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Confessions of a Shop Owner is hosted by Mike Allen, a third-generation shop owner, perpetual pot-stirrer, and brutally honest opinion sharer. In this weekly podcast, Mike shares his missteps so you don’t have to repeat them. Along the way, he chats with other industry personalities who’ve messed up, too, pulling back the curtain on the realities of running an independent auto repair shop. But this podcast isn’t just about Mike’s journey. It’s about confronting the divisive and questionable tactics many shop owners and managers use. Mike is here to stir the pot and address the painful truths while offering a way forward. Together, we’ll tackle the frustrations, shake things up, and help create a better future for the auto repair industry.
Matt Lofton [00:00:00]:
You're at some point in time, somewhere in one of your shops, you have a technician that thinks you make $200 an hour. That's why technicians start shops. You know, why am I only making $35 an hour and he's making 150? The original assumption is I'm going to make all that money.
Mike Allen [00:00:12]:
So what you're saying is most shops are born from a place of extreme ignorance.
Matt Lofton [00:00:16]:
I think most businesses are born. And, I mean, it's the whole reason that the E myth exists, right? It's the entrepreneurial seizure. And, I mean, I can 100% tell you that even with the business experience that I had coming into this, it was. It was a profound amount of ignorance and arrogance in the way that I entered into this industry.
Mike Allen [00:00:37]:
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. There may be some spicy language in this show, so if you get your feelings hurt easily, you should probably just move along. So without further ado, here's your host, Mike Allen, with Confessions of a Shop Owner presented by techmetric. Simply the best software ever made.
Mike Allen [00:01:09]:
Good rainy afternoon to you, Mr. Lofton. How's it going?
Matt Lofton [00:01:13]:
Doing wonderful, man. Enjoying this rain, actually. It's not often you hear me say that.
Mike Allen [00:01:20]:
Well, if those of you who are listening don't know, North Carolina is in the midst of a severe statewide drought, and it is finally starting to look up a little bit. We've got like a half day of rain last week. It was just enough to knock the dust down. And it's raining for real today. And I hope we get three or four inches, man. It's. It's badly needed. Have you seen.
Mike Allen [00:01:43]:
Have you seen any images of Falls Lake? It's dry.
Matt Lofton [00:01:47]:
I'm sure it is. It's got to be. We've been pretty fortunate. So we have three lakes here in Person, county in Roxboro, and the lake levels really haven't been affected that much. But everything else, I mean, we're turning brown across the.
Mike Allen [00:02:02]:
Across the city for sure benefit. You don't have to mow a lot when everything's dead. So, you know, that's been kind of nice.
Matt Lofton [00:02:12]:
Golf balls fly a lot further, you know.
Mike Allen [00:02:14]:
Do they? I don't know. I believe you. Oh, because the hard grass. Hard ground. Right.
Matt Lofton [00:02:18]:
Ground runs out further.
Mike Allen [00:02:19]:
Yeah, copy that. So we're recording late June. We're going to talk about May, and I guess we can talk a little bit about how June's going too, if you want. But how are things in the greater Roxboro metropolitan area?
Matt Lofton [00:02:38]:
Yeah, things are good. You know, we've recently got our new Chick Fil a up and running here in Roxboro. So we're the number one Chick Fil a in the state of North Carolina now here in Roxboro.
Mike Allen [00:02:49]:
So I don't. I don't doubt that it is the Lord's preferred chicken.
Matt Lofton [00:02:53]:
And we have been deprived of it for so long that the demand is still pushing out into the street even two months later. So.
Mike Allen [00:03:02]:
So if Chick Fil a is the Lord's preferred chicken, what is Satan's chicken? Is that. Is that Bojangles? Is it Popeyes?
Matt Lofton [00:03:09]:
Is it church's chicken?
Mike Allen [00:03:12]:
Churches? Is Satan? Is the devil's chicken the best spicy chicken? Who has the best spicy chickens anyway? This is probably not the value that our listeners come for.
Matt Lofton [00:03:22]:
Probably not. But just to answer the question there, if we have to, being that we're from the south, we have to say Bojangles is the best spicy chicken.
Mike Allen [00:03:30]:
I would, I would give you that for sure. We actually have a jar of Bojangle seasoning in the kitchen right now. So, yes, never go without. So May was good for us across the stores. Cumulatively, it was the best month of the year so far. Like summer finally got here and it felt like things kind of broke loose a little bit. There was a little bit of nerves about, you know, four and a half dollar gas, but that didn't really pan out. Yeah, we saw some price increases on oil and there was a lot of fear mongering about synthetic oils were going to become, you know, unobtainable, whatever.
Mike Allen [00:04:11]:
None of that have I seen come to fruition, at least not in this market, thankfully. Hopefully I'm not speaking it into existence, but May was two days fewer than April and it was the best month of the year across the company. And at the Hillsboro street store, the one that we report on, it was the best month of the year. We were, you know, we were down 15% on cars, May over April, but two fewer days. So that was a contributing factor. But overall sales were up. Aro was up significantly. So you got a different advisor in there right now.
Mike Allen [00:04:48]:
The advisor who had been there took a job elsewhere, closer to home. And his kind of, he was an advisor, assistant slash expediter, estimator, that kind of stuff. He, he asked to step up and said he could really show us what he was doing. And he's done really well. So, you know, anytime you see a dude kind of step into the breach like that and add $100 to ARO overnight, get pretty excited about that. Very happy with that. And you guys seem to be hitting a stride coming into summer proper when NC State University gets out and the students go home that typically, you know, this store is a little bit inverted from the standard. Summer is the slow season because the students aren't there.
Mike Allen [00:05:40]:
And so we've seen car count fall off a little bit from the student population, but the local population obviously is still there and is still coming in. And for him to be increasing sales without students is pretty great. So we're very happy with that.
Matt Lofton [00:05:58]:
Well, first off, you know, you've, you guys have had a bit of a, you know, a bit of a rough go of it this year, you know, as, as far as the reporting side of things is go goes. So yeah, it's nice to, nice to check in with you and, and hear some momentum moving in the right direction and especially on the staffing side because I know there's been a lot of, a lot of changes in turnover there, especially at the front counter. So glad to hear that we've got somebody that we, we feel confident about in place over there. And it is like you said, moving some of those numbers back in the right direction because they have been trending, trending negatively for some time.
Mike Allen [00:06:40]:
Yeah, I'm not really sure what played into that. I mean beyond know, lack of management on my part. Right. We've talked about it a fair amount. Stephen has really stepped up with his, you know, regular consistent phone call editing and RO editing and accountability conversations with the guys. And the new advisor in there is very process driven. Like you give him a system and he's going to work that system and follow, follow the system. And that's worked out really well for us.
Mike Allen [00:07:16]:
So all told, feeling pretty good about things.
Matt Lofton [00:07:21]:
So, so just to kind of get some, just to kind of get some clarity on the numbers there. I know you said ARO is up. What are we up to for last month?
Mike Allen [00:07:32]:
Hold please. Don't want to lie to you. It went from 460 to 553, so up 20% just shy of $100.
Matt Lofton [00:07:49]:
And what is tech average quote there?
Mike Allen [00:07:54]:
Tech average quotes are really high. And I think part of that is because we, it was 1293 and then we plugged in Golden Hour Garage and now it's $2,100. So it's gone astronomical compared to what it was. So I think there are a couple of factors at play there. And I don't know if we talked about this last month or not, that not all of the cars were actually getting DVIs when we thought they were.
Matt Lofton [00:08:22]:
Right. Where are we at the process now?
Mike Allen [00:08:27]:
Well, by default, every ticket when it was opened was getting two DVIs automatically added to it. One was our findings, DVI, the ISO, the one thing and one was the rest of the DVI. And at that store. Well, at all the stores we have ceased that. So they have to be manually added in to the ticket so that, you know, there aren't DVIs being reported that didn't actually happen. And so if I go into reporting now, you know, so far this month at that store, 84% of DVIs have been, 92% have been sent to the customer and 84% have been opened and viewed by the customer. So, you know, we set the target at 85% when it was at 50. Right.
Mike Allen [00:09:18]:
So huge improvement there. And 120, 119 DBIs. So it's 94% of repair orders have a DVI and 92% of those are being sent to the customer. So I feel pretty good about that now.
Matt Lofton [00:09:47]:
So let's talk about the good here. And then I want to. Not that there's necessarily any bad, but I think that there's some opportunity to continue to keep the momentum rolling in the right direction. Number one, I think your tech average quote's fine. I think The AWR at 2100, I mean, I know you said that's astronomical. Really what we shoot for at Elite, it's a big jump from where you were for sure.
Mike Allen [00:10:10]:
Yeah, yeah, yeah, yeah.
Matt Lofton [00:10:12]:
But just for the listeners out there, we try to keep that number somewhere between 1500-2000 for general auto Repair, Asian and domestic. If you're a specialty shop, Euro Diesel probably going to see that number be quite a bit higher. If you're a really. What is the spread between 1500 and 2000? A lot of that's going to be determined on your volume and your mix of maintenance. Yeah, right.
Mike Allen [00:10:38]:
Well, I think that's the difference that's gotten. And our target is 1800 is what we've established for the company is our target tech average quote. And I think the addition of using this remote estimating service is that they're putting all the overdue maintenance on there and in the past that wasn't happening. And we're not good at selling it. We're, we're better at selling broken stuff than maintenance.
Matt Lofton [00:11:08]:
So I think that's, I think that's a common problem across the industry. Right. I know we.
Mike Allen [00:11:13]:
It's easier to sell broke stuff.
Matt Lofton [00:11:15]:
It's easier to sell broke stuff. So we need. We need to come up with some strategies to improve our closing percentage a little bit, because we have the tech average quote up there where we need it to be, or the ads. What.
Mike Allen [00:11:29]:
We're.
Matt Lofton [00:11:30]:
We're still a little bit light on the aro, but we're seeing a lot of improvement. I'd like to see that grow just a little bit. I'm sure you would as well. I know when that store was really humming when we were meeting last year, we were somewhere around 700 to 800, somewhere in that range on the. You know, on the air.
Mike Allen [00:11:49]:
Yeah.
Matt Lofton [00:11:50]:
Yeah. So I'd like to keep climbing in that direction.
Mike Allen [00:11:56]:
Again.
Matt Lofton [00:11:56]:
I want to celebrate the improvement for sure, because there's. That's a big improvement in a short period of time. I don't know from a listener standpoint, I don't know if anybody out there has tried to improve their ARO by a hundred dollars inside of 30 days, but it's not. It's not an easy task to try to do. So I commend him and his efforts and you and Steven for giving him the tools that he needs to be successful there. But I think the next step is how do we, you know, how do we try to push that a little bit further and maybe get to that 650 range to start with and then start creeping into 700? Because I think you're like, again, I think your discovery side of it is there. We just have to. We got to close on a little bit more of it.
Matt Lofton [00:12:45]:
So on the. On the closing side, I know he's transitioning from the assistant advisor to the lead advisor. Would you say that he still needs some help and training on the sales presentation side of things, or do you think he just has specific services that he's good at selling, or what do you think?
Mike Allen [00:13:09]:
No, I think presentation and confidence are definitely areas of opportunity for him and also overcoming objections. Right. I think. And this is anecdotal. Right. So if I'm. Stephen would actually be better at answering this question because he's the one that's been listening to the calls. My suspicion is that if he gets it on the first presentation, great.
Mike Allen [00:13:29]:
And if he doesn't, there's not a lot of coming back to the. Well, you know, so, you know, he probably would be. He'd probably be one of the guys that would benefit greatly from, like, going to the master's program. That y' all got coming up in October. You know, Eagles is an October. Masters.
Matt Lofton [00:13:53]:
Eagles is coming up.
Mike Allen [00:14:00]:
STX coming up in August.
Matt Lofton [00:14:02]:
Masters is going to be in September, September 10th in Dallas.
Mike Allen [00:14:08]:
Okay. I love that y' all are doing that in different parts of the country now and moving around. I think that's good.
Matt Lofton [00:14:16]:
Well, we've, you know, we've obviously identified, you know, one of the biggest barriers for a lot of people is to travel. And if we move it around and try to shorten that barrier for some people, it's definitely a benefit.
Mike Allen [00:14:34]:
Well, like, I think he would benefit from Masters. And frankly, it's been many years since I've been to Eagles, and it's totally new curriculum and rewritten, and I think I'd probably like to go to that. So I think.
Matt Lofton [00:14:48]:
I think Eagles would be great. Even. Even I know Stephen went to one two years ago. There's not a. There's not a shred of it that would be the same that he would. That he would be able to recall from. From that Eagles class that he went to. I think that would be great for either yourself or him to go.
Matt Lofton [00:15:07]:
And we're starting to see a lot of advisors and technicians actually starting to come to that as well. And it's what we've gotten from that out of getting some feedback from shop owners that have sent their team and is, even though it's a manager owner course, when you send a lead advisor or you send a lead technician, you know, the problem that we have communicating with the team is a lot of times there's the gap between the employee perception of things and the owner manager perception of things. Right. And the employee has just never been put in that position before to see things from the other side. So, I mean, we all know this. Like, you're at some point in time somewhere in one of your shops, you have a technician that thinks you make $200 an hour.
Mike Allen [00:15:55]:
Yeah, right.
Matt Lofton [00:15:56]:
I mean, it just is what it is. That's why technicians start shops, is because why would I give this, you know, why am I only making 35 an hour and he's making 150? And the. The original assumption is I'm gonna make all that money. Right.
Mike Allen [00:16:11]:
So what you're saying is most shops are born from a place of extreme ignorance.
Matt Lofton [00:16:16]:
I. I think most businesses are born. And I mean, that's the whole reason that the E myth exists. Right. It's the entrepreneurial seizure. And I mean, I can 100 tell you that even. Even with the business experience that I had coming into this, there was, it was a profound amount of ignorance and arrogance in the way that I entered into this industry. I thought, man, I'm, you know, know I'm going to go start my own business.
Matt Lofton [00:16:43]:
I'm already, I'm already running this business over here, running all the day to day operations. This is going to be so much easier. I'm going to downsize my responsibilities because I'll only have five to 10 employees and I'll never have to show up and do anything and I won't have to travel because it's local and so on and so forth. And man, did I get kicked in the teeth with it, you know, So I can't even imagine what it's like for somebody to come into it with zero business experience and zero management leadership experience and then have to try to grow all of that at one time.
Mike Allen [00:17:20]:
Well, I think that's a huge underlying reason why you've got all this private money coming in and scooping up all these businesses because we don't know how to do business as an industry. The independent aftermarket is not super good at doing business at first. And the best ones learn or they seek out training and coaching and learn. But I can't imagine trying to put the pieces together on my own, like doing it on an island. Man, what a disaster that would be for me.
Matt Lofton [00:17:50]:
Yeah, and so it's, and you're not wrong there. You know what, what private equity understands is they understand the math and the numbers of the business. Right. They're, they're P L, you know, gurus and they, they, they understand how to run, run their expense structure, they understand the basics of their cost, you know, which is going to be parts and people and they, they understand how to minimize those costs to the best, to the best of their abilities. And, and they, they understand how to create a standardized product in some way, shape or form. Right. Where I think, and, and I think one of your recent episodes, you guys talked a lot about private equity, but there's still a lot of opportunity out there for independent business owners, independent shop owners, because what they're not great at doing, they're not a buy and hold entity. So yeah, they're looking for an 18
Mike Allen [00:18:42]:
or 24 month flip. Yeah, yeah.
Matt Lofton [00:18:44]:
You know, they're, they're, they're looking for, you know, five to seven year sunset where they're going to come in, they're going to roll up a bunch of, you know, shingles under one roof and, and they're going to pick up the phone and call other places. That they already have relationships with to be able to exit at a higher multiple than they paid. Right.
Mike Allen [00:19:02]:
I think that's what. Did you listen to the episode we did with Jesse from Mango Automotive? And that's exactly what she's working towards. Right. And she at least admits it openly that that's the goal. But there are lots of other big name players in our space that that's exactly what they're doing. But they're not telling you that's what they're doing. They're doing it with other pretenses. Right, sure.
Mike Allen [00:19:26]:
And I get that. But it's a great way to create incredible generational wealth.
Matt Lofton [00:19:31]:
And there's, there's no doubt about that. It has. I mean there are certain people that are going to be listening right now that have, you know, that that's going to have a lot of value to them. And private equity is the right move, I think, you know, but we also heard a lot of fear inside of the industry that you know, oh, private equity, this large brand is going to be moving in across the street from me. And you know, by and large what you see is that's not necessarily a problem. Right. Their vision is so short sighted on making the six times multiple, you know, getting a six time return on their investment over the next five to seven years that they're not worried about the community and being a lasting part of the community. So the customer experience and the employee experience has diminished to some extent because everything is about how we can maximize return on investment for that five to seven year window.
Mike Allen [00:20:19]:
Yeah. And I think if you're a, and if I'm talking out of my ass, just tell me. But I feel like if you're an independent operator and you're not looking to get out of the industry in the next 20 years, this is probably an opportunity to win some community sentiment and be the local guy and be the great employer and scoop up all the best team members from those organizations that are getting bought up. Because I mean, sure as shit, if there's a group that comes in and buys up a five or six location chain in the area that's been successful and been, you know, grown from, from the roots in the area, all their best employees or resumes are out there in six months. Yep, 100% because they fell in love with the small, local, well run family business and the next thing you know it's all corporate and everything, all the benefits are changing and all the metrics are changing and the pay plans are changing and they don't have, they can't go talk to the boss anymore because he's, you know, in Chicago or whatever else.
Matt Lofton [00:21:24]:
Sure. So, yeah. And so I think that's a great opportunity. I think it's a great opportunity for our industry. But, you know, I mean, you are right. They, they come in and they understand the foundational, you know, elements of business a lot better than we do. But that's, that's what we're seeing a lot. We're seeing, you know, like I said, we're seeing shop owners send technicians and service advisors to that they're getting a different glimpse and it helps put them on the same page when they come back.
Matt Lofton [00:21:48]:
Like when we go around the room at the end of the class, we ask them, you know, what they got out of the three days while they were there. And it's. I always try to pay really close attention to the guys that are not owners or direct managers just to hear what their feedback is because you expect them to just kind of zone out and be bored for the three days because they're like, what does this have to do with me? But they get a lot out of the numbers section that we do because it's eye opening to them to realize how much overhead a shop really has to run. And you know, hopefully it's a big number, but how little of a percentage the shop owner really gets to keep. Right. Because that, that 100% pie gets when dwindled down, you know, pretty quick when we start going over all the expenses there and then, you know, when we cover the, how do we, how do we develop a labor rate? How does a technician cost get, you know, get impacted into all of that? It's really eye opening for them to understand why the labor rates need to be set where they are, why the part pricing needs to get set where it is. And, and then the communication side of things, you know, that we teach on, on the process and implementation side is something that they start to understand a little bit better.
Mike Allen [00:23:01]:
So do you think it would be beneficial for someone to come in, like if they go to that class, they need to have a set of books from their store. Right. And they need to know how and how much people are paid at their store so that they can do that math?
Matt Lofton [00:23:14]:
Or if they're an owner or a manager that is responsible for the numbers, then we ask them to bring that because it's, that's, that's part of the takeaway that they get. Right. If you're going to send an employee and you don't, and your service advisor technician may not have privy access to the financials and it may not be applicable to their day to day or week to week role. So what we can do in that scenario is we can always give them a sample PNL just to work through the workshops together so they can understand the math behind it and not necessarily have direct access to your, you know, your shops financials if that's not something that's going to be applicable to their role. Because it's more important for us that they understand the concept of it and, and that they, they get to kind of go back through and do the math on the manager side of things and on the owner side of things. When we do those workshops and we look at is your labor rate the right labor rate and is your, you know, is your labor pricing set correctly? That's always a huge moment for everybody because when we do those workshops that you can start seeing a little bit of panic set in on, you know, on everybody's face. And you know, we do the calculations. So it's good to have their direct numbers, you know, because they're the ones that are actively working with them.
Matt Lofton [00:24:32]:
And again, on the manager side, it's something that it opens up, it opens up a large amount of understanding because again, when we start talking about effective labor rate, effective labor cost, you know, those are two things that usually your manager is a foreman or a service advisor, right?
Mike Allen [00:24:53]:
Yeah.
Matt Lofton [00:24:53]:
And they're just looking at shop data in a shop management system. And yeah, that information is not really, I mean, the effective labor rates in a lot of the shop management systems now. But they're not focused on effective labor rate really. They're focused on the door rate. And they're looking, you know, at, as far as labor cost goes, they're looking at either what the flat rate cost is or, you know, what the hourly rate is. Very few shops are really running true flat rate anymore. So even the flat rate shops that we talk to, they're doing flat rate with a guarantee. Flat rate with a guarantee is not flat rate.
Mike Allen [00:25:27]:
Correct.
Matt Lofton [00:25:28]:
That's a hybrid pay plan. Right? Yeah. So if I have a flat rate technician that has a guarantee of 35 hours and he's barely breaking his guarantee every week, then his effective labor cost to me is more than what his flat rate pay is.
Mike Allen [00:25:42]:
Correct.
Mike Allen [00:25:43]:
And that, and that doesn't reflect in the point of sale software because the point of sale software doesn't know his pay plan.
Matt Lofton [00:25:49]:
That's exactly right. Right.
Mike Allen [00:25:50]:
So and makes me think we had, we did an episode recently with Matt Curry and we cut A little clip out. And in his organization, his highest paid technician made something astronomical last year, like $350,000 or whatever. And people were losing their mind. He's a liar, that's whatever. Yada, yada yada, without any context. Right. And Matt is a bit of a troll and he enjoyed it. And he, you know, posted the dudes W2 up there with his name and address, everything redacted.
Mike Allen [00:26:22]:
He was like, you know, read it and weep, guys. But, you know, the point is this dude makes $68 an hour flat rate. And so if he's getting paid $68 an hour flat rate and he's working six days a week and he's a rock and roll unicorn type guy, right?
Matt Lofton [00:26:37]:
And that's amazing. And this isn't a knock on. This isn't a knock on Matt. Good on him.
Mike Allen [00:26:42]:
But.
Matt Lofton [00:26:42]:
But he is in one of the highest concentrated commuter areas in the United States.
Mike Allen [00:26:48]:
He's got unlimited cars and he has.
Matt Lofton [00:26:50]:
He has unlimited cars and they have unlimited revenue. That's one of the highest revenue, you know, revenue per square foot in America is right there in Northern Virginia. And they're all commuter drivers that have a 30 to 45 minute commute every single day to get into D.C. and back. So he's in a phenomenal area. He's got, you know, he's like you said, he's got endless car count. He's got great technicians and they've got systems in place that allow those guys to just churn out quality work.
Mike Allen [00:27:19]:
Well, if you back into it and you know, if one of our listeners is like, oh, well, I need to go get a $68 an hour technician and he'll be incredible. Not necessarily. And plus, you got to do the math. What does your labor rate need to be? If your effective labor rate versus your door rate, if you know how much erosion you have there, what does your effective labor rate need to be? To have a dude at $68 an hour and still have the margins you need to still be able to be profitable, that's going to be a really big number for most people. That is not realistic unless you're in an incredible market like what we were just talking about.
Matt Lofton [00:27:55]:
And that's exactly right. So, I mean, it's. While I'm super happy for him and all of his employees, that's, you know, and I think the concepts that he puts out there, you know, and the fact that we do need to pay our employees better, I think, I think is all valid, but the reality is that's not going to be. That's not going to be possible in every market, you know, unfortunately.
Mike Allen [00:28:19]:
But a version of that is or toned down to meet the metrics of your marketplace. Right. Maybe it's not 68, maybe it's 48, maybe it's $38.
Matt Lofton [00:28:30]:
So I think the real, I think the real study there is what is he above for that area? You know, so $68 is what he's paying, is the average rate in that area, $50 and he's, you know, 20 plus above the normal area. I think that concept can be applied everywhere like you said, because we, you know, I would say we're in that same. We're obviously considerably above what our, our target area or what our general area is for what we target our, our technician pay at. And we're doing that because I'm pulling technicians out of Durham and gram pull
Mike Allen [00:29:07]:
guys out of Raleigh.
Matt Lofton [00:29:08]:
Yeah, I'm pulling them out of everywhere and they're, I'm competing with a higher, you know, higher wage, you know, in that market. So we're paying considerably higher than a lot of the other shops in our area are, which forces our labor aid up. Right. Which adds in a whole lot of other challenges when it comes to the customer experience and, and the quality of service and the quality of work and all of that that goes along with it. So, you know, there's the raise your rates conversation that's been happening now since COVID you know, really in somewhat before that. And while I do, I do agree with and believe that a lot of shops are under undervalued with what their labor rate is. And I've heard you and Brian talk about it on your show quite a bit. If you're going to raise your rates, you also have to raise the value, right? You have to do something better.
Matt Lofton [00:29:52]:
So if you're raising your rates, are we providing, Are we raising the rates because we're providing a better team? Are we adding talent to the team? Are we adding processes and procedures that improve the, the customer experience and improve the quality of the work that makes the, that makes the value better to the, you know, to the user. Raising your rates just blindly for the sake of making more money is usually a, a short term feel good to a long term detriment.
Mike Allen [00:30:23]:
Well, think about it. You know, getting a combo meal at McDonald's 10 years ago was $4 or $5 or whatever it was, and now it's $10 or $11 or whatever it is. Have they doubled the value that they're bringing? No, but the price has doubled. We all know that some of that is inflation, but it also causes a little butt hurt when it, when you take the kids through the drive through because you just got done with a soccer game and it's already 8 o' clock and everybody's tired and five people getting crap food is 50 bucks. You know, you got to make sure that that's not what you're doing to your customers.
Matt Lofton [00:31:06]:
Sure.
Mike Allen [00:31:08]:
And, and so just. I don't know if that's not a well thought out example, but I think about that when I, when I eat. Because we eat out a fair amount and the cost of eating out has become shocking sometimes, you know, so maybe it's, maybe it's all the whiskey and vodka that we have when we eat out. I don't, maybe that's doing it. So yeah, I think, I think send, I think me going to Eagles is going to be a good thing. And I think one or two of my guys really benefit from going to Masters and kind of polishing those skills a little bit. Um, what would it look like? And maybe this is a conversation for offline and if it is, tell me and we'll just cut it out. But what would it look like to have a course hosted in Raleigh, you know, at my facility?
Matt Lofton [00:32:07]:
So we've talked about doing some, you know, three day courses. So the way that just for the listeners to understand a little bit better, Masters is our, is our sales training program that Elite puts on. It's a three day in person course and then it's six months of follow up after that. So it's a lot of one on one coaching and a lot of group coaching as well. So there's a lot of, there's a lot of hand holding and accountability built into that program. But because of that it's a lot of lift on us internally at Elite. So it limits the number of those classes that we can do per year. So we have actually talked internally about doing some, just three day courses without the six month follow ups to go along with that.
Matt Lofton [00:32:50]:
So we could cycle through, you know, some more people through. And then also, you know, we have, we have service advisors that have been through Masters before that don't necessarily want to go through the six months of follow up afterwards, but they would like to go back to the three day section of it. So it's something that we could entertain for you because we've already, we've already been in the works of having conversations there. We just haven't formalized it out. But I think that's something that's on our 2027 agenda for sure.
Mike Allen [00:33:20]:
Well, that's one of the things that, you know, a bunch of our listeners were able to come out and, and one of your guys came down for the AI class that Seth taught. And that was one, it was a lot of fun. Two, it was great to have a class in the environment that I set with the topic that I set. And I'm like, well, I'm just gonna have, if I feel like I need this training in my business, I'm just gonna have it in Raleigh at my shop and invite everybody to come down. And if people want to come, great. And if they don't, then my guys are going to get training, you know.
Matt Lofton [00:33:54]:
And Mike, I think you found a great niche for yourself because you're a fantastic host.
Mike Allen [00:33:59]:
I do like to throw a party, so that was a good time. So. But no, I think I would love to explore having you guys, maybe Sabrina out to Raleigh at some point to have a podcast hosted event. I think that would be really great opportunity for our listeners and for my team. So maybe we'll try to pinpoint that and set a time. One of the things we talked about earlier before we hit record is something that's been kind of catching my eye and it's been a conversation on a few of the episodes recently, but that was EOS Traction, Rocket Fuel, that whole deal. And that was a topic of conversation at the CL at the AI class a couple weeks ago also. Just finding the, the template and the system that works and that clicks for you, that you can execute on in your business to get some, some procedural methodologies in place because I am the world's worst, as Pollock calls it, weapons grade adhd.
Mike Allen [00:35:12]:
I get really excited about this thing and I get all about it and passionate about it and then I get 75% of the way there and then I get distracted by this thing and I go over here to that thing and I'm focused on that. So, you know, talk to me a little bit about your experience and knowledge. VOs versus other operational systems.
Matt Lofton [00:35:33]:
Sure. So I don't have any, I don't have any direct implementation of EOS experience. I have Red Traction. I've read Rocket Fuel. I know several people that have gone through, through our pro service group that you're a part of that are heavily involved in EOS and speak very highly of it internally. At Elite, we, we actually are in the process of implementing EOS as well. So I have some, I have some experience with it, of the user side of it as Being an employee of a business that is implementing EOS from a, from an actual implementation standpoint of things that are similar. And I think you, I think you summed it up pretty well.
Matt Lofton [00:36:10]:
I think EOS is a great tool. I think Traction and Rocket Fuel are fantastic books. I think every entrepreneur out there should read those books, understand the concepts of eos. Whether you actually implement it as a formal system or not. I think the concept of it has tremendous merit for anybody, for anybody that wants to learn about it. Where my personal belief sits is I think, I think the statement that you made is there's a bunch of different options out there. The important part is that you have some structure that you follow because most companies are started by people that have a visionary. You know, they're an idea creator of an individual.
Matt Lofton [00:36:55]:
Right. Which is what makes him a difficult employee. Right. So I, I grew up in a, in a family business with my dad. My dad, insanely intelligent individual, was a high producer at every job that he ever had. He's a terrible employee because he had, he had all the ideas. Right. And in a, in an employee employment relationship, those ideas oftentimes get, you know, they get put, there's a lid that gets put on them and that person eventually gets tired of, you know, being, you know, being restrained and they go start their own deal so they can run their own ideas.
Matt Lofton [00:37:31]:
However, and there's, there's, I think there's other good books that go along with this as well. Are you familiar with Patrick Lencioni's the Six Working Geniuses?
Mike Allen [00:37:40]:
I am not.
Matt Lofton [00:37:42]:
So I think it's a great book. Goes along with the Traction and Rocket Fuel. So it's slightly different concept, but you know, the, the concept of EOS is the vision, you know, the, in the pairing of a vision visionary and an integrator. Right. So yes.
Mike Allen [00:38:03]:
Okay, now I see it.
Matt Lofton [00:38:04]:
Yeah. And Patrick Lencioni's book and the Six Working Geniuses, what he states is, is that everybody typically has there's six geniuses that, that you could have in, in the workforce. All right, that exist. Six traits that exist. You have two of them that are your personal skill and that you get enjoyment out of and that you have a talent, just a God given ability to do it well. And then there are two that you might have the God given ability to do it, but you don't really enjoy doing it. Right. And then there's two that it's just not your gift.
Matt Lofton [00:38:39]:
You don't have the, you don't have the ability to do it and you don't get any joy from it.
Mike Allen [00:38:43]:
Right.
Matt Lofton [00:38:45]:
So the idea is, how do we put a team together that fits, you know, fits in the places. So same concept as, you know, visionary integrator. Right. So a lot of us at the top have a skill of being that visionary person that we come up with the idea, but we're not a get it across the finish line guy. Right. So there has to be somebody on the team that gets it across the finish line, and there has to be some structure in the organization that allows us to have the cadence and open communication of, here's the vision, here are the things that we identify that need to happen for the vision to be successful. And then we've, we have delegated effectively to the right people to take ownership of those tasks, to see them through to the finish line.
Mike Allen [00:39:32]:
Right.
Matt Lofton [00:39:33]:
And that's where, that's where people have really gotten the value out of eos is it kind of, it puts together a system and a structure that allows, you know, that to happen. And even for us, I mean, I'm, I'm adhd. I know you are. I think most owners have that. You know, my, my manager, she calls it shiny squirrel syndrome. She's like, good lord. So I'll be in the middle of talking to her about something and, you know, something changes and she goes, squirrel. That was a squirrel stop.
Matt Lofton [00:40:02]:
We got to get back to what we were talking about. And so, but number one, so I, I know we were talking about you having, you know, having some thoughts about maybe implementing EOS and going through that, which I think is great. What is your, what is your intended outcome? EOs?
Mike Allen [00:40:30]:
I think, like, when I get feedback from my team about what they wish was different within my business, one of the regular pieces of feedback was you have lots of great ideas or lots of ideas that you're excited about, whether or not they're great. You know, they specify that they know that I have ideas that I'm excited about, and there's a lack of follow through to completion. Right. I just don't get it across the goal line because I get distracted. And so because of that, there's this constant trickle of change. Let's try this. Let's try this. Let's try this.
Mike Allen [00:41:08]:
Which can be good in the right environment, but can be overwhelming without the right support and without seeing the results of completion. Right. And so change fatigue is a thing in my organization that I've created. And so getting a system in place where we can throw an idea out there, discuss it, make a decision, and then follow it through to fruition or have checkpoints where we're going to be like, this is not working. This, rid of it immediately and we'll move on to the next thing with certainty. And being able to complete a task and implement a new system or close the door on it and move on and not think about it again would be, I think, refreshing for my guys and gals. So.
Matt Lofton [00:42:05]:
So, yeah, I know in the first couple years of owning my shop and just trying to learn the industry, I, I suffered with that greatly, which was, you know, you see something online, you see something on YouTube or you see another shop owner and you see the system that they're running and you're like, man, we got to do that, right? That looks cool. And so my question is, you're suffering from an identity crisis, right? Okay. There's no core identity of what your business is and what you want it to be and what the core, you know, what the core system is that truly differentiates you, right? So, like, you just, you know, I
Mike Allen [00:42:52]:
watched when you say it like that.
Mike Allen [00:42:55]:
Well,
Matt Lofton [00:42:57]:
I mean it as a slight attack, but it's. I suffered with it too. I mean, it's just, it's what we do, right? We, we see somebody that's doing it better than us and we try to emulate that and then we struggle with the implementation of it, and then we go, well, that doesn't work. And then we try to. We try to glob onto something else and then we try to glob onto something else and then we try to go. And we're just hoping something sticks, right?
Mike Allen [00:43:20]:
Yeah, for sure. That's absolutely me.
Matt Lofton [00:43:22]:
And the real turning point for me was it was like, man, I gotta find something that. I gotta find something that I'm in love with, right? I gotta find an identity of the business that really, you know, that I think is a differentiator that sets us apart, that I believe in, that's our little secret sauce. And, and simplify it all down to that, right? Because the rest of it. So I mean, if you take a look at a lot of the concepts that are out there that you've been exposed to, they're really simple concepts, right?
Mike Allen [00:43:52]:
The.
Matt Lofton [00:43:53]:
There's nothing overly complex about them, which is why they work, right? But the reason that they work is the people that are running it are 150 committed to it. They're committed to the simplicity of it, and they don't over complicate it, right?
Mike Allen [00:44:09]:
That is absolutely. If you, if you ever go online and you look at a recipe Website and you read the reviews of the recipes, it's like, this is Paula Deen's famous fried chicken or whatever it is, right? All the reviews are like, great, loved it. I changed this. Great. Loved it. I changed this.
Matt Lofton [00:44:24]:
Great.
Mike Allen [00:44:25]:
Loved it. I changed this. None of those people are Paula Deen, right? And so it's funny, like I went to Houston, I fell in love with auto shop answers. I couldn't pull it off. There were things about it that I was never going to do. But the things that I did want to do, I couldn't pull it off because I kept trying to change it. And then, you know, eos, one of the, one of the people that we were talking about it the other week, he was like, oh, I'm like 80% EOS. I don't do it all.
Mike Allen [00:44:53]:
I change these two things. But you know, at the same time I believe in, go to training and get, get the things that apply to you and your business and utilize them and ignore the shit that doesn't. So how do you strike the balance there?
Matt Lofton [00:45:08]:
Yeah, so it's not ignore the stuff that doesn't. It's again, you need, you need to pull in all this information and then you need to sit down and say, okay, we need it. We need a core mission, vision and purpose, right? So one of the things that EOS is really big on is having the long term vision and then having a midterm, you know, of what that looks like, and then the one year of what that looks like and then, then they break it down into rocks, right? Which is your 30, 60 90s of things that we're going to actually do. So, you know, when I took a look at it, when I started really honing in on what our systems were really going to be that were going to make us unique and you just gotta fully 1000% commit to it and be 100 in love with it and be passionate about it. And in the guys like Matt Curry and Todd and the guys that are selling the model, right, and, and showing and sharing the models, that's what they are, man. I mean, when you listen to Matt talk about his story, he's in love with it, right? He's in love with everything. You know, when they, why do they get a thousand reviews? Because Matt's in love with getting reviews.
Mike Allen [00:46:14]:
Yeah, for sure, right?
Matt Lofton [00:46:17]:
You know, speed of service. And you talk about Todd. Why are they in love with speed of service? Because Todd's in love with speed of service, right? It's, that's a big part of, you know, what his entrepreneurial identity is, and that's their differentiator. It doesn't necessarily make it the best differentiator in the market. It doesn't make it the only differentiator in the market. It's the one that. It's the one that they've become passionate about, which is why it works so well for them. Right.
Matt Lofton [00:46:43]:
So the idea is, is how do you come up with your own system? By and large, most of these systems share a lot of similarities, which you've talked about, you know, on some of your recent episodes as well. I know when you and Adam were talking, you know, you kind of share the, the overall concepts of running a shop. There's only a handful of them, right? There's not that many. So you have to, you have to identify the one that really, you know, speaks to you, speaks, you know, speaks to your customer base, speaks to your team. And then you got to be really dedicated to what that is. Then you have to understand what type of team it takes to run that model. Right? So if I'm a, if I'm a basketball coach and we want to run the triangle, well, the triangle is a proven, successful, you know, offensive concept inside of basketball. Phil Jackson won a gazillion championships with it with the Bulls and the Lakers.
Matt Lofton [00:47:38]:
But you have to have a specific team that can run that concept, right? And so you have to put together the team that can do that. Then it's, you know, then it comes down to putting together some level of structure for yourself as the, as the owner in the operator. And I'll tell you, you know, the, the most impressive person that I've ever, that I've ever personally been around, and I think you'll agree with me, is Jim Murphy here at Elite when it comes to discipline, you know, individual discipline. And I was, I was talking to Jim at Ignite this past year and I was telling him, you know, one of my flaws and weaknesses as a, as a individual even is I'm not a, I'm not a good. I'm not a good connector and Meaning that, I mean, my best friend lives across the street from me, mile and a half away, and we've been friends since we were five years old. Our kids go to school together. We might see each other once every two or three months and, you know, we might pick up the phone and talk to each other once a month maybe, right?
Mike Allen [00:48:41]:
And so he pulled out in, in perfect gym fashion, he pulled out a printed out spreadsheet that had everybody segmented off and he had 52 weeks of the year and he had little check marks, you know, in each one of those boxes for each one of those people about called, you know, and he's got a check if they picked up the phone and he actually talked to him and X if he called him and they didn't, you know, they didn't answer and then a circle if he left him a message, you know, kind of deal. So, you know, my, my point is, is that I think a lot of us as business owners, we have in some way shape or form, we have shiny object syndrome and we get distracted. Just the shiny objects are different for different people. Right? For some of us, we, we gravitate to new systems and new, you know, some of us gravitate to new people, some of us gravitate to new tools and equipment. But there, at the end of the day, there are systems out there like EOs. There's other things that you can implement that allow us to get control over our natural proclivities and put some discipline into the day and into the week. Because that's really what these systems are designed to do, is to focus us in on what the objective is, what are the steps that need to get done to complete the objective, who's going to be involved in those and who takes ownership of those different activities that need to get done. And then what are we going to measure to make sure that it's getting done and when are we going to
Matt Lofton [00:50:18]:
meet to talk about it? Right.
Mike Allen [00:50:21]:
And my previous business experience with strut masters, we were a manufacturing company and ISO9001 certification was a, a big certification that you see all over the side of the road.
Matt Lofton [00:50:34]:
Right.
Mike Allen [00:50:36]:
So to be able to get large scale manufacturing contracts with certain companies, you have to be ISO 9001 compliant. And that was called QMS, which was quality management system, which was very similar to the overall structure, the entrepreneurial structure of eos, but it was just focused around the product. But it was, you know, identify, identify the goal for the product, you know, the quality goal for the product, identify how we're going to measure the quality goal for the product, identify what happens to non conformities and what do we do when there's a non conformity and then what is, who is the team that's going to be involved in it and then what is our, you know, what is the cadence of when we're going to get together and talk about these things and then how do we document those things when we get done?
Matt Lofton [00:51:30]:
Right.
Mike Allen [00:51:32]:
So very similar, you know, very similar to eos or Other things that are out there. I don't think that it's so important that we get too wrapped up in endorsing one particular version of it or another. But I think it's incredibly important that
Mike Allen [00:51:47]:
we have it that makes sense. Well, it's. At the, at the risk of, of being cliche, I always say it, you know, you will be a better business owner if you have a business coach. Not every business coach is right for every business owner. So you need to find the one that is right for you. You need to interview multiples. Find the one that's right for you and use that one and listen to the advice. Right.
Mike Allen [00:52:15]:
Obviously, elite pro service and elite worldwide coaching is what was right, has been right for me and helped me grow my business. It goes, it just flows from that, that it would make sense that finding the right operational system and the right processes to manage your company by. There are lots of opportunities out there. Go find the right one and use it. You'll be better if you use any of them than if you use none of them.
Matt Lofton [00:52:43]:
So.
Mike Allen [00:52:44]:
Makes sense. I can get behind that.
Mike Allen [00:52:46]:
Yeah. And I mean, at the end of the day, the simplest way to break all that down is, you know, the Elon Musk clarity. Right. Elon Musk is, is the, the individual. I mean, obviously he's our first trillionaire, so he's done some things better than anybody else in the history of the world. And if you talk to the, the other large scale entrepreneurs that are out there, what they give him credit for is, is that he is the most disciplined individual in the world about. He has the most clarity of what his mission is. And he stays 100 in line with what that mission is.
Mike Allen [00:53:18]:
And he's able to eliminate noise, you know, from the signal. Right.
Mike Allen [00:53:25]:
You know, it's funny. So like that's how I see Jim.
Mike Allen [00:53:29]:
Yeah. Yeah.
Mike Allen [00:53:31]:
He works his schedule. He's on his schedule. He takes it very like. I'm, I'm pretty sure that I'm dead to Jim right now because I had a one on one schedule with him like three or four months ago and like three dudes called out, boom, boom, boom. And I found myself on the counter running a store and he texted me like five minutes into our one on one. And I was like, oh. And I apologized and he was like, well noted. It's like, you know, like he's got a very busy schedule and when he carves out time for you, I mean he takes it very seriously.
Mike Allen [00:54:07]:
And I fucked up with that. So.
Mike Allen [00:54:09]:
Yeah. And so. And I mean, I struggle with that. That was one of the conversations that I was having with him at Ignition night is he was giving me one of those, you know, you know, those gym fatherly conversations that he likes to give there because I struggle with that as well. But I think, you know, just personal discipline again, getting back to the business side of it and how it relates to eos. If you identify the business model that
Matt Lofton [00:54:33]:
you, you know, that you're, you're in and you're all in on it, then
Mike Allen [00:54:37]:
you put together what is the big vision that this business model is going
Matt Lofton [00:54:41]:
to create for you?
Mike Allen [00:54:42]:
What is the ten year plan? If we run this business model perfect over the next 10 years, what do
Matt Lofton [00:54:46]:
we hope to get out of it?
Mike Allen [00:54:47]:
What's the objective? And then we're able to back into, you know, once we know that we're able to back into what has to happen in three years and five years, what does the team have to be, you know, to be able to run this model? And then when you get to that level of clarity, it's really easy to ask yourself the question, is what I'm getting ready to do helping me get closer to that objective or is it taking me further away from it? And if it's taking me further away from it, we find a way to
Matt Lofton [00:55:15]:
not do it or not do it as much.
Mike Allen [00:55:17]:
If it's taking me to it, no matter how painful it is, we keep pushing through it.
Mike Allen [00:55:22]:
Right.
Mike Allen [00:55:24]:
But that, that made a world of difference for me in my business and it didn't have to come through something like eos. But if you look at the concepts of it, it's very similar. Right? It's identifying the mission, the vision and the purpose, identifying the team in place that it's going to take to push that mission and vision purpose through. And then what are the, what are the steps that, you know, what are the break points in that, you know, in that vision that you have that we can back into to say this is the pathway to get there?
Matt Lofton [00:55:59]:
Right? Yeah.
Mike Allen [00:56:02]:
You've got to have the destination in mind when you're making your decisions, right?
Matt Lofton [00:56:05]:
Yeah. Yes, you do.
Mike Allen [00:56:09]:
Well, yet again you have impressed me with how well put together and articulate you are and left me feeling bad about myself and what a hot mess I am. So thanks for my monthly flogging. I appreciate you, Matt.
Mike Allen [00:56:24]:
So Mike, we're going to turn it the self deprecating. While it's good for your show, it's a, it's a cop out and excuse. You are smarter than I am. You are, you are more articulate than I am. And. And you have a. You have a very successful business that I've. I've enjoyed getting to know a little bit more.
Mike Allen [00:56:43]:
The. The discipline and falling in love with your business instead of somebody else's business is where I'd like to see you. Where I'd like to see you change, because you have a lot to be proud of.
Mike Allen [00:56:54]:
Lusting over other people's businesses and fall in love with mine.
Mike Allen [00:56:58]:
Fall in love with what you got.
Mike Allen [00:57:00]:
Did you just pull a Stuart Smalley on me? I'm good enough, I'm smart enough, and doggone it, people like me. It's a Saturday Night live from the 90s reference for you children out there. All right, dude, thanks very much. Great conversation. I appreciate you.
Mike Allen [00:57:17]:
Absolutely. See you, Mike. Appreciate it.
Mike Allen [00:57:19]:
Thanks for listening to Confessions of a Shop Owner, where we lay it all out. The good, the bad, and sometimes the super messed up. I'm your host, Mike Allen, here to remind you that even the pros screw. Screw it up sometimes. So why not laugh a little bit, learn a little bit, and maybe have another drink? 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 mikeonfessionsofashopowner.com or call and leave a message. The number 704-confess. That's 704-266-3377. If you enjoyed this episode, be sure to, like, subscribe or follow.
Mike Allen [00:57:52]:
Join us on this crazy journey that is shop ownership. I'll see you on the next episode.