217 - AMA: How the Best Shops are Confident in their Pricing
September 3, 2026 - 01:03:32
Profitable auto repair shops build pricing around financial data instead of fear or competitor rates. Rising technician pay and rapidly advancing vehicle technology make strong margins essential for investing in people training and equipment. Confidence comes from understanding the true cost of doing business and recognizing the value a skilled independent shop provides. Customers are often willing to pay more when they trust the quality and experience behind the service. Strong systems and productive teams also give owners the foundation needed to grow without sacrificing profitability. Long term success requires clean financials clear value and the willingness to charge what the business needs to thrive.
Lucas Underwood, Shop Owner of L&N Performance Auto Repair and Changing the Industry Podcast
Cecil Bullard, Founder of The Institute
[00:01:00] – Rising technician pay makes accurate pricing more important than ever.
[00:07:00] – Setting prices based on competitors leaves shop owners flying blind.
[00:12:00] – Great technicians use diagnostic data but often ignore business data.
[00:19:00] – Confidence means explaining why quality automotive repair costs more.
[00:27:00] – Low prices can actually make customers question service quality.
[00:31:00] – Build operating reserves before expanding into another shop.
[00:37:00] – Create a shared vision to earn staff support for pricing changes.
[00:44:00] – Automotive pricing has failed to keep pace with rising costs.
[00:53:00] – Independent technicians bring valuable diagnostic skills to complex repairs.
[00:59:00] – Clean financials create confidence in what your shop must charge.
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Episode Transcript Disclaimer
This transcript was generated using artificial intelligence and may contain errors. If you notice any inaccuracies, please contact us at [email protected]. Lucas Underwood: Good afternoon, everybody. My name is Lucas Underwood from Changing the Industry podcast. I'm a shop owner here in Blowing Rock, North Carolina, own LNN Performance Automotive Repair, and today I have the honor to be joined by Cecil J. Bullard, and we are talking pricing here, uh, on today's show, and we're talking about confidence in pricing.
Cecil, buddy, how are you?
Cecil Bullard: I'm great. I'm
Lucas Underwood: great. You're not a has-been yet?
Cecil Bullard: Not yet, brother. I'm a still-was, I think, or maybe never was. I don't know, man.
Lucas Underwood: I'm a something, right?
Cecil Bullard: I'm something. Somebody knows who I am.
Lucas Underwood: Man, I love it, and, and listen, we're talking pricing today, and it's really interesting. I'm, I'm headed up to Kentucky, uh, for the Survive or Thrive Thoroughbred Diesel event in October, and I was working on a presentation for them, and it's really about my story as a shop owner.
And for those who don't know, I, I started in diesel performance. I was selling diesel performance parts, and one of the things that we faced in the diesel performance world is they had these MAP prices, and all of these online vendors were selling their parts for MAP prices, and I thought I had to compete with that.
And one of the biggest challenges I ever faced as a shop owner was overcoming that fear of charging what I needed to charge. So Cecil, how do we get these shop owners who are listening, these shop owners who are gonna view this later, to the place that they're confident in their pricing?
Cecil Bullard: It, it's, it's a, a combination of multiple things obviously.
I mean, we, uh, I think if you understand, um ... So let's ... See, this is gonna jump around like it always does. Uh, you keep me on focus. Um- Bet. I'll
Lucas Underwood: do what I can. No promises.
Cecil Bullard: Right, right now we, we have this, this, uh, techs coming in. Uh, had one yesterday, uh, you know, uh, one of my clients is interviewing a tech, and the guy's saying, "I want 100 grand guaranteed."
And, uh, you know, I would tell you two years ago that was probably 65 or 70 maybe. Yeah. And so now it's 100,000. And so we have this, um, uh, you know, the, the, the shortage, right?
Cecil Bullard: And, uh, we have a demand, and we have, uh, a necessity of probably paying more. So if I understand, you know, what I'm paying and why I'm paying it and what I need to pay, then I also have to relate that to my pricing.
Because- Yeah ... um, if I don't charge enough, I don't get paid enough to pay the person that I need to enough to buy the equipment, to buy the training. And y- you know, when I, uh, was, was working as a tech, which is a long time ago, um-
Lucas Underwood: Yeah ...
Cecil Bullard: and, and people will go, "Oh, wow, did the cars have wooden tires?" Yeah. "Or were they rubber?"
Lucas Underwood: gonna say, I, I
Cecil Bullard: can't believe- They, they were rubber, man ... we had
Lucas Underwood: cars that long ago, you
Cecil Bullard: know? They were, they were rubber, yeah. But, but, um, you know, classes were, uh, few and far between frankly. Mm-hmm. Uh, mainly manufacturers had classes. We didn't have a lot of the aftermarket stuff like Asta that's coming up where we could get great tech training there or- Yeah
you know, great management training. Um, and it wasn't ... But it also was very inexpensive in comparison maybe to what training is today. And the cars, of course, were a lot simpler. So there's this idea that, okay, what I'm doing ... Uh, and I think this might be one of the core problems we have with shop owners.
They do not understand the value of what they do- For sure ... their knowledge, right? Yeah. Most of them, you know, uh, we still have a, probably a higher percentage of people in our industry that were not ... You know, they don't have a college degree. They didn't, uh, you know, have a master's degree in, in automotive technology or- Yeah
or, you know, engineering or whatever that is. Um, and many of these guys, I had a, again, a conversation, uh, Sunday with one of the clients that, um, you know, he's like, "I, I didn't even graduate high school," right? "I, I, uh, I got into drugs. I went to, I went to prison. Uh, I got out of prison. I started to be a mechanic 'cause I, that's, I could do that."
And now he owns a shop, and a pretty successful shop. Now he owns a couple pieces of property. And, but-
Lucas Underwood: Yeah ...
Cecil Bullard: I think if we don't value what we do- Or we don't see the value in what we do. And I also think that, that we have blinders on as, uh- Mm ... shop owners because all we really see, uh, we, and, and how we interpret what we see is probably, uh, very limited.
Lucas Underwood: Yeah, through our lens. Yeah ...
Cecil Bullard: I drive down these five streets to get to work, and there are three shops, and I drive by, you know, Billy Bob's shop, who is the cheapest guy in town, and I know that, and man, he's got a lot of cars parked outside that shop. He's always got a lot of cars. And then my phone doesn't seem to be ringing, and it's- Yeah
a real, it's a natural leap to go, "Well, my price must be too high," right?
Lucas Underwood: For sure. For
Cecil Bullard: sure. Uh, as opposed, uh, as opposed to, number one, I don't know what Billy Bob's costs are. Yeah. I don't know if Billy Bob, uh, is paying rent, you know, how much rent. Uh, I don't know what Billy Bob's- Yeah ... paying his technicians.
Lucas Underwood: even know if he's doing any marketing. Right? And frankly- Those could all be comebacks, right? Yeah, and, and- Like, we don't know
Cecil Bullard: Yeah, and frankly, I don't even know if he's making any money at all, right? He might be losing three grand a month, and-
Lucas Underwood: That, that's a- But- That's a great point, right? Because I, I've been- Right
there, done that, right? Because I, I, I was the guy riding by the other shops, looking at the other shops saying, "Oh, look how busy they are. Look at what they've got going on," not realizing that some of those cars had been sitting there for weeks. They hadn't- Yeah, for months ... got anything done. Yeah. Right. And, and a, as I dug in and I started talking to these guys, I'm going and talking to them, I'm realizing, hey, listen, they're doing twice the amount of work for the same amount of money.
I'd rather have an empty parking lot and make the amount of money I'm making as I would-
Cecil Bullard: Oh, yeah, yeah. If I'm not gonna make any money, I'd rather not work. I mean-
Lucas Underwood: Exactly ... holy smokes, right? Exactly, and look, here, here's what I keep seeing, and I talk to shop owner after shop owner, and this- You know, David gets frustrated because we keep having this discussion over and over again.
And he said- Yeah ... "Why do we keep having this discussion?" I said, "Because all of these techs leave shops and decide to start their own mobile mechanic business. They decide to start their own shop. They go out on their own and they do their own thing. And so we have to continue to teach them because they were uninterested in this when they were technicians.
They didn't care." And eventually what happens is we have these new folks coming in, they get burnt, they're trying to figure out, "Why can't I pay my bills? This isn't working for me. What's going on? Why doesn't this work?" And
Cecil Bullard: so then we- And by the way, they- when- Go ahead ... when people see this or, or people that are watching, many of them will be barely making a living.
You know? Yeah. They, what they have is a bad job that doesn't- Yeah ... pay well. So I work-
Lucas Underwood: Exactly. 100% ...
Cecil Bullard: I work 70, 80 hours a week, and I, I can't go to my daughter's play and I can't do this and I can't do that, um, because I'm trying to get this car fixed so I have the money to go in the bank to pay the bills.
And, and they're- They're payrolls we- ... trapped in this, they're- Yeah ... trapped in this thing, and, uh, they don't understand that, that you don't have to be trapped in that thing.
Lucas Underwood: For sure. Right? And, and here's the thing, is, is over and over and over again, I have this discussion. Right? I talk to, to hundreds of shop owners and techs becoming shop owners through the span of a given month, right?
Talk to- Yeah ... tons of them. Get a message every single hour throughout every single day- Yeah, every day ... from somebody, right?
Cecil Bullard: I'm glad I'm not you, baby.
Lucas Underwood: And so what I'm noticing is, is they're all going out and they're setting their prices, and they're using what I like to call the Oreo pricing method.
Lucas Underwood: So they've got, you know, shop over here's on the high end, shop over here's on the low end, I'm gonna be somewhere in the middle. And I talk to them and I say, "Guys, hey, listen. I don't know if you know this, but you should probably be using data to set your prices. And that data comes from your financials, and otherwise you're flying blind because you don't know if you're pricing yourself correctly or not because you're not using the data.
Now yeah, we can give you some numbers that the industry standard is, and we can get you 90% of the way there," but they all panic when you give them those numbers, Cecil.
Cecil Bullard: But I'm also- They have a- I'm also, I'm also not sure there's an industry standard because- That's true ... you know, we still have shops, you know, uh, that are probably under $100 an hour in the industry.
Yeah. I mean, there's that mobile guy that's out there for 80 bucks an hour.
Lucas Underwood: Yeah, yeah.
Cecil Bullard: And, uh, I've got shops that are- And thinks he's
Lucas Underwood: doing them favors. Thinks he's doing- Yeah,
Lucas Underwood: got- ... the guest a favor, man. Come on now.
Cecil Bullard: I've got shops that are in the same- General location that are 250 an hour. Yeah.
So I don't, I don't know that there's an industry standard. I don't think there is a standard. But- In fact... Yeah.
Lucas Underwood: Here, here's the problem though, is that it- standard or no standard, the reality is, is they're setting their price- Survive ... based on feel. Yeah. They're setting their price based on what the market looks like around them and what they suspect the market will bear.
And, and I'm telling you, would you go out and say, "I feel like this car needs a $4,000 control module"? No, you wouldn't do that because that's asinine. That's stupid. Why would you take your business, which has the potential to generate hundreds of thousands of dollars of revenue every single year, every single month in some cases-
Lucas Underwood: and take a gamble with it? Why would you do that? You wouldn't do that with a client's car. It just makes
Cecil Bullard: no sense to me. Well, you know, we, we don't like... I, I wouldn't go to a doctor that didn't have a degree, and I don't mean this in the sense that mechanic-wise. I'm just saying if I knew the guy was a quack, I wouldn't go there because I don't want somebody- Yeah
guessing about my health, right?
Cecil Bullard: And yet I have this business, and, and my business has done everything for me, right?
Cecil Bullard: Don't get me wrong, I've also done everything for my business, right? Yeah. But, but my business provides the money that allows me to live the lifestyle, that allows me to help the industry, that allows me to drive a nice truck, that allows me to, you know, have a, a nice coat- Yeah
if I want it, that feeds my family. You know, and we can eat steak and, you know, all that. The, the business is the engine that runs your life- Yeah ... in a way, okay? And so I've got this thing that literally can create generational wealth- Mm-hmm ... or it can be a bad job where I work too hard too long and don't, and don't get paid for it.
Be a burden take away from
Lucas Underwood: my family. Yeah.
Cecil Bullard: So, like, I, I'm talking to, uh, another shop a couple of days ago and, and we're talking about, uh, they're gonna- they wanna hire this guy who wants $100,000. And I'm like, "Okay, we can do that," right? Yeah. And I'm like, "Uh, so that's," whatever, it's 50 bucks an hour basically.
And, and so, uh, what's our effective labor rate? Well, our effective labor rate's probably not what our po- Our, I think the posted labor rate was between 155 and 175, depending on the kind of car and the job we're doing and-
Lucas Underwood: Yeah ...
Cecil Bullard: and but the effective labor rate was probably 130, 140. And, and so now you're...
I'm doing math saying, "Okay, it's $50." Then I've got 30% load, so it's really 65. And then if the guy comes in and he's only, say, 80% productive, then my cost goes from, say, 65 probably all the way up into the high 80s.
Cecil Bullard: And now I'm paying out 55% of the labor I brought in- Instead of 40%. And so that difference of that 15% is the difference in my profit, right?
Yeah. And it means I don't make money in most shops. Exactly. Yeah. Many shops are, are not even making 5% profit.
Cecil Bullard: And, and so if you're gonna lose 15% because you hired the wrong guy or you didn't price yourself correctly- Yeah ... or you didn't hold the line or you didn't build value, um, and you're gonna end up losing that 15% and only make 4%, then you have a terrible job with terrible hours and terrible pay.
Lucas Underwood: With no return on investment. Yeah. And, and he- here's on top of all of that, like when we look at this and we think about the whole strategy here behind setting our pricing and everything else, like profit doesn't happen by accident, okay?
Lucas Underwood: You're not gonna just walk into your shop one day and say, "I think the number needs to be X", and set that number and be profitable.
Now, you might get lucky. Yeah. You might actually become profitable. But without clean books, without good data, without the ability to look and, and dig into the information- It's very unlikely you're gonna be
Cecil Bullard: wrong Well, that's the other thing. That's the other thing that makes me a, a little bit crazy. We have these guys that are really great technicians.
Lucas Underwood: Yeah ...
Cecil Bullard: they're great technicians because of, they have the education, they have the hands-on experience, they have the right tools, the right equipment, and they also know how to read the data. Yeah. So, you know, I hook up the car, I get the, this from the scanner. It tr- I track down to the oxygen sensor. I know how to test the oxygen sensor.
I know what good is, I know what bad is. I know how to look at a, a wave, uh, uh, form for a injector, and I know what good is and I know what bad is. Yeah. And so they, they do that in their job every day in their life because they think that's important and because it is, but they don't do the same thing in their business.
Yeah. They, they literally pull stuff out of the air, or they listen to somebody like me, and they go, "Well, that guy's crazy 'cause he's saying we should be $220 an hour- Yeah. Yeah ... and there's no way we could be... We, every one of our clients- And let emotion drive it ... would run away. Um, you were, you were talking about the, um, the event that's coming up, the diesel event, Thoroughbred.
Yeah. Yeah. And, uh, I was at, at Thoroughbred, uh, last year and the previous year. And so the previous year, uh, you know, I did a thing and, and talked about the numbers and all of that. And so the next year I'm there and I, I said, uh, "Is anyone here that joined up with the institute or became a client in the la- you know, from the last meeting?"
Yeah. And there's a guy, uh, raised his hand a- and I said, "Okay. Um, if you don't mind me asking, and if you're willing to share, what is your labor rate, uh, when we started a year ago? When you joined the institute, what was your labor rate when you first came to this?" And he said, s- uh, he was like, "$79 an hour."
Cecil Bullard: Right? And I was like, "Okay. And so I'm assuming that you walked away and you said, 'I'm gonna raise my labor rate.'" And he said, "Yeah." And, and I said, "Okay. If you don't mind me asking, what did you raise it to?" Right? He said, "Well, today we're at $180 an hour." Yeah. A year. Yeah. He went up over $100 an hour a year.
Lucas Underwood: all of his clients.
Cecil Bullard: A- no. And I said, "Okay. A- and so how many clients realistically, just, just be as honest as you can, how many clients did you lose? Did you lose any?" And he went, "Yeah, we lost a few." Right? Yeah. And I said, "Okay. And, and who were they?" He said, "They were the people who would never pay us to do the work."
I mean- Yep ... he lost maybe 3% of his clients. Yeah. And at, at 3%, so what? I mean- Exactly ... his labor rate-
Cecil Bullard: Think, think about, think about three guys, let's say they're only doing 70%. So- Mm-hmm ... you got three guys doing about six hours a day. You got 18 hours a day. If your labor rate goes up 100 bucks-
Cecil Bullard: that's $18,000 a day, right? Did I do that right? 1,800, uh, 1,800... It's $18,000 a day in a- uh, additional profit that because your labor rate went up 100 bucks, right? And- A- and most people, they're like, they can't even fathom that, right? They, first of all, they don't run the math. They don't figure it out. They're, they're diagnosing based on emotion, right?
Yeah. Yeah. Um- 100%. I, I, uh, you know, I had a cl- if you, if you're in this industry, if you're in, in the industry, I don't care where you are, I don't care who you are today, you're gonna deal with price objections-
Lucas Underwood: Yeah ...
Cecil Bullard: every time.
Lucas Underwood: Absolutely.
Cecil Bullard: And, and, and you're gonna deal with a lot of them. Uh, you and I were kinda talking about that before we started.
I mean, right now, uh, a lot of people are out of money. They don't know what's going on. The price of gas is, you know, higher than- Yeah ... it should be, blah, blah, blah, blah, blah. What's Trump doing? What's... What, what are the Democrats doing? What are the socialists doing? Um- Yeah. Credit card delinquencies- A lot of them-
Lucas Underwood: are through the roof. Yeah. Car loans are through the roof. Delinquencies are through the roof.
Cecil Bullard: A- and, and you're gonna deal with price objection. And the problem is, if you don't know how to deal with price objection and, and understand your value and be able to, uh, create value for your client- Yeah ... then you're not gonna win the game.
100%. And, and, and what's gonna h- the other thing that's gonna happen is you're gonna get this emotional response, and the emotional response is, "Wow, I have these people that are beating me up on price. And number one, I, it's uncomfortable for me, and I don't wanna be uncomfortable, so what do I do?"
Cecil Bullard: "Well, let's lower our price." Yeah. I've shopped in, um, Tennessee- And, uh, the owner was like, "Yeah, we're really struggling right now," blah, blah, blah. Uh, I lowered the price on a, a, uh, several of our jobs, and I'm... I, I just wanna, like, you know... Yeah. Um, and, and what happened was his marketing was bringing the wrong customers in.
Yep. It wasn't that- Reaching
Lucas Underwood: the wrong people ...
Cecil Bullard: we changed the marketing companies, we changed marketing strategies, and all of a sudden the shop is full and people are paying a full price. They're not discounted, right?
Lucas Underwood: Yeah. Here, here's the thing is, is you're right, because it is all emotion. And, and- Yes
for so long it's been driven by emotion, it's not been driven by data. And one of the things that we fall victim to, and, and I'm gonna tell you one of the greatest David rants of all time, and I was there to witness the telephone call. Because David, say what you want about the guy, he's extraordinarily intelligent, right?
Absolutely. And I'm not saying that because he's my best friend. I love David. I'm saying that... Yeah. Yeah. If you really could get David to show you how smart David actually is, it would amaze the people who have negative things to say about him. Yeah. The man is genius level. I would say he's in the top 3% of- He just
Cecil Bullard: gets frustrated.
Cecil Bullard: He... And by the way, if you're really smart, you get frustrated- Yeah ... easier.
Lucas Underwood: Exactly, because everything looks easy to you. You're just like- Yeah ... "Why are you this stupid?" Um, and- And then- That's why
Cecil Bullard: we're friends, right? And then if you don't learn how to con- It works ... if you don't learn how to control that, it gets you in trouble.
Lucas Underwood: but here's the thing is we, we were riding down the road one day, and this lady is, is fussing about his price. And he said, "I'm sorry, can you help me understand something?" And she said, "What are you talking about?" He said, "Are you an expert in automotive repair?" And she said, "No, I, I, I just own a car."
And he said, "Okay, are you an expert in automotive parts?" And she said, "No, I, I, I'm not." And he said, "Okay, are you an expert in automotive diagnostics and testing?" And she said, "No, I'm not." I said, "Do you..." Or she said, "Do I... You know, what, what are you getting at here?" And he said, "I'm asking because I do this for a living.
Every single day I make estimates to properly repair automobiles. I, I make sure that I get the torque-to-yield fasteners on. I make sure that I get all the gaskets on. I make sure that I have the part pricing proper so I can stand behind the repair after I'm done."
Cecil Bullard: And qu- and a quality part is
Lucas Underwood: not a- And a quality part.
It's a, I am- And I, I am, I am a professional- Yeah ... at estimating your job. You are not. And I'm not trying to be disrespectful, but I don't need you sitting here telling me what the price should be unless you're an expert in pricing it. Now, if you want a different quality product, go somewhere else."
Cecil Bullard: Yeah, 'cause that's not what I do, right?
Lucas Underwood: And she stopped and she said, "What do you mean?" He said, "You can, you can go down the street and you can have somebody do this job with poor quality parts, not using the torque-to-yield fasteners, not torquing things to spec, lowering the time using a, a poor quality technician, and you can do that if you want.
If you wanna take that risk, that's your business, but you're getting what you pay for."
Lucas Underwood: And the lady said Just do the work.
Lucas Underwood: And so- Right. Yeah ... it, it was so interesting because it's a completely different mentality than most shops take. Because the consumer comes to them and says, "I can't believe you're gonna charge that.
That seems really expensive." It is really expensive because it's expensive- Yeah ... to fix a modern automobile. Yeah, I mean- But instead what do we do? We quiver, we shake inside, we get upset, our little hearts beat fast and we're like, "Oh, God, what do we do?"
Cecil Bullard: So- And- ... I bou- I bought my first truck, um, uh, 40 years ago.
And, uh, shortly after I bought, I bought a Toyota truck, and it was, it was kinda basic. It didn't have a lot of- Yeah ... crap in it. And that truck was, I think, uh, like eight grand or something. Seven, eight grand. It was not much. Yeah. And, and like, uh, two months later my wife was pregnant with our first and so I had to get rid of the truck and get something- Yeah
that we had back seats in. But, but-
Lucas Underwood: Yeah, they didn't like it-
Lucas Underwood: bought a- ... back then when you put them in the back-
Cecil Bullard: Right ... in
Lucas Underwood: the snow.
Cecil Bullard: I, yeah. In
Cecil Bullard: I, yeah. I bou- I bought a, a new truck, uh, about a year and a half ago. It was $82,000. Right? I mean, that comparison, I, I bought my first house. My dad's house was 13,000, my first house was 100,000.
Uh, I think, you know, we're paying somewhere between six and 800,000 for houses out here today.
Cecil Bullard: And, and you know, everything, what, what kills me is kinda this, you know, I, I don't know, I went to, um, uh, Jack in the Box, uh, this morning and got a couple of, uh, croissants, one for me and- Yeah ... and one for Kent.
And, and it was 15 bucks. Yeah. And I was like, "Those used to be two bucks a piece." That was the- Exactly ... you know, two years ago it was $4.
Cecil Bullard: And, a- and you know what I did? I gave them my credit card and I paid for it, right?
Lucas Underwood: Exactly. Didn't say a word. Didn't
Cecil Bullard: fuss. Didn't- And I didn't say a thing. And- Yeah ... I had to fill up the truck on the way home the other day.
It was $4 and, whatever, 38 cents a gallon. Yeah. It was $4.38 a gallon. I got a 32 gallon tank. I mean, it was almost $80 to fill up the truck. And, and you know what I did? Filled up the tank. I ran my card through the machine and paid it and walked away. Yeah. I went to the grocery store, right? And, and eggs were, I don't know, whatever eggs are.
Milk was whatever milk was. I spent $400 on, I don't know, a third of a basket of food.
Cecil Bullard: And, and you know what I did? I paid it and walked out and, and I didn't think about it because that's the way it is.
Lucas Underwood: You know, my first business coach taught me a very valuable lesson. He said, um, he said, "You're selling from your wallet."
Lucas Underwood: And I said, "What do you mean?" He said, "You're selling from your wallet. Everything's from your perspective. And because you're broke, because you're not charging what you need to charge, everything feels expensive. So when you're pricing it, it does feel expensive." And so later on we had this discussion, we're talking about discounts.
Because- Yeah ... it, now listen, I, I don't mean to, like, get y'all enraged here. I know it's going to. But here's the thing is like when we talk about this, all these shop owners come up and they say, "No, no, no, my labor rate's $200 an hour. My, my part margin's 60%."
Cecil Bullard: Oh, but then they-
Lucas Underwood: Why do you have $150,000- Well, they give it away on the other side
in discounts? Yeah. Yeah. Right? And, and so he-
Cecil Bullard: I see the financials. I'm like, I'm like, "You made t- $2,000 last month, but you had $12,000 in discounts."
Lucas Underwood: Right. Exactly.
Cecil Bullard: Help, help me understand that, right?
Lucas Underwood: And so he-
Cecil Bullard: How... Yeah.
Lucas Underwood: Well, my, my first coach said to me, he said, um, "I've, I've got a, I've got a rule that you're gonna implement in your shop."
And he said, "This is just a set rule. This is what it is." And I said, "What?" He said, "If you feel like giving a damn discount," he said- Yes, absolutely ... "I want you to keep some money in your wallet- Yeah.
Lucas Underwood: time ... and I want you to go up here and pull that money out of your wallet." I said, "Well, I ain't got no money."
He said, "That's my point. You don't have any
Cecil Bullard: damn money." And you, and you, and by the way, you never will if you, if you don't stay ahead on the straight.
Lucas Underwood: Keep doing what you're doing.
Lucas Underwood: And, and- You have to- But see- ... stay ahead on the straight ... we don't think about that, Cecil. We're so- Yeah ... disconnected because we're focused on fixing the car.
And, and it, I believe it's a mindset, okay? Because we're back there in the bays and we're turning the wrenches, and in our mind, the, the desired outcome is that car gets fixed. And so we begin to change whatever it takes to get the car fixed. Well, I could lower the quality of the part. I could, I could reduce my labor rate a little bit.
I could give them a discount here. Maybe I don't use that part there.
Lucas Underwood: it's to get the- Because we're technicians, we're-
Cecil Bullard: It's not to get the car fixed. And, and I, I understand what you're saying.
Cecil Bullard: But it's to get the car in, right? I believe that in order to get that car in, I need to bring my price down.
I need to be, quote-unquote, price competitive. Except- Tell me what price competitive is. I have shops-
Lucas Underwood: Yeah ...
Cecil Bullard: I probably have, um, in some areas I have three or four shops that we work with, and the price variance between those shops that are in, within 30 miles of each other can be as much as $60 or $80 an hour.
Cecil Bullard: And by the way, the shops that are most successful are not the cheaper shops. Yeah. They're the higher price shops.
Cecil Bullard: Because I think the consumer, there's this thing about price. So I'm, I'm in Edmonton doing a, a gig, and there's a Mercedes shop up there, and this is, I don't know, six, eight years ago, pre-COVID.
And, uh, the, the lady that ran the Mercedes shop, she was like, "We can't... Nobody is booking, you know, the phone rings, but nobody wants to come into the shop." And they're a Mercedes shop. And I looked at the shop and it was, you know, it was, it was okay. It wasn't, like, filthy, it wasn't terrible, yada, yada. And, and you know, I called the shop, and it wasn't a bad con- It wasn't a great conversation.
It wasn't a bad conversation. And I asked her, I said, "Well, what's your labor rate?" Now, by the way, at the time, say eight years ago, my shops up in Edmonton were between 130 and 160. All right?
Cecil Bullard: And she was 75 bucks an hour. Yeah. And I said, "Okay, if you own a Mercedes, right, and you're not the fourth owner, you know, the guy that- Yeah
the, it's the hand-me-down Mercedes that I got that's not fixed, that's t- you know, falling apart- Yeah ... I have no money. If you're the second owner of the Mercedes or the first owner of the Mercedes, and somebody says, "Well, you know, my price is half of what everybody else's is," what's the first thing that comes into your mind?
You know, if you, if you saw, I don't know, if you saw, uh, let's say, uh, tamales, right? You got, uh, tamales. You go in the grocery store, and there's two kinds of tamales. Yeah. They, they kind of look the same, but not exactly the same. And one of them for six tamales is 12 bucks, and the other one is three. Which one are you buying?
Cecil Bullard: know, I'm telling you. I'm not buying the, I'm not buying the $3 tamales. That's a, that's a chance that number one, I'm not gonna like them, and number two, it could make me sick, blah, blah, blah. Might have
Lucas Underwood: that listeria added in there. I'm,
Cecil Bullard: yeah, I'm buying the $12 tamales. It- Between the ch- I- if I'm thinking about price, right?
Lucas Underwood: For sure. I, we, we had those cabins, right, where the shop's at, there used to be nine cabins here. Yeah. And for years they were $100 a night, and they were log cabins. Actual log cabins with a kitchen, with a sleeper sofa, and a living room, and a dining room, had a shower and a, a bathroom. Some of them had hot tubs, had a, a bedroom.
And the, the occupancy rate stayed in the 40% range, and my parents were, were content with that. It was paying the bills. It wasn't that big of a deal. They're making
Cecil Bullard: enough money to pay the overhead.
Lucas Underwood: Yeah. My brother came in and decided he was gonna raise the prices, started charging $225 a night, and our occupancy jumped to 80%.
Yeah. Nothing else changed. No marketing, no nothing else changed. And people started coming in saying, "I thought there was something wrong with them. I thought they were gross or nasty or something." '
Cecil Bullard: Cause they were, 'cause they were so cheap.
Lucas Underwood: Because they were so cheap. Yeah. Yeah. And, and we don't think about that perspective.
And I, I'm telling you, I buy things on Amazon, and I'll see two exact comparisons side by side. Like, I'm not gonna get the cheap one 'cause there's a reason it's cheaper, right?
Cecil Bullard: Yeah, when I see the cheap, my, my thoughts are, uh, I just bought, uh, uh, some stuff yesterday and I saw the cheap stuff, and I was like, "I, I don't wanna buy that.
Cecil Bullard: Right? It, it might not be... It might be some Chinese whatever, because I don't know. I mean, it looks like the product, but it's, it, it probably isn't. At that price, it can't be, right?
Lucas Underwood: How... Uh, so look, here's the thing, because we, we're talking about confidence, right? And, and at the root, we, we know that the pricing has to go up in this industry.
We know that- Yes ... beyond a shadow of a doubt. Yeah. There, there's no if, ands, or buts about it. Nope. And because we, we need to be paying our guys more. I don't think anybody debates that. And if you do debate that- Man, come on now. Second of all-
Cecil Bullard: If you're, if, if you're not making 15% net profit minimum- Yep ... on your business, and your business isn't designed to make 20% net, then- Oh
you're gonna end up with Ford and struggle.
Lucas Underwood: Exactly. Absolutely.
Cecil Bullard: Go ahead. Sorry.
Lucas Underwood: And, and so here's the thing is, is the confidence piece of this. Because we know that the price needs to go up. We don't have to debate that the price needs to go up. How do we get shop owners to the point they're confident in sharing that price?
And I, I think there's a, a, a myriad of things, and I, I think that a lot of small business owners tend to be people pleasers, and that's something that I am learning myself to overcome. And, and I'm trying to work on this concept that if you're not happy, I have to be unhappy, too. And I'm growing and developing in that, but I've, I've realized, like, hey, I can't let that person's emotion dictate my emotion.
And so when they- What do you think- Go ahead.
Cecil Bullard: What do you think the future of automotive repair... Who do you think are gonna be the existing successful shops, say, 10 years from now, right?
Lucas Underwood: Well, I know we're gonna have venture capital and private equity with a bunch of big chain shops bought up. Yeah. Yeah.
And then there's gonna be a handful of small independents left that, that could overcome the financial challenges associated with small business ownership and automotive repair in the, uh, in the 2030s.
Cecil Bullard: It's all about... It will, it will all, it will all be about a couple of things. First of all-
Lucas Underwood: Yeah ...
Cecil Bullard: it's not about fixing the car.
Cecil Bullard: You have to fix the car, okay? That, that's a given. That's the base level
Lucas Underwood: expectation.
Cecil Bullard: That's a, that's a base level. That's not
Lucas Underwood: like a...
Cecil Bullard: Yeah. Somebody shows up to your shop with their keys and says, "Here you go," they expect you to fix the car, okay? Yeah. It is going to be the, uh, the additional items, the way the customer feels about your service, the way the customer feels about your pricing, the way the customer feels about how you paid attention to them, did you listen to them- Yeah
you know, all of those things. And, and by the way, the average person, in fact, I'd tell you 80, 85% of the people will buy the more expensive product if they feel good about the interaction and they feel good about the product. They will always do that. We got a couple questions coming in, so I think-
Lucas Underwood: Yeah, I, there's some really good ones in here.
Yeah. I've, I've got one, I'm passionate about this one. It says, "How much money should a shop have set aside?" I'm gonna tell you something. The best advice that I was given by anybody before building this new shop was maximize the shop that you have now.
Lucas Underwood: Don't just decide to move. Don't just think that, and run the numbers and figure out what your max capacity is.
And I'm gonna tell you, if I learned anything, I wish I had set on that bad boy for as long as I could, just letting it make money and stacking cash. I would get every single dime of money I can in the bank account, because here's what so many people don't realize about expanding They think when they have that small shop, that when they expand, all of a sudden they're gonna have all this demand and they're gonna be able- Yeah
to fill up that new big shop. If you, if you build it, they will
Lucas Underwood: It does not work that way. Yeah. Right? That doesn't work that way, I promise.
Cecil Bullard: Well, yeah, three bays, three bays, low roof, uh- Yeah ... no racks, uh- Exactly ... to, uh, what, 12 bays, uh- Yep ... you know, super high roof. Lot of space. You can get anything you want in, and all of a sudden you think, "Why isn't my shop full?"
Cecil Bullard: Well, wait a minute, you didn't
Lucas Underwood: do all the work. Well, uh, we're making more
Cecil Bullard: revenue. Yeah, yeah.
Lucas Underwood: That was just the limit of the capacity that we had at the given time.
Lucas Underwood: And so, I, I
Cecil Bullard: would- And so maximize it. Exactly, man. So I have a client...
Lucas Underwood: Maximize what you got and stack the cash.
Cecil Bullard: So that particular question, I think, I think the answer is ve- it varies.
Yeah. First of all, every shop, every shop owner should have a minimum of three months worth of operating capital in a savings account, period.
Cecil Bullard: Right? That's before I even think about buying another shop. So- Yeah ... uh, I have a client, uh, we're buying shop number three. Mm-hmm. Um, he's been a client now, I would say probably since 2021.
Um, when he started with us, he was making three, four grand a month. Uh, we currently have two shops, we made $87,000 in profit last month. Now, he's got half a million dollars in the bank. His machine is generating between, say, 70 and 90,000 every month. Yeah. The machine that he has built. And, uh, and that's, and that's pure profit, right?
It's not, "Oh, I'm gonna have to do this with that or that with it." And then it depends on the deal, because he's gonna buy a piece of property for, uh, a million dollars that comes with a shop on it that just hasn't been operating for a bit. So he's got some- Yeah ... expense for marketing, building it up, tools and equipment, et cetera, that if you bought an operational shop, you wouldn't have.
And this is not an owner finance carry. Yeah. So if I'm, if I'm, if I'm gonna do owner financing and the owner's gonna carry it, I might need less cash, right? Yeah. Or if I have to buy more equipment, I might need more cash. Or if- Yeah ... if I have to go through and remodel the shop, I, I mean, I don't think anybody that I've dealt with when they bought their next shop didn't spend at least $40,000 in the move.
Lucas Underwood: And, and at this point, I think 40,000's an undershoot because- Oh, it's way, it's way low ... things have gotten so expensive. I mean-
Cecil Bullard: Yeah, you could... I need, my signage is 40 grand, right? Yeah. I mean, if I'm gonna- Yeah, for sure ... put signage on the building. And-
Lucas Underwood: Uh, here, here's the deal about this, is that, that you think, "I'm gonna go buy a shop," or, "I'm gonna go build a shop," and you get these numbers in your head.
I promise you, because everybody told me, you can double it. Just double it. Just- Yeah ... right off the number, whatever it is, double that number. And so they told me- And the timeframe ... $2 million, that's what it's gonna be. Yeah. And I didn't believe them.
Lucas Underwood: the timeframe-
Cecil Bullard: And so... Exactly. So by the way, not six months, a year.
Lucas Underwood: Oh, yeah. Double the money, double the timeframe-
Lucas Underwood: and, and then get comfortable with those numbers or even higher numbers than that. Target the lower numbers, sure, but be expecting for it to be way more expensive than you think it's gonna be and take way longer than you think it's gonna take, and be way more uncomfortable, create way more stress.
And, and let me tell you something. If you think it's not gonna impact the shop you have now- Yeah ... when you're in the middle of that- Yeah ... you're gonna find out if you grew a team or not.
Cecil Bullard: Well, the other thing, I-
Lucas Underwood: Because you're gonna be focused on something else.
Cecil Bullard: So the other piece of that is if I have a really great team and I have really good systems and processes, I need less money to open the other shop- Yeah
because I don't need... Like, the shop I have, if it runs really well, if it runs, uh... You know, if it's very consistent, et cetera, and it's done that for, I don't know, six months, a year, year and a half- Yeah ... and I have a great team there, uh, um, then I need less money to open up the next shop because I'm, I'm, I'm comfortable.
I'm putting money- Yeah ... in the bank routinely, et cetera. There was another part of the question, uh, best marketing strategy in a small town. I, I'll tell you the best marketing strategy, period. Do an unbelievable job- Yeah ... for your client. And, and- Treat people well ... and the other thing is, you know, learn how to answer the phone correctly, and learn how to build value from the start.
You know, when people- Yeah ... called me and they said, "Hey, Cecil, um, you know, how much for a water pump on a whatever?" I'd say, "You know- Yeah ... I know price is important to you, but before we have that conversation, can I tell you about, you know, Larry's and, and why we do what we do here?" And I never had somebody say, "No, just give me a damn price."
Um, I... Then I was able to say, "Look, we... This is our philosophy of taking care of cars. We, we believe that our customers can drive these cars for 10, 15, 20 years and take care of them, and if they do, it's gonna cost them a lot less over the, the lifetime of the- Yeah ... of the vehicle. So every time you come in here, we're gonna inspect the car.
We're gonna do a- Yeah ... complete inspection, and every time you come in, someone like me is gonna sit down with you and have a conversation about what you need and, and, and why you need it- I'm gonna be- ... and be able to tell you exactly what it costs- Yeah ... so you can make a, an intelligent decision. For sure.
And if that's good, if that sounds good to you, then I have an appointment on Tuesday or Wednesday. And- I think if you create a product that's different than everyone else's product, that's better, that's superior, that you get that, right? The, the, the person, uh, uh, uh, that the, the, the 80% of the population that's gonna value that is gonna value it.
The 20%'s always gonna look for the cheapest price. And- Absolutely ... and by the way, they're not my, they're not my, they're not my clients.
Lucas Underwood: Exactly. So- Exactly. And, and that's what they're gonna be going after no matter what. You're not gonna please them. And even if you made 50 cents on it, they're gonna be fussing about that.
Yeah. Right? And so it, it doesn't work. Now I, I wanna jump into this next question and, and Steve from Wassbalden Motive, Steve, I really hope that we see you at ASTA. Uh, you're in Durham, it's in hometown, so we'd love to see you there. I'm, I'm gonna post a link down here in the comments, and I, I hope that you, uh, see that, Steve.
Because I, I think it's important. Because he's asking the question is how do I get my legacy staff to buy in? And I think this is touching- Shoot them
Cecil Bullard: all. Shoot
Lucas Underwood: them all. There you go. Um- Shoot them
Lucas Underwood: I think it- No,
Lucas Underwood: starts for me with vision. Yeah. And it starts w- with destination. It starts with what we're trying to accomplish, what do we believe, where are we trying to go?
Cecil Bullard: What if we really sat down and had a conversation with our staff that said, "Who are we and what do we wanna be?" Yep. "And what's the image that we wanna portray to our clients," right?
Lucas Underwood: Exactly.
Cecil Bullard: And, and we built that with our staff because, like, I took over a shop, I went in and, you know, within a week I sat everybody down, I said, "Okay, what kind of shop do you wanna work for?"
Right? "What do you wanna be? You wanna be a discount shop, you wanna be a tire shop, you wanna be a transmission shop? Do you wanna be, like, a, a top shop in the industry? Do you want the community to look at you as a top shop, or do you care?" Right? And, and everybody in my shop said, "We wanna be a top shop."
Yeah. And by the way... So then we started talking about, well, what does a top shop look like? What does it feel like? How, how do they answer the phone? How do they... What's their comeback rate? What's their, you know, what's, what do they charge? Are they on the lower end, are they on the higher end? Yeah. So you, you have to get your team on your side.
You have to get your team behind. Like, if I can't value my own pricing-
Lucas Underwood: Yeah ...
Cecil Bullard: how can I expect my team to value my pricing, right? For
Lucas Underwood: sure. 100%.
Cecil Bullard: I have to be... My, my dad, and I've said this in a lot of classes and a lot of people, my dad always said I had an over, uh, developed sense of my own self-worth. Yeah.
All right? But when I was a, a tech working on cars, I always thought, "Man, we are so cheap." And I've always thought that through the whole thing. Yeah. Even as a coach, I'm like, "Man, there are coaching companies that are a lot more expensive than us. Why are we so cheap?" Um, I'm always thinking that, right? Yeah.
And, and what that did at the service counter for we was when we were $158 and everybody else was 100- It made me confident because I thought we should be charging 300, right? Yeah. But- It's, it's kind of the same thing as having that cash in your pocket.
Cecil Bullard: But when I have cash- Yeah ... in my pocket, I think differently, right?
Lucas Underwood: He- here's the thing, i- is for me, right? When we're talking about this staff and we're making this transition, we've never charged any more, especially somebody buying a shop, and they know the fundamentals of shop ownership. They know about financials. They're buying a shop that was from somebody who did not know, and they did not charge appropriately.
They didn't have a lot of overhead. Now this person's buying the shop, so they've got payments, they've got all this stuff going into it, and they're trying to retain the legacy staff. And I get how hard that can be, but you can't have a staff member that is the equivalent of the bottom 20% of the clients that cause all the problems.
If they believe- Yeah ... that no matter what, you shouldn't be making any more money than you have to make, and no matter what, they know how much you paid for those parts, and you shouldn't be marking those up that much. If that's their mindset, if they have a- Yeah, when- And, and I'm... Look, I mean no disrespect by what I'm getting ready to say.
If you have a poor person mindset, you're not gonna fit into that organization well. Not a- If you don't believe people should have money-
Cecil Bullard: Not a company, not a company that wants to be exceptional. So the other- Yeah ... thing would be, and, and this is not to tout, say, the institute, but well-trained people. We have a service advisor intensive coming up.
You know, it's a- Yeah ... three-day service advisor, and, and after many days with some of the top service advisor trainers, sales trainers, what do we- Yeah ... really came up with? We need confidence. How do we build- Yeah ... confidence in the service advisor- Exactly ... in the product, in the price, in the things we do?
Cecil Bullard: And, uh, you know, we have a, a big marketing event coming up. We have, uh, the MARS event, which is Marketing for Auto Repair Shops, coming up in October. And, and if you wanna have a great marketing strategy and you wanna learn what you need to do today and what the shops that are winning today- Yeah
are doing, that's the place to be.
Cecil Bullard: So I g- I, I have to, I have to a little bit, you know, sell the, the company and what we do, so.
Cecil Bullard: Uh, this question comes from Steve ... how do we... A- and the other- Go ahead. Go ahead ... one, one more thing on that, on that legacy stuff If I can't bring them ahead, if I can't get them to think correctly, if I can't get them on the page, you can't have, you know, two people that think that you're too expensive- Yeah
and that you can't, you can't make a profit or you shouldn't make a profit, and, you know, five people that wanna be profitable and wanna go. You can't have- Yeah ... slugs with, with, uh, super performers. You just- Yeah, you can't
Lucas Underwood: have slugs- You can't do it ... with the racehorses.
Cecil Bullard: Yeah. It's not gonna work out. You, you, it won't work.
Right? You, you're exactly right. The racehorses will run a lot slower and be upset.
Lucas Underwood: And, and look-
Lucas Underwood: I'm, I'm gonna tell you something. I used to be so afraid of letting people go, and, and I made a video this week talking about this as, hey, I get that there's a shortage of... And, and I'm gonna tell you right now, this is gonna upset some people, we don't have a technician shortage, we have a skilled and willing worker shortage across all trades, across all professions.
There's a shortage of people who want to actually work. And so I get the fear associated with letting someone go, but that person will become toxic and cancerous inside your business if you keep them. They will start telling people you're too expensive if you keep them.
Cecil Bullard: Yeah, even your clients, by the way.
Lucas Underwood: Yeah, that's what
Cecil Bullard: I'm saying. Will start making excuses for you with your clients. Yeah. Exactly. "Well, got this new, got this new owner. I don't know. He raised the price, and you know, I..."
Lucas Underwood: Yep, because it's gotta be somebody's fault besides theirs.
Cecil Bullard: But here- Yeah ... but here, let me help you out. I'll give you a discount.
Lucas Underwood: it. Right?
Cecil Bullard: We, I had a, I had a shop- Yeah ... out of, out of Arizona. Um, uh, we, we went in, and they were not profitable. They lost, I don't know, he, he did 2 million, they lost, like, 200 grand. Yeah. And so I said, "Next year, what do you wanna do?" He said, "I wanna do 3 million." I says, "So you wanna lose 300 grand?"
Right. You go, "Wait a minute." And, and I said, "Why don't we do a million and a half, make 20% net?" Yeah. And, and we went in and we looked at their coolant flush and their brake flush, and at the time they were, like, $39.
Lucas Underwood: They were charging-
Cecil Bullard: Yeah ... $39. Now, by the way, this is 10 years ago, but everybody else was charging 100.
Yeah. And so we instantly, we went to 79, right? These coolant flushes and brake flushes gotta go to 79. And his two sons are at the counter, and a month later we're looking at the numbers, no margin changes, no nothing. So we start pulling work orders, and what they were doing was discounting the $79 down to 39.
Cecil Bullard: People have to understand that, that first of all, we're not the, we're not Billy Bob's Auto down the street. And so I don't know what's going on at Billy Bob's. I do know what's going on at Cecil's, right? That's, that's what we're gonna do. And- Yeah ... this is who we wanna be, and if we wanna be that, this is what we need to look at, this is what we need to look like, this is what we need the education in, this, these are the things we need.
And in order to get those things, we have to be able to afford them, so we have to charge X price, whatever X price is. Okay. And I'm not trying to set a price, but I can tell you right now by math, at, in 1980, we were $70 an hour in our shop. Okay? Yeah. And we were one of the higher priced shops in town at that time, because I'd been through a bunch of training.
If I had started at $70 an hour in 1980, and I raised my price 3% to today, we'd be like 286 an hour. Right. Yeah. And, and we're not. I mean, I think the last survey I saw, which was one of the TechMetrix surveys, and it was like 150-something, 152 or
Lucas Underwood: something. Yeah, that's what I saw as well.
Cecil Bullard: Yeah, and-
Lucas Underwood: That's what I saw as well
Cecil Bullard: We're, we're not gonna survive at 152, nor would we be able to- Yeah,
Lucas Underwood: and, and none of the other industries have lagged like we did
Lucas Underwood: cars fixed
Cecil Bullard: and deliver the rest. No.
Lucas Underwood: None of the other industries have lagged like we did. Now, here's a really interesting question by Steve, and I, I wanna answer this kind of from the technical aspect first. Okay. Because he says, "Manufacturers are making it increasingly difficult for anyone outside their dealer network to service their vehicles.
As independent shops invest more in the tools, technology, and expertise required to keep up, how do they confidently price that capability and convince customers they aren't sacrificing quality by choosing an independent shop?" Now, a couple things. The first thing is, and, and I loved your explanation of this, all you have to do is go to a dealer one time and you realize the experience isn't so great.
And so maybe this- I, I wanna... I,
Cecil Bullard: I need to clarify something here. The dealer expenses I have, experiences I have had, have mostly been terrible, okay? Yeah.
Cecil Bullard: I have had a couple of decent dealer experiences.
Lucas Underwood: Yeah, for
Cecil Bullard: sure. Just not very often, and, and, and few and far between. Yeah. And so I'm not saying all dealers suck, but the dealers I've dealt with suck.
Lucas Underwood: Yeah, for sure. Right? And, and maybe this is a good one for Steve, too. Yeah. Is, like, Steve, go, go take your team, give them the money to go somewhere else and get their oil changed at a dealership and let 'em see what the experience is like, and they'll come back and they'll say, "We're amazing."
Cecil Bullard: And I think you should do- And they will
go to a, once a year you should go to a Quick Lube.
Lucas Underwood: Yeah, exactly.
Cecil Bullard: And get the Quick Lube experience, and see- So- ... how they do what they do, right?
Lucas Underwood: Yeah, absolutely. So, you know, here, here's the first thing that I wanna say to Steve, is I personally believe, based on my relationship with a number of manufacturer guys, I personally believe...
And there's, there's some folks in C-suites and manufacturers who have a very different outlook on this. But the engineering teams and the people, the boots on the ground, who are getting us tooling, who are getting us access to the information we need, genuinely want us to be able to work on their automobiles.
There's a couple that don't. There's a couple manufacturers who are trying to lock things out. The large majority of the auto manufacturers are trying to provide us access in a meaningful yet secure way. And so the reality of that is it is more expensive. But here's the deal, is the car itself got more expensive to fix?
The difference be- I don't think- Go ahead.
Cecil Bullard: I, I don't think that it's more expensive than what they would be doing at the dealership. Well- And if you look at the survey data and the customer data, currently the consumer believes that the independent shop is a much better place for them to be.
Lucas Underwood: Absolutely.
All right? All right. But, but here's the thing. Here, here's where I was going with that, though. Right. Is the difference being the, the automobile got much more expensive to fix because the technology increased tenfold. I was in a meeting, and Mary Barra was there, and it was like 10 years ago, and she said, uh, the technology in the vehicle in the next two years, I think she said, will outpace what we've seen in the past 100 years.
Oh, yeah. And then we saw her again at another event, and they said in six months we'd already outpaced that. Like, it happened before we realized it had even happened.
Cecil Bullard: And- And we're gonna have self-driving cars on the road. I mean, and we have them now- It- ... but we don't, we don't have a mass. The problem- Fully autonomous,
Cecil Bullard: The problem that they're dealing with is data transfer, so they can't get the, the links good enough. So as the links improve, as the- Well- ... you know, StarNet and all that improves, that will happen better and faster. But it, it... There's gonna come a point in time in the future where we're gonna have a bunch of self-driving cars on the road.
For sure. And that technology is not today's technology. That's not what I worked on five years ago.
Cecil Bullard: Oh, yeah. You know, the-
Lucas Underwood: Absolutely. And
Cecil Bullard: the technology- Everything has
Lucas Underwood: changed so dramatically ... the technology we're seeing in automobile right now has advanced- Yes ... so much in just the past few years, it's unbelievable.
And, and here's, here's kinda what I'm getting at, though. Is that the automotive aftermarket, the independent shops have withheld increasing their pricing like they should, while the technology outpaced them. And that technology outpaced a lot of technicians too. And so we, we weren't investing in training of our people, we weren't investing in the tooling for our people, we weren't doing what it took as an industry to keep up.
Now, there's a lot of really great shops that have done a fantastic job. You think of Seth Thorsen's shops, you think of, uh, Matt up there in Minnesota. Yeah. You think of these shops that have really put the work in to learn this technology, grow. Brandon Steckler, great educators out here teaching these guys how to take this next technology.
And, and somebody commented the other day, and they said, "Lucas, it's voltage drop, it's all the same stuff," right, but it's theory and operation of these systems, understanding how it works, understanding
Cecil Bullard: how the networks- It's also, yeah, how, how does the computer talk to itself? How, how, how do the networks talk to each other- It-
and how does that data transfer and, a- and that. It, it's, it's changed dramatically in the last five years. Just dramatically. And
Lucas Underwood: so, so here's the thing, though, is like as an aftermarket, we just didn't see the value ourselves. The consumer- I- ... sees the value.
Cecil Bullard: I also think-
Lucas Underwood: If they want their car fixed, they see- Yeah
Cecil Bullard: I, I also think that there are, are shop owners that believe that they can just do brake jobs or- Yeah ... I can still do suspension work, and so I'm gonna do that. Yeah. The problem is, is that- You're right up
Cecil Bullard: all of that's getting- ...
Lucas Underwood: putting those piston calipers back in.
Cecil Bullard: It's all getting... Yeah, it's all getting tied into the computer systems.
Yeah. All, everything is being monitored now, and adjusted and changed as the, as the... And it's gonna get worse and worse and worse. Yeah. And I, by worse, I mean there's gonna be more and more opportunity for the peoples that understand the technology. And you said something that I think I gotta, I gotta make a statement about.
So the manufacturers of the equipment are gonna continue to wanna sell us equipment. Mm-hmm. Okay? Yeah. So they want us, uh, uh, to do that. We currently work on, I don't know what it was, 78, 79% of the industry. Mm-hmm. So the independents do almost 80% of the work. Um, the dealerships tomorrow, if, if, if there was a law passed that dealerships had to do all the work or even half the work-
Lucas Underwood: They couldn't take the-
Cecil Bullard: They couldn't do it.
Yeah. They're already, some of them are already scheduled out 8 weeks, 10 weeks, 12 weeks. Yeah. Because they also can't get good technicians in their shops, and- Yeah ... they have shops with 42 bays, right?
Cecil Bullard: And, and, and so I don't fear for us as an industry because of that. I look at, at things like, you know, we just went to STX.
Cecil Bullard: yeah. And if, and if Worldpac decides not to support that because they lost, you know, $2 million putting on STX, now where are we gonna get that training that we need? Yeah. You know, uh, ASTA, the big e- uh, the big event coming up at ASTA, and, and I know that it'll be a great event, but that event should be five times the size it is- Yeah
because of the training that's needed. And i- if we don't support that additional training and those equipment manufacturers, they're gonna stop supporting us. Yeah. That's the thing I worry about the most. It, it- That's the thing that keeps me up at night.
Lucas Underwood: It's so interesting because I'm, I'm in other industries too, and I go to their trade shows.
And, and there's one particular trade show, attendance starts at $1,500 a person- Yeah ... and they put approximately 400,000 people in a convention center, right?
Lucas Underwood: And you think, at $1,500 a person, and-
Cecil Bullard: That's not one of our trade shows in the automotive industry- No ... is it? No, okay.
Cecil Bullard: Just checking.
Lucas Underwood: it is a big trade show.
Lucas Underwood: And it's for the amusement industry. Yeah. And, and there's people here, and they're learning, and they're developing, and they're growing, and they're... Right? Lots of opportunities, yet we aren't there, yet we have a bigger footprint. We have a bigger presence. Definitely. Why are we not there? And, and I'm gonna tell you something, Steve.
You're talking about these dealerships. There, there had long been a belief that the dealerships were the authority in fixing that brand's automobile, and I'm gonna tell you something. They screwed that
Cecil Bullard: though. They
Lucas Underwood: screwed it. That's gone. Yeah.
Lucas Underwood: they screwed it. That's gone. They, nobody believes that.
Cecil Bullard: When they- Yeah ... when they decided to try to be competitive with the industry.
Cecil Bullard: So when they, when they, uh, decided not to have all A-Techs... Uh, 25 years ago, if you came in the program, you were gonna be an A-Tech. Yeah. There was no, "We're gonna have 10 C-Techs and one A-Tech." Uh- Yeah ... they couldn't make money because their expenses are so much higher than ours in general, and so they decided, "We need to make money, and we're gonna cut down on A-Techs.
So we'll have one A-Tech-" Yeah ... "and we'll have 10 C-Techs, and that's how it's gonna be." Uh, when they decided to compete on tire prices, and when they decided to do quick lubes in their dealerships, they started competing in an area, and they, they lowered, they took themselves off of that, "We're the best" pedestal.
Lucas Underwood: absolutely.
Cecil Bullard: And when, when BMW started, uh, using aftermarket parts and going out to- Yeah ... uh, aftermarket suppliers to get a cheaper part for their customers, they don't even understand their market. Are they... Are you kidding me? You know? Well,
Lucas Underwood: look, look, I'm gonna give you the hot take, and, and Raleigh's gonna cut this up, and it's gonna go out as a reel.
Cecil Bullard: It wouldn't. Yeah.
Lucas Underwood: And it's gonna, it's gonna upset a lot of people, so I'm just gonna put this out here.
Cecil Bullard: Go, baby, go.
Lucas Underwood: All right, here's the deal. I'm gonna tell you what happened, okay? All these technicians were paid unfairly And they were not treated fairly by the dealerships, and there was favoritism, and there was a lot of BS happening in dealerships.
They did not see the value in continuing to develop themselves as a diagnostician because the way the pay systems were set up is they could make a whole lot more money hanging parts than they could truly understanding, learning, and growing how to diagnose a modern automobile. Yeah. So they are pattern failure fixers.
They do not specialize in deductive reasoning like we see in the aftermarket industry. Now listen, automotive dealer technicians, that is not me talking trash about you. I'm not saying that. You were conditioned by the environment which you were faced with to behave and learn that way. In the independent aftermarket, we have to focus on deductive reasoning, learning, growing, developing at a much higher level.
We work on all makes, models, brands of automobiles, and so we do things a lot differently in the aftermarket than you do in the dealership, and we have a lot more skill in the independent aftermarket that fixes cars that the dealerships can't fix.
Lucas Underwood: And so it's about a value thing in that sense.
Cecil Bullard: There's another thing that happened, um, and this happened over the past 20 years, and that is, you know, uh, I know the guys that developed the... What's the, uh, mechanic thing where the mechanics would go on and ask questions, and they would have a whole library of-
Lucas Underwood: Like IATN or something like diag.ad ... IATN.
Cecil Bullard: Yeah. I know the guys. I was, I was... I wasn't involved with it, but I knew the guys.
Lucas Underwood: Jeez, you're old, Cecil. No, I
Lucas Underwood: wouldn't tell anybody. I wouldn't tell them I'm a diagnost- But- Let me know Scott Brown. Don't tell him you're 70, Cecil.
Cecil Bullard: But, but I'm not 70 yet. Um, not yet. I'm not, I'm not dead yet. Um, but, but what's happened over the past, say, 10 years is with...
An- and it's gonna happen more and more with AI, is they're looking at pattern failure diagnostic a- as the, as the key because they're saying, "Well, you know, 9 out of 10 times when this kind of a car with this engine, with this transmission has this problem, this is the solution."
Cecil Bullard: And so now the m- the guys who are technicians at the dealerships, they haven't had to learn how to fix that, that 1 out of 10.
Cecil Bullard: Right? 'Cause they just don't fix it. They just basically- Yeah ... you know, they throw the towel in and go, "No, thank you." And it goes out to the aftermarket, and in the aftermarket- Mm ... we have to... For some reason, we believe we have to fix the car, right? Yeah.
Lucas Underwood: We, we don't send
Cecil Bullard: them out. And, uh-
Cecil Bullard: are we doing?
No, we, we, we basically don't chase anything away. Uh-
Lucas Underwood: Yeah ...
Cecil Bullard: e- even though maybe sometimes we probably should. But, but I think that the skill set that we have developed in the aftermarket is a much broader skill set, a much better skill set, and I think it will take us into the future even- Yeah ... even better.
So I, I agree with you 100%. I mean, the, the flat rate pay system, I, I... And here you go. Here's another one, right? It's not fair to the employee. It just is not. It's not. It puts all the responsibility of car count and flow and getting the right parts on the employee's shoulders. And it, it, it- I mean, I, I talked to a shop last week and they're like, "You're at 40% productivity."
"Oh, well that's fine because I'm paying flat rate." And- Okay, so now you have a bunch of employees that aren't making any money. How do you think they wanna work? How do you- Exactly. What's the... How motivated do you think they are? I'm gonna come to work and make $400 this week, uh- Mm-hmm ... 'cause we, we're only gonna have, you know, six cars that I can work on.
Um, and it's not because the cars aren't there, it's because the process of fixing the car and getting the parts here and getting the estimate done and getting the inspection done and getting the diag done, those processes are screwed up. Mm-hmm. We don't have a tech shortage. We have a productivity and process issue problem in our industry.
Yeah. And if we fix the productivity and process issues in our business, every shop owner, I guarantee you, would make five times, 10 times more than they currently make-
Lucas Underwood: Yeah ...
Cecil Bullard: if they fixed that- Yeah ... and got their productivity up. And- Absolutely ... most shop owners are looking at the end and they're going, "Man, I hope I make it to the end of the month, and I hope there's still money left at, on the 1st in the account."
Yeah. And they're working their butts off when what they should be doing is running their business and, and fixing those, those productivity and those, those process issues in their, in their business to create the machine that runs the best, right? Yeah. 100%. And I don't think we, we un- I don't think we understand our business in that way, right?
Cecil Bullard: we don't- In this, in this industry. Not as a, as an industry.
Lucas Underwood: Yeah. We, we've, we have fallen into the, uh, the trap of seeing our businesses as fixing cars. Yeah. And, and that's one of the issues with being technicians be- that become business owners- Yeah ... is we, we get stuck in the mentality of doing what the business does, and it, there has to be a shift.
There has to be a- And, and- ... a view of synergy ... and
Cecil Bullard: because it's, because fixing the car for us is relatively easy, right? Yeah. Um, you know, uh, uh, Wayne bought a, a, a used Cadillac and, uh, Escalade and the water pump, uh, was leaking and, and he was like, "Ah, I think I'm gonna do that. It looks pretty easy." So we got a water pump.
Ah, easiest water pump I ever put on in my life, right? I mean- Yeah ... I think it took all of 15 minutes to take the water pump off and put the water pump... Took more time to figure out the serpentine belt and how it runs- Yeah,
Lucas Underwood: figure how, how
Cecil Bullard: to route it ... than, than doing all the rest, right? Mm-hmm. We know how to do that because we've done it a million times.
Mm-hmm. Because when I started, I didn't, I, I couldn't have done any of that, right?
Cecil Bullard: And so our, our, the consumer sees our value when we don't see our value often, and I think we've also trained the consumer to not see us as valuable 'cause we don't value ourselves.
Cecil Bullard: 100%. And until we fix that, until we, until we realize that, yeah, we probably should be upwards of 200, 250 an hour.
And, and I'm not trying to set a price. Please, I'm not trying to. Yeah. Whatever it takes you to make 20% net in your, in your place- Amen ... where you're at, in your region with your costs, that's where you should be. That's what your pricing- Yeah ... should be. But- That's it ... if you don't understand how to figure that out, you need somebody that knows how to figure that out.
Lucas Underwood: Amen. And listen-
Cecil Bullard: So that you can be profitable ...
Lucas Underwood: without clean financials, okay? It's gonna be real hard to have confidence in your pricing. But when you have clean financials, then you realize you ain't making no money, it's a whole lot easier to charge that money. "
Cecil Bullard: Lucas, we, I think, I think we gotta go up 15 bucks an hour."
I know. "Oh, I don't want to, Cecil." "Yeah, but, but we have to, brother, 'cause there's not money in the bottom line." 'Cause you're not paying your bills. Yeah. Well, yeah. Remember those bills that keep piling up? That's it. They're gonna still be there.
Cecil Bullard: it. Cecil- So confidence in your, in your product, you know, uh, I think the confidence we have sometimes is even weak that we're gonna fix the car.
And so we- Yeah ... you know, even a sales guy sometimes doesn't trust the people behind him. Yeah. And I don't think you can sell when you don't trust the staff behind you to fix the car.
Cecil Bullard: Cause you're gonna be the one that takes the heat. And so it's more- Yeah ... than just, well, we should be 300 bucks an hour, so I'm gonna be 200 bucks an hour, or 220- Yeah
and I can do that and I'll make money. I, I think it's more than, than, hey, I have a skill set that no one else has, or very few people have, and I have people that have that skill set, and there's value in that skill set, right? Yeah. And what we do and how we do it. And, and I think it's even more than, "Hey, if you go to Billy Bob's Auto down the street, maybe you won't get the same service level or the same quality part or, or those things.
But here I know that we're gonna do all those things correctly." Yeah. I think it's also knowing that and feeling comfortable that, that in the end for yourself and the consumer, it's gonna be all right. It's all gonna be okay. Yeah. And if you feel that way, if you feel like no matter what I charge, it doesn't matter.
What you charge, it really doesn't matter at all. How you treat the customer and whether or not you can build value in what you charge is everything. Yeah. And if I can do that and I feel good about it, then it, I can be very confident in my pricing,
Lucas Underwood: right? You're exactly right.
Cecil Bullard: Amen. A- and, and it, also, I have to be willing to send some people home Meaning I have to be willing to say, "You're not my customer.
You're not willing to pay my price." You know, the guy comes out, I, I had a, um, a water heater blow up or whatever and leak, and guy comes out and, uh, I could go get a water heater at the time for around 1,100 bucks, and I could lug it in, you know, go down to the thing and lug it down and, you know, go out five times to my toolbox to get the right wrenches and, and all of that and, and, uh, then I could hurt my back trying to lug it out of my basement.
And guy came in and, and he said, um, you know, how... I said, "How much for the thing?" He says, it's, I don't know, it was $2,200, 20, 26, whatever it was at the time. And I was like, "Okay, great. When can you have it done?" Right? "Oh, I'll, I, I got a water heater in my truck." Yes. "I'll
Lucas Underwood: be done." Just
Cecil Bullard: go get the water. "Put the water heater in.
There you go." That's it. When we were all done, and I, I paid him, I said, "Now, I, I didn't argue about the price. I don't care about the price. What were you charging per hour?" Yeah. "What was your
Lucas Underwood: hourly rate?"
Cecil Bullard: Well, let's see. He was there for less than 45 minutes start to finish, and the part, uh, my cost at Home Depot was 11.
You know, he paid less than that, and he charged me, I don't know, 22, let's say $2,200. I think it was 26, but he charged me $1,000 for being there for an hour- Yep ... and for driving over, right? Whatever that 15-minute, 10-minute... Uh, by the way, he only lives two blocks from me, 'cause I see his truck- That's it ... outside the house, right?
Right. Um, but... And, and people tell me, "Well, Cecil, you lie when you say there are plumbers out there that are 4 or 500 bucks an hour." No, I don't.
Cecil Bullard: I paid it. I've paid it more than once. That's it. And I'll pay it again tomorrow so I don't have to hurt my back lugging the, you know- Water heater ... heavy water heater out of my thing and, and carrying it away.
Yeah. Um, and there are- Oh, that's so true ... lots of people in the world that are willing to, ready to, and able to pay that.
Cecil Bullard: And they're not willing to, to do it themselves, and they want a quality product. Amen. If you're that person, be confident in what you do.
Lucas Underwood: Amen, buddy.
Lucas Underwood: sell a lot more crap. And, and we, we as the independent auto repair aftermarket are here to serve you.
And Cecil, it has been great being here with you today. I'm excited to do the next one coming up here soon.
Cecil Bullard: Always is, brother.
Lucas Underwood: That's it, and I can't wait to see you guys next time.
Lucas Underwood: That's it, real soon.
