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BONUS Episode! Todd Hayes Welcomes The Hate
308 Plays28 days ago
Got a confession you need to make? Call 704-CONFESS. (704-266-3377)
Today, Mike Allen and Todd Hayes talk about why his business model works and why many people don't like his methods. But why? They work!
00:00 "In the Trenches Entrepreneur"
05:06 Scripted Sales Dialogue Success
07:18 "Dream Job with Star Athletes"
12:24 Fluid Exchange Follow-Up Process
15:12 AI Evolution Since 1986
19:02 Polaroid Success and Service Failures
19:51 AI Monitors Call Tone Effectively
22:38 "Mastering Client Retention Techniques"
26:50 Successful Entrepreneurial Transformation
28:58 Weekend Job Brokering Insights
33:10 Expanding Customer Thresholds
35:23 "Diagnostic Fees Elimination Success"
Recommended
Transcript
Introduction to Todd Hayes and His Ventures
00:00:00
Speaker
Today's episode is one of the first episodes I recorded at Vision KC 2025 this year. with Todd Hayes, um driving force between behind the Houston Boston Partnership, private equity group, Adams Automotive, Now Auto, Pleasant Car Care, JB Auto, lots of shops.
00:00:19
Speaker
Todd is driving force behind all of that, and he is a firebrand. I pissed a bunch of you off a couple months ago when I interviewed Joe Adams of Adams Automotive, and I referenced Todd as being the Donald Trump of the automotive world. He's loud. He's brash. He doesn't give a fuck about your feelings. He cares about running a good business, being a strong business person.
00:00:44
Speaker
It was a really good conversation and i had some really good takeaways that I've kind of store away and continue to use in my business. I think you'll enjoy it.
Host Introduction and Episode Disclaimer
00:00:53
Speaker
And if you don't, call me and leave me a message and tell me why.
00:00:59
Speaker
The following program features a bunch of doofuses talking about the automotive aftermarket. The stuff we, or our guests may say, do not necessarily reflect the beliefs of our peers, our sponsors, or any other associations we may have.
00:01:13
Speaker
There may be some spicy language in this show, so if you get your feelings hurt easily, you should probably just move along.
Business Strategies and Innovations
00:01:20
Speaker
So without further ado, it's time for Confessions of a Shop Owner with your host, Mike Gallen.
00:01:32
Speaker
Well, if you're good, what I'd like to talk about is because, you know, I'm on a lot of the online forums and in the groups and that kind of stuff. And I love to stir the pot and talk shit.
00:01:43
Speaker
Let's go. Two of the concepts that I've really embraced in the last year that I learned from you ah was Rack Attack. yeah One, so I want to talk about Rack Attack. And two is i stopped charging for Diag and I used to charge a lot for Diag. How is that working for it It's fucking great, man. Oh, no way. You mean you mean you have an exit fucking fee now?
Customer Service Philosophy
00:02:05
Speaker
Wow, and that amazing? I don't charge you to come in, but I charge you to leave. I had a guy call me yesterday, and he's in San Francisco Bay Area, of California. um Got three shops. He said, my car counts down. many glasses are off? Does it matter?
00:02:21
Speaker
doesn't matter. You can have off if you want. I'll probably take them off. I'll see if I take them off. might take them off later. don't know what's better. He said, car count's dead. um You know, phone's ringing a little bit, but not a lot.
00:02:33
Speaker
And I just walked him through what Glenn and you walked me December of 23. What was that? Answer the phone to say yes? Yeah. So, i mean, the script is, well, Ms. Jones, anytime you experience whatever the hell it is that she's experiencing, it's important to have my ASC certified technician inspect that for you I'm going to give you a complete written estimate at no charge.
00:02:56
Speaker
Is right now a good time to bring in? good time to bring her in? Wow, how hard is that? well And so, you know, people roll their eyes when they hear that. But then when we sit down and we talk about the mental condition of the average first-time caller into your shop, it shields up, I don't want to get fucked.
00:03:12
Speaker
No, man, they have their... Okay, when you have a new customer, where does that customer come from? They are unhappy somewhere else. They have fired every single shop they've ever walked in until they walk into your shop. Now they're going, hey, I'm going to give you a try. And if you're just like the other shop, they're going to fire your ass also, period, period.
Contrarian Business Model Success
00:03:33
Speaker
yeah And so, man, I have an industry that truly thinks that is the customer's privilege to come to you. No, no, no, no, no. no No, no, no, it is my privilege to serve of a customer and see my industry can't get that.
00:03:47
Speaker
And so, you I mean, you know one of the greatest exercises, Mike, when you come to Houston is when we call competitors. Now think about 1986.
00:03:58
Speaker
I had a freaking radio shack recorder. See, everybody thinks of me. They don't know that I was just, I'm still an in the trenches guy. You know that. You know, you think, oh, yeah, he's rich. He's all this stuff. No, dude, I'm an in the trenches freaking guy.
00:04:12
Speaker
Yes, I've been very successful because I created a business model, which is entirely polar opposite of the industry. It's like, hey, my father-in-law taught me customer service.
00:04:24
Speaker
That you serve the customer, as Sam Walton said, man, the customer can fire from the CEO down. Man, the customer pays all your bills. Does my industry understand that?
Transparency and AI Integration in Business
00:04:34
Speaker
No, not all. Absolutely not. I do want to tell you, not...
00:04:40
Speaker
the last class, but two classes ago, when it was time for that exercise at Key to Key where you call around, somebody called me in North Carolina, those sons of bitches, and I will tell them, they they called me and laughed about tell we knock it right out of the park. Boom! home you gop There you go so See, that's so crazy because here's what happens. I'll tell you the story on that. You'll love this.
00:05:00
Speaker
I have been doing this so long. So that that exercise started out with me in 1986 with a Radio Shack Recorder. Autoshop answers might operate in some ways that are not entirely the same as how you operate, but I'm here to tell you you're a fool if you don't at least listen to their concept and see what you can learn and use from their concept.
00:05:22
Speaker
It has dramatically changed my business. Yeah, I've had a lot of turnover as a result of the implementation in this concept because some people aren't comfortable with change, right?
00:05:33
Speaker
And that's okay. Five of the last six months have been the best months I've ever had. February was down across the country and it was my best February ever. I'm in the middle of my first $400,000 month at my big store.
00:05:44
Speaker
There's more to life than top line revenue. It matters. And I think it's a great business model. I think there's a lot to be learned from it. I'm not open on Sundays, but, uh, I don't think you have to be open on Sundays or seven days a week to agree that there's something you can learn from these guys.
00:06:01
Speaker
They have a class, uh, called key to key once a month in Houston. It's Saturday and Sunday. There are classes before and after for owners, uh, but owners, managers, and advisors can come to the key-to-key class.
00:06:14
Speaker
I've had multiple conversations with people and told them, you owe it to yourself to go down to this event. Check it out, learn what you can. And if you decide that you don't like it and you think it was a waste of your time and money, talk to Todd. I think that they'll give you a refund because that's how confident they are in it.
00:06:32
Speaker
I'm that confident in it too. It's changed my business for the better significantly. should check it out. Now think about who would ever believe that a Polaroid camera and recording
High Standards and Teamwork in Business
00:06:41
Speaker
phone calls with a Radio Shack recorder would turn into $20 million. dollars Well, it did, you know, as I was perfecting this business model.
00:06:49
Speaker
But what happened? Well, the Polaroid camera proved transparency. I took Polaroid pictures. I'm going to save your old parts. what What did that do to my close ratio? Absolute integrity.
00:07:00
Speaker
Total integrity. We got in the business for total integrity. There still shops out there that do not operate with total integrity. Of course. I charge for my integrity. Do you understand that? See, I can charge more money guaranteeing you total integrity.
00:07:13
Speaker
Do I let you in my shop? Did I in 1986? You bet I did. You look at what auto hospitality looked like in 1986. Red ties, gloved up. In 1986, taking Polaroid pictures of car repair and saving the old parts.
00:07:31
Speaker
And when I first called around... going, how much are brakes? Well, what did I hear from the industry? I'm like, what kind of car do you have? You know, what's it doing? It's grinding. Well, I'm grinding these brakes, caliber, rotors, all this stuff.
00:07:45
Speaker
And you're like listening to it going, oh, my God, man, that's horrible. It's terrible. It could be a million things, but they still do it. And then I said, I called my shop, mystery shop, my shop. How did it go? I sounded just like him because the industry has been teaching the same step.
00:07:59
Speaker
And so I said, wow, I'm going to start recording phone calls. We're going to write some presentations. I'd met a guy a long time ago. His name is Brian Tracy, friend of the families. Now he's super successful. He's an older guy.
00:08:11
Speaker
But he taught me scripts. And so I started of writing these scripts. That's where the anytime presentation came from. And, man, how much sense does that make? A customer calls in, how much are breaks? What type of concern are you having with your breaks? Yeah.
00:08:23
Speaker
And you tell me what the concern is, direct question. And then the customer says, well, every time I apply my brake pedal, I'm hearing a grinding noise. Well, anytime you're hearing a grinding noise, you need to have that respect about one of my certified technicians.
00:08:35
Speaker
Is now a good time to bring your vehicle in? I can look at it right now. Now, does that get the car over the curb? Here's the deal. Look at me, people. If you learn nothing else from this conversation, that script right there will change your business.
00:08:50
Speaker
Absolutely. I have an industry that that has perfected the no. They have perfected the No, I'm too busy. No, I'm closed on weekends. No, I'm booked up. Okay. I have a store, Mike. You've been to my stores. Have you not? Yeah.
00:09:05
Speaker
So my top store does 1.2 million is this record month. Month. Now we scaled that store from 250 or 3 million to 12 million.
00:09:17
Speaker
Let me tell you, our business model works. How many days a week am I open? All of them. Wow. Why would that be? See, when did my industry stop operating? Opening seven days a week. Huh?
00:09:28
Speaker
So here's. No, wait. I want you to hear this. See, back in the day where it was full service gas stations, how many hours? ah They're open seven days a week. Ding, ding. You run out, wiping windshields down, checking air pressure on the tire, looking at the tires, lifting up the hood, checking the oil. You did that seven days a week. My grandfather was a full
Overcoming Industry Challenges with Unique Models
00:09:50
Speaker
service fuel station and repair shop that he lived in. And one bedroom in the back, he was open 5 a.m. to midnight. night seven days a week you bet he was and here's what happened see here's what happened to my industry it went to self-serve and then we started opening up these things called car repair shops and then we got too good to be open on saturday and sunday or you hated the business so bad you don't want to be around it and see i love the business look at my team have you met my team mike are they phenomenal yeah i'm going to talk to a bunch of them this weekend do you not want to go to work every day and work with these players yeah
00:10:25
Speaker
I mean, wow, man, I get to go to work and and work with Glenn Piccolo. Jose Garcia, freaking players, man. You know, a stable of freaking studs. Oh, my God, man. We are professional business athletes.
00:10:39
Speaker
That's a whole different deal. If I told you, okay, look, I will pay you $1 million dollars to play. Professional on football. Would you would you take the job? Sure. Oh, wow.
00:10:50
Speaker
But you've got to play on Sunday. You've got to work on Sunday. Hey, how about baseball? got to work on Sunday. See, business is a sport. See, it's just ran by technicians who hate business.
00:11:03
Speaker
They aren't trained in business, and that's what I do. I train technicians. You look at Charlie Zalakos. Here's a guy who is a master technician who now is a CEO. How does he do?
00:11:14
Speaker
You'll interview him later, I hope. yeah He is a f freaking superstar with a massive net worth, and he will never stop making massive money. Because once you learn how to make money in this business, it's very easy. And he's in the bay PMI in cars multiple days a week. Oh, wow. what Where's my office at, Mike? Yeah, bay two, bay one. See, no one understands that.
00:11:35
Speaker
Do I have an office at Adams? I don't think that you do, do you? Yeah, bay one. i You know where my desk is out in that bay. You know, up until I was diagnosed with cancer, I would work every day in that shop until we hit $40,000. Okay, well, let's just do the math. That's four cars an hour, $1,000 ticket hours, 10 hour days, 40. There's your math, people. It ain't that hard.
00:11:58
Speaker
See, but then you go, something's not right there. Well, Mike, how fast can I PMI a car? When i do a rack attack, huh? If you've got four people on it, 15 minutes is very doable.
00:12:10
Speaker
Shooting all your videos, getting everything strategized for this sell, and then where does the car go, Mike? Back in the parking lot. Out the parking lot. Yeah. So I sell the brakes, right? Wow, how is that?
00:12:21
Speaker
Here's my brake video. Here's MotoVisuals. Here's ChatGTP. I watch them watch the video. I'll come Did have an opportunity to watch that video? Well, great. You know, my certified technician, I would look to the vehicle as you saw the video. Those brakes were really bad. We start with a master cylinder.
00:12:35
Speaker
We do a nice close. and we we we We walk them through what they just watched on video. Well, what's my close ratio going to be on that? Well, it's f freaking huge. It's huge. If you miss that close, really?
00:12:48
Speaker
Now, so where's the car at, Mike? In the parking the parking lot. Wow. Did also see an axle with bat on it? Well,
Auto Hospitality and Service Excellence
00:12:55
Speaker
see, then I say, oh, and by the way, while your vehicle is in here, absolutely no charge to you.
00:13:00
Speaker
I'm look over the rest of the vehicle and make sure it's in what? Tip-top condition, right? And what's customer going to say on that? Absolutely. Please do that. Right? So I already you know I have an axle. I've already shot the video on the axle. i I'm ready to sell the axle. So I call him back.
00:13:15
Speaker
I go, wow, man, I'm starting on your PMI. As you can see, man, this axle is bad. It needs your media attention. I'm going to go ahead and take care of the axle while it's in here. And what's that customer going to say? Watching the video, seeing the axle, seeing MotoVisual axle, and Chad GDB saying, yes, it's major safety concern.
00:13:31
Speaker
What do you think my close ratio is on that? I feel like it's pretty good. Pretty freaking good. Yeah, pretty freaking good. My average toward is little over 500,000.
00:13:39
Speaker
Yeah, and people go, well, because they're so nice. Wow, that's kind of goofy. You know, yeah, no, let's have really cruddy stores. And then you look at Charlie's two bays, four lifts. $369,000. He's to break almost nets month.
00:13:56
Speaker
and you're going wow mans two bay's four lift Now, wait a minute. Now, where's that car at? So I have the axle. Where's the car at? Still in the parking lot. Still in the parking lot. So now, man, screen record your Carfax report. I call them up.
00:14:09
Speaker
You screen record a Carfax report. Send it to them. I have AI doing that now, which is way cool. So I have screen record AI doing my Carfax report. Send it to them. You will not know
Revenue Targets and Expansion Plans
00:14:20
Speaker
what's AI talking to you.
00:14:22
Speaker
And then I call you. I'm going, hey, did do you have an opportunity to watch that screen record, that um Carfax report? Oh, yeah, I did. Well, great. It's a perfect time to catch up on the rest your fluid exchanges. So we're going to go ahead and take care of the rest of your fluid exchanges. That way you'll be up to date.
00:14:35
Speaker
And we're already doing your brake fluid exchange. So why don't we go ahead and get caught up on the rest of your fluid exchanges. What's my close ratio on that? So I have a question about that. Sure. i'ming I'm a chicken shit compared to what you guys are doing. um We presume to close on the ISO. We presume to close on the PMI.
00:14:50
Speaker
And we ask for the sale on the third call. Here's why. you know If they are going to give you objection, they're giving objection. You understand? So I'm the doctor.
00:15:01
Speaker
My job is to tell you what to do. Is that correct? Yeah. I don't ask you what to do. When I was diagnosed with prostate cancer, I didn't go... Well, let me ask you. um here's They assume the cell. yeah You need to get that inspected right away. And I did the next day. Seriously.
00:15:18
Speaker
So here's where when I say that, I just tell them what to do. So I said the Carfax screen record to them, correct? Just like any other video. I normally attach some um some fluid exchange videos through BG with that.
00:15:33
Speaker
Plus, I'll attach some chat GDP with it. So there it goes, just like any other cell. And then I call him up and I go, hi, Mr. Jones, did you have an opportunity watch that, those videos that I sent you?
00:15:45
Speaker
Since we're doing your fluid exchange, I went and looked at your Carfax report. And as you can see, you've done no fluid exchanges. Or as you can see, the last time you did fluid exchange was three years ago.
00:15:57
Speaker
So we're going to go ahead while it's in here and we're doing a brake fluid exchange. I'm going to go ahead and take care of these fluid exchanges. I should have your car ready by tomorrow. Is this going to be a good number to reach when the vehicle is done? Did I just assume the cell?
00:16:10
Speaker
Yes. Yes, that's And they're going to say yes. I want to talk about your haters. because i have haters? well I have haters, and it said they hate you by proxy. um So the things that I get the most hate about are being open on weekends, right? And something that you said a minute ago. The business in America, again. is Car repairs start out with gas stations. What was your dad? Your grandfather was open seven days a week. Sorry, guys.
00:16:35
Speaker
You're the ones who got lazy and hate your business. Not me. I love You said that our industry, the aftermarket, is technicians who hate doing business. Yeah. And you're a businessman who happens to work in the auto sector. That's it. And I think that's a pretty profound statement because...
00:16:52
Speaker
oh I mean, most of the independent aftermarket are former technicians who are ground down and angry at the fucking world. And here's why. because and I wouldn't want do that seven days a week either. They have been taught two plus two is five.
00:17:03
Speaker
Now, want you to hear this. i can Obviously, everybody pretty much knows I'm pretty successful. So I can afford any toolbox I can buy. Is that is that a fact? Yeah, sure.
Future Growth and Private Equity
00:17:15
Speaker
You can name anything you want, fill it up with tools, and now I'm going to become a technician. How will I do, Mike? You will? Poorly. I will fail miserably.
00:17:26
Speaker
I'm not a technician. Well, the minute you turn your box in and you jump over into my ballgame, you're now a CEO of a company. I mean, that's my profession.
00:17:37
Speaker
I'm well-educated. I was groomed from the womb for retail. And yet, my God, what would make me think that I can become a technician because I buy a toolbox is about as insane as a technician thinking I can open up a shop with no business knowledge.
00:17:54
Speaker
See, that's crazy. And see, I just teach technicians how to become CEOs, the discipline of it, a business model. If you don't have a business model, you don't have a business.
00:18:04
Speaker
And let me tell you, if you're in the car repair business, that's a freaking race to the bottom. Let me tell you, I am not in the car of a repair business. I'm in the auto hospitality business. And it is so different.
00:18:16
Speaker
It is so different. When you think about back in
Conclusion and Future Discussions
00:18:20
Speaker
1986, a Polaroid camera radio track recorder, you see the AI that I work with now. It is wicked. I mean, I'm talking, I have AI in every single thing I do, from how I answer the phone to how I listen to it.
00:18:35
Speaker
I can absolutely have AI um analyzing the phone call, and I can go live on it and go, when did the close happen? When didn't it happen? Did the close happen?
00:18:46
Speaker
what What happened on this? um she at The AI will tell me, oh, she asked for – she didn't have the money. And I go, well, did we ask for i know financing? yeah No, you did not.
00:19:00
Speaker
So, wow, could you write me a presentation right now to call her close that deal on financing? And what's the best service advisor I have for that? And they will tell me, and he calls. So how far away from – and this is just an opinion thing. How far away from – Okay, how to question this.
00:19:20
Speaker
At 1010, you've got somewhere between 15 and 20 service advisors, it feels like. No, I put 10. Okay, all right. How long until AI can allow you to do what you're doing there with four?
00:19:30
Speaker
and Never. It won't happen. See, see that's where the industry totally misses it. See, high technology allows me to have higher customer contact. See, I'm not looking to replace my service advisors.
00:19:43
Speaker
I'm looking for AI to do my heavy lifting. Now, let me give you an example of that. Phone rings. AI is listening to my call, correct? Yeah. um I set the appointment. AI knows I set that appointment, now right? Boop, it's integrated with TechMetric.
00:19:57
Speaker
Sets the appointment. What else does AI do? Boop, sends out my shop tour. Do you understand? Car comes on my drive. I walk out, do a strong meet and greet with that customer, correct? yeah Oh, what else do I do? I take two, three intake photos total.
00:20:11
Speaker
Oil change sticker, state inspection sticker. What happens to that? Oh, integrated up to my call center. Instantly, I set two appointments by one, when that state inspection is due, two, when the next oil change is due, and then I take a picture of the mileage. Mileage tells me Carfax. Oh, that's mileage.
00:20:28
Speaker
They need a Carfax report. Boom. Did you see that? So you have AI doing those steps for you. Yes. That's pretty slick. No, no, no. You haven't seen anything yet. It's so badass on what I'm working on.
00:20:41
Speaker
And see, that's the thing. If you can imagine how we have pushed the ah envelope from a Radio Shack recorder and Polaroid camera... to you know how i shoot videos how i do chat ggb how i um my my integration of and now a lot of people are doing the um integration of your um my videos moto visuals but you know me we were in industry first on that i've been doing that four freaking years well you've also been for two and a half years training the general public how to do it so we're and trying to but you know hey Here's what I tell people.
00:21:13
Speaker
How can you unsee what I'm talking about? i wish I wish you'd stop, though, because so many of my neighbors North Carolina are now going to Houston, and they're they're figuring out the secret sauce. They are, yeah. how we We're sold out every month. That's for sure.
00:21:26
Speaker
And as you guys know... It's really, you know, we do so much training for private equity. It's ridiculous. You know that. you You met a lot of the private equity um clients that we have that have 50, 75 units. I do a ton of training for them because you can't unsee what we do.
00:21:43
Speaker
Every single private equity that has come in one has tried to buy us. Two has said, wow, I can't unsee this because you can't. How do you go back and...
00:21:55
Speaker
So I want you to hear this in 1986, that first Polaroid picture that I took. So let's just talk about those defining moments. 1986, Polaroid picture, did the job sell? Hell yeah, well sure did. sure it did.
00:22:07
Speaker
Well, how could I ever not take a Polaroid picture again? Well, that would just not make any sense. So I had a massive close ratio and grew a chain of stores with a Polaroid camera. Now, if you're listening and recording phone calls you hear how bad we sucked, well, how do you not listen to record phone calls every freaking day, all day long? Sales are down. What's problem?
00:22:27
Speaker
You're saying no on the phone. Sales are down. There's a problem with your service advisors every freaking time. yeah I spend 5%...
00:22:36
Speaker
Of the number I have to reach, which is $500,000, $25,000 a month in advertising. Am I guarantee you my phone's going to ring? Yeah. Oh, yeah. I have pre-booked callbacks. Oh, my God.
00:22:47
Speaker
How can I not be busy? So the minute there's a problem with car account, I'll go to your phones, dude. It's your phones. It's your phones. So that's what I'm learning, too. And, like, I hate listening to phone calls because it makes me angry.
00:23:00
Speaker
Because it's cringy because you know the way that you would answer that phone call, but you can't answer every single phone call. And so your team needs to be on their A game. And it makes me angry because i only I only hear the ones where they drop the ball.
00:23:12
Speaker
like So the one of the new AI tools that I'm trying out right now It's really good at judging the tone of the call and giving me a summary of the call. And whether not yeah col is and you see a call that you know customer called in, and they've got a check engine light on, and they were told they need timing chains on you know their Acadia. That's a wonderful ticket. Over the phone?
00:23:35
Speaker
and Well, that's what they were told by another shop, and they called us. but So that's a home run. That's an easy sale for thousands of dollars. And when instead, what you see is a six-and-a-half-minute phone call, and they didn't book an appointment.
00:23:45
Speaker
Oh, wow. And that makes me furious. yeah And so, you know, here's what you do. we you know We do a take five every morning, and people go, wow, man, there's no way you're going to get people to come in your store. At 645, no, you're right. They have to be there at 630.
00:23:59
Speaker
How many take fives can you be late to? One. And what happens if you're late to the second one? Bye. You get fired because I cannot trust you in one of my assets. See, I look at people as money managers. They are managing one of my massive assets, which is worth a fortune.
00:24:13
Speaker
So let me tell you something. If you can't show up to work on time, that means if me, i I've opened put up a store and I give it to you, and you're not going to open up on time for my customers, and you're to say, oh, yeah no, thanks. you know You can go work anywhere in the industry and not worry about it.
00:24:26
Speaker
See, that's the beautiful thing. My company is so special that if you want to be the Michael Jordan of car repair, that's who we are. But you do not have to work in my environment. Man, go out in the industry, man. It sucks to be out there.
00:24:40
Speaker
You know, I have... I have exercises. I make my team call all kinds of shops. I mystery shop, go in with them and go, that's what it looks like out in the industry because we're in a money ball bubble, as you know.
00:24:54
Speaker
But I want you to hear these defining moments. Polaroid pictures. How could you ever not take a picture? How could you ever? And then they come up with an iPhone. How do you ever not take a picture? Then you do a video. How do you not shoot a video?
00:25:07
Speaker
See, that's like, dude, what is wrong with you people? Then you go, wow, chat GTP. Then you have a moto visual. How in the world do you unsee that? you follow me? How do you unsee if you hear you have a our industry hires people that are not likable?
00:25:22
Speaker
Has there ever been a technology tool that you've tried out and it was a disaster and you just stopped doing um I can't say, i you know, because you know I'm always going to tool it up. I'm going try all kinds. so I can't think of anything really off-base because we're pretty tuned in on what we need to do. That's okay. just curious. know, think about it.
00:25:43
Speaker
So I've recorded phone calls now for 38 years. I've taken pictures for 38 years. And the dentist to across the street in 1986 taught me how to pre-book cars. yeah Well, how do you want see that?
00:25:55
Speaker
You mean if I write an index card out, And I put it in this folder that says, call this guy in 90 days. He'll come back. And you do that and he comes back.
00:26:07
Speaker
Wow, that worked. daniel I was open until 9 o'clock at night making phone calls. That worked. Super big. Now I'm integrated with TechMetric. Man, I have a call center that's fire. You've seen Yeah, I'm using it.
00:26:18
Speaker
it's It's wicked. it is We generate almost a million dollars in in in nothing more than pre-book appointments last month for our national clients.
00:26:29
Speaker
On my side of just Houston-Boston Partnership, my eight stores, we generate like $689,000. got to understand, I'm averaging 500,000 in stores. So I'm opening stores with no brick and mortar just by doing callback pre-book appointments.
00:26:45
Speaker
And we're tight on our numbers, you see Yeah, yeah. So what's next? Oh, boy, private equity. yeah yeah So um' I'm going to have an episode sometime soon with a friend of mine who hates private equity and thinks that private equity is evil.
00:27:00
Speaker
The wrong ones are evil, but we are the right ones. See, and that's kind of the difference. We are the private equity. Houston Boston Partnership is a private equity company. So ah you're seeing us move forward with a pretty massive roll-up.
00:27:15
Speaker
We probably ah have right now about $50 million. We have another $50 million committed, and you'll see another $100 or so million committed. That's $200 million right there. And we already have all kinds of private equity wanting me to do the deal and put their money to work. But I will continue to run the operation or no deal, period. So when it comes time to execute on the deal, how much revenue do you want to have in the deal before you pull the trigger?
00:27:42
Speaker
Minimum $200 million. Minimum $200 million, 20% net. massive it That gives me a pretty strong EBITDA. See, I'm still an old-school Warren Buffett guy. I need net. Man, I don't care about EBITDA. If I can net $1 million dollars a month, which is my target goal always, $12 million a year, what does my EBITDA look like? My head back.
00:28:00
Speaker
yeah That company's worth a lot of freaking money. See, I teach people. You've been through my accounting deal, haven't you? I have not. Yeah, you should. Because I teach people, I measure every single dollar coming in my store.
00:28:12
Speaker
And you know that through Moneyball. That means every single cell from the minute every store opens, we compete against each other with every cell. And so every dollar, the first thousand, boom, next guy got $2,000. This guy's at $600.
00:28:27
Speaker
And we run it all the way until the end the day. So we have first to $5,000 all the way up to first to $80,000.
00:28:36
Speaker
And let me tell you something. We also measure our gross profit every single day. We're that tight. Well, if you want to make, oh, and here's the greatest thing. If you run auto hospitality, what's my labor rate?
00:28:51
Speaker
$250 an hour. yeah It's laughable. If you're in car repair, these guys are still talking. Oh, yeah, man, we're well worth it. Well, i'll charge what you're worth then. That's an embarrassment to the industry. There are still dudes out there for $80. No, it's insane. No, no see, see that's and that's not my competition. They're $80 an hour, and they're talking about how proud they are that they're booked out two months. yeah, they're booked out for two months. Yeah, right. You make no freaking money. yeah Dude, we make so much money. i you know, you had Joe Adams on the deal. It ain't about money, guys. We make so much money.
00:29:24
Speaker
ah How can I present this to anybody? If you're in car repair, that's a race to the bottom. We own auto hospitality. How many people are in my space, Mike? I don't know what.
00:29:35
Speaker
I don't know Do you know anyone in my space at my level? Oh, hell no. It's a joke. When I take these stores that go out of business, you've seen them. That's a man's dream, man.
00:29:48
Speaker
But he hired the wrong people, and he didn't have a business model. He suffered to the point he finally went out of business. I walk in, buy the piece of property, paint it, remodel it, do auto hospitality, and ramp it up to $500K, the exact same store.
00:30:02
Speaker
You've seen my stores. Absolutely. That's another man's dream who did, who was in a race to the bottom in Cara Bear. And you see, it's like, wow, guys, I have a successful formula, you know, and people go, well, why do people hate you so much? Because I represent what you'll never be if you do not change.
00:30:19
Speaker
yeah i question I think they hate you because you're so humble. Well, no, man. But no, I want Judy Harrison. No, it's not about being humble. It's about, wow, I opened my shop to you.
00:30:30
Speaker
See, don't judge me without knowing me. Man, I started out with a six bay operation when I was 26 years old. Let me tell you something, man.
00:30:41
Speaker
These people don't know what they're talking about. yeah so And I say, hey, I will make you a deal. Don't judge me. You come in. If you're not happy, will I give you your money back? absolutely. How many people have I ever given their – I've been training for 20 years. My mom would say,
00:30:56
Speaker
why in the world you give your secret sauce away? And I go, because they won't do it. they They will go, oh, my God, this is freaking amazing. They go back, du do you take fives? Nope. I would tell you that sometime in the 90s, my dad went to a Gary Gunn event in Arizona, and he came back talking about this crazy MF-er who had these insane numbers, and he was up in front of the class, and everybody was saying, how do you do it? How do you do it? And he said, I'm not going to waste your time telling you because you're not willing to do it.
00:31:25
Speaker
I tell them exactly what to do, but I go, hey, I'll tell you exactly what to do, but you're not going to do it. I'm open every day the week. I'm always open. It's like, wow, man, you know how can that not work? Dual income with kids, number one customer out there. My industry shuts down when they're off work.
00:31:42
Speaker
See, who wants to go to the bottom and hey, man, have to get my car worked on. No one does. So I'm open for them. So when your number one customer is off, dual income with kids, corporate America, making multiple six figures as a household, you're shut down when they're off.
00:31:58
Speaker
Dude, and don't forget, do I fix cars on the weekend? Not often. Oh, wow. What do I do? I sell jobs on the weekend. People, well, how do you get parts? I don't. I sell jobs. I get my loaner car and they go.
00:32:10
Speaker
And then on Monday, a technician will walk in with 20, 30, 50 hours. I mean, you've seen it. It's like, does this not make sense? Oh, you're open on Sunday. Every business in America, other than Chick-fil-A, they'll they'll name the two like Hobby Lobby and Chick-fil-A is not.
00:32:27
Speaker
Well, good. Don't open. Matter of fact, go. i And here's what i tell people. I don't care if we're open seven days a week. Man, but let me tell don't care if we're open four freaking days a week.
00:32:39
Speaker
It better be four spectacular days. You better answer the phone with his smile. You better say, is now a good time? Because let me tell you something. If you continue saying no, no, no.
00:32:51
Speaker
No, man, we're too busy. i can get to in two weeks. Really? So I'm calling you, which means I have an emergency. Going, I need help. And you go, yeah, I ain't got to help you. I'm booked for two weeks.
00:33:03
Speaker
Dude, I do a million dollars a month and I'm never booked for an hour. It's not a good time. One of the things that has always pissed me off is people who say, I closed on Fridays and I do the same amount of revenue in four days. i don't find they not yeah And you know what that means is means they so they were shitty and inefficient said yeah and they became more efficient.
00:33:24
Speaker
That's right. I said, so now that you're at the same revenue on four days, open back up five days and grow your business by 25%. So, you know, you have an industry talking about bay efficiency, effective labor rate. You know what I talk about? Retail, revenue, gross profit, car count, net operating income.
00:33:38
Speaker
What's my GNA? What's my GP? Do you understand that? I have never had a private equity guy go, hey, what's your bay efficiency? See, those are all, is there a technician shortage for car repair? Yes. Auto hospitality? Absolutely not.
00:33:52
Speaker
How fast can I recruit my... um Well, I need to talk to Brian Rhodes about that because I can't do it as fast as you guys do. No one can, but we are so good at it. yeah And also, what are you offering out there? Take a picture your freaking shop and go, would you work for that shop?
00:34:07
Speaker
And see, if you take a picture of that shop and you're embarrassed by it and you go, wow. That's probably why I'm not attracting talent. And then you walk into these dirty groups.
00:34:17
Speaker
Look at the shops. You look at that before and after of my Santa store. Does that freak you out? Yeah, it's crazy. Does it freak you out? Industry junkie. That store making money, pushing big numbers. It will hit $500,000 and then $600,000 and $700,000. And we only own it forever.
00:34:33
Speaker
But that's auto hospitality. Yeah. Do I have a problem recruiting stud technicians for auto hospitality? We can't talk about recruiting right now because I got Brian Rhodes coming up next.
00:34:44
Speaker
And then why do we why did we recruit Brian to become our national recruiter? Because I'd recruited about 120 people, scale in a company. Oh, yeah, I'm done with this. Because we're very good at that. But Brian will talk about that.
00:34:57
Speaker
But really, you know, when you start looking at – Auto repair versus auto hospitality. How many shops are in the auto repair business that are here right now? Yeah, a lot of them. Almost all of them. All of them are in auto repair.
00:35:10
Speaker
How many of them in auto hospitality? So that means I get to own my space. I can open up anywhere in America. And here's the other deal. It's like, man, you have these people who want to scale to fail.
00:35:22
Speaker
There's something about, oh, yeah, you got to have more numbers, more stores. That's stupid. No, man, I will not open a store until do $6 million, then I open up another store. $6 million, do another store. Because they're all available. They're all on the mat.
00:35:36
Speaker
See, I can buy any store at any time. Why? Because the owner makes no money. So i can go in and, man, I'm actually his pain reliever by buying them. So we're running out of time, and i don't know if you want to do this or not. Your call.
00:35:50
Speaker
But it is confessions of a shop owner, and the idea is say something that fucked up at your business recently. I think Joe Adams already told you. yeah See, there's a business model. I mean, this is true. You've got to look it It's called the customer threshold of pain.
00:36:05
Speaker
And this goes back even when Greg Sands was um working with me. I recruited Greg. from from the restaurant industry is true stud. It was really fun. We had a great relationship for many years.
00:36:16
Speaker
Well, I'll never forget this. I think we were going, know, we're pushing the envelope of like, you know, hey, you know, are we going to go from 49 up to 50? You know, something stupid like that. That's how long ago it was.
00:36:29
Speaker
You know, and and I'll never forget we're upstairs at my um store number two. And I look to Greg and I go, let's take it to 80. You see sure what happens, you know, let's find customer threshold of Bain.
00:36:40
Speaker
And what happened? nothing yeah Nothing. Nothing happened. Oh, you made more money. Oh, yeah. We made a lot more money. Yeah, we've always made a lot of money at what we do. And then that just taught me, wow, you have to find the customer threshold of pain. When does the customer say no?
00:36:52
Speaker
So um last year, man, we just had so many cars coming in. And I said, man, I've got to find the customer threshold of pain. So we were probably about $200 an hour and moved up $225, moved up $250. And I said, screw it, man. take it up to $350. Yeah.
00:37:08
Speaker
and You went from $250 to $350? $350 an hour. That's insanity. No, it's not, man. I found the customer's threshold of pain. I bet you did. No, here's what happens. ah But how did I find that number? i got guys out there at $89 hour. what it What are you doing?
00:37:24
Speaker
yeah Stop working and go get a job because you are making no money. john Guys, at $150 an hour, my God, I remember when I was like 24.
00:37:36
Speaker
Seriously, that's so many years ago. Now, I push the envelope to $350 an hour, and I found the customer's threshold of pain. That meant my top customers were saying no.
00:37:48
Speaker
I was having to tag team turnover too much, and I go, good. Now let's drop it. Give them a soft landing across the board. I dropped it to 250. How did that work for me?
00:37:59
Speaker
Great. But I found the number. Do you understand that? How much money is being left on the table right now across America? A guy charging $89 an hour, a guy charging $150 an hour, he makes no money because he also doesn't a markup of his part, so he's dead broke. you understand?
00:38:16
Speaker
You should come work for me. My top technician last year made $250,000. My service advisors are pushing average probably about I'm like, what is going on here? okay I got to stop you. We're running out of time. But there is one thing that I want to tell our viewers and our listeners.
00:38:32
Speaker
Glenn told me to do this December 23 when I went back in January. I stopped charging for Diag talking about labor rates, customers threshold of pain. I had done $200,000 of revenue and diagnostic fees and testing and in 2023.
00:38:46
Speaker
And we spread that across about 12,000 and change hours that the shop did total. Divide those two numbers together, it was $16 and change. We added $17 to our base labor rate. We stopped charging for Diag. Car counts through the roof.
00:38:58
Speaker
Authorizations through the roof. Don't be scared of that. Just fucking do it. Oh, my God. You know, man, it's so funny. You know, my industry wants to charge you to come in. And, you know, one time on social media, put no recharge and believe. Oh, you hold them hostage?
00:39:11
Speaker
Oh, I can't fix that level of ignorance, people. It means that if that car comes over my curb, I offer auto hospitality, strong meet and greet, shop tours, beautiful facility with shooting videos, moto visuals, chat GDP. What's my close ratio? I know that the average car is $1,000. $1,000. $1,000 ticket average. So, hey, you want to $500K, $500K, $1,000 ticket average.
00:39:31
Speaker
It's really that simple, guys. Run a 62% GP. I want you to absolutely net about 20% on top of that. But that also includes a $25,000 rent. It includes a $10,000 corporate. It includes my call center. It includes um my tech training. in I have so many things in my P&L.
00:39:49
Speaker
And we still crush it. you understand that? Because there's no other way. See, here's deal. Where are you getting your technicians trained at? Well, I have tech training on staff, one of the best.
00:40:00
Speaker
See, what happens is people don't get it. No, man, we run the best concept in the country. We have auto shop answers by far the absolute best infrastructure you have ever seen.
00:40:14
Speaker
And that's a fact. I'm going to interview some people. I've got to cut you out, brother. So we're going to try to talk to Brian. We're going to maybe try to talk to Peter if we have time. I want to talk to Charlie and Bill. Definitely Charlie, Bill, possibly good. Yeah, awesome. They're amazing people. Well, thank you very much. So, hey, hopefully do it again.
00:40:28
Speaker
Brother, I'm exhausted just sitting here listening to you talk. i don't know how you do it. Well, i hope you know I love the industry. I'm the biggest fan of the industry. Come into Daytona. I mean, come into Houston, Texas.
00:40:39
Speaker
Visit us. Come to Auto Shop Answers. And then if you go, oh, yeah yeah, I still hate you, you won't. I'll give your money back. I will pay for your travel, everything. You heard it here. heard here first. It won't happen. Satisfaction guarantee. Never giving a penny back. All right.
00:40:53
Speaker
Okay, Mike. Thank you, guys. See you, man. Thank you, everybody. Love you guys. Bye. Thanks for listening to Confessions of a Shop Owner, where we lay it all out. The good, and the bad, and sometimes the super messed up. I'm your host, Mike Allen, here to remind you that even the pros screw it up sometimes. So why not laugh a little bit, learn a little bit, and maybe have another drink.
00:41:10
Speaker
You got a confession of your own or a topic you'd like me to cover, or do you just want to let me know what an idiot I am? Email mike at confessionsofashopowner.com or call and leave a message. The number is 704-CONFESS. That's
00:41:25
Speaker
three three seven seven If you enjoyed this episode, be sure to like, subscribe, or follow. Join us on this crazy journey that is shop ownership. I'll see you on the next episode.
00:42:04
Speaker
Yes.