THA 149: Top Financial Challenges to Overcome – Shop Owner Perspective

Andy Massoll second-generation owner from Curt’s service in Oak Park, Michigan was featured in episode 29. He and his dad Curt build their 15,000 sq ft dream shop in 2012 and you can hear about all the Green Capabilities of his shop in episode 29. His main location focuses on specialized services such as European, Asian, hybrid and fleet. Andy recently opened his first branch with a partner in a more rural setting. He and his partner Jim were consulting for the business but decided to buy it instead. He is also a member of CCPN and ASA. Andy’s previous episode HERE.

John Long started to gain more interest in vehicles and just after his 21^stbirthday he accepted a position working at National Tire & Battery as a service advisor.  He knew nothing about tires or vehicle systems and how they worked, but he learned as much as he could.

In 2005, John and his wife decided it was time for a move. He arrived in San Antonio late on a Friday night after driving 24 hours straight and interviewed with Mark Roberts on Saturday morning.  Mark hired John, and for the next several years he helped grow the new mechanical repair shop business. Listen to John’s previous episodes HERE.

Tom Ham, with the help of his wife Deb, is the creator and owner of Automotive Management Network a 12,000 plus member website dedicated to the exchange of vehicle service management information. Tom got his start in the auto service industry pumping gas in the late ’60s. Tom and his wife operate Auto Centric, an import specialty shop in Grand Rapids, MI. Tom and Deb have five children including two sons and a daughter who served in the Iraq War as U.S. Marines.  He writes extensively on industry topics.  Discover Tom’s previous episodes HERE.

Key Talking Points:

• Big take-a-way is Budgeting and the Profit First Strategy
• Create a budget on every category of the business and share it with your people. They need to know of the entire plans for revenue, margin, and costs in the business
  • A budget needs to be in-depth
  • A budget is not a saving plan but an earning and spending plan
  • Tom Ham: An oversimplified 25/25/25/25 budget plan. Simply put of your sales you can allow 25% for payroll, 25% Expenses, 25% for Parts, 25% for profit. 
• Dave Ramsey financial goals will help your people live within their income
• Long-range goal: Will the shop run without you.
  • Make the plan and work the plan
  • Set yourself up to succeed
• You should not get yourself into debt as you grow your business
• The family must be on the same page on how you spend money. What is your incoming and live within your means.
  • Spend less than what you take in both personal and business
• Money needs to be there for investment in technology, tools, equipment
  • Can’t spend what you don’t have
  • Must budget: set aside money for every aspect of the business
  • Monies/funds available must be earned through running a great business
• Andy and Tom are in a twenty-group. This really helped them focus and grow their business
• There are two different types of shop owners as it relates to increasing labor rates
  • One’s that will immediately change their labor rate
  • Other, will worry and labor over the decision
• Managing your profitability and running a successful business allows you to may a great wage to your team and keep them.
• Many techs turned business owners manage their business by what is in the bank.
  • The worse way to manage
• Andy suggests ‘reverse engineer’ your cash. Allocate taxes, payroll, profit and so on.
• The book Profit First will help. Find it HERE.
  • Podcast episodes on Profit First HERE.
• Rarely businesses will go out of business if they have high prices
• Never borrow to pay parts bill. This shows that your core fundamentals are broken.
  • Use debt to grow the business
• If you are in trouble paying your bills. Suggestions:
  • Find an accountability partner. Admit you need help. Can help you and give you guidance
  • Stop the bleeding. Not hard to find areas that are bleeding money
  • The family must be on boards (spouse)
• Learn to be uncomfortable as you learn. Get out of your comfort zone
• If you are struggling you are not alone
  • Ask for help
• Don’t let finances scare you, however, you must learn
  • Get educated, get help
  • Don’t just keep track of what you want, you must look at every performance indicator and find ways to improve them
•  Be content with where you are and also be aggressive in going forward.
  • If you are not content figure out what doesn’t make you content

Resources:

• A special thanks to Andy Massoll, Tom Ham, and John Long for their contribution to the aftermarket.
• Books Page HERE
• Leave me an honest review on iTunes. Your ratings and reviews really help and I read each one of them.

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Thanks to Shop Ware and Jasper:

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