It’s time to dig into real-world strategies for managing debt and strengthening the financial foundation of your auto repair business.

• Shiju Thomas,Hotchkiss Auto Repair
• Dustin Brown,Brown Auto Experts
• Hunt Demarest, CPA,Paar Melis and Associates

The first big takeaway: Cash is king.
Our panel emphasizes the power of maintaining healthy cash reserves—ideally three to six months of operating expenses—to safeguard your shop against unexpected disruptions. If the pandemic taught us anything, it’s that cash on hand can be the difference between surviving and scrambling.

Another core theme is recognizing the difference between good debt and “bad debt.”

Good debt includes real estate and other collateral-backed loans that appreciate, add stability, and support long-term growth. Bad debt includes high-interest burdens like merchant cash advances or short-term credit card loans—products that drain cash flow fast and offer zero assets in return.

The panel also addresses a common pain point: “Why doesn’t my bank balance match my profit?”
The answer lies in understanding the cash flow statement—specifically, that principal payments don’t appear on the P&L, even though they hit your bank account hard. Their guidance: pay off high-interest debt first, but don’t erase debt so aggressively that you end up “debt-free but cash-poor.” Cash matters just as much as debt reduction.

Bottom line: Be intentional with your money. Understand your numbers. And approach debt reduction as a strategy, not a sprint.

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