Show Summary:

In this inspiring episode, Jimmy Lea hosts Tim Chakarian and Johanna Reichert of Bimmer PhD in Pasadena, CA, as they open up about their journey from humble beginnings to building a thriving, purpose-driven auto repair business. Tim shares his roots from working in his uncle’s restaurant to becoming a BMW master tech, and how these experiences laid the groundwork for his leadership style. Johanna recounts her leap from the postal service to becoming a cornerstone of the business’s administrative and cultural success. Together, they explain how investing in leadership development, clear communication, and intentional culture-building turned their shop into a place people love to work. Their unique practices around team meetings, accountability, and recognition reveal how to create a business people feel proud to belong to.

Host(s):

Jimmy Lea, VP of Business Development

Guest(s):

Tim Chakarian, Owner of BIMMER PhD Motorsports

Johanna Reichert, Vice President at BIMMER PhD Motorsports

Episode Highlights:

[00:03:20] - Tim shares how his love for fixing things triumphed over family pressure to pursue other trades.

[00:05:22] - Restaurant experience gave Tim unexpected sales, management, and leadership training.

[00:08:03] - Tim’s 10 years at BMW taught him the critical importance of precision, mentorship, and attention to detail.

[00:13:34] - Johanna describes transitioning from USPS to becoming an integral part of the shop—starting with a terrifying first phone call.

[00:15:35] - Shop expansion forced Tim and Johanna to face the realities of leadership and begin shaping culture intentionally.

[00:17:13] - Leadership training transformed how they approach communication, staff development, and accountability.

[00:24:02] - Weekly meetings are structured around shared goals, technician performance metrics, and problem-solving.

[00:27:09] - Introduction of the “Actualizer” tool empowered team members to self-direct projects and own their responsibilities.

[00:43:33] - “Love it and Learn” rituals at weekly meetings foster camaraderie, gratitude, and internal recognition.

[00:54:01] - Tim and Johanna outline how mission, vision, and courageous hiring/firing decisions protect and nurture a strong culture.

👉 Unlock the full experience - watch the full webinar on YouTube: https://www.youtube.com/watch?v=FdSELe--ljA

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Links & Resources: 

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Episode Transcript Disclaimer

Episode Transcript:

Jimmy Lea: Good morning, good afternoon, good evening or goodnight, depending on when and where you're joining us from. It's a bright, beautiful day outside. Absolutely gorgeous. So excited to be here with you, my friends.

Jimmy Lea: And I agree you don't have to go this journey alone. We are gonna go with this journey together. It's a crazy storm out there. Not all the ships are created equal. Let's lock arms together and make sure nobody's left behind. 'cause together we can make this happen. We've got a phenomenal conversation gonna happen today about your shop, about your business, about your company, about your people, your staff, your technicians, your service advisors, your managers, your parts people, all of the people inside of your shop, including you.

Jimmy Lea: Joining today in our conversation, and if you've got questions, go ahead and type them into the comment section. Joining us for our conversation today is Tim, Ian and Joanna from Bimmer PhD in Pasadena, California. Some really good friends. They have a phenomenal shop. They have a phenomenal program. And I'm just super excited that we are gonna have this discussion today.

Jimmy Lea: Tim's here. Joanna's here. Thank you so much for being here. You guys. Good morning. How are you? 

Tim Chakarian: We're good. Thank you for having us. We're excited to be here. 

Jimmy Lea: It's a pleasure to be here. Nice. Oh yes. That's gonna be interesting. You guys are in the same room, aren't you? 

Intro: Yes. Oh, that's you. 

Jimmy Lea: We will figure this out and we will make it work.

Jimmy Lea: So, phenomenal. Tim and Joanna came to our summit conference in Amelia Island, Florida. What did you guys think of the conference? Awesome. Yeah. That was top notch, wasn't it? Phenomenal speakers. It's really good. Yeah. Phenomenal speakers that were there. It was just absolutely amazing. And so, gosh, dang, Tim you gave such a great presentation talking about your company culture and what it is that you've done.

Jimmy Lea: I, I wanna weave in your story first to talk about the history. Like when you started, when it is Joanna joined the team. When you moved up, when you, I wanna I wanna document this for posterity. That's my history channel moment here. Tim, how did you get started in the automotive aftermarket? 

Tim Chakarian: It was interesting because 

Jimmy Lea: you see that's a big old long breath.

Jimmy Lea: A big old si out. Well, 

Tim Chakarian: no, actually I'm gathering my thoughts, I'm gathering my thoughts. Usually it's just like a barrage of thoughts coming out. But I got started in automotive industry when I wanted, I had a passion for fixing cars growing up, always fixed cars, and my parents tried to deter me from being a mechanic technician as it were.

Tim Chakarian: So they got me involved with my family that taught me the pool business, the construction business, the restaurant business. But ultimately I, I loved taking things apart. I love fixing things. I love making 'em better. So, when we moved back up from to San Diego after I spent several years working at my uncle's restaurant business you know, I went to West Valley Occupational.

Tim Chakarian: I wanted to get certified. And I applied at every dealer I could. And BMW picked me up in Westlake, about 45 minute drive from my house, and I was super excited because that was, oh, Johanna's joining me here, they want me to, all right. So, and that, that was the start of it. I was so excited to be working at A BMW dealer that I didn't realize the possibilities and where it would lead me today, but.

Tim Chakarian: Ultimately I was happy to be working at a dealer, consistent income. They were gonna teach me and mentor me. I had some tire experience beforehand. In high school. I took auto shop. I stunk at all the other classes, but auto shop, metal shop and wood shop. I got an A in and

Jimmy Lea: yeah, very tactile, right?

Jimmy Lea: I mean, you get to touch stuff, you get to do things. Oh yeah. Okay, well now I gotta pause for a moment here. Let's rewind just a second. You worked at a restaurant. What did you do in the restaurant? 

Tim Chakarian: Since it was my uncle's restaurant, he didn't wanna have any kind of favoritism, so he started me from the bottom.

Tim Chakarian: I started out as a buser and I had to do all the menial chores, like cleaning and, you know, sweeping and catering after people. Seeding people. Yeah. And finally I worked my way learning the menu and learning what the. What we pitched, what we sold as it were as a server. Love, love it. And then from a server, I worked my way to managing the servers so I can understand whose shifts did what, when was the busy time, when was the slow time how to move people around and who, what, what happens when people don't show up to work?

Tim Chakarian: And eventually when my uncle went on vacation for two weeks, I got to. Order food and control the kitchen. And I thought, oh my God, this is huge. But what I didn't know at the time, and they say everything happens for a reason, is life was preparing me for what lay ahead, which is owning the business today.

Tim Chakarian: And the customer service people business 

Jimmy Lea: works. Yes. Oh, and you know what I just heard there was you had sales training. You had sales training, this is what we pitched, this is what we want to have. You had to study the menu, then you had management training, and then you got some leadership training. And then it was like business ownership training where you're having to order all the inventory and all those things.

Jimmy Lea: I love it. What kind of restaurant was it? 

Tim Chakarian: Being Armenian. It was our Armenian restaurant. It was called the Armenian Cafe, and we had kebabs and chicken and salads and humus and, you know. And,

Jimmy Lea: did you ever 

Tim Chakarian: cook? Were you ever chef? No. I'm I can cook here and there, but if you like your food chard, then let me cook it.

Jimmy Lea: Well, we, you know, when you do chard, it takes out all the calories, so then you can eat whatever you want. 

Tim Chakarian: Johanna's a much better cook. 

Jimmy Lea: Okay. Well, very good. Well, and are you cooking Armenian as well, Johanna? 

Johanna Reichert: You know what I do? I do try some dishes, but there's some things I won't try because I know I'll never live up to his mother's cooking when it comes to that.

Johanna Reichert: And I'll leave that. That's hard. But I do some simple dishes and it's really good. It's healthier food too, so it's, I like that. 

Jimmy Lea: Love it. Love it. Rocky took me out to dinner and we went and had some Armenian food f phenomenal amazing. Life changing. It was so good. I just can't wait to do it again.

Jimmy Lea: Okay. From there onto BMW. You're working at the dealership you're a tech, you're doing tires, you're doing the whole thing. At how long were you at the BMW dealership? 

Tim Chakarian: I spent about 10 years there. When I first came in, I came in as an apprentice, and that's really what I liked is because I'm not gonna lie, I was intimidated.

Tim Chakarian: You know, BMWs are complex and you know, they have electrical issues 

Jimmy Lea: and 

Tim Chakarian: so I was very blessed to go into a mentoring program with the shop foreman. And I basically became the shop foreman's pet. And whatever he told me to do, I would do. And let me tell you, he was not easy on me, Jimmy. I mean, I got my butt handed to me one day because it was 10 Newton meters, not 10 pounds.

Tim Chakarian: And you know the difference between 10 Newton meters and 10 foot pounds? 

Jimmy Lea: I don't, but it sounds metric in standard. 

Tim Chakarian: Three foot pounds and you would've thought it was the end of the world. 'cause I tightened the gasket. But the, what I learned at that time, or what I learned now that at the time I was getting my tooth handed to me was three pounds.

Tim Chakarian: Is the difference between the gasket lasting 80,000 miles and the customer having reliability and you doing the job again a year or two or three years down the line. Oh my gosh, isn't amazing. So attention to detail was the bottom line. The attention to detail, that is it.

Johanna Reichert: Yeah, he started in 99 when the dealerships were a little bit different than they are these days. They had an apprenticeship program and I think that was key because you know, they're willing to take on people and to train them and to give them a mentor. I feel like they don't do that these days, which is actually in our.

Johanna Reichert: Our advantage because it helps us to make a better shop culture and a better culture for people coming into the industry. 'cause you can't, it's very difficult to just, you know, leave school and go straight into a dealership and be able to hold your own and not feel overwhelmed or not have them just kind of, you know, treat you like a number basically.

Johanna Reichert: So he was actually fortunate to get in when they were less like that. And so they did. Yeah. You know, I'm sure they treat a little bit like a number, honey, but, you know, they gave him a mentor. They gave him somebody to train him and teach him and pass along their skills to him.

Johanna Reichert: And so he really did benefit from that because of when he started. 'cause in that day and age, that was, you know, a little bit more normal than it, than, it's not normal these days for I feel dealerships to, to give their younger tech mentors and people to look up to and to train them and to teach them their experience.

Tim Chakarian: They don't, yeah, the. I worked my way from being a certified tech to a diagnostic tech to being a master tech. And when I finally was a master tech at a local dealer here they gave me an apprentice and I was so excited to be mentoring somebody else. And they're like, in 90 days he's going on the line and fixing cars.

Tim Chakarian: And I was like, 90 days. I was an apprentice for 18 months and I still didn't know Jack. So in today's era now. Recently they have kind of changed and understood that, you know, these guys are not successful. They're not setting them up for success. They're actually setting them up for failure. So finally, after all these years, they're going back to a mentoring program where somebody does watch over them, but it's not the same it doesn't have the same personal touch.

Tim Chakarian: And I'm sure we're gonna get into that, but that's was the growth part. You know, if we're looking at it from the time where I was at the dealership, that was a growth part. The part that had meaning for me was always worked under Mark, or I always worked under Steve. You know, Steve was a, he wasn't as old as Mark, he was closer to my age.

Tim Chakarian: But man, that kid could fix anything. He could weld brackets, solve problems, ac, so it was like. This dude's my idol, you know? And years later you progress and learn from that. You go to another dealer, you find another mentor, somebody else that takes you under their wing. And all of these experiences help build beliefs.

Tim Chakarian: Beliefs that we can do this, we can tackle anything. And, you know, guiding it into what we're learning today, those experiences, those truth tapes. Those are what built the foundation, the second foundation of what I'm experiencing to be able to mentor others in my shop. 

Jimmy Lea: Oh, I love it. You got such a solid foundation there working at BMW and then at some point you, with that solid foundation, you decided, oh, you know what?

Jimmy Lea: I want to go and create my own. And so you opened up a shop. And how long of you being on your own with a bucket and a wrench and a phone and a computer, are you doing this on your own that Joanna joins the team? Because I know that there was a time period that she was doing the after hours books and then finally came on to the full-time.

Jimmy Lea: What does that look like? 

Johanna Reichert: About six months. 

Tim Chakarian: Yeah, about six months. I had left the dealership and I was doing everything on my own. We, I rented a, an 1800 square foot back shop and I opened the door, I dropped the customer off, I picked up the parts, I washed the car, I did everything myself. And it was only a matter of time until, you know, there's so much, these two hands can get done in one eight hour.

Tim Chakarian: Oh yeah. At the time, Johanna was still she was a mail carrier at the post office, so she said, you know what? I believe in you. I'll take care of the bills at home. You just concentrate on building the business and, you know, do what you need to do. And yeah, there's we had one weekend we had gone dirt bike riding and she did a wheelie on the trail and bashed up her knee.

Tim Chakarian: And after that she got some time off from the post office and, so she said, you know what, we're always talking on the phone. Why don't I come help you out in the shop? And I was like, perfect. So she came, thank you. Started answering the phones, helping me with the paperwork and you know, you wanna tell about your very first experience of answering the phone?

Tim Chakarian: My first 

Johanna Reichert: phone experience? Yeah. And I'm. I'm not an extrovert. I know you know me fairly well, so it doesn't seem like that, but I'm a little shy and a little bit quiet and kind of to myself when it, when I first meet people, so Tim's like, I need to answer the phone. And I was like, I don't know how to answer the phone.

Johanna Reichert: And he's like, just pick it up and say PhD. And I literally, I picked up the phone and I froze and I went, I can't. I put it on hold and I handed it to Tim, like the customer must have thought I was crazy, but I literally like, I can't do this. And then I gave it back to him. But now you would have no idea that was my beginning.

Johanna Reichert: In the shop. I, now you, yeah there's a night and day difference, but I just have to get used to things and acclimate myself to them to become more confident with them. 

Tim Chakarian: Now she trains all of our new guys and our service advisors on our outline of how to answer the phone. You know, thanks for calling Bemer PhD.

Tim Chakarian: This is Johanna who may have the pleasure of speaking with, and that way we can start engaging on the relationship part of it. But yeah, I mean, you love, you gotta start somewhere and all these. You know, inexperiences are part of the journey of who they build, the character of who we are today and how the future looks in our industry from, based upon the experiences and the lessons that you've had in life.

Jimmy Lea: Oh, for so, so for sure. So, so you've had this great trail. You come together, you're building the business. You're now hiring more people, more technicians coming in. At what point did you discover, oh my gosh, we need to work on our culture.

Tim Chakarian: The culture I think came from when, so from the backdrop, our landlord came up to us what about two and a half years into it and said, Hey, you know what the front building was a parts house and it was about a 3,400 square foot. Square building. It had parts in it and the guy had been there 25 years.

Tim Chakarian: So, when Albert retired the landlord came up to me and said, you're so busy back here that you have to take both buildings or move out. Go get another shop. And it was like, whoa. Oh my gosh. Another huge milestone in our lives. Right? So 

Jimmy Lea: it was a big 

Tim Chakarian: gulp. Yeah. Yeah, it was definitely. But you know, every time life throws you lemons, you make lemonade.

Tim Chakarian: So that's what we did. We built the front shop. We added three lifts. We made the, we built an office for ourselves. We built a waiting area, put windows in so that the clients can see inside. And now we had to fill it with some bodies. And unfortunately, I. I was not a people person at the time, you know, and I tell the story of I got into cars because I love fixing cars, but I didn't really like people 'cause the car did what I wanted it to do versus 

Johanna Reichert: car doesn't talk back.

Tim Chakarian: Car doesn't talk back. I used to say, right. Occasionally they do, but Right. But what a long ways from, you know, today I understand it's about the people. Yeah, I can fix the car. But it's more about the people now. Yeah. 

Johanna Reichert: I think we learned along the way that, just jumping into this from being a mail carrier and a technician and really knowing nothing about leadership and running a business, which happens quite a lot with shop owners.

Johanna Reichert: It's usually just a technician or a service advisor who decided that they can do it better than the dealer did, and so they kind of jump in with both feet, which, you know, it's a lot of bravery, but there's a lot that you don't know and you don't know that you don't know it. So when we first started up the shop, I don't think we had a bad culture, but I don't think anyone really knew anything about it.

Johanna Reichert: And then, you know, being a shop owner, you get, you have frustrations throughout the day and you're the one worried about the finances and making the ends meet. And so you can be stressed out and you can. Can, your attitude and your mind frame can bleed into the staff and you don't even really realize it because you're kind of caught in your own world.

Johanna Reichert: And so we just kind of started realizing from feedback from, you know, our staff that maybe the way we were handling things and dealing with things personally. Because, you know, it's hard to work together, live together, do everything together, just constantly be around each other. It's not I don't think we were meant to do that.

Johanna Reichert: So, you know, that can take a toll on you if you don't know how to handle it correctly. It can affect things. So, we started taking leadership training. We started taking management training. We started taking any kind of training that we could possibly find which I feel like maybe five, 10 years ago that wasn't as readily available.

Johanna Reichert: It was all technician training and service advisor training, which don't get me wrong. We did find the service advisor training very beneficial. One of our first technical trainings was when Cecil was working with worldpac and he had the Service Advisor Academy, and we took his class two clients and we got so much out of it, not just for service advising, but you know, he talked about personality types and things like that.

Johanna Reichert: Now granted, he talked about that when it came to customers, but that's also applicable when you're dealing with employees, learning what kind of personality type you are what kind of people you're dealing with. So how to 

Tim Chakarian: communicate with those personalities. Yeah. So I think 

Johanna Reichert: that's kind of where we started to realize that, use some of that information in the shop as well and try and benefit that.

Johanna Reichert: I used to tell Tim we would go to summits and, you know, trainings and I used to tell him, look at what we did by accident. Imagine what we can do with actual proper training. And so yeah, I think that's where we started realizing, start building a culture, start building a place where people actually want to work because you know, I used to work at the post office, and don't get me wrong, it wasn't a bad job, but you had service, not service advisors, supervisors who were who had mine, not my power trips.

Johanna Reichert: And you know, they just loved having the power. And you were just like, dude, I don't wanna deal with this. I just wanna go and do my job and enjoy myself and go home and have a good life. I don't want to have stress and. Dread going into work and dealing with certain personalities and certain people and all that.

Johanna Reichert: So you kind of start realizing in your own workplaces. Now we're creating a. You know, these people, sorry, we're creating this atmosphere. People are coming in and Yes, and working for us. We're creating jobs and lives for these people to have incomes and live in California, which is not easy. And have families and, you know, have homes and things along those lines.

Johanna Reichert: And I don't want them to be miserable coming in to do it. So we want, our main thing now is that we really want people to enjoy working here and create a really good comradery. And so we've done a lot of 

Jimmy Lea: different 

Johanna Reichert: things to kind of get into that, but I'm sure you're gonna ask us about that down the line.

Jimmy Lea: And that's gonna be my next question here. So, but first I wanna say thank you for pointing out, look what we did by accident, but imagine what we could do on purpose. I. Focus. 

Johanna Reichert: I've said that to him multiple times. Back in the day, I was just shocked. Like I, I was shocked because I was proud of the fact that we had done so well and it really was accidentally, I mean, it was through a whole lot of hard work, but it was without knowledge.

Johanna Reichert: Right? It was without having the pre knowledge of, Hey, I went and got an MBA in business, or, you know, whatever. We didn't have any of that. And yet we were, you know, we were being pretty successful and we were, we created seven jobs for other people other than ourselves. There's nine, including Tim and myself.

Johanna Reichert: So that's something to be pretty proud of. And we did it completely without any kind of education. So imagine, you know, with a little bit more education and training, imagine how much better we can be. 

Jimmy Lea: I love it. Okay, so now you get this training. Now you're going down this road of purpose. We're gonna do this on purpose.

Jimmy Lea: We're gonna create this culture on purpose. What are those five elements, those five pillars that you've identified, Tim, that, or Joanna, that you guys work on in your shop? What are those five pillars? I. 

Tim Chakarian: Well, I think it starts with leadership, right? Everything rises and falls with leadership. So understanding, like Johanna said, the mindset that we're in before we come to work, are we in that positive mindset?

Tim Chakarian: Are we solution-based and can we have a positive influence on the team? Starts with you, and I wasn't necessarily. Trained on that until we started going into the groups program and seeing how other shops are doing it and seeing the success, seeing how you can actually implement this. Because again, being text textile, hand driven, textile.

Tim Chakarian: Textile, thank you. That I have to see it in the works. Right. So, yeah. Now I understood. Okay, cool. In order to have a productive team, I need to be having meetings. I need to be getting experiences out and teaching them this is the right way, this is the wrong way, instead of putting it on them and expecting them to know, right?

Tim Chakarian: Everybody wants that perfect tech. The heavens are gonna open and the perfect child is gonna fall out of the sky and he is gonna know every single thing about cars and BMWs. It ain't gonna happen. You have to grow. That is not gonna happen. And the way to do that is to constantly have clear goals.

Tim Chakarian: The way we have clear goals, clear definitions, is to meet with people regularly, you know, have a weekly meeting. So we started implementing the weekly meeting, and I didn't know what to talk about in the weekly meeting, so we're like, so how was your week? What did you do? What's, you know, what's going on?

Tim Chakarian: And then we started learning, oh God, there's an outline of things we should be talking about. 

Johanna Reichert: We joined a few boards too. We just, we joined some voluntary boards for associations in California, the A-S-C-C-A, and we got to see how a meeting's run. And then Tim's like, well, why don't we take the agenda that we have from the board meeting and try to kind of use it as a template.

Johanna Reichert: In our meeting with the shop. And then that way, instead of just, Hey guys, what's going on this week? Oh, I don't know. What do you think? What's going on? You know, nobody has anything to add because they don't know what the structure is. So Tim's like, finally structure. And at first I was like, oh man, more work.

Johanna Reichert: But then we, you know, we just kind of made a little template of like a manager's report and an administrator's report and a service advisor's report and a technician's report, and then it's just kind of, it kind of grew from there. So like it 

Jimmy Lea: evolved. 

Johanna Reichert: Yeah. Yeah. So, you know, Tim would share. What he feels is going on.

Johanna Reichert: And then our service advisor who turned into our service manager, he we share the numbers every week with our guys. Like, how do we do last week? What was our sales? What was our average repair order? Did we meet our goal? You know, just the numbers of everything that goes on for the week.

Johanna Reichert: And then the technicians like to see, you know, who got better productivity. We pass around a little report and they all like to look at their hours and see who got you know, who got hours and which ones. And it's a friendly competition. I've never seen anybody get upset or frustrated with anybody.

Johanna Reichert: It's always just kind of done and fun. And so, you know, we, they enjoy seeing that and seeing how they're doing and seeing if the goals are being met. And that helps. And then, you know, I'll it's a good place to say, Hey, what's needed in the shop? Is there a piece of equipment that's broken down or needs maintenance, or we need to bring in somebody to work on it.

Johanna Reichert: Is there a shop supply that we've run out of? Is there something that we're not aware of that needs attention? And then that actually grew from, from just verbally doing it. And then we'd write it down on the agenda and then we'd forget about it till the next week. 'cause we'd get busy and then we'd look at the agenda and go, oh crap, we didn't do this.

Johanna Reichert: We said we needed to do it. So then we evolve that. Do you wanna talk about the action? 

Tim Chakarian: Yeah. And then also in the groups program with the Gear Performance Groups program we're in. We hold each other accountable in that program. Right. Our awesome group facilitator is Jennifer Holbert and man, she is on top of it.

Tim Chakarian: She's, 

Johanna Reichert: when I grow up, I wanna be Jennifer. Yeah. 

Tim Chakarian: She is just absolutely amazing and we learn so much from her, from Erin, from the other shops in our groups, and we learn to hold each other accountable. And how we do that is we use a platform that the institute has that's called, that's the institute's created, called the Actualizer.

Tim Chakarian: What do you wanna accomplish? Who do you wanna accomplish it with? By when do you want to accomplish it? And what is the status of that? So we started implementing that not only in our groups program, but also in the shop what needs to be fixed. 

Johanna Reichert: We asked permission first. 

Tim Chakarian: Of course. And so, oh yeah.

Tim Chakarian: And recently, Kent has created one specifically for shops, for those in the groups program. So now we can go ahead and our team puts down what we need to accomplish by when do we need to do it? Who's in charge of that, and when is it gonna be done by? What's the progress? It's not meant to say, why didn't you do it, but more so not to have that, oh, I showed up to a meeting not doing what I need to do.

Tim Chakarian: Because you do that once or twice and your self-motivation, your self-accountability now kicks in and you go, all right, well, I don't wanna let my team down. I don't wanna let my members down. I don't wanna let my boss down. More importantly, I don't wanna let myself down. I wanna build self-confidence, you know, so that I know I can accomplish the things that I set to accomplish.

Tim Chakarian: And that gives me the dopamines, the feel goods. 

Johanna Reichert: You know what I love is that at first, you know, it started with us, right? We're the ones like, Hey, we should start doing this. And then, you know, they were open to it. They didn't resist us, but it wasn't theirs. They didn't own it. So it was like, okay, we'll go along with it and kind of see how it goes.

Johanna Reichert: So then, right, I'm along 

Jimmy Lea: for the ride. I'll buy a ticket. Yeah. Okay. I'm in. Yeah, 

Johanna Reichert: exactly. And then what? So we used it for the first quarter. Then when the second quarter came along, it was getting long, so I was like, maybe we should make a second one for a second quarter. So I made one for the second quarter, so it was a little bit shorter 'cause all the things that were done, we didn't need to worry about that anymore.

Johanna Reichert: So I made one for the second quarter and then now what I love is we've had something that's been on our agenda for, a couple weeks that we haven't gotten to. And then my my shop foreman in training goes, Hey, you know, I think we should add this to the actualizer now. And I was like, yes, I love it.

Johanna Reichert: Go for it. Like it's, I dunno why we didn't think about it. Like we didn't think, oh, maybe we should add it to the action. We keep talking about it but not doing it. And he was like, Hey, I think it's time we add this to the actualizer. And in my head I was like, go James. Like that's what I wanna hear. I want you to be, to start thinking about you know, this is what we should be doing.

Johanna Reichert: This is how we do it. We're not doing this the way you've taught us to do it, and that we've now all got accustomed to doing so, hey, why don't we do that? So it's like, awesome. So now even our team's holding us accountable when we forget the process or we don't always follow the process and that's when you know you're doing a good job and everybody's on board and everybody's bought in because now they're starting to tell you, Hey, this is what we do.

Johanna Reichert: Why don't we do that? It's like, oh, great. Like. I love it. Let's do it. So we did, and I just remember being really impressed by that that he just, on his own, he was like, Hey, we should probably add this to the actualizer. 

Jimmy Lea: Thank you, James. That's amazing. I, to reiterate what you're saying, if you're not having company meetings with purpose, you are having company beatings by accident, not on purpose.

Jimmy Lea: Because those company meetings, you've got an agenda, you've got the actualizer. If you're not, when do you have company meetings? When there's a problem? When there's an issue. So it's a beating, it's not a meeting, it's a beating. And they walk away depressed and disappointed. You've created that environment where they feel safe, they feel a part of the team, and James has that input to say, Hey, you know what, Johanna?

Jimmy Lea: We really should add that. Yeah. So this, 

Johanna Reichert: and he got scared to say that, right? He knows that this is how we do it, this is what we should be doing. 

Tim Chakarian: Jimmy, this was one of the points that Dr. Jessica Kringle brought out at the summit, and that really hit home because I was able to build confidence in what we were doing.

Tim Chakarian: So, so far we've talked about leadership and accountability with the owners, right? We've talked about conducting and having regular meetings that are not time wasting, that are productive. Now comes problem solving, right? Okay, so here's the problem. What are the challenges that we have? What are the solutions and our goals?

Tim Chakarian: And what this is doing is it's building a pyramid. And the pyramid is the experiences that we're having. Again the stories that we're telling that is allowing the staff and ourselves to have those beliefs. This is our vision and mission. This is how we do it. So when we don't align our actions with that, we go back and understand what was our mission, what was our vision?

Tim Chakarian: We were trying to build something that made an impactful difference that was educational and had a excellent result, because that's what we're driven for, right? Fueled by passion, driven to excel is one of our mission statements. Yeah. Oh, I love 

Jimmy Lea: it. 

Tim Chakarian: Quality without compromise is one of our mission statements.

Tim Chakarian: So is the actions that we're as a team producing align with that? If they do, now you have buy-in from the staff, right? So you have the stories, the experiences, you have the beliefs, aligning up our beliefs and the team's beliefs together. Now you have an action. That action can now produce a result once you're able to produce a result.

Tim Chakarian: I think magic happens. They start doing it on their own because now they're self-motivated. I'm not holding, you know, I'm not probing 'em as it were to say, why didn't you do this? Or Why isn't this done on time? You know, it's more like, did we do this? If not, what can I do to help you with that? Is there something that I can help you achieve?

Tim Chakarian: Those goals that we set out together. 

Jimmy Lea: All right. I've got a question. Sure, go ahead. I've got a question about your company meetings. You're having a company meeting once a week, is that right? 

Tim Chakarian: Yes. 

Jimmy Lea: On Wednesday. Is this a Wednesday meeting? 

Tim Chakarian: Yes, that's a Wednesday. Meetings. We shut down the gate closes, you know, the phones go offline.

Tim Chakarian: We don't do anything when a customer walks in, you know, obviously we have the door open for parts deliveries, our front door, and we just let 'em know. Sure. Put parts down on the counter right there. If a client walks in, they automatically walk in and they're like, there's a big screen and they're doing something and everybody's together.

Tim Chakarian: So they're like, oh, did we miss something? And we just kindly tell 'em yeah, we're having a quick staff meeting. Go ahead and leave your keys or your phone number and we'll get right back to you afterward. The purpose of that is to let them know how important this meeting is to us, because that's hundred percent's the foundation of how we build the good customer service, the good teamwork that we're able to provide them afterward.

Jimmy Lea: I totally agree. I love that. So if you're having the meetings once a week, do you also have any sort of a standup meeting and by standup meetings, these are five minutes. You bring the team on the daily, do you have any daily checks, pulse checks with the team? That the team all comes together? Or is it the company meetings on Wednesdays?

Tim Chakarian: No, the daily checks, so we started with eight o'clock James, our junior shop foreman. He'll, when he gets here early, he'll check with Kevin, our service manager to see what's on the agenda for the docket for today. How many appointments are coming in? Are they jobs? Which jobs should be going to which technician?

Tim Chakarian: We've got two level a technicians. We've got a level B technician. We've got a C technician and an apprentice that's all five of the guys in the back. So he'll kind of de decide how the day looks, and then they'll do a check in again at about 11 o'clock. So in the morning it's a, who's gonna get what job?

Tim Chakarian: Delegation, 11 o'clock. Now comes the check-in. Did we get the diagnosis or the testing and analysis done? Are we on point? Because now advisor one's gonna go to lunch at 12. Advisor two's gonna go to lunch at one, everybody comes back. We even during the week, the guys know to shut down. At 12 o'clock, everybody stops working except for the one person answering phones.

Tim Chakarian: And then from there at two o'clock is our next check-in. So eight o'clock, 11 o'clock, two o'clock. And then finally at four o'clock, are we on point to be able to get this car out Because they built role in the shop, 

Jimmy Lea: The eight o'clock, 11 o'clock, two o'clock. Those aren't company meetings. That's quick standups.

Tim Chakarian: Five minute check-ins. Are we on point? Did we hit our mark? Did you put it to a status change? Are you gonna be ready to pass the baton off to the next individual, which is gonna close out the paperwork and make sure that the quality control inspection is done? All the check marks love are identified. If there's a repair that the client didn't buy, did it go into the CRM?

Tim Chakarian: Did it go into what is lost sales? And now the system is gonna reach back out to the client 'cause that's very important. 

Jimmy Lea: Yeah. Oh, that is important. Now to Jason's question, so I was building up here because I was inquiring for myself to Jason's question, which is you have these, he started doing weekly meetings with his technicians on Monday mornings.

Jimmy Lea: How long are your weekly meetings? You guys do lunch? 

Johanna Reichert: We do lunch. We purchase lunch. So per an hour? Yeah, it's an hour. We have one of our, our second service advisor kind of headed out. He figures out what everybody wants to eat. We have a budget of $15 per person, and we figure out where everybody wants to eat, and then we will order it, go pick it up and have lunch at noon.

Johanna Reichert: And it usually goes from noon to one o'clock. And the first 15 minutes we'll spend obviously on eating. And what we'll do is we will choose some kind of training video. One the the tips from the institute were super helpful. We would watch the tips quite often when we went through all of them.

Johanna Reichert: So actually we went through all of 'em and then we kind of went back and listened to a few of 'em that we felt were really good to kind of go over. 

Tim Chakarian: Technician, time management. Yeah. Communication between advisors. This is really the time where the owner let the put your CEO hat on and say, okay, if I'm the owner of this business, how do I wanna cultivate the team mindset?

Tim Chakarian: And this is now how you can use that to mold your team for the first 15 minutes. Because now it's, we call it, it's part of lunch and learn. Right. So 15, 20 minutes. Yeah, we learned. What we're gonna be educating ourselves on. And then we'll go ahead and start the meeting agenda. And it's, we try to keep it to about an hour max 15, I'm a little bit of a chatter, so 

Johanna Reichert: Tim sometimes goes over, give or 

Tim Chakarian: take 15 minutes, 

Johanna Reichert: but that first 15 minutes we do the training so everybody can eat and not have to worry about talking.

Jimmy Lea: Oh, I love it. I love it. Yeah. That way they're listening. They're watching, they're listening. They can eat. To Jason's question, would you be willing to share your meeting agenda? Absolutely. Yeah, absolutely. 

Tim Chakarian: As a matter of fact, I sent a I did a follow up from the last from the summit. There's a quick little video that I created. I'm gonna be putting it on. You saw that as to how to do the meeting, how to set it up, and then there was another one that we created that was 28 minutes. That really had the entire meeting recorded. I, now, I regret not having the lovetts and learns on there because the Lovetts and learns have become my absolute favorite part of the meeting.

Tim Chakarian: Tammy, I think 

Johanna Reichert: it's everybody's favorite part. 

Jimmy Lea: Then we need to record one of those. 

Johanna Reichert: Ha, yeah, definitely. 

Jimmy Lea: Okay, so now to Betty's question. She's asking why are you doing your meetings on a Wednesday? Shouldn't it be like a Monday or a Friday type of deal? What why did you choose Wednesday? Which I'm inquiring as well.

Tim Chakarian: Good question. Wednesday's a good middle point because we want self-accountability. So if we have it on Monday, you kind of lose that steam, as it were. So from Wednesday to Wednesday gives you enough time because when you come in on Monday. It's a written agenda. You know what you ought to be doing.

Tim Chakarian: So when I come in on Monday as an owner, I know these are my management and marketing things. I gotta do Management Mondays, marketing Mondays as an owner, this is what I gotta do. So if I'm acting this way, then the staff is acting this way as well. So they go, okay, cool. What did I, what promise did I make on the last Wednesday meeting that on Monday I gotta start acting on.

Tim Chakarian: On Tuesday, if I, let's say I'm offbeat, right? Monday. Monday I did. I wasn't on point on Monday. Now I have Tuesday to be able to go, oh yeah, I said I was gonna run to Home Depot and get X, Y, and Z, right? Because when Wednesday comes now, you gotta have committed to what you're doing. Oh, by the way, we don't conduct the whole meeting.

Tim Chakarian: We have our, James our shop foreman. He is the secretary as it were. So he'll start the meeting on time. We have a timekeeper who keeps the time, and then you'll, he'll give a I'll do a operations and managers report. Johanna will do an administrator and HR safety report, and then he'll go back to James.

Tim Chakarian: Then he'll switch it on over to. Kevin, who's our service manager, and Kevin's basically he go, goes over the financials, Hey guys, this was our goal for last week. Like Johanna said, what was our gross profit? Dollar per hour. What's our a RO? You know, how are we doing? Who needs assistance to do what?

Tim Chakarian: We use the dashboard of the institute to understand where our numbers are. Johanna and I set the goals at the beginning of the month, and then the staff weekly works towards achieving that goal. So Wednesday gives you a good middle point to make sure to stay on your schedule, stay on point so that you can get to what you need to, and it still gives them the freedom without us having to micromanage and, you know, get all into their business.

Tim Chakarian: Self-accountability. Yeah. 

Johanna Reichert: To, oh, I love that. A better answer. Betty's question too. Wednesday works for us. It gives Kevin time to put the numbers together. Mondays are usually super busy for us. Fridays are really busy for us, so I feel like if we try to put a meeting in on a Monday maybe, but Friday it would just be disastrous 'cause there's so much going on Fridays.

Johanna Reichert: Everybody wants their car back before the end of the weekend. So that would just be, for us, it would be too difficult. But I would say. Do whatever works best for your shop? Our shop does run a little bit differently than a lot of shops we're very heavy on upsells and keeping cars in for a little bit more than a day.

Johanna Reichert: We're, we don't often like, get you in, get you out immediately 'cause. You know, we do inspections. We try to let you know what's going on with your car. We try to see if we can get you know, upsells and things along those lines. So, a lot of times we have cars in for multiple days. So we're not an In-N-Out shop, so I feel like In-N-Out shops it might be a little bit easier to do a different day.

Johanna Reichert: This just works out for our shop. So I would say kind of see what works out best for your shop. It's just kind of how it works for us, but I'd say check out and see how your workflow goes and everything, and then kind of choose accordingly from there. 

Jimmy Lea: I was gonna a hundred percent say exactly what you just did.

Jimmy Lea: Thank you, Joanna. What works for your shop? That's exactly it. Wednesdays work for you, Betty. Maybe for you it might be a Monday or it might be a Friday, who knows? Yeah. For Bimmer PhD it's Wednesday. 

Jimmy Lea: Yeah. 

Tim Chakarian: And Jimmy, we can use this as a tool as well. I'll give you a quick example of it. When we were hiring Jesse, our second service advisor.

Tim Chakarian: We tried something a little bit different this time. You know, we do have a, motto in, in the shop. We hire together, we train together, we fire together. You know, so we all do everything for each other. One, one for all and all for one. Love it. So when we're attracting you talent for example, you know, Jesse applied with us.

Tim Chakarian: He was working at the local BMW dealer. I wanted him to come meet the team, right? So we invited him for our Wednesday meeting so he can see how our. Team meshes together how we play together, how we get along, and he came in and I introduced him to the team. The techs got to meet him. So it's not like this.

Tim Chakarian: Who's this new guy that the owner hired? Are you gonna take my job? Who's getting fired? Blah, blah, blah. It eliminates all of that because it now shows how united and the culture that we have, what is acceptable, what is not acceptable. So it starts acclimating from day one, new hires, and believe me, from the work environment that we see around us.

Tim Chakarian: It's 180 degree difference, and it was like after the meeting, I got a text message from Jesse that said, when do I start? 

Jimmy Lea: Right. That's the only question. I mean, it 

Tim Chakarian: just shows, you know, how strong the culture is when you work at building it together. And we're not shy. If you're new to our team, you know you're gonna do a love it and learn as well.

Johanna Reichert: Yeah, I usually ask somebody who's visiting. We have a lot of shops ask if they can send their service advisors, their managers, their, you know, kind of their higher up people, key players. Yeah. Yeah. They will actually act often or even themselves. We have a lot of shop owners that will come and visit with us.

Johanna Reichert: And they'll come for a Wednesday meeting and we just include them. We get them lunch as well, and we kind of show them what we do and they're usually blown away. So we, that happens quite often. Yeah. I dunno why I started that, but it's been useful. People really find it to be. Very useful to their shops too.

Jimmy Lea: Are you asking the guests to give the lunch and learn as well? Yes. 

Johanna Reichert: Yes. Oh, absolutely. You ask them, I say, Hey, I don't wanna put you on the spot. Thank you for reminding me. I say, Hey I don't wanna put you on the spot, but this is what we do. So let me explain the love and learns, 'cause we kind of talked about it but not really explained it.

Johanna Reichert: So we like to end the meeting on something, not that it's not positive, but something really positive. Right? Something fun. So, Tim actually started it out and so basically we like them to tell us one thing that they loved about the prior week and one thing that they've learned in the prior week.

Johanna Reichert: And at first we would just do it verbally and everybody was really uncomfortable because nobody had time to think about it. And then we'd be like, oh no, like, who wants to go first? And nobody would want to go first because we'd be like who's think who could think of something quickly enough? And then some people would be like, I can't think of anything.

Johanna Reichert: And it was, I remember I would always feel on the spot 'cause I would have a hard time thinking of something. So then what we changed it to is we would have them, we would give 'em a slip of paper and it says. Your name, love it. Love form, love it. And learn and just write down your love it and learn before the meeting.

Johanna Reichert: That way you don't have to worry about coming up with something at the meeting. And then I wanted to make it a little bit more fun and I thought, well, how about we, well, two things. I wanted to make it more fun. Number one, I thought it would be nice to recognize somebody for doing something good in the shop.

Johanna Reichert: Yeah. So we now it's love it and learn and recognition. So I add an extra line recognition. So if somebody you know, you're a technician and you're having a hard time diagnosing something, and another technician came in and said. Hey, what about this and this? Why don't you try this? And gave him a little clue or gave him some advice or helped him to diagnose it?

Johanna Reichert: Well, he may say, Hey, I wanna recognize this technician for coming over and helping me when I was trying to diagnose this car. Or we have like a shop Porter, who's kind of like our apprentice as well. He like learns how to keep the shop clean and the flow of the shop, but also he's learning how to work on cars and maintenance and things like that.

Johanna Reichert: So a lot of times people will recognize him because of the fact that, you know, he keeps the shop flow going and he is trying to help out and he is trying to, you know, anticipate what the technicians need so that they can be a little bit more productive. So it's nice for to have the recognition so that way you can feel good about recognizing somebody who did something good for you.

Johanna Reichert: Then to make it one step more fun. I got this little, I went on Amazon and I found this little tire candy dish and it has a little cover and we put a little BM BMW rondell on it, so it's a little tire. And then I have everybody do their lovetts and learns and recognitions beforehand. We fold it up really small.

Johanna Reichert: I shake it up and it's almost like a secret santa, so I pass it around and say, somebody choose one. Make sure you don't get your own. So now you don't even have to read your own. So everybody, so. You know, Tim will be like, okay, I got James'. And he'll read what James loved about the week, what he learned in the week, and who he recognized.

Johanna Reichert: And so we all go around and we all read another person's love it and learn. So it's just kind of fun. Everybody enjoys doing it. It's a fun way to end the meeting, a positive way to end the meeting. And then James will puts James, who's a secretary. He'll put together who won who got the most recognitions.

Johanna Reichert: And then another shop, when we were telling 'em about this, they said, Hey, you know what you should do with that? You should at the end of the quarter find out who got the most recognitions and then give them some kind of reward. And we were like, that's a great idea. So we're gonna do done. We're still talking about like what the reward should be.

Johanna Reichert: We're thinking like maybe like 

Tim Chakarian: last week we a 

Johanna Reichert: bonus or last 

Tim Chakarian: week we threw it out to the team. Yeah. And we said, what do you guys want to see? And, you know, the consensus I got was a paid day off would be nice. You know, a hundred or $200 bonus would be nice. Yeah. So we were thinking 

Johanna Reichert: for the quarter we'll do a bonus of some sort and then whoever won it for the year, we'll give them an extra day off paid day off the next, the following year.

Johanna Reichert: And everybody liked that again. Love it. So, yeah, it's, oh my gosh, it's just kind of fun. It's, everybody enjoys it. It's a nice way to end the meeting and to, on an uplifting and positive point and it, everybody kinda looks forward to it. 

Jimmy Lea: That is awesome 

Tim Chakarian: and if I can add to it, cool. What that really does for me is it for the moment while that person's reading it, it gives you the opportunity to put yourself in that person's shoes, right?

Tim Chakarian: The love it and learns actually came from John Maxwell. I'm a big John Maxwell fan, and John Maxwell would always say, you should take some time to reflect. At the end of the week, we're going a hundred miles an hour. What does. The experience that you had mean to you? What was a real takeaway that you had that you really loved?

Tim Chakarian: And I'll give you an example. Our seed technician, Shane, he's super awesome. He's 21 years old. He's been an apprentice for 18 months and then now he is doing another 18 months learning to be a, a. A C technician being able to do parts replacement. So he was doing a transmission rebuild, right? So his little alert was, make sure you drain the fluid before you take the pump out first.

Tim Chakarian: And the reason that came about is because, you know, he's young, he is inexperienced. He didn't know he took the bolts out and all the fluid leaked out. And so that's what he put in his loves, love, learn it. His learns, he put, I love the fact that I was able to rebuild the transmission. My learn is make sure you drain the fluid before you take the pump out.

Tim Chakarian: And my recognition is to James for helping me put the transmission back together and that it runs. And for that moment, you just see it from his point of view and you think. You know.

Tim Chakarian: Have opened up an opportunity. But as owners, it's not our job to do the job. It's your job to provide jobs and teach them to be able to do the job and they love it. And that gives me such a warm feeling. It's the same feeling that I get when I put the car together and I press that start stop button or turn the key, you know, it's running on its own.

Tim Chakarian: It's better and everybody's working together in a way that. The customers really see that. 

Jimmy Lea: They can see it, they can feel it, they can sense it, they can smell it, they can absorb it, they can touch it. You can, it's paddle pool in shops when you know that it's a good environment or a toxic environment.

Jimmy Lea: I've been in shops all over North America and it is absolutely. Paramount. So what I, here's a question for you as we wind up this hour. I can't believe it's already been an hour, by the way. Okay. What advice would you give to shop owners that are struggling to maintain a culture in their company, in their shops when they're trying to grow their teams, they're struggling to maintain culture struggl.

Jimmy Lea: What advice would you give them? 

Tim Chakarian: I would say there's two ways that you can approach it. There's two beliefs. There's the blame it on everybody else belief, which is, let's just wait and see what happens. And it's not my fault. I didn't know, you know, and we'll call that below the line thinking, right?

Tim Chakarian: It's not me. It wasn't me. It was it's blame, it's victim. Yeah. Right. Or there's the above the line thinking, right. And this is the belief that I can do this. So we need to start with, do you see it? Do you own it? Are you able to solve the problem yourself and what needs to be done about it? And this way, what it does is it believe it, it builds a self accountability system because now the person, whoever, whether it's the owner, the service advisor, all the way down to the shop helper, right?

Tim Chakarian: What was your contributing factor? How did you own the solution and how, what else could you try differently? To make it work for the team and then now that builds you the confidence to be able to go, I can do it. And once you get to that point, now you can help somebody else with it. So tho those would be the two ways that I see it.

Tim Chakarian: Especially past the summit, I really took away a lot of good points from Dr. Jessica. She was, I urge you guys, if you watching the Carm Capto podcast. Watch that one just came out that she had on there. Yeah. Yeah. Just came out. It was recently. It's very good. And those, it's basically like tools, guys, you open your toolbox or oh, you're always going to the snap-on, or the macro track building tools.

Tim Chakarian: This is your business tools that you're putting in your toolbox. You know, a scanner's no good if you're not using it. So these skills are no good if you're not actually implementing them and trying them, and you're gonna fail at first. But what do they say if at first you don't succeed? 

Johanna Reichert: Try again.

Tim Chakarian: Keep trying. Yep. I would 

Johanna Reichert: say it's so true. Build your vision and your mission and your purpose. 

Jimmy Lea: Yeah. Yes. 

Johanna Reichert: What kind culture do you want in your shop? And once you've created that with yourself or you and your business partner, or you and your manager. Figure out what it is that you want that culture to be, and then you need to share that culture with your team.

Johanna Reichert: Or you know what, you can even include your team on it. Hey, I feel like maybe we can improve our culture here. What do you, what kind of culture would you like to see? Yeah. In the shop? And then get the, 'cause that actually creates buy-in. So sometimes that's even better. So you wanna have a conversation with them, you wanna include them, you want them to.

Johanna Reichert: Be on board with you. And then the hard part about creating a good culture in your shop is if you have a person who's not on board with your culture. They might be a high producer, they might be a high seller, but if they're not on board with your culture or they're toxic in your shop it's really hard to let those kinds of people go.

Johanna Reichert: But you usually find out afterwards that you're much better off without them and even sometimes your people who you thought weren't. As good producers, either salesmen or technicians they will usually rise because before they were being held back by that toxic person, sometimes those people percent rise and you'll be floored how talented they are.

Johanna Reichert: There was one shop that we knew that had two service advisors. The one service advisor was, he was a star. He would sell everything, but he was a little bit toxic. Not crazy toxic, but a little bit toxic. They finally got rid of him. And the second service advisor who they thought was just kind of average, oh my goodness.

Johanna Reichert: He rose to the top. He is amazing. He's there, he's still their number one service advisor. And I see him all the time at like our meetings and stuff. 'cause he is local here in, in our area in Southern California. And he is the nicest, sweetest guy. And he is making them all kinds of sales and the shop's happier and everything.

Johanna Reichert: So, I would say that start with your mission, vision, and purpose. Figure out what you want the culture to be with your shop. Make sure everybody's on board with it. If they're not on board with it, you need to get rid of them. Because if you start showing some employees that you're willing to put up with people not being on board, then why was, why?

Johanna Reichert: Why would the people who are willing to be on board feel like they need to be on board? Well, you're not making the other person be on board, so why do I need to worry about it? And then when you're hiring, you need to start hiring for your culture. 'cause if you're gonna hire, you need to make sure that those people fit into your culture.

Tim Chakarian: And you know what will happen? Jimmy is the bad apple Betty was talking about. The bad it takes one, the bad Apple will find his way out because he'll see that one of these things doesn't belong like Sesame Street. Back to the basics. One of these things doesn't belong and you can hide. But ultimately you know, we had a scenario where we had somebody that had to go and the team said, Hey, they gotta go.

Tim Chakarian: Wow. They took the initiative to say, this is not good for us. It's not good for you. And. This is a decision, and it was one of the more quiet members of our team, and we listened. Interesting. When it changed, we were all like, wow, now you give a lot more admonition to the person that rose to that occasion to say like, wow, that was really brave of you to, you know, call that person out on their mistake.

Tim Chakarian: Yeah. Or their outcome as it were. And so, or 

Johanna Reichert: their attitude. Or their attitude, and that employee would act differently around us than they would around 

Tim Chakarian: correct 

Johanna Reichert: the rest of the staff. So we necessarily didn't see it. But because we listened to our staff, we saw that they weren't a correct person in our culture.

Tim Chakarian: So it's all, it's nonstop ever-growing teamwork. Jimmy 

Jimmy Lea: Evergreen. Yes. Ever-growing? Yeah. For sure. Thank you so much for sharing. I've got some I wanna go to some quick one word answers, rapid fire culture questions for you. You ready for this? Joanna, you answered first favorite, and then Tim. Okay. Okay, so, and you got five seconds to answer and then I go on to the next question.

Jimmy Lea: Culture in one word. Joanna. 

Johanna Reichert: Atmosphere. 

Jimmy Lea: Tim. Belief. Your leadership style. Joanna. 

Tim Chakarian: Chill. 

Jimmy Lea: Tim. 

Tim Chakarian: Clear communication.

Jimmy Lea: It's two words, but I'll still take it. Most important value in a team. 

Johanna Reichert: Comradery. 

Jimmy Lea: Love it.

Jimmy Lea: Ethics.

Jimmy Lea: Ethics. Oh, I love that. Your shop's vibe. 

Johanna Reichert: Fun. 

Jimmy Lea: Fun. Nice. Biggest culture killer.

Johanna Reichert: Anger, 

Jimmy Lea: deception. Ooh. Yeah that's good. What drives your team 

Johanna Reichert: vision? 

Jimmy Lea: Unity. Love it. One non-negotiable in your shop 

Johanna Reichert: attitude. Good attitude. 

Tim Chakarian: Do the right thing. Love it. Success 

Jimmy Lea: feels 

Tim Chakarian: like.

Johanna Reichert: Making other people successful.

Tim Chakarian: Winning. 

Jimmy Lea: Oh, I love it. I love it. You guys are awesome. Thank you so much for joining today and talking about your company culture. Tim, we didn't even get to talk about your employee that came back and said, I don't care where I work. You could put me under whatever. I don't care. I just want to be here. I guess we 

Tim Chakarian: need a round 

Jimmy Lea: two then.

Jimmy Lea: You, you have established a phenomenal company culture and Tim and Joanna you are. I'm down. Let's do it. We'll do it again. 

Johanna Reichert: Thank you. 

Jimmy Lea: Absolutely. For sure. Thank you so much you guys. 

Johanna Reichert: We appreciate it. Have 

Tim Chakarian: a great day Today we made a lot of the things that we. Successful with the things that we learned from the institute.

Tim Chakarian: So we wanna give a shout out to you and the entire team at the institute, all the coaches, all the people in the background that, you know, some of 'em even get embarrassed when you name them or put 'em on the spotlight. But you know what, if it wasn't for all of those people, we wouldn't be where we're at today.

Tim Chakarian: So together teamworks makes the dream work. 

Jimmy Lea: Oh, it's so true. The final slide that's gonna come up here, it'll be up for about 30 seconds, so get out your smartphone, scan the QR code. Let's connect. Let's see if the institute is a good solution for you to help you have a great foundation to build a company culture that you enjoy, not one that you endure.

Jimmy Lea: With that, thank you very much. 

Jimmy Lea: Have a great day.

Show Summary:

In this episode, Jimmy Lea welcomes Dan Vance from Shop Dog Marketing to explore the transformative power of AI in marketing for auto repair shops. They highlight how AI has shifted from an experimental tool to a central part of digital marketing, influencing how customers discover and interact with local businesses. Dan shares how understanding your ideal customer and problem-solving strengths can better align with AI-driven search results, enabling shops to stand out as the preferred choice. They discuss practical ways shop owners can leverage AI tools like ChatGPT and Gemini to brainstorm marketing strategies, assess online sentiment, and optimize their presence for both human and AI-driven searches. The conversation also emphasizes the importance of personalization, community engagement, and consistent online activity across platforms.

From single-location shops to MSOs and mobile techs, the advice is universal: AI isn't the future—it's the now. And shops that adapt will lead.

Host(s):

Jimmy Lea, VP of Business Development

Guest(s):

Dan Vance, Owner of Shop Dog Marketing

Episode Highlights:

[00:07:27] - Dan shares a surprising story of a customer finding a repair shop via AI, bypassing traditional reviews.

[00:10:15] - AI search favors shops based on category and customer preference, not just keyword ranking.

[00:12:29] - Shop owners need to identify their ideal customer and market directly to that profile.

[00:15:25] - Using AI as a brainstorming partner is powerful—ask good questions and refine with human insight.

[00:17:31] - AI can evaluate your online presence and suggest what you're known for in your community.

[00:23:09] - AI can create engaging subject lines for marketing emails with a personalized voice, like Oprah.

[00:27:35] - Dan outlines how to optimize your local presence for AI search results—focus on consistent content, reviews, and social engagement.

[00:44:10] - Tips for both MSOs and mobile techs on how to leverage AI and local search effectively.

[00:48:28] - Avoid incentivizing reviews; instead, use AI to analyze sentiment and improve service authenticity.

👉 Unlock the full experience - watch the full webinar on YouTube: https://www.youtube.com/watch?v=wn0m3CSVg4c&t=1394s

Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!

Links & Resources: 

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Episode Transcript Disclaimer

Episode Transcript:

Jimmy Lea: Good morning, good evening, good afternoon, or goodnight, depending on when and where you're joining us from today. It is a gorgeous day outside here in St. George, Utah. We are entering into the 90 degree temperatures per day, which is awesome, especially if you like the heat.

Jimmy Lea: And if you don't like the heat, then it's not so awesome. Very quickly, we'll be cresting over that 100 degree mark very quickly. And then the next thing to look for is 105 and 110. Anyways, enough about the weather. So excited to be here with you today. Excited for this conversation that we are gonna have, which is all about marketing, which is all about your shop and how things have changed yet again.

Jimmy Lea: If we go back in history, we start back with the blacksmith. Blacksmith in town was the gentleman or the lady that was working on your wagons would create wagon wheels for you. Somebody came along and created the automobile and the natural person to fix those things was the blacksmith. Go down the road, a few go down the road a few miles, and what happens?

Jimmy Lea: Somebody invents the telephone and there's a knock at the front door from a salesperson selling you. Advertising on a phone book. The phone book, because there's a device called a telephone gonna be in every household. Well, don't worry about that. My customers, they just come down and see me go down the road a few more miles.

Jimmy Lea: We're gonna create something called the web and it's gonna be in the cloud. Your customers are gonna search you on a computer. Oh, my customers, they call me on the phone when they need me. They come down to the shop. Well, it's gonna change yet again. For our discussion today, it is going to be amazing as we talk about what's happening in the wide world of the internet and the inner webs that are out there with us working together to keep our customers safe on the road.

Jimmy Lea: I, I just, I'm so excited to have our guest today. Our guest today is Dan Vance from Shop Dog Marketing. Welcome, Dan. How the heck are you, brother? Your camera's buffering. Oh, technology at its greatest. I don't see Dan. Does anybody else see Dan on here? Oh man. This is awesome. Awesome. Here we go. Oh, Dan, you're on now.

Jimmy Lea: I see you on camera. Do you have audio up?

Jimmy Lea: Oh my goodness. Well, we'll give a couple more shout outs while we're on here. Melissa at Berks Transmission Service in Sarasota, Florida. Dan, can you hear us, brother?

Jimmy Lea: I don't know if he, we do now. Rich Lucas. Oh, rich from Lucas Tires. Am I the only one? Not hearing Dan, he is frozen. Thank you, rich Dan Vance. Might need to go the way of Windows and restart that computer. You know, it's a funny thing and it happens. It happens when you do live events. Oh, Dan, you're back.

Jimmy Lea: You're moving.

Jimmy Lea: Do you have sound? 

Dan Vance: I'm here. I thought I've been here the whole time. Yeah. Yeah. I'm hearing great. 

Jimmy Lea: Okay. Yeah you were frozen there for a minute. Did you? Me, Dan, thanks for being here brother. How are you? 

Dan Vance: I'm doing great. Thanks for having me. So happy to be here. Oh, good. 

Jimmy Lea: Really? Oh, good. Good.

Dan Vance: Even 

Dan Vance: more now than I wasn't even here. 

Dan Vance: Exactly. 

Jimmy Lea: Yeah. Yeah. You were here, but you were frozen, so it was like that buffering mode. Right. So glad you're here. One more shout out to 

Dan Vance: frozen face. 

Jimmy Lea: Yeah, you were frozen face for a minute. Betty or Toro from Greg's Auto in Florida. Betty is here as well.

Jimmy Lea: Thank you Betty for joining us. Hi Betty. Hey, our conversation today, we are going to be deep diving into AI and how AI has changed marketing. I love marketing. I love the process of marketing of, you know, it's like a phishing where you try a different lure, you try a different lure, you try a different bait, and then once you find that thing that works, man, you're just able to sink in.

Jimmy Lea: And that works really well. So Dan AI has changed everything. Got a quote from, I. Google's CEO Wanna read this real quick and get your feedback on this? It's not a quote. This is a summarization that in Google's CEO's last announcement, Google, CEO highlighted some massive AI adoptions.

Jimmy Lea: 480,000,000,000,480 trillion tokens processed monthly, monthly. Yeah, that's a 50 times increase over last year. 400 million Gemini app users. Gemini is the Google app users and over 1.5 billion, B billion, 1.5 billion monthly AI overview users. So these are people that are using and, but they don't have the app downloaded.

Jimmy Lea: Like myself I use Gemini, I use chat. GPT, I do buy the chat GBT, but I don't buy Gemini. So he's, I'm one of those 1.5 billion using Gemini, but I'm not registered. Right? Yep. Yep. It's crazy. So yes. I mean, we knew this was coming. We knew it was gonna hit. Now the ripples have happened and it's starting to even out a little bit years ago we would talk about using ai, trying it out, test it out, see what you can get.

Jimmy Lea: AI was learning. It's still learning. We were creating pictures and artwork and puppies with six toes, and that was a lot of fun. 

Dan Vance: Yeah, exactly. 

Jimmy Lea: How has AI changed marketing, Dan? 

Dan Vance: Well the truth is we don't know because it's just moving so quickly, but it is changing things. And I think this would be a great time to just share a quick example of like, stuff that's even surprising us is when a client calls us and says, Hey, I just got a car in from somebody that found me in.

Dan Vance: Gr, which is Twitter's AI language model. And what they had done, they were at the dealership and they went in and decided they didn't want to do business with the dealership. And they said, who in this town can fix Subaru transmission? And this client came up as the only option and they called him, oh my word.

Dan Vance: And got the car in. And what's so credible about that is, is that there was no reviews. There was no cross-checking or looking who else was an option. They just picked up the phone and they called and booked an appointment. So that's just an unbelievable example of how AI is changing our experience with the internet and collecting data and making decisions, and we're gonna see a lot more of that.

Jimmy Lea: Oh, it's so true. And to reiterate this with you, Dan there was an 10 years ago. 10 years ago? No. It wasn't 10 years ago. A few years ago, 4, 5, 6 years ago. 

Jimmy Lea: Was 

Jimmy Lea: going out with my soon to be son-in-law, and he said, he says no. We can't go to this restaurant. And he was basing that on reviews.

Jimmy Lea: It was Yelp reviews. Google reviews, the restaurant that I really like to go to. He says no. They got a 3.5. I'm just not going in there. 

Dan Vance: Yeah. 

Jimmy Lea: Oh, okay. Where are we going then? So it, it's gone from Father knows best friends know best reviews, know best, and now AI knows best. Yes. And here's a client that didn't even check reviews, didn't check with anybody else, just brought the car right on down because Twitter said it's the best place for Subaru transmissions.

Dan Vance: Yes. Yeah. And I don't know, I don't know what his repair order was on that, but. People that listening would know and it was healthy. And as a marketer, I'm just like, that is pretty sweet because being able to stand out to be isolated as the best option is an incredible win.

Dan Vance: And so I think that's another thing that AI is gonna provide and we can talk more about how it's doing it and how cool this is for auto repair shops, but we're gonna see a lot more of that for sure.

Jimmy Lea: Well, and then let's dive into that, Dan. 'cause I, anytime you can be the only solution, you know, it's always great to be the guy selling guns when you show up to a knife fight. Yes. 

Dan Vance: Yeah. 

Jimmy Lea: If you are the only solution, if you are the only one being recommended, I. How can I do that more often? 

Dan Vance: Yeah, well, I've been talking about this a long time, how the internet has become more of a search personalization.

Dan Vance: And so this idea that I, Hey I need to market to search engines by ranking for keywords is actually very old thinking because back in 2012, Google made a shift to categories. On your Google business listing, it's a category, it's auto repair. So I like go to the library and I go into fiction and there's a hundred books or a thousand books under that category.

Dan Vance: And so the. Thing the Internet's been doing is it's been taking people that batch up with that category and the things that you're telling, the search engine that you like to work on, like Subarus, and it starts to match those people to you, especially in a local environment. It's called Search Preference.

Dan Vance: It's been around a long time, and now we're seeing AI just take that to the whole new next level because they're, it's completely. Preference around you. They know a lot about you. They know of things that you've been asking, concerns that you have a whole gamut of things. And then it can pull all this data from the internet and give you very quickly the perfect match 

Jimmy Lea: and really this.

Jimmy Lea: Okay. So, so, so what I'm hearing you and I want to summarize this just a little bit to make sure I keep up with where you're going. 'cause AI is changing so quickly. It's taking software from a three month lifecycle to, it feels like almost like. Yeah. Monthly, weekly daily things are changing in this AI cycle.

Jimmy Lea: Okay. So everything that we've done in the past, everything that we've done for marketing and reviews and social media and public outreach, that has all gone into what AI is discovering today. It do I understand that right? 

Dan Vance: That's correct. 

Jimmy Lea: Okay. 

Dan Vance: All the things you've been doing are good and healthy, and you haven't lost that.

Jimmy Lea: Okay. Is there a but that goes along with that. 

Dan Vance: Yeah. The but is that we need to do better as marketers, whether we're an agency or as a shop owner, to accept the responsibility to know who our best client is. Okay. And start marking around that person. So, you know, so you 

Jimmy Lea: need to know your avatar. 

Dan Vance: You need to know your avatar and if you put more energy into that, AI will perform better for you as people get more comfortable with using that as a channel to find you.

Jimmy Lea: Okay. So when we talk about our avatar are you talking about the cars that they drive? Meaning, I really like working on Ford F1 fifties. Anything Ford, Chevy Dodge, that's in my wheelhouse. Do I focus on that or do I focus on my ideal client, which is fleet vehicles, construction workers, that type of a truck?

Dan Vance: Yeah. It's a great question and I would say the first thing anybody needs to do is first say, what problem do I solve and why am I really good at it? And because there's lots of people that do Fleet or BMW or whatever, it's right. What problem do I solve in my local market and why am I the best? Why am I unique about doing that?

Dan Vance: Okay. And then start building things around that support, that like. Not only am I really good at fixing BMW, but that type of driver, that type of owner I get along really well with. We resonate, we have commonality. They're my best customer. And the reason they're the best customer is because of the income they make right where they live.

Dan Vance: How new their vehicle is, how many vehicles they have, the whole list. So you build out a customer profile on demographics about them, and then you build out a profile about the vehicle and why you're so good at it. So it's two sides of the same coin. I'm understanding who the client is and their demographics, and I'm understanding my side about the problems that I fix and how it ties to that customer.

Dan Vance: And love it. This is Marketing 1 0 1. It's been around for a hundred years, but a lot of people that get into the internet because it's so simplified, we forget some of those basic principles and, but it's going to be a core driver for how AI works in helping bring local business. As we see more and more of that, those two things, what do I really do and why am I really awesome at it?

Dan Vance: And who's that customer that really loves what I do? Who 

Jimmy Lea: are they? No that's so true. That's so true. And when we're sitting down thinking about this, is there any tools that we can use that will help a shop owner? Because I, I run into a lot of shop owners, Dan that really struggle with what's my unique sales proposition?

Jimmy Lea: What's my USP? 

Jimmy Lea: What makes me different than my competition? What is it that I do solve? Is there anything that, that, a, an AI can help provide a shop owner to prompt those? Yeah, results. 

Dan Vance: I would tell anybody listening to this that if you're not using AI language models like chat GBT or Gemini or whatever your choice is as a way of brainstorming.

Jimmy Lea: Brainstorming, 

Dan Vance: yep. Yeah. Then you're losing out on the power of having a massive knowledge base bring you. Perspective and fresh ideas that it would be very challenging for you or a group of 50 to come up with. Yeah, and it's just about asking questions and getting better about asking questions and knowing that when you're communicating with ai, you're not communicating with a real person.

Dan Vance: It's a machine. So it's okay to tell the machine. Hey, stop. Okay. You're being weird. We're not really talking about that. Let's refocus. Want you to redo this Looks like you got lazy. Like you have to be in command on one level. Stop making 

Jimmy Lea: up information. 

Dan Vance: Stop making up information. I know that's not true.

Dan Vance: And then and then, but the other piece is just asking really good questions. So you could ask a prompt like. I'm an auto repair shop owner, and here's my website. Look at my website and tell me what you think we are the best at in our local community. Might surprise you, but it will come back with a result and it'll do a really quickly and it will tell you, well, you're actually really good at this.

Dan Vance: And can you, I would start there. 

Jimmy Lea: And so I, I love adding the website as a reference website. Can we also add in for example our Google Business page, Google Business Profile our Facebook profile, our Instagram, our Twitter. Can we Twitter? What's in a x? Yeah. Can we add that as reference websites as well, percent?

Dan Vance: Yeah, but you don't have to work that hard. You can just say, go out and look at all the social media channels that belong to me. Because they have your website address. Yeah. And come back and give me feedback on how I'm communicating, what I'm really good at. 

Jimmy Lea: Oh, I love it. 

Dan Vance: And I would start there.

Dan Vance: And as it starts to feed back to you, it's gonna create more questions. You're gonna be like, I. I didn't think about that. I have another question. Maybe you write three or four questions down on a piece of paper so you remember to get 'em in. 'cause it'll start moving pretty quickly. But it's all about brainstorming and it's all documented.

Dan Vance: Yeah. So then you can say, I wanna make a copy of this so I can print it off and think about it and process it and bam, all, you've got some really powerful tools there. And then you can say, okay. I agree with this. That's really is our strength. That's what we're really good at. Who in my community matches with that?

Dan Vance: Who would be some people, some demographics of people that would match up with that? And we have a case where we know somebody did that and the response came back. Teachers driving Subarus, 

Jimmy Lea: oh my gosh. 

Dan Vance: Yeah, and this owner, she was smart enough to know like, well, that would include firemen, military, and police too.

Dan Vance: And so that became her demographic profile. She knew their ages. She had a pretty good idea of their income, but then chat, GPT can refine that too. What's the income brackets in our community for those professions? And Okay. Is it mostly female or male? 'cause that could change my marketing. Okay. What is things that we know they like?

Dan Vance: You don't have to make that up. You just ask the AI model. It'll give you some ideas. Yeah. Then we use this to go, okay, that's a little weird, but that is a really good idea. 

Jimmy Lea: You still gotta have the human element in there to fact check, to qualify, quantify, make sure that we are on target.

Dan Vance: Yes. And just like the reference I was giving you, like teacher Subaru, that's great but it got built on by saying right here, like, well that's gotta include police, military, and. Fire too. 

Jimmy Lea: Yeah. 

Dan Vance: And so I love that because that's, that is truly brainstorming. Like my mind is just racing and all these little sparks are coming out and I'm thinking, wow, this is such a relief because it just feels so heavy and like I can't get past first base and now I feel like I'm just hitting home runs boom every time.

Dan Vance: And that's how AI can help you be a better marketer and understanding. Fundamentally, who is my customer that loves the problem? I know I'm really good at fixing. 

Jimmy Lea: Oh, I love it. I love it, man. That's awesome. That just takes it to a next level now, and I have two questions that I want to ask.

Jimmy Lea: One goes down the realm of do we continue to do what we're doing in replying to Google reviews and whatnot. But before we get to that, I want to talk about AI being a draft one, draft two, draft three. Can I take that information that Google gives me and put it as a copy paste to use for my marketing? 

Dan Vance: No.

Dan Vance: Just think about it. It's brainstorming. It's a conference room meeting. It's, you know, internal documentation, and then you wanna go back and you wanna put your human touch on it and your expertise, like you better have some expertise. Like you don't want AI to tell you things about brake repair that you didn't know.

Dan Vance: Or you're probably not an expert, right? Right. So use your expertise, but use it for that brainstorming to give you creative ideas that you're, it's challenging to come up with when you're isolated, either by yourself or a team, a small team. So, but no, don't ever copy paste. Don't ever put that stuff on your website.

Dan Vance: Like this is legitimate content for the search engine. That won't work. 

Jimmy Lea: Go ahead. 

Dan Vance: Oh, I was gonna say definitely like what we're seeing right now with ai. Two years ago in an interview with a, b, C, you can go back and watch it. It was a 60 minute segment. They asked the president and CEO of Google about ai and he essentially said, we're so excited about where this is going, but we're nervous about rolling everything out.

Dan Vance: So what we're doing right now is we just have the baby. 

Jimmy Lea: Yes, 

Dan Vance: the adults in the closet, the adults lives exists. It's real. It's just in the closet because we're not sure about whether the public can handle it or not. Oh that's mind blowing to me. But that just illustrates like they already have very complex models that are ready to go, and when those come out, there's additional expansion that we'll see with this technology.

Dan Vance: So it's very young and we're just testing it. And the things that we're having, the experiences we're having are awesome. Freaking awesome. 

Jimmy Lea: Yeah. Oh, they are. They are. And I love it as a draft one, draft two, draft three. Definitely don't use it at any marketing on the internet as far as websites.

Jimmy Lea: But what about emails? Can I use can I use the AI to be able to send out emails? Well, am I safe doing that or does that get into a danger zone? 

Dan Vance: Now you're safe on that, and I'll give you a pro tip. Everybody watching this, don't tell your friends and neighbors or other shops or your group 25, this is just for you, but.

Dan Vance: There is a thing called clickbait, and it's an old style where you wrote headlines that just grabbed people and they couldn't resist just clicking it. And you can go in and you can have AI help you write an email for a service or an offer you want to do, and then you can say, okay, write 50 clickbait type of headlines that will draw people in to read my email.

Dan Vance: And it'll give you 50 in about two seconds. And you can go through there and you can pick out the ones that you love and try a couple of them, test half with half, and test another headline with the other and see what happens. 

Jimmy Lea: Well, and I've also done this, Dan I've said, oh, all right. Gimme the top 50 subject lines that will, entice people to open my email and then I'll say you know what I like number seven and 21 and 32. Combine those into one tantalizing email subject. 

Dan Vance: Okay. Now I'm gonna blow your mind, Jimmy, because if you did, if you really understand your customer and their demographics, like teachers driving Subarus, 

Jimmy Lea: yeah.

Jimmy Lea: Then 

Dan Vance: you're gonna know what kind of TV programming they like. Ooh. 

Jimmy Lea: Let's say, 

Dan Vance: let's say Oprah. Then you say, give me a headline in the Voice of Oprah. 

Jimmy Lea: Oh, that's funny. And you get a car. And you get a car. But 

Dan Vance: AI will design those headlines with a reading voice, which is legitimate. It's a real thing that will resonate with teachers who are educated and it will draw them in, but they'll feel comfortable with that.

Dan Vance: They'll feel a connection with your headline. 

Jimmy Lea: For sure. That's phenomenal. Okay, so now a question. This comes from Yvette and thank you Yvette, for this question is using copilot just as a, as good as using Gemini? And the second half of this is, does it matter which AI I use? Yeah. All right. Well, I 

Dan Vance: think AI is a preference.

Dan Vance: You gotta find one that feels like jiving with you. But I'm, I feel pretty strongly into saying right now the best AI model for chat and brainstorming is chat, GBT the paid service. I do like 20 bucks a month. I mean, it's not 

Jimmy Lea: that, is it 20? Exactly, 

Dan Vance: yeah. Something like that. Yeah. I think you can get five users for 1 25, so maybe 21 or $22.

Dan Vance: Yeah. And Jim. Yeah, I love how I'm doing searches and a lot of times my informational type of search, like, how does this really work? The Gemini is much easier, faster for a response and understanding than going into chat GPT. But if I'm legitimately working on marketing and want to ferre out ideas for content or whatever I'm doing, I'm in chat GBT and I'm working that thing.

Dan Vance: And I get great ideas from that, some of the ideas we're talking about today of help been formulated by experimenting and doing that. 

Jimmy Lea: Oh, for sure. So my, my wife uses Chachi pt, she also uses Claude. And she uses Claude because it does have a more human-centric conversation. It seems like is she using 

Dan Vance: the voice?

Jimmy Lea: I don't know that one. 

Jimmy Lea: So she's, that's 

Dan Vance: one of those that's coming that people are gonna love. 

Jimmy Lea: Oh, I know. It's a great TV show called The Voice, but I didn't know it was an AI app. That's for our next one. We'll talk, there's one that starts with a p. What's the one that starts with a PP?

Dan Vance: I don't use that one, but it's like proximity or something.

Jimmy Lea: Yeah. Yeah. Yeah. A lot of people are using this AI as the search, though, they don't go to Google anymore to search stuff. They go straight to an ai. So if I am a shop owner, Dan, and I want to make sure that I'm on top of things how can I optimize my online presence so that the AI. Bots, assuming that's what's out there, searching for information.

Jimmy Lea: How can I optimize my online presence so that I'm attractive to an ai? 

Dan Vance: Yeah, there's some of that. That's still an unknown because there's not a lot of data that's available, but what it looks like to us is this stuff that you do for local search. So good social media presence that you're tying in with your Google My Business, and you're publishing SEO content on Google My Business.

Dan Vance: And your website supports local search all of the backend metrics support local search, but then you have a page on your website that talks about community things and you're building like this awareness around it. The AI models because of a lot of the formulation of these questions is like, who in this town does this?

Dan Vance: It's gonna look for those kind of content pieces. 

Jimmy Lea: Yeah. 

Dan Vance: And it's, you know, this is the AI we're using right now. This model that we're using right now is not going back and using old data. It's doing a search right now in whatever everybody else is seeing, and it's coming back with information for you. 

Jimmy Lea: So the the idea that everything from a AI is two years old, that's is not true anymore.

Jimmy Lea: It's all current now. 

Dan Vance: When you're in Chad, GBT, you can tell it to do a live search or you can do it to use its regular model. So I would recommend using the live search and ask it for resources so you can validate the websites and the resources. You'll learn this stuff as you get going. If you're hearing this and you're like, man, I'm not sure where to start.

Dan Vance: The answer is just get started. Start doing some stuff and playing around with it and brainstorming and saying, I really want to know who my customer is. I really want to know what the internet thinks I'm really good at and crossing my fingers. That's true. And if not, I'm calling my marketing guy.

Dan Vance: 'cause we gotta fix some things. 

Jimmy Lea: So the same questions you want to ask your marketing person, the same questions that you want to ask in that marketing realm are the questions you can ask to a chat GBT. And now when you go to your marketing. Company, you'll have a much better conversation because you've already done the research and educated yourself.

Jimmy Lea: Yeah. For those first steps. 

Dan Vance: Yeah. 

Jimmy Lea: Okay. So what are some of the I wanna ask this question, right? 'cause I'm thinking like I'm a shop owner. What are the, some of the things that I can do as a shop owner versus what are some of those things that I definitely need to hire out because. It's gonna take too long.

Jimmy Lea: I don't have the expertise. A marketing company would definitely do a better job at it than I would where? Where's the separation there that says I can handle this, but I need to hire this. 

Dan Vance: Well, a lot of the work that we do as an agency is, for example, we write content, so that's labor intensive.

Dan Vance: Now we're using tools and innovation like everybody else to get to the very best place. But it's a lot of work. It's a, it's akin to like, I know I gotta chop this tree down, so I'm gonna give my marketer the best tools possible so he can do it efficiently and give me the best results, which is to get that tree cut down.

Dan Vance: So if I give him a hand saw. I gotta have reasonable expectations versus if I give him a chainsaw. And so again, of our conversation, which is so critical today, more than ever, what do I really fix? And who is my best customer? I'm giving my marketing guy a chainsaw and he will go out, he'll create content.

Dan Vance: He knows how to fix the language on the backside of my website, so it makes sense to. He knows how to do this stuff and it's technical, it's hard work, and they can do this for me for a small investment. I get this huge return and I empowered them efficiently because I gave 'em a chainsaw instead of a handsaw.

Jimmy Lea: Oh yeah. That definitely helps a lot. I'm seeing some comments here from Sheila Costa, Sheila and Daniel Costa out of California. Gemini has not been that great in, in for them, which that's interesting that it's not working. They're using more Claude and Perplexity. Yeah, perplexity 

Dan Vance: is the one we were trying to think of.

Jimmy Lea: Yeah. Yeah. Thank you Sheila. Way to 

Dan Vance: go. Ka. Yeah. Good job. 

Jimmy Lea: Yeah. So, okay. Back to the the handsaw and the chainsaw. So, do we continue to answer all of our reviews? Do we continue to. Post on social media, do we continue to do that type of activity or do we let AI do that kind of activity? Yeah, 

Dan Vance: you know, right now we're in a weird time in the economy. There's, I think there's a deficiency of trust and we're, it's almost like a trust recession and reviews have always been like our solid.

Dan Vance: Foundation of like how we secure third party trust. 

Dan Vance: And you don't want to do anything different with that. You want to keep going the way you've been doing. You wanna get regular reviews, new reviews, you wanna respond to those. You always ask questions like you tell us about what we did and where you came from to do business with this.

Dan Vance: And not just that you loved us, but why, you know, was it. The warranty or was it the loaner car or whatever. You definitely want all of those things, but I'm having a lot of thoughts and conversations with what else can we do to reestablish trust? Because I think reviews don't have the same kind of power that they had even two years ago.

Dan Vance: AI is definitely a place where people have a lot of trust in it. We're seeing that, but what can I do to build trust in the community? And so that's a conversation for maybe another time, but definitely do reviews and definitely be asking yourself or brainstorming sessions with ai, like, what else can I do to build my brand and trust?

Dan Vance: Because we know people are clicking and they're looking at your stuff, but they're not necessarily calling. There's a large percentage of them that don't call, and I think that's trust. That equates trust. How do I solve that? How do I fix that? 

Jimmy Lea: Yeah, that'll be different 

Dan Vance: for everybody, but. 

Jimmy Lea: Yeah, and I like what Yvette said in here about using chat to summarize her Google reviews so she can get a sentiment of what her clients think of her or of her shop 

Dan Vance: a hundred percent.

Jimmy Lea: And I think that's a great draft one. This is draft one, draft two. Yeah. Where you're getting that sentiment. And now I want to jump to John's question. So John's got a great question here. Why is it I would want to have a single AI search on my website reviews to see the things that we're best at instead of just going to our customers.

Jimmy Lea: What do they think of us going to our old customers that come in and ask them? It seems like the human perspective would be much better than an AI perspective. What's your feedback on that, Dan?

Dan Vance: I, I think as a business owner, you have to know like, this is the problem we solve. 

Jimmy Lea: Yeah. 

Dan Vance: And going to your website is a way for you to say what I think the problem we solve and what the community and the internet space thinks. Are they a match? 

Jimmy Lea: I love it. 

Dan Vance: And if they're not a match, what do I do to get them to be a match?

Dan Vance: Because I'm unique because I can solve this problem. 

Jimmy Lea: Yeah. 

Dan Vance: I had a guy, he told me, he says, Dan, he says, we're really good at fixing transmissions in Porsches. This so called some pkt, or, I don't know what it's right. But I was like, okay, that's something they're really good at fixing and there's a place for them in the marketplace to get more of those and they're profitable for them, so why not?

Dan Vance: Why not know that? And then see if that's what you're communicating digitally. I do love the idea of going in and saying, look at all the reviews I have on Google, and tell me like, what is the sentiment being the emotion towards us. What are some things that they complain about the most?

Dan Vance: Is there maybe like three or four di of services that are commonly referred to as complaints, brake repair, oil service? Oh boy, I gotta fix those, 

Dan Vance: right? 

Dan Vance: Right. And then the other one would be, what is it that customers think is really good about us and unique about us? And hopefully that matches up with what I think the, I'm really good at fixing as a problem in our community that my competitor can't do that.

Dan Vance: Jimmy, how many of these guys ever tell you like, oh, we get calls from people that have called other shops and they're just like, they can't fix this, but we can fix this. We get that car in and we do it. 

Jimmy Lea: Oh yeah, all the time. All time. All the time. They're, they are known as the go-to in town because they can fix anything.

Jimmy Lea: Cars talk to them. They're the go-to. I was talking to a shop the other day and I'm trying to remember who it was. The car had been at two other shops. They had already spent 2300, 20 $800 at these other shops, and it finally brought it to him, and they were able to fix it very quickly.

Jimmy Lea: It's amazing because all this troubleshooting that they had done and all these parts plug and play didn't get to the problem and these shops threw up their hands and were like, yeah, we don't know. Take it somewhere else. Oh, it's a paperweight. It's scrapyard. Yeah. That wasn't an option. They had to fix.

Jimmy Lea: Put that car down. Yeah. Put it down behind the shed. It's time for the shed. Oh, man. It, it happens all the time. It, and it's scary. It's unfortunate that these shops aren't known for that, that they're not known as that. Go-to and to John's question, by the way, John, thank you very much for your question.

Jimmy Lea: I love it because, I think what Dan is suggesting here is using AI as the draft one, draft two. So you gain an understanding. You start with somewhat of a foundation. Now as you're talking to your clients and your customers, you can ask them specifics about specific areas. 'cause if you ask clients and customers you know, what do they think about you?

Jimmy Lea: Or what do they think you are unique at? You might get deer in the headlights like they don't know. Yeah. They gotta think. But if you're able to come in and say you know, according to the internet, they think we're really good in these areas. And you list out four or five different options, which one do you think we're the best at?

Jimmy Lea: Yeah. Now you've given them options. They're gonna be able to choose one. So using AI as a draft one, draft two is a really good platform. Then introduce that human-centric side of things. Which I agree, John, that the human side, we want to connect with humans. The more we connect with humans, the better. And out to Sheila's question.

Jimmy Lea: Sheila, this is a great question, by the way, is that related to SEO versus GEO transitioning? That's happening now. SEO focuses on traditional search engines like Google, while GEO focuses on AI driven. Search engines and platforms. It seems like eventually AI, GEO will take over SEO and position itself like an authority when recommending business for our customers.

Jimmy Lea: Now, I'm not familiar with the term GEO. Maybe you are, Dan. I've heard SAO for search algorithm optimization, search, artificial optimization. Are you familiar with this term? 

Dan Vance: Yes. A lot of marketers are talking about like. It's not SEO anymore. It's search everywhere now. Search everything. Optimization.

Dan Vance: Yeah. Yeah, exactly. Search engines. The this, people are not going to change to something new until they get more comfortable with it and have more experiences. We don't really like change as human beings, so the search engines aren't really going anywhere, but everybody is racing on the AI stuff because they see what's coming around the corner.

Dan Vance: So we definitely are going to be experiencing AI driven local search results. Moving forward 100%. You count on that. The question is, what does it look like in a year or two years is really unknown. Well, and what it 

Jimmy Lea: looks like one year from now is gonna be different than two years in three years.

Jimmy Lea: It's just, it takes money from now. Yeah. Oh, yeah. Yeah. It's gonna evolve so quickly. 

Dan Vance: So it's a great question, but I would also just add to this kind of like this level of like, find stuff that's working for you. You have to know that local search, when practice right, is the same elements that AI is using in pulling out into search results.

Dan Vance: And we think that's a big reason why our clients are telling us they're being found in AI models. 

Jimmy Lea: And so when you're talking about local search, Dan, are you talking about the LSA local search ads? 

Dan Vance: Nope. I'm talking about organic search, which is ranking a specific effort to rank better in Google Maps mobile.

Dan Vance: Another way to think about this is mobile ranking. What do I do so that I rank on mobile devices that are based on proximity? How close am I and how strong, yeah, prominence and how strong is my brand? So those factors, that's all local search, it's all mobile device driven. There's specific techniques that you apply.

Dan Vance: A lot of SEO companies don't do it 'cause they think it's a bother, but it's the leading edge of taking us from mobile users, having a great experience with Google Maps to the next thing, which is mobile users getting personalized, highly personalized returns. Based on their search and their behaviors based off of mobile devices.

Jimmy Lea: Alright, so now I have another question. Going down this this idea what about two different scenarios. One is a a mobile tech. 

Jimmy Lea: And then second is MSOs, multiple shop operators. How does that local search affect? Let's go to the MSOs first. How does a local search, how can they set them up sales up for success?

Jimmy Lea: If they're a multiple shop operator, they've got two shops, three shops, 10 shops, 21 shops, what's the best way for them to see success now here with this new AI model? Yeah. 

Dan Vance: You know, I, I'm not associated with this company, but I'm gonna tell you this brand Christian Brothers, if you go to their website, they're a perfect example of how they've taken multiple locations and they built one website around the model of promoting services and each one of those locations.

Dan Vance: And if you go in and you look at that'll probably answer a lot of questions. For an owner that has multiple locations, what kind of website should I have? Christian Brothers website has a what's called a domain authority, which is an internet scoring model. That's over 45 and that totally blows away Most auto repair shops, I've seen some of the best performing auto repair shops in the twenties.

Dan Vance: Oh wow, so, so just so you know, like it takes you to the new level. So yeah, I have multiple shops. I have both. I have a brand that's tied to all of those, or an associated brand, but they're all on one website and I can see that structure interesting. And all of that works really well for ai. 

Jimmy Lea: Okay. So that's 

Dan Vance: how they would do that.

Jimmy Lea: Well, and what about the mobile person? The mobile tech? Yeah. Yeah. So they don't have brick and mortar, but they probably have a radius of 20 miles that they might travel to repair vehicles. How can a mobile tech optimize their online information? 

Dan Vance: There's a way to set up the business listing for guys that have a business location, but don't publish it.

Dan Vance: I work out of my home, but I don't want people to know where I'm at. Yeah. If you just set up that way. Google does like mobile auto repair. It's a place that if you're doing that, will boost your rankings. So even if you are just a traditional shop with an address, but you do mo mobile repair, I would add that as a subcategory, it'll boost your rankings.

Dan Vance: Those guys. I think what they have to do is they have to do more as more social media posts talking about their services, how they come to you, customer reviews and social media, and then similar type of posts that they do that. Oh, I was, I can't read that. I gotta finish my thought. Oh, it says 

Jimmy Lea: I don't necessarily agree with AI telling people what to do, but I can't deny what's happening.

Jimmy Lea: Oh yeah. I totally agree. That's just. Fascinating that people are agre going after AI first. So you were talking about mobile technicians. Google likes the mobile text. They like that convenience factor, and I think that's what's happening in that algorithm is Google is going for that convenience factor of of convenience for the client. 

Dan Vance: Yep. And so work on getting great reviews when you're on the job. Take pictures, post those on your Google business. Listing pictures are a huge thing. Reviews, obviously as we've discussed, and then I would do Google posts that I could also share into social media.

Dan Vance: And the Google posts are gonna be things like, Hey, we are really good at oil service as much as we are like diagnostics on your vehicle, either in your office, parking lot or your house. 

Jimmy Lea: Love it. 

Dan Vance: And that'll help the ranking system understand you better as a mobile place without maybe you don't even necessarily need a website.

Dan Vance: A website enhances that too, but definitely not a business location. 

Jimmy Lea: Yeah. Well, you don't need a business location, but I think the websites are still in necessity. You've gotta have a website to be found. 

Dan Vance: Well, I'm guys get away with not a website. Yeah. 'cause the algorithm likes them. But look, if I'm a mobile guy and I'm busy, I'm good.

Dan Vance: But if I wanna hire a couple guys and get a couple more techs out there, then you wanna make sure you have a website. Like you build that foundation like everybody else has to. For sure. Yeah. 

Jimmy Lea: You gotta keep doing that. Yeah. All right, so, let's go to John's question here. Do you think. That social media presence and trying to market to the AI on each of those platforms will be better, or staying on Google search engines, they're much different kinds of marketing.

Jimmy Lea: So there is a bene is there a benefit to one versus the other? 

Dan Vance: I'm not sure I understand that. You know what he's saying, 

Jimmy Lea: Uhhuh. Yeah. So, do they, is it more important to be active on your social media and your reviews or? Which is optimizing it for ai or do you stay with the Google and search engine optimizations?

Dan Vance: Yeah. Years ago Google had a thing called Google Plus, which was their social media attempt to compete with Facebook, and I don't think they ever got rid of that algorithm. I think they use that in local search. 

Jimmy Lea: Ah, 

Dan Vance: so anything I do in social media. Seems to work. Like we can't really put our finger on why or what it's actually doing, but we see better performance when we do it that way.

Dan Vance: So that's why I think you use social media 'cause it ties in with locals. It's this idea of community and groups and things that I like and where I live. And so I would definitely utilize social media with my Google Maps local search 

Jimmy Lea: for sure. Yeah. This goes right back to your. Definition of SEO, which is search everything Optimization.

Jimmy Lea: Yeah. Yeah you really do need to focus on all of it. Make sure it's there. All right. Lance has a question here. Any recommendations on combining organic customer reviews versus shops that pay or discount to entice or encourage positive reviews? 

Dan Vance: Yeah, I'd stay away from that. That's, that usually violates most of the review sites guidelines for the way you're supposed to put reviews up there.

Dan Vance: And discounts or enticing is a violation of Google's. And for sure, Yelps will just close you down. Well, they won't close you down. They'll just make you like a one rating star. 

Jimmy Lea: Well, yeah, they'll take away all your reviews, and I've seen Google do that. I saw Google take a shop from 440. Reviews down to 80.

Jimmy Lea: Yeah. Overnight because they were incentivizing five star reviews. Yeah. So it's not good. 

Dan Vance: I do have a tip for you though, like if you're wondering like. Hey, I know this shop is intense. They're doing that. Then use AI to say, ai. Go read the reviews these guys have on Google My Business, and I wanna know what the sentiment is.

Dan Vance: I want to know what the negative comments are. I want to kind of get an idea of like, I. The underlining from the mass of data crunch, all that, mash it all up. Give me something good. And we had a shop, we did that too. And the reviews came back that basically said even though they were rated high like a five score, the sentiment was negative.

Dan Vance: Ne the sentiment was negative. And what we also saw was that there was common words like rude. 

Jimmy Lea: Oh my word. 

Dan Vance: And it was tied to services like brake repair and oil service. So that gave me the power and our client the power to kind of like display, like, we're really good at this, we're really good at these things.

Dan Vance: You'll have a better experience with this and we're not gonna pay you to give us a review. That doesn't really reflect the experience you had. So you can, so you gotta be 

Jimmy Lea: open to all reviews. 1, 2, 3, 4, 5 stars. You need the full rainbow of flavors there, right? 

Dan Vance: Yeah. 

Dan Vance: Spam is a huge issue with reviews.

Dan Vance: Google's saying they want to fix it, but they, I don't think that problem ever goes away, but if you, but agencies can definitely do this for you, where they can go in and they can file complaints against that shop and identify specific reviews and hopefully get Google to take some kind of action. That's a lot of dang hard work, but it will generate some results, but the problem still doesn't go away.

Dan Vance: So it's much better to kind of tackle it another way just to say where are their weaknesses? And I'm gonna market to that and I might even run some Google ads. So I know somebody's searching for brake repair is gonna find me right up with that other guy, like I'm gonna start pulling away his lead source into me.

Dan Vance: And start hurting his business. 'cause he's doing bad business practice anyway. And I'm better at fixing breaks. That's my thing. I fix breaks. I'm really good at that. That's the problem I solve, right? Yeah. Porsche 

Jimmy Lea: breaks. I fix Porsche brake better than anybody else. I fix. Be 

Dan Vance: competitive and think that way.

Dan Vance: Like, okay, I'm not gonna try to go head to head, but I'm gonna look for where they're weak and where I'm strong and I'm just gonna pull those people. I'm a stronger magnet, I'm a better place for. 

Jimmy Lea: Oh, I love it. I love it. I can't believe how quickly this hour has flown Dan. Phenomenal. So, so I want you to be thinking here, I'm gonna go into a little bit of a commercial for the institute, but then I want you to think, if you had a magic wand, what would you do in the automotive aftermarket?

Jimmy Lea: So I wanna let everybody here know that Dan is coming to our Mars intensive September 4, 5, 6 in Ogden, Utah. Ooh, I hope I have those dates right. September 4, 5, 6. Ogden, Utah. Mars is a marketing for the automotive repair shops. This is an intensive, we are limiting the number of seats, so it's gonna be a very good and intimate group.

Jimmy Lea: We're limiting the tickets to 40 tickets. The tickets just went on sale just the other day, and I think we've only got a few tickets that are sold so far. So those of you who are watching this that want to be here, you want to be here to ask questions. Dan, face to face. We're limiting the number of seats, so it is gonna be a really good conversation at our Mars Conference, our Mars Intensive marketing for repair shops.

Jimmy Lea: I'm so excited for it, Dan. It's, it is just gonna be an awesome event. We're gonna have so much fun. 

Dan Vance: It's always the best, really. 

Jimmy Lea: Yeah. Yeah, it is. All right. So Dan, if you had a magic wand, what would you change in the automotive aftermarket? I. 

Dan Vance: Well, we wanna change the thinking and we want people to accept the fact that AI is here.

Dan Vance: It's not going anywhere. It's just gonna be deeper and deeper water. So we're looking. We're about to announce, but I'm just gonna give you a T teases that we have some AI tools that are gonna empower shop owners to build a better, more marketing profile. And also some tools that'll sit on your website for better conversions that are all gonna be AI driven.

Dan Vance: So you wanna stay tuned for that because this stuff is coming and you can be on the forefront of like utilizing that for more success and it's not going away. This is something that we can do right now to empower. So that's kind of cool. That's what I think is gonna help the industry because we can't keep doing what we're doing and we gotta stop thinking about the way we've thought about search engines 10 years ago.

Dan Vance: 'cause nobody does that anymore. 

Jimmy Lea: Yeah. 

Dan Vance: We gotta fix that. Gotta fix that. 

Jimmy Lea: Yeah, definitely gotta fix it. It The future is bright and we're here to be on that ride with you. So as we lock arms, we become greater together as an industry, we can rise together. Not all this, not everybody's ship is built the same.

Jimmy Lea: We're all in the same storm, and this storm is one crazy wicked weather pattern that we just can't predict. Yeah. So I'm super excited for what's coming up down the road. If you find this information fascinating and interesting, we've, we at the institute have partners like Dan that are gonna be there to help you and your shop.

Jimmy Lea: We have programs for advisors, managers. Owners with coaching one-on-one coaching, as well as 20 groups of shop owners that are getting together and holding each other accountable. It's a higher level of understanding, it's a higher level of coaching and training. You wanna advance yourself as quickly as possible to go from the face-to-face coaching on a one-on-one to a group environment.

Jimmy Lea: It'll just hockey stick your business. It's so much fun. So much fun. Yeah. Thank you Dan. We're having a great time, brother. I can't believe how quickly, let's not do it again fast. 

Dan Vance: I know. There's a lot more we haven't even started on. Let's do it again. I know. 

Jimmy Lea: We gotta schedule out our next webinar for sure.

Jimmy Lea: Let's talk after here and we'll get on the books here. 'cause man every three months it's a new lifecycle. Yeah. Every three months for sure. Sure. A hundred percent brother. Thank you everybody. Thank you for being here. Look forward to talking to you again here. And this week we have quite a few webinars, so hopefully you get to catch us a few times this week.

Dan Vance: Yeah, hope to see you soon. See you soon. Thank you. Bye-bye.

Show Summary:

This episode dives into the journey of Tonnika Haynes, the dynamic leader behind Brown’s Automotive in Chapel Hill, North Carolina. Hosted by Jimmy Lea, the conversation opens with laughter and memories, then unfolds into a powerful reflection on family legacy, leadership, and resilience. Tonnika shares how she went from being a little girl napping on a pleather couch in her father’s shop to running the service department solo after an unexpected handoff. She discusses the trials of business ownership, the lessons from her Marine father, and how she’s cultivated strength and success through grit, coaching, and personal growth. The episode is a must-listen for shop owners and aspiring leaders ready to turn life’s curveballs into victories.

Host(s):

Jimmy Lea, VP of Business Development

Guest(s):

Tonnika Haynes, Owner of Browns Automotive

Episode Highlights:

[00:03:00] - Tonnika recounts the early days of Brown’s Automotive, founded by her father after serving in the Marines.

[00:06:59] - In 2001, the business moved to a significantly larger location just two weeks before 9/11.

[00:08:01] - At age 16, Tonnika was unexpectedly left in charge of the shop, a pivotal learning experience.

[00:18:00] - In 2016, she was again thrust into leadership when her father retired, taking over the service department.

[00:23:00] - Tonnika discusses how The Institute helped her understand profitability and manage financial data with confidence.

[00:27:00] - She reflects on her greatest growth being in self-development and becoming a responsible leader for her team.

[00:35:17] - Her biggest business mistake: keeping the wrong people too long and the impact of toxic employees on culture.

[00:38:15] - Emphasizes hiring for character over skills, sharing success stories of loyal, high-integrity employees.

[00:40:45] - Tonnika shares her evolving “why” and plans to promote industry opportunities for youth and women.

[00:43:56] - If given a magic wand, she’d change the public’s perception of the industry to one of respect and professionalism.

👉 Unlock the full experience - watch the full webinar on YouTube: https://www.youtube.com/watch?v=u-TVQMePOk8

Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!

Links & Resources: 

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Episode Transcript Disclaimer

Episode Transcript:

Jimmy Lea: Good morning, good afternoon, good evening, or goodnight, depending on when and where you are joining us from today. Hello my friends. It is good to see you. My name is Jimmy Lea. I am with the Institute for Automotive Business Excellence and thank you for joining today.

Jimmy Lea: We are going to have an amazing discussion today with a very good friend, someone who I met a few years ago at ASTA at an NATA conference, Tonnika Haynes. Thank you, Tonnika for being here. You are awesome and I love your hairstyle. Sister, you are looking fly. This is nice. 

Tonnika Haynes: It's like Jimmy, it's like yours.

Tonnika Haynes: We're twins. 

Jimmy Lea: Yeah. Yeah. Two inch, two inch hair and it stands right up. It gets out to about three and it just falls down. 

Tonnika Haynes: Yeah. I'm gonna cut it a little bit more so we'll be twins in Pennsylvania when I come See you at tools. 

Jimmy Lea: Hey, good. Yeah, you're gonna be at tools. That'll be fun. 

Tonnika Haynes: And oh, and I've got my jacket ready.

Jimmy Lea: You do? I got a couple ready. I'll be bringing a couple jackets 'cause jaded mechanic is supposed to be bringing my jacket back from Canada and I'll be bringing him a new jacket. 

Tonnika Haynes: Jeff had, what did he put, like one arm in your jacket? 

Jimmy Lea: Oh yeah. He looked like the big man in a small jacket. That man in a coat.

Jimmy Lea: I need footage. I need to see that. Oh, sister. Oh he was on the stage at Asta. He's like, Hey, can I wear your jacket? Sure. Of course you can. Yeah.  

Tonnika Haynes: I gotta find a picture of that. Oh my goodness. Yeah. It was last year. 

Jimmy Lea: He was the panel. He, yeah, when he is MCing. Yeah. Which he had his back to us the entire time talking to the panel.

Jimmy Lea: That's funny. 

Tonnika Haynes: Okay. Let leave him alone. 

Jimmy Lea: Leave. He did such a. I, I was very proud of him. He has come a long way in the industry, so thank you for joining Tanika. And how's Brown's Automotive? How's the family? 

Tonnika Haynes: I'm doing good. Everybody's good. You know, work and life is a rollercoaster and we are riding, but mostly up, so.

Jimmy Lea: Nice. 

Tonnika Haynes: Yeah. Nice. 

Jimmy Lea: All good stuff is right. So, in our discussion today you are the rock star of Browns Automotive. You are the rock star of Chapel Hill, North Carolina. Love Chapel Hill. Been there a couple times. Absolutely gorgeous. I wanna talk about Browns Automotive and your journey.

Jimmy Lea: And I think we need to go back to 1980 when your dad founded Browns Automotive after service in the Marines, who raw to the Marines. My daughter's in the Marines and our our own Ryan Daley is a Marine. So back to that what thank you to all those servicemen and women that are keeping us free and that are fighting for our freedoms.

Jimmy Lea: We really appreciate it. Thank you very much. What do you remember about his journey in him founding the shop? The foundation of the shop. What do you remember? 19 80, 81, 82, 83. What do you remember of dad setting up the shop? 

Tonnika Haynes: So, of course I was only three. I don't remember a whole lot. So when I look at the pictures, I remember just had, how busy was, he was always busy.

Tonnika Haynes: He worked like, I wanna say dad worked 18, 20 hour days. I remember summertime spending all the summer with dad and the dogs. We had dogs to keep me busy and falling asleep on this blue pleather couch and sweating to death 'cause it was summertime. But I do remember my dad being so busy. But I enjoyed it 'cause I would do anything to be around him still.

Tonnika Haynes: Just whatever. What are we doing? I don't know what he is doing, but I'm just gonna be standing beside dad to be with him. But a busy man is what he was. Yeah. Worked all the time. 

Jimmy Lea: So did he have employees? Was there more than him or was it him? A bucket and a wrench. And he ran the whole show. 

Tonnika Haynes: So, he did have employees, I wanna say I remember it only being maybe two or maybe three at the most in our older location in the beginning.

Tonnika Haynes: But he was hands on. He didn't just do the office that did office, and he was still the primary body man. And so he just had a couple employees. But yeah, mostly him. 

Jimmy Lea: So Brown's Automotive was a body shop? 

Tonnika Haynes: Yes. Brown's Automotive started as a body shop in 1980. Oh my. When did that? I'm the body shop world.

Tonnika Haynes: Oh, that's, yeah. A lot of people don't know that. So we started off in a body shop and we were in this very small location for a very long time, and we moved to our current location. And when we did that, my dad built two buildings. Because a lot of people don't know that insurance rates are very low still.

Tonnika Haynes: I believe the insurance rate is about 42 to $44 per hour. I don't think it's above 50 yet, but here's the kicker. 

Jimmy Lea: Wow. 

Tonnika Haynes: Yeah. So if you get in an accident front end collision, or right, three quarter front, whatever, and you have suspension work that needs to be done right, the insurance company only pays that existing labor rate.

Tonnika Haynes: So at the time, I think when we got out, it was like 38 to 40. What I could take that same work to be done at a local mechanic and they would pay them their full rate. 

Jimmy Lea: Yeah. 

Tonnika Haynes: And so you could sublet the work and they would pay it with no problem. So dad say, okay, I'm gonna play this game too. He built two buildings.

Tonnika Haynes: One was where I work now in the mechanic shop, different tax ID number, different name, and said, okay, well I will sublet the work to myself. And so that's how we got into the service side of everything. 

Jimmy Lea: Way to go pops. That is so smart. 

Tonnika Haynes: Yeah. And so that's how we ventured into the service center. 

Jimmy Lea: Oh, that is so smart. Way to go. Yeah. That is very cool. So, how old was the business when you moved to the current location? Or what year was that you guys moved? We moved 

Tonnika Haynes: in 2001. We moved two, was it 2001? We moved two weeks before nine 11. 

Jimmy Lea: Oh my word. 

Tonnika Haynes: Yes. So we moved in like a location that was probably, I'm not really good with square footage, but I wanna say about 30 times the size of our first location.

Tonnika Haynes: Yeah. 

Jimmy Lea: Like, we don't have enough furniture to fill this place up. 

Tonnika Haynes: Right? There was construction on the highway in front of our building. They were widening the street and two weeks before nine 11. So let's talk about struggles. 

Jimmy Lea: Yeah, that's a struggle bus for sure. 

Tonnika Haynes: We are still here. 

Jimmy Lea: You're still here and you're doing well and still kicking.

Tonnika Haynes: Yep. 

Jimmy Lea: That's good. That's good. So you moved into current location 2011. Was that the first summer that you were handed the reins and Pop said, have at it? Good luck, sister. 

Tonnika Haynes: So summer I turned 16, but that would've been 93. 

Jimmy Lea: Oh, you were at the old location? 

Tonnika Haynes: Yeah, we did at the old location, just in the body shop.

Tonnika Haynes: And it was the summer I turned 16 because I had my own car. I could drive back and forth to work by myself and I get to work early in the summer and dad looks at me and he says, okay, I'm going on vacation. Yeah, brother just left me there and told me to handle it. Yeah. 

Jimmy Lea: You're 16 and he's like, here's the keys.

Tonnika Haynes: That's how my father, any and everything, that's how he's gonna teach you. You wanna learn how to swim? Yeah. Wanna learn how to swim? Let's go to the middle of the lake. I'll push you in order. But did you die? Like the whole, but did you die? That was way before that movie. Yeah. Uhuh. Yeah. But that's how he taught.

Tonnika Haynes: But then people say, well, you know, you're only 16. I know as a mother now, and I know as his daughter for the last 48 years that. He was teaching me the whole time I had been taking classes from William Brown since I was three. Yeah. So in order for this man to leave his 16-year-old daughter alone for what, two or three months, he already trusted me.

Tonnika Haynes: You know what I'm saying? 

Jimmy Lea: Yeah. So he had taught you for, let's call it 13 years, right? You were in tutelage for 13 years. You had a master's degree in running the shop. Where most people they're not even close. So speaking of that dynamic you mentioned it just here in the same sentence, your father and William Brown.

Tonnika Haynes: Oh yeah. What's 

Jimmy Lea: the difference between working with dad and working with William Brown? 

Tonnika Haynes: I've never worked with my dad. My dad has me rotten. I'm spoiled. Oh yeah. Daddy, I need a dolphin. Okay. I'm on the way to get your dolphin baby. I am spoiled, but William Brown, that's a different person. William Brown is a teacher.

Tonnika Haynes: He is Mr. Miyagi. So how do you teach a 16-year-old girl to run your shop or any 16-year-old girl or boy to leave them at the shop your business, and you just leave that way? Because for the last 13 years I was straight up doing some wax on, wax off and didn't really know that I was practicing karate moves.

Tonnika Haynes: You get it? Like we had to think about the karate kid. Everybody knows that. Yeah. Coat on, coat off, wax on, wax off, paint up, paint down. And then at the end of that, when it was time to fight, it was just natural for him. And so when it was time for me to fight, it was just natural. 

Jimmy Lea: You were ninja. 

Tonnika Haynes: You were nin is the what do you call him?

Tonnika Haynes: Sensei. 

Jimmy Lea: He was your sensei. Oh, absolutely. Right. So 13 years of training, he hands you the keys, like I mean, when we say, he says, I'm going on vacation, was he gone? 

Tonnika Haynes: He was gone. No, he was, I mean, he was at home. I don't know what he did between office hours, but he was not at 1 0 2 Cobb Street. So he was gone.

Tonnika Haynes: No. 

Jimmy Lea: Huh. Wow. Wow. I mean, I know 

Tonnika Haynes: that's not true. He had to, for the people that know my father. Yeah. And the people that are watching this or that will watch it, they're laughing 'cause they know that's who he is. So yeah. That's how it was taught. So yeah, eh, go do it. What? But nothing. Go do now.

Tonnika Haynes: Love you. Bye. 

Jimmy Lea: The butts have it. Get down. Yeah. Let's count. Oh, wow. 

Tonnika Haynes: Right. 

Jimmy Lea: Do you feel like that training prepared you? Like you were ready? Or did you feel like you were still unsure? 

Tonnika Haynes: I'm pretty sure I was still unsure. 

Jimmy Lea: Yeah, 

Tonnika Haynes: but you can't live like life like that. I wasn't raised like that.

Tonnika Haynes: You didn't, that wasn't an option for you to sit back and say, well, what if what if it's gonna be fine? So you, if you're gonna fail, you're gonna fail forward. Like before all these cliches came out, this is how I was raised. So if you're unsure, you know, we'll talk about that tomorrow. But right now we've got stuff to do.

Tonnika Haynes: So I couldn't sit and have a pity. Have customers and employees and cars to fix. Yeah. So maybe at night when I went home, I might have cried in my pillow or whatever and not have come to Jesus, but from eight to five or whatever the hours were, there was no room for that. Right. And I'm not sure that's So like the people out there to watch it like that seems so cruel.

Tonnika Haynes: It's not. That's actually what a lot of people need. You know, that push that, I mean, not a gentle push, but a shove and like go and do it. 

Jimmy Lea: Yes. Yeah. Yes. Well, for sure. Right, for sure. Do you think, do you feel that because of your upbringing, you have raised your sons the same? 

Tonnika Haynes: Yes. Poor kids. And I know when people see them online, they think they are spoiled.

Tonnika Haynes: 'cause again, they have their mom and then there's Tanika. But I know, and as they get older, so they're 19 and Santana will be 21 in a couple weeks. When your kids come back and they tell you things in a light that, hey, they got it like they were listening. Or when they're comparing themselves to other kids like, mom, this dude cannot find his way out of a paper bag because it's real.

Tonnika Haynes: Like these 20-year-old kids don't know how to do anything because we huddled them a lot. I mean, I love my boys from the moon and back. I mean, I, if I could pick them up and put them in my pocket, I would, but I know they can't live in my pocket. The world is no matter, the world is ugly, it's cutthroat.

Tonnika Haynes: People are mean. Society is a mess. You're gonna find people in your life that are gonna bring you in and take care of you and love on you, but for the most part, the world doesn't give a crap about you. And that sounds so mean. And I'm pretty sure the comment section is gonna flip out, but it's not a lie.

Tonnika Haynes: And I wasn't gonna raise my kids on a lie. 

Jimmy Lea: Right, right. So yeah, 

Tonnika Haynes: suck it up buttercup. You fall down, get up and try it again. Their knees are skinneded up. There's plenty of blood on my carpet. They went outside to play and they smelled really bad when they came in. They did sports, but they didn't do sports.

Tonnika Haynes: 'cause I thought they were going to the NBA or the NFL or whatever, like Santana's a big joker. But that's not why I put them in sports. I put them in sports to be coachable. 

Jimmy Lea: I 

Tonnika Haynes: put them in sports so they would have to listen to other people. 'cause they will have to listen to other people in the world.

Tonnika Haynes: Totally. Like even you gotta think in families Now. When I got in trouble as a kid, you got in trouble with everybody because it was a village, right? You got in trouble with the neighbor, the little old lady up the street. Everybody heard about it. Everybody helped you raise like I thought coaches were very important for them.

Tonnika Haynes: Their grandfather, William Brown, was very important. So yeah, I was very strict, but with a purpose. And now I can see the difference in my kids versus from others, but we won't talk about that. 

Jimmy Lea: No well, I'll tell you a quick story about my son. 

Tonnika Haynes: We were 

Jimmy Lea: at church and somebody came up to me and he says, Hey, can my son hang out with your son?

Jimmy Lea: I was like odd requests, but yeah, sure. Why? Well, your son seems to have street smarts, like he's got common sense and. My son doesn't have so much. Right? Like, yeah. Well you're gonna have to let him out. He's gonna be able to have to go outside and stay out after dark. Yes. You okay with this? And he is like, Ooh, let check with my wife.

Jimmy Lea: Okay. There's boogeyman out 

Tonnika Haynes: there, but the boogeyman iss gonna be out there when they're adults too. So won't we teach 'em about 'em now? 

Jimmy Lea: Yeah, teach 'em. Let 'em learn. Skin, knees, skin, elbows. Yes. Yes. More please. Yeah. 

Tonnika Haynes: But now you know, the kids are like this. 

Jimmy Lea: Oh 

Tonnika Haynes: yeah. They can make eye contact and they can't have a conversation.

Jimmy Lea: Yeah. Yeah. My girls so I was a scoutmaster for 18 years. And I would take my girls out and I. Coach and train and teach them. They knew all the knots and sharpen knives and light fires. And my daughter now is Marine and she's in Hawaii, but she's been deployed and I think it has prepared her and them with confidence and ability to do stuff.

Jimmy Lea: I told my girls, I, I would take you into any Boy Scout competition before I take any of these boys. 

Tonnika Haynes: Well, but it starts early. You have to start early in 'cause you're training up teeny humans. 

Jimmy Lea: Oh yeah. Yeah. 

Tonnika Haynes: You know, but they're not gonna be q forever. You're training your next, the next husband, the next wife, an employee, a boss.

Jimmy Lea: Yes. Yes. And in fact, to your point there, Tanika, I was asked, why in the world are you a scout master? You only have girls because I had two girls. And there's, so there's three years between the two girls and then five years between the my youngest daughter and my son. Why? Why are you doing boy scouts?

Jimmy Lea: And I said, well, one of these yahoos gonna wanna marry my girl, so I'm gonna make sure these yahoos are worthy. 

Tonnika Haynes: Exactly. And people forget about that. I think we do forget about that when it comes to raising kids and we're so busy. But I mean, children are a gift. Yes. Sometimes curse, but they're a gift and God gives you these, this child and says, okay, what are you gonna do with it?

Tonnika Haynes: Yeah, you just gonna get him a bunch of toys. What are you gonna teach him? You gonna wait for the school to do it? Yeah. What is he gonna do when he has to go outside and like the boogey man is outside and he doesn't recognize the boogey man. 

Jimmy Lea: Yep. Yep. So, yep. Totally agree. I think Crystal has said it very well that you're training these children while they're young, because then when they get old, they'll remember.

Jimmy Lea: And

Tonnika Haynes: I'm at the phase of remembrance. I'm getting to hear it from my kids that they remember. 

Jimmy Lea: Yes. Isn't not, we're doing something right. Yep. We're doing something right. So now to the time in your life, 2016, you take over Brown's auto. What does that look like? What's that transition? I mean, is this like when you turn 16 and Pop says, here's the keys.

Jimmy Lea: Good luck. God bless you. Love you. 

Tonnika Haynes: Actually, it was. I haven't thought about. Yes, because listen, we're a body shop. We're just using the service department for to keep it in house. 

Jimmy Lea: Right. We didn't 

Tonnika Haynes: mark it to the outside. We didn't mark Brown's Tire and Automotive is what it was called at the time. We didn't do any of that.

Tonnika Haynes: And so when he retired and he made a decision to rent out the body shop, which I knew. And left me the service department, which I did not know. I didn't know, I didn't know anything about that. Sister was mad. Jim was mad. I was mad and sad. 

Jimmy Lea: Well, you're mad is here. He goes, throws you in the deep end again.

Tonnika Haynes: He threw me in the deep end again. As a matter of fact, I think we should call him right now and ask him what his problem is, like get him on the phone. He threw me. He, but he knows what he's doing. I look back, he knew what he was doing. He pushed me outta my comfort zone. Again, nobody asked him to do all of that, but that's what he did.

Tonnika Haynes: And I remember thinking to myself, 'cause the boys were young okay, all if I can just make this amount of money, I need this amount money to break even. And then I just have to have this amount of money to make sure I can pay the bills. And I was just in a mindset of, okay, I just need to figure out enough to get by.

Tonnika Haynes: And so I became the state inspection and oil change queen. 

Jimmy Lea: Oh goodness. 

Tonnika Haynes: I would say yes to everything because

Jimmy Lea: that's what you knew 

Tonnika Haynes: somebody said to do. And I entertained all the bottom 

Jimmy Lea: feeders 

Tonnika Haynes: and I ran myself crazy, I think. 

Jimmy Lea: Oh, yeah. 

Tonnika Haynes: Yep. 

Jimmy Lea: Oh yeah. 

Tonnika Haynes: I think my average repair order, I looked back, it was maybe a hundred dollars if it was that.

Tonnika Haynes: Since we've been talking numbers, I just went back, I was like, oh my goodness, how far have I come? But yeah, and so I didn't have confidence, not be, I did have it, I just didn't know it. So let me rephrase that. But yeah, he threw me on the deep end again and says, okay, what are you gonna do? Now 

Jimmy Lea: what? 

Tonnika Haynes: Now what?

Jimmy Lea: How do you like me now? 

Tonnika Haynes: You like me now? So, yeah. Oh, you work for your dad. It must be great. It is great. It is great. It ain't easy because he's like, because he knows who I am and he knows what I can do. And you know, at times we can doubt ourselves. And Dad wasn't having that. I remember in high school he would say, if I would get a C well I don't have no average child.

Tonnika Haynes: Ain't nothing about you. Average. So what you get that for? I'm just like, I just, I did. Okay. Okay. Is not good enough for William Brown. Neither it is from, it's not for me either. I've grown into that, but I'm more like him than I think, which is scared to say out loud, which I'm just like that man. But if he wouldn't have pushed me, then 

Jimmy Lea: what?

Jimmy Lea: Yeah. Yeah. 

Tonnika Haynes: We'll be talking to you. 

Jimmy Lea: Yeah. Oh, I'm glad he pushed you. I'm glad you survived the deep end. I'm glad that you are able to stand up to the challenges and you've trained and taught your beautiful boys the same. Principles, the same character, the same work ethic. Yes. And I'm glad that they're coming back to you saying the same thing.

Jimmy Lea: Thank you, mom. My friends really don't know what they're doing. 

Tonnika Haynes: It's hilarious. 

Jimmy Lea: Yeah. 

Tonnika Haynes: I was like, oh yeah, mom, you remember, you know what the worst, my worst, best punishment was. I'm like, why are we having these conversations? And they can remember. That's how my father was. You know, you did something once. Oh, you were not gonna do it again?

Tonnika Haynes: No. He taught lessons, not abusive. I mean, in 2025 standards, you know, somebody probably should call it Department of Social Services, but hey, it worked. Oh, it does. It does. 

Jimmy Lea: And the 

Tonnika Haynes: couple of, 

Jimmy Lea: just as the song says, the children are our future and we've gotta train 'em. Right. 

Tonnika Haynes: Because 

Jimmy Lea: we don't want a bunch of marshmallows running in the future.

Tonnika Haynes: No. 

Jimmy Lea: Yeah. 

Tonnika Haynes: Yep. 

Jimmy Lea: So question for you about joining the the Institute for Automotive Business Excellence. 

Jimmy Lea: What have you learned? What have you grown to what were, if you were to describe your experience to somebody else, what would you tell them? 

Tonnika Haynes: So, this has been good for me. My coach is good.

Tonnika Haynes: Jennifer's, she's good. She can call me on my own bull crap. 'cause I got a lot of y'all. I get in my own way and one thing that I have not, in the nine years I've been completely on my own a hundred percent. I've been afraid of the numbers. Truly understanding them. You know, in the beginning you learn about your KPIs, you learn how to set your labor rate and whatever, but one thing that I struggle with is you thinking, okay, I'm a million dollar shop, but hey, are you a profitable million dollar shop?

Tonnika Haynes: What? There's a difference. Bottom line, there's a difference. What is your bottom line? Are you recycling money or do you have money to spare? And how much of that million dollars did you profit? You know, was it 8%, 1122? What do you know and where's your money going? Like, how much did you spend on charity?

Tonnika Haynes: How many elementary school charities can you donate to What is your marketing budget? So digging into the numbers and having a resources I love it. I love it that you can just go and press, play and listen to a class. I love the reporting that I get back every day. Those daily emails that are telling you, Hey, you're on track.

Tonnika Haynes: Hey, you not on track. But watching those numbers, which people are afraid of, I'm still afraid of them. That has been like one of the biggest things for me, actually, seeing where my money's coming in, where it's going out, making adjustments so I can keep more in my pocket. Make an adjustments so we can pay your employees better and make an adjustment so that I can actually offer benefits.

Tonnika Haynes: You know, I can't say that the institute did it, but before the institute, you know, I had I didn't have health insurance, but now I have health, life, disability, vision. I can offer all of that stuff now because I know exactly where my money is and I know exactly how to spend it. 

Jimmy Lea: Well, I, there's most people that don't need lessons in how to spend it 'cause they can spend it very well.

Jimmy Lea: But it's definitely more important to know where to spend it and why To spend how to spend it. Exactly. Yeah. I love that. And you went to college for accounting? 

Tonnika Haynes: I went to college for accounting. But here's the thing. My first couple classes my i's were crossing, even now when I have to do my composite reporting, I will get a message like, hey.

Tonnika Haynes: Put your numbers in. I'm like, oh my God, because you know, your, I start across and there's like a million numbers on there and no, so I didn't graduate as an accountant. I just know I decided to change courses. Business administration is what I did in management and marketing. So numbers are scary to me.

Tonnika Haynes: I'm no I'm no accountant. 

Jimmy Lea: No. 

Tonnika Haynes: I could fight people that develop QuickBooks. Right. We wanna fight people to develop. I do, but it has to be done. 

Jimmy Lea: Yeah. 

Tonnika Haynes: It has to be done. If I'm going to succeed and I'm gonna bring in a million or two or eight, you can't just be bringing it in and not budgeting and not bouncing your checkbook.

Jimmy Lea: Right. 

Tonnika Haynes: Crazy now, wouldn't it? 

Jimmy Lea: Yeah. No I'm glad you're paying attention to the numbers. I'm glad you're able to know. The million dollar successful shop is the one that is able to have more money in the bank every year. 

Tonnika Haynes: Right. 

Jimmy Lea: It's how much you keep, it's 

Tonnika Haynes: how much you keep. 

Jimmy Lea: Is there, what are some of the biggest successes or breakthroughs that you've had since stepping into an ownership or leadership position?

Tonnika Haynes: Oh, that's a good question. Biggest success. It sounds arrogant, but I would have to say my self development.

Tonnika Haynes: Don't know how to elaborate on that without crying. So I'm not doing this with you right now, Jimmy, LOL. But continuing to learn to be myself, continuing to grow, continue to allow myself to be challenged by different things. I'm responsible for currently eight households. 

Tonnika Haynes: So we talk about leadership, we talk about running the business, but I'm literally responsible for feeding eight families 

Jimmy Lea: and the roof and the utilities, and the right shoes on the babies and the diapers.

Tonnika Haynes: So I don't get to crawl in the hole and cry and die. I have to step up, you know, I have to move forward. I have to keep learning. And so just con the learning part of it. And I feel like, and I know people, oh, you're already doing it. Leadership, that's a good word. Like everybody leadership.

Tonnika Haynes: That is a scary word. 

Jimmy Lea: Yeah. 

Tonnika Haynes: You know, leading I. My family of employees. 

Jimmy Lea: Yeah. 

Tonnika Haynes: Being I'm saying a lot. I'm sorry 'cause it really tickles my heart, but people are actually looking up to me in the industry, so that's weird. You know, the direct messages, they're asking real business questions.

Tonnika Haynes: I'm like, whatcha asking me for, I dunno, either. I'm in the same boat as you guys, but yeah, just growing in my, in myself. 

Jimmy Lea: For me. How do you feel like your leadership has changed over, I mean, shoot, since you've been doing this in 96? 

Tonnika Haynes: It's still a work in process. 

Jimmy Lea: Yeah. 

Tonnika Haynes: Because William Brown was the leader forever, and then for, I had an employee mindset.

Jimmy Lea: Right. 

Tonnika Haynes: So changing your mindset from an employee to the boss or the leader, the business owner, making all those executive decisions, that's a lot of growth there. 

Jimmy Lea: It is. So how can we prepare, or what advice would you give to an aspiring shop owner who is stepping out of the shoes of employee into the shoes of business ownership?

Jimmy Lea: How do they. Work on that mindset to be the boss. 

Tonnika Haynes: I would change what is entering into your ears? For me, it started with a lot of podcasts, a lot of motivational speakers, a lot of books, a lot of audio books. Reading Fundamental. I would tell somebody to find a business owner that you admire. And get in their ear and ask for help because you know, I've never been a mechanic.

Tonnika Haynes: I can't turn wrenches, right? But here's what I can do. I can cook, a sister can cook. I can cook, man, I can make a me macaroni and cheese. But just because you can do that doesn't necessarily mean you can go open a restaurant. Right. So I think sometimes in the forms and the Facebook groups, you know, people are asking questions like, how much do I charge?

Tonnika Haynes: People don't know how to set their labor rate to be profitable and to pay the bills. I will tell that person take business classes 'cause it's more than just fixing the car. 

Jimmy Lea: Right, right. Well, and with those nails, you are definitely not turning a wrench, sister. No, by the way, gorgeous. You have gorgeous nails.

Jimmy Lea: Love, love your nails. So what are you reading right now 

Tonnika Haynes: again? I am reading profit First again. 

Jimmy Lea: Nice. I'm going through 

Tonnika Haynes: that. You know, we, my favorite thing to read is nothing to do with Business. 

Jimmy Lea: Okay. 

Tonnika Haynes: It's The Alchemist. 

Jimmy Lea: Oh, I need to read that. I've heard that before. 

Tonnika Haynes: So I actually don't read it every time I listen to it on the audiobook, probably twice a year.

Jimmy Lea: Oh wow. You really like this book. 

Tonnika Haynes: I the story is amazing. The story can apply to anybody. It's about finding your personal goal. He is going after these goals. It's hard to explain, but I love it. The audio audible version because it's a story being taught to you so you don't have to really focus on the book.

Tonnika Haynes: 'cause you can get lost in the pages, but once you listen to it over and over again, it sticks with you. And I started listening to it in the car. When we take trips, long trips with the kids, like, we're gonna be in here forever. We're gonna listen to books. So that is the book that I listen to all the time.

Jimmy Lea: Nice. It's like the the book, the Richest Man in Babylon. It's a story. The 

Tonnika Haynes: Richest Man in Baby. It's a story just like that. 

Jimmy Lea: Yeah. Yeah. And a big shout out there to Parker's comment about go to your local Chamber of Commerce. Take all the business classes and courses that you can possibly take, consume it, absorb it, sponge it.

Tonnika Haynes: Yep. And a lot of this stuff is out here for free, right. I mean, there are some things that the Institute offers for free. You've got a couple free. Classes in there there's free stuff available. You have to start somewhere. And the key word is starting, 

Jimmy Lea: like yes, 

Tonnika Haynes: I know it sounds cliche, but a lot of people just do not know what they don't know or they think they know everything.

Tonnika Haynes: If you know everything, then you might as well just be dead. You should always be learning. Always. Nobody knows everything. 'cause even, like, who is it? I'm not a sports person, but basketball. You think about basketball, you got five guys on the court, NBA. They're good. They're the cream and a crop, right? Best of the best.

Tonnika Haynes: And on the side, on the sideline, who's the coach? What does the coach look like? Does he look like them? Not necessarily. He can't do that anymore. He can't run up and down that court. He'd die. I mean, he's an overweight, older guy, but he's got the experience, right? 

Jimmy Lea: Yes. 

Tonnika Haynes: And when the clock is at what? So the clock is at.

Tonnika Haynes: 10 seconds. Right? Game's about be over. It's Todd. You've got these million dollar players looking for this guy on the sideline. What? Help me out, coach. Yep. Yeah. Great Stu. Even NBA players have coaches, so everybody should help a coach. And I know if, oh, coaches are stupid, that man took my money. Every coaching company is not gonna fit every person a personality.

Tonnika Haynes: But to not get one and to not need one, to not need one, to think you need one. That would be like one of the biggest. Mistakes that a person can make. 

Jimmy Lea: Yeah. 

Tonnika Haynes: In my opinion, 

Jimmy Lea: yeah. Coaching companies have value. 

Jimmy Lea: Check it out. Go in there, be part of it. Dig in deep. If it's not your jam, if it's not your song, don't go it.

Jimmy Lea: Go find the next one. Go find the one that connects with you. 

Tonnika Haynes: Right? 

Jimmy Lea: Yeah. I mean, all these professional athletes that not only do they have one coach. They might have 3, 4, 5, 6, 7 coaches. I think of Michael Phelps as a swimmer. I was a swimmer in high school and he had like seven coaches, one for each stroke, one for his flip turns, one for his dive, one for his streamline.

Jimmy Lea: Yeah. You gotta have multiple coaches looking out for you. 

Tonnika Haynes: Right, because you can't let your arrogance cost you money. 

Jimmy Lea: Oh, amen. Yep. Absolutely. Absolutely. Oh, okay. Oh, man. We could just keep going down this road of path learning setbacks. Oh, yes. We learn more from failures than we do successes.

Jimmy Lea: Yes. Tanika, what is one of your greatest, strongest, most impactful failure that taught you the most? 

Tonnika Haynes: Keeping people too long. 

Jimmy Lea: Oh, 

Tonnika Haynes: employees. Yes. What do they say? You have to be quick to fire. Fire higher, slow to higher, quick to fire. I had never practiced that. I've kept people in places too long. And that's been it for me, and I'm still working on it.

Tonnika Haynes: I'm a work in process in progress, so. Keeping people too long keeping the wrong person in that position. People are not always who they are in front of you. In the last 60 days, I fired two service advisors hired and fired. Two, you gotta go. I would get up. Gotta go. 

Jimmy Lea: Wow.

Tonnika Haynes: But it took a long time for me to get there because, you know, I need them.

Tonnika Haynes: I need them. You do not. And the quicker you fire them, the quicker you'll be forced to hire the next person. 

Jimmy Lea: Well. It's almost like you're attracting the right person. Like you, you've gotta get rid of this bad apple. 

Tonnika Haynes: Because 

Jimmy Lea: The right person will not be attracted to your shop or to your business, right.

Jimmy Lea: With this cancer or this bad apple in your community, in your culture. 

Tonnika Haynes: Yeah. I've had technician that we had to fire, and when I fired him, it was like the sun came out in the back of the shop. I mean, like everybody's attitude changed and I'm sitting there like, y'all didn't like him. Why You didn't say something?

Tonnika Haynes: We did. You were not listening. You thought you had to have them. It's like, oh, okay. So that was me. You put that on me I'll take that. But it will mess up. You know? I say one bad apple. It's true. It's true. All those cliches are true. So yeah, I've had some hiring problems. 

Jimmy Lea: Yeah. 

Tonnika Haynes: But we found solutions now.

Tonnika Haynes: Like the team I have now, very proud of them, 

Jimmy Lea: so. Okay. So, and thank you and I'm glad you're proud of your team. Do you hire, there's a question for, we've got a webinar coming up that's going to deep dive into this with Promotive and Mike Gross of Glen's Auto Outta California. Into, are you hiring for skill or character?

Tonnika Haynes: I'm focusing on hiring for character. The people that I've hired for character in the past are still with me. Resumes lie. 

Jimmy Lea: Yeah, people 

Tonnika Haynes: lie. Trying to dig into someone's character and figure out who they really are. I'm struggling with that 'cause I try to love and like everybody Yeah. Most of the time.

Tonnika Haynes: But the people that I've hired in the past for character, and I'm not gonna say his name, I'm gonna say his name, everybody's name. I remember the first young man I hired. He literally said, I'm not a mechanic. I know how to change parts. He's been with me nine years. I remember him saying that nine years ago.

Tonnika Haynes: Wow. He's got integrity written all over him. 

Jimmy Lea: Yeah. Yeah. 

Tonnika Haynes: My newest service advisor, she is 20, 22 now, but she was 20 when she started with me, but I knew she was the one after hours of having a conversation, you know? I can teach skills, she can get training, I can, Albert can get training. You have to want it, you know, everything else can be taught, but an attitude, integrity, you're born with that stuff and I'm not gonna try to coach that out of you.

Jimmy Lea: Yeah. I like what, yeah. I've already 

Tonnika Haynes: raised two kids. Yeah. We're not doing that. 

Jimmy Lea: Yep. Yep. We raised two. We're good. I like what Stu said here, that you hire for attitude, not aptitude.

Tonnika Haynes: That's true 

Jimmy Lea: because it's, and 

Tonnika Haynes: that's hard to hear because you want to put somebody in that position, say, Hey, you already know how to do it.

Tonnika Haynes: I don't have to spend time and money. Yay. Now I can leave and go to the 

Jimmy Lea: beach. Yeah. 

Tonnika Haynes: But no matter how much money they're bringing in, so they've got a $1,200 a RO, the customers hate 'em. 

Jimmy Lea: Yeah. 

Tonnika Haynes: So they sold that one job, they'll never be back. Yeah. So they can, you know, do this job in 50% of book time.

Tonnika Haynes: Everybody else in the shop hates 'em. Yeah. And you're slowing down everybody else because there's so much venom back there. Yep. That's tough. Tough. It's a crazy struggle. But that is, that's it for me. That's my struggle. 

Jimmy Lea: Yeah, it is. It is. Alright, so let's talk about today. What makes you the most proud about Brown's Automotive today?

Tonnika Haynes: Well, that I can sit here in my health. A webinar and know that the people that are there running the show are doing a great job.

Tonnika Haynes: That my community stands up for me. That when people walk in the doors and I see them, and I don't, not at the front desk all the time, that I can still remember their names, that we can catch up that we're not too big for our britches yet. That our customers are really celebrating our growth, so it feels good.

Jimmy Lea: I love that. That's very cool. Very cool. What is the future of Brown's Automotive? What does that look like for Tanika? 

Tonnika Haynes: So that is something that everybody should ask themselves, and that's another one, you know, was that Simon said, you know, your why. So my why has changed big. So like the kids are gone.

Tonnika Haynes: My why was always about Santana and Jordan. It still is, you know, but it's not my focus 'cause they're adults now. So now that's been the question for the last year or so. What next? And for me I know I say I'm not gonna do it, but I think after I, when I turn 50, I'll probably be a multi shop owner. I might have another location, so that may be in the stars.

Tonnika Haynes: We won't talk about it. But I want to continue to use my voice in whatever platform that I can build to encourage the youth to come into the industry. I think they get a bad rep. Also, and I want more women naturally to speak out, speak up, come into the industry like you. Imagine a young lady's that's been wrenching with her dad or her pop for the last couple years, and she's really not interested in being in the back of the shop.

Tonnika Haynes: There's a spot for her in the front of the shop, you know? Yeah. So there's so many opportunities in the industry for our youth, and I wanna highlight that. So I think my future is about not teaching and coaching, 'cause that's not me. I don't think that's me at all. But promoting the industry 

Jimmy Lea: good. And growth.

Tonnika Haynes: And growth. 

Jimmy Lea: I hear growth. I hear growth in, in promoting and communicating. And promoting the automotive aftermarket to the next generation, right? Both male and female. This is a great opportunity there. There is a space here. 

Tonnika Haynes: For 

Jimmy Lea: everybody, for whatever your interest might be, whether it's tech and wrenching service, advising, selling management.

Tonnika Haynes: Yeah. 

Jimmy Lea: Marketing. Oh yeah. Marketing, communication, social media websites. Yeah. There's so much that can be done in this industry. I. We just need more people to know about it. 

Tonnika Haynes: Right? So I wanna be a part of that. 

Jimmy Lea: I agree. Well, we will make sure and help in any way we can to make sure that you're part of that.

Jimmy Lea: All right magic wand question now, before we ask the magic wand question, if there's any questions, comments, concerns that people have that are part of our audience, type in your questions now so we can ask Tanika. What your questions are, put them in the comments so that we can ask and get some feedback from Tonnika as she has just done such a phenomenal job with Brown's Automotive.

Jimmy Lea: I'm sure your pops is just so proud of you and what you've accomplished. 

Tonnika Haynes: He says he is. I think he is. 

Jimmy Lea: I think he is. I hope so. Okay. Well, we're not gonna cry. 

Tonnika Haynes: No, we're. 

Jimmy Lea: No, we're not doing that. Not today. Magic wand question goes into if you had a magic wand, Tanika, and maybe it's a magic wrench for the automotive industry, if you had a magic wand and you were to wave this wand, what would you change about the automotive aftermarket?

Tonnika Haynes: I would change how the public perceives us. I would change I wouldn't allow YouTube mechanics. 

Jimmy Lea: I wouldn't 

Tonnika Haynes: allow people to just be able to go into AutoZone or wherever and buy parts and try to fix it. I mean, some things, yeah. But I wish we had more respect from the public and sometimes I believe that some of that problem comes from us.

Tonnika Haynes: The industry itself. But I wish I could wave a magic wand and get some respect on. For automotive professionals, you know, because we're fixing one of the, you know, maybe the second most expensive thing people are gonna buy. 

Jimmy Lea: Yeah. 

Tonnika Haynes: And drive their families around in it. Okay. Yeah. It could potentially kill you or someone else.

Tonnika Haynes: Yet they want us to be the cheapest, the same conversations that customers have. With the last minute stuff. All the things that we all know that run us crazy are not had with the HVAC company. They're not had the plumber, the electrician you call HVAC and you, it is hot. It's 95 degrees outside and 110 in your house, and they tell you we'll be out to see you next Tuesday.

Tonnika Haynes: You know what you say? Oh man. Okay. We're gonna charge you to come out there and sometimes they will charge you a prepayment to show up and you know what we say? Okay. But we do not get the same respect. So if I had that, Juan, Jimmy, and I would have some like rhinestones on it, it'll be very glittery, Juan.

Tonnika Haynes: Okay. Of course it 

Jimmy Lea: would. 

Tonnika Haynes: Yes, that is, yeah. I would just make that happen for us. 

Jimmy Lea: You, your wand. And my wand will be twins for sure. Yeah. 

Tonnika Haynes: You wand. We'll make 

Jimmy Lea: that happen. Oh, I love that. The wave of the wand is for respect and perspective. 

Tonnika Haynes: Exactly. 

Jimmy Lea: I love it. I love it. All right. I got a couple of rapid fire questions I wanna throw at you.

Jimmy Lea: This is a one word answer only. Let's end with a couple of quick hits. What is your leadership style? 

Tonnika Haynes: Wealthy. 

Jimmy Lea: What is your favorite car? 

Tonnika Haynes: Mercedes. 

Jimmy Lea: Which Mercedes?

Tonnika Haynes: Right now I'm looking for S 63 or G Wagon. Ooh. I have just a E 43 and a 400. 

Jimmy Lea: Nice. Well then that G wagon, that'll put some tax benefits for you too, by the way. 

Tonnika Haynes: Yeah, I've been working on that for a while, but I gotta take it easy 'cause I know what my numbers are and. 

Jimmy Lea: Yeah. Yeah. Shop culture in one word.

Tonnika Haynes: Silly fun. Had I say two? 

Jimmy Lea: That's okay. Biggest strength. 

Tonnika Haynes: Ooh, pass. 

Jimmy Lea: One thing. You never leave home without. 

Tonnika Haynes: Red lipstick. 

Jimmy Lea: It might not 

Tonnika Haynes: be your own, but it's in my pocketbook because I gotta be ready at all times. 

Jimmy Lea: Ready at all times. Biggest motivator. 

Tonnika Haynes: My kids. 

Jimmy Lea: Oh, amen. Secret. 

Tonnika Haynes: All kids. All kids. But definitely my kids.

Jimmy Lea: All kids. Yeah. Yep. Coffee or tea? 

Tonnika Haynes: Tea. Unsweetened. 

Jimmy Lea: Unsweetened. 

Tonnika Haynes: Don't judge me. Judge your mama. Don't judge me. 

Jimmy Lea: Yes ma'am. Late night or early riser? 

Tonnika Haynes: Early riser.

Tonnika Haynes: Like what? 

Jimmy Lea: You got a bad sister? Oh my gosh. Alright, last question. Legacy in one word,

Tonnika Haynes: it's gotta be two words. 

Jimmy Lea: Go for it. Two words. 

Tonnika Haynes: Hang.

Jimmy Lea: We said we weren't gonna do this. Gonna 

Tonnika Haynes: do this. Santana and Jordan, my babies. 

Jimmy Lea: Amen. Sister. It's family. It's family. Thank 

Tonnika Haynes: you Megan. 

Jimmy Lea: Thank you Megan. Yeah. Yeah. Family. It, at the end of the day, it is all about family. Thank you. Thank you for what you're doing in the industry. Thank you for your communication, your inspiration, your influence.

Jimmy Lea: Keep it going, sister. Keep it going. 

Tonnika Haynes: All right, Jimmy, I will. You too. 'cause you're doing a lot and we all appreciate you. 

Jimmy Lea: Thank you. Thank you very much. Appreciate the shout out. 'cause I'm a backup singer, but I'm a pretty good backup singer. 

Tonnika Haynes: You singing in the background? 

Jimmy Lea: Yeah. So, and for the last couple of minutes here we throw out a commercial for the institute to say, Hey, you know what, we're all in this together.

Jimmy Lea: It's a crazy storm. Not all ships are created equal. If we lock arms and we do this storm together we can survive together, we can make it together, we can thrive together, we can make sure that no one's left behind because this crazy aftermarkets all about building a better business, resulting in a better life for you as a shop owner, and the net result is a better industry for all.

Jimmy Lea: So come join us at the Institute. We'd love to meet with you to talk about your business. No judgment, we'll talk about your numbers. No judgment. Where are you today? Let's do an analysis. Let's look at your numbers and see what can you do to improve. Or are you hitting on all eight cylinders and you're doing a great job?

Jimmy Lea: We'd love to sit down and talk to you. So as we conclude, there will be a QR code up for about 30 seconds. To which you can scan that QR code and set up an appointment with me or my team, and we can sit down and look at you and look at your shop and look at your numbers. My name is Jimmy Lee. I'm with the Institute.

Jimmy Lea: Tanika. Thank you so much for joining me today. This has been so much fun. I look forward to seeing you next week. Bring your blank. 

Tonnika Haynes: Oh, I'm ready for it. Jim, you don't want none of this. 

Jimmy Lea: I know you're, I'm like nervous. I'm like I need a different jacket. 

Tonnika Haynes: I'm so sorry. Keep in the comments inside joke.

Tonnika Haynes: Yeah. You should join a fun, get a bling jacket. 

Jimmy Lea: Gotta bring a jacket. Bring a good jacket. Bring your jacket. Love you all. Thank you very much. See you again soon.

Show Summary:

In this episode, Jimmy Lea hosts Craig O'Neill from Auto Flow and Mike Simard from Simard Automotive in Fairbanks, Alaska. They discuss the journey of building successful auto repair shops, the importance of transparency with customers, and the transformative impact of Digital Vehicle Inspections (DVIs). Mike shares his story of growing from a single 24x32-foot shop to seven locations by focusing on customer education, transparent inspections, and integrity in service. Craig emphasizes the role of proper communication and the need for inspection consistency. Together, they explore the evolution of shop processes, the benefits of digitization, and the future of the automotive repair industry, highlighting the importance of leadership, team development, and a strong company culture.

Host(s):

Jimmy Lea, VP of Business Development

Guest(s):

Craig O’Neill, VP of Training of AutoFlow

Mike Simard, owner of Simard Automotive

Episode Highlights:

[00:02:22] - The Origin of Simard Automotive: Mike recounts his journey to Alaska in 1995, starting with a small shop built by hand and growing one customer at a time with a focus on transparency and communication.

[00:06:35] - Building Trust Through Inspections: Mike emphasizes that customer trust was earned through transparency, education, and clear communication—elements that became foundational to his business growth.

[00:19:57] - Transitioning to Digital Vehicle Inspections: Mike explains how moving from paper to digital inspections enhanced trust, customer understanding, and streamlined operations.

[00:23:06] - Accountability with Digital Inspections: Craig discusses how DVIs improve accountability and transparency, making it easier for technicians and advisors to communicate vehicle needs effectively.

[00:34:02] - Setting Standards in Lube Shops: Mike details his experience acquiring lube and tire shops and the challenge of introducing structured inspection processes to improve service quality.

[00:42:16] - Hiring for Values, Not Just Skills: Mike shares his strategy for scaling ARD Auto by focusing on hiring individuals aligned with company values, which drives better customer service and shop culture.

[00:49:22] - Growing People to Grow the Company: Mike outlines his vision for ARD Auto's future, emphasizing people development, structured onboarding, and leadership growth.

[00:53:51] - Industry Ambassadors and Communication: Craig and Mike discuss the need to change the perception of the auto repair industry, positioning technicians as skilled professionals and improving communication skills across the board.

[00:42:16] - Leadership and Accountability: Mike talks about the importance of empowering technicians and advisors to make responsible decisions and own their roles in the shop.

[00:54:11] - Key Takeaways for Shop Owners: Mike emphasizes that successful shops focus on transparency, integrity, and proper communication, backed by effective training and leadership.

👉 Unlock the full experience - watch the full webinar on YouTube: https://www.youtube.com/watch?v=vDGT_B2d9qs

Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!

Links & Resources: 

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Episode Transcript Disclaimer

Episode Transcript:

Jimmy Lea: Good morning, good evening, good afternoon, or good night, depending on when and where you're joining us from. Today is a beautiful day outside. It's absolutely gorgeous. So excited to be here with you today, my friends, as we have this phenomenal discussion with two rock stars of the automotive aftermarket.

Jimmy Lea: We, we are gonna have a great conversation. And I'm excited for this conversation 'cause we first, we're gonna start by talking to, well, first buy, no, we're just gonna bring 'em both in at the same time. My guests today are. Craig O'Neill from Auto Flow. Thank you Craig for being here with us as we have this phenomenal discretion.

Craig O’Neill: Oh, thanks Jimmy. Glad to be here.

Jimmy Lea: Yeah. And how many days did we work together at the same company?

Craig O’Neill: I don't remember how many days. It was like three months. It was, yeah, three weeks.

Jimmy Lea: It's one of the two. Oh man.

Craig O’Neill: Been following you around though.

Jimmy Lea: Hey, we got a good thing going, brother.

Craig O’Neill: I appreciate our relationship, my friend.

Jimmy Lea: Absolutely. And joining as well with us is Mr. Mike Ard from ARD Auto up in Fairbanks, Alaska. You're very close here to the other Fairbanks of Alaska that just chimed in as well. Good morning, frontline Mike. Glad you're here, brother. Glad to be here. Thanks for having me. Nice. Now, how is I heard a story that must be told.

Jimmy Lea: And it is. How did you Craig meet Mike? Or is it Mike? How did you meet Craig?

Mike Simard: Oh boy. We made a production together. About feeding cars with baby bottles.

Craig O’Neill: Yeah. There was a baby bottle involved. A large one larger than this water bottle. But is that the Institute Summit 2023, your inaugural summit And we won Summit.

Craig O’Neill: Yeah. And we won.

Mike Simard: We won. We told the story and the story told the truth and we kicked butt. So we told the best story that day.

Jimmy Lea: Yeah. Oh, I love it. I love it. That is so cool. That is so cool's. One of those really good

Craig O’Neill: team building projects too. You just meet cool people in that time and that was fun to be a part of that.

Jimmy Lea: Yep. Yep. Very cool. We had a phenomenal institute, summit in 25 here earlier in February. Phenomenal, very successful. Many shops were there, had many great inspirational presentations. Beautiful. That was awesome as well. It's a good spots

Craig O’Neill: at a good time of year. I always appreciate those trips that bring me to Florida around that February threshold there.

Jimmy Lea: Right.

Jimmy Lea: We'll have to.

Craig O’Neill: I know Michael doesn't mind. I've only seen him that's dark from Alaska, but every time I've seen him it's been in Florida.

Mike Simard: That's right. Every time.

Jimmy Lea: That's awesome. Well, and our, we ha we are in the depths of planning our 27 so news to be coming soon. Gonna be on Alaska this time?

Craig O’Neill: No, not in February. That'd be fun.

Jimmy Lea: Alaska in February I think. Not I've done that once before.

Craig O’Neill: No, dog sled team building exercise would be pretty

Mike Simard: That's right. We could make it fun. We could feed the dogs with the baby bottles and and echo. That's right.

Jimmy Lea: In fact I think we were at the finish line, the hotel, the conference, the trade show was at or near the finish line for some sort of a dog race.

Jimmy Lea: I don't know if it was a Iditarod or not, but it was a dog race and there were a plethora of sleds and dogs and it was very cool.

Mike Simard: Yep. Very cool. Anytime. You're welcome. In February and January, especially those times of year, we need some extra comfort and friends in Alaska.

Jimmy Lea: Hey, bingo. Well, there you go.

Jimmy Lea: So my next trip up to Alaska will be in February yet again. There you go. Mike I'd love to talk about your story and your shops and your success and your journey. So really I want to take us all back to the beginning because we've got a lot of friends, a lot of fellow shop owners that are in the first stages of their business, and there's always these great stories of these successful shops, and what is it that they're doing today?

Jimmy Lea: Take us back. Take us back. For the guy who just started his shop a month ago, a quarter ago six months ago, a year ago, what did you do when you started? What did your shop look like? What was that facility? What was what did you do? How did you get started?

Mike Simard: Well, my story started in 95 when I drove up here.

Mike Simard: Always knew what I wanted to do, so I was blessed with, I was blessed with that. And so it's good to know what you want to do and what you like to do, and I always like to figure out hard problems and try to make a connection with a customer or someone else in that particular case. And so when I got here two years later, I started the company and we expanded and it grew, but it really started with.

Mike Simard: One customer at a time. So we built a 24 by 32 square foot shop ourself, and we just literally started with one customer at a time. In asking for referrals, trying to do a good job. It was a lot of hard work. So I always say Michael Jordan didn't come out of his mother's womb with a basketball in his hand shooting, shooting like he did, right?

Mike Simard: So it took a lot of time. Success doesn't happen overnight. And success is. You know, in, in it's only perceived a certain way and the struggles it takes to get there is difficult. But I do remember the most important part of learning how to start a business and have customers, right, that want to come back is it really started with transparency and started with communication.

Mike Simard: Realizing that customers don't like to be sold. They like to be empowered and educated to make good decisions. So, that's kind of where we started and we kind of grew from there into seven locations that we have now.

Jimmy Lea: Okay, so I yeah. Just so many questions for you right now, at this moment.

Jimmy Lea: First of all, 97, 95 to 97, that's two years. What were you doing for two years that you finally built the building and launched the business? What was that two years consisted of?

Mike Simard: Well, started a family got married in 99 as well. So there was a lot of activity. It was very busy at that time.

Mike Simard: And really just kind of getting established in Alaska. Okay. So I worked heavy duty for about a year.

Jimmy Lea: You were wrenching, heavy duty?

Mike Simard: Oh yeah, full on, full wrench. Call me a wrench. Still a wrench at heart. So yeah, I fixed cars in my own little shop. But before I did that, I worked a dealership for about a year.

Mike Simard: I worked heavy duty. I even worked I remember to buy my wife her wedding ring. Saved up for two weeks, working out in zebu, which if you don't know where that is, you can't drive there, you can only fly there. It's a village out there below Nome or around Nome. And on the west coast, Alaska.

Mike Simard: And I worked on a drill rig. I. So I fixed everything and anything that was put in front of me, build dozer, tranny, I mean, just stretched myself beyond, made a ton of mistakes. I pulled a couple of transmissions out, an engine or two that I messed up. So one of the things I can tell you the way I learned.

Mike Simard: The hard way. The hard way.

Jimmy Lea: Yeah. The busted knuckle way. The Fort Knox way

Mike Simard: hard, Knox way. Very tough. I can definitely empathize with anybody. Starting a business. Just started a business struggling. And I will tell you something. If you want to run a business and grow, get used to hitting the ceiling often.

Mike Simard: Oh yeah. Hitting the ceiling often, meaning you, you reach your capacity. You run into a roadblock. It's not for everybody. No, but those are the times when you look back on your life. The biggest struggles you have is where you learn the most. It just doesn't feel good at the time.

Jimmy Lea: Oh, it doesn't.

Jimmy Lea: It doesn't. And speaking of transmissions as you know, Craig is also a wrench from a transmission shop. Craig tell, I don't even, Mike, I don't even know if you know this story of Craig being called out of class.

Craig O’Neill: Oh yeah. Yeah. My first class that I ever took in management training versus being a technician.

Craig O’Neill: Yeah. With Bob Greenwood at the time. And that was I remember just this being, this, I learned hard too. Michigan, Alaska have some hard, I think Alaska has a degree notch. Higher than that for sure. Roughness.

Mike Simard: Yeah.

Craig O’Neill: Man. Cold day in February, Michigan. I was sitting in Bob Greenwood's class. He asked that question, what's your job?

Craig O’Neill: And I had the smart Alec answer that any technician in a room of management trainers would probably say is that I fix cars. Proud answer, right? Bob got in my face, he told me what I'll never forget, and I often share, no. Your job, your professional responsibility is to make sure the vehicle's safe, reliable, and efficient.

Craig O’Neill: That's your job. How can you do that unless you inspect every vehicle that comes into your bay? Amen. Finally busted my mind wide open on how I approached everything. 'cause otherwise I was proud to do the transmission fix, do the big stuff, make customer happy by make transmission go good now. And that's not all there is to it.

Craig O’Neill: It might go good, but it may not stop. Yeah, we would that we weren't a general repair shop. We were happy in those days sending everything to everybody else. But as everyone knows in the transmission industry, that evolved yeah, well evolved really everyone else started doing replacement units and that became a real challenge for us.

Craig O’Neill: We had to that Oh, for sure.

Jimmy Lea: Yeah, for sure. Make it go. So, so to Craig, to you're inspecting every vehicle. Mike, when you started you spoke about how when the cars came in, you inspected the vehicles and this was important for you because an educated client, an educated customer, makes better decisions.

Jimmy Lea: What was your process in the beginning?

Mike Simard: So, you know, the, what I wanna impress upon what I learned I guess, is going through a lot of different trial and errors is that, you know, the more and more you talk to customers and you fix their cars and you really try to see what they want. 'cause what they really want is they want to be treated fairly.

Mike Simard: They wanted to be treated with dignity, they wanna be treated. They don't wanna be talked down to. We always, for example, really tried hard, and my wife made sure of this, that like, if we can help serve the customers the single mom a woman that comes in, like anybody, it doesn't matter. I always say, if it's your grandma, it's the president, it's the pope.

Mike Simard: It doesn't matter. Treat them the same. Yeah, like treat them the same, treat 'em with respect and don't talk down to people. Guys pretty much always think they know what they're doing and they'll tell you what's wrong, their car and women won't. So there's different types of people that you need to talk to, but the information remains the same.

Mike Simard: So the first aspect is what's the information that the customer needs, and then how do we communicate that? And so as I went through that process, you know, originally it was. Well, when you're doing it yourself and you're the one guy, and I'm sure a lot of people listening to this is one guy, one gal, right?

Mike Simard: Doing it themself. You're maybe fixing the car. You're running service. I've been that person. You know, Craig might have been that person. It's tough. So you just do things. So, you know, if you're talking about scaling. It's tough to be the center of attention doing things, but that's really where you learn, that's where you cut your teeth.

Mike Simard: That's where you learn how to shoot 10,000 hoops while everybody else is parting. Like, that's how you become a master. You miss 9,000 of the 10,000 shots. So in that process, every time you look at the car, if you make a mistake, maybe they went down the road and it was making a noise that you didn't catch.

Mike Simard: One of the things that differentiated us, and I believe the brand. And it's difficult to retain this type of thing as you scale is to retain that quality. So it's like, I came in for this, the customer came in for X. Okay. What they think they want? Okay. But really, and it has to be done with integrity.

Mike Simard: See, this is the, this is where are your values of that shop? But you really want to help them see what they need. Yeah. Now you can be manipulative with that. So you have to be careful. So where are your foundations, your principles and values? Who's working for you? Are they following them? Do you have a process?

Mike Simard: That all came later. Okay. But it's usually win later.

Jimmy Lea: Win later. Well, from starting, 'cause you were the, you were it, you were the brain in the start. Right? Which is typical. Was most typical. Yeah. And then you expanded, you hired more technicians, and then you discovered, oh my gosh, I've gotta have policies, procedures here.

Jimmy Lea: So they do it the way I did it. So when did you implement some of these policies, procedures?

Mike Simard: So it started, I remember the day that you know, the institute RLO recruited me and I said, no, I remember exactly where I was in the shop and that, that saying no to getting coaching and learning from my peers cost me a lot of hard ache and sleepless nights and time and money.

Mike Simard: And because you're learning it all on your own. So it's always good if you can when you think you can't afford it to be, if you're not around better people or coaches or training and you don't think you can afford it, well, you can't afford not to. I learned that. I think that was I can't remember what year, but just say it's 25, 26 years ago.

Mike Simard: Well, two years later I woke up and we had been working on some things. So one of the things we always do, just to kinda answer your question is we got together often. We talked about what's working, what's not, what's going right, what's not, what can we do better? The customer went down the road and maybe they had a new squeak they didn't have before.

Mike Simard: How could we have made that better? If we could have so inspecting the car, having, what are we inspecting? Like, what should we do? How long should it take? What should our test drive route be? We started working on those things, having lunch every week and listening to people around us, the people doing the work.

Mike Simard: I was in the middle of them. So when we talked about something that happened, we all knew. So we can go right into problem solving moments. Let's try this week. So it's very important to get your team engaged in collaborating what you're doing, especially if you're rolling out a new inspection program, you're trying to create more transparency.

Mike Simard: Just get your team engaged. Because if they don't believe in it, right, they're not gonna want to do it. Their behavior never lies, so it's easier to do that. Then we met the RLO, which is now the institute. And when I got into those groups then I realized, oh everybody else is like me. We all have unique strengths and weaknesses.

Mike Simard: We're all learning. And then things begin to accelerate because I didn't have to make it up with my team. We could just ask. And some of those things came easier.

Jimmy Lea: Oh yeah, that, that peer to peer, when you're able to have those collaborative discussions, that might be something that Craig's already experienced and you're like, oh my gosh, this is new.

Jimmy Lea: This is huge. This, I can't even get through this. And Craig's like. Nah, that's just Tuesday, man. We got this.

Craig O’Neill: Yeah. I see a lot of the same behaviors across the nation. And I always look at Alaska too, and I, it surprised me like Michael, like you, you have to have seen multiple times, like in that environment.

Craig O’Neill: There's some big distances. Some of 'em can't be traversed by vehicles, but even the ones that can, it's. Seems to me the RAM ramifications of failure have some really dire consequences in that environment. So a vehicle that could see a breakdown there, it seems like anyone that would be inspecting a vehicle understands that and would be totally bought in all the time to doing a very thorough inspection.

Craig O’Neill: Educating the customer on what they actually do need that isn't always natural, is it?

Mike Simard: No. So one of the, I think the hardest thing is of being a leader is bridging the gap between the vision and reality, you know? You know, without the vision that people shall perish. So that's a very important thing.

Mike Simard: Well, there's also a matter of you can cast a vision, but you also have to walk the talk. Yeah. So there's a, you know, and I'm tend to be more visionary, and in the beginning I was more tactical. So as I've grown. You know, the distance between the vision and the tactical gets greater.

Mike Simard: It's, you know, again, having good transparent systems good inspection processes that can go out helps. But to your point Craig, you can do an inspection. So just last week we were talking about measuring DVI, so just saying just this is one of the things we're gonna know. In our fast paced lube shops, we have two different models.

Mike Simard: We have lube shops, we have three of those. Lube and tire fast paced. Yeah. Different type of customer expectation for their experience. Totally. Okay. And we have comprehensive, and we always excel at the comprehensive, so I know that well. So bringing in inspection process to those that you would think would know what you're saying about Alaska in particular, about how you could literally die at 50 bull.

Mike Simard: If your car launches off a snowbank and no one sees you for hours, you could die. Trapped in your car, die. So if you hit the brakes around a corner doesn't work, you inspected it, someone's gonna probably call you. So it's important that that we teach that vision early. You're 'cause a lot of people just come to start a job.

Mike Simard: Hopefully

Mike Simard: they find a career. Hopefully they see the vision. So you have to connect that with their, bla their brain and figure out what is their belief. So if their belief is this is important 'cause my grandma could be in every single car I'm inspecting.

Mike Simard: Yeah.

Mike Simard: And I care about grandma, hopefully like grandma, right?

Mike Simard: Yeah. Then I'm gonna treat it the way you said to keep grandma safe. And that's a challenge today with the younger generation. It's just a challenge with the workforce today. We have a passion for the industry, so we're not just here fix cars. We're not just here for that. We're here to provide solutions and transparency, change the face of the automotive industry, not just in Alaska, but working with our peers, our friend friendly shops and the country and the world.

Mike Simard: Like how do we do better on the planet while we're here?

Jimmy Lea: Oh, I love it and I love that you're educating your customer, educating the client. This is what your vehicle needs. This is what your vehicle's telling me it needs. I know you came in for a leaking radiator, but your vehicle's also telling me you need all new hoses.

Jimmy Lea: You need brakes, you need a brake flush. You need new pads and rotors. There. There an educated customer is much more intelligent. So at what point did you go from a let's say a paper inspection? 'cause it sounds like you were paper inspection from the very beginning. Day one. When did you go to a. A digital vehicle inspection?

Mike Simard: Good question. 'cause I think being in part of the group process, we saw a similar thing that I bet you some people are going through and I'd love to talk about this for a minute. So from the, it was so we started the newer shop in 99. And so we had more technicians and so there was more things going on all at the same time.

Mike Simard: So we had to get something on paper and it was a paper inspection. So I love technology. It's, it was harder back then. But we used to scan in the inspections. I think cell phones were coming along, but they were like the big blocky things, right? So, and then we'd email 'em. So scan 'em and email 'em and then go over it.

Mike Simard: But it was like one page. I still miss it actually. 'cause it's really easy to teach because if you get an auto flow inspection it's all on a tablet, which most of us familiar. Right. But you get one page you can scroll. But the cool thing about one page of teaching a new person is like, this is everything we do on a 30 point or a cursory or a complimentary inspection.

Mike Simard: And you can use it as a teaching tool. It's like, this is the overview of the vehicle. 'cause they're looking at a vehicle and they don't know it and it's like, well, where's the strut?

Mike Simard: So you have to start somewhere. And paper inspections were thing, so we, because of our training and our collaboration and the good people we had.

Mike Simard: To help build the company where it is. We said we gotta have a better way to communicate to them, but we really focused on, and this is one thing that I think people need to, like, if they think like just an inspection, digital inspection program, alone's gonna fix all this form. The real problem I see is like, do you already try to educate your customers?

Mike Simard: Yeah. Do you already try to pop every hood? And in loop shops is harder, I can tell you that. Do you already try to teach your technicians to always tell the truth, right? And make sure that information is being delivered to the advisor in an appropriate way that's efficient. Where the tech, the advisors don't have to go talk to them every time where you sell something doesn't need, like are you already working on that or not?

Mike Simard: Now a digital inspection platform will help. Okay. But if you're an owner that's just trying to implement it to fix other issues, like inspections aren't good under the hood, like the physical work still has to be done. You can't hire a robot to do that. You can't have AI do that. It requires somebody with the values that your shop has to bring that information into the system, into back then it was paper then it went to digital and it just, digital just made it easier.

Mike Simard: But our average roll was already good. That's the thing. Our average O is already good. Now, a lot of times I believe people will sell you this or that. And the other thing training, it should. There's some things that you should get an ROI inspection program. You should get an ROI. It will help your average O.

Mike Simard: But it won't do it for you.

Craig O’Neill: Correct. Yes. It's a human engaged process. I find it so funny, and I ran into, I run into this all the time, especially with quick lube places places that have that speed of service mentality, which is necessary for that part of the market. They find that they are up against a clock.

Craig O’Neill: They feel like they're up against a clock. They feel like that paper sheet like Michael was describing, has that one page. They move through that so much faster is the feedback that a lot of technicians initially will give. And I find that really strange 'cause I've seen the results on those paper inspections and I've observed them being completed before and a lot of times you don't see a technician going around the car.

Craig O’Neill: You see a check, check. You've heard the term pencil whipping inspections, right? The accountability that comes from A DVI basically is sures that there is some accountability of the inspection actually occurring and an actually occurring inspection. Would take longer than a non actually occurring inspection.

Craig O’Neill: We ran into that with a shop that we're working with right now that's a tire store, and his observation was brilliant. It's like, yes, we've been doing the paper inspections and theoretically you could say that the DVI takes longer on the digital platform versus the paper, but I. They're more thorough and they know that accountability is there.

Craig O’Neill: So I guess I would ask you on this, Michael, did you see an accountability piece enter once you were digital that was not able to be achieved before?

Mike Simard: So, yeah definitely it made it a lot easier, so we worked really hard to make sure back then and if you're a single store shop owner now it's easier, especially when you're in the center and it provides a way like paper provides a way to.

Mike Simard: Okay, this is outlined on a piece of paper. This is the menu. This is what we're looking

Craig O’Neill: at.

Mike Simard: Yeah. The standard over

Craig O’Neill: there. Yeah. You gotta have it documented.

Mike Simard: Yeah. And you can teach it from digital, from the start. Like a lot of people grew up in the digital world. Like I, I drove to Alaska and when the cell phone, we didn't dare pick up the cell phone bag because we didn not know how much it was costing someone else.

Mike Simard: That was Sure. We had the CB radio, so that's the day. Sure. That I grew up in chops. Wow. Okay. Back with O OTC 4,000, Atari six, you know, Ataris and Commodore 64 TRS eighties. Anybody old enough to know what those names are? That's the world I grew up. So paper was a thing. Yeah. So you can still do this today, right off the bat.

Mike Simard: You don't have to go to paper and then go to that. But it did make it a lot easier because a lot of people are wired this way today to pick up the tablet. And start inspect the car. Now the transparency is like pictures, like huge pictures. Auto flow helps you see the history. It sees the history of the work orders, like having that information.

Mike Simard: One of the biggest challenges I think, that create a sense of mistrust in the industry that we have is the lack of transparency. But if anybody understood what a service advisor and a technician has to what kind of data they have to simulate. At the speed, their brains can process it. Like a really good advisor, for example, has to take all the information from the tech, sniff out mistakes or in different texts, have different strengths and see different things they might miss.

Mike Simard: Oil leak every time. Okay. That's important. That's leaking over the manifold. So do we have a picture? Who's holding that team for accountable for that. So it helps with accountability when you have those pictures. But they have to assimilate all the data. What was the history? What's the TSPs, you know, what's the service intervals like?

Mike Simard: How am I gonna present this to the customer in a way that's digestible? Now if you're thinking about it from that way versus here's my paycheck, right? We all need, we all work for paycheck. I mean, we just get that outta the way. So that's why we're here today. We do this for a paycheck. Yeah.

Mike Simard: Hopefully we learn as we get older, I think we lose hair. We go great. We like, I gotta do more than just work for paycheck. I gotta actually satisfied with the career. Yeah. But the transparency in a digital inspection, like with auto folks helps. Super because. You have work order history, and you have pictures that brings a lot of transparency and accountability to the process.

Jimmy Lea: Yeah, I, and I think Jonathan's saying it very well there, that it breaks down the barriers. It breaks down the barriers with the clients so that they are more educated. They are able to see their vehicle. Now they can see what a strut is because you're showing it to 'em and they can see that it's seeping.

Jimmy Lea: They understand seeping. Leaking. Yeah,

Craig O’Neill: for sure. And but here's the thing, like we all know even like, like he's talking about the old technology. I love that. Oh, 99, early 2000 internet is in its infancy. What did we do? We had people come into the shop in many cases to show them things. Where in Michigan we have to give them their old parts back.

Craig O’Neill: It's one of the things, you know, so show the old stuff when they're done. It's a nice show and sell at that point. But this is the show and sell. And what I observed is a lot of the technicians really are like career technicians. They enjoy showing off their knowledge. They like it. Yeah. I've been the technician, I've been the transmission guy.

Craig O’Neill: Ego driven to an extent. When you do the complicated thing, it makes you feel really good. I'll tell you what, some of our better builders were the ones that could engage the customers that we brought in. And so yeah, this transmission's all part of the bench. Here's the problem, you know, they loved it and it was the easiest thing in the world once the customer saw it all apart.

Craig O’Neill: Saw the complexity of the thing. They understood the value of what it was that we were trying to communicate to them, and that person who understood the value, it was a quick and easy signature on what we offered. I loved it, and that's what the DVI can do without having the customer have to come into the shop.

Craig O’Neill: Absolutely.

Jimmy Lea: That's cool and I'm glad that you were educating those customers from the very beginning, even if it was across the CB radio. Hilarious. Okay, that's cool. Life Stop. Publisher

Craig O’Neill: made little like printouts for people back in the day and I took pictures with a old early digital camera, loaded them onto the computer and Oh my goodness.

Craig O’Neill: That was interesting though. 'cause I gave him a few pages of stuff, that kind of thing could be useful and was still a. What we would call a delighter today, something that other shops are not doing, and that's still where DVI is. And Michael, I guess like in your market especially, I'm curious on this too.

Craig O’Neill: I know it's farther apart. Even people are, your neighbors might be pretty good ways away, but it still stands out in your market, right? So you're talking about like digital inspections and Yeah. When they get that

Mike Simard: presentation. Well, here's what I've learned by buying a different set of shops, and I don't know if you wanna go into this, but I think a lot of, like, we have a lot of great shops in Fairbanks and they're a pretty tight knit group. And we wanna keep it that way. So I think a lot of 'em, and we share information together have a pretty good inspection process and are familiar with this technology. It's easier to get.

Mike Simard: It's easy to call one of us and we'll talk and help them for short. But here's what's interesting. Buying into the tire and lube business, I don't know why and who left them behind, but they, I tell you what, they're not all in the times as far as where we are today. I feel like these are CB radio days.

Mike Simard: Oh my gosh. So I bought these shops and is inspection even happening?

Mike Simard: No.

Mike Simard: Maybe not. I mean, it wasn't, the answer was no.

Mike Simard: Yeah,

Mike Simard: right. If it fell on your head, then the part was needed to replaced. But, and tire shops the same way, and I get it. Everybody has their niche, so some of, some people have their niche.

Mike Simard: But my challenge was this. It's like I know how run comprehensive, I don't wanna mess up the experience for the lube shop, but it's like we can do a little bit better, just a little bit. And it's better than most in that space as far as tire and lube. And people actually really appreciate if you present it in the right way.

Mike Simard: Yes. Again, what's the motive and intent behind the person presenting? Like that's important. So important. And it's something that has to be taught. Today's generation, customer service. And again, you're here for a paycheck. Okay, we got that. Good. You want to grow in a company? Yeah. Great. We want you to too.

Mike Simard: Now here's how you do it. Serve them well, tell them the truth. Show and tell the inspection. And the, that process is different. I'll be honest with you. We're still struggling the other day. For example short example of how to implement something like, I like to measure. I'm a DDIs profile.

Mike Simard: I like to measure towards a goal. Rally behind a goal. Let's celebrate when we get there and then guess what? The next mountain, we're already ready. I, if you don't know where it is, I can point. So we're going, but let's get some milestones down. So in the lube shops, we're still like, when I bought these lube shops, $110, 110 to 115 average row, we charge a hundred dollars for oil change.

Mike Simard: What's the value? It's Alaska prices, right? Not much selling, right?

Mike Simard: No, it's, yeah. Now we're up 1 92 10, which is probably, I'm more a little worried it's going too high, which we're in a comprehensive stores, we're eight to 1200. Okay, sure. So there's the difference of good quality inspections over time with a different model.

Mike Simard: Now when the customer comes in we want to not just sell 'em 'cause we want to get to average up. I mean, that's the idea. What is the right things that they need today? Is their car breathing clean air? Is the wheel gonna fall off? Yes. Are the brakes grinding? Like if the brakes are gonna grind and the caliper's gonna go and the rotor's gonna go, now it's cost you more money.

Mike Simard: So the goal is through this transparency of process through inspections and presentation, which is abbreviated. So that's our challenge is to make sure we present the information every time. So the other day we were measuring at 90 something percent dbis and presentations. Well, they started looking and this is one of my busiest stores in Anchorage Tire Shop, where it was 95% tires when I bought it.

Mike Simard: We've got a picture of a bumper. So they were getting their bonus on completions.

Mike Simard: Oh no. It was a bit of

Mike Simard: a bumper to get the completion rate. So obviously, but what I'm point trying to point out is, you know when you said, Hey Mike, you've been successful. It's like success really is every day I wake up, we choose to serve each other and help each other succeed.

Mike Simard: That's where success starts and ends every day. 'cause you can get up tomorrow and be like, I'm gonna go. Fishing all day and let my team do that. So we always have to be vigilant to make sure because of the transparent ability process and the abilities to look with auto flow and say, Hey, let's take a gander of those pictures.

Mike Simard: We got a picture of a bumper. So then we realized, oh, we're measured for completion. We're driving that performance under stress. They're probably not presenting the bumper to sell. Nope. So guess what? I said, what can we measure now? Which it's not quality, so it's more important to get it right.

Mike Simard: Honest, transparent. Talk to the customer, it's quality over quantity. So that's gonna be the battle in any shop if you're busy, especially lube shops that are trying to do something from not inspecting cars to get to profitability, which is raising your average roll, but using a great platform in auto flow, for example.

Mike Simard: Just one of the great platforms, it keeps up very well. Has a lot of great tools to do that.

Jimmy Lea: Oh, that's good. You know, you've gotta inspect what you expect. I've seen pictures of bumpers. I've seen pictures of shoes. I've seen pictures of toolboxes and it just goes to the point of the proper PR training will produce the proper results that you're looking for.

Jimmy Lea: Yeah. But if they don't understand the reason why they're gonna take pictures of their shoes and the cat, and the dog and the bumper and it's accountability

Craig O’Neill: still important. Especially for consistency, like Jonathan just mentioned in the chat it can be a struggle to get technicians to do inspections consistently.

Craig O’Neill: And when I approach things for my role with auto flow has always been on training and adoption, first and foremost, get inspections going. Just get them going, get the baseline skills going in place, that pictures are being taken. Great. We have progress right then that service advisors take it. Take the results, build an estimate, and deliver the inspection to the customer.

Craig O’Neill: And you would think that doing the inspection is the thing that most shops have a struggle with. It is not. It is actually the advisors taking it and doing something with it. And that is almost every single shop that is new to the technology. And so really. That first line of defense for accountability and consistency has to begin with that service advisor.

Craig O’Neill: Understanding the reason you do the inspections in the first place. Receive them, do something with it. And if they don't see the results outta the inspections from the tech, they've gotta work with guys like Michael. Be the advocate. Don't wait for Michael to come in and swoop in and help with the accountability.

Craig O’Neill: Be that first layer of accountability, and that requires empowering your service advisors with that responsibility. Takes 'em. Ownership of it, and that's when changes really start to take place. They own it. They will make sure it happens.

Jimmy Lea: Yep. We call that the 300% rule. Oh, yes. Every car gets inspected, every recommendation gets estimated, and every DVI estimate gets shown to the customer.

Jimmy Lea: You do those three things. If your customers would be better educated and respond so much better to your shop and to your recommendations, they become lifelong customers for sure.

Craig O’Neill: But it's an advisor thing, and I'm sure you've ran into this too, Michael. You have a great team. I've enjoyed talking with several of those guys and they seem to get it like really good, especially the guys in your Quick loops who are, were a little bit newer I think to the DVI process at the time.

Craig O’Neill: But once they started to see that it isn't actually just for sales. It's also covering their butts.

Mike Simard: Things

Craig O’Neill: that bite us all the time in the industry. That's sort of, these aha moments start to come in. I, and once they have those, that's why just getting pictures, sending them, having the experience with the customer is so important for me as a first step is really, once you've self-actualized in that you start to see the results, those quick wins that gets the buy-in from the team more than anything else.

Mike Simard: And having a champion too. So as you mentioned, it's a struggle to get his guys doing inspections. Here's the thing, as you guys stated, if the advisors know anything with it, you know, the most thing that's gonna frustrate the tech back to one of your guys' points earlier Yeah. Is if you don't present all their hard work, you underhood for 10 hours and you know you got the best job in the back done.

Mike Simard: The advisor's like, yep, car's done. And then you give 'em an indifferent experience and take their money. It becomes transactional and they don't present any of the inspection items. Like you can put your own dot in here. And so that's really frustrating. That's why the text. It's a lot of techs are a bit quirky and they're bit like, like, like just technical minded, wanting to fix everything.

Mike Simard: Yep. Yeah.

Mike Simard: But something happens when they come. A lot of 'em, when they come in front of a customer and they're so proud to present what they've got. So first thing is, I would say have talk to someone that knows. Get training for the guy that said it's tough, meet every week. Let's go over this.

Mike Simard: Like, you're not letting up. Let's go over this. Yeah. But are you measuring? So there's a 300% rule. All those things were measurable. Okay, in the beginning we did, we paid for some inspections. So here's a couple tools. You know, if your pay plans are fighting against the behavior you want, look at your pay plans.

Mike Simard: Are you rewarding the right behavior? So for example, I just told you an example of a mistake. A bit of a mistake is we spiff for completion. We didn't fiff for goodness.

Mike Simard: So, so guess what? Continuous evolution of life

Craig O’Neill: till the day I die. So we gotta look at the benchmark score. Gotta look at that.

Craig O’Neill: AutoFlow with you, Michael. We'll set up that benchmark score rating system so you can see the score on each one. I knew you help with that. See

Mike Simard: we were gonna call you and say, we've gotta fix this thing now. But at least we got every car inspected. Just 20% aren't as good. Now the other thing we shifted is we put some of those guys on and gals in performance.

Mike Simard: So the performance, and there's a team performance component of soon to be quality because we actually talked about this meeting this week. Now instead of completion, how about doing it right every time? Yes. And yes. Some techs need, you know, in the beginning we actually paid like 0.2 for an inspection.

Mike Simard: That's a good way to start. Now the way we did it was this, if we pray for inspection. Technician. This is more the comprehensive model. We own it. We'll do whatever we want and give it to anybody we want. Yeah. That there may not like that. Now at our shop, we do an inspection. Our average tickets are 3.5 hours.

Mike Simard: Right. So you might, the fastest text I know said, give me every darn oil change you've got. I'll do every darn inspection. I do it real. They do it the same way every time. Yeah. Okay. Because you can sell the pants off it in a way that the customer, again, honest sales. Okay, so that particular type tech we're like, don't pay me for the inspection, just give me as many as you can because there's gonna be 3.4 hours for every job versus that 1.1 you're giving me now where if I give a tech 0.2 or 0.1, I might give it to another tech.

Mike Simard: Yeah.

Mike Simard: Okay. But they're like, no, you sell work here. So I want it all. It's like, okay, so can we take the 10 minutes or whatever it takes at your shop to do an inspection, create transparency and trust. The more we do that, the more they come back, the more our jobs are secure and you know, there's a little bit of satisfaction.

Mike Simard: Go home at night saying, I kept you safe at home. It's 50 below. Yeah, I gotta get my grandma outta dialysis. Okay. In Anchorage. Six hours drive in the middle of the night. And I, it's one of my fun stories. It's like if your grandma was going to dialysis at 50 below and you wouldn't go to Anchorage for that, by the way, but just the story, you wanna make it and not die.

Craig O’Neill: Yeah.

Jimmy Lea: No, nobody wants to die.

Mike Simard: Well,

Craig O’Neill: it's

Mike Simard: a sense of purpose

Craig O’Neill: that goes into this, and you've look Alaska. I understand you guys have turnover issues just like anybody else, but you also have to compete with the fact that coming to Alaska is hard and expensive. I just did a podcast with some missionary friends of mine that are going to be coming down there over in Kenai, little south of you, and they have to spend twice as much time gaining support.

Craig O’Neill: To go into a mission in Alaska, not because they'll make money or anything. It's twice as expensive to live there at all. And that's, it's just a harder place. You guys have to deal with so many things, and when you have people that understand that there's a sense of duty and purpose behind this, it takes away some of the money element for a motivator.

Craig O’Neill: I don't. I'm I once my needs are met. Once you have a decent lifestyle, the money motivation starts to diminish. You need to have fulfillment in what you're doing. And for me, that was a big aha thing. Once I started doing inspection in the shop, I felt like I had a true sense of purpose behind the activity that I'm doing isn't just for that paycheck like you were holding up earlier, Michael and the young generation, gen Z, millennials, they all cite having a sense of purpose, like a mission, a purpose.

Craig O’Neill: Is key to their satisfaction in even coming into the industry and working with you in the first place. I guess I would be curious too, if you've been successful, Michael, and in the interview process of saying, Hey, this is something that we do here and here's why do they clinging onto that? Why I.

Mike Simard: So that is again, one of the challenges of scaling.

Mike Simard: So we wanna find people that have the same values as us. 'cause it's really hard to if mommy and daddy didn't teach it, they didn't have a good upbringing and a lot of us didn't. Okay. And you should definitely treat everybody with fairness. But some of those behaviors are not necessarily gonna change.

Mike Simard: So find someone with those values that, that you uphold, that'll make life a lot easier. And I get stuck a lot of times in thinking I can change that.

Mike Simard: And

Mike Simard: so starting with that, and then really starting out with, in the interview process, through the onboarding, which we're really working to strengthen now this is who we are and this is who we want to be, and this is where we're going.

Mike Simard: So what's the vision and who we are as a people. This is how we handle mistakes. We learn from 'em. Like they don't create an environment that you can't make mistakes. Like tell me if you forgot the DVI, let's figure out what it is. That's in the way. If you've got a team, that's not the behavior and actions aren't what you want.

Mike Simard: We've gotta go into belief. This actually came from the institute, mind blowing. I got this right up here. Steps to accountability. Oh, right. From Jessica? Yes. And it's like belief, like we kind of knew it, but it's like she put words to it. It's like, ah, well your behavior's telling me what you told me yesterday isn't probably what you really believe.

Mike Simard: So if they're not doing it, okay, and if you gotta start with their paycheck, start there. Sure. Some people have to start there when you're barely making rent, so they gotta be empathetic with what their situation is. Okay? Don't forget about that, but tie this. Goodness to, Hey, you know, we can all do well here if we're transparent.

Mike Simard: Let's use these tools. What's in the way? Continuously every week, this guy's not gonna let up. Or maybe the team spiffed on a program of quality inspections. And, I mean, just because a lot of us have been this while I guarantee the customer are like, ah, more trustworthy. 'cause they're more transparent.

Mike Simard: I feel like I made the decision and then get shoved down my throat when I usually go to a shop. And I feel like these people care. And as a matter of fact, I couldn't do it all 'cause I couldn't buy groceries this week. But I found out what I needed to do and I can do those other things later and they said I'll be okay and I feel like I can trust the guy that used to be a training builder that came to the front selling, starting serving

Craig O’Neill: up AutoFlow.

Craig O’Neill: Dude, you mentioned something though. 'cause Dr. Jessica Kriegel was at the recent Institute Summit down there in Jacksonville, Florida. So for the audience listening that couldn't be at that summit, Carm Capto did do an interview with her. It's on Remarkable Results Radio. It's his episode number 1 0 3 5.

Craig O’Neill: And you can get a sense for if she has this three steps to real employee buy-in. Guys, you bring the guest at those summits I that some of the. Best speaking above the

Mike Simard: line and below the line, thinking like, I use that every day. I have a whiteboard and I have a big line. Yes.

Craig O’Neill: Me and Brandon joke on that.

Craig O’Neill: One of my teammates here at Auto, Brandon Che and we, it was, oh, that's below the line, man. You wanna go below the line more? Yeah, let's do it for a minute. You know, it's just a dude, Jeff. Check it out. Jimmy. I gotta give you guys, if they don't

Mike Simard: know, it's just meaning we focus on solutions, what we can do, or we focus on everything we can't do.

Mike Simard: That's a very common thing in our world, in our shops. So I can't do an inspection 'cause of this. Let's write it down. Let's go through one at a time. Let's start talking about what we can do. And that's above the line. So,

Craig O’Neill: so good. It is, it's always beliefs. Their beliefs, you have to get to the core of it with their conversations that they don't believe that doing a DVI is vital for the safety and wellbeing of your clients.

Craig O’Neill: So that's something you can absolutely address. Yeah. Otherwise, you're just gonna be trying to tell 'em to do something they don't believe in. Amen. Yeah.

Jimmy Lea: Thank you. Thank you for the shout outs there for Jessica Kriegel and good for pointing out that Remarkable Results podcast. I didn't even think that had come out yet.

Jimmy Lea: I thought it was still in the works of being edited. So that one recent, that was phenomenal. Yeah. Yeah, everybody needs to listen to that one. And then also Dan Clark. Dan Clark was a phenomenal presenter. Did a phenomenal job. And then Ross Bernstein. Was Carm able to interview Ross Bernstein? I was on there.

Jimmy Lea: Look,

Craig O’Neill: that's a great question. People that are interested in it, the institute sponsors remarkable results. They sponsor my podcast, speak Up, effective Communication. I really appreciate that and these are really great ways. I'm gonna post a link for the Jessica Kriegel conversation in the comments for our audience here.

Mike Simard: She's a great LinkedIn learning module. I found where her content was, so that's magic right there. Some of my people took it like, oh my gosh, I can't believe no one's taught me this and I'm 60. Like, oh wow.

Jimmy Lea: So LinkedIn

Mike Simard: learning.

Jimmy Lea: Love it. Love it. Check that out. Let's look down the road here a little bit here.

Jimmy Lea: The vision ahead you, you talked about hiring for the. The core hiring for the vision for the the core of who the person is rather than their skills or skillset. As we look down the road and we're exploring more, what's the future of some art?

Mike Simard: Well, the current theme is we're gonna grow the people to grow the company.

Mike Simard: So the very first thing we gotta do, 'cause we hit another ceiling. We went from two to four to seven in like 18 months. And it was a lot of growth starting with me. So, everything from all our processes that customers used to leadership finance, I mean, those are all difficult things.

Mike Simard: It's easier when you're running one or two shops, so there's a huge growth curve and you've gotta be willing to pay the price. I mean, when you're in it, you're in it, you can't go back. And when you have people to serve and lead, there's no going back. You are the one that's gotta be there to serve and help them whether you're feeling like it or not.

Mike Simard: Yeah. So what we're doing now is building, consistent onboarding programs. We have A-A-A-L-M-S or a platform called WAY Book, which is all our internal processes. We call, I call it 90 things in 90 days. I like to make acronyms, by the way. It's fun, but 90 things in 90 days. Like what is the experience of a new employee?

Mike Simard: Because we found out we're not training them on everything, giving them all the tools they need to in the lube shops and the comprehensive models. So if we grow them there. And we're actually working with Michael Smith on something we've been talking about for years. Anybody that's been in the leadership intensive, like we want to take it beyond that.

Mike Simard: So I always say this, if you want to be an astronaut, and this was before we even thought we might get to Mars, okay? If you want to be an astronaut, do really well what you're doing. Make the money you need to make. Let's try to find a team. You know, we have multiple teams that, you know, find some satisfaction in your team of being transparent to customers making a good living.

Mike Simard: 'cause you could do that in this industry Now. And if you wanna go to school to work on Mars Rovers or be an attorney or something like ultimately this company, I hope it serves that purpose, even outside the company. Even if you don't wanna stay, some people leave because they don't like where they work.

Mike Simard: Okay? That retention's huge. But some people wanna do something else and maybe they haven't found what that is. So honestly, if this company could serve the purpose, because our purpose is serving the community by empowering team members, customers, and stakeholders. Anybody involved with anybody we touch at any time of day or night we want to enrich their lives and help them reach their highest potential.

Mike Simard: So it just happens. You know, the car is a vehicle to get to soccer, to get to dialysis, to get to training, to be an astronaut, which we don't have that training here yet, but let's help you get there to where you know your God-given purpose is found. You know, not everybody knows what that is, believes in that, but why were you on the planet?

Mike Simard: Everybody has a purpose. I believe that. 'cause it's strong in me. So whatever it is, you believe you're important and you're part of society and you're here for a reason. You're different, you're unique. Let's work together. Love it. It's gonna be messy to go further and higher and help each other grow.

Mike Simard: So, did I answer your question there? I can't remember what it was.

Jimmy Lea: Yeah. That was extraordinary. Yeah, for sure. Beautiful. For sure. Beautiful. Well said. I've got a a bonus magic wand question that I want to ask. If anybody in the audience has questions of Mike or of Craig, go ahead and type those into the comments bubble.

Jimmy Lea: My I have a magic wand question for you, Mike, and then I've got a couple of rapid fire questions that I just wanna throw at you, and whatever comes off the top of your mind. That's the answer. Don't think too hard about it. Just give it quick responses. So my magic wand question is if you could change one thing in the automotive repair industry today, what would you change?

Mike Simard: What I would change would be the narrative that I grew up in with the picture. And I don't know if anybody's seen this, but when I was in the guidance counselor's office, there was a picture of a greasy mechanic that was kind of looking dumb. And there was a college graduate. And that mindset, political, I don't know where it came from, is that the blue collars, the people that were all of a sudden essential during covid all of a sudden were essential.

Mike Simard: Anybody that's been welding and beaten their knuckles or serving customers for years knew we were essential because the firetruck doesn't run. The ambulance don't go, the doctor don't get to work. Now, I got kids in college. God one's gonna be a doctor and one wants to be a lawyer, like they have to go to college.

Mike Simard: If one wants to do brain surgery, he better freaking go to college. Understand. But my son's torn 'cause it's like I want to fix people, but I like to fix cars. So I'm like, okay, either way to be excellent at either one, it's gonna be hard. You're gonna pay a price to master that. So I would change the narrative.

Mike Simard: Whatever happened with the narrative, kinda like the food pyramid. Somebody messed up.

Mike Simard: Yeah.

Mike Simard: Someone messed up with the narrative about the fact that there's a lot of smart people in this industry and it downright just irritates the heck outta me that a lot of us already had challenges in broken homes or whatever.

Mike Simard: It's like, and then we come to this industry and you're not as good as someone's certificate. It's like we all matter, and the people in this industry are awesome and I mean, I bring apprenticeship and make a lot more money than my kids make. If they just stopped at four years without the debt. Yeah. So it's a great industry and that's what my heart is wanting to do is help other shops and help the mindset and it would've changed that a long time ago.

Jimmy Lea: Yeah. Help with the, help the public to know that our industry is awesome and amazing people in it work it Awesome. Amazing, great opportunity. Yeah. Craig, final question for you. Exactly the same magic wand. What would you change in our industry to make it better?

Craig O’Neill: I would put a strong emphasis on communication skills, my friend strong.

Craig O’Neill: I would get everybody involved in Toastmasters and focusing on those core communication skills. I think it's going to be absolutely critical in this AI era that we are propelling ourselves into. The better we are, interpersonal communication, connecting and making real, authentic relationships. You will be successful in any environment, and I think that now is the time to really emphasize it.

Jimmy Lea: Oh, I love it. I love it. Both. Your suggestions, both magic wands are very similar. I. In communication and changing the public's image of our industry. So industry

Craig O’Neill: ambassadors, right? That's what we should strive to become. And there you go. That really takes really not a lot, just your perspective.

Craig O’Neill: Shift a little bit. Little leaf. Good communication. Yep,

Jimmy Lea: Yep. Okay. Lightning rounds. Mike, you ready? Let's go. Biggest eyeopener after implementing DVI.

Mike Simard: Bus. Biggest eye-opener is that customers felt more engaged in the process and that they can actually see more clearly. The green, red and yellow is a mind blowing thing.

Mike Simard: It's just immediate understanding for the customer, and then it pictures create transparency. So I did not expect that coming from paper to the digital. Of that, that, that was huge to build trust.

Jimmy Lea: Nice. Most surprising benefit of improving your shop flow.

Mike Simard: Productivity increases when everybody's working efficiently.

Mike Simard: And productivity is the amount of time that the technician actually rents on a car. And so you gotta keep them on the car and that's a challenge in a lot of shops, so that's huge.

Jimmy Lea: Love it. Love it. Favorite feature in your current system?

Mike Simard: Well, in AutoFlow, one of the favorite features I love to see is the histories at their fingertips.

Mike Simard: So if the transmission fluid was flushed 30,000 ago, you know, the clutches were already slipping and burnt. When I recommended, again, I'm mindful of knowing that the transmission was flushed, so they may have a problem. So I'm gonna. As a technician, I'm gonna write that story a little differently for the advisor to not, oh, you just did that.

Mike Simard: And then there's a trust potential. Trust breakdown because of the data simulation. So the way AutoFlow presents the information is huge to create transparency.

Jimmy Lea: Love it. Love it. Last and final one thing. Every shop owner should stop. Doing today.

Mike Simard: Stop micro imagining managing and empowering your people and figure out where their belief really is.

Mike Simard: It's a hard one to do. Once you find out where their belief is, you can build upon the right things to get them to go where they want to go. So, you know, leadership is the art of getting others to do what you want them to do. Because they wanna do it.

Craig O’Neill: Yes.

Mike Simard: Yes. Totally agree.

Jimmy Lea: That's awesome. Thank you very much, Mike.

Jimmy Lea: Thank you, Craig. Really appreciate this discussion we've had today. Lots of questions coming in from the audience. Those that were not answered here live, we'll put 'em into the follow up email along with a copy of this recording. Of course it goes to Facebook and LinkedIn, not LinkedIn. It goes to Facebook and YouTube immediately.

Jimmy Lea: And it's there. It's up. It's on. It's ready to go. Rock and roll baby.

Mike Simard: Let's do it again and answer their questions some other time. We can certainly go do that.

Jimmy Lea: Yep. We can circle back. Well, thank you very much. You guys summit in

Craig O’Neill: Alaska? No,

Jimmy Lea: no. What's that?

Craig O’Neill: Summit in Alaska?

Jimmy Lea: Yeah. Summit in Alaska. That's a great Amen.

Jimmy Lea: Suggestion for a summer event. Yes, we could do that. That would be awesome. We'd have to go during the salmon season. It'd be fun. Let's go. Nice. Nice. All right with that, thank you very much. You guys have a great day and appreciate y'all. We'll talk to you again soon,

Mike Simard: friends. Thank you. Wonderful.

May 7th, 2025 - 00:55:37

Show Summary:

In this engaging episode, Jimmy Lea hosts Mark Seawell and Brandon Ballou to discuss the critical role of service advisors in the automotive repair industry. Brandon shares his journey from martial arts to the service counter, emphasizing the importance of discipline, customer advocacy, and process-driven approaches to succeed as a service advisor. Mark dives deep into the strategies behind effective communication, understanding customer needs, and the impact of proper training. Together, they unpack the parallels between combat training and handling high-pressure situations in the shop, while also addressing industry misconceptions and the value of continuous learning. The conversation underscores the transformative power of strong coaching and structured processes in building trust and delivering top-tier service.

Host(s):

Jimmy Lea, VP of Business Development

Guest(s):

Brandon Ballou, Service Manager for Trustworthy Auto

Mark Seawell, Head Facilitator/Instructor

Episode Highlights:

[00:03:05] - Brandon's journey from martial arts to becoming a service advisor in his father's shop.

[00:05:57] - The critical importance of having a routine and training for service advisors.

[00:07:28] - How martial arts training equipped Brandon to handle stress in the service advisor role.

[00:11:31] - The significance of core values and being an advocate for the vehicle, not just the customer's wallet.

[00:22:11] - A powerful lesson Brandon learned about integrity and always doing what’s right for the customer.

[00:29:56] - Mark on the growth journey of service advisors and how training elevates performance.

[00:42:47] - How The Institute's training transformed Brandon's communication and leadership skills.

[00:54:10] - Brandon's wish to change the negative perceptions of the automotive repair industry.

[00:55:20] - Jimmy Lea shares how The Institute's service advisor training builds better communication, understanding of KPIs, and effective customer service practices.

👉 Unlock the full experience - watch the full webinar on YouTube: https://www.youtube.com/watch?v=9XV6-iV9RGI

Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!

Links & Resources: 

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Episode Transcript Disclaimer

Episode Transcript:

Jimmy Lea: Good morning, good afternoon, good evening, or goodnight depending on when and where you're joining us from today. If you are in the live event, it's either good morning or good afternoon, unless of course you're on the other side of the world of us, and then it might actually be Good evening.

Jimmy Lea: Glad we are here together today. We are gonna have a phenomenal discussion. Love to have this interactive discussion as we're talking to our friends and our family. And I'm glad to be here with you, my family, my automotive aftermarket family. Put into the comments. This is to be an interactive webinar.

Jimmy Lea: Put into the comments your shop name and where you're joining us from today. Love to give you a shout out to all those who are here for the live event. As we continue to build and grow this network that we've got with great information and great knowledge and great interaction that we've got as we lock arms to really elevate this industry and make it the best that we can possibly make it.

Jimmy Lea: So we'll give a big shout out to Andrew Knutson joining us from Long Island. Good morning. Good morning for me. Good afternoon for you, Andrew. Glad you are here. Can't wait for that little baby girl to show up. That's gonna be awesome. And Stu, joining us from Salt Lake City, Utah. Glad to have you here, Stu, the ever present, Mr. Keith Brown Tire World in Salt Lake City, Utah. Keith, glad to have you here, brother. Good to see you man. Cody Morlock. Cody Advanced Automotive, Reding, California. I know Reding, California. I almost went to Red University. Reding, California. Glad to have you here with us Cody. Welcome. Welcome to our webinar at 42 Days and counting Andrew Knutson with The Little Baby Girl.

Jimmy Lea: You know, she'll have you right here and you'll love it. Having a little girl is awesome. Excited for our discussion today. We are speaking with service advisors today and as our main highlight, our main focus we have with us today are service advisor, trainer, facilitator, head coach. It is Mr. Ever present, ever.

Jimmy Lea: Wonderful, Mr. Mark Seewell. Mr. Mark, glad to have you with us as we discuss the advisor program. This is going to be awesome. Thank you for being here. 

Mark Seawell: Glad to be here, Jimmy. Thanks. 

Jimmy Lea: Nice. And oh, Brandon's on too. So today I'm excited to dive into this incredible journey with Brandon Blue. He is a powerhouse in the automotive aftermarket as a service advisor and as a former Kickboxer, MMA fighter, we're gonna explore how these two worlds have shaped the mindset, the discipline, the ability to lead a high pressure environment.

Jimmy Lea: Brandon, thank you for being here, brother. How are you? I'm doing great. Thank 

Brandon Ballou: you for having me. 

Jimmy Lea: Yeah. Glad you are here. What, you know, I'm gonna kick it right off and ask you right outta the gates here. How in the world did you get into the automotive aftermarket? I know that there's some family business here as well.

Jimmy Lea: For those who don't know, explain how it is you got into the role of a service advisor. 

Brandon Ballou: So I got into the automotive aftermarket 'cause my father started a shop. My dad was always a technician. I was always around cars, helping him fix stuff on the weekends. And then he opened his own shop. And so I started there as a technician and then I left and did a short tour as a technician at a couple dealerships and then came back and was a tech.

Brandon Ballou: And then man, we fixed a lot of cars, but my dad with three techs, him being the advisor and the head diagnostician, he just couldn't balance at all. So he. Said, Hey, we're gonna try with you as the advisor. And with no training, no nothing. I got thrown on the front counter and that, that's how I got my start as an advisor.

Jimmy Lea: Dude, welcome to the deep end. It's swim or Survive. You either gonna swim or sink. Wow, that's amazing. He just threw you in and said, okay, have at it. 

Brandon Ballou: Yep. Seriously. 

Jimmy Lea: And how long ago was that, Brandon? 

Brandon Ballou: That was a little over, it was about four or five years ago. Five years ago. 

Jimmy Lea: Four or five years. So four or five years you were treading water, trying to keep your head above water, trying not to drown.

Jimmy Lea: Dude, that had to be tough. 

Brandon Ballou: Yeah, it was a big change. Everybody, when you're in the back shop, every technician who's never done it thinks, ah, you know, you're just someone who answers the phone, books, appointments, and tells people what the price is. Until you start dealing with the public and realize people are way harder to fix than cars, 

Jimmy Lea: right?

Jimmy Lea: I mean, that's all you do. You just answer the phone. 

Brandon Ballou: Yeah, 

Jimmy Lea: no, there's more to it than that. There's more to it than that. And what advice would you give to a technician who's never been an advisor? 

Brandon Ballou: So, advice to give to a technician who's never been an advisor. Find a routine and find training.

Brandon Ballou: Find something that gets you in the same head space every day so you can, you know, have the same performance. Every day and get training because as much as you think you know about cars, you don't know anywhere near as much about people. 

Jimmy Lea: Oh that's true. That's good. I wonder in our audience, how many of you in our audience have gone from being a technician to being the shop owner or from being a technician to being the advisor?

Jimmy Lea: I wonder if that's in our audience. How many have done that? I know Andrew, at least I believe Andrew didn't you wrench before and now you're the advisor. Manager and owner. So, yeah, put that in there for those of you joining us. And we are streaming live. We are streaming live both on YouTube and Facebook and on Streamy Yard.

Jimmy Lea: So where you're joining from would be amazing. Keith Brown came up. Keith Brown came up front about 34 years ago. So, Keith, were you wrenching before as a technician? Andrew was 15 years. 15 years as a tech. Andrew Cody shop partner, tech advisor, and then owner. Oh, shop? Porter. Porter. Wow. Wow.

Jimmy Lea: That, that's quite the road there, Cody. 28 years. Oh, he started when he was 12. I was gonna say, I've seen pictures of Cody and he looks 28. Oh, that, that is awesome you guys. So, question for you about your background in martial arts and kickboxing MMA. How did that journey help you in your role as an advisor?

Brandon Ballou: Being able to deal with stress and high pressure situations coming through any sort of martial arts or combat training you're gonna be under stress. So most people, when they get put in the advisor role, that's usually when everybody decides, is to either take it as a career and learn or change careers.

Brandon Ballou: 'Cause it's a much more higher stress environment than anybody who's never been in customer service can imagine. And so you either learned to roll with it or you change jobs. 

Jimmy Lea: You know, I had in my mind you were talking about your role as a kickboxer, not as a customer service advisor.

Jimmy Lea: When it's high stress. Is that high stress? 

Brandon Ballou: Yeah. Yeah, both are high stress because I mean, whether you're on the phone talking to someone who's upset about a problem and you're trying to offer 'em a solution. When our industry, everybody thinks we're just trying to cause more problems or charge them more, so we have that unfortunate.

Brandon Ballou: Label on our industry, but then going into the combat kickbox inside you have someone who's trying to kick and punch you and you're trying to kick and punch them without being hit. And I don't care how long you've been doing, nobody wants to get hit. So both are pretty high high stress situations.

Jimmy Lea: Oh, that's so true. So which is more stressful? Martial arts or service advisor? 

Brandon Ballou: Oh, the front counter advising's. Way more s 

Jimmy Lea: Yeah, 

Brandon Ballou: because here's the thing, no matter what fight you're doing, whether it's boxing and it's, you know, 12 two minute rounds or three minute rounds, or three five minute rounds, or three, two minute rounds you'll have one round with a customer for an hour and a half on the front counter.

Brandon Ballou: So advising's way. More high stress. 

Jimmy Lea: Yeah. Mark. They don't ring a bell and tell everybody, go to their corners. 

Mark Seawell: You try. It just doesn't work. 

Jimmy Lea: Yeah. How, mark, what do you what's the training or what's the advice that you give to your service advisors in your training program that helps 'em to deal with this high stress situation as a service advisor?

Mark Seawell: So, a couple things. Really preparation, if you're prepared, the better prepared that you are the more that you're gonna be able to manage. And mitigate some of that stress that occurs. After you're prepared, of course, you know, there's, there, there are different techniques to make sure that you're calming people down, using the correct body language, using the correct vocal tones, things like that, as well as having a good solution and putting yourself in the position ahead of time to have proper expectations so you don't end up in a stressful situation.

Jimmy Lea: Yeah. Oh man, that's so true. You know, with the Boy Scouts, that's their motto is be prepared. So the better prepared you are, the better the conversation will go because you're, you have the answers. And if you don't have the answers what advice do you give Mark when advisors don't have the answers?

Jimmy Lea: How do they get the answers? 

Mark Seawell: Well, you first, you start with the truth. Tell the customer you don't know. And, that, that the truth goes further than anybody ever knows. And and then promise to go get the answers and get the answers from wherever you need. If it's if it's from the technician, from another advisor, or maybe your manager or a coach, go get the answer there.

Mark Seawell: Sometimes, you know, there, there's other avenues. You can even consult the internet and find a, at least a path and get that, get down the path, but. Ultimately the worst stress that you can potentially have is making up an answer and it not being right. 

Jimmy Lea: Oh, yeah, no, that's the worst thing of all making up answers.

Jimmy Lea: No, please don't do that. Ever common 

Mark Seawell: mistake with a new advisor. 

Jimmy Lea: Oh, so true. So true. You know, Brandon be prepared as the Boy Scouts motto. What principle from your martial arts do you live by on a daily in both your personal life and in your professional life? 

Brandon Ballou: Having a set of values and no matter what, you're not deviating from those.

Brandon Ballou: That's something at the base of every martial arts school or most martial arts schools, any good school whether they're a school training for competition or a school training just to teach kids proper skills and. You know, good habits. You need a core foundation of values. Always be respectful.

Brandon Ballou: Always tell the truth items like that so that cross reference over directly and on the front counter being trustworthy, no pun intended, I is the most important thing if you can, I. Talk to a customer no matter how bad the situation is. If you are sticking to your values and you truly believe you're doing what's right for that customer and you're sticking to what you know is right, it doesn't matter what happens, you are doing what's right.

Brandon Ballou: Yeah. No matter what happens, at the end of the day, you did your best. 

Jimmy Lea: Oh, I love that. And 

Brandon Ballou: that's something you, I learned directly from the martial arts coming up as a kid. 

Jimmy Lea: So, do you fight for the customer or do you fight for the vehicle that's in the shop? 

Brandon Ballou: So my job is I'm the advocate for the vehicle.

Brandon Ballou: And I'm not, and I work with the customer, but I'm the advocate for the vehicle. They speak two different languages. What the advisor really is almost a translator. So the car comes in and the technicians figure out exactly what's going on, and they give all that information to the advisor. The advisor then prioritize everything to make sure that vehicles in its absolute best shape.

Brandon Ballou: And here is everything your car needs because your car's not gonna tell you what it needs. That's our job. We tell you everything it needs now. I present it all and I talk to you, but based on your situation as a customer, I'll help and prioritize things and make a plan to get that stuff done, whether it's all today, whether it's over three months, what, whatever it is.

Brandon Ballou: But as the advisor, you're the advocate for the car, but you're there to help the customer. 

Jimmy Lea: Oh I love that. I love that. What and in your role as a service advisor, when you were very first starting out, what were some of those? Challenges that you had as an advisor? 'cause I'm guessing that when you first started being an advocate for the car wasn't second nature for you, you were speaking more in the terms of the customers.

Jimmy Lea: What were some of the challenges you faced when you very first started out? 

Brandon Ballou: The challenges in the beginning is we, I was almost an advocate for the customer's wallet or the customer's financial situation, which that, you know, that doesn't fix their problem. You know, finances are important.

Brandon Ballou: People need money to fix their cars, but if their car's unsafe, if their car's unreliable, I shouldn't be making decisions based on their. Financial standpoint, we need to make decisions on how can we keep their car safe and how can we keep their car reliable, and then offer as many solutions as we can to help them get there, given whatever their financial state is.

Jimmy Lea: Oh yeah. Because you didn't buy it, break it or drive it. You're just advocating for the car and it's customer that's gotta figure out how to make it work. 

Brandon Ballou: Because if we're making decisions just off the financial aspect of the car, that car's just gonna get worse and it's become gonna become a bigger and bigger problem.

Brandon Ballou: Financially. It's keep the money in my bank account, why am I gonna put it in a car that's just gonna continue to depreciate in value. 

Mark Seawell: Yeah, that's 

Brandon Ballou: just the financial aspect of it. But when you look at the reality of it, the car needs to be reliable. So you can, when you get in it and need to go somewhere, whether it's your daughter's soccer practice or somewhere urgent, it's gonna start up and take you there safely.

Jimmy Lea: Oh, so true. So true. You gotta be an advocate for the car. Now, mark, question for you when we talk about an advisor selling from their own pocketbook. I understand that. What how do you break that idea? How do you break that habit, that, that mindset, what do you, as a coach, facilitator, what do you train your advisors on?

Mark Seawell: So typically that comes from two different places. First not understanding the concept of being the advocate as Brandon so eloquently defined. The you know, being the advocate for the car and while helping the customer. Because really what happens is the customer comes in. And hires you to be the advocate for the car.

Mark Seawell: That's really what they're doing. And once the advisor understands that concept, then we build up their confidence to be able to have the hard conversations. And understanding that they're being right. They're right with whatever they are, they're righteous, as well as having the correct conversation about the right things.

Mark Seawell: And as Brandon said earlier, living by the code. You know, we we understand what the level of, what we expect a car should look like and be like, you know, our job is to keep the vehicle safe, keep the vehicle reliable, help. The customer to, to save money over time and time over time and ultimately not be aggravated.

Mark Seawell: If we can come to those types of conclusions and we can teach an advisor to do that, they don't, they, they don't have that fear anymore and and sell with their own wallet any longer. 

Jimmy Lea: Yeah. So what advice do you give to that advisor that the customer has said, Hey, you know what, all I want is an oil service.

Jimmy Lea: I, I drove it in, I'm driving it out. I don't wanna buy anything else. This is all I need. This is all the car needs. I just need an oil service. 

Mark Seawell: I, I don't understand, 'cause you just said that was our customer, but it's not because my customers don't come into my shop that way. My customers, when they come into my shop, they, we have vetted who that customer is because the type of people that want to do business at my facility.

Mark Seawell: They are people who want their car to be safe and reliable. They're people who want their car to make sure that it's up on its maintenance. They don't have to be able to do everything all at the same time. I, you know, we're not, you know, we're not sticking to just that.

Mark Seawell: But I, I want people that want the same things. I mean, it's the same, you know, if I'm looking for a better meal somewhere, I'm not going to McDonald's and demanding that they're gonna have ribeye, ribeye steak, you know, it's and by the same token, I wouldn't walk into the steakhouse and go demand a big Mac and 

Mark Seawell: fries, 

Mark Seawell: you know, like I, there's, there, there's that whole, there's that whole thing.

Mark Seawell: And so at my shop, it's just not that. And it's. It's okay. There are shops that are out there that, that are, they are structured to cater to that type of client that that wants to come in and says, Nope, I just want an oil change. Yeah. And you know what they're quick lube boil places.

Jimmy Lea: Yeah. That's what they do. 

Mark Seawell: If you roll through one of those, your oil changes $130 because they have to make their profit somewhere. Yeah. And your oil service is probably not $130 should be. Maybe it should be, but and who knows, maybe it is. But but typically what happens is, you know, those places, the quick lube places they're set up to do that they're set up to make profit on volume.

Mark Seawell: And that's what they do. They do it in 10 minutes. They have their profit model that works and that's it. Ours just strictly isn't like that. You know, we have a way where we're going to make sure that our customer. Is taken care of and the vehicle is taken care of. You know, I love these cars.

Mark Seawell: I wanna see 'em on the road forever and ever. 

Jimmy Lea: Yeah. And selfishly, if we will I wanna keep you safe on the road because it actually keeps my family safe on the road as well. Sure. 

Mark Seawell: For sure. 

Jimmy Lea: Yeah. 

Mark Seawell: Andrew's a hundred percent right. It is our job on the phone to vet that customer and make sure that we teach them that.

Mark Seawell: What type of customer can be our customer. Everybody has the opportunity, but but not everybody wants to be. 

Brandon Ballou: Yeah. It's our job to educate those customers that, you know, some people they come and I just want an oil change, and then we have to figure out why that's all they want. Is it 'cause they had a bad experience somewhere else and you know, someone took 'em for a ride?

Brandon Ballou: Is it 'cause that's all they think they need and they need to be educated on. Okay. Maybe there are other things. Like what? Like what's. What's their why and figure that out. You can make someone, your customer, 

Mark Seawell: and ultimately too, sometimes people just aren't educated about it. Someone somewhere has given them some bad information about, oh yeah, every time you go there, they're going to try to sell you something.

Mark Seawell: And so when they do that, you just tell 'em no. And ultimately, I mean, anybody that, that's maintained any type of anything, not just a car, but any, anything. Yeah. I mean, people wash their driveway every year, don't they? And I mean that, that's maintenance for your driveway. People wash their house, wash their car.

Mark Seawell: That's even just maintenance, right? Yep. What if people never did that? What would happen? I. 

Jimmy Lea: Lot of dirty cars rolling, 

Mark Seawell: right? 

Jimmy Lea: Yeah. Okay. Question for both of you and mark. This will give you a few seconds to think of your favorite. Brandon, your first, what's a customer interaction that you'll never forget?

Jimmy Lea: What's a customer interaction that you'll never forget, and why? Why was that such a. Significant customer interaction. Brandon, what you got, brother?

Brandon Ballou: It was a striking moment when I seen that. So my dad started trustworthy and it's a moment that really showed me that our values are in line with what we need to be.

Brandon Ballou: We had a customer come in and, you know, the description and there was some loss in conversation with what was actually going on, and we ended up replacing headlight bulbs when the actual lenses were clouded over. And so no matter how bright the bulbs were, this customer wasn't gonna be able to see.

Brandon Ballou: It was a really good customer of ours still to this day, and he came in and he was like, look, I'm a little disappointed with the last visit. I thought we were gonna fix this. I thought we were doing this, and instead we did this. And, but before I could even respond or the customer could say anything else, my dad said, I just ordered two headlight assemblies for you.

Brandon Ballou: They'll be in on Tuesday. We're gonna take care of it. We're sorry for the miscommunication. A hundred percent fault on our end. We're gonna take care of you. And that moment really struck. And I was like, that's why we're here. We're here to help people and we're gonna do what's right. We have integrity, whether it's, whether it hurts or not, we're always gonna do what's right.

Brandon Ballou: And that was a situation that really proved that to me. 

Jimmy Lea: Wow. That's a strong lesson to learn too, especially from Pops, huh? 

Brandon Ballou: Yeah. 

Jimmy Lea: Wow. That's awesome. And has that client continued with trustworthy auto? 

Brandon Ballou: Absolutely. He was here last week. He's a, but he does for a living. He is a Uber, he's an Uber driver.

Brandon Ballou: And so we see him like a professional Uber driver. Oh yeah. 

Jimmy Lea: You see him like every two to three weeks probably. 

Brandon Ballou: Yeah. And he has his own private charter company to and from airports on top of that. So he does really awesome for himself. We see him all the time. We have a close enough relationship. He doesn't.

Brandon Ballou: Call the shopper or anything. He's texted me personally. Anytime I need a ride to the airport, he's who we're reaching out to. And we've developed, and that's part of that to where with your customers and stuff, it can't just be a transactional relationship. You can build a real relationship, know the family, know the kids, know what their actual purpose for the cars are, and you can make a little bit better decisions for 'em depending on their life, not just what some book says.

Jimmy Lea: Oh man, I love that. That is awesome. That is awesome. It's good to have a good friend in the automotive industry from a customer point of view, and then also from a industry point of view, it's great to have an Uber driver that you can rely on. Yeah, that's super cool. Alright, mark, what is your most interesting customer interaction that you'll never forget?

Jimmy Lea: Now, for those of you who don't know, mark was it 14 shops that you used to take care of and manage? 

Mark Seawell: Yes. Do 

Jimmy Lea: all the coaching and training. Yeah. 14 shops. Yeah. Okay. So you've seen a lot. 

Mark Seawell: I've seen a few. I've seen a few let me see. Gosh, I. The only reason that this one's even coming to mind is because I was just telling the story to somebody the other day where we had a client that that was a guest at our shop.

Mark Seawell: We'd quoted out racking pin. It was a Honda Accord. I don't remember which year or whatever, but excuse me. It was it was a Honda Accord. It needed a rack, pinion, and it was a whole bunch of labor for whatever it was that, that particular service was a lot. And we always, we vetted the products that we installed because we wanted to make sure that we had the best possible components because we attached a warranty to it that was that was quality and our.

Mark Seawell: Our labor rate was also probably higher than most of the competition around town because we deserve to be you know, we provided a considerably better quality service, just like many of our clients do. And the job had been quoted out to the customer, and the customer decided that they were going to search elsewhere.

Mark Seawell: For whatever reason, the service advisor couldn't, couldn't go over the val the value that that was attached to it. And and so, it ultimately that particular customer got that job done somewhere else and and had the rec opinion done and all that. But then later, as you can expect.

Mark Seawell: With a subpar component and probably subpar labor. The the part failed and it was only months later and I happened to be in that location at the time. And the the customer came in and he was angry with us because we. Must have misdiagnosed it because the problem was still there. There was a noise that was coming from the rack and pinion something, I don't remember what it was.

Mark Seawell: And and so when we went and we saw a brand new, you know, we saw the noise coming from the rack and pinion on our roadside. We were like, oh my gosh, well, let's go wreck back and reinspect it. We we brought the vehicle in, figured out what the problem was, and it was also coming back from that wrecking pinion we're like, wow, that's, yeah we told 'em they needed it.

Mark Seawell: That's, yeah, that's what we said it was. And then we figured out that he said, oh no, we had this wreck and pinion replaced already. The noise is still there. It has to be coming from someplace else. Our original diagnosis must have been incorrect. Well, the best thing about that was that we were able to prove to that client that our diagnosis was right, and at the same time.

Mark Seawell: Went over that customer because whatever they were able to to find later, they had to go through all bunch of hassle. They didn't have any warranty on the service. Ended up that car came back to our shop and and we took care of the wreck and pinion and corrected the problem, and that customer had to pay for it twice.

Mark Seawell: They became our client forever. Yeah. After that they never went anywhere else. And this customer he happened to actually live. Very close to my sister. And so like one, one day I was at I was at my sister's house for a party in the backyard. Right. You know, barbecue burgers and hot dogs and stuff.

Mark Seawell: And he happened to be there and he walks in, he is like, oh, mark, IM glad to see you. Let me just tell you everything about it. And he's a friend. And and so that was it. It was a good, it was one of those stories where it's like, oh, this is, you know, if people just listen to us in the first place.

Mark Seawell: The you know, how many times you know, can we get that? I want that shirt too that Jennifer was talking about yesterday. If you just listen to Jennifer. 

Jimmy Lea: Yeah. If I'd have just done what Jennifer said the first time, everything would be okay. 

Mark Seawell: Right? I need one of those. 

Jimmy Lea: So Mark, I thought for sure you were gonna say the customer was upset because you hadn't convinced them to buy it from you the first time, which it sounds like it did come back around all the way where they were upset that you'd hadn't sold them the first time because they still had to pay for it twice.

Mark Seawell: Right. Well, that was the thing is he became our client forever. And I, you know, we got, we, we had a good relationship after that. You know, several times he was in after that a lot. 

Jimmy Lea: Oh, that, that's so good. That's so good. It's great to have a loyal customer, a key tosser, somebody that'll just toss you the keys and say, all right, call me when it's done.

Mark Seawell: Well, ultimately that's it. Right? So, you know, we talk a lot about trust and how you make trust and it's character and it's competency. Yeah. And then, I mean, you end up, you multiplying the, that character and competency with either consistency of a visit and seeing it all the time the same way or your ability to talk to people, your communication.

Mark Seawell: And so when that's all together in the beginning. If you don't have that and that that communication is the only thing that's sitting there. That's the, that's the strength. And you know, like advisors, like, like Brandon has gone through our program and, you know, I'm so proud of just how well he communicates to customers versus I before he was all thumbs and and he'll admit it himself.

Mark Seawell: Right. You know, he didn't know what to say, how to say it. And and that's, you know, that, that's, I'm so proud of just seeing. You know, Brandon's growth and other people's growth. I got to see it over this weekend. Just a bunch of people that were just were just doing it right. And I was just so excited.

Jimmy Lea: Oh, that's super cool. Speaking of Brandon's growth, where was he when he started with us? And where is he now? I mean, do we judge that by average repair order, car counts, increase in closings? How do you judge success in a coaching and training environment? 

Mark Seawell: Gosh, it's all of it. You know, we use several metrics to figure out where people are.

Mark Seawell: I like to use gross profit per hour because it seems to be the culmination of everything. It's like, it's your top end number. Yeah. And you know, I mean, Brandon raised his gosh. About $65 or so. 

Brandon Ballou: Yeah, it's almost probably tripled, maybe now quadrupled. Yeah. Because that's when, you know, we were the shop that we fixed a boatload of cars, but there, there was, we fixed the boatload of cars and moved a lot of money, but none of it made it to the bank account or the bottom line.

Brandon Ballou: And then, you know, we made some adjustments. The front counter probably being the biggest held our margins where we needed to be, at least at the minimum of the industry standard instead of, you know. Pricing with our own wallet. 

Jimmy Lea: Yeah. 

Brandon Ballou: That made some huge differences in our shop and even customer satisfaction 'cause we were able to offer our clients so much more.

Jimmy Lea: Oh, I love it. I love it. And just as much, oh sorry. Go ahead, mark 

Mark Seawell: that. So that's one of the things, and you know, we don't often talk about this, but you can't offer customer satisfaction to folks if you don't make some profit. Because ultimately, if, you know, like, like the story that Brandon was just talking about getting new headlight assemblies for this car and all that stuff, because they didn't, whatever, there was some kind of miscommunication that happened ahead of time.

Mark Seawell: Yeah. And 

Mark Seawell: you know, the right ca the right call was to solve the problem. They wanted to solve the customer, they did something wrong, they wanted to solve the problem and their easiest solution was to get new headlight assemblies. Well. They couldn't have ever done that if they didn't make some profit, because if you don't make some profit, you don't have any money in the bank.

Mark Seawell: You can't buy stuff. So, you know, that's one of those things where the more profit that you make it helps your ability to ultimately solve problems for people, especially if you cause them and you can move on and go to the next one and just your day becomes a lot less stressful. 

Jimmy Lea: Yeah.

Jimmy Lea: That, that's true. That's true. That's solid. That's solid. Well, I forgot where I was going with my next question. Perfect.

Jimmy Lea: Let's go into the the crossover between fighting martial arts, kickboxing, MMA, and advising. How has your combat training influenced the way you handle conflict with clients or teammates even inside the shop? 

Brandon Ballou: It's I've always, I've been pretty trained and well dur in being able to deal with stress.

Brandon Ballou: So that, that part's never really got to me. There could be 10 people in the office. I could have an unset employee, customer and manager all at the same time. And you know, it is just deal with each problem, one step at a time. It really comes down to, and, you know, I might be a broken record, but if you have your beliefs and you have a process that's in line with your beliefs you'll always get the right result.

Brandon Ballou: It might not be the best, it might not be the funest. It might hurt a little if you know. It's something where you gotta pay for a set of headlight assemblies 'cause it's what you believe is right. But long as you have a process and you have your values it, it doesn't matter if it's fighting, service, advising any other career field, any other sport you'll always get to the right answer.

Jimmy Lea: Nice. Nice. I love that. So you've never had to headlock a technician or punch him in the face or kick him in the head. That's one thing we're 

Brandon Ballou: super proud of in our shop is the culture. And we've built we've always taken care of our guys. That's something that's been passed on right from my dad.

Brandon Ballou: He always believed we gotta take care of the team and we go above and beyond more than what any numbers on a spreadsheet should ever tell us we should allocate to our technicians. We just do what we know is right and we take care of our team. And, you know, for instance, one of 'em, he loves to go race at the local, like Speedway track, just so we can race, you know, in the clunker car events. And we've bought him the car and every year and when he crashes it, we get him another one. And that's something we've just always done for him. 'cause he's been with us coming on nine years. 

Jimmy Lea: Oh, wow. And 

Brandon Ballou: whether that's one of those things that it's not in any spreadsheet, it's not something we care about.

Brandon Ballou: We just, we have that relationship with him and what we're gonna do that to take care of them. 

Jimmy Lea: Oh, I love it. I love it. And thank you for mentioning spreadsheets 'cause it sparked the idea. And I remember what I was going to remember. Mark, gross profit, love, gross profit. Love that you were able to increase gross profit.

Jimmy Lea: And I also assume that this translated into your net profit as well. You were able to keep more because empty shelves don't feed mouths, but full shelves do. 

Brandon Ballou: Yes. So definitely did compared to where we were. Yeah, that's probably where we struggle the most because we're that shop that, you know, we always give back.

Brandon Ballou: My dad's always reinvested, we're always adding another loaner car to the fleet so we can make sure our customer has a loaner car, always buying the new, newest and latest tools to make sure the technicians can get the job done faster so we can get the car back to the customer. We're always putting it back into the business.

Brandon Ballou: Or if there's something left over, then my dad's, probably the most humble give back to everybody person I know like our technicians pay will increase if there's anywhere else we can do. We just, we've always reinvested it back into the shop. 

Jimmy Lea: Oh, I love it. That's awesome. So 

Brandon Ballou: on the actual spreadsheet, you know, the net at the bottom might not look where it's supposed to, but the gross is taking care of it.

Brandon Ballou: 'cause all the stuff we're adding to grow the business, take care of the team, or take care of the customer, just keeps getting better. 

Jimmy Lea: Well, that, that's really good. That's really good. I Congratulations for doing that. Okay. Question for you about crossover here. Between the combat training and service advising, is there a specific mindset or preparation ritual that you developed in, I.

Jimmy Lea: The ring that helps you on your daily service advisor routine? 

Brandon Ballou: Yes. Mark's already chuckling 'cause he knows where I'm going with this and I didn't put it into a process until training our latest advisor. But same thing going into a fight. You gotta psych yourself into what you're going into and you have to believe you're gonna win.

Brandon Ballou: If you don't believe you're gonna win you're gonna lose. Whether you believe you're gonna win or not, you're right. Whether you believe you can or you can't, you're right. And so having that headspace, having that belief, so training our newest advisor you know, you might have a bad night, a bad weekend, something might happen in your personal life to where if you bring that into work, you're not gonna perform.

Brandon Ballou: If you bring that into the ring, you're not gonna perform. So we put it, and it's in the process, like written physically. When you check in, what you do, when you get into the shop and it says, put on your super suit. You know Batman can't bring Bruce Wayne's problems when he goes to Safe Gotham City. He is gotta be Batman.

Brandon Ballou: So you put on your super suit, you get in your headspace. I'm going to be the best advisor I can be today. And then you can deal with, you know, your personal problems after, at the end of the day. 

Jimmy Lea: Oh, it's, that's true. That's true. I brushed up on a little bit of boxing trivia. Rocky three, remember Rocky three when he was fighting and he lost 

Brandon Ballou: Yes.

Jimmy Lea: Because he was afraid his mindset was not right. 

Brandon Ballou: Yep. 

Jimmy Lea: And that scene where he and Creed are on the beach. Adrian's there. He finally admits that he was afraid. So, you know, he was gonna lose. Yep. Don't lose. It's in your mindset. Yep. So, you talk about your mindset and that's good advice for a service advisor.

Jimmy Lea: What other advice would you give to a service advisor that just starting out in the industry so that you can help them to not feel overwhelmed? There's so much that happens. How can we help them? 

Brandon Ballou: It really boils down to process, have a process or a routine for everything. 'cause if I answered the phone differently every time, and presented the information to the customers differently every time and checked in the parts differently every time I.

Brandon Ballou: I have no routine and every time it feels like this new unorganized experience versus I, I hate scripts, so I'm not saying a script by any means, but have a process for how you're gonna answer the phone. Have a process for this is the direction I'm going to go through the call with the customer. This is how this process is done.

Brandon Ballou: And it makes it so much easier to learn and understand where everything's going and coming from. And. It just makes things easier. 

Jimmy Lea: Oh, I love it. I love it. And Mark, what would you add to that for a new service advisor in the industry? How can we help them to not get overwhelmed with all of the. Tasks that a service advisor has to do on the daily, how can we help that service advisor?

Mark Seawell: So I really can't add anything new to that because I think Brandon said it perfectly have a process when you have a plan to go through things. I mean, the science behind it is that your brain needs less. Blood, no less oxygen in the blood to to actually fire the neurons to do the thing.

Mark Seawell: It's you actually have to use less brain power when you already have a process that you do. It's like, it's like when you drive home from work and you already know the way to go home and you show up and you're like, I'm here already. Or or when you are going through and. Just going through your morning, half awake, half asleep, and you've already made coffee and you've gotten your bagel.

Mark Seawell: I mean, it happens that it's just this is what you do every morning. This is how it works. And you're like, wow, I'm done with this already. You get into that muscle memory and really what it is that, that you have this process that happens, and when you do that, everything like you, you need less bandwidth to do it.

Mark Seawell: You, you need less brain power to do it. And even better than that, it just becomes who you are and what you do. It's so, it makes life so easy. Yeah. And so the thing that I'll say is just. You get yourself into a routine. You get yourself into a process and do it the same way.

Mark Seawell: And you don't have to do it this, like, you don't have to use the same words to say it, but you have to have the same meaning when you say it. 

Brandon Ballou: Yeah. Yep. Processes they prevent so many problems. And then if you do a process over and over again, it becomes a habit. And then eventually you're preventing all these problems without even thinking about it.

Brandon Ballou: It's just muscle memory like Mark said to where. Hey, how many more problems you probably would've had to deal with that day if you didn't have that process down to where now it's just muscle memory 

Mark Seawell: processes, prevent problems. 

Jimmy Lea: Amen. Amen. 

Mark Seawell: Processes, prevent problems. Yeah. While eating pickles. 

Jimmy Lea: Oh, boy. Now we're getting there, Peter.

Jimmy Lea: So, Brandon and to, to what you're talking about, what you have now as a habit. Started out as a process, started out as a script, and you learn that script and then eventually you're able to throw that script away because you don't need it anymore. It's now habitual for you. So to duplicate, you write it down in a process so that the next guy, the next gal, can step into your position and do exactly the same things you do the exact same way that you do it.

Brandon Ballou: And it's the same for anything. You wanna transition even over into the combat side of the world. You know, if you develop a poor habit, a bad process of always leaving your hands down and your head open, well, you're gonna get punched in the face a lot. But if you force yourself to develop a habit where your hands are always up, you're always ready, you're throwing punches with the proper technique from practicing the process of punching.

Brandon Ballou: There we go. Then then you'll have. The right technique in form. It'll be a habit when it comes to the real fight. 'cause you can know how to do things, but if it's not a habit, when the real show starts, it goes out the window. Right. 

Jimmy Lea: Proper punching prevents poor performance. 

Brandon Ballou: Yeah. 

Jimmy Lea: Yep. Thank you Mark. You started it.

Jimmy Lea: I know. I love it. I love what you guys are doing. I love what you're talking about. And Brandon how did working with the institute impact your approach? To your position as an advisor to your position as a leader at the shop, how has working with the institute helped you? 

Brandon Ballou: The institute?

Brandon Ballou: Yeah, just talking about I. My career in the shop is just the tip of the iceberg. So I was a technician and without the institute I don't know if my dad would've ever even made the transmission transition to put me up front. That was something the institute recommended. Try it, see what happens.

Brandon Ballou: And then going through all the training with Mark, learning how to not just be an advisor, how to speak, how to understand people, understanding different personality types, how to work with people. Learning from Cecil how being. Fair to everybody. Everybody needs to win in a business environment. So they didn't just impact my career, they impacted my life.

Brandon Ballou: Mark and Cecil, I mentioned at the summit there, there's probably a group of five people outside my immediate family that make me who I am. And Mark and Cecil are two of those five, like you removed that this guy right here probably doesn't exist. Just the level of communication I have now. Being able to communicate in and out my personal life and professional life.

Brandon Ballou: Understanding people trying to solve problems with solutions, not just opinions. And it's it's come full circle. The institute has done much more than just elevate my family's business. 

Jimmy Lea: That's awesome. Mark, did you ever think you'd have that kind of an impact? Hold 

Mark Seawell: on. I'm still tearing up. That's it, you know what I when I started this, I don't even know how many years ago when I started doing this type of thing working with people, I really didn't have a clue what it would do.

Mark Seawell: Like, I really didn't like I was just like, oh, well that's just the next logical step for me is I'm good at. Sales, communication, leadership, operations. Well, the next best thing is to go in and teach people how to do sales, leadership, opera and all that. And I never really thought about it at the time about how much impact I could have on people.

Mark Seawell: And I come to find out that I crave it more than. Air, I mean more than oxygen. I see people just achieving a better version of themselves. And that's what, like, I, that's where I go, okay, I have, I built that. That's awesome. And I feel pride and you know it. And so. At the first to answer your question, Jimmy.

Mark Seawell: No, I didn't think at all. I just thought it was the next logical step. I was like, cool, I'm gonna have to work less and probably make more money. And I made less money and I worked more, but but what I get out of it is so much better. There's so much more out of that. And you know, it I'm truly thankful.

Mark Seawell: That that what I get to do is share what I know with people to help them grow as individuals and make my impact not just on our industry, but on the people in it. 

Jimmy Lea: I love it. I love it. That's super awesome. I'm, thank you for sharing, mark. I really appreciate that. If you had a magic wand mark, and you could change anything about the industry, what would you change in the automotive aftermarket?

Mark Seawell: Gosh. Does it have to be just one thing? If you can narrow 

Jimmy Lea: it down to one thing. Yeah. What's the one thing? 

Mark Seawell: Okay, so if it was one thing. I wish that everyone would take the path that Brandon here has gone through, where he took a step back, understood that things weren't going right, and he wasn't doing it exactly as he should, and that he needed help.

Mark Seawell: You know, it's like a 12 step program. Realize that you need help and and then ask for it and get it, and then pour everything into it. And I wish if there was one thing I could wish for the industry, it was that people had a different mindset about getting help.

Mark Seawell: Yeah. Oh, Jimmy froze. No, Jimmy froze.

Brandon Ballou: Oh no, he is good now. Oh, I felt 

Jimmy Lea: that. I felt that freeze for a second. 

Brandon Ballou: Oh 

Jimmy Lea: my god. Ooh, that one's scary.

Jimmy Lea: Anytime you unplug Jimmy, that's what happens. He just stops 

Mark Seawell: moving. You gotta plug them back. Kick the cord. 

Jimmy Lea: Yeah, right. Yeah. Make sure those batteries are in nice and tight. So, yeah, I agree with you, mark. I wish more would step up and accept the coaching and training and the feedback and the accountability.

Jimmy Lea: And I think that's where most people really kick back is that accountability, that level of here's the training, here's the understanding, and we're gonna hold you accountable to it. Right. So thank you. Thank you for what you're doing in the industry and with shops and shop owners. It makes, it's a world of difference.

Jimmy Lea: And in fact, we've got a service advisor training class coming up here pretty soon, don't we? 

Mark Seawell: Well, I've a three day, I've got a three day one coming up. Yeah. It's in it's in sunny Utah, next to the mountains. It's the best time to be in Utah. In the summer, the, if you don't like skiing, I guess.

Mark Seawell: But it's it's coming up in August. It's second week of August, second weekend of August. If you go to the institute we are the institute.com. Under the events page, you can find that. You know, all, everything to sign up for on that. It's a three day workshop. And what it does is we take the advisor through an intensive, it's bootcamp.

Mark Seawell: I mean, let's call it what it is. It's bootcamp. Yeah. We take advisors and we and we break 'em down and then build them up. And and what we do is we go through communication skills. We go through working through problems with customers and things like that. We go through a sales process.

Mark Seawell: We go through understanding KPIs and understanding what to do with them. I mean, it is a it is a bootcamp where we we do we break every, everything down. We break all the bad habits and we put good habits in. And in my opinion, I'm biased. It's it's one of the most high impact things that we do.

Mark Seawell: We you know, we go fast and hard and it's a lot of information all at once. And typically whoever goes to those workshops, they come back tired. And and it's not because we have 'em doing jumping jacks, it's because their brain is hurting. 

Jimmy Lea: We melt their brain and then put it back in.

Jimmy Lea: Yeah. So, is this for advisors that are only the brand news or are the somewhat experienced, or the highly developed or highly skilled? Is this an a, a class for all or just brand news? 

Mark Seawell: So this is for everybody. The certainly brand new people will get one thing out of it. And we have, the way that we design our training is that someone could take the training that has years of experience or zero experience or anything in between.

Mark Seawell: And we have different parts engineered. To impact those specific people. And and we were able to take the people that that have the experience and do these things well and have them help demonstrate examples. Which is also part of education. You know, being able to teach other people.

Mark Seawell: Actually, I think you learn more from Ask Brandon. He's been doing that. Absolutely. He's been doing that all the last part of the last year and all of this part of this year. I bet he's learned more about it than than the entire time that he got beat up by me all the time. 

Jimmy Lea: Oh, that's pretty good.

Jimmy Lea: That's pretty good. Well, I think everybody should attend this three day service advisor class. Especially if you're a new service advisor or an experienced service advisor, you will come away with more knowledge, information and better mindset. Right. To help you. Yeah. Brandon que final questions for you.

Jimmy Lea: What would you say to any other fighters or athletes for that matter that are considering transitioning into the automotive aftermarket? 

Brandon Ballou: Ooh. So any fighters or any athlete in general take the discipline you've learned from being able to train every day and get what you need to done to be the best athlete, fighter, competitor you can, and take that discipline and put it into training.

Brandon Ballou: 'cause you're only gonna get good as. Hard as you train and that's in anything like you're, like, you could have all the talent in the world if you don't learn from the right people and train you. Yeah. You cap yourself at a ceiling. So if you're already an athlete and you got that discipline to put the work in every day, put that work into training and then you'll be on top of wherever you land.

Brandon Ballou: Whether that's a sport, an industry, a job, a hobby, you'll be the best at it if you train hard enough. 

Jimmy Lea: I love it. I love it. And of course you're gonna recommend the Institute for that Service Advisor training, right? 

Brandon Ballou: Yeah, absolutely. I mean, they made me who I am. How could, and I and I only got to attend the two day trainings and my brain was always swelling and pulsing.

Brandon Ballou: So I can't imagine the poor people that gotta go through the three day bootcamp 'cause they're gonna learn everything there is about it in three days and then come home and. Hopefully retain 10% of it, and they'll still be 10 times better of an advisor than they were before they went. 

Jimmy Lea: Oh, they will.

Jimmy Lea: They will. Whether you're new or experienced to come to the service advisor, training's worth every single penny. For sure. For sure. Brandon, if you had a magic wand question, what would you change in the industry? 

Brandon Ballou: I'd remove the label. That's been placed on our industry, far as the career, far as what people think when they bring their car into a shop.

Brandon Ballou: People don't think it's a lucrative career, whether you're a technician, advisor, manager, whatever. They'd rather you go be, you know, work from home, fill out a spreadsheet, do something along those lines, get a degree, whatever. Then same with when you bring your car to a shop. Everybody's like, oh, you know, they're gonna try and sell me something.

Brandon Ballou: They're gonna try and rip me off. They're crooks. They're, when that's not the case. That's such a small percentage and what the top 10 percenters, or especially one percenters in our industries make. If that actually got out there and people understood. How good of a career the automotive industry offers.

Brandon Ballou: I think we'd see a whole bunch of young people jumping for joy trying to get in. So yeah, if I had a magic wand, I'd remove the negative label that's been placed on our industry so people can actually see how amazing it is. 

Jimmy Lea: So true. It is an amazing industry, has treated us very well for many years and many years to come.

Jimmy Lea: There will always be transportation, which means there's always going to be a need for. Technicians one form or another, and service advisors and owners and parts people and all the above. It's all there. Well, thank you very much. Thank you, mark. Appreciate your insights, your input. You definitely know what the heck's going on with service advisors and service advisor training.

Jimmy Lea: Brandon, thank you very much. Really appreciate you being here and sharing your story, whether it's from Fight Camp to the front desk. Your story is proof that discipline, resilience, and service can win the day on any stage in any ring. Yes, sir. So thank you. Thank you very much. I really appreciate you sharing your story with us.

Jimmy Lea: Problem. Thanks for having me, Jimmy. Thank you. Thank you very much. We'll talk to you guys soon. There's a QR code here at the very end. Those of you interested in an analysis of your business, looking at what makes it work, what makes it tick, what advice can we give to you that will make all the difference in the world.

Jimmy Lea: There's gonna be a QR code here. It's up for about 30 seconds, so grab out your smartphone, scan this QR code, and let's see what we can do for you at the institute. My name is Jimmy Lee. Talk to you again soon.

April 30th, 2025 - 00:58:20

Show Summary:

In this episode of the Institute's weekly webinar, Jimmy Lea hosts Eric Joern, CPA and partner at Kaizen CPAs, for a deep dive into mastering shop financials. They tackle the anxiety many shop owners feel around accounting and taxes, encouraging transparency and strategic planning. Eric emphasizes the importance of daily metrics, consistent financial reporting, and leveraging tools like point-of-sale systems and financial calculators. The duo walk through a powerful profitability calculator live, showcasing how small improvements in technician productivity or parts markup can generate significant gains. They also highlight the value of peer accountability groups and ongoing coaching to drive real growth. The episode closes with insights into practical budgeting, reading balance sheets, and long-term business health monitoring.

Host(s):

Jimmy Lea, VP of Business Development

Guest(s):

Eric Joern, CPA, CMAA, AAM at Kaizen CPAs + Advisors: Advisory & Accounting Services

Episode Highlights:

[00:05:59] - Eric reassures shop owners: the goal is not judgment, but helping clients become better, more compliant taxpayers.

[00:07:44] - New clients often start with a 3-year review of tax returns to identify areas for correction or a clean slate.

[00:09:11] - Digital access to financial records reduces stress and eliminates outdated systems like shoeboxes of receipts.

[00:13:33] - The most important report to review regularly is the end-of-day or monthly summary report from the shop management system.

[00:17:34] - Common profit leakage comes from untagged parts, missed markups on sublets, and lack of shop process rigor.

[00:30:15] - Using a real-time business calculator, Jimmy and Eric demonstrate how small adjustments in markup or productivity impact profit.

[00:36:45] - A real shop example: a family business jumps from 7% to 24.9% net profit within two years thanks to Institute coaching and mastermind groups.

[00:44:55] - Top overhead costs (like rent, service manager salary, and owner compensation) must be managed for healthy financials.

[00:50:06] - Eric explains how to track where profit goes using balance sheets, emphasizing shareholder distributions.

[00:51:56] - Eric offers his shop financial trend tool to webinar attendees and encourages shops to reach out for help without pressure.

👉 Unlock the full experience - watch the full webinar on YouTube: https://www.youtube.com/watch?v=Iy_4KFidp3I

Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!

Links & Resources: 

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Episode Transcript Disclaimer

Episode Transcript:

Jimmy Lea: Good morning, good evening, good afternoon, or goodnight, depending on when and where you are joining us from today. It is a beautiful day outside. Glad we are here together. Those of you watching the recording, hit that like button, hit the share button.

Jimmy Lea: Make sure that you are a part of the institute and all the awesomeness that's happening over here as we continue to lock arms with you and elevate this industry. We don't wanna leave anybody behind, especially not you. So let's work together to make this awesome and amazing. In our webinar today, we are going to have a phenomenal discussion and I say discussion because I want you to participate.

Jimmy Lea: We are live streaming on YouTube. On Facebook and on Streamy Yard. So if you are here with us today, find that comment button, find that comment button, and put in there where it is you are joining us from today. Love to give you a shout out and say hello and recognize you for being here for this live event as we're talking today in our webinar.

Jimmy Lea: So in the comments section, go ahead and share with us where you are joining from today. Bobby joining in from Florida, Bobby Lambert. Bobby, thank you. Welcome. Glad you're here with us. Just got your advisor or manager signed up in the program. That's phenomenal. Thank you very much. Super excited for that.

Jimmy Lea: Chris Adams, spectra Auto, Frederick, Maryland. Oh, very cool, Chris. Glad you're here. Thank you. Crystal Taylor, easy Otto from Alaska. How about that? Alaska's in the house. We got the two extremes. Florida and Alaska both in here. Oh, that's awesome. Thank you Crystal for being here. Shout out to those of you who are putting your locations where you're joining us from in the comments.

Jimmy Lea: Love to know where you're joining us from. So, thank you for being here and those of you watching the recording, we do webinars every Wednesday, 10:00 AM Pacific, 1:00 PM Eastern every Wednesday. There's knowledge, information, insight to help you into the information you need, the inspiration you need, and.

Jimmy Lea: Now we turn it to you. It goes into the implementation that you will do inside of your shop to make things awesome. Amazing. Take it up to that next level. Last and final shout out to Shayla Costa. Does that mean Daniel's there with you too? Shayla, San Francisco, Marvin County, California. Oh, Marin. Marin.

Jimmy Lea: Marin County Small print. Is Daniel there with you? Good to have you with us. Glad we are here today and I am excited to welcome today. And Shayla says, yes. Daniel's there. Thank you. Welcome. Today, Eric Jorn from Kaizen, CPA. Eric is a CPA. He is an awesome member of the industry, an awesome member of the family, one of the certified vendors with the Institute for Automotive Business Excellence.

Jimmy Lea: So to you, Eric, good morning. Good afternoon. Thank you for joining us. Glad you are here today. 

Eric Joern: Hey, good. It's good afternoon for me and I think it might be good and morning for you. And it's, it feels like a normal Wednesday, seeing somebody from Alaska in Florida in the same day. I don't know if you can get more polar opposites.

Jimmy Lea: I, I love it. I love it. I, and you talk about traveling halfway across the world. I think of like Cindy Ries and Mike Somar and them traveling from Alaska all the way to Florida for the summit. 

Jimmy Lea: Yeah, you were at our summit conference. That was awesome, wasn't it? 

Eric Joern: Absolutely. It was a really great time.

Eric Joern: Beautiful resort. I'm looking forward to that again. 

Jimmy Lea: In 2027. Yes, 27. I had to do quick math there 'cause we go off years of STX, so we are the odd years. They're the even years. Yes. STX even years. So the in 26 STX will be in Washington, DC. Looking forward to it. We should see you all there too. Yeah, everybody needs to be there.

Jimmy Lea: So, yeah. We haven't decided a location for Summit yet, nor have we decided a date, but we have a pretty broad, wide field of options that we are looking into, so we're quite excited once that announcement happens, you'll probably hear it here first. Awesome. 

Eric Joern: We're very excited. 

Jimmy Lea: Yeah. Yes, Eric? So I've been working with my CPA taxes came around.

Jimmy Lea: We all had to do our personal taxes. We had to do our corporate taxes, you know, which were due in March and our personal due in April. There's a lot of fear trepidation. Anxiety about coming and talking to somebody like yourself, A CPA, who's, you know, you've gone to school for a long time, you've got all the certifications.

Jimmy Lea: There might be some things about my business I don't want to share, or I'm scared to share or embarrassed to share. Is there any sort of a guideline or anything that you provide to your clients that might be. Helping them on this journey of not being afraid to come and talk to a CPA. 

Eric Joern: Yeah.

Eric Joern: Yeah. So I mean, number one, right? Let's get past the fear of the sins of the past, right? Maybe some, something's a mess. At the end of the day, we're happy turning somebody into a better taxpayer. I. That's number one for us. If we can turn you into a better taxpayer, more compliant, get you on the straight and narrow, that's a win in our book.

Eric Joern: We're not gonna judge you for your, for something that's happened in the past, and we understand the reality of running a small business, right? We're busy every single day as a, one of the best things that happened to me is becoming an A partner in the firm so I can understand all the aspects of the day-to-day operations of a business and how demanding that is and how easy it is to.

Eric Joern: Get off track, deal with whatever you have to deal with. So when we start working with small businesses, our goal is to take the burden of all these obligations when it comes to generating a monthly financial statement, paying your sales tax, running payroll even filing a, even filing your tax return, and gathering all those documents.

Eric Joern: And we wanna take as much of that burden off your plate by creating great systems and processes to really make that make that. Not a interruption into your day-to-day of running your business. 

Jimmy Lea: Yeah. That's so true that helps. It reminds me of those tiktoks you hear where you see 'em and they're like, we listen and we don't judge.

Jimmy Lea: We listen and we don't judge. And so that, that's a lot of your position is listening to where they are talking to 'em about what they can do to. Be in a better position for upcoming years. Yeah. So when you bring on a new client, do you do a a three year review with them or do you just start fresh from today?

Eric Joern: Yeah. Yeah. So, all depending on the client's particular situation. So we all start with what we call a discovery call even before you become a client, to really kinda set the stage of where you're at. You know, maybe you're unsure about how things were done in the past. We usually ask for three years of tax returns.

Eric Joern: If you're able to provide it, only because that gives us a little bit of an insight of your journey. And if we think there's things that we can go back and fix, great. If not you know, we'll start from either the last filed tax return or, you know, wherever we even sit today. And then depending on the quality of your books, and where you kinda left off, we might make a decision of, Hey, we need to start fresh, or, Hey, we're gonna go fix what has happened in the past and kind of bring you along to up to current. One of the best things that's happened though is we've moved into this digital environment where a, you don't even have to drive over to.

Eric Joern: Your accountant's office and drop off paperwork and even paperwork is becoming a thing of the past. We're just getting online access to everything we can so you don't have to carry the burden of, I gotta go fit, make sure I have all 12 of my bank statements for the year, my credit card statements, here's my box of receipts, here's here's my printed out repair orders.

Eric Joern: It's a whole, so you don't 

Jimmy Lea: get shoe boxes of receipts anymore. 

Eric Joern: Oh no. Those days are long gone. Those tho, well, I shouldn't say long gone because we come across shops that don't even use shop management systems at this point still, which is close. 

Jimmy Lea: Wow. 

Eric Joern: I think there's things that they're trying to accomplish by not having it, but yeah, I mean, we see, we still see everything under the sun.

Eric Joern: But especially when we're working with shops that work with, associations like the institute I mean, they're already leg up ahead of what we see just out in the wild. Yeah. On a regular, recurring basis. 

Jimmy Lea: Yeah. There's a lot of point of sale systems that we work with, and it's interesting to hear their numbers when they say, you know, anywhere from 30 to 50% of our new customers coming in that are adopting our SaaS, 30 to 50% are coming from.

Jimmy Lea: Paper and pen or QuickBooks. So they're not using a point of sale system, which really does help them to optimize that the markups, the parts look up the matrix. It really does help with that. Many shops aren't doing that. They're still pen and paper or they have a QuickBooks or Quicken or something like that.

Jimmy Lea: So, absolutely. Yeah. I'm excited to hear that, that you meet the shop where they are. Yep. You're there to meet them where they are. You don't judge. Here's the situation, here's the facts, here's the numbers, here's the truth. 

Eric Joern: Absolutely. 

Jimmy Lea: And here's what we can do moving forward. We've got a couple of things we need to take care of and we're moving forward and here we go.

Jimmy Lea: That, that's wonderful. I and I hope that everyone. All my friends and family and everybody that's listening to this. And by the way, dad, no more shoebox with receipts. Okay. Eric, you heard it? Hear from Eric. He 

Eric Joern: doesn't want it anymore. My, my dad still tries to bring me his stuff in a plastic baggie, and I finally got online access to get everything.

Jimmy Lea: Oh my gosh. Is it That's, so your dad and my dad, same cloth? And yeah. So Dad, no more shoe boxes. So, so here we are. And thank you. I feel just even this conversation with you right now, it, the anxiety has just dropped so much in being able to talk to you. I think you are amazing.

Jimmy Lea: I think you do a phenomenal job in the automotive industry especially working with my friends and my family and I consider the automotive industry my family. I know you're not working with my family, but you are working with my family Absolutely. In the greater whole. So you've got information we wanna share and talk about here today.

Jimmy Lea: Eric the time is yours. I'll interrupt you with questions, comments, concerns, as we have those questions coming in from our audience for the live, we'll ask those questions. Go ahead and put those in the comments if you've got questions for Eric. Anything CPA, anything accounting wise?

Jimmy Lea: Let's ask those questions of Eric and as we go along, Eric, I've got a pretty curious mind, so you're probably gonna say some things that just trigger a wild hair. Absolutely. 

Eric Joern: I'm looking forward to it. And please, from the crowd. Any questions that you have specifically is only gonna help not just you learn and probably solve an issue, but it will help everybody else.

Eric Joern: We learn better from example. And you can listen to me talk and ramble straight through this whole thing. But if you bring your actual real life situations and we solve them today on this call, that's gonna be a win for everybody involved. 

Jimmy Lea: Love it. Let's do it. Let's solve the world's problems right here.

Jimmy Lea: And anybody here live will be able to cure. All ills. It'll be a successful lunch hour for me if we do that. Yeah. Oh, absolutely. Absolutely. Oh, one more. Shout out to Andrew Knutson joining us from Long Island. Andrew, and his wife for having a baby in about 50 days. A little girl. Oh, congrats. His first, congratulations, Andrew.

Jimmy Lea: Okay, so you, are you gonna share your screen and 

Eric Joern: Nope. There we go. 

Jimmy Lea: There we 

Eric Joern: go. Nice. All right. Yeah, so what are we talking about today? It is Mastering Your Shop's financials. Right. And one of my goals for today is to kind of demystify the complications that everybody has around financials, right?

Eric Joern: We sometimes pull up p and ls or balance sheets and it. It's talking in foreign language. It's three miles long. We don't know where to start. So our goal is to simplify this and let's say, hey, if I need to look at my financials once a month, I'm a busy shop owner. I got five minutes to look at it, and I need to answer a handful of questions.

Eric Joern: I wanna be able to walk away from today and answer those questions. So what questions are we generally looking to answer? Well, let's start with just, Hey, what is the most important report that I should be looking at on a regular, recurring basis? How is my business performing? Is it performing the standard?

Eric Joern: How am I tracking my spending? Right? Do I need to have every vendor broken out? Do I need to analyze every little thing? Hey, I had some profit, but it's not in my bank account. Where's my money going? And then overall, is my business healthy or am I in a good spot? Am I in good shape? So we're, our goal today is to figure out how to answer those five fairly simple questions utilizing your financial statements.

Eric Joern: But I'm gonna start with number one thing that we are looking at and we should be looking at probably even on a daily basis. Depending on the shop management system you're using, everybody's got their own flavor of it. We work with a lot of shops that run on tech metric. Their end of day report.

Eric Joern: It's great. It's got a litany of information and the decisions that we make on a day-to-day basis are. Almost as important as the long-term decisions we're making. But the one report I should be looking at on a regular recurring basis, and I think it's most important, is indeed this end of day type of report.

Eric Joern: Some type of monthly summary or daily summary of everything that happened in my shop and what are we gonna focus on inside of those? A lot of these great metrics that we have now, this is a whole year for a shop as an example, but it gives you some snapshots, right? We have total ros, so that gives us our car count.

Eric Joern: We could take a 2171 total RO count, divide that by 12. Right? And we're touching about 200 cars a month, just a little under that. We have our average repair order, 5 64. I think Jimmy and I had a discussion and we think institute members have a much higher a RO number than that. One of the things I really like is how many hours did we sell?

Eric Joern: How many hours did we sell in the month? Because there's important metrics that we should be thinking about, right? What is my actual cost per labor hour sold so I can price my labor correctly? That's super important. The send a day report or these summary reports give you those information, right?

Eric Joern: In a snapshot, what's my effective labor rate? How different is that from my door rate? How many, how, what's my gross profit per hour? What are my sales per hour for operating in operating my business and per hour sold? All these metrics are deep dives that you can get into to really move the needle.

Eric Joern: I. Another section we have here is a profit summary. We can load our shop management system if we are able, if we have good financials, we can come back to our shop management system and get really good data on a day-to-day job to job basis. And what happens, what, where can we make the most immediate impact?

Eric Joern: If we understand what our numbers should be while we're writing our new repair order. So we're gonna look at things like, Hey, what are my labor sales? What kind of discounts am I providing? What's my cost, my labor cost? Do I have the right cost in there? It. And again, we wa we talked about that.

Eric Joern: Take your total labor for the year for your production team, technicians and anybody else that's assisting in generating those labor hours. Divide it by those total hours sold. That should actually be your cost. Not the 35, 40, $50 an hour you might be paying as a wage to that technician. Parts costs.

Eric Joern: Our number one the money. One of the number one opportunities we find with shops is parts leakage. We're not tagging parts on repair orders. It's generally not even that the parts are stolen, broken, misused, comebacks, warranties. It's actually just we're making an administrative mistake of not tagging a part on a repair order, and not only do you eat the cost of the part, we lose the opportunity for that markup and margin that it comes with that part.

Eric Joern: Same thing with sublets. We might add a sublet on a ticket if we don't make sure, hey, we knew that vehicle got towed in. We gotta charge that client for that tow, including my markup. It's the same thing with missing parts on repair orders. And are those at and are those all happening? I. At the right margins.

Eric Joern: Right. I see on this example here, we're at a 46% parts gross profit margin. And that's gonna be all the way on the right, the second second line down 46% gross profit on parts. I know I would not be happy as a shop, right? We're looking at 50, 55% as our goal rate. Well, that tells me I have real time data.

Eric Joern: Hey, I'm gonna tinker with my parts pricing matrix. I'm gonna go in there and adjust some rates, and then I wanna see those immediate results. If we wait for the financial statements to make some of these immediate impact decisions. We actually we're, we're leaving profit on the table from that for that entire month from the date you make the decision till the date you close your books.

Eric Joern: So a lot of times that could be a whole month of. Extra gross profit. Say it's 5% that you can make that difference and you're doing a hundred thousand dollars a month in parts sales, right? That's five grand that you're missing out on because we're not doing a daily analysis. And this is where we would want to spend our time to do these day-to-day analysis.

Eric Joern: This is kind of just a special shout out. This is a nuance that we see. We coach a lot of shops on using some functions within their shop management system, and for us it is, Hey, how do I handle these weird transactions where I might not just get paid by a credit card check? Where it might be, Hey, I do have an internal, vehicle that I serviced, I wrote up an ro. How do I do it? Do I just not write up a repair order? Do I ignore some of the formalities of it? And we say, no, we wanna see all that data tracked, and we do another payment type to, to move that onto the p and l in the appropriate spot. So we do track the appropriate costs.

Eric Joern: So we use these other payment items. A big coaching area that we do with new shops when they start working with us is we want to direct the items from your shop management system to the right home on the p and l. Super important, but now we want to ask, we want to ask and answer the question. We know the report.

Eric Joern: We want to focus on the shop management system. It's the lifeblood of the financial statements for your shop. We're pulling as much data as we can from your shop management system to do accounting for your shop because it is gonna give us the most real time, accurate data possible. Now we gotta answer the question, is my business even performing?

Eric Joern: How do I look at my actual p and l and my balance sheet and know that, hey, my business is operating in the way it should. We're looking at five numbers. We're gonna keep it simple, right? Because we gotta start somewhere. Let's keep it simple. We're gonna look at five numbers. We're gonna look at our total sales.

Eric Joern: We're gonna look at our cost of goods sold. We're gonna look at our gross profit. We're gonna look at operating expenses and we're gonna look at net operating income. These are five numbers we want to track every single month to see if we're getting where we want to be.

Eric Joern: And there's a simple formula to that. You know, we get a lot of questions around, Hey, what is, what's, what should we be doing? And there's two ways you can answer this question. What does the industry do and what do we want to do? The industry normally says, Hey, if I'm running a loaded, which means I'm including things like benefits and payroll taxes onto my labor costs.

Eric Joern: Probably service advisor up in cost of goods sold as well. I'm shooting for a global 50% gross profit, 30% in operating expenses, and 20% net income, right? So this is our three goal criteria. If I'm doing unloaded, meaning I'm only focusing on. Tech wages without attaching benefits or payroll taxes.

Eric Joern: Then we're shooting for a 60% with 40% overhead and a 20% net income. Now these are, this is just a formula to get to a 20% net. Jimmy and I were talking about this earlier, that, hey, what happens if I have a different goal, right? Maybe it's 40%, or maybe it's just 10% and I wanna have a modest living. Maybe I want to take a higher paycheck.

Eric Joern: How do we, and then how do we get there? What steps can we take to make this formula work the way we want it to work? The cool things is the institute's developed a tool that we can actually back into the gross sales and all the various other input factors to get to this formula. Jimmy, did you want to jump in and, 

Jimmy Lea: Go through that?

Jimmy Lea: Yes, Eric, we do. We have a great calculator. I'd love to throw my screen up there so I can share with you this business calculator and those of you who are here that are in the audience, if you want to volunteer your numbers, happy to put them in here. For you, it could be your dream numbers, it could be your actual numbers.

Jimmy Lea: It could be, oh, these are the numbers of a friend. Oh, I have a friend who has. This. So the idea here is, and we'll go through this, Eric, I was grabbing some numbers that you were saying in your little sheet that you were talking about. Perfect. But let's say what's the salary that somebody wants to pull?

Jimmy Lea: What is your salary? Let's say it's 

Eric Joern: $140,000. Yeah. Well first if you're pulling, if you're, most shops are gonna be an S corporation. We're pulling $140,000 salary. We're gonna have a talk about if this is, if that's the most tax efficient way to pay yourself. Bingo. Yes. And I think you guys had a guest on there that, that hit on that topic.

Eric Joern: But hey, let's control our reasonable comp and maximize profits as an scorp. Okay. Just had to do my tax plug only because that's the whole other side of the brain that we operate 

Jimmy Lea: on. Hey, and I love it. I love that you said that. So do we want to adjust this 140? Should we make it different? Yeah, let, 

Eric Joern: let's bring it down to even $80,000.

Eric Joern: And I'll just say there's never been an IRS court case that said. Anything under eight or anything over $80,000 has not been a reasonable salary. 

Jimmy Lea: Yeah. And to replace an owner in a business to do everything that an owner does, it's probably gonna cost $80,000 a year to do that. So that's a great number, and I love that net profit.

Jimmy Lea: What do we want to profit out of the business? What do we want the business to profit 

Eric Joern: $200,000. I think 200,000 is fair. $280,000. It's pretty good. Take home. You know that from a, 

Jimmy Lea: yeah, 

Eric Joern: And on a million dollar 

Jimmy Lea: business, if they're doing a million a year, 200,000, that's our 20%. It's 20%. Three weeks vacation.

Jimmy Lea: We'll keep that. We're a five day work week. Anybody want to change that? Let us know. Put it in the comments by a five day work week. That means you're open for approximately 250. Days per year, and then there's a couple of holidays to consider. Yes, those have to be taken out dah. Yeah. We got you.

Jimmy Lea: Service manager pay 120,000. We can change this. What? What's a good service pay? Eric, what do you see out there in the industry? And comments? Comments. Anybody wanna put in? Usually we're trying to.

Eric Joern: Yeah I'll let the comment, we'll give it another five seconds for somebody to put something in the comments and then I'll give you my opinion. 

Jimmy Lea: Gimme your opinion. They're not writing anything. 4, 

Eric Joern: 3, 2, 1. All right. We're gonna go with what would be 10% of revenue. So, so a hundred thousand dollars, which cover your service advisor and or service manager cost.

Eric Joern: If you have a full blown service manager and they're not writing service, maybe it might be a little more, but we'll go with that. 

Jimmy Lea: All other operating fixed expenses we're in the 350,000 range. This includes putting minus your salary, what's minus your service manager. So this is your rents and your utilities and your licenses and everything else.

Eric Joern: Yeah. So that means we're gonna include all that ex 180,000 would be inside of our, that would all be inside of our overhead bucket. This is our overhead bucket. We talked about trying to achieve a 40 40% overhead bucket with all those included. So we might actually, that might only be another 220,000.

Eric Joern: Two 20. 

Jimmy Lea: Happy. So total expenses were right around $600,000. 

Eric Joern: Yep. 

Jimmy Lea: Okay, gross profit. On your sheet that you were shown, you showed a 46%, so I just grabbed a hold of that and threw it in here at 46. In that scenario, in that shop that you were looking at, I know it's all fictitious numbers, but what was the car count?

Jimmy Lea: Do you remember as you were looking at that? 

Eric Joern: So, let's see. We'll go with daily car count. Daily car count, and how many days were open. 5 5, 2 50. Two 50 divided by 52. We're open. 4.8 days on average. You ask an account, you ask an accountant to, to come up with a number, right? You know, I'm gonna want a pre precise number here.

Eric Joern: Come 

Jimmy Lea: up with a number. Doesn't mean have your calculator 30, say 

Eric Joern: 36 days. 36 days or 36 cars. 36 cars a day. 

Jimmy Lea: Okay. All right. So effective labor rate from your scenario that you're running. I, I. The font was a little bit small on my screen, so I couldn't see it. Yeah. Let's, but you talked about an effective labor rate.

Jimmy Lea: I did grab the average repair order, $584. 

Eric Joern: Perfect. We have that. And then our how many 

Jimmy Lea: texts is this? 36 car count. You must have six texts. Let's go with six. I was gonna say six or seven. Yeah. Oh, but you could do it with five. Oh my gosh, look at that. You could do it with four. All right, but we'll keep it at five.

Jimmy Lea: Tech productivity is at 71% do with that scenario. What did you have? Because 36 cars a day with five techs, you're looking at six and a half cars per tech. That's a lot of, that's a lot of cars. That's what I'm thinking. Comments. I need somebody to pipe up here, Andrew. Shayla, Tommy, Daniel, Chris, Bobby.

Jimmy Lea: 36 cars per day. Five texts. Too much. Too little. Let's 

Eric Joern: bring that down to the 36. Let's do the car count. Let's bring it down. Yeah, let's bring that down to nine per. Nine total. Nine per day. Nine per day. All right. If I do, nine times two 50 gets me my 2250 of cars for a year. Yeah, that sounds a little bit closer.

Eric Joern: Our effective labor rate was 1 24 15, so, or 1 24 

Jimmy Lea: current ro a ro. Average hours. Okay. Number of techs. We've got five techs. 

Eric Joern: Yeah, and I think we're gonna bring that number even down to probably three if we're doing nine cars a day. Okay. 

Jimmy Lea: 71% productivity. I'm at most shops that I'm talking to. We discover that they are somewhere between the 50 and 60 range for this exercise.

Jimmy Lea: We'll keep it at 71 and then we'll show you some really cool things that we can change here. Thank you to Daniel, Shayla, Chris, they said too little texts or too many cars. Yeah, and I agree. So I'm glad we changed that. What's your highest paid technician hourly rate? I'd love to hear that in the comments, but I know that you work with.

Jimmy Lea: A lot of shops, Eric. Yep. What's the hourly rate and 

Eric Joern: Yeah, before loading and adjusting for productivity. $50 an hour, seems about right. 

Jimmy Lea: Okay, cool. We'll keep that right there then. And we'll also keep our parts labor and we'll keep this right there where it is at 48. Perfect.

Jimmy Lea: So what we're saying is, if you want to do this. You want to be selling in this range, you can do what you're doing with 3.3 technicians. So either you need to increase the productivity a little bit or you need to increase your profit margin just a little bit. So if we let's play with a couple of numbers here really quickly, because you were talking about getting to a 58, even a 60.

Jimmy Lea: Totally agree with that. If we adjust this just to a 52 notice here that you don't need. An additional technician, you're able to do everything inhouse just by adjusting the profit margin, adjusting your parts markup, your parts matrix. You're able to hit all these numbers. 

Eric Joern: Absolutely. And that's a very simple, I love it.

Eric Joern: Very achievable. 

Jimmy Lea: Yeah. Just like you were talking about that $5,000 that you're missing out on one simple, slight little adjustment. Okay. Let's look at a couple of other things here too. What if we were to, and this is something that we talk about at the institute, and I'm going to use the average. So we have two averages.

Jimmy Lea: Which one should I use? In our a, in our advisor group, our a PG, the average of average repair order in our a PG group and our advisors group, the average repair order is $1,100. Within our coaching and our group member groups, it's anywhere from eight 50 to nine 50. So let's go conservative.

Jimmy Lea: We'll go with the eight 50 range. So anybody that comes in with the institute, you should be operating at this level. That's the average of what is operating at the institute right now. Eight 50. Phenomenal. Look at that. It brought down the number of technicians even a little bit more now. What if, what else should we adjust?

Jimmy Lea: Oh, let's adjust the productivity. Let's make our technicians a little bit more productive. 80% productive. What do you think, Eric? I think that's reasonable. Oh, it's totally reasonable. I. Look at that. Look at that. Brought down the number of additional technicians that would we'll need. We're down to 2.6. We gotta find a way to get a 0.6 technician.

Jimmy Lea: So here's what's interesting, Eric. By being 80, only 80% effective, we're still losing $101,000 per year. 

Eric Joern: That is a whole lot more money than anything that I can find in the operating expenses. Yeah. On this p and l right? We have 220,000 of other expenses. Yeah. Or we can focus on driving productivity and find a hundred, $1,000.

Jimmy Lea: 101. So let's adjust this to, let's adjust this to a 90% efficien productivity. Look at that. We just picked up $55,000. Huge. Huge. Now now this will blow your mind here. When Cecil owned his three shops, when he was managing the shop in mountain View California, his technicians were operating over a hundred percent.

Jimmy Lea: They were over 120%. In fact, I think it was 121. So let's just look at, so the reason I say that is a hundred percent efficient is possible. Absolutely. So let's look first at a hundred percent efficient. You could totally even lose a technician and be just fine. Alright let's operate at the the 115.

Jimmy Lea: You just picked up another $52,000. Oh, 

Eric Joern: we just found $150,000. Just finding moving one 

Jimmy Lea: needle. One. One. Yeah. J just our technician proficiency. So our technicians need training. Our technicians need to know what they're doing. We need to look at our shop process procedures in-house. I've seen shops where the filters are way over on the other side of the building, and your quick lube bay is way over on this side of the building.

Jimmy Lea: The tech has to go back and forth. Dude's walking five miles a day. 

Eric Joern: Absolutely. 

Jimmy Lea: No, let's bring it all over. 

Eric Joern: So look at your in-house. Yeah, I mean, think about right, are what? What is everybody's number one fear right now? Where am I gonna find my next technician? How am I gonna develop my next technician?

Eric Joern: Yeah. Look at everything that technician has to do. And can that be done by somebody else in the shop too? What? At what? Point in time, do I not need a technician to perform a function that they're performing? Oh yeah. And I'll say for some efficiency things, right. There might be things like when they're compiling an estimates and you need part, you need a part list.

Eric Joern: Yeah. And they're the ones actually on the physical card. You know? Can a service advisor use a standard guide and compile that? Sure. But. That's a probably a fine line, but is there anything else? Moving cars, right? It's the reason why dealers use Porters. Yep. And another life. I wrote Service Now we were spoiled.

Eric Joern: This was during the both during the unintended acceleration problem for Toyota and their Tacoma Tundra right frame rot issues. But we had technicians that were at over 200% productivity because we streamlined as many processes as we could. 

Jimmy Lea: Wow. Yep. That, and that's a lot of porters running stuff around.

Jimmy Lea: So the technician is more, more productive. I love that. You know what, that reminds me of a story I want to tell you about a shop that came to the institute and said, Hey, look, we've been to a few different training companies and every single one of 'em seemed to hit on these three things. And if you look at your car count, increase your car count, increase your average repair order, spend more in marketing.

Jimmy Lea: Yeah. And the shop came to us and said. Look, if that's your jam, that's cool, but that's not our jam. That's not what we want. That's not what we need. We need shop efficiency. We need to be more productive in our shop. So don't talk about these. We've got a solid average repair order with $650.

Jimmy Lea: We've got a solid car count. We've got a solid. Marketing plan. I need shop efficiencies. Great. Love it. You are in the program, so he comes in a family business. The success or failure of the family depends on this business. It cannot fail. That's some pressure, right? Absolutely. He comes in, he and his sister, and they're working the system.

Jimmy Lea: They're being coached and trained. Within nine months, they go from a 7% net profit. Did I tell you the 7% net profit part? Yep. 7% net profit. They couldn't break that. He's like, I just can't break it. What can we do within nine months? Got to an 18% net profit. Wow. Boom, boom. Right? The natural progression of him coming into our coaching and training program is to progress them into the GPG group.

Jimmy Lea: It's to a group environment, a mastermind. This is where you have a composite partner that keeps you accountable. So he moves into. The group environment goes to these meetings and goes and visits a shop, and they come away with an action list for that shop owner. 200 different things that you need to do on your shop, Eric, to make it a better, more attractive for the consumer, for the public to come in and purchase from you.

Jimmy Lea: Love it, 

Eric Joern: love it. And another shout out to that group environment. You know, we, as a firm, one of the best things we ever did was. Join an association that has, we call 'em financial review groups. Very sim this is your mastermind groups. These are your 20 groups. We have our 20 groups as well.

Eric Joern: So, and one of the best things we do is we go out, we meet, we spend a few days together, we come away with our long list of to-dos that our co o hates when we come back with that list. But it's a it's what moves us forward, right? It's one of those things that, Hey, what is working for your shop that's not working for mine?

Eric Joern: We're all doing right things and wrong things, and when we can com compliment them. One another. That's how we all move forward together. 

Jimmy Lea: Oh, 

Eric Joern: I love it. 

Jimmy Lea: I love it. I love it. I love that you're in a mastermind group for CPAs. That has to be the most riveting meeting you go to. Yeah, that was sarcasm. I was being sarcastic.

Jimmy Lea: Sorry. 

Eric Joern: Ironically, as a group of CPAs, we focus so much less on numbers and everything else because we're all good with our numbers. Good, okay. It's everything else that's challenging for. Oh, it's 

Jimmy Lea: a good meeting. So let's get to the end of the story here, because this is where I want to tell you that group environment that you speak so highly of.

Jimmy Lea: That we tout as great. This is where we want you to move into, because this is where you have that peer-to-peer accountability. This is where you really move the needle. You already heard we moved the needle 7% to an 18% net profit. Yep. Huge, solid. That's a changing event. It really is Now.

Jimmy Lea: Now nine months in the program. Now they move to the group environment. Now they've been in the program now about roughly a year and a few months. Let's call it a year and a half, record months, 24.9% net profit. 

Eric Joern: Huge. What? And that's better. The, we saw those industry averages, right? That I put up under the formula 20.

Eric Joern: That's above it. It's above 

Jimmy Lea: it. 

Eric Joern: It's above 

Jimmy Lea: it. 

Eric Joern: A year and change. And this just somebody 

Jimmy Lea: that came into the program a year and a half ago. Wow. Let's see this, I gotta think now, this September, ooh, I think it's this September. It'll be two years that this person has now been in the program. This family, I'm gonna call it a family because it's not just him it's.

Jimmy Lea: It's her as well, brother and sister and family. They have nephews, nieces, sons, daughters that are all working in this business, plus the additional family that you adopt because you choose to bring them into the family. They are part of the. Ship. They're part of the machine. They're part of what makes us awesome and amazing and takes us out to that next level.

Jimmy Lea: So a big, huge shout out to this shop, and he's a very dear friend. And I don't know, I'm not gonna name him in this environment, but if you want to know, come to me privately and we can talk about it. 

Eric Joern: Awesome. Awesome. I hate after all that excitement. I hate to drive us back to a PowerPoint, but there are a few things that we still want to drive home here.

Jimmy Lea: Well, let's do it. Let's drive it home, because even though this is the PowerPoint, even though this is the numbers, this is where we wanna put our focus and attention so that as a shop owner, we know, okay, do I have money in my pocket? Well, that's the wrong way to look at this. We gotta look at the long term.

Eric Joern: Absolutely. Yeah. So is money in your pocket? Absolutely. We have the formula, so whether or not we choose one of these industry standards, or we actually go through that exercise, we come up with our numbers, right? That that calculator is gonna give us what we need to hit for gross profit percentage, what we need to hit for operating expenses, to achieve the net income, the lifestyle the business infrastructure that we want.

Eric Joern: So we come up with those three numbers. We're just going to every month, what's our goal? Hey, are we hitting our goal? You know, we have our revenue number based on that target that we had. Were we above or below it? Are our cost a good sold where we need it to be to hit that number? Right? So in this case, this is just pulled right off of a QuickBooks p and l to snip shots of it.

Eric Joern: Now I, one thing, one downside with QuickBooks online, they won't do nice things like, Hey, I'm gonna calculate my parts costs off my parts sales to see how that corresponds back to my goal for parts margin. But we're gonna look at that gross profit amount, right? Is that 60, in this case, 64% gross profit?

Eric Joern: We're pretty happy with that number. How are we doing as a whole? Our part. So we, you could just take a little Excel sheet and just drop those few numbers in there, right? And we're talking again, five numbers. That's it. What are our parts sales? What are our tire sales? What are our labor sales?

Eric Joern: What our sublet sales shop, supply sales? And I know those, fortunately for those in California, you can't participate in that program. But we have parts costs, we have tire costs, we have sub labor costs, and we have our sublet costs and shop supply costs, and what are our gross profits and what do they aggregate to, you know?

Eric Joern: So when we say that 65% was at 55% under that 60% goal, I. Which, which category do we need to work on? Right? Maybe it's our parts sales. We go back to the parts pricing matrix. If it's labor, we go back to our efficiency. All the things we talked about with labor efficiency, right? That was moving the needle more than anything, right?

Eric Joern: Even more than a parts pricing matrix or whatever other costs we can carve off off the business. Maybe we're missing out on some sublet markup. Maybe we're missing out on sub shop supply sales now. Again, this from a gross profit standpoint, I'm pretty happy with how this p and l shook out.

Eric Joern: What are the other items we're looking at? What's our total expenses? Remember we talked about 40%, and that's gonna include all those overhead items. Also include the owner salary. Also include my service manager's salary to hit that 40%, and that's how we end up with a 24% net income percentage. Huge, and it's simple, right?

Eric Joern: Those are our formulas at least from the analyzing the numbers standpoint. It's simple. The complication is going out in execution. How do we drive those labor efficiencies, right? We wouldn't be able to hit this 24% without having our labor gross profit at 76% without hitting our parts sales. At 53%, we have to focus on our parts pricing matrix.

Eric Joern: This is our labor efficiency. Bringing the right cars in the door with the right a RO, the right gross profit percentages.

Eric Joern: And here's a breakdown of some of their largest overhead items with inside of that 40%, there's three items that we probably might wanna spot check inside of our overhead operating expense account. It's usually gonna be our three biggest items, right? Because that's the thing, you know, we can go through and we can beat up our uniform vendor, we can beat up our insurance provider, we can beat up our accountant CPA to help reduce some costs.

Eric Joern: Probably those are representing a fraction of a percent of your total p and l. We need to focus on these big heavy hitting items, right? What's our rent and marketing? Are we, you know, do we have enough? And that's the truth teller, right? Is do we have enough cars coming in the door to justify our spend on our space and bringing those cars in the door that tells us when we have a revenue problem, more so than a cost control problem, we need to make we, if we have.

Eric Joern: Four walls that cost us x, we don't really have an option to move the shop. So that's when we know we need to drive more revenue. Is our service manager percentage, is that in line? Right? Are we too heavy on the front end of things? And then, hey, in this case, they're just taking the most comp out of this deal.

Eric Joern: So their three top overhead expenses representing half of their overhead load is. What they pay their service advisors, what it costs for their four walls to bring the cars in and to compensate themselves to hit their financial goal that they have.

Eric Joern: So high level we talked about a few, just a few numbers. Sales. Did we hit our sales goal? Did we hit our cost of goods goal? Absolutely. Our total cost of goods sold was 36%. Our goal was 40%. We were under by 4%. Our operating expenses, our goal was 40%. We hit 40%. We're right on target. Our net income our goal percentage for that was 20%.

Eric Joern: We hit 24%. All these just pulled right off the QuickBooks p and l. Super simple. I would keep a spreadsheet with those five metrics. What's my goal? What's my actual, and what's my result?

Eric Joern: Now, a lot of times people ask, Hey, where, what about where I'm spending other parts of my money? You know, how do I control costs? How do I not let that creep out and get outta hand? How do I not let my overhead costs get outta control? Now you can. I analyze and you can look at what you pay your vendors every month and really deep dive and spend the time on that.

Eric Joern: In my opinion, time is better spent in actually setting a budget. What I'm willing to spend in those categories to hit that 40%. Right. The more we plan, the more we can prevent outrunning things running into issues. We're gonna actually create a budget and say, this is what we're gonna spend. And now we have, now it's our job to hold ourselves accountable every month to look at it.

Eric Joern: So I might look at a budget to actual and right, this is the first layer of, Hey, I'm gonna deep dive in my financial process. But creating a budget really should be your first. The first avenue you want to go. If you need to find a way to control costs. Because if you set a plan and you hold yourself accountable to it, that's what is going to prevent you from overspending and move the needle.

Eric Joern: So that's something I might look at is what's my actual to budget? You can build that out in QuickBooks Online. You have to have the upside subscription for it, the expensive one. Or you can just export 12 months of p and l to Excel. And then change your numbers, what you want 'em to be and drop in the other one.

Eric Joern: We have templates for that. We do that all the time with our clients and we actually even service some shops in a, what's called a fractional CFO seat that might actually, that will, we'd actually create help you come up with this plan in depth, create that roadmap, and then hold you accountable on a biweekly basis for that.

Eric Joern: Another question that we have that we answer is, I had profits. Now, where's the money? I hear the term cash flow statement thrown out a lot. Now, QuickBooks has got a function for a cash flow statement. That statement comes through. In a way in which only those who had to spend four years going to school, actually five to be a CPA and go take all these egregious exams to understand where it talks about investing, cash flows, debt service, cash flows, all these different items.

Eric Joern: And in reality, you know, for us on a day-to-day, month to month basis, it's not practical to look at that and interpret it and be educated to the point where we need to understand that particular rapport. And I don't think it's gonna answer the questions that we want to answer. We'll, let's do it even in an even more simple way.

Eric Joern: We're gonna run this balance sheet report, so at the end of the month into the prior year, and we're gonna display columns by year. That's the important part when we do that. And what this will return us is a. Balance sheet that shows us the prior year balances. So what's in our bank? What do we have for fixed assets?

Eric Joern: What do we have for other assets? What do we have for liabilities and equity? And it'll show it where that sits in the current month. And we'll just follow this along, right. Hey, we're up 50, 50 plus grand in cash. Our total assets are up, so we know we're actually holding onto some of our profits. Oh, it looks like we acquired some more short-term liabilities, but we paid down some long-term debt, but we're up actually a little bit altogether from a liability standpoint.

Eric Joern: And then, hey, we maybe took a lot of money out outside of the, out of the business, so I. Some of the money we're accumulating as assets and some of it we're taking out of the business. And you can actually foot the change in all these balances back to that net income number to exactly know where all your cash flow went from your net income.

Eric Joern: So when I don't know where the money went, I. From my p and l, I made a hundred thousand dollars. But where did it go? It's not in my bank account. Follow the balance sheet, see where those accounts all moved, line by line. And that'll tell you exactly where the money went. And usually we see that in the shareholder distributions account.

Eric Joern: Hey, we pulled that money out of the business. And then final question, is my business even healthy? Here we're gonna focus on this equity number right now. This. This shop was actually highly profitable and it's a new thing. And you'll see their balance sheet's not super healthy, right? We have more debt than we have assets, so we have negative equity.

Eric Joern: What we want to do is over a long period of time over trends, I. Years and years, we wanna see the equity section actually continue to grow, continue to accumulate versus going negative. The good news for this shop, right, we went from a negative two 60 equity to start the year and through the first quarter we actually chipped away at that.

Eric Joern: So we're improving the health of this business little by little month after month. Super important basic balance sheet item to look at.

Eric Joern: Slideshow is all done. This is our contact information if you did want to get in touch with us. Jimmy do we wanna open up the q and a or we wanna do a little a little other experiment about deep diving? 

Jimmy Lea: I. I like the deep diving. If anybody's got any questions, comments, concerns, type them into the comment section and yeah, let's dig into it.

Jimmy Lea: Let's, if not pull up your, 'cause you've got a how often is it that this report goes out to your clients when you're working with them? Is this a monthly or is this an annual 

Eric Joern: or quarterly? Yeah. Yeah, so this is a tool that we use when we hold something called a strategy session. So we can provide reports all we want.

Eric Joern: We try to make them as informative as possible, but we wanna actually sit down and talk to you about it. So something that we might bring up in your strategy session. Can everybody, am I sharing the right thing? Nice little graphical Excel workbook. There you go. This is just a a tool that we use.

Eric Joern: If we wanna do some more deep diving and if we want to answer some questions of like, how do we become more efficient? What goals do we need to set, where we do we need to be? So this will help us analyze trends. So like our average repair order from a period to period. Hey, is this seem, is this seeming consistent?

Eric Joern: What happened in September and November that it's so much higher than say in January, February? I think we can answer those questions, right? Those are. Maybe some seasonal aspects to our business. So this really gives us some tools to talk about different things. And let's look at the, the total view, this is kind of spreadsheet, this is my language.

Eric Joern: The graph is more everybody else's language. But yeah, we're looking at, hey, what's my average repair order? What are my gross profit percentages, labor, gross profit parts, gross profit? What's my overhead rate? And then what did my net end up being? And then we wanna look at maybe even some other items that help us understand, Hey, what does our car count?

Eric Joern: How do we back into those gross sales numbers? How do we know if we're pricing things effectively? How much overhead do we have per car? Every car that comes through the shop? How much does that, does it cost us to just have that car come into our building? How much per labor hour sold? What's our labor cost per hour?

Eric Joern: What's our revenue per hour? I think some of these numbers might have gotten jumbled here. Hope our labor cost per hour is not $158 an hour. That's, that'd be hard to manage. But what's our revenue per build hour? What's our gross profit per build hour? What's our net income per build hour. So this is this is how you can know if you're making money on a car to car basis is when you drill down into some of these metrics like that.

Jimmy Lea: Yeah. And that's something that needs to be drilled down, not just annually. 'cause you can't correct the ship if you're only doing it annually. You can't do it quarterly, you can't do it monthly. This is a daily analysis of those daily numbers. So those five numbers that you were talking about on the daily man, they're so valuable because it really does give you the indication if you are going negative further in debt or if you're on the positive rise, if you're increasing and.

Jimmy Lea: Making money. 

Eric Joern: Yeah. I mean even like our effective labor rate variance, right? That's a daily thing. I'm be looking at my, what is my how off are, what's our bound right? And usually we see around 10% is our bound of how often can I vary through vary from my what my street labor rate is, right?

Eric Joern: We set that labor rate to make it a gold gross profit if I don't keep that under control on a regular, recurring basis. That's how money walks out the door. We're never gonna get our efficiency number that we're hoping for if we're not doing that. 

Jimmy Lea: Yep. Gotta be careful. Thank you for sharing your spreadsheet there.

Jimmy Lea: That's, 

Jimmy Lea: that's awesome. 

Eric Joern: Yeah. Hey, 

Jimmy Lea: Go ahead. Sorry. Oh, 

Eric Joern: Yeah. If somebody wants this tool to use to tinker with themselves, happy to share it. Share it. Here's my I guess I can pop back to the, to my contact info. Yep. Awesome. Reach out. Happy to share it with you. If you want to call, jump on a call, run through an exercise.

Eric Joern: Anybody in the institute family is also part of my family, so I'm happy to provide that to any member. I. I don't sell anything. I'm not, I'm a partner here at the firm. I'm not one of our salespeople, but I'd be happy to walk through that with you without any pressure of coming to work with us.

Jimmy Lea: Nice. Thank you for that offer, Eric. That's very cool. So, anybody that goes to Kaizen that's scanning this QR code, make sure you, that you saw them on a webinar with the institute. Yeah. That way you get some the institute experience there with them. So thank you. Thank you very much for doing that.

Jimmy Lea: And is this also an email that'll 

Eric Joern: get to you, Eric? Absolutely. Yeah. So this is, it's a shared inbox, but I'll see them come through and I've instructed my team to write on anybody requesting this directly to me. 

Jimmy Lea: Beautiful. Beautiful. Thank you for all you're sharing with us today, Eric. Really appreciate that.

Eric Joern: Yeah, my, my pleasure. It was a good spirited conversation. We didn't get too far into the. Deep dive into spreadsheets and hopefully everybody was able to follow along 'cause we didn't get too far into the number crunching. 

Eric Joern: Yep. 

Jimmy Lea: But we got in there and this is good. And you know, the, this is what we do with our vendors in the industry is we lock arms in together we, we make a difference.

Jimmy Lea: And for the institute, thank you for the institute for sponsoring this webinar. They have a phenomenal advisor, program manager, program coaching, one-on-one, even group environments. So if this information you're finding valuable and you would like to join the institute, we'd love to work with you, go to our website.

Jimmy Lea: We are the institute.com book, a business review, book of business analysis so that we can look at your business. We're here to listen. We will not judge. We're here to listen and we'll take those next steps with you. So that you can be a profitable business as well. It's a total different set of skills, right, Eric?

Jimmy Lea: It's a different muscle set compared to being a technician working on a car. Now we 

Eric Joern: have to work on the business. It's the hardest, har hardest leap to make for a business owner in general. Absolutely. 

Jimmy Lea: So true. So true. 

Jimmy Lea: Thank you Eric. Really appreciate it, brother. Thank you guys. Nice. We'll talk to you again soon.

Jimmy Lea: See you guys next week.

April 16th, 2025 - 00:51:31

Show Summary:

In this enlightening episode, Jimmy Lea welcomes tax and wealth strategist Derick Van Ness to help auto repair shop owners uncover overlooked strategies to save thousands on taxes every year. From foundational tactics like business structuring and paying your kids legally, to advanced moves like cost segregation and research & development (R&D) tax credits, Derick shares proven tips that can dramatically increase your financial efficiency. With humor, clarity, and decades of experience, he breaks down how shop owners can shift from reactive to proactive tax planning, and reveals how seemingly small changes can add up to $25,000+ in savings annually. The conversation also explores how financial literacy can be passed on to the next generation, and why working with the right advisor makes all the difference. If you're tired of overpaying the IRS and want smarter strategies for your business, this episode is a must-listen.

Host(s):

Jimmy Lea, VP of Business Development

Guest(s):

Derrick Van Ness - Wealth Strategies, Investor, Life Adventurer at Big Life Financial

Episode Highlights:

[00:02:12] - You don’t have to keep having bad experiences with your CPA, there are better advisors and strategies out there.

[00:04:02] - Derick will show how shop owners can save at least $25,000 a year in taxes with the right strategies.

[00:06:09] - Quick self-assessment: How well do you understand taxes, and how strong is your current tax team?

[00:13:11] - The way you pay yourself, through W-2 vs. distributions, can save you thousands in self-employment taxes.

[00:14:53] - The Augusta Rule: Legally rent your home to your business for up to 14 days a year, tax-free.

[00:20:18] - Pay your kids legitimately and tax-free while teaching them financial responsibility.

[00:26:01] - Using just a few of these strategies can result in $23,000 - $31,000 in annual tax savings.

[00:30:10] - How structuring real estate ownership separately from your business can reduce taxable income.

[00:34:00] - Cost segregation accelerates depreciation and significantly increases your short-term tax write-offs.

[00:39:02] - R&D tax credits aren’t just for tech firms, they apply to innovative auto shops and can yield five-figure refunds.

👉 Unlock the full experience - watch the full webinar on YouTube: https://www.youtube.com/watch?v=B5N1zO3cDAc

Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!

Links & Resources: 

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Episode Transcript Disclaimer

Episode Transcript:

Jimmy Lea: So excited to be here today with you as we are gonna have some phenomenal discussions about your business, about taxes, about the things that you'd love for your CPA to tell you, but they really won't do it.

Jimmy Lea: I've got my very good friend with me here today that we're gonna have an awesome discussion. Now, before we get into this, because this is to be an interactive. Webinar. Put into the comments whether you are watching us on Facebook, Instagram, LinkedIn, YouTube, wherever you're watching us from today, put into the comments where you're joining us from today.

Jimmy Lea: I'd love to give you a shout out to your shop, to your business, to your location. Shop name, city State, love to give you a shout out. Thank you so much for doing that. I gotta tell you a quick little story. Two days ago I went and got my hair cut and it was probably. One of the worst haircuts that I had gotten in quite a while.

Jimmy Lea: So why am I gonna tell you that? 'cause I, you know what, haircut looks pretty good today. Yeah. Because I had to go back and get it fixed, not by the same person. I went to somebody else, I went to somebody else. I found my old stylist and I found her at the salon. And it was just a boon of a haircut because I walked in and she was there and it was like a great reunion.

Jimmy Lea: Why? Why tell you this story? Well, because you don't have to keep having bad haircuts. You don't have to keep having a bad CPA. You don't have to keep having a bad experience with your taxes, with your advisors. I wanna introduce you to a very good friend of mine, and as we have a discussion today to talk about your business and your taxes.

Jimmy Lea: My good friend is Derek VanNess. Best man at my wedding. Best man that I know. He and I, together at Fraternity Brothers way back in the day, met up our freshman year. Derrick, it's been a long time together, brother. A long time going. It has. Thank you for being here, Derrick. I'm so excited for this presentation today.

Jimmy Lea: This is information that I have not seen you present before, mixed in with a little bit that you have done before. So I'm super excited for what you've got to share with us today. 

Derick Van Ness: Me too. This is gonna be fun. Very special on the day after tax day. Right? So.

Jimmy Lea: Very strategic on our part.

Derick Van Ness: Yes, it is. We were talking about that before the show here. 

Jimmy Lea: Yep. So I'm gonna turn it right over to you, Derek. Everybody's cringed. Everybody's winced. Everybody's upset about having to file their taxes. They're feeling the pain. Yeah you've got a special offer for everybody here by the end of the presentation, so everybody needs to stay tuned in for that special offer.

Jimmy Lea: And Derek the floor is yours, brother.

Derick Van Ness: Well, let's do that. And just so you guys know, my commitment to you is I think I'm gonna be able to show you how to save at least $25,000 a year in taxes if you're paying that much yet because there are enough strategies out there that apply to shop owners.

Derick Van Ness: That you can do right away, that we're gonna show you how to get that kind of value. So definitely gonna be worth your time today. And I'm excited. And we're really just gonna be talking about smart tax strategies. Every shop owner needs to know, because listen, every dollar that you make is important, but every dollar you keep.

Derick Van Ness: It's the same as a new dollar you make, it stays in your bank account. Now, my disclaimer is I own, I'm a part owner in an accounting firm, but I am not a CPA myself. We have CPAs and EAs and tax professionals that do the work. But I am a tax and wealth strategist, so I know the strategy piece. I just don't file returns.

Derick Van Ness: Right. I'm obviously, I own a couple of businesses, consider myself to be a life adventurer because. Listen, that's something Jimmy and I have in common. We both love adventure. So before we get started, I just wanna do a quick tax quiz with you guys, right? And so on a quick piece of paper or in your mind, or if you don't have a place to take notes, you should do that today for sure, right?

Derick Van Ness: But I want you to write down, on a scale of one to 10, how much do you personally feel like you know about taxes? So one being I don't know anything. I show up at the shoebox and my CPA just takes care of it from there, a 10 being I should probably have my CPAI live and breathe taxes and you know, that's what we do for Christmas is give each other tax code books.

Derick Van Ness: Second question, on a scale of one to 10, how good is your tax team? Now I bring up the term team because a lot of shop owners have enough going on. That you might need more than just a tax person, right? You might need a tax attorney, you might need entity structuring or investment advisors who understand taxes.

Derick Van Ness: How good is your tax team? Once again, a one being terrible, a 10 being best of the best. The Rockefellers would be excited to hire this team. Right. And then the third one is, over the last three years, how good have you been at keeping your taxes optimized? Right. We're not talking about going into gray area or doing a bunch of crazy stuff.

Derick Van Ness: But really, like, are you proactively doing strategies that are gonna help you to reduce taxes? Once again, one being we haven't done any of that. 10 being, we're literally looking at it, you know, every single month looking for opportunities to reduce taxes. So the question with those or the thing I want you to look at is, do you like your answers?

Derick Van Ness: If you're more on the 1, 2, 3 area, there's a ton of room for improvement. If there's an 8, 9, 10, hey, we've got a job, maybe we can hire you. Right? But most shop owners I talk to are somewhere between a one and a six, right? They get their taxes done. They may know a few things, but they're really not doing a lot.

Derick Van Ness: My goal today is to help you up your game, and the reason I'm so passionate about this is I have been. Very successful in my life. Had a couple of different success stories, but, you know, where I really got passionate about this was back in 2008 up to that point from 2001 to 2008. I was a house flipper.

Derick Van Ness: I was those guys like, you know, flip this house, buy a house, fix it up, make it look cool, resell it, make more money. I know some of you do that with cars and other kinds of things. But the reality was I was making really good money. I just didn't realize at the time that I didn't know that much about taxes or finances.

Derick Van Ness: And what happened was I had a good income, but I did not have a good plan for building wealth, even though I was in real estate. Right. That seems like one of the easier places to do it. So when the oh eight came, I was unprepared. I thought I was prepared. I had a bunch of money set aside. I had a bunch of things in place.

Derick Van Ness: It was not nearly enough that tidal wave. Of the mortgage meltdown wiped me out. And at that point I became really passionate about understanding as a business owner, how do I translate my income into building wealth and taxes is a huge piece of that because quite frankly, I went from being a multimillionaire to filing bankruptcy in about 18 months and it sucked.

Derick Van Ness: And it was a really hard lesson, but it also put me on this path of helping small business owners 'cause I know so many of us, so many of you. Work so hard for your money. I wanna help you keep a lot more of what you make because efficiency matters, right? And you guys know that so already, disclaimer, I'm not a CPA.

Derick Van Ness: We do own a firm, but I don't do the filing. Okay? So what does make me a little different than a typical CPA, and this is where we're gonna start to divide, this is your typical CPA does taxes, right? They're what I would call a tax recorder. And so what that means is they, you bring your stuff to them, they take your stuff, and they basically copy it from your profit and loss onto the tax return.

Derick Van Ness: And maybe you do a couple of things with depreciation and interest write offs and so forth, and then they tell you what they owe. What we really do is we pick it up way before that, and we kind of do a lot of the work that they don't do with how do you structure your business, structure your life? I'm gonna be giving some examples as we go through this today.

Derick Van Ness: What are things that you can proactively be doing and really that gap that if you have a tax pro, you probably think they should be helping you. And all they do is do your taxes. We fill that gap, right? So we create the tax breaks rather than recording them. And we coordinate this because ultimately taxes is part of your financial life, and your financial life is part of your real life, right?

Derick Van Ness: So we wanna help that. A couple of quick statistics that I think are important here. 70% of small business owners believe they're overpaying taxes, so you can ask yourself, do I think I've had this right? My guess is if you came today, you feel like there might be room for improvement. What's wild is the real number is actually about 95% of small business owners are overpaying.

Derick Van Ness: When we've done internal audits with our firm or other firms that I've worked with. More than 95% of them were significantly overpaying taxes, and I'm not talking about a couple hundred bucks here. Typically per a hundred thousand of income we were seeing without even getting into the advanced stuff, just the basic stuff, they were overpaying $11,300 per a hundred thousand dollars of income.

Derick Van Ness: So if you make a couple hundred thousand, multiply 11,300 by two or three or four, that seems to be pretty consistent. Actually, the more money you make, the worse it gets because taxes get more expensive. But I just want you to do some mental math there real quick. If you're making a couple hundred thousand bucks, then you're probably overpaying 20,000 or more.

Derick Van Ness: And I'm gonna show you how to save that. So the three things that you need to master to build wealth, and this is going to be one of those categories, is you need to make more money. And that's where the institute comes in, right? They help you guys run your shop, be more profitable, keep more of that money that's coming through the door, but then after that, keeping more of the money you make through tax efficiency is key.

Derick Van Ness: And then something I want to encourage you to do is as you save the taxes, rather than going and buying a fancier car or a swimming pool, put that money to work and help it to start to build more income for you. So that you don't always feel like everything has to come from the business. I know a lot of shops feel that way.

Derick Van Ness: So we're gonna help you to create a bunch of money that you can then use to reinvest in the shop or to build wealth outside of it. So today's going to be more about the keep more of what you make component, right? Okay, we just went over that. So let's get right into strategies. I'm gonna cover seven or eight direct strategies that you can use this year to keep more money in your pocket.

Derick Van Ness: So the first thing I wanna talk about is how you pay yourself matters. A lot of you are doing this and a lot of you aren't. So if this doesn't apply to you, that's great, but ultimately it comes down to this. Once you're making more than about $75,000 a year there, you want to consider having some sort of entity, not just a sole proprietorship, right?

Derick Van Ness: If you have an LLC. Or you have an S-corp. The LLC can file as an S-corp, but s corporations allow you to take money that's not your W2 income, but your distributions or your, you know, the money, I call it your business income for being the business owner. And you don't have to pay the self-employment tax on that if you take it that way.

Derick Van Ness: So you pay yourself a W2 where you'll, you're gonna pay full blast on those taxes, but on the dividends or distribution income. You're going to save six, six and a half percent roughly on that money. So if you're paying yourself $250,000 a year, you take 150 thou or a hundred thousand as a W2, you get the hun other 150,000 this way, that's probably gonna save you about $10,000 in taxes.

Derick Van Ness: Just that one move. By having the right entity structure and paying yourself effectively, and this is something you wanna work with your tax pro on, like how much should be W2 and how much can you take as distributions? Some people get weigh to one side or the other. I think there's a proper way, ideally, I like to think of it this way, if the IRS or someone was to look at this and they would say, how much are you paying yourself as a W2, you'd wanna say, well, it would cost a hundred thousand dollars to replace myself with a key person in the business.

Derick Van Ness: So that's what I pay myself as a W2. Then the rest comes as my, as a result of me being a business owner. In other words, that's money that is made on top of what I would have to pay someone to do my job. Right. I've heard other CPAs say. Roughly 30% of your overall income should be taken as a W2. You can talk to your tax pro and see what they say, but if you are way outta whack on those things, one way or the other, I think you should consider it.

Derick Van Ness: 'cause it can be a pretty huge tax savings. And listen, an extra five, 10, $15,000 a year is not so bad, right? Just for doing it that way. Plus, I'm not an estate planning or entity structuring attorney, but. If you have a sole proprietorship right now, if you're not just getting started, you probably want some liability protection.

Derick Van Ness: Entities can do a great job at that and, you know, you could talk to someone about that. So, strategy number two this is something a lot of people have may have heard of. It's affectionately known as the Augusta Rule, but what it is it is a way that you can take your home and you can rent it out and the code tax code says you can rent your house out.

Derick Van Ness: Up to 14 days a year. Tax free. 

Jimmy Lea: Question, Derek? Yes. Okay, hold on a second before we get into the Augusta rule. I wanna go back to strategy number one. You talked about $75,000. And I wasn't, I, my mind went way down a trail. I don't know if you said 75,000 as I pay me as an owner or as my business is making or producing 75,000 a year.

Derick Van Ness: Yeah. 

Jimmy Lea: What were you talking about there? 

Derick Van Ness: The reason I say 75,000 is it'd be hard to hire an employee who could run your business for a lot less than that. Yeah. So at that point, it's hard to justify a W2. Too much lower. Even if you paid 'em 65 and you take 10 as dividends, like there's not a huge amounts, maybe 600 bucks of tax savings.

Derick Van Ness: But once you start getting above that, it's like, oh, I can pay myself. Let's say you get to a hundred. 

Jimmy Lea: Yep. 

Derick Van Ness: Now I can pay myself half W2 and half distributions, and the numbers are worth the change. So I feel like 75,000 is about where it really starts to make sense to use that strategy. That's why. 

Jimmy Lea: And I love this Augusta rule because not only can I do this from.

Jimmy Lea: The business point of view, isn't this also something that we can do on a house? 

Derick Van Ness: Well, so what you do is you actually rent your personal home, your primary residence. 

Jimmy Lea: Okay?

Derick Van Ness: You rent it instead of renting it to strangers. You can rent it to your business. Right now, a lot of shop owners, very community oriented.

Derick Van Ness: They use their home anyway, right? And so they may be doing team building barbecues. They may be doing retreats or bringing their management team or their key employees to the, to, to their house. But where this really comes in is if you're already spending money. Let's say you do team building, you do holiday parties, you do trainings or retreats for your team.

Derick Van Ness: That kind of stuff. And you normally go somewhere and you rent a hotel room, like a hotel conference room, or you go to an event center, or you rent the back room at the local steakhouse or whatever. You can do those things at your house, and then your business pays you personally, just like you would've paid the restaurant to rent that back room.

Derick Van Ness: Your business pays you, and you can take that income tax free up to 14 days a year. Right now you can't pay yourself a million dollars. Right. You can pay yourself market rates. But if you say, Hey, my house, we're gonna be using 500 square feet for this, you know, for this holiday party you can look at what would it cost me to get a space that's equivalent for 505, 500 square feet.

Derick Van Ness: Yeah. And you can pay yourself that, right? And so for a lot of people, that might be a thousand, 2000 if you've got a really nice, beautiful house, it could be more than that. In your area. 

Jimmy Lea: Well, especially if you spill out into the outsides and you've got parking and you've got people on the street and 

Derick Van Ness: Sure.

Jimmy Lea: It does take up your whole house. 

Derick Van Ness: It, it can. Right. I don't want to over exaggerate and tell people to get crazy, but the reality is what you're really using, you can, and honestly, if you wanna document it, a, you should have a real lease just like you would with any other entity. Right. Treat it like two third parties.

Derick Van Ness: That don't know each other. Yeah, do some paperwork. Obviously you don't need some kind of airtight lease because it's you renting to you or your business renting to you. But take some pictures, show that it, show what's going on. If you ever got audited or whatever. It's like, Hey, here's the pictures, here's what we did.

Derick Van Ness: It's clearly business. We've got a lease. Everything's, all the boxes are checked. But this is something, this is another way to get an extra 10 to 20 grand a year, maybe a little bit more if you've got a nice house into your h into, your personal bank account from the business tax free. And in a lot of cases, this is stuff you're already doing, you may as well get the tax breaks for it, right?

Derick Van Ness: Yeah. If you're not doing this, you can look at it and say, well, do we want to have our team retreats and other kinds of things offsite? If we do start using your house for this, you know? And you don't have to hit 14 days, but that's the limit. So obviously if you're doing this stuff, you may as well, you may as well be tax efficient, right?

Jimmy Lea: That's right. 

Derick Van Ness: And that's the name of the game here. This is not about beating the IRS. This is about knowing the rules, taking a lot of the stuff you're already doing, and just doing it in a way where you can get the tax breaks, right? They want you to take tax breaks. The tax code is as big as like the Harry Potter book series.

Derick Van Ness: It's super thick, like the first 30 pages are on how you pay taxes. The other. 4,000 pages are on how you cannot pay taxes. The government uses the tax code to get you to do things. They want you to start a business. So they give you tax breaks. They want you to have kids. 'cause when people have kids, they're not so crazy and they're a little more stable, right?

Derick Van Ness: They give you tax breaks. They want you to own a home. 'cause that creates stability in the country. They give you a tax break. That's how they do this. So let's take what the government wants us to do. And let's do it in a way that works for us that we were gonna do anyway and save the taxes, right?

Derick Van Ness: Everyone calls 'em loopholes. They're not loopholes, right? Okay. Strategy number three here. Paying your kids, right? This is one that brings up, like everybody raises their hands, and I'll be honest with you, we have a whole system that we've developed teaching people how to pay your kids and then use that as a way to start educating your kids on money.

Derick Van Ness: A whole nother thing. We call it the family Fortune formula. But the idea here is you can pay your kids up to, it changes every year, but it, so I don't know what it's for twenty five, twenty five yet, but let's call it a between 13 and $14,000 a year that you can pay your kids income tax free.

Derick Van Ness: Right now. This is where this comes up. People are like, how, you know, what can my kids do for this? Because if you're going to pay your kids, they need to be earning some money for kids who are. 12 and older, they can help around the shop, they can do social media, they can file things, they can clean up, they can do a lot of that kind of stuff.

Derick Van Ness: But another thing that allows you to pay your kids is use them in your social media. Almost every shop has social media. You've got a website, you've got Instagram, you've got Facebook. You've got these kinds of things to build that community feel. Use your kids, put 'em in the pictures, have 'em hold up signs that you put stuff on.

Derick Van Ness: Get your social media team or whoever handles the marketing for the company to, to do that. Put 'em on the website. 'cause almost every shop I know, it's like a family brand, you know, it's very community oriented. So put the kids in that stuff and pay them. Like you would pay a spokes model or like you would pay a, you know, someone who's gonna be a representative for your company.

Derick Van Ness: And you can pay them that money. If you're making a lot of money, you might be paying 30, 40% or more in taxes. Your kids will pay pretty much zero. Right? Even if they make a little bit more than that. Or have to pay some payroll taxes. It's super, super low compared to it. And then let your kids, you know, if you want them to save for college, that money can go toward that.

Derick Van Ness: If they wanna pay for their own baseball or dance or music lessons or whatever they're into, you can let the kids pay for the stuff, but a much lower tax bracket of dollars. Use it as a chance to teach your kids about money. People put it into Roths, they put it into life insurance. There's a million things you can do with this, but the key is.

Derick Van Ness: How do we legally get money from the business where it's gonna be taxed at a higher tax rate into the household at a much lower tax rate or tax free. And do that in a way that's consistent, right? And I like to use it as a way to teach your kids about money anyway, but that's a whole nother thing.

Derick Van Ness: But yes, once again, if you've got three kids, you know, paying yourself, paying them 13,000, that's $39,000 that can come into the household. At a zero or a very low tax rate, that can be huge for you. Right. 

Jimmy Lea: Well, and Derek, I love what you were talking there as well about teaching the kids about money.

Jimmy Lea: Uhhuh, I, a buddy of mine down in St. George, he pays his children and his children have to buy their own groceries. They have to pay for their own sports events and their own sports equipment. Yeah. So. It while he's using it in his business and he is paying the kids are paying for their own groceries.

Jimmy Lea: They're paying for their own clothing. Their own sports events. Their own sports equipment. Yep. They wanna go out, they wanna buy a, a bike. They wanna buy a new jigsaw puzzle. They wanna buy a new video game. Hey, that's great. It's your money and as long as we all approve it. Yeah. Because they have family banking going. 

Derick Van Ness: Yeah. The, these are all exactly what I'm talking about. And you can take it to the next level. Have your kids saving for their own college and planning for that. Have your kids doing their own investments and different kinds of things, even if it's at a small level to get the experience, because these are all super valuable experiences and you can take a lot of what you know 

Jimmy Lea: Yeah.

Derick Van Ness: As a business owner and pass it on to your kids. Right. And it means something when it's their money. 

Jimmy Lea: Oh yeah. Oh yeah. Yeah. It was eye-opening to discover how willing they were to spend my money and how frugal they were to not spend their own. 

Derick Van Ness: Yeah. It's great. Right? It changes the whole conversation and listen, I know a lot of people, they don't have their finances totally together, so they're a little bit afraid to like include their kids on some of this stuff, but.

Derick Van Ness: You gotta start somewhere. And this is a great place to give them a chance to have a real world experience. And like you said, Jimmy, they have to make the decisions. Not you, do I buy this or do I buy that? If I want a new car, I've gotta save up for it. Whatever it is. These kinds of things really start to matter and if you can teach them at an early age, they're just miles ahead of other people.

Derick Van Ness: So, so, yeah, getting the kids involved. So strategy number four, and we've all heard of this, right? As a home office. Now I bring this one up partially 'cause there's a little bit of a tax break there. But the big question is something like a home office, a red flag? And the reality is if you're lying about it, it's not a red flag.

Derick Van Ness: You're just lying, right? I don't want you to lie or make stuff up on your taxes. If you have a real home office, like quite frankly, I'm working from a home office. I literally have a lighting setup in here and cameras, and I've got all the screens and all the stuff. This is a home office. Write off. If you have a laptop in your bedroom, probably doesn't count, but if you're really using your home space, dedicated space for your home office, then you can write it off, right?

Derick Van Ness: It's not going to be a huge part, but generally how it works is, let's say your office is. 400 square feet and your house is 2000, right? So that's 20% of your house is your office. Then you can write off 20% of your costs, of your mortgage, right? I bring this one up, not because it's a huge tax saver, but if you are doing it, you can write it off, right?

Derick Van Ness: It's not a red flag if you're really doing it. But the bigger thing is, if you're really doing these things, you can write them off. And if you're not, you shouldn't. And some of them, it might encourage you to do certain things. But I want you to be aware that you don't need to be afraid if you're really legitimately doing something of writing it off, right?

Derick Van Ness: So that's the bigger point here. But this can save, you know, a couple thousand bucks a year depending on how big your office is and how big your mortgage is. So, so if you just use these three strategies, right? And I've kind of given a range here based on your tax bracket, but if you know, if you did a salary versus owner's draw took a hundred thousand of that.

Derick Van Ness: As passive versus W2, that'd save you 7,500 bucks. If you did the Augusta rule at 1250 a, you know, a day for 14 days, that would save you between 52 and $7,800 depending on your tax bracket. The average family has 2.5 kids, so I went with 2.5 kids, right? $30,000 coming into your household, depending on your tax bracket, that's gonna be between nine and $13,000, and then a home office.

Derick Van Ness: 500 bucks a month, that's $6,000 a year. You get to write off that could be between 1,820 600. So if you look at that at the bottom, that's 23 to $31,000 a year just by using these really basic strategies that apply to almost everybody, almost all the time. Right? And I realize that 23 to $30,000 one time isn't gonna totally change your life, but here's the thing.

Derick Van Ness: You can do this every year. Most people I meet aren't even saving that much money. So if you can just take this outta what you were gonna give to Uncle Sam, leave it in your bank account and now put that money to work and add it to what you were already going to save anyway. Suddenly you can just massively supercharge the amount of money you've got working for you, or the amount of money that you have to build your shop or add to it or hire that extra employee or put it into marketing or a million other things.

Derick Van Ness: Or one of the best things is run your shop better, right? Work with someone like the institute and learn how to be more profitable. You can do this every single year. Over the next 20, 30 years. I mean, we're talking about half a million to a million dollars. That's a lot of money. So just that alone, everybody can do.

Derick Van Ness: Now we're gonna get into some other strategies here that may not apply to everyone every time, but will apply to a lot of shop owners based on the hundreds that we've worked with. So I want to jump into that. I think this is such a great one. If you've started making good money. A lot of people ask their CPA, what do I do?

Derick Van Ness: How do I save taxes now that I'm making a couple hundred thousand or more? And the CPA usually says, just get used to paying more taxes. Right. That's not true. There's a ton of things you can do. We won't get into everything today, but but we're gonna, we're gonna tackle a couple more here, right? The first one is, as often as you can, you want to turn active income.

Derick Van Ness: To passive income. So what's the difference? Active income is like that W2 income, right, that you pay full blast on. Passive income is taxed at a lower rate, more like your di dividends, but also has the ability to be written off against against passive losses. So this is, this comes into play a lot with how you structure your entities and a lot of times if you have real estate.

Derick Van Ness: It gets into this, right? So how you structure your entities can allow a lot of income to become passive. So the most common example of this is if you own your shop real estate, and I know a lot of shop owners do, instead of you having the same entity own the business and own the shop, and all the money just goes in one bucket and it comes through to you for taxes, if you have the business.

Derick Van Ness: Have an entity and the real estate have an entity, the business will pay the real estate company. And then you still get the income from the real estate company. But now that income is passive, so it's taxed differently and you can take the depreciation from the shop and you can write it off against that income.

Derick Van Ness: So it makes a lot of that income feel like it's tax free. Right? So here's an example of how I would structure that. The business pays the W2 income. The owner's distribution into, we call it a wealth reservoir 'cause I think it's worth it too. Instead of just paying it straight into your living account, you pay it in here, then you put the money into your account that you spend out of.

Derick Van Ness: So that way if you're got extra, it stays here instead of coming over here and burning a hole in your pocket. And then of course, everybody should save. We're not going crazy into all of that, but the money that for the real estate company comes here and it's paid as passive income into that. So it ends up in the same place.

Derick Van Ness: Now you can take losses against it, like the real estate company gets to depreciate the value of the real estate. We're gonna talk in a minute about how to accelerate some of that depreciation, but it can make a huge difference in how much of that money you get to keep, right. So this is a very simple version of how you can structure entities and how you pay yourself that's going to allow you to keep more money.

Derick Van Ness: And once again, if we just do some simple math here. Let's say you're paying. 5,000 bucks a month for the shop. That's $60,000. That's passive income. Let's say the shop is a million dollar building. You get to write that off over 39, 39 and a half years. So you get like $25,000 a year of depreciation.

Derick Van Ness: So now you're only gonna pay that first $25,000 that you get as the 60 grand of income. You aren't gonna pay taxes on it. It's gonna be offset by the losses. So you're only gonna pay taxes on like 35. Now that's really. Basic math, but I want you to see that first 25 grand basically feels like it's tax free because of the depreciation that you get to use it against.

Derick Van Ness: So hopefully that made sense that I didn't go to make it too convoluted. Right? And this works if you own any kind of commercial real estate. It's a good strategy. So now what's even better is if you have, like in that case you have 60,000 of income, but you only have $25,000 of write-offs. There's a strategy to accelerate depreciation on real estate.

Derick Van Ness: And I would say if you've owned your shop for less than I'd say seven or eight years, this is a really powerful strategy. As long as the shop's worth more than a couple hundred thousand, the real estate itself what cost segregation is it's taking your costs of your real estate and you're breaking it up into pieces, right?

Derick Van Ness: You're segregating it out in layman's terms. What happens here is you take the shop. And it's classified as real estate, but you have someone come through, usually it's an engineer and there are companies that do this and we can refer you to someone if you don't, you know, don't wanna go find your own person.

Derick Van Ness: They come through and they classify as much of the building as they can, as equipment. Instead of real estate. So all the build out the garage doors, the plumbing if you've got AC units, all these kinds of things that are a huge part of the value of the real estate, not the structural component, but a lot of the other stuff can be classified as equipment.

Derick Van Ness: That equipment can be depreciated much faster, right? Maybe 5, 7, 10, 15 years. It is not that you necessarily get more depreciation, it's just if you can get depreciation and keep the money today instead of 30 years from now, that's worth a lot. You get to use that money, grow that money, put it to work in your business, a lot of other things.

Derick Van Ness: So this is a strategy where you get that depreciation faster. And once again, if you can do cost segregation, maybe you get to write off that whole $60,000 against passive losses. Instead of only 25,000 of it. Right. So that's another 35 grand you're not paying taxes on, or you're paying a lot less tax on because you've accelerated the depreciation.

Derick Van Ness: Right. So I know there's a lot of probably numbers and things going through your head. I just really want to open you up to the idea that there's a lot of stuff out there. That is not proactively being brought to the table. Like I think every tax pro should be talking to you. And if you have real estate, they should at least be bringing up cost segregation.

Derick Van Ness: If they're not bringing this up, and lemme tell you this is a pretty obvious one then you gotta wonder what else they might be missing. Right? So passive, the key here is passive losses can only work against passive income. And this is important because. Let's say you do cost segregation. You get $120,000 worth of write-offs, but you only have 60,000 of passive income.

Derick Van Ness: You can only use it against that 60,000. It doesn't do anything against your W2. So as often as we can, we want to take money and shift it from active income to passive income, it will allow you to get a lot more of these losses, and that's just something a lot of people don't know is you can't take that depreciation against your regular income.

Derick Van Ness: So, so we wanna find legal and ethical ways to shift it whenever we can. Strategy number seven, and this is something we've done for a ton of shop owners, is the research and development credits. Now, there's been some interesting things. We did research and development credits for a long time, and then in 2022 the rules changed just a little bit.

Derick Van Ness: The credits are still there, but there's a little bit of an offset short term on those. We actually think that's going to change. With this new tax rewrite that's going on right now basically it got kind of screwed up with the tax rewrite from 2017. It took place in 2022, and for the last two or three years, we've just had a lot of people sitting on the sidelines.

Derick Van Ness: But here's the good news, with research and development credits, especially if they changed the tax code, you can go back and claim this. You can also go back and claim depreciation like cost segregation in arrears so you can actually get money back from the IRS. We've done this for a ton of shop owners, and even if it doesn't get changed, it still continues to produce credits for you.

Derick Van Ness: You just have to understand the little bit of offset that happens in the first couple of years that you do it. But at the end of the day, you end up getting the same amount of credits. So I want to talk through this real quick because it's a really powerful strategy that almost no tax firms are doing, right?

Derick Van Ness: This is something that came about in the eighties, so this isn't like some new thing. This isn't like one of those CO credits or whatever. This is a completely different thing that basically the government wants you to be innovative in what you do. Or people who create new products, they want you to bring those into your business so that you can continue to improve.

Derick Van Ness: So these actually were established in 1981 to help American automakers compete with a lot of the foreign cars. And they wanted to make sure that the US companies tried new stuff, essentially, right, to keep it really simple and and did research and development. So they said, we'll give you credits if you do that.

Derick Van Ness: It changed a lot over the years, but ultimately it comes down to these four questions. This is called the four part test, and I won't get too deep into the weeds, but basically is it for a permitted or qualified purpose? Which really means are you trying to improve something? Are you looking to develop or improve a product or a process?

Derick Van Ness: As shop owners, I know that you're always looking at. How do we bill faster? How do we, you know, quote better? How do we figure out how to get in front of people more effectively? How do we improve our communications and follow up? How do we use better equipment for better diagnostics, more accuracy? All of these kinds of things.

Derick Van Ness: Anything in that realm is probably going to qualify for improving your service or your process. Right. Does it reduce technological uncertainty, really? Are you looking to get more consistent outcomes when you run a diagnostic or when you're trying to figure out what's going on with someone's car?

Derick Van Ness: Do you get the right answer more often? Right. Is it more certain? Almost everything you do is probably working that direction, especially in the shop. Is there a process of experimentation? In other words, is this new to your business? And this is a big misconception. People think it needs to be new to the world.

Derick Van Ness: It doesn't. It just needs to be new to your business, right? So if you're bringing in something new and is it technological in nature? Does it use engineering, computer science, biology, or physical science? You guys obviously have a ton of engineering and computer science that goes into a lot of what you do.

Derick Van Ness: So if you're buying new equipment, if you're trying new processes, if you're adding new software or creating custom software, there's probably credits on the table for you. And most shops we look at that's happening. Now, these credits, the more you make, the bigger they get. But I think it really starts to make sense to look at it if you're doing 500,000 of top line revenue, right, or gross revenue, and if you're paying more than $10,000 in taxes, you are probably big enough that these credits will add up to something.

Derick Van Ness: It's not that you can't do them if they're smaller, it's just not necessarily worth the work. Usually shops if they're less than two years open, they probably aren't big enough or making enough money. There are exceptions, so you could still qualify but usually it's for shops that are a little more established.

Derick Van Ness: 'cause usually the first year or two, you have a ton of write-offs. You didn't pay taxes, so there's no credits to get that money back for. Right. Couple quick examples of shops. We had a an MSO up in Minnesota. It was two brothers. They got about $171,000 when we did a three year look back in their RD refund.

Derick Van Ness: So ton of money, four shops, pretty awesome stuff. Another one in New Hampshire, they had a couple of auto shops. They got about $31,000, so about 10 grand a year. And then we had someone with a little, you know, a little bigger single shop in Oklahoma. He got $26,000. You know, so these guys are getting between 2030.

Derick Van Ness: Thousand dollars a year type of type of credits for a typical size shop. We do have some bigger shops, you know, 2 million plus that are getting a lot more than that per year. So the question I wanna ask you is, I mean, when we're looking at this, $25,000 a year for the first four or five strategies, 10 to $15,000 for r and d credits.

Derick Van Ness: Plus if you own the real estate. I mean, what would that kind of money every single year do for your life? Right? An extra 30, 40, $50,000 that you just don't have to give Uncle Sam, because you can write it off, right? You can use the tax code in your favor, and ultimately it's not how much you make.

Derick Van Ness: I hear people brag about this all the time. I mean, I have a client, he's in California. California is a high tax state as you know. He made 1,000,002, he paid nearly $600,000 in taxes, you know, and he wanted to complain about it like it was a badge of honor. It was terrible, right? Who wants to give $600,000 to Uncle Sam?

Derick Van Ness: So it's not about how much you make, it's about how much you keep, and that's the golden rule, right? How much gold do you get to keep? So. I think it's pretty clear that these could be worth $25,000 or more per year. And I'll be honest with you, especially if you make over $400,000 a year, there is a ton of stuff you can do.

Derick Van Ness: 'cause at that point you get into some pretty big tax brackets. So adding a little more complexity is totally worth it. But even for those of you who are newer in business, you know, this could easily be worth 20, 25, $30,000 a year, every single year for as long as you're in business. So. Those are the key things I wanted to cover today.

Derick Van Ness: 'cause we didn't want to go too long and maybe leave a few minutes for questions. But if you're curious to see how much have you been overpaying Because of our affiliation with the the institute and our relationship, we're willing to do a free three year tax review to explore what have you been overpaying.

Derick Van Ness: I'm not gonna tell you that we can go back and claim all that for you. There may be things like the RD credits like. Honestly, you know, if you've been in business for a while, we can still go back and claim 2021 and it's super clean for the next six months or so, and maybe help you get 10, 15, $20,000 back depending on the size of your shop.

Derick Van Ness: Depreciation is another one we can go back on. But the bigger thing for you is if you've been overpaying in the past, how do we help you to not overpay in the future? Right. Even if we start from here, forward 2025, and you can keep an extra 20, 30, 40, $50,000 a year, that's a ton of money. Where I come from that makes, I mean, they'll pay for your kids' college that'll pay for, I jokingly call it a government sponsored retirement plan, right?

Derick Van Ness: Because it's the tax loopholes, the tax opportunities they're giving you that you're using. To pay for your retirement. So all you gotta do is scan the QR code or you can see the link down here at the bottom. It's just big life financial.com/the-institute. You can just sign up there, you'll meet with myself or someone from my team.

Derick Van Ness: We'll gather your tax returns. We'll go through 'em with a fine tooth comb, and we'll give you an exact number of how much. And we actually do a range of high to low, like if you did everything or if you just did some things. How much is on the table? I think if you're overpaying, if you're paying 10 or $15,000 or more in taxes, it's definitely worth looking at, you know, so that's our gift to you is we'll do all the work for free, and if we can save you a bunch of money, great, you can take that.

Derick Van Ness: You can go to your existing tax person or you know, if you feel like you really want someone more proactive, we can talk about what that looks like. But I think it's important for you to know if you're massively overpaying taxes. I want you to keep a lot more of that money. It just makes such a huge difference over time if you can keep that much more money. 

Jimmy Lea: This is huge. Derek, this is amazing and thank you for putting this up there. An offer to review the last three years. Everybody that's watching this. You need to scan the QR code, scan it now, scan it and get on Derek's calendar so that you can have this conversation. Now, Derek, here's a interesting question for you.

Jimmy Lea: I meet with a lot of shop owners Sure. And we talk about taxes, we talk about accountants, we talk about what's working for other shops around the country. And one of the interesting questions that I'm asked by a lot of shop owners is there a list of items. Statements, financial statements, concepts, ideas that I should have on a piece of paper that when I come to my tax advisor, they're able to advise me better because I'm listing out things that they might not think to ask.

Jimmy Lea: Is there a list of items that we can bring to a tax advisor? 

Derick Van Ness: Yeah, so there, there are definitely a topic or topics that we cover all the time, right? Equipment's a huge one. So any equipment you have purchased or any equipment you're looking at, purchasing and making sure you're doing that optimally is a key one.

Derick Van Ness: Anything once you understand the RD credits that's related to new technology, new advancements. Different things you're bringing into your shop, being sure that you keep track of that along the way can be super, super proactive and really help to optimize those credits. And then anything else you're looking at investing in like real estate or buying additional shops.

Derick Van Ness: I know you guys work a lot with that. Planning those things out in advance because then you can optimize, Hey, we don't need to be paying so much in quarterlies 'cause we're gonna take, you know, we're gonna buy a bunch of equipment, we won't have any taxes due this year. We're gonna get those write offs.

Derick Van Ness: No reason to pay that into Uncle Sam and then have to wait a year to get it back. Right? Yeah. So just being aware of what's really happening. And I think in a perfect world, you wanna meet with your tax pro, I would say three to four times a year throughout the year, so that you can bring these questions up, they can help you to structure things and think about them and make informed decisions along the way.

Derick Van Ness: We don't have a specific, like we have. Forms that we use with our tax reviews and with our quarterly meetings, but we don't have a specific checklist of like, what should you be prepared to bring to your person? But I'm sure we could put something together. 

Jimmy Lea: Yeah. And I'd love for us to put something together, Derek, because what is second nature to you?

Jimmy Lea: Seems to be. Groundbreaking to 95% of other businesses or other accountants or other bookkeepers. They don't understand that. And Shayla, there you go. There's the QR code again for you, so you can scan that and get on Derek's calendar. Yeah, Derek I think we ought to create something because Yeah, it's second nature to you.

Jimmy Lea: It's groundbreaking to everybody else. So I think we ought to come up with something and maybe that's our follow up email. We can send a list that people can bring to their accountants or tax advisors to start the conversation because they if I come to my CPA and I say, Hey, I want to take advantage of the Augusta rule, and they say.

Jimmy Lea: What's that? 

Derick Van Ness: Right, right. 

Jimmy Lea: Chances are you might not be talking to the right person. 

Derick Van Ness: Well, and what I see that's more common, Jimmy, is you go to them and you're like, Hey, can we do this thing? And they're like, oh yeah, we can totally do that. And you're like, well, why haven't you been telling me? Right. I hear that all the time.

Derick Van Ness: 'cause we tell people strategies and they take it to their person. Their person's like, oh yeah, that'd be great. You should totally do that. And we're like, where's this guy been the last 10 years? And so, and then you start to wonder if they're missing this, what else are they missing? You know, that, that starts to really leak in and truly, you know, to defend CPAs and tax people, most of them have been trained to file taxes on time and accurately.

Derick Van Ness: It's not, yeah they're not trained when they get their CPA and when they go to school to save you taxes. They're trained to record accurately and on time. And so sometimes I think we're expecting too much of them. We think it's their job, but a lot of them don't think it's their job. So, you just, you have to kind of separate, Hey, strategy and recording are actually two different jobs.

Derick Van Ness: Some CPAs, some tax pros are proactive and are strategy driven. A lot of them are not, especially if they don't own their own business. And they're just like working at a firm. Yeah. They just they, you know this, you're a business owner. You think differently as a business owner than you do as an employee.

Derick Van Ness: So I'm not trying to bust on these guys. I'm just saying it doesn't serve you well as a business owner if you don't have somebody who understands this and is really looking out for you from an advice perspective, not just a recording perspective. 

Jimmy Lea: So true. So true. Thank you, Derek. Any questions, comments, concerns from those who are listening to this live?

Jimmy Lea: Go ahead and put them into the chat. This will be available on YouTube. It'll be available on Facebook and on our website. We are the institute.com. Of course. You wanna get ahold of Derek VanNess? He is At Big Life. You're at big life financial.com. 

Derick Van Ness: That's correct. Yep. 

Jimmy Lea: Yep. So let's get in touch with him.

Jimmy Lea: I know a few shop owners that have worked with you and a few, I mean, quite a few that are working with you and have taken that up to that next level. 

Derick Van Ness: Yep, yep. I mean, we've had a couple of shop owners who have saved six figures in taxes. Obviously they run pretty big shops and have good things going on, but the reality is the opportunities are there for people who are interested in it.

Derick Van Ness: For sure. And the more you make, the more you can save. 'cause they just, they get more expensive. 

Jimmy Lea: Yeah. Yeah. No, that's awesome. And thank you Crystal. She, thanks for the information. Be reaching out. They have records. Nobody can really answer questions.

Jimmy Lea: Come to Derek Crystal. I think you'll be very happy with the information you get.

Jimmy Lea: I have yet to hear anybody who was not pleased. That's not true. I think they're upset. They're upset that they just barely got introduced to you. Where have you been for my last 10 years of business? That's the question they're asking because the strategies that you have and that you put into place with these shop owners is life changing.

Jimmy Lea: And I applaud you, and thank you for doing that. Thank you for working in the automotive industry. I'm so glad that we were able to recruit you away from anything chiropractic or doctors or whatever it is you were doing for that. You are in the automotive world. I'm glad that this is such a good fit for you, man.

Jimmy Lea: Thank you for being here. I really appreciate it. 

Derick Van Ness: Me too. Loved working with shop owners and just appreciate the opportunity to share this stuff, jimmy. 

Jimmy Lea: You're awesome. Well, thank you very much. Thank you everybody for joining. And make sure you connect with Derek. Get on his calendar, big life financial.com/the-institute.

Jimmy Lea: Get onto his calendar so we can get some things going here. And thank you to everybody watching live. Thank you very much. We'll see you again soon. 

Derick Van Ness: Thanks, Jimmy.

April 2nd, 2025 - 01:00:14

Show Summary:

Jimmy Lea welcomes David Boyd from Inbound to discuss how technology, communication flow, and consistent training shape the customer experience in auto repair shops. They explore how shop owners can use AI to streamline call reviews, build advisor confidence, and ensure consistent, high-quality interactions with customers. David shares the importance of shifting from rigid scripts to natural, process-driven call flows, and how shop owners can better define their expectations and measure performance. Together, they emphasize the power of call analysis, customer journey awareness, and daily coaching to drive shop success. The conversation wraps with a live demo of Inbound’s AI tool and thoughts on the future of AI in customer communication.

Host(s):

Jimmy Lea, VP of Business Development

Guest(s):

David Boyd - Founder & CEO of Inbound

Episode Highlights:

[00:02:08] – David shares his passion for improving communication in the independent automotive repair industry.

[00:03:13] – Call flow should define expectations, build confidence, and lead to customer satisfaction.

[00:04:00] – The biggest challenge in call coaching is finding the right calls to review.

[00:05:48] – Using AI to pre-screen and identify meaningful calls saves time and improves coaching.

[00:07:06] – Scripting is outdated; teaching flow and natural conversation is more effective.

[00:09:12] – Advisors must be trained in communication and soft skills, especially with a younger workforce.

[00:14:05] – Calls must build trust and credibility within the first 15 to 30 seconds.

[00:18:43] – Every customer interaction is an opportunity to create a lifelong customer.

[00:26:06] – Normalizing call reviews improves team performance and builds comfort over time.

[00:51:01] – A live demo shows how Inbound’s tool identifies coachable and champion calls instantly.

👉 Unlock the full experience - watch the full webinar on YouTube: https://www.youtube.com/watch?v=1kk2jVaCR8s

Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!

Links & Resources: 

________________________________________

Jimmy Lea: Welcome. Good morning, good afternoon, good evening or good night, depending on when and where you're joining us from today. Thank you very much. I'm excited to be here. David Boyd is coming into us from Minneapolis, Minnesota. Minneapolis, Minnesota.

David Boyd: That's correct. Minneapolis.

Jimmy Lea: Nice. Glad you're here. David, this is going to be awesome.

David Boyd: I am enjoying our fresh blanket of snow outside in Minneapolis. So for those of you, Cindy, I think you got a little bit up in Alaska. And, thanks for sending that down to Minnesota. But for the rest of you around the country that aren't familiar with snow, let me just tell you, it's, a real, sad event in April to have a fresh layer of snow hit the ground.

David Boyd: So, thank you, everybody, for joining today. Our our content is going to be very exciting, and I'm glad that we can share it. I've visited with Jamie before where we've talked about, communication and I of course, I'm in the communication industry. And with inbound we focus exclusively on the independent automotive repair industry. So I work with, many, many of your peers across the country, and we talk about, communication and the various aspects of communication to drive growth and, to drive training.

David Boyd: And so it's something I'm very passionate about. And I'm glad that, you're able to join us today. So we have a great line up for you today. We're going to talk about, how to get started with, you know, a communication plan. What is coaching and training look like? What is call reviewing look like? Some of you are likely doing that today.

David Boyd:  And there are areas and opportunities to improve as you move down that path. We'll talk about a call flow. There's a, dirty word that we used to use in the industry called a script. And, I'd like to, you know, read rethink that terminology because it speaks to how we look at, the communication process.

David Boyd: I'm a process guy. I come from a background of process engineering and corporate America. So I look at things as process flow. And, we'll talk a little bit more about what that is, what is a call flow. And as we look at, creating this process and moving down the path of this process, we want to, define aspects and clarity, develop confidence for your team, and ultimately drive customer satisfaction.

Jimmy Lea: So, David, thank you for filling in. A couple of shout outs to, inbound from Todd. Todd says he loves inbound, so thank you very much, Todd. And, Ed chair is joining us from Las Vegas. Thank you, chair, for being here. The super awesome. Glad you're here. So David, to your point about call tracking and call scripts and call.

Jimmy Lea: I've listened to hundreds of thousands of phone calls. I can tell you right away why it is a phone call was not successful, why it did not connect, why it did not close a deal, it because of the thousands and thousands and thousands of phone calls that I've listened to. That's also the challenge. David. Finding the call. Right.

Jimmy Lea: So previous life coaching and training with sales skills and customer service skills at a at a former company. And we had to go in and find the calls. So if you rely on your person that you're coaching to send you the calls, it doesn't happen. Send me a good one. Send me a bad one. It generally those that are good for the coaching, that that want to succeed and want to progress, they're the ones that will send you the calls.

Jimmy Lea: Those are the ones that don't. They? I'm being forced to do this. I really don't want to do it. It's a totally different experience. And so I would love to talk to you about your program, because it is so cool what you have done in your process procedures, in your advancement, in your technology. Yeah, you're a nerd when it comes to this as well.

Jimmy Lea: And I say that nerd in a loving, kind and generous and respectful way that you are amazing. Thank you. You've done this work and this coding to get there. So the first thing I'd love to talk about is. Oh, and a quick shout out to Christopher Johnson, Southern Ontario. Christopher, thank you for being here. You're awesome. To the phone calls.

Jimmy Lea: Your system has an amazing method and an amazing way of finding those phone calls and identifying a closed deal, or a closed opportunity, or a missed opportunity. What does that look like? What are you doing?

David Boyd: We're really using technology and it's a great point. You you've touched on so many, parts that, every, every owner I talk with wants to do call reviews and training and coaching, but they also acknowledge that there's this heavy lift of time. It's always the time. And you talked about the scenario where the service advisor may send in the, call examples to the coach.

David Boyd: Well, if they do it, you know, they, they may be softballs. Right? So, they're going to self-select something that isn't that bad. And we miss that opportunity. So assuming that we understand what we're trying to accomplish in the coaching process, and I do want to make sure that we cover that as well. We want to make sure that we have the ability to very quickly get to effectively, you know, pre-qualified, meaningful calls for this coaching review process, something that, has evaluated the call.

David Boyd: We use technology. Now AI is everywhere, right? So how we utilize AI to evaluate key performance indicators in a call to evaluate key insights. I can be used in a positive light to help us reduce that heavy lift of time required to listen to call after call after call, and very quickly get to something that would be effectively prescreened or pre-qualified to benefit our call coaching and review process with the service advisor.

Jimmy Lea: What? So no question for you in that process. And I love the AI is involved in this. It is a when it comes to a script, I've always thought that you should memorize the script and then couple it up and throw it away. You don't want to sound robotic. You don't want to sound like you're reading a novel or, write a script to somebody nobody wants to be read to.

Jimmy Lea: But let's have a conversation. Can the AI, can your software can your program identify? Is the service advisor following the pattern that we've established?

David Boyd: Yeah. And you've in that statement you've asked two questions there. One is are we doing a script anymore. And at the, at the risk of, of upsetting maybe people that are holding tight to their script. I'm sorry in advance. Scripting is, I think, a little bit antiquated, where we really want to train to the flow so that it isn't robotic and it doesn't become this.

David Boyd: I need to, you know, did it, did it, and go step by step through this process. The, the flow of the call now becomes, really the important aspect of what we want to evaluate. So and I like that that was that flow and understand what is the context of the conversation. And that's now where, the tools and technology can help us.

David Boyd: They're very powerful in this regard because that, that is much like having a person sit on the call. Yeah. And listen to it and review it from that standpoint instead of, was this word spoken in this order in this sequence that's can still be evaluated. We may want to hit those key performance indicators, but it needs to be a little bit more natural.

David Boyd: So we want to identify who I am and who the customer is called. We want to know who they are and how did they hear about us. And we want to go through this flow, but it can be very much conversational. You and I can just sit down and have a conversation. I can get to know you. Now we're developing a relationship, right?

David Boyd: And we're communicating rather than me going through the checklist of how I check these aspects off of my script.

Jimmy Lea: Yes. And I think a lot of the, service advisors that you are analyzing or the that are part of your program have gone through an extensive phone training program so that they now know the flow of what to do. There's an entire generation now that would rather text than talk, right? I think there's an entire generation that has lost the soft skills of how to answer the phone properly, how to greet a customer, how to acknowledge.

Jimmy Lea: And so, I agree with you. It's the flow. Let's back up a couple steps. We've got to teach a script first for you to follow, and then crumpled up, throw it away and now you've got the flow. Now it's just bullet points, and you're able to do it because you know the right words to say in the right order to say them.

Jimmy Lea: But it's not scripted. It's now conversation.

David Boyd: Yes. And even prior to this, it starts with the owner's expectation. So does the owner have a clear understanding, an idea of what they want to accomplish and call handling? Who are they hiring to be in the front office and represent the face of that business to the customer? Assuming that somebody is calling and and overwhelmingly, people are still calling today, they may text at some point in the interaction, but they are absolutely calling.

David Boyd: And the people that we hire and have on the front counter now, we need to understand emotionally, which is funny to talk about in this context, but emotionally, where are they coming from? Do they even do they even feel comfortable talking on the phone? Right. So if I hire a younger service advisor, as you mentioned, they may be coming from an upbringing that doesn't have this type of, interaction.

David Boyd: So thinking through a conversation may not be natural. So that might be part of our training. The owners need to understand and acknowledge that's the case. Do I need to go out and get some third party help to help with this? This is something that we're going to do ourselves. Ultimately, we still have to have that basis of understanding.

David Boyd: What do I want to accomplish as the owner? And then, here are the things that I want covered the script, as you say. And here's how we want this to go. Well, we'll talk to this, will train to this so that we have a core understanding. Now, this is going to go away. And we're going to talk about communication, and, and personal interaction.

David Boyd: That's where we get into the call flow that it does become a logical progression. It starts with the owner. And of course, if they don't have a, sense or concept of what call training can be and should be, there are plenty of helpers out there, like contact Jimmy at the Institute. You got a camera over there just to touch.

Jimmy Lea: Right.

David Boyd: And, you know, I work very, very closely with. Yeah. Make the noise as well to go with it. Gotta get Mark and the crew, that do a lot of call coaching with the Institute. Just fantastic. So getting the business process nailed down is a core, competency for the owner to have as well.

Jimmy Lea: Oh, it is 100%, because there's a lot of people that can't talk on the phone or. And here's where I discover those that can't talk on the phone. Oh, can't. Wrong word. Those who are intimidated by the phone. It generally comes down to two things. One is training. Have they been trained that phone is the most powerful tool in the shop.

Jimmy Lea: It's more powerful than the air gun, more powerful than the the lift in the back, more powerful than the engine hoist. It is what determines if the vehicle comes into the shop or not. So the most powerful tool is the phone. Are you certified to operate that phone? Most people that are intimidated haven't been trained, so they don't understand the basics of what needs to be done there, and that's where they need training.

Jimmy Lea: The institute can definitely step in. Mark Seawell, phenomenal program for the APG. The advisor performance group. We call that the APG phenomenal program. The advisors that graduate from this program are, by far the best in the industry. So that being said, the second reason somebody is not confident on the phone goes into their mindset. And it could be that their self-esteem, their self-confidence, they've been just hammered so much with the no, no, no, the negative, the slammed phones, the yelling, the screaming.

Jimmy Lea: Their mindset isn't right. Well, that's a whole other course on a different subject, you probably can't test for mindset with inbound communications.

David Boyd: Kenya mindset is is not something that we can test, but we can look at other aspects of the call because that's really our ability to overcome objections. Yeah. And we can evaluate that. And if somebody has a tendency to cower back when an objection is met, right. They may not know how to overcome an objection. So this becomes a turning point.

David Boyd: And these are the parts that we learn as we as we, you know, have consistency in our review process over time. What is the capacity of my service advisor to handle calls for them to recognize where they're at in the conversation, to control that conversation, have ownership use their own sales skills, and we can develop sales skills.

David Boyd: We can teach how to overcome objections. And these are key components that help us make sure that, you know, we are understanding the customer because, I mean, when we think back, there's the cliche, right? When a customer calls the shop and they don't know what to ask, what are they going to ask? How much?

Jimmy Lea: How much is it?

David Boyd: How much is it? Right. And how many times to service advisors hear that? Well, if we change this mindset just by a simple understanding that that only means that my customer needs to be educated, right? So now that's my job. I'm an advisor, I will advise, so let me understand more. Why do you think you need XYZ. And we're going to we're going to flow into this conversation.

David Boyd: I'm going to take ownership of this of this call. I'm going to ask open ended questions. I'm going to overcome these objections. And ultimately I'm going to get them to agree to come in and, visit with my ask certified technician. And we're going to take care of them. So we're going to build this confidence. We're going to develop this relationship.

David Boyd: All of these things can happen, you know, in fact, they should be happening to establish credibility within maybe the first 15 to 30s of this call. Right. We want to make sure that we're controlling this or we're not going to go down this other path. Right. The other problem that we see and we can test for and call analysis is things like diagnosing over the phone.

David Boyd: That's a whole separate webinar. Right. So let's maybe not go down that path today and, we can have Mark join us for that one.

Jimmy Lea: Sure. For sure. Yeah. There's just so many stories coming up in my mind as you talk about these, service advisor skills in the questions that can be asked or should be asked, my brother called up the shop and said, hey, I want all new shocks and struts. Sure. We got you booked in today at 2:00. Come on down.

Jimmy Lea: That that that that one simple question. What makes you think you need new shocks and struts? Because my brother left the shop, went around the block, came back in and said, you didn't fix my car. Yeah. We replace all the new shocks and stress. There's four of them. They're brand new. Come here. We'll show you what's going on.

Jimmy Lea: What's wrong? Well, the. It shakes. The whole truck is shaking as I'm driving down the street. Oh. Let's go look at your tires. You needed all new tires. You had a big old bubble on one of his tires. Simple question. Would have avoided that. Whose fault is that? Is it my brother's for saying, hey, I want new shocks.

Jimmy Lea: It struts. Or is it the service advisor who should have taken the position of professional authority and say, what makes you think you need new shocks and struts? I'd be happy to do it right. How come? Why?

David Boyd: Yeah. So the mindset and the mindset shift now is I'm not an order taker on the front counter. Right? I mean he's not going to call and just order a set of shot and shocks and struts from me. They're going to order, you know, a competent review and inspection of their vehicle. So my job then is to get them to gain, you know, agreement that this is how this how this works, right?

David Boyd: We are a professional organization or skilled and qualified, competent in what we do. And I'm going to build your trust. Mr.. And Mrs., car owner, and we're going to come in and work together on this, and I'm going to keep you informed and advised every step of the way. So these are the trust components that are important when we're looking at, call reviews and training.

David Boyd: Are we, you know, identifying, who we are that we're, you know, a trusted organization. How do we establish our credibility right off the bat? Where are we building brand value throughout the course of our conversation? And a conversation may be 90s. It could. I mean, it could be several minutes, but it's not like we're having this very long dialog.

David Boyd: We're not speaking for 15 or 20 minutes on the phone. These are relatively short conversation. So this is a, a, trainable, teachable skill. Some people are more capable to do this naturally, and some, everybody can do it. I think we need to all acknowledge that that, for somebody who says I just I'm not good at that.

David Boyd: I don't I don't buy that because there are plenty of things that I thought I wasn't good at in my life that I recognize. Looking back, I now I'm very good at those things. And it really has to do with, again, what's the expectation, what tools and training do I have available as an advisor to develop these skills required to meet and satisfy or even exceed the owner's expectation?

David Boyd: And then we all share the need to share the understanding that it is really about the customer. So at the end of the day, the experience of our customer is paramount. And, the if I'm talking with somebody for the first time this now we're setting the tone of our relationship literally forever. So the likelihood of them coming back depends on, you know, this first 15 to 30s of the very first time they ever call our shop, what are we doing in that period of time?

David Boyd: How are we? Establishing our credibility, building confidence in our brand?

Jimmy Lea: Oh, I love that. And, you know, when they do call in to the shop, you've got to take that full customer journey experience coming in that the time that they actually call into the shop is the second opportunity you have to make that first impression. And I say that because they have looked at your website, they've looked at your social media, they've done some research about you before they call you.

Jimmy Lea: Now that they call you, they want to confirm is my research correct and my calling the right shop? Do you guys actually know what you're talking about? So that customer journey becomes very powerful in communicating with those customers.

David Boyd: I love that that I think I, I'm familiar with the term customer journey. I don't know how much we talk about that as an industry. I think we're I'm hearing it more, but I think that's an important part of our dialog. As successful high performing shop owners. Yes. And operators within the industry is do we understand the customer journey.

David Boyd: So this call process is part of the customer journey. And I love that that picture you paint to that it is the that phone call. The first phone call is the second impression. We're making the second opportunity to make a good first impression. Because it does come down to, the search that they've done or the referral that they heard from their neighbor or the, the reviews that they've read out on, on the website or, and other sources.

David Boyd: So it's a, it's a valuable, understanding that feeds nicely into this call handling process.

Jimmy Lea: Oh, it does, it does. And, and luckily, unluckily, okay. So to our ability to analyze the customer journey, you may you, as a shop owner may want to talk to your neighbors and, and recruit them as secret shoppers that you're going to comp their oil service, but you're looking for their customer experience. You want to know from them as a secret shopper what's their customer journey.

Jimmy Lea: And we as shop owners, we need to do this often to look at our full experience. Is it easy for somebody to book an appointment with us? Is it easy for them to call in on the phone? Is our phone easily identifiable? Does it ring one, two, three and we answer it? What is the customer journey? And to that point the customer journey?

Jimmy Lea: Is it consistent? Is everybody having that same experience as they're coming through?

David Boyd: This is good. And consistency is driven for the customer experience and our, our internal, process. Right. Do we have consistency in everything that we do with does every vehicle receive a complete inspection. And do we estimate, the entire inspection? Are we presenting all of this, all of those? We learn about consistency. That ties back to the phone as well, because I'll tell you, it's super easy to be distracted by something when I answer the phone.

David Boyd: Oh, we got I've got a technician that is chewing me out because of I don't know what reason right now. And I go answer the phone and I'm angry and they can hear it and it comes across a little bit of like, yeah, what?

Jimmy Lea: Yeah.

David Boyd: Oh. Okay. I need some help.

Jimmy Lea: You breath first, buddy. Deep breath.

David Boyd: That's exactly it. And that's what I talk about, like, okay, no matter what's going on around me, no matter what noise is happening or, how busy I am, it's always that moment of pause before I answer the phone. I'm going to take that breath. I'm going to, you know, collect my thoughts, regroup, and then I'll answer the phone and I'll the I'll let them hear me smile, because when I'm physically smiling, it sounds different.

David Boyd: It sounds better. Right? And when I'm, you know, I'm when I'm tensed up like this because I'm angry and I just whatever had, some interaction, believe it or not, that's easily detectable on the other side of the phone.

Jimmy Lea: It is important.

David Boyd: Parts.

Jimmy Lea: It is absolutely. And even a fake smile is better than a real frown. Right? You can hear it. Every service advisor class that I've taught, every, phone skills course that I've taught over the last 15 years. One of my questions is, can you tell when a customer is multitasking? Oh, yeah. Totally. Can you tell if their feet are up on the desk, if they're reclined in their chair?

Jimmy Lea: Oh, yeah. Totally. Yeah. Me too. And guess what? They can hear the same thing about you, right? Are you multitasking? Are you distracted? Are you being lax a days ago? Do they have your full attention? Yes or no? So not only does this phone skills help on the phone and the front counter, it also helps in communication in life.

David Boyd: Right? It does the way that we interact with one another. It's it's very important. Am I distracted and am I sitting here trying to have a conversation with my kids while tapping away on my phone? Right. Because that leaves an impression on the recipient. And, it's so it's so true in every aspect of communication through our lives.

David Boyd: And, you know, I, I spend a lot of time. Thanks for bringing that point up to me. But I spend a lot of time thinking about how we, handle calls and manage communication in the front office. It's easy to lose sight that it does apply to every aspect of our life. And setting the phone down, making this connection here some eye contact.

David Boyd: I'm going to smile. I'm happy to see you. I'm enthusiastic about being able to talk with you today. Jimmy, I'm going to use your name. Not too frequently, but I'll use your name, Jimmy, because you're worth it, right? You have my undivided attention, and this becomes important. When we talk about technology and call reviews, it, it's important to have the process and expectation established to go through this consistently, so that we don't develop complacency and then, manage the make this normal.

David Boyd: Right. So we want to make our, review of communication. And the review process is always backward looking. We don't want to spend too much time looking in the rearview mirror, but we want to know what's been on the road behind us so that we can, make better decisions about how we're going to navigate going forward.

David Boyd: So if we do this consistently now, it becomes a familiar process. We can sit down and do it very quickly, and we have to, have the ability to, you know, quickly get to a call, that isn't in in a lot of cases. You know this very well. It it happens more frequently, probably than it ought to.

David Boyd: But in the shop, the only calls that are reviewed, so to speak, are where something's gone really wrong. Yeah, right. And now we have a problem. And this becomes an uncomfortable experience. It doesn't feel normal. So we want to normalize the the review process. The other part of this too, is boy listening to myself in a recording.

David Boyd: Man, that sounds funny. It really does. It's uncomfortable for the first half a dozen times, and then it becomes normal. But if I if I listen to myself in a call and then it's six months before that happens again, now I'm right back to the beginning where it sounds unusual. It's not normal. So we want to drive consistency around this.

David Boyd: And consistency is important for you as an owner to determine what is that? I'd like to see something done weekly. If we can spend ten minutes a week on this, I'll tell you what. Your performance on the phone is going to go to the moon.

Jimmy Lea: Oh, and daily, let's do it daily.

David Boyd: Why not?

Jimmy Lea: Quick, quick phone call. And this goes to providing feedback. How can in let's back up a little bit. My mind is getting a little bit further ahead of the conversation. My mouth is just wanting to be there with it. The mind. If you're not having weekly company meetings or daily company meetings, you're having company beatings. And what that means is there's a problem.

Jimmy Lea: Let's talk about it right. If it's a consistent company meeting and you always have the agenda and you follow the agenda and you play a good call, you play a call that needs attention. Even the good calls can be improved. But playing that for the entire team allows them to hear it, see it, feel it, imagine it, and it becomes easier for them to then duplicate it and do it again.

Jimmy Lea: And when you're asking for feedback on how can we make this our best call from yesterday, how can we make this best call from yesterday? Even better today when it happens to play that call, everybody listens. They give their feedback and it goes on. So what, how can you. And maybe I just answered my own question.

Jimmy Lea: How can you start reviewing calls and turning that feedback into improvement? Well, you got to be consistent with it.

David Boyd: It is definitely about consistency and the ability to to get to those calls quickly. Again, I keep I feel like I'm saying the same thing and I apologize for that. But, the heavy lift of time, if we remove that barrier now, this becomes natural. It becomes easy to do and becomes fun and engaging. So how can I quickly get to those calls?

David Boyd: Because my only other option historically really has been listening to call after call after call after call until I find something that's reviewable. Right.

Jimmy Lea: I've done that. So your software identifies that these are the, angry customers. These are the missed opportunities. These are the top performers.

David Boyd: All of these things. So it will review the call and transcribe it so you can read it like a text message. You can look at a an AI generated summary, evaluate the key performance indicators that are important to you. And then we, you know, take additional, steps like having the AI determine is this is this a lead?

David Boyd: Basically, are we talking to a customer? Right. Because the other funny thing about, call recordings is, everybody calls the shop, including our parts suppliers and vendors and distributors and, you know, the, the various, dealerships and all of this stuff, those, when we start to introduce technology, those can look like bad calls because, you know, we tend to answer with the parts guy down the road in a very familiar way.

David Boyd: Hey, what's up, man? That kind of thing. Well, now, right off the bat, this is going to but this isn't a reviewable call. So we want to know that this is a customer interaction. We want to know is this an appointment setting conversation or is this a status check. Let's talk about that. Is check just for a second.

David Boyd: Right. When a customer calls us at 2 or 3:00 in the afternoon and says, hey, what's the status of my vehicle? And they might use those exact words.

Jimmy Lea: Well, you dropped it off at lunch.

David Boyd: Yeah, yeah. Or they dropped it off at seven in the morning or the night before.

Jimmy Lea: And that's true that that's a different scenario. Certainly somebody should have called early in the morning and followed up with them. But let's say they didn't. And now it's 2:00. The customer's doing the heavy lifting. That shouldn't be the experience, but that's training for a different day. Yep. To that phone call 2 p.m. in the afternoon. Hey, what's the status on my vehicle, David?

David Boyd: Well, yeah, let's check on you. I mean, we're going to go down this path right? And I'm like, oh, let me look up and see. And we want to know how well that that call is handled. I, I agree with you. I think that, that I didn't mean to get us off track on, on a status call because that's probably a webinar by itself.

Jimmy Lea: But yeah, it is, but that's okay, David, let's go down there.

David Boyd: So, do we have an expectation to, get in front of that for the customer? Really, no matter what time, they have dropped their vehicle off, did we establish an expectation on when they're going to hear from us, and then how they're going to hear from us? How are they prefer hearing from us? That could be a text message.

David Boyd: It could be a phone call, whatever that happens to be. But whenever, whenever a customer calls and they're looking for a status check, I shouldn't say whenever the majority of the time from what the types of calls I ever hear and see. This is a this is a defect. I'll use that word. It it's an error.

David Boyd: We've let somebody down. So now we have to backpedal. And I got to go look up the status of this vehicle. I got to go and ask the technician who's still working on this. Where are we? I haven't done that pre-work that might take 90s, but I haven't done that and then proactively communicated to the customer.

David Boyd: So now they're calling the shop. What's the status of my vehicle? And I see that usually happening about 3:00. They're beginning to mentally kind of shut down for the day. You're thinking about I'm going to check out from work here shortly. Do I need to go get my car? What do I need to do for taking the kids to practice tonight?

David Boyd: They're asking, an innocent enough question, but we've created some customer disappointment in that process.

Jimmy Lea: Yeah. No. It's true. Yeah. You have. And hopefully somebody is taking care of that earlier in the day. But those are coachable.

David Boyd: Calls coachable calls. Exactly. So then we can go pick them up. Is this the status call. Is are we using words or terminology. You know the nice thing about technology, because we're transcribing calls, we can identify if a word was spoken.

Jimmy Lea: Yeah.

David Boyd:

And, and I have, I have a customer that it was, feeling plagued by, service advisors that were using the word unfortunately.

Jimmy Lea: Ooh. Okay. Tell me more about the story.

David Boyd: We want to use. We want to know when that happens so that we can coach an alternative option. Right. Is it really unfortunate for the customer? Unfortunately, I can't get you in today. Or fortunately, I can get you in, next Tuesday at 10 a.m.. Is it unfortunate that it's going to be a $1,300 repair or. Fortunately, we found this now, right.

David Boyd: How do we frame that up? And where are we using, terms that could be off putting to the customer. That makes them defensive. So this was the my customer's mindset. I don't want to hear that word, unfortunately out of my service providers mouth. So we said, well, we're going to analyze the calls. We're going to find out when your service advisor speaks that one word, which is easy enough for the technology to pick up.

David Boyd: But then I'm also going to send you an email with that transcription and the audio file that you can listen to within moments of that call, and now have an immediate coaching opportunity. So and then you see that change in behavior almost immediately. The other thing that if I can talk about this just for a second to me, is when we do this consistently and we know that the review process is happening and this is normal.

David Boyd: Yes, in the shop it's normal for the service advisors. The next time they pick up the phone there, they have this conscious awareness. This might be the next call that we're reviewing. Well, what happens when I feel like somebody is watching me? I'm going up to the next level. So I, I'm driving accountability of performance. Right. We establish the expectation.

David Boyd: We do this review process. We do it consistently. We understand what the outcome is going to be. And now we're driving the accountability through, you know, improved behavior. They are aware that this is happening. And, you know, it's not like they're operating in fear. I don't mean to confuse what we're talking about here, but there's an awareness, right?

David Boyd: And where there's awareness, we understand that things are being measured. When something's measured, it's improved.

Jimmy Lea: Yeah, 100%, 100%. And you remind me of a story that I just barely heard up at 80 and in Seattle, Washington. Katie, service advisor for a shop up in Washington is in the APG program. The advisor, advisor performance group, a PG program. And her complaint was, I'm selling everything. So nobody there's no objections to overcome.

Jimmy Lea: Everything is being sold.

Jimmy Lea: Interesting feedback. Thank you very much. Interesting complaint. I don't take that as a complaint though. Congratulations. That is awesome. Awesome for Katie that she's operating at a level with her coaching and training. And she's got that feedback. To your point, the sooner the quicker you can come to an advisor with feedback that change will happen faster. If this is a call from last week, forget about it.

Jimmy Lea: This is a call from last month. Forget about it. Old news.

David Boyd: Right?

Jimmy Lea: Old news. Even yesterday. It's going to be a little bit old. Yeah, it's better than last week or the last month, but yesterday, is good. Hey, here's a call from this morning.

David Boyd: So. Yeah, it's going to be great. Yeah.

Jimmy Lea: Yeah. You're using this word. Unfortunately, we talked about using the word fortunately instead of the opposite. A word for me. And I'm wondering if you hear this on the phone calls as well is the word just, just as a weak word. I'm just calling to follow up with you. I'm just. It's just going to call you.

Jimmy Lea: Yeah. Just checking in. So the word just justified can justify. It's a weak position to take as opposed to. I'm calling you back about your vehicle. I'm calling to tell you we can get you back safe on the road, and it's going to be $1,300. That's the other thing I hear a lot from service Advisors is that they're selling from their own pocket book, right?

Jimmy Lea: Their own wallet, their own bank account. Don't do that. Don't do that. You are an advocate for the vehicle. The car right now is telling you, I need $1,300 worth of work. I need $2,500 worth of work. You as a service advisor are the advocate for the vehicle, right? And it's your job to be able to explain to the customer what your vehicle needs.

David Boyd: It's a mindset, a mind shift. Again, this comes through training because I, I might think that $1,300 is a lot of money or too much money. So if I frame my presentation to the customer for my personal financial perspective, that can influence how I present that to the customer. Yeah. I'm like, I'm sorry, it's going to be 1300.

David Boyd: You know, it's not the it's not the professional, mindset that we want to have. Even if I feel like that $1,300 is a lot of money, I can still come from the mindset or the perspective that my customer and I share the same objective. My belief is that they want to keep their vehicle and they want to be safe.

David Boyd: Yes, I understand what they're doing with their vehicle. Is that a commuter? Is it the, you know, is it the proverbial grocery getter or am I taking the kids to practice on, on Saturday morning? What am I doing with this vehicle? And do I do I understand do I believe as the service advisor that, it's my job to inform my customer and share their interest to be safe and have a reliable vehicle?

David Boyd: Reliability and safety are the top two things that most customers will tell you as important about their car and if they're going to if they just want it fixed so they can sell it, and they'll tell you that. Right? So, that doesn't happen very often though. But I think that's kind of the.

Jimmy Lea: Oh, David. David. David. It happens more often than you want to admit. I'm sure this car has been for sale for three years. I just want you to do the minimum. It's. I'm going to sell it next month.

David Boyd: Next month? Right. But I still want it to be reliable and safe in the meantime.

Jimmy Lea: Yeah, and that's what that's where advisors need that coaching and training to be able to overcome the objections and be able to talk to the client. Customer, help them to understand that, yes, I understand what you want, but it's not safe if this is my own vehicle, if this was my mother's vehicle or my father's vehicle or my daughter's vehicle, no, absolutely.

Jimmy Lea: This needs to be fixed and repaired today. It's really it's not safe. Right.

David Boyd: And if there are things that are going to be do soon like they're, they're invocations. Right. What are those. Yeah. I'd be it'd be best to do that all today. We're already in here working on this. Right. And however that is presented. How but we may need to be, you know, earn our keep as an advisor and put this plan in place.

David Boyd: So in three months, we're going to do this and, that, I mean, that's, that's getting kind of far in the weeds here because a lot of times this is much better suited for, the advisor, the sales training part of this, the AP GM program, does such a good job. And training. How to do this really super effectively and, making sure that, you know, we understand and we're following up with the customer if they ever have decline services.

David Boyd: So what does it come all down to though, Jimmy. It's really it's it all comes down to the customer experience isn't it.

Jimmy Lea: Yeah, absolutely. What is that customer experience.

David Boyd: Yeah. Yeah. The customer experience is paramount from the, from the time that they're, looking at, at our website or they hear about us from their neighbor, maybe they have a, you know, a, referral card with a discount in their hand. Something of the sort. Yeah. Now they're going to call, they're going to begin checking us out.

David Boyd: And, I've, I've seen, you know, the, the, the journey that we talked about earlier in our session here, the customer journey, suggests that as we get to the fourth and fifth visit, now, we, we have brand champions and people that are they're loyal to us. We develop loyalty. But that loyalty that dates all the way back to that first phone call and the first the first information they've ever heard about us, really their first experience.

David Boyd: So every customer interaction is an opportunity to create a lifelong customer. Owner spent a lot of time generating, customers to come in the front door. And we know that there are, you know, the back door is pretty big on some shops. Hopefully the owners know what's going out their back door as well. So if we invest in the, the, the, call review time, if we invest in the process and the training for the service advisors, that back door now begins to swing a little bit more closed and a little bit more closed.

David Boyd: And it's because the customer experience has been elevated. They really trust and believe that, you know, you know, no matter who I talk with here, maybe you have 2 or 3 advisors at your shop and you're not going to talk to the same. The customer won't talk to the same person every time. Do I have a vastly different experience depending on who I talk with?

David Boyd: This is important to know. So, training and coaching and call analysis and review, in my humble opinion, is best done when we're looking at everybody. And sometimes it's necessary to, you know, take the new person and bring them up to a certain point. But then are we are we consistent internally in our dialog and our conversations, looking at everybody's calls and, addressing those?

Jimmy Lea: I totally agree, totally agree. I'll give you my mother's advice when it comes to that sort of coaching and training is that we praise in public and we reprimand in private, or we instruct in private, or we provide that feedback in private, because you don't want to embarrass somebody in the in front of everybody. Those public meetings.

David Boyd: Not this is important for, the, the process areas that I help owners with because, a lot of times we're looking for bad calls, and it doesn't have to be. There's just be bad calls. Right? I, this is where, sometimes, an owner will tell me, I can't listen to calls because I'll choke them.

David Boyd: Well, whether they will or won't, I don't know, but, the whole point in all of that is, if I, you know, as a, as the shop owner, if I listen to my service advisor's calls and they do something that's upsetting to me, how am I going to respond to that? I have an emotional response to that.

David Boyd: Yeah. So it speaks to the, the normalcy. Right. Is it normal for the owner to review calls and listen to calls? But are we also reviewing good calls? Right. Can I listen to and can I identify what has gone well in a phone call? Right. It was, you know, efficient. It was effective. We made good use of the customer's time.

David Boyd: We got an appointment set. We didn't diagnose over the phone. We did all of these things well, and we're going to listen to that and identify. This was a good call. You did a great job on this one, boy. If you know, especially when we're doing this, as a, as a group or a team effort, when we listen to good calls together, now we know what good sounds like.

David Boyd: Yep. And then separately, we can go and listen to a I. There may be times where you do want to listen to something that didn't go quite so well, but I want to be very careful now about how do I correct somebody on this. Right. If I, if I talk to the group, versus Jimmy, I've talked with you about this before.

David Boyd: I, you know, and I start to listen to you now. Now we're reprimanding publicly and that can be very, very damaging for employee morale and the culture in the shop. So I agree with you 100% praise publicly. And you know, correct privately. And there are there are times and certainly we want to make a habit of evaluating when things go well and, you know, giving the, the, the fist bumps and the high fives for doing so.

Jimmy Lea: I love it, I love it. In fact, let's ask our audience, how many of you guys are doing weekly meetings, daily meetings, monthly meetings. How often are you having quick meetings, stand up meetings with your service advisors, your technicians? How often are you having these meetings to provide feedback on phone calls? How many of you are listening to phone calls?

Jimmy Lea: I'd love to hear that as well. So go ahead and put those into the comments, because, David. Yeah, if we are not having those morning huddles, if we're not having those quick stand up meetings, it's a public meeting because it only gets addressed when it's a problem. Oh yeah. Look there Bill is weekly. Cindy is morning huddles and weekly meetings.

Jimmy Lea: Very nice. And Bill and Cindy for your phone calls. Phone call reviews. Is that also a weekly event? Is that a daily event? Is that only as needed? Cindy says she's listening now.

David Boyd: Now and then and then. Yeah. Thanks for your, like.

Jimmy Lea: I'm only tasking. I'm listening to this webinar, but I'm, I'm checking all these phone calls as well, and. Yeah, now and then Mike's.

David Boyd: Mike's point is, that that's a key takeaway, that, it's important to acknowledge that we never want to lose the, the intent. So, And good job, Bill. The intent is super important. So as an owner, you can begin to skirt yourself by saying, I've told myself, I want to do this more for three years now, and I forget that I'm going to give up on it.

David Boyd: So, point well taken. It it it's if you want to do it more, great. Maintain that and then do it more. And if you don't, because something, you know, busyness gets in the way, maintain the intent to do that and pursue that, pursue the intent, because it will, will, elevate your service advisors and elevate your customer experience.

Jimmy Lea: Oh, and I love it. And you see Cindy's comment as well. They've got a new person. And with that new person, they're doing more phone reviews than they previously do. Why? Because you've got a new person. You want to make sure that they're part of the company the culture, the process, the procedure, the look, the feel, the customer journey experience.

Jimmy Lea: They want to make sure that that resonates. Yes, with the new people.

David Boyd: So I'll go back to the, the process part of this. Right. So the, the owner's expectation, for the owners and thanks for the, the real time feedback from those that have, you know, voiced their perspectives. If you don't have a clear understanding yourself of what you're wanting to accomplish, just take a little bit of time and do that talk with your coach.

David Boyd: You know, the service advisors can get involved in the coaching and training program, but I know, certainly a number of the people, live with us here now are also part of coaching. So talk with your coach and help define what that expectation can be and should be because, there, there are, good, healthy ways to define as the owner, what do I really want to accomplish in this phone call?

Jimmy Lea: Yeah. Oh, for sure. And to that point here, Cindy is saying, hey, you know, I'm super interested in this, I programing. How will that, I well, Cindy, I think it is and save you a ton of time.

David Boyd: Right. It's it does save a ton of time and, I don't I don't know that that we want to. I mean, I'd be happy to just show real quick and give a, quick overview of what it what it looks like. Yeah. Right. I would say, you know, I'm happy to talk with anybody, whether you're an inbound customer or not.

David Boyd: I can talk with you about what? What the tools can help you accomplish and how you can quickly get to the review process. And, what we have is, is our insights platform. And I have this set up based on some real data here. We're looking at a, at a subset of calls. And, I think Stu will be able to flash this up on the screen here, but.

Jimmy Lea: Michael, Michael, I'm sorry. Michael. Michael, pull up the screen here, Bubba. So you've click it and, we're going to be able to see, your live screen. This is your probably your demo account I'm guessing.

David Boyd: Yeah. So it's based on real data. But it's so we have, you know, we have the ability to look at a subset if you're a multi shop owner, we can look at a subset of locations and we can filter in on a specific service advisor. We have different scorecards that we can use. But what I want to really help illustrate to Cindy's question point here is, you know, I have a subset of calls, this is actually filtered down for leads.

David Boyd: Like I know that these are customer interactions. And the appointment was not set. So the appointment set is false. I want to identify calls where we didn't set the appointment, but this was a customer interaction. So I have set up calls where things went well except we didn't set an appointment. And then I have defined coachable calls, but I can look at a summary on this and figure out, you know what?

David Boyd: And just like, very quickly, what, is going on with this call, I can look at a transcription of this call. I can if the funny thing is I can read through a transcription very quickly. Yeah. That's super helpful. And then if I want to, I can drill into the, the call in more detail. And this gives me an interesting perspective to not only telling me about the, you know, the length of the call, but who's talking.

David Boyd: And when this we were talking a little bit before about, you know, ownership and control, these are some leading indicators about who is in control of the conversation of, you know, if the customer is talking two thirds of the time, we might want to question, really who is in charge of this conversation. So just wanted to give you a, you know, a quick peek.

David Boyd: But the whole idea here is that I can quickly drill in for a particular service advisor, or maybe one location that I'm working with if you're an MSL and then, filter down based on certain criteria, I want to evaluate, if I, if I just want to look at if these are leads, these are all of the lead calls, whether an appointment was set or not.

Jimmy Lea: And, seven days. This is looking at seven days, 200 and.

David Boyd: 60 days worth of data here. So I have 216 calls to look at which is way too many. Right? I can't get 216 calls over here. I see a gross conversion of the customer interactions of 70% conversion. So 70% of these 215 calls, we had, an agreement to buy or an appointment set. And then I can go down into here and identify there is a subset of five each.

David Boyd: So five champion and five coachable calls that I can very quickly go to. These are prescreened qualified. I have all of the key performance indicators here that I know that's super small on your screen, but you know, was this an existing customer? Did we take ownership? Did we leverage our sales skills, build brand value things of this sort and at a super high level?

David Boyd: That is what technology can do for you. So Cindy, this is how you can, you know, leverage, technology to, to really drive this process for you and others that, that, you know, we're hearing this today or in the near future.

Jimmy Lea: Because what you're going to do is say, Cindy, hours and hours and hours and hours and hours of listening to phone calls, looking for that one call to find it coachable. It just stacks it right up for you. I love that. That's absolutely amazing.

David Boyd: It really puts it right in front of you. And when I, when I talk about taking the heavy lift and we can go ahead and take that off the screen now, but when we take that heavy lift of, of time off of the owners table or the call coaches table, that is where it becomes a force multiplier, right?

David Boyd: I have the ability to do more in less time. Yeah. And that's, that's, super powerful for the owners. Who if they're, if they're taking this responsibility on themselves. But it also means that that my, call coach, who I brought in to come alongside in my training process, can maybe work with, 2 or 3 of my advisors instead of just one.

Jimmy Lea: Oh, I love it.

David Boyd: They have the ability to very quickly get to these calls.

Jimmy Lea: And I love your drill down as well. Were you able to drill down to the specific advisor. So to our audience, are there any questions, comments or concerns you have that you want to address here with David that we're coming in quick here to be landing this plane. If you've got questions, let's type them in now. I love that we can drill down to the specific advisors.

Jimmy Lea: That's for to see their close rates too. Will it show you, a, Eric is closing at a 99% or let's call it 90%. And then I've got Joe over here that's closing at a 30%, where they might say the shop averages 55 or 60. That's not bad. Yes, but can we look at each advisor to say, all right, Joe, you need to shadow Eric for the next 3 or 4 hours.

David Boyd: Exactly. So, so it does just that to answer your question, the short answer is yes. So, with our insights dashboard, when, when you filter, if that filter includes just the advisor that, that that those numbers, the conversion and the data and the metrics, the key performance indicators. That's only, looking at just that one advisor. So it really it is a powerful tool because if I have an advisor who's, you know, conversion is 50%, an appointment setting calls.

David Boyd: And I have an advisor who's 90% on appointment setting calls. We can do a couple things. One, we can acknowledge that we have an appointment setting problem, and, we know who to work with, but two, we can leverage, my stronger advisor to have examples. Right. We were talking about the review of good calls.

David Boyd: We can take some of those good calls and say, hey, underperforming advisor. This is what a good call sounds like, because once I once I hear those examples, now I can begin to relay, relate and adapt to my interaction with the customer and begin to emulate what a stronger advisor is doing, in order to perform better.

Jimmy Lea: Nice. I love that. And, there was a testimonial there a minute ago from Jenny that's using you at, Titan Auto entire Chesterfield, Virginia. 

David Boyd: Thank you. I saw that pop up. I didn't read it, but,

Jimmy Lea: Oh, it's good, man. It's been a wonderful coaching tool. It makes monitoring advisors easy.

David Boyd: Thanks, Jenny.

Jimmy Lea: Thank you. So, to Ed Scheer's question here, what do you think about the AI driven automated phone answering system? So this will be our last question before we land the plane here.

David Boyd: This is a good question. And, this is a yeah, I would say probably a different type of AI. So now we're doing some customer interaction, with, with the use of a bot. And, my preference would be to not use the bot, but I also see that there's value in the industry to be able to do that, because I, I fully acknowledge there are times when we can't handle 100% of the calls.

Jimmy Lea: Oh yeah, we've got four clients in front of us. The phones are ringing off the hook. We can't get to the phone because we got to take care of who's in front of us. If we take care of who's in front of us, we miss all those phone calls that could have come through. Or maybe it's after hours, right?

Jimmy Lea: So that would be better.

David Boyd: Yeah.

Jimmy Lea: Let's say that's the scenario. We're not having a service advisor not answer the phones because they want it to go to the bot. That's bad right? Let's assume that it is a scenario that it's the safety net. What do you think of that?

David Boyd: I think that if we have the correct perspective that really this becomes an interactive voicemail, then it's a powerful experience. It can benefit the customer. And this is about the customer experience. And you may also know that there are times that a customer may I say I'll say annoyed, but they may just be like, I whatever, you know, hang up.

David Boyd: So, if you have the correct expectation about what that type of, tool can do for you, it's important to know that it can and will benefit you after hours. Because it allows you to take that appointment. Right. And, and I partner, with somebody that provides a very powerful tool that does this and integrates, you know, with, with the vehicle history.

David Boyd: And it can pull this forward and, you know, allows us to, to really be sophisticated in that appointment setting process. But that is probably the, the, the ideal time to use this is after hours. And if we look at this is really the sophisticated or interactive voicemail. This is a good use of, of AI in this way.

David Boyd: The last thing and thanks, Cindy to, I love that comment. I on the phone, has gotten a lot of heat lately. I don't know if you've seen or heard about this, but, I as a communication expert focused on the industry, I pride myself in my ability to protect my customers. So, there is some case law coming forth now with regard to the use of AI.

David Boyd: Whether it's kind of I, I do with car reviews or the bots and things of this sort. And we want to be, very particular in the way that we deploy that. So, I've got my thumb on that. It was on a very extensive, call, yesterday with a law firm that, is a frontrunner in the industry, in the communication industry.

David Boyd: So, these are all of the things that are important. And as an owner, there's a lot of, you know, cool and flashy tools out there. I would say I make sure that that you understand, what you're deploying and the potential legal implications, particularly in states where we have two party consent laws with regard to phone use.

Jimmy Lea: Yeah, yeah, that's interesting. David. Thank you. We'll have to do a follow up webinar to this webinar to find out what the ruling is or what happens with this new case law that that would be fascinating.

David Boyd: It's important. Yeah. It's important, you know, the wiretap call recording all of these. And I'd love to, have a follow up for your audience because it is important, and, we don't hear about it. Often. People get in trouble. So. Yeah, you got to have an advocate on your side that can that can help you with this, right?

Jimmy Lea: Love it. Love it with that. Thank you. David. Thank you for your time. Thank you for your effort, your energy to our automotive aftermarket industry. You are an awesome asset for everyone here and those who use your services. They know how great you are and the services you provide. So hats off to you brother. Thank you very much.

Jimmy Lea: You make the coaching and training side of what we do with phone skills and advice and following that proper phone flow. So much easier.

David Boyd: Thank you Jimmy. This has been a lot of fun. I really appreciate you.

Jimmy Lea: Yeah you're welcome. Thank you brother. And for those of you still with us, there are some upcoming events. Check out our website. We are the institute.com. Go under all events. See that we have a leadership intensive coming up very soon. If you want to dig deep into the human centric side of why you choose to do what you do and why your clients are the way they are, and why your employees are the way that they are.

Jimmy Lea: And how can you best communicate knowing these? This information is going to be very important. That leadership intensive happening in April. We are in April, happening in April in Salt Lake, Salt Lake City, Utah. Love to have you be a part of that. It's going to be awesome, awesome and amazing. We've also got some service Advisor training coming up soon, and in September is September or October.

Jimmy Lea: I think it's September is the next mini Mars series we are going to have at in the office in Ogden. It's going to be limited seating, 50 people only, limited seating, mini Mars. Love to see you there. Thank you very much, David. Thank you to everybody who is here today. Good to see you my friends. Thank you. Cindy.

Jimmy Lea: Bill, Ed Sheer, Jenny. Mike, you guys are awesome. Thank you so much. Have a great day.

March 26th, 2025 - 00:56:14

Show Summary:

In this episode, Jimmy Lea from The Institute for Automotive Business Excellence is joined by life coach Juliana Sih of Crescendo Coaching for a masterclass on the Golden Rules of Listening. Together, they explore how powerful listening skills can transform your business, relationships, and leadership approach. Juliana shares actionable insights and data-backed reasons why deep listening is essential, offering tools to increase awareness and intentionality. Through real-life examples and practical exercises, listeners learn how to minimize distractions, let go of judgment, and build trust through reflective communication. Whether you're managing a shop or navigating personal challenges, these skills can help you unlock better conversations and stronger connections.

Host(s):

Jimmy Lea, VP of Business Development

Guest(s):

Juliana Sih, founder of Crescendo

Episode Highlights:

[00:00:00] – Jimmy introduces the webinar's interactive format and the power of today's topic: life-saving communication.

[00:00:59] – Juliana Sih joins and shares her passion for helping leaders and teams grow through better conversations.

[00:04:08] – Juliana introduces the “Golden Rules of Listening” and how applying them can increase your skills by 30%.

[00:07:36] – Only 2% of people are formally trained in listening, yet it's the most-used communication skill.

[00:10:53] – Listening is crucial for building trust, catching key details, and aligning teams for better decision-making.

[00:15:09] – Juliana introduces the three levels of listening and how great leaders operate at level three.

[00:20:49] – The group discusses what makes a good vs. bad listener, with input from the live audience.

[00:28:22] – Active listening involves full-body engagement and thoughtful clarification to build connection.

[00:30:29] – Golden Rule #1: Be Present - Juliana shares a personal story about missing out by being mentally distracted.

[00:36:04] – Golden Rule #2: Listen Without Judgment - understand context over content and put “Bob” (your inner critic) in the back seat.

[00:44:47] – Golden Rule #3: Reflect and Rephrase - this technique helps diffuse conflict and deepen collaboration.

👉 Unlock the full experience - watch the full webinar on YouTube: https://www.youtube.com/watch?v=Z5DPfR3OZb0

Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!

Links & Resources: 

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Jimmy Lea: Morning. Good evening, good night. Depending on when and where you're joining us from today, it is a beautiful day outside. Glad to be here with you in the automotive aftermarket, as we talk about all those things that you just don't always have time to talk about, these are some of those discussions that are deep conversations that really help us to take it to the next level.

Jimmy Lea: Joining me today is a life coach, and we're going to talk about some of those things that will help save your life, help save your business, help save your marriage. Help save your relationships. Help save your communication with employees and spouse and clients and customers. This is going to be a great discussion. I'm super excited for this.

Jimmy Lea: And it's to be an interactive webinar. Interactive in what way? How do we do that? We're not going to save all your questions for the very end for the Q&A. We want your questions in the middle of the discussion. So you have the voice. You are able to kick it in and join us in this conversation.

Jimmy Lea: So go to the comments button. And this is new for us. We're first time we're streaming live here with StreamYard. This is going to be awesome and amazing and so much fun. Click there in the comments button and put in where you're joining us from today. So we can give you a shout out in the comments just like that and see that there.

Jimmy Lea: It's going to give you a shout out. Super excited to be back on StreamYard. It's been a couple of years since I was on StreamYard, so I'm super excited to be back here in StreamYard to give you all a shout out. And thank you for joining us as we're having this conversation. So type in where you are joining us from.

Jimmy Lea: Those of you who are on Facebook, you can join this conversation as well. Type it into the comments. Same with those of you on joining on YouTube. Click into the comments and you can tell us where you're joining us from today. And since you are all being a little bit shy, or maybe you get comments button, I don't know who's on or who's not.

Jimmy Lea: Love to have a give you a shout out. All right. Well I guess we'll have to keep this to the three of us. I think this is going to be a great conversation we're having with the three of us. Hey, you know what it is? It's going to be a great conversation. And those of you who are watching the recording, this is some of the great information that we at the Institute are able to, give out to you as a shout out.

Jimmy Lea: And you know what? It does look like things are starting to work. We got Stu in the Salt Lake City, Utah area, and, we've got the Institute for Automotive Business Excellence. Shout out from Ogden, Utah. And, well, Salt Lake. So yes, we are working that that's a, a YouTube. So it's working. Hallelujah. All right, so here we go.

Jimmy Lea: On to the next. And joining me today is Juliana. Si. She is a life coach with Crescendo Coaching. A phenomenal friend in the industry. We have done quite a few webinars together over the years talking about communicate and talking about, marriage, talking about life, talking about running a business and running a marriage and being partners in running a marriage, being partners in a marriage and running the business and not killing each other.

Jimmy Lea: So Juliana and I have had some really good conversations. I'm so excited to welcome you here. Juliana. Thank you for joining me today.

Juliana Sih:: Yes, Jenny, I'm so excited to be here again. What I love about the institute is just helping the business owners grow, be their best self, and help their employees.

Jimmy Lea: Yeah. Oh, that. That's so powerful. It's so powerful when we can make a difference. And that difference comes when we lock arms together and decide that we're not going to leave anybody behind. We are all going to make this storm together, because it's a strange and crazy storm that we're in. We're all locking arms together to make sure that we can weather this storm together.

Jimmy Lea: So with that to Juliana, where are we talking about today?

Juliana Sih: Today we're going to be talking about the golden rules of listening. And I think this is a skill that is a really a game changer, because I truly believe that leaders, coach and coaches lead. And one of the great skills that I've been able to expand on, and I'm still working on it, it's a work in progress, is the skill of listening.

Juliana Sih: So I want to teach your audience and your people and your shop owners all about this skill. But if you just have a little bit of awareness and a little bit of intention, you can increase your listening skills by 30%.

Jimmy Lea: Nice. I'm down for this 30% increase. I am working on my skill of listening, so I'm super down with this information. I'm excited.

Juliana Sih: Yeah, because really listening helps to strengthen personal professional relationships. That helps you to navigate difficult conversations right? When you're triggered and you have like strong emotions inside or your employees triggered and you don't know how to be with them, listening is the key. So listening can help you break through communication barriers, and it can help foster deep and trusting relationships.

Juliana Sih: So I want your audience to do just a little quick, question. On a scale of 1 to 10, I want you to rate how would you rate your listening skills just on a scale of 1 to 10? Just think about it. Put it into the comments. I want to know where you feel like you're at with your listening skills.

Juliana Sih: Jimmy, what do you think you're listening skills are,

Jimmy Lea: I think I'm at a solid 7.5.

Juliana Sih: Beautiful. And then for the audience, too, just you don't necessarily need to think about this now, but maybe just in the back of your mind, what would make it a ten?

Jimmy Lea: Yeah, I think oh, can I answer this one.

Juliana Sih: Yeah.

Jimmy Lea: Because I think I have an idea. I think for me it's putting away the distractions. So that in that conversation, in that moment when, we're having a conversation and it's one that needs full attention, which is all conversations, I need to put away the distractions and give that the full attention because, as much as I like to think I can multitask, I really can't.

Juliana Sih: I'm fearful I'm going to talk. I'm going to actually talk about that a little bit later today. During this masterclass. So I mean, one of the what. Oh, wait. Sorry. So listening is actually the most common communication skill that we use more than speaking. We listen 45% of the time, which is almost about eight hours of our day.

Juliana Sih: And then we spend about 30% of our time speaking, and then 25% is split between like reading and writing. And the statistics are pretty sad. On listening, only 2% of people are formally trained in listening, and it's people like coaches or therapists, and most of the money that is spent on personal development and communication skill all goes to speaking rather than, and very little on listening.

Juliana Sih: So today I want to talk about, you know, why does this matter? Why does listening matter? I want to talk a little bit more about some of the statistics. I have some, things I want to read off here. I want to talk about the difference between passive listening and active listening. And then we're going to go into the three golden rules.

Juliana Sih: And then I'm going to share the rest of the rules with you. And then we'll go into some Q&A in case the we don't answer all the questions before that. So as Jimmy shared with you, my name is Juliana and I'm a leadership coach, and I help leaders find their authentic leadership style so they can make a bigger impact.

Juliana Sih: I've been doing this full time since 2018, and as a coach, my main job is to listen deeply, to be radically curious, and to ask thought provoking questions, to evoke new awareness. So what I've done with this masterclass is I've really condensed what I've learned in the past seven years as a coach and put it into really layman terms so that I can teach a business owner or a spouse and leaders in the community to deepen their listening skills.

Juliana Sih: And really, my mission with all that is to elevate conversations. One deep conversation at a time. Because all the time I hear this in my practice is like I hear people telling me that they haven't shared what's on their mind with other people, right? Like, I get that all the time. Like, people know and trust me for a reason, but I don't think I have anything special.

Juliana Sih: I think I just listen more deeply and people than open up. So that's why. That's why I care about teaching this topic. Here's a few reasons why I think you should care, right? Miscommunications happen all the time. If you can listen more deeply and you can understand the other person's lead, it's going to lead to less disagreements and unresolved issues, likely if you're not a good listener, there's a lot of frustration, and people may choose to stop sharing openly, which can lead to feeling of resentment or isolation or being left out of a conversation.

Juliana Sih: And I know as a shop owner and as a leader, you don't want that. Frustration is an energy leak. There's a lot of missed opportunities. Also, poor listening can cause you to overlook valuable information, feedback, or potential new ideas. And of course, limited growth. Bad listeners missed out on learning new perspectives that could spark personal development and make better decisions.

Juliana Sih: So really, when you can be a better listener, you can be more efficient. Effective people will trust you, and you'll have more influence in either in your community or in your business. Because I know as business owners, as leaders, you want to be more efficient, right? You want to catch kids, you want to catch key details of first time and reduce miscommunications and unnecessary back and forth.

Juliana Sih: You want to be influential. You want to get everyone aligned on the same page. You want to be able to solve problems faster by really understanding the real issue and not the surface level issues. You want more collaboration. You want people to work together, clear communication and stronger relationships. And that's really the power of deep listening.

Juliana Sih: You want to be able to make good decisions, right? When you listen deeply, you can gather insights. You can ensure you don't miss the critical information that's needed to make a really powerful decision. And you also want to build influence. Influence is built when people trust you and people trust you, when they feel heard and seen and they feel important.

Juliana Sih: And that's what listening can do. So so I hear this quote often. It's like, don't be the most interesting person in the room. Be the most interested.

Jimmy Lea: And and oh my gosh, Juliana right there. You just hit on an an on a solid topic, a solid almost another webinar. Two things that I that I hear when I hear you talking about communication and listening. As you can imagine, in high school, I in college and in life, people remind me that I have two ears and one mouth.

Jimmy Lea: So I need to listen more. And I'm trying to I'm trying to listen more. I'm trying to listen and be better. My mind tends to go pretty fast, and I try to hear what you're saying, but my mind is, and this is my fault. This is where I'm trying to draw back and listen better rather than anticipate what your problem is.

Jimmy Lea: You concern is, and I'm trying to fix it. Before you even get to your point, I need to listen better instead of thinking ahead. Are you gonna be talking about that as well? Where I want to solve all the problems and they don't even know the problem?

Juliana Sih: Yes, Jimmy, you bring it up. Such a good point. Really? There's a reason why this happens. And it's scientifically based, right? So our brain is brilliant. It can process up to 400 words per minute. And the average speaker talks about 100 words per minute. So that's only 25% of your brainpower. Guess what it's doing. The other 75% of the time it's we have our inner chat, right.

Juliana Sih: You're either like maybe judging, trying to give advice, you're trying to mind read is what you're trying to do, trying to anticipate what they're going to say so that you can try to solve their problem or you're trying to one up someone or you're trying to, or you're just daydreaming, right? Someone's talking about their weekend. You're like off thinking about the vacation you had five years ago when that pina colada.

Juliana Sih: That was delicious. So I think part of it is like we're how how do we refocus that 75% or, you know, 60%, whatever it is to something else so that we're actually present with the person. And I am going to talk a little bit about some of the things where you can, put that beautiful brain power that we have to good use.

Jimmy Lea: Nice, nice, awesome.

Juliana Sih: So there are some different levels of listening, and this is kind of something that we don't really think about. Right? There's the internal level of listening. Level one. So I want you to picture yourself at a restaurant. You're sitting with a person on the other side. Maybe you're on a first date or someone you admire. And then the waiter brings you the menu and you're looking at the menu, and you're.

Juliana Sih: This is where you're at level one. You're looking at the menu and you're like, what would look good right now? What do I what am I, crazy? The focus is on you. The spotlight is on you. Oh, should I have a drink before I start eating? What? Appetizer. Sounds good. So that's level one. All right, let's say you ordered, some spaghetti and meatballs and you're happy.

Juliana Sih: And now, level two, you're focused, listening on the other person. Your sole focus is on them. It's like the whole world could fall away, and they would just be you and the other person that's focused, listening. You're paying attention to what is said and not said. You're paying attention to their nonverbal cues. So that's level two. The spotlight is not on you, right?

Juliana Sih: Level one is on you. The spotlight is on the other person. So we're going to be talking a lot about some strategies to be more and like level two, level three is global listening. And level three includes the action, the inaction in the interaction. And it includes, like all your senses, not just your hearing, but also your senses, your intuition.

Juliana Sih: You know when you get that gut feeling, someone tells you like I'm doing fine, but deep down you kind of know, like something's up. That's global listening, that's level three listening. So I just want to distinguish these three levels because we all have access to them. Global three takes a lot of practice. The most influence, and successful people are able to practice at a level three.

Juliana Sih: They're able to read their impact and adjust accordingly. So some of this, the success that I already shared with you about listening, I told you they're a little sad. And that's okay. This this is why I want to teach this. And others already teach this to change that narrative. Right? Only 2% of people have formal education and listening.

Juliana Sih: 75% of people are preoccupied while listening. They're either thinking about their to do list. What to say next, just waiting for the other person to kind of like, stop talking. 80% of organizations spend money on speaking, but they don't spend money on listening and building the listening skills. So it's all about like talking and how to talk more effectively, but not on listening.

Juliana Sih: So we're kind of in a crisis and listening just because there's not enough, resources spent on that. I'm going to share a few other statistics here that I found. A survey found that 96% of people believe themselves to be a good listener. There's actually a Google did a three year study on trying to figure out what the most effective teams did, what made them different from other teams, and what they found is that the most successful teams were better listeners.

Juliana Sih: They were better communicators. They had, you know, when someone speaks, everyone listened and their ideas were all exchanged and shared. Everyone felt curtains heard and seen. Then they were like contributing. So the most successful teams have a good listeners where people can feel heard and seen, and they have this sense of safety within them. The funny also thing is that most people believe they're a good listener, but they think they're a better listener than they are.

Jimmy Lea: Oh yeah. No, of course. Right. I mean, we always think that. So to to the Google analysis was, were these teams trained and taught how to do this or they just discovered that they were better listeners.

Juliana Sih: They just discovered like an outside party was evaluating, these teams. And that's what the outside party discovered is that these teams had really good communications skills internally in their team. Everyone felt like they were contributing to the whole, and everyone felt like their ideas were being heard and valued.

Jimmy Lea: Well, that's fascinating. Fascinating that that Google would analyze that within their own company to see what makes a good team great.

Juliana Sih: Yeah, yeah. Some of the other statistics here listening to 30 minutes or more of nagging complaining can negatively affect the brain problem solving skills. Active listening is identified by 64% of HR professionals as the most critical leadership skill. Being able to actively listen is shown to increase productivity and collaboration by up to 25%, and it's also shown to reduce the number of misunderstandings by 40%.

Juliana Sih: So a really, really valuable skill to have. I showed this a little bit earlier, but we spent a lot of time listening. 45% of our time is spent listening. 30% is spent speaking, and then around 25 is writing. And, reading. So I would love to hear from the audience a little bit about what they think.

Juliana Sih: Hang on this, which may I said, let's talk a little bit about the good, the bad and the ugly of listening. So I want to hear from your audience just a few things about what they what they believe is a good listener. What makes a good listener just put into the chat in the comments just right. So the first thing that comes to mind when you think of a good listener.

Jimmy Lea:

And while we're waiting for people to chat in something that I, it just reminded me I saw on Facebook, reels and on TikTok is that we listen and we don't judge. So judging, would be one that I need to work on to make sure that I'm not judging when I'm receiving information. But then the second, as a good listener would be that I am listening, not multitasking.

Jimmy Lea: So something that goes a long way for me when I'm talking to somebody or giving instruction, is for them to acknowledge. Acknowledge goes a long way in my book, attentive writing says attentive. Yes, absolutely.

Juliana Sih: Using mirroring, repeating what they're saying.

Jimmy Lea: Yeah, yeah. And I love that Mary said this because in that mirroring, the sender of the information is able to hear what you heard, and it might not be what they meant to say. It might be, oh my gosh, now that I'm hearing that back, wait, there's a couple of changes we need to make to that because that a lot.

Juliana Sih: Yes. You bring up such a good point when you mirror and when you when you can be that reflective mirror like then they also know what they're saying because most of the time people don't actually know what's coming out of their mouth. They have some ideas, but then things slip and you know, they don't know what they're saying.

Juliana Sih: But by being a mirror, they can learn about themselves as well.

Jimmy Lea: Yeah. And I like John suggestion here too. And there's a fine line. I don't know if you can talk about this or not. Juliana, in asking questions is asking questions that are good and important, but at what point does it go to an interrogation from the the receiver side? You're asking me questions. Well, at what point does it go from you're asking me questions to now it feels like you're just interrogating me.

Juliana Sih: Yeah. That really has to do with the quality of the question. You really want to make sure that it's not pointed, right? Like if someone's telling me about, like, their marriage and they're struggling and I ask, well, why don't you just divorce them? See, I'm going to that is. And how like, instead of like, oh, what? Don't what don't what aren't you happy with in your marriage?

Juliana Sih: So really that really depends on the quality of the question that you ask. You want to make sure that a you're being curious, you don't know the answer. Right. And also you're not leading them somewhere and you want to ask an open ended question. Not like a yes no question which usually starts with a what. Versus like a did or how goes sometimes in the explanation and people can feel a little bit defensive also when they have to explain themselves.

Juliana Sih: But there's a purpose and reason for those types of questions as well.

Jimmy Lea: Yeah, yeah for sure. It's something that, that I've, discovered in my communication, is, acknowledge before you go asking me the next question, I need some sort of a verbal cue body cue that says you're hearing me. You're listening. You understand? There may be, affirming, confirming, acknowledging or saying yes. And, that goes deeper into it.

Jimmy Lea:

So, if I get a barrage of questions, probably three in a row without acknowledgment, then I it feels and I'm discovering this about me. I mean, I'm 51 years old and I'm finally learning these things that I, I feel, interrogated.

Juliana Sih: Yeah. And it's. Yeah. You mentioned something really important to asking one question at a time.

Jimmy Lea: Yes.

Juliana Sih: Oh, yes. When you stack questions, people get overwhelmed. They don't know where to, where to start, what to answer first. So really, like, you know, asking good questions, the quality of the question matters. Making sure it's from curiosity, but also, yeah, asking a simple question as you can long winded questions are also make it very difficult because, there's like some explanation in there and, you know, other components.

Juliana Sih: The most powerful questions are the simplest.

Jimmy Lea: Oh yeah, for sure. I learned, 15 years ago about asking multiple questions at the same time. They'll only answer the last question. The first two weeks, they don't even remember what they were, but they'll answer the last one.

Juliana Sih: Yes, yes. Beautiful. So good leaders, we have a very good responses here. Very attentive. They're focused, they're connected. And they're responding either by nodding, nodding, acknowledging that they are either here in you, seeing you, or in the conversation with you. All right. Let's talk about a bad listener. What are the qualities of a bad listener or just like someone who's not?

Juliana Sih: Yeah, I don't like the word bad, but, you know, a bad listener. Let's talk about that. What are some of the qualities of that?

Jimmy Lea: I think distraction is top of the list.

Juliana Sih: Yes.

Jimmy Lea: Or dismissive. That is right up there with, being distracted, dismissive. Yeah. My my concerns, my questions, my comments, my concerns have no weight in your world. And you're going to just dismiss me.

Juliana Sih: Yeah.

Jimmy Lea: Maybe I didn't say right. Maybe we need to repeat this, but, yeah. Dismissive that’s a...

Juliana Sih: That's a tough right. It makes you feel like, disrespected or not important or just like you're they're not even listening, right. They interrupt. Bad listeners also are closed minded. They just want to, like, share their ideas. And they're not actually even it doesn't even feel like they're allowing what the other person is saying to enter.

Jimmy Lea: Yeah, it feels in those situations it doesn't feel like a discussion. It feels like a instruction.

Juliana Sih: Yeah.

Jimmy Lea: Like I'm being instructed and told what to do, where to go, what to think. And that's not good. Nobody wants to have that type of a relationship with a business partner, a client, a spouse.

Juliana Sih: Yeah. People really want collaboration. Yeah. And that's where, like, the listening skill can really come in. Is like, if you want to collaborate on a solution, right? Everyone has input, then everyone's involved, everyone's aligned. Everyone's like, ready to go because they all felt like they contributed. And they're part of the whole, something else that makes people or that looks a little too busy.

Juliana Sih: They're distracted. They're, you know, they're on their phone, they say they're listening, but you kind of know they're they're not.

Jimmy Lea: There's some that I've seen before is, talking over here. I am telling you about a situation or a story or some information and, it's it's as if, though I'm not even there. I'm not even talking because somebody just comes in, blows right over the conversation, takes right over it.

Juliana Sih: Yeah.

Jimmy Lea: That's very frustrating.

Juliana Sih: So common because we all want to like, relate it to ourselves also. And then we don't need to bring that spotlight back on us. But we unintentionally bring it back. Right?

Jimmy Lea: Yeah.

Juliana Sih: So it's like initially it was on you and then they want to bring it back to them, but not intentionally. It's just like a very subconscious thing very often.

Jimmy Lea: So what's a way to be able to do that so that we're not doing that too. It's about them. It's not about me. They're telling me about a problem, a question, a concern. And how I, I guess it's just focusing with full intent on making the conversation about them and zero about me. Is that the listening skill for that one there?

Jimmy Lea: Juliana.

Juliana Sih: Yeah, the listening skill. Again, it goes back to that, brain power like our brain has. It's so it has such a high CPU and we're not using all of it when the other person's talking. So it's just about where can I put my focus? So it's not just going back on me. So it's about listening to the content, right?

Juliana Sih: Making sure you're understanding them. It's about reading their moods and emotions like the subtle things it's about, like noticing if they have any vocal changes that are happening. Like, you know, someone says they're really they say the words, oh, I'm so excited about something. But the voice is it or the like. Body language is there. That's where you tune and that's where you put the energy when you want to actively listen.

Jimmy Lea: Yeah.

Juliana Sih: So when you're just listening, you're, you know, focused, you're focused on the speaker, but you're not fully in it with them. You know, you might be kind of disengaged. You might be doing something else. So that's not really active listening. Yeah. Active listening is more on the, sorry, just my slides. Active listening is more being fully with the speaker.

Juliana Sih: It's having the spotlight, being fully on the person. You're understanding the speaker's message, you're understanding their feelings. You're understanding their perspective. You're putting yourselves in their shoes so you can try to understand them completely and do your focus on understanding and responding thoughtfully. And you take into account those verbal and nonverbal cues to understand. You make eye contact with your present within you.

Juliana Sih: Ask clarifying questions. How often has someone been talking to you? And they're chatting about something and you're lost, but you're just like, yeah, yeah, right. Instead of pausing and being like, actually, hang on a second, I'm not quite sure what you're saying there. Can you clarify that? So active listening is all about, you know, engage in the conversation and ask those clarifying questions and paraphrasing.

Juliana Sih: So active listening aims to understand passive listening is just hearing. You know active listening involves reflective responses and asking clarifying questions and involves the whole body, not just the words. It involves the mood and the motion, the body language, the vocal changes. So that's where all that CPU can go, right? Because in listening, the thing that we're doing often is we're judging not I don't mean like bad judging, but we're just judging what the person saying, whether it's good or bad, whether it's right or wrong.

Juliana Sih: We might be trying to give advice for like, I know the exact solution to make this person, successful. And then you're thinking about all the advice that you want to give. But unfortunately, that's not active listening. We all have really good intentions. We want to help people, but the best way we can help people is by active listening.

Juliana Sih: So the thing about listening is we often think we are better at listening than we really are. Study showed that managers will rate themselves high on listening, but their employees who report to them will rate those same managers as poor listeners. So we all think we're, like, better listeners than we are. And I think that's just because we have a lot of blind spots when it comes to listening.

Juliana Sih: You know, we learn listening from our families, peers and our life experience, mostly through trial and trial and errors. And they've and we've just compounded over the years, they have become habits that we don't even realize are getting in the way. So like I mentioned earlier, just a little bit of awareness and, just a little bit of awareness and some attention can go a long way when it comes to listening.

Juliana Sih: All right. We're going to get into some of the rules now. And Jimmy, you are so spot on with some of the things that you talked about earlier. Because the golden rule number one is be present. And I know this sounds repetitive and simple, but we have to put it into practice. Because this is the one of, one of the key ways to really be with the other person.

Juliana Sih: We got to be present. You know, we're often thinking about the future, the past, how it's gone, how much you know this person, how much you know about their problems. And then we can't be with who they are in this moment. I'll share a story about a time with my boss. Hang on. Oops. When I thought I was being present and I wasn't.

Juliana Sih: So I was in a one on one with my boss, and they were walking me through some, like, crucial technical aspects of my job, and she was like, dropping some gems, some insights, things that would have made me better, faster, more effective. But where was I in my head? I was miles away. I was like thinking about some personal problem that needed fixing.

Juliana Sih: So on the outside I look like I was listening. I was nodding, making eye contact, even throwing in the occasional but I wasn't actually there. And then I realized at some point that I was just completely lost. And I had no idea what she was just saying. And instead of owning up to it and interrupting her and being like, hey, can you like, repeat that?

Juliana Sih: Or can you say that again? Some way to get back, engage in the and the conversation? I was too embarrassed to just do that. So I just kept nodding, hoping she wouldn't notice. And by the time I walked away, I knew that conversation had been really a complete waste of time. I had missed something important, something that could have helped me grow simply because I wasn't truly listening.

Juliana Sih: And here's a real impact, right? Not only did I miss out, but my boss wasted her time pouring knowledge into someone who wasn't even present. And that's the thing about listening. It's not just about hearing the words knowledge. It's about like doing the the the gestures. It's about showing up and being fully present and respecting the person speaking by actually taking in what they're sharing.

Juliana Sih: Like the one of the key ways to build respect is by acknowledging and listening to the other person, especially in a world of so many distractions. So one of the things you mentioned earlier, Jenny, was put away your distractions. One of the simplest things we can do is put away our distractions. Right. I don't need you to throw your phone out, but, yeah, put your phone away.

Juliana Sih: Put it on silent. If you're on a zoom call and you know all your windows distract you, close them all down. Keep it simple so that you can put all your attention. On to the other person. If you know that being in the office is distracting for you to be present and you can't focus, go have a one on one out on a walk.

Juliana Sih: Get creative with what works for you. I tell people, like, if you're meeting someone at a coffee shop and you know you're facing the door is going to be distracting because you're just going to watch people going back, you know, in and out, like face the other way. So these are just like simple things you can do to start being more present with people.

Juliana Sih: Because at the end of the day, people are always revealing something about themselves for a reason. And as a listener, it's your job to try to find out. Why are they telling me this? Why is this important to them? What does it say about their values, their worldview, and what they care about? And I think one of the things that we forget is we have to be responsible for minimizing distractions, right?

Juliana Sih: Like, if, you know, like when me and my husband try to have a conversation and the kids are around, we can't have a conversation because, you know, two minutes in, my daughter wants something, the other one's crying. So I have to be be intentional and create a space. Honey, let's talk when the kids are asleep. And then I have to remember to go back and do that.

Juliana Sih: So this can look many different ways for each relationship in your life, but you need to figure out what works for you, right? To be present if it you know, I think we talked about this in another webinar, Jimmy, where when you cross a bridge, you don't talk about any more work, right? If you work together and are married and have a business together, like you have that bridge where you, don't talk about work anymore, that's very similar.

Juliana Sih: Like be present, like set yourself up to be present. Get curious with other person. Create an internal game for yourself. You know, ask why are they sharing this? What? What has them share in this room? Why is this important to them? What are they experiencing as they share them? So getting curious, asking questions. And I think the thing that we really forget is it's okay if there's silence in between.

Juliana Sih: We're so used to thinking that we need to fill in the space, that we need to think of our response. We don't. If there's like a three second silent pause, that's okay. Just let them know that you're thinking about your response and you're really absorbing the information that they're giving you. Oh, I realized, sorry. The other thing to do is start a simple practice of meditation.

Juliana Sih: I think I think one of the most important things that we can do as humans in general is like learn how to quiet our mind. And that's what presence is also with other people. If we can learn to quiet our mind and train ourselves either through meditation or through other practices, then that can really help people be present.

Juliana Sih: Something else that you can put your focus on as you're being present is notice if someone is stating some contradiction, you know, like if someone is saying that, they're doing fine, but they look really sad, or they're saying, that they're really excited about something, but then they on another set and this sentence, they say they're really mad.

Juliana Sih: Notice start noticing those contradiction. The real powerful thing about listening is that you can help the person speaking see themselves in a new way.

Juliana Sih: Okay. We're going to go on to Golden rule number two. Jimmy, you talked about this too. So I love it. Listen, without judgment. Yeah, judge. And I don't mean judgment, like in a bad way. I think this is, you know, what is judgment. Let's talk about that for a second. Judgment is a mental habit of labeling or categorizing someone's word are literally judgment making machines.

Juliana Sih: That's how we evolved. That's how we've probably survived, is we need to be able to evaluate people fairly quickly. But there's also probably holding us back now, it's often based on our past experiences, past conditioning, and often it looks like being right or wrong, agreeing or disagreeing. And it's really a self-protection mechanism. Part of the reason, why we judge is because our egos like to be right.

Juliana Sih: We want to be right. So it's a self-protection mechanism. We don't want to be we don't want to be vulnerable. So we try to fill in what we already know about the person. So we don't have to be in the unknown. Like, for example, if you like, label someone as, let's say, like you label someone, let's say you're going to go into a conversation and you already know this person is kind of like you think they're a jerk, right?

Juliana Sih: You're going to experience them as being a jerk just because you already have that prejudgment about them. So that's that's kind of the impact of judge, judging is that we it's a filter. It acts as a filter in our listening. If you know you're going to meet someone and they're energetic and fun, you're going to show up differently than if you think they're a jerk.

Juliana Sih: So those judgments will filter what we hear and what we see in the person. Does that make sense?

Jimmy Lea: Oh my gosh, yeah, it totally does. Not only from, prejudging somebody for for where you think they are, but there's also that judgment that says under these same circumstances, I had something similar happened to me before, and this is what I learned from it. And this is what I want to avoid. You may need to ask more questions because not all circumstances are the same.

Jimmy Lea: Not all conditions are the same. It might be a different situation and asking more questions will help you to discover. Yes, you've had this great experience in the past that's helped you to ask the right questions today to avoid conflict.

Juliana Sih: Yeah, yeah. And that's what judgment does. That really shuts down our curiosity and our empathy with it, which are like two cornerstones of listening. And then we have we think we can mind read or know who they are. So letting go of judgment is really important when it comes to listening. And it's all about awareness with judgment, like, what are we judging about?

Juliana Sih: Who, what, what do I think about this person? Sometimes it's as simple as just like writing out what you think. So you can see it on paper. And the real reason why letting go of our judgments is important is because then we can understand the context of a conversation, and the context means understanding the full story behind what someone else's, what someone is saying.

Juliana Sih: When you understand your judgment, you can move the conversation from content to context. So content is just like what's being said. The words, facts, data, surface level, information, context is a deeper meaning behind what is being said includes emotions, intentions, perspective, the bigger picture you want to get. Like the 10,000ft view of why is your employee telling you this?

Juliana Sih: Like do they have a suggestion? Do they want to make an improvement? Or are they struggling and frustrated? Do they need time off? Sometimes when people are sharing, they're all in the content. And if you can put your judgment down and you can get to the 10,000ft view, then you can understand their context of the conversation. You don't want to be in the weeds as a leader.

Juliana Sih: You want to be in the context. Understanding the bigger picture of why they're sharing, what they're sharing. So, you know, context. What's being said. Staying here leads to reacting rather than understanding. Just imagine like, you you know, I can't believe I have to stay late at work again. Right? From content, you might be like, oh, well, you know, maybe it's really busy.

Juliana Sih: I'm sorry, you have to say, like, maybe you're going to try to make them feel better, right? Versus maybe what they're if you're looking at it from a context point of view, you're going to understand what's really being expressed. Are they frustrated? Are they feeling unappreciated? Are they feeling disrespected or they're feeling like their boundaries aren't aren't being honored?

Juliana Sih: That's the power of being able to uplevel the conversation and getting into the context.

Juliana Sih: So context means understanding the full story. It means what's really going on here? Why is this person, what does this person feeling or need right now? This behind every complaint is a need. But people don't know how to share their need directly. So they might be complaining or, or be shut down. It depends on the person. So if you want to stop judgment in real time, there are few things you can do right?

Juliana Sih: Take a breath, breathe. And just like try to bring yourself back into the present because the judgment is all up here in our head thinking right? Get back down to the breath, acknowledge the bias. Maybe recognize you know, I like to I like to name my judgment. I like to name him Bob. Oh Bob's around like oh is he like trying to protect me.

Juliana Sih: What is, what is Bob need right now. Right. Because it is a self-protection like judging is a self-protection mechanism and sometimes it's needed but also acknowledging like oh Bob's around. Oh Bob, I don't really need you. You can take you can, you can be in the back seat. Thanks, I got this. I can drive a car.

Jimmy Lea: That's funny. That's really good. I acknowledging the bias. I think that is probably going to help me a lot. Going forward, because, I want to listen better. I want to not judge according to past. And my might have to park Bob for a minute. Yeah. So I can listen without the prejudice of of things of of the past.

Juliana Sih: Yes. Yeah, yeah. Something that I also find helpful, but I didn't share in the being present is maybe find something that helps you be present. Right. When I started coaching, I would just doodle on paper. I wasn't like trying to be an artist, but I would just doodle because it would help me to, listen better. By just like writing on my page, like writing little drawing little things on my paper.

Juliana Sih: So sometimes maybe it's like you have a squishy ball where it's just like, you know, that physical thing that helps you to be present.

Jimmy Lea: Right?

Juliana Sih: But yeah, and also naming that part of you, we all have different personalities. We all have like a little internal family, and they all have different roles, but they're not always needed. Bob doesn't need to be here. Thank you, Bob, for being here. I see you, I hear you take a backseat. Please. Stopping judgment in real time can look like asking any questions, right?

Juliana Sih: If you're asking questions, you're more concerned with the other person. You're not in your head judging or do an empathy check with the other person, like, oh, what is this person actually feeling like? Put yourself in your shoes and that will get you outside of your head, inside of the judgment. And the outcome of that really is helping the person that you're talking to feel understood, connected, seen and heard.

Juliana Sih: It's really all about them feeling safe with you because that's when they trust you, and that's when you have more influence. All right. Moving on to, golden rule number three. I think someone mentioned in the comments before, but we're going to talk about it, reflect and reflect. Rephrase.

Jimmy Lea: So Mary was talking about that with the mirroring repeating what they're saying. So yeah. Thank you Mary that this is rule number three.

Juliana Sih: Yeah. Rule number three. And this practice is really powerful because when you reflect and validate, it shows the person not only that you're listening and you're there, but that you truly understand them, that you honor their experience. And these are some of the keys to building trust, empathy, and stronger connection. Because as I mentioned earlier, most people don't know what is coming out of their mouth.

Juliana Sih: So being their mirror helps individuals gain clarity and insight into their own thoughts and emotions, and knowing this will help them make more informed decision. Also, this is a great way to use some of those CPAs of our brain as it ensures that we're listening and understanding what they're saying, because people just want to feel understood. And that's the simplest way to start a rephrase and reflect conversation, as you say.

Juliana Sih: Like what I'm hearing is I think people think that you have to parrot the exact same words, and that's not what you need to do at all. You need to summarize and rephrase what the person is saying, and make sure that you're on the same page with them so that you're really getting what they're saying. The power of this reflection and rephrase is amazing in resolving conflict because it shifts the focus from it.

Juliana Sih: Shift the focus for me, the spotlight on me to the other person. Right. And that's important because when we're in a conflict, there's a lot of emotions in the space, and the conversation is often not very constructive. Let's say, for example, you know, I tell my husband, you never help around the house, right? If my husband goes into like, well, actually, you know, I take the garbage out and, you know, I did this for the kids and I did that for the kids, that would not lead to any good, fruitful conversation.

Juliana Sih: What now? If he said something like, sounds like you're feeling overwhelmed with the household chores, how can we balance things out? Can you see how that would be a very different conversation from going into defense? Because then there's collaboration. Then it's people getting on the same page and feeling heard. And that's the power of rephrasing and reflecting.

Juliana Sih: It's like people feel heard. They feel seen. And they open up to you. And it also reduces emotional escalation. When people are emotion, people tend to react quickly. When people react quickly, we want to go into defense. We want to use that self-protection mechanism. When we can rephrase things, we slow down the conversation and we tune into the present and we slow things down.

Juliana Sih: And then the reframing helps shift from the negative emotions to potential solutions. So the next time you are going to argument, I challenge for for everyone here, use the reframe and reflect and see what happens. It's going to be it's a it's a game changer because you're not going to go into defense trying to defend yourself. You're going to go into potential solutions.

Jimmy Lea: Julianne, I really like that. Because I, I personally, feel like when I'm attacked, I and I go on the defense, I need to put in a whole ton of grace into that situation, which I'm going to implement going forward, is reflecting back and trying to certainly de-escalate the situation about the house and the chores and not doing things.

Juliana Sih: Yes, yes. And then there will be collaboration. You'll be on the same page again, because when you're on the opposite team, you're you're fighting, you know, in some way, shape or form. And the reflecting and rephrasing will help you get back on the same team with some solutions versus just talking about the problem. So here's why this works.

Juliana Sih: It reduces misunderstandings and the emotional escalation. It promotes empathy and understanding. Connections shifts from a reactive response to a thoughtful dialog, and it encourages collaborative problem solving. So I was going to, oh, sorry.

Jimmy Lea: Oh.

Juliana Sih: So here's the practice for you to take on the next time you're in a conflict. The next time you want to use this, reflect and reflect. Just pause and listen fully focus on the words that are being said. Focus on what they're doing with their body language and then rephrase it. Rephrase what they said to you to make sure you're understanding.

Juliana Sih: Because when we're in our emotions, we have that filter, right? We have like a similar filter to judgments that can alter emotions, make us poor listeners, to be honest. Like when we're either when we're excited or also negatively like if were frustrated. So that makes us, our listening goes down when we're having those strong emotions. So by rephrasing and reframing, you can get back to the present and make sure you're in the conversation.

Juliana Sih: So here's an example. No one at work is listening to my ideas, right? Someone could say, oh, that's not true. Like I listen to your ideas. You have really good ideas. You might try to be making them feel better. You might try to be like minimizing their experience. But the power of reframe and rephrase is, oh, it sounds like you're feeling frustrated and move it.

Juliana Sih: Maybe even a little dismissed. That shifts where the conversation will go.

Juliana Sih: So I have a practice for you, to do, homework. I want you to practice with someone I want you can do this with anyone, whether it's with your spouse, with your business partner. But I just want you to for two minutes. Just share a little bit about the context of this exercise for two minutes.

Juliana Sih: I want one person to share a short frustration, and then the other person is just going to listen. And then they're going to practice rephrasing and reflecting. They're going to listen. They're going to practice reflecting reflecting and then just switch. So go practice it with your partner and go practice it with a friend. Get someone enrolled and doing this I wanted to do this live, but we're in a we don't quite have breakout rooms like I was hoping.

Juliana Sih: So, do this at home, though. Do this at home. Because, really, I mean, I want you to imagine a world where you're running a meeting and everyone's feeling heard and engaged. Kind of like at Google, right? The best teams, they feel heard, they're engaged, they feel like they're making a contribution. Imagine if your team was running like that.

Juliana Sih: Imagine if your relationships with loved ones or colleagues felt easier with less conflicts. Imagine instead of reacting, you can be fully present and listen. That's the power of building the skill. So just to kind of recap, we've gone through the three golden rules of listening. Stay present, listen instead of judging, reflect and rephrase. Now I created a cheat sheet that I want to share with you all.

Juliana Sih: Where it's going to help you to nail communication. It's this cheat sheet has like kind of all the golden rules, plus a few things. And what I want you to do with this guide is I want you to download it. I'm going to have a QR code on the next slide, and then I want you to print it out, print out this cheat sheet.

Juliana Sih: And then I want you to practice one of these each day. Use the Kiss method message method. Keep it simple. Just pick one and utilize that one per day. The great thing about listening and deepening the skill is that intention and practice go a long way. Literally, you can increase your listening skills by 30% just by kind of knowing these things and practicing it regularly.

Juliana Sih: So here's a QR code for the cheat sheet. Go ahead and do that. Now print it out. Pick one that you do daily. Put it in in your office or somewhere you can see it and then practice it consistently. Literally. You can change the way you listen with just something as simple as this. And then, of course, there are a few more golden rules to listening, right?

Juliana Sih: We talked about the first three today. And then of course there's asking powerful questions which we kind of touched upon, as Jimmy, as we were talking. The next golden rule is be curious. The next golden rule is watch for those nonverbal cues, whether it's in yourself or others. And number seven, acknowledge and stay silent. So I know we're up at how are we doing a time, Jimmy?

Jimmy Lea: We're right up at the end. I mean, like, professionally, you've entered exactly on time.

Juliana Sih: Okay. I'm just going to leave it at that. I did have a few more things to share, but if anyone is ready to learn more about the next Golden Rules, please book a quick call with me. And I'd be happy to share more because I do have a little mini course kind of sharing all of these seven rules that I'm going to be doing.

Juliana Sih: So if you're interested in learning more and you want to unlock the seven Golden Rules, please book a call with me and we can chat about it. And then.

Jimmy Lea: That's it. Nice. Oh my gosh, such great information. Julianna, thank you so much. This is how people can communicate with you. Send an email to coach at Giuliana cch.com C is ach.com. And this is your office phone number (831) 245-5362. Yep. All right. Very good. That's awesome. Well thank you so much, Julianna. And I hope that we can be better listeners.

Jimmy Lea: It's definitely something that is hard work, something you have to consciously, effectively do every day. All day is listening. Listening to yourself, listening to that other person.

Juliana Sih: Yes. And that's a beautiful thing. You can practice every single time you talk to someone. You can just be like, oh yeah, let me practice that presence. Oh yeah, let me practice that rephrasing and reframing. There's always an opportunity to practice and there's simple. But yes, it's hard Jimmy. It's simple consistency just like learning the piano. But we all have we all have the instrument already.

Juliana Sih: We just got to learn how to use it.

Jimmy Lea: Yeah, that instrument's there. We got to learn how to use it. And once we do, we'll play beautiful music. Nice. Well, thank you very much. My name is Jimmy Lee. I'm with the Institute for Motor Business Excellence. My guest today, Julianne C with Crescendo Coaching a life coach. She has a tremendous friend and I appreciate you being here.

Jimmy Lea: Thank you very much.

Juliana Sih: Thank you.

Jimmy Lea: Talk to you guys soon. Thank you.

March 18th, 2025 - 00:56:44

Show Summary:

In this insightful episode, Donny Seyfer from WTI and Jimmy Lea, from the Institute, hosts a special podcast featuring Wayne Marshall, Interim CEO of The Institute to tackle a critical topic for small business owners, how to protect your home and your business through the proper legal and tax structures. The conversation focuses heavily on LLCs, S Corps, and C Corps, demystifying the differences and outlining the benefits and risks of each. Real-world scenarios highlight the consequences of not setting up a legal firewall between personal and business finances. Wayne provides practical advice on taxes, ownership structure, planning for a sale, and maximizing profitability. Listeners walk away with clear guidance, actionable steps, and a new sense of urgency around legal compliance and business structure.

Host(s):

Donny Seyfer, National Automotive Service Task Force

Jimmy Lea, VP of Business Development

Guest(s):

Wayne Marshall, Industry Coach

Episode Highlights:

[00:01:21] - Many shops are operating without legal protection, putting their homes and future at risk.

[00:03:02] - 95% of U.S. businesses make less than $3M annually, laying the foundation correctly is crucial.

[00:04:24] - LLCs offer tax flexibility and create a vital firewall between your business and personal assets.

[00:07:26] - LLCs allow for separation of finances, tax structure options, and credibility with banks.

[00:11:03] - Failing to separate business finances can result in major IRS penalties and even losing your home.

[00:14:27] - Pay yourself a reasonable salary and take additional profit as dividends to reduce taxes.

[00:18:06] - Commingling funds hurts valuation - $13K in personal spending can cost $120K at sale.

[00:23:58] - LLCs are ideal for most small business owners, especially those making over $60K annually.

[00:32:35] - Life insurance and annuities can secure your business in succession or ownership changes.

[00:50:57] - Track your net worth yearly to measure real progress and business impact over time.

👉 Unlock the full experience - watch the full webinar on YouTube: www.youtube.com/watch?v=JpHnWSHicMQ

Don’t miss exclusive insights, expert takeaways, and real talk you won’t hear anywhere else. Hit Subscribe, drop a comment, and share it with someone who needs to hear this!

Links & Resources: 

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Jimmy Lea: If you're not having fun doing it, then you're doing it wrong. We're gonna have a great time. We have a phenomenal discussion gonna be happening here. Donny, do you wanna kick it off with any words in the beginning here or what? What? What's your M.O. 

Donny Seyfer: M.O. Well, I just wanna say thank you to the institute for agreeing to do this for us.

Donny Seyfer: It's been something we've talked about for a while, and Jimmy and I met up at APEX and SEMA and I said, Hey. How about we do a session, because we've got some, we've got members who've had some really interesting things happen to their businesses and I said, I told 'em, let's call this thing how to lose your business in two minutes, and they're like.

Donny Seyfer: Maybe we better not do that. So I thank you guys for doing this for everybody and and everybody that, that showed up to listen. I'm gonna turn it over to you and just listen in. 

Jimmy Lea: Nice. Awesome. Well, thank you for being here. And thank you for meeting up at the conference.

Jimmy Lea: That was super awesome. We, we catch caught each other there in the I think it was in the elevator, the escalator we were coming down. Donny says, Hey we really wanna do this webinar about, we gotta help our shops and our companies and our businesses and our members. They're losing their business.

Jimmy Lea: They're operating dangerously. And I said, oh, so you're, you want something around the lines of how to protect your home? How do you not lose your home in 30 seconds? 'cause there's so many businesses out there that are operating without the protection of a corporation. And that's what we're gonna talk about here today is essential steps to save your home and save your business.

Jimmy Lea: Joining me today in our webinar is Wayne Marshall. Wayne is with the Institute. We are excited to have him here with us as our interim CEO. Thank you for being here.

Jimmy Lea: Yep. And everybody who's aware Cecil Bullard has been through some surgery. He is in recovery. He's doing extremely well. He's been into the office twice now.

Jimmy Lea: And it was only a week and a day ago that he had some brain surgery. So that is one resilient. Resilient man. Pretty amazing. Pretty amazing. This is to be an interactive webinar. Interactive webinar in that we want to know what you are thinking. We want to know your questions. You've got questions.

Jimmy Lea: We've got the answers. We're gonna talk a lot today about. Corporations and incorporating and how to do it, why to do it, what are some great ways to do that? To, because this is gonna help to protect you and that's what we wanna do here, is to be able to protect you. So Wayne, we brought in Wayne.

Jimmy Lea: Wayne I have your slide deck here, so when you give me the signal, we'll make it happen.

Wayne Marshall: So, yes, you can go back. 

Jimmy Lea: Got it. 

Wayne Marshall: So it's an honor to be here because when you stop and look at, you can look at the statistics too. Come from the Department of Labor. 95% of all businesses that are in our country operating today do $3 million, is less in revenue.

Wayne Marshall: So when they say the small businessman is the backbone. 

Jimmy Lea: Oh, it totally is. 

Wayne Marshall: It really is. When you look at this and you start thinking about how small businesses start and grow and they get going, many of 'em do start just as we see in our industry. 

Jimmy Lea: Oh yeah. 

Wayne Marshall: As a small might be one person, two people, and eventually they start to grow and they start to increase those revenue.

Wayne Marshall: But it becomes really critical and very important whenever you get started that you start doing things and you build the right foundation. So that when you get ready to take some of those next steps and you start to add an employee, or you might say, I want to have my own facility or own building or property, that you make those moves that put you in the right position legally,

Jimmy Lea: yeah, 

Wayne Marshall: that gives you the right things you want, but also that you start giving some forethought to the right moves you want to make, so you put yourself in the right place, taxable. Because like me, I don't want to pay any more tax than I need to. And there's things you do when you start thinking about that corporate structure that can and will make a difference.

Wayne Marshall: And we're gonna point out a few of those things for consideration. And also hopefully through some of this we'll be able to look at this. It gives us some of that scalability. 

Jimmy Lea: Yeah. 

Wayne Marshall: Of where we began starting small, but giving us the opportunity to go and get it up to that bigger level that we wanna get into.

Jimmy Lea: We want to, we wanna, we want to grow the business. We want to be protected by the business. We want to protect you on the business as well. And for those of you who are in the audience, you're listening to this live the q and a in the bottom section of your window for the zoom in the q and a.

Jimmy Lea: That's where you want to put in your questions. And just to make sure that this works for everybody. I wanna give you a shout out, go to the q and a and type in where you're joining us from today. If you wanna put the name of your shop, your business your mobile business at city and State, love to give you a shout out.

Jimmy Lea: I wanna make sure that this q and A is working. So if you're listening, yes, we do want you to type that in there. Virginia. Got Bruno from Virginia. Kyle from Crystal River, Florida. Oh, you guys are awesome. John from East Ohio. Lawrence in New Jersey. Rock on. Thank you so much you guys. Yes, it is definitely working now.

Jimmy Lea: Jacob Bell. Jacob Bell from J Tech Automotive Solutions, Tucson, Arizona. Jacob, welcome, glad to have you here with us. Jeff from St. Paul, Minnesota and Jeremy from Columbia, Kentucky. You guys rock. Thank you so much for being here. Thank you for participating. You've got questions, we've got some answers.

Jimmy Lea: We've got a lot of really great information to help protect you, help protect your home, help protect your future retirement, your future of everything. 

Wayne Marshall: Benefits. 

Jimmy Lea: Because you don't want to lose everything because of a mistake, an accident, and the way to do that is to protect yourself.

Wayne Marshall: So let's jump to this first slide. Many people are very familiar with the different structures that come. 

Jimmy Lea: Put your mic a little closer? 

Wayne Marshall: Is that a little better? 

Jimmy Lea: Yeah. Richard's saying can't quite hear. And this is Wayne Marshall. I know you think it's Cecil. Cecil had surgery a week ago. This is Wayne Richard. No. Jeff. Jeff. Can you hear Richard better?

Jimmy Lea: I mean, Richard, can you hear Marshall better? How's that, Michael? We good? Okay. Rock on. 

Wayne Marshall: So let's jump to that first slide that we talked about. Most people are very familiar with some of the different structures that are out there, and most people at the small businesses are taking advantage of just putting together an LLC, and we all are familiar with within that LLC, there's a lot you can do, but on top of an LLC, you can also do an escort.

Wayne Marshall: Which is a sole proprietorship, or ultimately you can have a C court. C Corp are usually regulated to more of the larger companies and the things you're gonna do. And what I've always done, I've had and started and sold many of businesses in my career and I've done every one of those as an LLC.

Wayne Marshall: And one of the things that's really great about that LLC is we're saying at the very top, it's gives you limited personal liability. It becomes that firewall and that shield from you and your personal. Your home, your savings, all the other things to what you're doing on a business. So those debts and those things that are going on there can not transfer over and affect you on a personal level, and that's what you want to do because you never know when something happens, especially when you get a little larger.

Wayne Marshall: You might have an employee or something else could go on within those that can affect your company and that limits you from having anything cross over into your home or putting in at risk. It also gives you a lot of tax flexibility that you can pick how you wanna do your taxability of the income and the money that you can make on that.

Wayne Marshall: If you're in an LLC, you can choose to file as a business as that LLC. You can choose to file as a sole proprietorship or you know, the S corp. And you can even choose in an LLC to be incorporated and fire taxes as if you were a C corp. Obviously you want to probably stay to where it's the most easiest, and we'll talk a little bit about, and I've got a few key things that we'll be sharing as we get into it.

Wayne Marshall: The other thing that's nice about an LLC is there's less formality or compliance requirements that you come into. If you take a C Corp as an example, many of your large corporations are C Corp. There's a tax. Ability of it that's higher than what you're gonna get as a personal business owner. And the other thing of it is that you're gonna have much more structure, in a lot of cases, even the requirement to create shareholder board meetings and other things that can come into play.

Wayne Marshall: One of the other things that's really nice about once you start forming your legal corporation or your LLC, is you enhance your overall credibility, but you bring legal protection. So think about what you're doing and you don't want to be sitting there and have a, your. Business finances, co-mingling with your personal finances.

Wayne Marshall: If you create an LLC, you're gonna get a tax EIN number. You take that EIN number, you can go to your bank. You can then create that bank account. You don't co-mingle your monies. You keep it separate, which again, keeps you in that credibility and legal protection because you can start talking about and how you're gonna receive in the handling of those funds.

Wayne Marshall: And then the last thing that we talk about is very flexible ownership and management. Just because you. Start the LLC, you can have what they call a manager managed LLC. Someone else can manage it, someone else can run it for you. As you get bigger and you say, I don't want to sell my business, but I want someone else maybe to run it now.

Wayne Marshall: And you can have a manager run the LLC that you still own. And it gives you that flexibility where obviously when you get in some of the other absentees, you don't get all that flexibility and there's much more compliance that you have to deal with. 

Wayne Marshall: So those are some of the key benefits of, and the most and biggest is number one, you wanna create that firewall.

Wayne Marshall: You want to separate your business life, business, money, all the things that go on from your home. So you don't get into a litigious situation where someone can tie it all together. You can say, Nope, everything stops with the LLC. 

Jimmy Lea: Yeah. Ha has have the, do you know of any situations where someone was operating as a sole proprietor?

Jimmy Lea: And they got into a sticky situation. Do you know any of those situations? 

Wayne Marshall: Most people that I have seen, yes I do. 

Jimmy Lea: Yeah. 

Wayne Marshall: And most people who have not filed and done, they end up in a tax scenario. And the IRS, they get kind of funny with their money and they think they always gotta have it. And if you don't keep those two things separated, which comes down to some of the things that we're talking about in number four and five.

Wayne Marshall: You got that flexibility, you get credibility, you get the bank account set up. Right. You can keep those things where they don't look at it in a funny way. Yeah. So because he never separated out and you just kept running everything through him as a person under a social security number, because you don't have a tax number of an EIN.

Jimmy Lea: Right.

Wayne Marshall: The business now it's gotta go to your social security. Yeah. He ended up about 400,000 in the rears with IRS. Oh boy. Lost his house, lost everything. 'cause he didn't have the firewall. 

Jimmy Lea: Oh boy. 

Wayne Marshall: So they don't like that? 

Jimmy Lea: No, they don't like that. They don't like that at all. 

Wayne Marshall: That's probably one of the more extreme cases.

Jimmy Lea: Yeah, that would be an extreme case, but that's also what can happen if you're not set up right. 

Wayne Marshall: That is correct. 

Jimmy Lea: Okay. 

Wayne Marshall: Very much correct. So let's jump into, if you want, we can jump to some of the tax benefits. I did share, and I know this slide is a little bit. Busier than the other. But the first thing, and one of the biggest benefits of the LLC is that you have pass through taxation.

Wayne Marshall: And what happens is if you're a C Corp, as an example, you have to pay a 21% corporate tax, but then you gotta pay tax again on the income that you make. Soon end up paying tax on it twice. 

Jimmy Lea: Right? 

Wayne Marshall: And if it's just passed through, there is no business tax. It only passes through you and then it comes back to your personal taxes when you file, where you'll be getting your K one or other things.

Wayne Marshall: And if you work with any of your local, a county professional or tax repair, they can help you work through these things. That can help you do, but it helps you on your tax standpoint. Which is a good thing to have. The other thing is obviously you can have the, we talked about it earlier a little bit, was very flexible tax classifications, and then you can decide.

Wayne Marshall: Most people, once they get into an LLC, they keep it down to a sole proprietorship or partnership...

Jimmy Lea: Right? 

Wayne Marshall: If you bring someone in and they don't do anything with an S or a C, even though you could. But you wanna avoid that begin 'cause of the taxable aspect of what you're gonna get and you can get into a lower tax bracket, right?

Wayne Marshall: That you want to keep. Obviously if as soon as you become an LLC there's a lot you can start running through, that becomes deductible business expense. So many of us people we've o and I did it many do you start thinking of having a company vehicle. 

Jimmy Lea: Yeah. 

Wayne Marshall: Other activities that go on. You maybe need a new computer or laptop.

Wayne Marshall: Sure. Am I gonna use it at home? Yes. Am I gonna use it for business? Yes. I'm gonna use it as a business deduction. And there's other things that can come into play that helps. Because now that becomes a deductible expense. You don't have to pay tax. 

Jimmy Lea: Because it's a business expense. 

Wayne Marshall: Because it's a business expense that you can come into.

Jimmy Lea: Yeah. 

Wayne Marshall: Obviously there's a self-employment tax savings. There's things that can come into play here that really becomes nice under the LLC. Okay. And I know we tell a lot as I coach people also, we tell them this a lot, that it pay yourself a reasonable salary. 

Jimmy Lea: As an owner? 

Wayne Marshall: As an owner, but take that additional profits at distribution because if it's a W2 income that's taxed at one rate.

Jimmy Lea: Yeah. 

Wayne Marshall: Dividends or profits. If you do a distribution or an earning payment out, that's at a lower tax rate. 

Wayne Marshall: So as you start to go up, and if you get to a point. Like I was, we tell some of our coaching clients, Jimmy, is we get to a certain point that I tell people, if you're gonna pay yourself about 90,000, talk to your tax professional.

Wayne Marshall: Don't exceed that. Talk to 'em about doing dividends. If you're having a really good year, 

Jimmy Lea: yeah, 

Wayne Marshall: pull it out as dividends 'cause it's taxed at a lower rate and it won't take you to the next tax bracket. 

Jimmy Lea: Nice. 

Wayne Marshall: So it's a way to also help save money and not give it to. IRS keep more of it in your pocket and or reinvest in your company.

Wayne Marshall: The other things that have happened here in the last few years is there's been some different things that have passed legislatively that, and again, those tax professionals can help you get into the qualified business income deduction, along with some of the tax cuts and job acts that can help qualify you for a one time 20% deduction.

Jimmy Lea: Yeah. 

Wayne Marshall: On different income. Because they're trying to help the small business person keep the money so they can reinvest. 'cause again, I go back to 95% of all small businesses. Or what we have in the United States that is the backbone and the more that we can put in their pockets, the government's saying that's more reinvestment, that helps them bring more money back to the IRS eventually.

Wayne Marshall: 'cause they're helping to grow the economy. 

Jimmy Lea: Yeah. 

Wayne Marshall: And that's a significant tax savings too, to give. 

Jimmy Lea: There's a I think there's a misnomer or a misconception within the industry that says. I as a company owner, as the corporation owner, I can't take a paycheck. Is that true? 

Wayne Marshall: No. You wanna, like we said, you wanna be really mindful of how much you take, 

Jimmy Lea: right?

Wayne Marshall: That can put you into a higher taxable event than if you keep it lower and it'd be no different. I mean, as small business people, we start to grow. And I started in rented space, some of my companies. Eventually, I got to a point I said, you know. Instead of paying rent, I'd rather own and let it help pay for the mortgage and create more wealth.

Jimmy Lea: Right. 

Wayne Marshall: And change my overall net worth. 'cause now I have commercial property that I've bought. So again, I started another LLC that owns the property that I then now pay to them out of the first LLC, the company. And now there's other things you can do that helps because I can also pay extra to the property LLC and the IRS, for the most part, if you're paying an extra 15% above what the going rate is for a lease, you can put that into a maintenance fund. 

Jimmy Lea: Sure. 

Wayne Marshall: It's not taxed. 

Jimmy Lea: For the cams. 

Wayne Marshall: Yeah, for the cams, but it's not taxed. So now you got more cash sitting there that's giving you the opportunity to do other things and reinvest.

Wayne Marshall: And do things within your property or other stuff. So again, a good tax prepare, a good account can help you navigate these waters. But it's so important to start and have those right business entities. 

Jimmy Lea: Yes. 

Wayne Marshall: Get 'em legal. Get the LLC, get your EIN, keep your money separated. Your personal or business don't co-mingle. That can create you issues, but you can start to create and it'll improve your overall net worth. And. Build it. 

Jimmy Lea: What advice would you give the shop owner or the business owner that currently is commingling their funds? 

Wayne Marshall: You're hurting yourself. 

Jimmy Lea: Yeah. 

Wayne Marshall: So think about it this way and we I talked to one of our coaching clients and I'm looking at his p and ls and we're talking, and one of the things he's trying to do is increase the overall value of his company.

Wayne Marshall: He wants to, in the next three to five years, sell his company. Any good person that's gonna come in and do their due diligence or the discipline to look at the financial is gonna go back to three years. Well, we're going through and I said, well wait a minute, gentlemen on this. I won't say his name, but I said, I see $13,000 that was spent at Walmart.

Wayne Marshall: And he goes, well, yeah, that's my groceries, that's this, that's that. And I said, okay, I get it. And you can do that. And there's some gray area. 

Jimmy Lea: Sure. 

Wayne Marshall: But here's what it meant. I, and I explained to him, I said, okay, so you spent 13,000 this year, and if we go in the arrears three years, and you do that every year, so that's 13, that's 26, that's 39,000, let's say $40,000.

Jimmy Lea: Okay?

Wayne Marshall: And you're trying to sell the company and you want to get three x or four x on your ebitda, that was $40,000 that used in personal, that was really profit for the company. Take that 40,000 now times three X ebitda. That's $120,000 less you're gonna get when you sell your company. 

Jimmy Lea: Ouch. 

Wayne Marshall: And all of a sudden he is like, yeah, I'm not gaining anything by doing it through the company. I said, you're not.

Jimmy Lea: No. Clean up your clean up your finances. 

Wayne Marshall: Don't mingle 'em together because where it can hurt you, especially if you're trying to get to a point that you want to sell your company. 

Jimmy Lea: Yeah. 

Wayne Marshall: You don't want any of those personal expenses because that's gonna make the company not look as profitable and that might help you today in taxes.

Wayne Marshall: But that $13,000 is gonna end up costing him 120,000 or more 160 if he got four x. Ebitda. So that is why you want to be really careful. 

Jimmy Lea: Yeah. 

Wayne Marshall: About how much of some fringe personal things. 

Jimmy Lea: Yeah. 

Wayne Marshall: And you can do it. 

Jimmy Lea: Right. 

Wayne Marshall: You're not gonna get in trouble with the IRS unless you get really aggressive on it.

Jimmy Lea: Right. 

Wayne Marshall: But if you're thinking you're gonna be in a position to sell, or you're gonna bring a partner in that maybe wants to buy into your business, you wanna look the best you can look. 

Jimmy Lea: Yeah. 

Wayne Marshall: And you wanna maximize those bottom line earnings. That's where it's hurting you, and that's where it can really multiply up big.

Jimmy Lea: So at what point do you start the process that says, Hey, you know what, I'm ready to sell my business now. Should we start today with that process? Or do you start two years down the road. 

Wayne Marshall: I tell everybody that we talk to, with our clients, if you think you're gonna want to sell your business and you tell me I'm gonna do it in the next year.

Wayne Marshall: We can do a few things, but we're not gonna move the needle much. Yeah. You need almost a minimum of three years to really clean it. 

Jimmy Lea: Yeah. 

Wayne Marshall: And make year after year look good. Right. 'cause when they look, they're gonna take those three year numbers, they're gonna average it out, and that's where your multipliers gonna come from.

Jimmy Lea: Oh, for sure. I hear it said all the time that three to five years. 

Wayne Marshall: Yeah. 

Jimmy Lea: Three to five years is what it takes. But really and truly. You should start today. 

Wayne Marshall: Yeah. 

Jimmy Lea: I started my business yesterday. Good. A good habit. Start today and build that habit. 

Wayne Marshall: Yeah. 

Jimmy Lea: Okay, good. 

Wayne Marshall: Yeah. So one of the things, I don't know, do we, I think we had some questions there. Anything here that we should stop and talk? 

Jimmy Lea: Let's see if we have any questions yet. 

Jimmy Lea: Nope, no questions yet. 

Wayne Marshall: Alright. Just wanna make sure, because I see on the screen here and I see something popping. I'm like, oh no. It's big deal. One of the things that we get asked, and it's like one of our coaching clients right now jimmy is he's going from a C-corp and he's moving it over to an S-corp. And a lot of this is because of the tax taxation aspect of, and he's also in a position, just as we talked about, that he's trying to get ready to sell his business 

Jimmy Lea: Right. 

Wayne Marshall: And transfer out. And he's trying to maximize his income.

Wayne Marshall: And with a C corp, you're limited. On what you can take out of it. And I, and obviously it's gonna be just on your W2, if you get into an S or you get into some of the things we're already talking about, where you got flexibility, he can get more cash out in earnings in the short term. That will help maximize and then also put 'em in a better position.

Wayne Marshall: Because most companies, unless you're a large company, and when I say large, I'm talking 50, a hundred million and more, you don't want to be a C Corp and it's gonna limit his. Possibilities of selling without restructuring his company. So he is in the process of doing it. So one of the things we get into conversations with him here recently, which I wanted to share a little bit more, which is on that next slide, is, which is right for you?

Wayne Marshall: And again, it's like he's doing, we started talking about these things, but at the end of the day, I says, you know, again, your accountant knows better what should be done, how to do it. They know your personal situation, but. One of the best things, again, if you're just in a default LLC taxation, you can see what happens when you sit there with the pass through.

Wayne Marshall: And basically when you're a self-employed, you're at a 15.3 tax. That's a lot lower than what's gonna be on a W2. 

Jimmy Lea: Oh yeah, for sure. 

Wayne Marshall: And those are some of the benefits that you get when you start looking at this thing with your profit pass through on your personal taxes and some of the things you can do with the earnings and it, I mean, and it's perfect.

Wayne Marshall: Perfect for that small business owner I. Without employees for most part even. Or if you got one or two employees, it's the perfect place to be. 

Jimmy Lea: So that single member LLC. 

Wayne Marshall: Yep. Keep it simple. Keep it simple, and. Like I said, there's the benefits of if you go to and you start getting employees, you start making more money, you do other things, then you wanna start maybe looking at filing as an escort.

Jimmy Lea: Okay. 

Wayne Marshall: Sole proprietorship. Then there's also partnerships you can look at and we'll talk a little bit about, but what you can start doing here, especially if you think your earnings are gonna be over 60,000. In the course of a year, you have that ability, which I was talking about earlier. If you can take so much as income and then take another portion of it as a distribution or an earning or a dividend, yeah.

Wayne Marshall: People will talk about, that's going to put you in some of your best spots, 

Jimmy Lea: right.

Wayne Marshall: To maximize. What you get in income and put cash in pocket compared to how much you're gonna end up paying in taxes and that will reduce your self-employment tax. Again, there are some things you gotta do, obviously to set up payroll, which I've mentioned here.

Wayne Marshall: You're gonna have to for file in form 25 53 with the IRS 'cause you got employees. There's gonna be other things that gotta be done around that. But again, it's about keeping your tax bill low, keeping the money in your pocket so you can reinvest. Everybody's got a unique situation, so I know I say it multiple times.

Wayne Marshall: Talk to your tax preparer, talk to your professional accountant. Ask these questions. Yeah, ask what's best for me. I'm, I think this year, take 2025. I'm having a really good year. Yeah, I think I might make $120,000. They're gonna say, that's great to know because here's what we're gonna do. I'm gonna do this, we're gonna do this. Take this much in distribution, pay this much in your quarterlies off that distribution, what have you, and it'll put you at the right spot at the end of the year, minimizing that exposure. 

Jimmy Lea: Beautiful. Now speaking of talking to your tax professionals the question came up, what is an ebitda? 

Wayne Marshall: Oh, EBITDA is earnings before interest taxes and amortization.

Jimmy Lea: Right. So what does that mean? 

Wayne Marshall: So you got your earnings? 

Jimmy Lea: Yes. 

Wayne Marshall: We all know which comes to your bottom line. 

Jimmy Lea: Right? 

Wayne Marshall: And then before interest, if you got interest loans that you're paying, which is a deductible, and then you got taxes you gotta pay. And then if you take that depreciable asset, amortization of it as it's going down, because all of those are different things that write off that change what the net is.

Jimmy Lea: Okay. That add to it. So is the ebitda. And these are questions coming in. Is EBITDA the same as net profit? 

Wayne Marshall: It depends on how your books are set. But yes, they can be.

Jimmy Lea: Pretty dang close. 

Wayne Marshall: Pretty dang close. 

Jimmy Lea: Yes. 

Wayne Marshall: But usually when you get into your ebitda, you're taking your, so people are using QuickBooks.

Wayne Marshall: And you get your QuickBooks set up and you can run all the different categories and you got all your different things you're set up, you got income, you got expenses, then you got some, all those miscellaneous things. And then you got earnings. This money's left over. Some of the things, unless you accountant is going into QuickBooks and set up your depreciation schedule, you're not gonna get to the EBITDA at your net.

Wayne Marshall: So it will change some. If you've got, so if you had a property LLC, you're gonna have big amortization of your building because you're paying a lot in interest. And you got a lot of that's flowing through. So it can change the bottom a lot, but usually most small business people, what they've got, maybe they've got a vehicle.

Wayne Marshall: Which isn't overly, I mean, they're expensive, but they're not over the top like a building. It might be a lift or like for us, a lift and alignment rack, some of those things,

Jimmy Lea: right. 

Wayne Marshall: You're gonna put it into a depreciation scales or you're gonna amortize it out 

Jimmy Lea: right 

Wayne Marshall: over time, depending in, but there are some things, which many people are familiar with, you can do accelerated depreciation.

Wayne Marshall: There's other things you can do, right? Again, a good preparer can tell you when you should take it. Right. And when you shouldn't. 

Jimmy Lea: Right. 

Wayne Marshall: And when we wanna schedule it out, or we wanna just go ahead and take it all in the first year and just be done. 

Jimmy Lea: Nice. Beautiful. 

Wayne Marshall: Just depends on how much money you're making.

Jimmy Lea: Oh yeah, for sure. Okay, so one more question here about the LLCs. You talked about a manager to run your business. 

Wayne Marshall: Manager managed LC they, 

Jimmy Lea: yeah. You said as an LSE, you could have a manager run your business. Could you review again, what are the tax. Overall benefits of doing it that way of having a manager run your LLC?

Wayne Marshall: There's not, so there's not really anything on a text, right? 'cause it's still gonna float through. Correct. Just because I started the LLC and maybe I'm saying, you know what, I'm gonna still work, but I'm tired. I'm gonna have Jimmy. Okay. As my manager managed LLC, I can put 'em on the legal papers, he can get all the legal docs, do all the things that need to be done.

Wayne Marshall: IRS and so on and so forth. And he's got that power and authority that you're gonna have in your operating agreement. But I still have to take care of all the taxes and the things that are being done. Now if I'm an LLC, and one of the things we talked about was flexibility of how we can pay. I can pay Jimmy however I wanna pay him and not worry about certain things.

Wayne Marshall: Where if I was a very structured like a C Corp. You got shareholders. It's very structured and everybody's paid whatever. So as an example, if we were in a C corp Yes. And we owned it 50 50, we'd have to split the earnings in half. 

Jimmy Lea: Oh wow. Yeah. 

Wayne Marshall: But if he's here, let's just say you're still 50 50. I'm doing not doing squat.

Wayne Marshall: I could pay Jimmy 90% of the earnings. I can do anything I want to do under the LLC. You can't do that in a C court. It's very rigid based on the shares and the percentage and so 

Jimmy Lea: on and so forth. 

Jimmy Lea: So I think a lot of the members here for Nasiff are mom and pop shop shops, mom and pop structures, mom and pop business you know, pop is out as the technician.

Jimmy Lea: He's either working on cars, popping locks, working on vehicles. He's in the shop. Mom's up at the front. She's doing the books. She's doing the counters, right? So in those situations. What is a good LLC for a mom and pop structure business? 

Wayne Marshall: Well, this gets into some other things that could come into obviously trust and wills and 

Jimmy Lea: Yes.

Wayne Marshall: Other things that could be considered with obviously transferring of Yes. Now most people. I'm not trying to take a deep dive into the legal language of, but most people, when you sit there and you'll hear about setting up a corporation, you've got articles of incorporation or you're gonna have an operating agreement.

Wayne Marshall: They're very similar. It's not. Just how people define them. Yes, it's really not a big difference. But part of all those agreements, we'll also have in there certain things under buy, sell, things that, how you would transfer what happens up on death of a partner or an owner in, if you have a husband, wife, I can give you a strong argument because you've created the right firewall to put both on.

Wayne Marshall: If you want to do some things that put you in favor with female owned or whatever, maybe make the Y 51, 49. 

Jimmy Lea: Yes 

Wayne Marshall: to keep that as you wanna do. But in that we'll also have some of the structure about the passing of others, which you can then say, how does that affect the outstanding stock, which can easily then if you create the right trust, that everything can move into the trust.

Wayne Marshall: And again, a good legal professional can help do. But, 'cause the one thing is one of my businesses, I had four partners, great guys, but I told all, every one of 'em. I says, I don't want to be a partner with your wife. 

Jimmy Lea: Right? 

Wayne Marshall: So if something happens to you, we're gonna write in there that upon your passing your shares, go into a holding state.

Wayne Marshall: You have no voting right. You don't have anything 'cause, but we're gonna take care of your wife correctly. We're gonna do the valuations and we're gonna buy her out and give her the money that she should have. Nice. As an example. Yeah. But I don't want any of your wifes jumping in actively to the business.

Wayne Marshall: Not trying to be a jerk, but 

Jimmy Lea: No. And when my dad has his business with his partner, he had a a death benefit, a key employee benefit. So if you got a mom and pop situation. And mom was to pass away or dad was to pass away, right? You can have a life insurance policy on that person. That is correct.

Jimmy Lea: It comes to the the business. 

Wayne Marshall: And again, I, you know, which I did that, we did that too, right? So we did the company bought, we did it instead of a keyman policy with obviously death benefit. We did it in a combo with an annuity. So it was a way to, and again, talk to a professional on, but there's a way to structure this.

Wayne Marshall: That we were buying The death benefit. Yeah. If something happened, right? That's right. We were the beneficiaries. We got the money and then gave the money to the spouse 'cause that bought the shares. So they still benefit. 

Jimmy Lea: That's perfect. 

Wayne Marshall: But the other thing we did, what have you doesn't die. So what we did is we started putting the money into an annuity with the death benefit, which the policies are there.

Wayne Marshall: We're paying more. And we're getting a return if, which happened. None of us did die, fortunately, never had to deal with, but the beauty of it was when we sold the company, every one of those annuities came back to us and it became deferred income. 

Jimmy Lea: Oh, that's beautiful. 

Wayne Marshall: And it was a way, and again, you've gotta talk to a person to get it set up right?

Wayne Marshall: Yeah. That you can do it to keep the tax ramifications out. 

Jimmy Lea: Right. 

Wayne Marshall: But it ended up being that we were putting not a ton of money, but we were putting about $10,000 in each. So pretty soon we got up there and before we know it, it's worth a hundred thousand dollars. That's, it's multiplying in value 

Jimmy Lea: Right.

Wayne Marshall: And growing off the annuity that's given a return. 

Jimmy Lea: Oh, that's beautiful. 

Wayne Marshall: Instead of money just going away. Yeah. I needed a death benefit, but we also made it to where it had value that each of us got to benefit with a, basically a deferred payment. 

Jimmy Lea: Nice. Of income. Nice, excellent. 

Wayne Marshall: Small little thing to get.

Jimmy Lea: So one more last question on the S corp before we go past this one questions coming in that says, under the S corp, is there a benefit of establishing a home office? And this person you may need to type in a little bit more to expand on this idea. I does this mean you have brick and mortar and you're establishing also a home office, or you're working solely from your home office and want an S corp, which I have that.

Wayne Marshall: Yeah. So you can do, it's again, it's like anything in life. There was 20, 30 years ago, people were abusing this privilege with the IRS code and there was a lot of audits happening from people I know. 'cause they all of a sudden they were putting their dog on as part of their expense. 'cause it was a watch dog.

Jimmy Lea: Oh gosh. 

Wayne Marshall: Yeah, no. People do crazy things and then they wonder why they get audited. 

Jimmy Lea: Yeah. 

Wayne Marshall: And so the things I would say, 'cause look, I do it. I got a home office, right? You've seen, you know where my home offices and so yeah, I take a percentage of, and I can take a percentage of electricity, water, internet, all the things that I need to run my office.

Wayne Marshall: It's part of my tax. 

Jimmy Lea: Yeah. 

Wayne Marshall: You know, deduction and write off that I'm doing. You just gotta be careful. Don't take advantage of the code. But yeah, you can do it again, your tax preparer, if you tell 'em how many square feet based on all these things, they can add it up. There's a, they've got the formulas .

Jimmy Lea: There's a formula that they use.

Wayne Marshall: They've got the formulas that they can use to help you get and stay clean with the IRS. 

Jimmy Lea: Beautiful. 

Wayne Marshall: But yeah, do it. Might not be a lot, but hey, four or 500 bucks is four or $500. 

Jimmy Lea: It all adds up. 

Wayne Marshall: Amen. 

Jimmy Lea: All right, well good. So are we going on to three? 

Wayne Marshall: Yeah, let's go on to the next. So I mean, the last other one that we've got is obviously C Corp.

Wayne Marshall: No one's gonna do it. I just threw it up here just so you can kind of see. 

Jimmy Lea: So everybody knows it's still bad. 

Wayne Marshall: Why C- Corps really suck unless you're big. Because you can see it has a flat corporate tax rate at 21%, and then if you get a dividend, you got again. You gotta pay tax on it over again. So the company's paying tax, you then get a dividend of what's left and you gotta pay in, you know, a personal tax on it again, along with the tax that was coming outta your paycheck on a W2.

Wayne Marshall: And it's a very complex and there's a lot of formula formalities and garbage had nobody wants to do. The only reason that people choose this is if they're starting to really grow and you want to attract investors, you want to have obviously scale. And there are companies I know I. A few years ago I consulted with a company over in Illinois.

Wayne Marshall: Yeah. They did convert, but they were 55 million privately held. They were growing and they were wanting to get to a hundred million. When you got to a hundred million, they were gonna go to a public offer in a small one. 

Jimmy Lea: Nice. 

Wayne Marshall: And that's the reason you do that stuff? 'cause it gives you structure and governance 

Jimmy Lea: Yeah.

Wayne Marshall: That allows you to do, but.

Jimmy Lea: It's there. It's available. Yeah. It probably past what we're doing. 

Wayne Marshall: Yeah. 

Jimmy Lea: All right. 

Wayne Marshall: Obviously the best things that we get into when you get all done, when you look at corporations is obviously you can deduct everything, take advantage of retirement plans, other things that could come out of you can use different tax credits and things for the hiring end of people.

Wayne Marshall: You know, you gotta look at what state you're in. There's things around some states have no income tax. You know, you look at Nevada, where you live. 

Jimmy Lea: Yeah. 

Wayne Marshall: Florida doesn't, there's other things that you, 

Jimmy Lea: Wyoming, 

Wayne Marshall: consider, yep. Other things that you wanna look at in there. At the end of the day, it's like we talked, it really comes back to looking at your own personal situation, the size, how much money you gonna make, how big do you want to get?

Wayne Marshall: Talk to your professionals. Most everybody's doing that and they're putting together the different things with their tax preparers to help them ask those questions. Say, I'm gonna have one heck of a year. What should I do? How should I prepare? And try to have those conversations early in the year. 

Jimmy Lea: Yeah.

Wayne Marshall: If you get to the beginning of July or the, you get to that third quarter if you've paid your. Obviously you paid your quarter quarterly estimates based on what your income's going to be at that point. If it looks like it's going bigger and stronger and your tax repairs already giving you your coupons 

Wayne Marshall: Go back to 'em and say, look, I'm having one heck of a year. How can I manage this to minimize my tax exposure? Should I change what my income is on my. Income or payroll? W2. 

Jimmy Lea: Yes. 

Wayne Marshall: Should I change dividends? 

Jimmy Lea: Yes. 

Wayne Marshall: Should I leave the money in? 

Jimmy Lea: Right. 

Wayne Marshall: How does that, because again, it's gonna pass through and we talked about the 15% tax rate for businesses that's, you know, up on the LLC at the top. At the beginning of all this. So Yeah. You know, just have those conversations and the goal here today. More than anything was just to have these conversations that, that you ask good questions when you sit down and that you start talking about, here's what I got going on, here's what I'm doing, here's what I wanna do, here's how I wanna set it up.

Wayne Marshall: They'll help you. It's just asking those questions. 

Jimmy Lea: Yeah. And that, I think that's what we're really empowering everybody here with is the knowledge, the information to be able to ask those right questions. Yeah. Knowledge is power, but knowledge is also dangerous. Yeah. Especially if you think you know the right way to do it and then you discover, oh, holy crap, I did it totally wrong.

Wayne Marshall: Nobody wants those oh crap moments at the end of the year. 

Jimmy Lea: Yeah. 

Wayne Marshall: Or. It's happened to me because I didn't do a few years back. Yeah. You're sitting there and all of a sudden your tax repairs going yeah. We kind of missed the mark and you're gonna have to write a check for $20,000. 

Jimmy Lea: Yeah, no, thanks.

Wayne Marshall: Or I've had the other side a few years back, I'm sitting down and I didn't do a good job. And he goes, you overpaid and you're gonna get a refund for $40,000. 

Jimmy Lea: Oh, wow. 

Wayne Marshall: And I'm going, you know what I could have done with that money if I had it every month and invested it or did other things.

Wayne Marshall: Oh, yeah. But I let the government hold on to my 40 some thousand dollars one year. 

Jimmy Lea: Yeah. And did you get any interest on that 40,000? 

Wayne Marshall: I got Zip zip. 

Jimmy Lea: Ouch. All right. 

Wayne Marshall: So I, I think I have one last slide that just says, Hey, you know, here's some things to consider. Obviously we talked about different states and certain states who have, well, some states have franchise taxes or annual fees.

Wayne Marshall: Don't live in California or New York. I apologize for any of you that are honest, that are in those states, but they're not business friendly. And obviously some states are right, more business friendly, but you know, real easy if you've got a low income business, just stay with your LLC taxation. Do the Schedule C.

Wayne Marshall: It's easy if you're starting to get up to moderate or higher, and that's 60,000 or more. Consider the, you know, the S corp and some of the things because it gives you flexibility of income. Distribution on a quarterly basis. If, hey, and God bless you guys, if someone gets big and they're gonna franchise them. 

Jimmy Lea: Hallelujah.

Jimmy Lea: Let's go. 

Wayne Marshall: We call a c -corp. 

Jimmy Lea: Yeah. 

Wayne Marshall: We call Jimmy and I, we wanna invest.

Jimmy Lea: We wanna make money too. At what point does it make sense to go to a C Corp? Is that based on the number of employees? Is that based on the number of locations? It's all dollars, yeah. Dollars driven. Yeah. 

Wayne Marshall: If you get, if you start getting really big and you get multiple shareholders or you wanting to go public 

Jimmy Lea: Yeah.

Wayne Marshall: And do other things. 

Jimmy Lea: Yeah. 

Wayne Marshall: I mean there you look at some of the bigger companies today, and if you go back and look at their history, I. They started out like we started out. I mean, you hear the stories of, well, apple and Microsoft start in garages. I now look at 'em today. But there was a point where they said, we're gonna go and we're gonna become a C corp because we're gonna get shareholders.

Wayne Marshall: We're gonna do this, we're gonna have shareholder meetings, all the other things that come with it. 

Wayne Marshall: But we want to be big. And when you get that size, you don't care about 21% of what the corporate tax is. 'cause the revenue's so high. It's so big. 

Jimmy Lea: Yeah. Oh that's phenomenal. So knowledge and information.

Jimmy Lea: So powerful questions, comments, concerns. Would love to address any of those other additional questions that you might have. Maybe there's something that's sticking out in your mind that, Hey, you know what about this situation? What about my situation? I'm a small mobile tech. I'm doing 6,000 a month.

Jimmy Lea: What kind of a LLC should I have? There's a question for you. How about that? 

Wayne Marshall: I would just, I'd keep it simple. 

Jimmy Lea: Just the simple LLC.

Wayne Marshall: I would do, I would do the simple one if you're wanted, if it's just you and you're self-employed. You're running your business. Well keep it simple like that. If you're having a really big year, 'cause I've known some guys who are running an independent one person business.

Wayne Marshall: They're making six figures plus, then you need to start doing some planning. 

Jimmy Lea: So that's when you start looking at the S corp. 

Wayne Marshall: Yep. Even if it's multiples because your income's getting so high. 

Jimmy Lea: Yeah. 

Wayne Marshall: And I. I didn't look it up. I should have real quick, but I know in 2025 it's somewhere around 96 or $98,000 you go to the next tax bracket. 

Jimmy Lea: Right.

Wayne Marshall: So you know, this is again, where a good tax preparer is gonna tell you, look, we wanna look at this, pull this. And like I most, our coaching clients, oh my our coaching clients, as we talk, I tell 'em, if you wanna pay yourself, 'cause you know, and then see how your dividends are going. Your earnings are going start at about 90.

Wayne Marshall: If you want to go higher, that's fine, but again, talks to your preparer. Yeah. Start at 90, take those paychecks out and then look at what you're gonna do with dividends or earnings on a quarterly basis. 

Jimmy Lea: Yeah. Yeah. We do know a couple of shops that are a single employee. The owner. And the owner is the phone, the computer, the wrench.

Jimmy Lea: Yep. And they're doing in the $400,000 a year range. 

Wayne Marshall: I coaching with one. 

Jimmy Lea: Yeah. 

Wayne Marshall: He's trying to get his company in a position to sell. 

Jimmy Lea: So he, is he currently as an LLC looking to go to S Corp or does he just because he's looking to sell? He's probably... 

Wayne Marshall: so he was doing exactly what we talked about. Yeah. When I started the whole conversation.

Wayne Marshall: He was an LLC for his business. He owns the building personally, and I'm like. Dude, you've gotta get an LLC for your business or the building, the property. And then you need to pay yourself rent. And then pay yourself a little extra rent because that generates a little extra income. We talked all this through, so he got it done at the end of the year.

Wayne Marshall: So he started this year, 2025, a clean tax year. So he now has a property LLC. So if he sells his business, he can now create income off renting his bus, his building back out. So that can be ongoing retirement income for him and his family as he wants to go. As an example, he could also turn around, sell the business.

Wayne Marshall: Put that on a five year balloon, sell the building separate of and create a different income stream. Love it. And it changes some of those tax ramifications because the other thing you gotta start looking at and then plan for, even on a business, if the valuation goes up, there's still capital gains.

Wayne Marshall: And you also have capital gains as we're all familiar with on property. Yeah. Again, and it's same as he's done and I keep saying, but he talked to his local preparer and I said, here's the things you wanna ask. Here's some of the questions we wanna address that get you set right for your personal situation.

Jimmy Lea: Love it. Excuse me. No, some questions coming in from Jeff and Jeff, thank you. This is a really good question. The S corp breaks at $60,000. Is that $60,000 of profit or is that $60,000 of business? Revenue. After the owner gets paid, what? What is that? $60,000. 

Wayne Marshall: So if you're gonna make 60,000 in profit or net. So let's just say for sake of argument, you did 400,000 in revenue. Yep. You paid yourself. 80,000. 

Jimmy Lea: Okay. 

Wayne Marshall: And the company still made over 60,000? That's where that would kick in. 

Jimmy Lea: Oh, I see. 

Wayne Marshall: So even if you wanna look at it, 'cause it's gonna flow to you on a sole proprietorship in that pass through, it's gonna show that you really made 140 or more thousand, maybe 150,000.

Wayne Marshall: But that's when you wanna stop and say, okay. If I pay this and I'm at this tax level, I don't want to get to some of the next tier. That starts to happen when you get over the 96, 98, you get to a hundred, I can't remember where the next one is off the top of my head. But it's like 120, something, and then it just continues and you're just gonna pay more. So this is again, where you wanna stop and go, okay, I want to have my taxable income here during the year so I don't pay overpay, and then take dividends and other earnings. You can, or you can leave it in and then talk about how you can reinvest and other things you can do with it.

Wayne Marshall: But that's where, that's how that all adds up. 

Jimmy Lea: Nice.

Wayne Marshall: So it's not your income's separate of the 60. 

Jimmy Lea: Beautiful, beautiful. Jeff, I hope that helps you out, brother. Cool. Good. Well, we're asking for final questions, comments, concerns. 

Wayne Marshall: It went by fast. 

Jimmy Lea: That I, it is like a flash man. And you know, I'm thinking of a client that we have in Texas.

Jimmy Lea: This is a shop that was struck by lightning flooded. Caught on fire. Yeah. Yeah. And and lucky for them that they were covered. They did have the right insurances in place. It's not even something that we're talking about today, but it is important. You do need to evaluate that. And there's been a lot of businesses that when they start, they have two bays.

Jimmy Lea: They have an insurance policy for two bays. Then they grow and they grow. And then there's a problem. And now that insurance policy that they set up originally doesn't cover. Four bays, six bays, eight bays, and then they get into a little bit of trouble. So lucky for this shop in Texas, they had all the right insurances in place that they were covered, right?

Jimmy Lea: And the trifecta within, I think it was within two or three weeks that they got struck by landing, caught on fire and flooded. 

Wayne Marshall: Another thing, I didn't really, I should have said this earlier too, but one thing, if you start going down this road. If you don't do one, I do one annually, have done 'em for years.

Wayne Marshall: When I had my businesses, even still to this day, I do 'em do an annual personal financial statement. 

Jimmy Lea: Nice. 

Wayne Marshall: That list out all your debts, all your assets, the valuation of your business, everything else that you're sitting there, and you can see what your net worth is and how that net worth is changing year after year to year.

Wayne Marshall: Because it's a great scorecard. To just look at your overall, not only your personal financial health, but to even look at it from a bigger picture of your business and how everything is changing and growing. Because we, any of us as business owners, we work our butts off at times, and you sometimes wonder, am I really gaining, am I getting what I should get?

Wayne Marshall: It was always a nice thing to look at, and I'd try to sit down and then my wife and I would talk about it and I'd say, you know what? This is paying off. Sometimes it doesn't feel like it because you're just like, you're in the grind. You're in the grind. You're grinding it out. But when we would take the time and look and see that, but wait a minute, I did add this much to my 401k or my IRA or something.

Wayne Marshall: I did do this. We do pay down the building more that we were owning. We did this things and next thing you know, you just start seeing that growth and you're seeing that change and then you look at five years ago to there and you're going, oh my goodness. We are doing it well and we are making a difference in what we're trying to do today.

Wayne Marshall: So it's just a good exercise. I know we've, I've shared some things with the form I've used, I've sent out to others that I've coached with, and I say it is just one of those things to just, it's a good way to see am I going up or down? Am I winning, losing, and how it's, what's my overall health. That's what you're really trying to do.

Wayne Marshall: That's why we do what we do. 

Jimmy Lea: Yeah. 

Wayne Marshall: And try to, that's why we got into business for ourselves. 

Jimmy Lea: Oh, so true. So true. So question from Jeremy. He's asking when you pay yourself, do you deduct taxes? I. I think there's two answers to this question, correct? Yeah, go ahead. 

Wayne Marshall: So if it's W2, so it's an actual payroll.

Jimmy Lea: Payroll, yep. 

Wayne Marshall: So when you think about all the normal employee deductions that you would have, social security, what have you. Yes. I would run that, and I'd run it actually through with, you know, you. QuickBooks can do it. If you're just a single person and you're using QuickBooks, it can help you get and deduct the right things and make all the right payments that you need to pay.

Wayne Marshall: And then the second is if you pull it out as earnings. Yes, that's where your tax preparer. If you guys kind of remember, you're gonna get a coupon. It'll be for the four quarters of you need to write a check to cover your dividend tax or what you're gonna take on earnings or what the earnings of the company might be, even if you don't take 'em out so you don't end up with a tax surprise at the end of the year.

Wayne Marshall: Hence, I had to pay 20 grand 'cause I didn't pay enough. Ouch. Quarterly's going through and then you gotta pay it at the end of the year. So yes, I, my normal W2, yeah, normal taxes, everything. You run it as you normally would. The others are done quarterly on a coupon. 

Jimmy Lea: Oh, I love it. I love it. So big compliment to you from Jason.

Jimmy Lea: Jason says, right. Well, what did we do this time? Jason says, thank you so much. I now understand it's so much better than when my accountant tried to explain it. Wow. LLCs, SCORP, C Corp. Thanks. Yeah. Good job brother. Appreciate that. Thank you Jason. Yeah. Alright one more thing. And this goes from. First is from Jeff.

Jimmy Lea: Jeff is saying, does Wayne offer coaching services? 

Wayne Marshall: Yeah. Yeah. 

Jimmy Lea: As a matter of fact, we do. There it is. Matter of fact, we do. If you find this information interesting and inviting and educational, and that's really what we're here to try and provide for you is an education information knowledge. If you find it interesting, let's have a meeting.

Jimmy Lea: Let's see. If reach coaching would be something of value to your business, are you at a position that you're ready to do it? I knew of a mobile shop in Virginia that wanted to come on with the institute and he just wasn't ready. Just wasn't ready. It took him about a year and after a year, so I'm again at a show and he's like, yep, I'm ready.

Jimmy Lea: Let's go. Went from doing 6,000 a month as a mobile tech. To his first month, brick and mortar, $24,000 that month and started day one with coaching and training to make sure that he was doing it right. So big shout out to our friends there in Virginia. 

Wayne Marshall: Well, that's noted. Everything. A guy, you met him, you know our guy from Canada, he started out with a mobile truck.

Jimmy Lea: Yeah. 

Wayne Marshall: Truck mechanic. 

Jimmy Lea: Yeah. 

Wayne Marshall: And today he's got three mobile trucks and a 22 bay. He's gotten huge. That is huge. 22 bays each mobile and we've talked about it and we're working with him today and working on some things. But yeah, he talks about starting on that mobile truck to the point today, each mobile truck for him.

Wayne Marshall: 'cause he also does heavy earth moving equipment and construction equipment and service along with over the road diesel trucks. Each mobile truck's running about 400,000 in revenue. 

Jimmy Lea: Wow. 

Wayne Marshall: So he's getting 1,000,000 or 2 between his three mobile trucks. That's not counting all the stuff comes to the shop on 22 bays.

Jimmy Lea: Gotta love that. Gotta love that. 

Wayne Marshall: Start with one mobile truck. 

Jimmy Lea: Yeah. 

Wayne Marshall: And there he is today. 

Jimmy Lea: There he is. 

Wayne Marshall: Great story. 

Jimmy Lea: So those of you who are interested, scan that QR code first name, last name, email address. Let's set up an appointment. We can sit down and review your business.

Jimmy Lea: Review where you are. There's no obligation, there's no financial cost to it. So that's a free resource for you as well. Check out our website. We are the institute.com. We are the institute.com. A lot of valuable information on the website as well, our YouTube channel. There's o easily over 160 hours worth of knowledge and information that you could gain a master's degree in running your shop, your business, your mobile business that, that's gonna help you as a business owner.

Jimmy Lea: I. Available on YouTube. And that's a free resource as well. Any things that you would want to include in an offer that we can send to our listeners that are on this webinar today? Maybe the the five steps to a 20% net profit? Maybe a couple links to some videos that we've.

Wayne Marshall: There you go. Sure.

Jimmy Lea: Yeah. 

Wayne Marshall: Let's make it happen, captain. 

Jimmy Lea: Okay. Well scan the QR code. Make sure you, as you talk to our representatives, you say, Jimmy told me that you were gonna send me the workbook, 5% net, five steps to a 20% net profit, five steps to a 20% net profit. And there's a webinar that goes right along with that, where Cecil breaks down those steps and exactly what you need to do every step along the way.

Jimmy Lea: So with that, thank you very much. Appreciate the time, Wayne. Thank you to you, brother. Appreciate it. Great knowledge, information you got another shout out here. It went away. Lemme get to it real quickly because Jeremy says Thank you guys. This has been a real eye-opening experience. I awesome.

Jimmy Lea: Lots of great information. Definitely gonna make some changes. Jeremy to you. Thank you very much, brother. 

Wayne Marshall: Glad to help. Love paying it forward. 

Jimmy Lea: Yep. That's what we do. 

Wayne Marshall: All right. 

Jimmy Lea: And with that, we'll see you again soon. Thank you.