?

It's not even a measurable number to think of, right? But in the brain, we always think worst case scenario versus thinking the 9,999 times that it actually worked. So I said, we're not even going to think about this. We're just going to run the process. And guess what? We worked in a whole new market, a whole new shop. I've never been in that shop before. And we had a record day because we changed our mindset. That is really where it stands.

So when you start learning the process, I always say for people that heard my podcast and all this stuff, I always say the biggest hurdle I had to overcome when I started learning Todd's concept was me. Up until I changed my mind, it didn't work. Once I started believing it and just did it, then you're 100% worth. Yeah, and, you know, I know you're kind of prepared for what could happen if it's going to happen. And you know, one thing that I was noticing.

When we were at your store, when I was up there a few months ago, Rack Attack and McGoo is you have a whole drawer in one of your, you know, your toolboxes for your, your inspection area, which is a bunch of bolts that you're going to probably need. Cause you're going to break some bolts. Right. And so, so you've got all the bolts and you've got everything you need to fix it right there. So it's not a, you know, it's not a problem. It's just a minor inconvenience and then you can just kind of keep on going.

And if it's going to happen, you might as well be prepared for it. So you guys, you know, obviously do that really well. You don't use the excuse of, well, in my market, you can't do that. It's not the first time that we've come into a store. It's been done many times where we'll go into a store, execute our concept.

And we're not even executing our concept at really full throttle in terms of technology because we don't have necessarily all the tools that we need there because most shops aren't quite set up the way we are yet, but we'll go into a store and we will absolutely go and break a record. And the all-time record day gets broken and you think it's by coincidence? Well, of course not. I mean, it's just, we're doing the concept and it works the same across all markets. So, you know, a lot of people, they don't quite understand, you know, just a hundred percent about what we do.

And we're trying to get that message out and teach people because if they don't know it and they're getting secondhand information or they think they know or they heard something from somebody and they don't actually understand and don't know it, then it really just won't make sense to them. But once you see it and once you do it, like there is no other way. There's nothing. Todd always says, what could you take away from this? And it's like nothing. You can't take anything away from it. It's a perfected business model.

And so, man, I'm just so thankful that we get to operate with it because, man, it sure does make it easy. You know, one thing I want to talk about was kind of customer's threshold of pain. A lot of people are, you know, scared to raise their prices because they're, you know, they're thinking, oh, my gosh, I'm just going to start, you know, start losing customers. And I have to tell you this, too. I'll start this by saying a lot of training companies do teach. Oh, you just need to go back and raise your labor rate.

Well, that's a really good, easy way for any shop to just get an immediate lift or tick up in their gross profit. I mean, obviously, if you just do nothing different and you raise the labor rate just a little bit, you know, obviously, the revenue is going to go up. But you can't really do that without adding and delivering excellent service to go along with that rate. And so, you know, Todd always talks about trying to find that customer's threshold of pain. And you can't do that by listening to the feedback. Like you said, you know, the 1%. One person complains about a price.

Well, you don't build your business on the exception, you build your business on the rule, but everybody does seem to focus on the, you know, the one customer that gives any kind of pushback on it. But, you know, you got to kind of find that customer's threshold of pain in terms of, man, what can I charge, right? And am I leaving money on the table? So I did want to talk a little bit about that this morning. As far as customer's threshold of pain and kind of where you guys were and.

Where you're at now in terms of the year on a start with yeah so uh jj let's let's get jj back yes sir yes sir well that's such a um a major point because i remember i was at one point you know particularly at my last shop my first shop that i started i was the cheapest guy probably in the state of maryland okay and that wasn't even cheap enough you know what i'm saying like i was it was so many jobs I did for free and that, and that wasn't even cheap enough. It was very weird. Right. And I did not enjoy that.

So I remember hearing you talk about that and Todd talking about, you know, finding that customer's threshold of pain. Um, but just to circle back, I remember like, like kind of being hesitant to, to raise the prices. And, and it's because I didn't have the, the foundation of being able to deliver superior customer service. OK, so this whole thing, everything we're talking about, once you put it all together and you start putting these major pieces together, man, your prices are justified because if you look at it, you can the person down the street can change the alternator just as good as you can.

OK, so the everybody can, you know, put a new starter on the car. OK, completely understand. But what is the difference? What separates, you know, us or Charlie's store from the guy next door right down the street? What separates it? And that's the world class service. So the key to key concept is not teaching you how to change an alternator, because I have never changed an alternator or starter, never busted the bead on the tire. I don't want to do none of that. I don't like it. It's dangerous to me. Right. So I want qualified people to do that. So I was the cheapest, Glenn, and it was not fun.

So when I heard you guys talk about finding the customer threshold of pain, I was like, wow, this is very interesting. OK, so I'm no longer looking at what my market dictates. OK, what what what everybody else is.

Charge i'll tell you a funny story man you know how you say when when somebody calls you and they ask you what your uh labor rate is you know it's another shop right it's funny it's so funny you said it because you know what i had even before i came down to the uh to the class man i had my mom i said mom look here's the list of 25 stores i need you to call all of them get their labor rates. Ain't that funny man so so she could yeah she called like a you know a damsel in distress yeah That was your labor rain.

And they would tell, right? So so that's how I came up with my one seventy. OK, so that's how I came up with my one seventy. And and that was kind of at the at the upper tier. There's people charging one ten, one fifteen, one fifty. Dealership was right around one eighty, you know, one ninety max. So I said, let me let me come in at one seventy. So anyway, I heard what you guys said is that you raise the prices, you know, and you kind of figure out or find out when that customer starts saying no.

When they when do they start kind of objecting you know a lot you know and that's when you start seeing that that price point where it starts to be a little bit more difficult to justify um that that particular price so to speak for for lack of better terms and when you guys found it you guys uh what was yours glenn like where did you find yours uh 350 high 350 yeah and we came down obviously and and here's an important part of this uh it's you know you have to make sure that you're executing this concept you're coming through training and you understand and you're doing everything and you're not missing any plays and here's why because just because you started getting objections doesn't mean you found the customer's threshold of pain it could mean that you're not executing the concept right and you don't have the right people so don't get those or too confused.

You have to make sure you have the absolute superstar studs executing the concept, and then you can start to make that decision. But a lot of people, sorry, a lot of people are already getting objections, guys. I mean, at $110 an hour, there's shops out there that are getting the same exact objections that we get every single day, right? We all know the objections, they're all the same. So whether you're at 110 or you're at 210 or you're at 310, you're going to get the exact same objections. So that doesn't mean it's the price. That could mean it's the execution.

Now, once you start executing, then you can start determining, okay, we're getting, I mean, some of my really good customers start to say things like, man, it seems like it's getting a little bit high or the prices seem like they've gone up. And you have to get a good sample size of that, right? Because you can't, one, you don't find that out immediately. You find that out over a period of time.

Because if you raise your labor rate today, and me and Charlie, and he could probably touch on this, if I raise the labor rate today, well, there's going to be six months worth of customers that don't ever even feel that if they don't come in during that time. And so that's why we talk a lot about don't raise your payment rate, $10 an hour over the next six months or $10 a month over the next six months. Go ahead and just raise it. If you're going to end up getting there, just do it now because Ms. Jones that came in today isn't coming back for six months.

She's not going to see and feel the incremental increases. It's like, just rip the Band-Aid off. Let's find that threshold of pain. And then we'll come and we'll find a soft landing once we get there, which is what we did. And we adjusted it down and we've been comfortable where we're at right now.

But charlie is a good example uh you know he was wanting to raise his labor rate well these little increments and uh we had a conversation one day and i learned when you want to get charlie to do something all i got to do is put a camera on him and tell him all right charlie you said you're gonna do this i got you being recorded everybody's watching so let's still get it done tell that story and so tell that story charlie and what that's done for your business uh sure but before we get there i have to bring up some other points because a lot of people that are listening to this they might just think oh these guys just charge more right see it could sound like that oh they just charge more money let's rather make money and this and so there is this couldn't be further than the truth so i want to clarify a couple of things first before we get to that story okay so first of all years ago when i started you know charging because i was kind of like you jj I wasn't cheap enough, probably.

I was so cheap because I thought that's what drove the business, right? So, I thought that if I raise my price, the customers will walk away. And it is not, there couldn't be further than the truth. That is not how business works. As long as you provide good value, and Glenn, you do a very good job saying that if you just go ahead and charge more today without upping your quality of service, you could be running to the potential of being an overpriced shop. So you have to give them better service.

So in our take five that we had today, right before I jumped into this call, we were talking now of our videos. So obviously we do the videos before and we send to the customer and we do meta videos on a case. So I have to be honest, we don't do it all the time of after we finish the repairs. How about process videos?

So do you think if a customer came in, we presented a nice job, and they said yes, and I would do work on the car for $3,000 or whatever the number is, and I'd take a video of my technician, superstar technician working on the car, and it will happen like a timing bell job. Today we're going to do a timing bell job on a Honda, right? So how about if I took that video so they can see what's involved in the job? Does the customer still think I'm overpriced? I think I'll take that away. So what value can I build to be able to charge a fair price?

You see, it becomes a fair price. You're not overpriced anymore. What else? Man, I had so many notes here. So it was really, again, a mine thing. And the biggest pushback you're going to get on price is going to be from the people inside the organization. So if you guys went to your shop today and you say, hey, we're going to change the price $40 an hour, your people are going to give you a lot of pushback. And that's a confidence level thing if they don't believe in themselves.

But if you do provide better service, if you train your people every day on the take five on the auto hospitality, not just fixing cars, what can they do? Are they there to provide value to the customer? How about this story? JJ, you remember this very clearly. So it was a Saturday. You were in my shop in Utah. And we had a Honda Pilot here that I can never forget because it's such a good story. And the only reason that Pilot was here that day, because Gary Walker had called that customer on a warranty. We had done axles on the car previously.

Gary or his team called the customer and said, hey, it's been a while since we did these repairs for you. We would like to inspect our work Make sure everything is going great Do you think there is value to that? So we inspect our car You came in.

It for a warranty check well obviously cars wet out right over time so we have the car on the lift we inspect the axles what else we noticed we noticed the brakes are worn out so as i'm taking that video on the axles because i still want to show them but i did inspect our work see there is value to that mr customer thank you for coming in here is the actuals we previously did everything looks great there's no problem at all we appreciate your business however while i'm under here and wheels are off the car i noticed that the brakes are worn out we sold those brakes and then the next day we sold on that vehicle uh we presented him that the strats were leaking by the time we were done with that car it was over four thousand dollars and that is because gary and his team provided value by following up on that customer so so you see the price becomes irrelevant because that customer doesn't have to think anymore right man these people call me to thank me for the business.

These people will call me to check on my car before the warranty runs out. So long as you build all these value-added items, then the price doesn't become a problem anymore and your team will believe it because they see the value. Would you guys agree with me? Yeah, 100% on that. Well, a lot of people say that they're going to get, the biggest pushback they get when they change their labor rate is they get pushback from the technicians is what they tell us. And I'm like, huh? It took me a second to, okay, I'll be honest with you.

Like the first time I heard that, it kind of just like took me back a little bit. I'm like, I don't understand. Like, what do you mean the technicians? Like, what are they, like, we're, I mean, because I'm thinking differently.

I'm thinking I'm literally I'm serving the I'm serving hours like on a platter like they can't even keep up that I have unlimited hours and and they have access to whatever they want to do with their career and so I don't understand why they're giving pushback like it doesn't make sense like we just wrapped up we just did 700 hours last week okay 700 build hours last week okay and I've got technicians that are backed up and wow that's yeah yeah we did 700 build hours last week okay to wrap up our month okay and so uh i've got technicians they're just slammed and blown out i just like roll we just roll over a part full of cart or a cart full of uh parts to them like here you go here's 15 hours and and so and and then people are saying they're giving pushback i don't understand well i understand it's because in a 50 close ratio world or less okay and you You have technicians that are checking out all these cars and the cars are leaving.

Well, of course, they're going to complain about the price because they think the price. Directly ties to the decline sales that they are not getting and they want to blame the price or they say, hey, you guys are going up. You're not giving me any more. You know, like I should be making more money if you guys are making more money. And so that's a technician that doesn't understand how business works and how business runs. We want to give our technicians more money, obviously, but we have to do that once we can be profitable and be able to provide, you know, consistent.

You know, high profitability and, you know, and obviously growth, we want all of our technicians and our technicians do make big money. So they don't complain about labor rate. They don't, I never, I've never had a technician in our company ever mention the labor rate to me, not one time. One, they don't even know what it is or care what it is, right? All they care about is I'm just, man, I'm just flagging a ton of hours. And so that is a tail wagging the dog situation. And a lot of people fall into that trap.

So yes, you have to provide and you can't forget like, okay, I provide amazing service. I'm on a zoom call at 6am. We had a meeting before the zoom call. I'm going to, I'm going to be working all day. I'm going to deliver amazing hospitality. I'm going to deliver cars, pickup cars. I'm going to train my team. I'm going to send my team down to Houston. They're going to train. I'm going to do all these things.

And that makes me worth so much more and it gives the confidence level to your team so much more when they believe that they're worth it because we put in so much time effort and energy to deliver the world-class service that we're worth it but if you just change your prices and go up and you're just like the auto guy down the street well guess what now you're just an overpriced repair shop okay we're not comparing apples to apples we sell oranges and the industry is selling apples so you've got businesses that are basically competing. Okay. And they're comparing their prices to the person down the street.

That is, you know, in a lot of cases on their way out of business. And I know that's sad to say, but that's the truth. And, and these people are competing with each other and they're basically racing to the bottom. Okay. So we do it completely different. So, you know, obviously all of this is taught in all the programs. And you guys have obviously been through a ton of them, but I definitely want to ask Lynn on this. We haven't heard much from Lynn yet this morning, so I really want to just kind of hear from that.

And your thoughts on this, Lynn, and kind of how this has changed your business. Oh, yeah, it's definitely changed a lot for us getting to elaborate where it should be.

Again rural southeast tennessee we're at the high end of the market but implementing the concepts like outrageous world-class service the best people training every day with our take fives phone training company take fives like all the focus on people and getting better and creating that experience what i found is like we do not have pushback on pricing customers are looking for extreme value and being taken care of and just that great world-class experience that we offer the last thing a customer wants is a bad experience and so many customers have been in bad shops before that they're so happy to be out of now and they come somewhere that is implementing world-class service through auto hospitality their whole mindset changes.

They're no longer looking for the cheapest price in town or a shop that may be a little bit less than us. They're looking for world-class service, a great experience, number of cars being taken care of, and the transparency we provide and just the wonderful people. That are serving them. And we just do not have to push back on price. And that's been a game changer for our business for sure. Yeah. And you know, you know, another part of it, and we're talking about price going up, but you know, a lot of people also miss a very, very big part of this, which is how can my costs go down?

You know, and talking specifically about gross profit and parts cost, you know, yesterday, a good example, there's some control arms, a lot of people are quick to click. And there's some control arms we get sold and I got to order them. And, you know, these particular control arms were $90. And so I could, now that was $90 was the best price across all my, you know, vendors that I could see online. Now I have an option there. I can either click that button and those parts are on the way and boom, it's done fast. Or I pick up the phone. So I pick up the phone. I call the guy.

I said, look, man, I had to make a deal on this job and these controllers are $90 each and I need them for $69.99. Can you do them for $69.99? Not price match. I'm just saying, look, I had to make a deal. Cause we did, we had to make a deal to save a deal, which is another part of like having hammers. Okay. Um, I'm like, man, I need them for $69.99. And he's like. Let me see. He's like, I can't do that. He's like, the best I can do is $70 and 50 cents. And I'm like, okay.

I said, I'm like, here's the PO send them over. Okay. Now that's $60. Okay. That is $60. That is a lot of money. Okay. When you're talking about running big car accounts, when you're talking about, um, you know, over the course of a month, over the course of a year, That is, that is big money. That is $60 that somebody would just, it's either they're going to keep it or we're going to get it, you know, and all I had to do was pick up the phone and it literally took me one minute to do it. And so that's another part of it. Right.

I mean, that was a huge part. Yeah. So I, yeah. So tell me a little bit about that and kind of like what you've learned coming through on, on that side of it, on managing, not necessarily the price increase, right? But on the managing of the actual, you know, estimating and parts purchasing. Yeah, purchasing, we are obsessed with that. Like our team, we talk about it all day long, VE, VEV, value engineer. So we are constantly working on getting those parts prices down.

And it's crazy, the money you can put to the bottom line just by shopping those parts, picking up the phone and say, hey, I need it for this. And when you have a team that is, has an incentive based off of gross profit, they're very eager to do that for sure. Everyone wins when we're saving $60 on a part, $100 on a part. And it is just crazy the amount of money that is just sitting there. And just like you said, it's either going to be a win for the parts store, they're going to keep that 60 bucks, 100 bucks, or it can go to our bottom line.

And once you train your team to do that, every time, every car, every day, it just adds so much money to the bottom line. And it's so fun. It's a game for our people to do that. They love like. Calling up. Who's calling? Oh, I've got it. No, I'll call. They're just obsessed with buying those parts down. And it's a huge impact for sure. And then what's this job worth? What can I sell this for?

If we get a set of control arms and it's estimated and it's $1,000 and then the repair pal says, okay, I can sell this $1,500 to $2,000, that's a whole other opportunity there where can I charge more? Absolutely, I can charge more. I have world-class service, the best warranty in town, the best people, the best technicians, loaners, cars, et cetera. For sure, there is a huge opportunity there where I can take care of this for the customer and deliver world-class service and get paid the fair market or just above what the range is. And it is super fair for the customer.

And we feel great about doing that all day long because we can provide more than anyone else to that customer. Smell no limb hit something so so critical because first of all i know i went down to lens too man because i i just had to see what in the world they had going on man and it's just it's just phenomenal what what they are doing down there you you can imagine just the culture that that lynn has built down there it's amazing glenn uh lynn knows that soon as i i left out of there I was filled up. I said, oh, my God. I mean, there's so many things.

That's why I say like everybody that that's all in. Oh, my God. You can just you could just pull so much from. So let's go back real quick about the part shopping. Right. Let's I remember Todd said this and this this opened my eyes hugely. OK, he said if you save one hundred dollars on on, let's say, on parts, you shop, you shop the parts.

And like Glenn, like you said, don't be quick to click, you know, but if you save one hundred dollars on this part, then it's the exact same thing as a thousand dollar boom it's the exact same thing you know so that's what i said oh my gosh okay okay so then it started it started really growing in my mind how important it is to make sure that we're getting deals on these parts because it's just the exact same thing as getting booms yeah so um well well for you it's more like about a 500 boom based on your net percentage. But just so everybody understands that.

Just so everybody understands, or probably less than that, but just so everybody understands what we're saying here is if the average shop in America puts 10% to the bottom line, and the guys we're talking to, we're talking about 25 to 30 plus percent, but the average shop is 10%. That means every, you know, it takes a thousand dollars sale to make that hundred dollars. And so when you save that hundred dollars, it's essentially the same thing as a one thousand dollar sale with no effort, with no extra energy. We do an exercise in key to key that says, okay, we're going to go back last week.

And I want you to re-estimate all these jobs by looking at repair pal, go and get the parts price. See who has that parts price at a better price. What could you get it for? And we do this little exercise. And when we come back from the breakout group, people tell us that they have like, you know, you know, nausea in their stomach because they're like, I can't believe how much money I'm leaving on the table. So I tell them, we'll go back for the whole year last year and do nothing different except just reestimate all your jobs and stop your parts. How much money would you make?

And people are like, I can't do that. I can't do that. I don't, I can, no, I can't do that because they understand, right? If you estimated every job all over again, like today, if you're listening to this call. Go into your shop, pull up your repair order from yesterday, the day before, and look at the estimates and look at the parts and go on just do, even if you just did the parts, not even talking about an increase, just parts alone.

And you get those part numbers and you start calling around and you start shopping those parts and you are going to find out that you left a lot of money on the table. Every single person, every single time, doesn't matter. We find a ton of money. And so our goal is to make the spread obviously as big as possible. I've got to sell it for the best possible price that I can sell it for. And then I have to be able to buy the parts, quality parts still. We're not talking about using cheap parts, right, in place of quality parts.

But we can get quality parts and get them at a good price. And then we increase that spread. So if it's a $1,000 ticket, as an example, and, you know, the average shop out there, not our average shop, but the average shop in America is charging $1,000. And they're vying all the parts in the labor for probably like $500. Like people are running 50% gross profits out there. So it's costing them $500 to do this $1,000 job. Well, if they look at it and they say, wow, RepairPal was $1,400. I could have sold that for $1,400.

And then my $500, I could have bought those control arms that were $100 a piece. And I could have gotten them for $70 a piece. And so now I've just made 60. and I've just made $400. So I've just made $460 on that exact same job and I did nothing different except just be smart about my business. And then all of a sudden, you start having insane net profit numbers, you know, like you guys do. And you're not, you know, you're just giving great service, but you're charging the right price for it. We are allowed to make a profit in this business.

Now, the parts vendors, straight from a parts vendor, okay, he tells me, and I don't know the exact number, but it's something along these lines. It's 44% of shops out there pay their bill late. That's almost half. They pay their bill late. And then 20, I think 27% or 24% don't pay their bill at all, okay? Complete write-off, okay? So think about that from a parts-fender standpoint, right? We pay our bills on time, okay? We want to pay our bills on time. I need to get my bills paid on time. And that gives me the upper hand with my vendor.

And we spend a lot of money with them, which means they'll do whatever they want. We are a TIAB. This is a buyer. We are a VIP customer. Therefore, our vendors want to sell us parts. And so they will work with us and they will help us out. And so super important to remember that, right?

If you pay your bills, see a lot of these things that we take for granted, paying your bills on time, all those things that we do, amazing training, all of that wrapped together, separates us from the competition and when that happens it allows for you to be able to charge the right price and your customers want to pay it because they want you to exist and be there and they want you to make money and they will continue to take care of the business um wow this one gosh we need like one more thing so So cool.

So Todd started this accounting class years ago, and he used to do it one-to-one with us. Then we did it as a class. Now the accounting class developed from, you know, where people come in. It's accounting and it's fraud prevention. That's another league. We still have another podcast for that alone. And it starts very basic, and now Matt Kiss teaches here, and it goes to pretty high-level stuff. So any level, anywhere you are in between, you're going to learn a lot. But it's this exercise that all does. And everybody, I want to assume I've seen a P&L, right? So on your P&L, you have all these line items.

You have your rent, your software, your dumpster, your insurance, your payroll, blah, blah, blah. There's 100 items. Now, next to each line item, there's a percentage. So I want you, in your mind, to take this part, visualize of a water pump or an alternator or whatever that part is, and I want you to take your profit and take the percentage off that profit. Take a 1% away, take 2% away, take 5% away for advertising. Whatever the line item is, I want you to deduct the percentage that you made off of that part.

And at the end of the day, at the end of the bottom of the line, Todd asked me the first time he did this exercise, like, how much you have left? And I said, not enough. That was my answer. That was my answer. So that will make you price yourself to where you should be. So a lot of times we use our feelings versus using real data of what's happening. Yes, you nailed it 100% right there. It's like, and that's, there's a perfect example of when the technician says you're charging too much or, you know, where's my part of that?

It's like, if you go through and you do this open book financials with your team and they understand what it takes to actually run the business, right? It's like. It gives them a completely different perspective because yes, when you break it down a $2,000 job, well, and, and, and even an advisor, mate, if they don't know this, they're going to look at that and they're going to go, wow, we, you know, we're making $1,200 profit or we're making $1,400 profit. Look at that right there. Okay. And then you break it down and you strip all that out of it.

And it's like, wow, we, okay, we did not make, make nearly as much. So I'll say this, I'll end it with this. We're going to have a part two of this. We have to, There's just, there's just wasn't enough time. This is just too good. For sure. So go back with your team and do an exercise. And here's what you do.

You grab your team and you get them individually and you say, all right, if our store does, whatever that number is, whatever your revenue number is for your month, okay, write down a piece of paper, how much money you think that the company makes, how much money does the owner take home? Okay. Do this exercise with your team. And here's what's going to happen. You are going to find out that your team, see, people are scared to let their team know how much money the business makes. But the average person, now this is real data. The average person believes that you make six times more than you actually make. Okay?

So if you're worried about your employee thinking you're making X amount of dollars per month or per year, just remember, they believe or think in their mind that you make six times what you're actually making. Okay? So get them to write down a piece of paper. If our store does this much in revenue, how much money do we make in profit? And what you're going to find out is your team thinks that you are making insane amount of money. And you may not even be making any money. So those of you that are listening, I'm going to tell you, you really need to teach and educate your team on this.

I know we're up on time today, guys. Thank you guys so much for being on here. We will do a part two. For those of you listening, be ready for that. This is going to be great. We'll get deeper into it. But thank you guys so much for jumping on this morning. Thank you, guys. For more information, reach out to Todd Westerlin at 925-980-8012. Or visit AutoshopAnswers.com. Get more information about Key2Key to Callbacks, Courtside, VIP Racket Tech Day, where you spend a full day in the trenches with our teams. We have leadership classes, an AI academy, accounting first, fraud and prevention, as well as auto tech training.

We are literally your one-stop shop. Please don't hesitate. Reach out to Todd Westerland, 925-980-8012.