THA 135: Implementing Profit First – Shop Owners Thrilled With Results
Kenny Wedow knows cars. A natural talent even at the young age of 17, he pursued it auto repair in shop classes in school then slipped right into the work field. Working for dealerships such as Saturn, and Nissan, as well as other independent shops, has afforded Wedow with an extensive and well-rounded education. More importantly, before Wedow branched off to open the doors of Fine Tuned Auto in 2013, he already learned the importance of patient diligence. Many dealerships and independent auto shops can default to make generalizations about the problems with your car, sometimes not always seeing the things that really might put you in danger on the road. The patience Wedow has to pull everything apart if need be to find the root answers makes him unique in his field. It is a quality that got him promoted to foreman at a Nissan dealership when he was only twenty-three. It wasn’t that the six technicians under him weren’t experienced, in fact, some of them had worked considerably longer than Wedow. However, his attention to detail and follow-through put him above and beyond.
Danielle Bohlman, owner with husband Brett in Highway 7 Service Center, Newell, IA Find Danielle’s other episodes HERE.
Chris Cotton utilizes the Profit First method of cash management. He is trained and certified by the Profit First Professionals organization to guide business owners and entrepreneurs in maximizing their profits.
AutoFix is the first and currently the ONLY auto repair shop specific coaching company, nationwide, that has achieved certification in Profit First.
Chris Cotton has been in the customer service industry for over 40 years and has been in the auto repair industry for over 25 years. He is a former shop owner that has dedicated his life to helping YOU to get your business where you want it to be and helping you FOCUS on the things that matter to you. Find Chris’ other episodes HERE.
This episode will change your thinking as it relates to a new profit discipline and cash management. I know you know that cash is king in any business, so start being a better manager of it.
Listen in on Danielle Bohlmann, owner with husband Brett in Highway 7 Service Center, Newell, IA, Kenny Wedow from Fine Tuned Auto, Broomfield, CO and Chris Cotton, Certified Profit First Professional from AutoFix SOS coaching company and a former shop owner.
They nailed the benefits of a strong and disciplined cash management system. Both these shop owners say they are in a better place because of implementing Profit First.
Danielle and her husband Brett always plowed all their money back in their business. Now hear what they are doing and are better for it.
Key Talking Points
- Profit First is like ‘Telling Your Money Where it is Going’ Danielle Bohlman
- My Profit & Loss Statement says we made money! Where is it?
- Eight out of ten businesses fail from a lack of profit.
- 50% of businesses fail within the first five years
- In the book Profit First author, Mike Michalowicz says: “Profit is not an event, it is a habit”
- You do not need to be in financial trouble to implement
- Profit First is a budget based on your income (revenue)
- Great accountability and discipline
- Everyone in the aftermarket can benefit
- Kenny did not follow the account conventions exactly like in the book but set up according to his business. His accounts: income, profit, debt repayment, sales tax account, opex account, parts, payroll account.
- You may find some challenges with your bank until they understand why you want additional accounts
- Danielle had challenges to cutting expenses, but they made it worked.
- Too many live with a big pot of money. One account that everything gets paid from. That is how the money disappears without having a ‘budget’ for your responsibilities.
- Funding these accounts based on allocations can determine exactly where attention needs to be paid. You can get a really good check on your business by looking at your bank account. KPI management is important as you see if you have enough cash to support all areas of your business including the owner’s profit.
- Danielle and her husband Brett always plowed all their money back in their business. Profit First will allow you to allocate owner profit so they can enjoy the fruits of their hard work.
- Danielle pays bills twice a month and has freed up a lot of her time
- Fine-tuning the operating expense account allows you to allocate more to profit
- This new accountability to your cash may hold impulse purchases at bay
- Kenny thinking to add a new account called charitable contributions to use in the community. He will allocate a percent of his revenue and pull that percent from another allocation or increase his prices or labor rate to cover it
- You only have 100% of your money and you can’t spend what you don’t have unless to don’t pay your costs or debt or government
- This discipline will let you look closely at all your expenses and wonder if you need every service you purchase or spend money on, especially if you run out of money in the opex account
- You don’t know what you don’t know until you know it
- A special thanks to Kenny Wedow, Danielle Bohlman, and Chris Cotton for their contribution to the aftermarket.
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