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This podcast is dedicated to changing the automotive industry for the better, one conversation at a time.
Whether you're a technician, vendor, business owner, or car enthusiast, we hope to inspire you to improve for your customers, your careers, your businesses, and your families.
Lucas Underwood [00:00:00]:
All right. So what?
David Roman [00:00:01]:
No, I was hoping to get through the day without being threatened with physical violence.
Lucas Underwood [00:00:07]:
It's not going to happen.
Cecil Bullard [00:00:08]:
See?
Lucas Underwood [00:00:09]:
What you didn't know, David, and I'm very sorry for this. We probably all should have been more transparent honest with you, but this is really an intervention into your business. Now, I've been telling Cecil how many struggles you've had recently and the fact that you're thinking about closing down. So I was just going to say, like Eric and Laura, I could walk away tomorrow.
David Roman [00:00:27]:
I would lock them suckers up and walk away.
Lucas Underwood [00:00:31]:
Well, middle fingers in the air.
David Roman [00:00:34]:
Okay?
Lucas Underwood [00:00:35]:
That's what's happening here.
David Roman [00:00:36]:
You guys sound like you want a second shop in Kansas, let me tell you.
Lauralee Schmidt [00:00:40]:
Yeah, Kansas.
Erich Schmidt [00:00:42]:
I don't think Kansas is the place for me.
David Roman [00:00:45]:
Why? What's so great.
Erich Schmidt [00:00:50]:
About Ohio?
Lauralee Schmidt [00:00:51]:
It's like Kansas.
David Roman [00:00:58]:
We are far closer to the mountains. And if you've ever been to the Rockies, they are gorgeous. Gorgeous. Okay, then. See, within half a day's drive, you are knee deep in Rocky Mountain beauty.
Erich Schmidt [00:01:13]:
In 3 hours drive, I can be in Appalachians.
Lucas Underwood [00:01:16]:
Appalachians. Oh, my God, I love it. That's not the Appalachians Mountains.
David Roman [00:01:25]:
I swear.
Lucas Underwood [00:01:26]:
Not Appalachians.
Lauralee Schmidt [00:01:29]:
The Appalachians Mountains.
Lucas Underwood [00:01:33]:
I hate to tell you all, but if anybody hears this, they're going to hang me up here.
Erich Schmidt [00:01:37]:
I'm telling.
Lucas Underwood [00:01:38]:
Terrible.
David Roman [00:01:40]:
Terrible. I'm gonna go out. It's not the same. It's not the same.
Erich Schmidt [00:01:44]:
It's different, for sure. I agree. Yeah.
Lucas Underwood [00:01:48]:
Okay. Laura Lee. How you doing?
Lauralee Schmidt [00:01:53]:
I'm real good, Lucas. How you doing?
Lucas Underwood [00:01:55]:
I'm good, Eric. How you doing?
Erich Schmidt [00:01:57]:
I'm doing all right. Better than I was.
Lucas Underwood [00:02:00]:
I heard. Cecil, how you doing, buddy?
Cecil Bullard [00:02:04]:
I am. I couldn't be any better if I was quite two of me.
Lucas Underwood [00:02:08]:
I understand.
Lauralee Schmidt [00:02:09]:
I like that tree behind you.
Lucas Underwood [00:02:11]:
Yeah, that's a nice tree.
David Roman [00:02:14]:
They were going to put a cactus there was supposed to be a cactus back there. Cecil slapped the cactus out of the way. He's like, I don't want the cactus. He just slapped it right out of the way.
Lucas Underwood [00:02:24]:
It's pretty great. I mean glad we got it on video. Thanks, David. So we're here today. This is an interesting story because, Laura Lee, you and Eric wanted to come here and share a pretty emotional story, a pretty deep story, and we wanted to make sure that you had an opportunity to share it in all its glory. Right. We wanted you to be able to share your emotion. We wanted you to be able to share in a big way what happened. Because I know it's been very emotional. I've been in your shoes before. I know what this feels like. And we also asked Cecil to be here because Cecil kind of guided you all through it and was at that 30,000 foot level. Sometimes when we're going through something like this, we have one perspective, and I think it's important to have Cecil's perspective here. And that's because I'm sure he saw things differently than you all did. And I think that maybe the fact that he saw those things differently is part of what helped get this turned around. And I mean, this was a pretty miraculous turnaround. And so Laurie, why don't you tell us the story?
Lauralee Schmidt [00:03:39]:
Well, we can go back as far as you'd of it's a tedious story, so I'll just kind of wrap it up quickly. We wanted to be absentee owners, and in order to do that, we overlooked some things that were going on. And even though we physically saw and knew some things were going on, we allowed the policies to be broken and we gave a lot of reasons for excuses. And at the end of the day, that cost us an enormous amount of money. It cost us our team. Looking back now, I feel like it probably cost us a lot of other team members and I probably was placing blame in the wrong place and it ultimately almost cost us our business.
Lucas Underwood [00:04:30]:
Let's take it back a step. When did you start the shop?
Erich Schmidt [00:04:36]:
Started in nine.
Lucas Underwood [00:04:38]:
Okay. And you all were a couple when you started the shop?
Erich Schmidt [00:04:44]:
No.
Lucas Underwood [00:04:46]:
Okay, tell us a little bit of the timeline.
Erich Schmidt [00:04:50]:
So I worked at a Chrysler dealership for the majority of my career, spent some time, good time in Independence as well. So I was pretty well rounded technician, and as the old story goes, technician turned owner. So basically when the housing market fell apart, as we all know, Chrysler announced a bankruptcy. Consumers are not well educated on how that stuff works. And so the work went away. It's making pretty good money at the dealership and the work just went away. I think the deciding factor, I've always wanted to start a shop, but the deciding factor was I watched two guys get in a fight over an oil change and that's how bad it got. And I pretty much was done at that point. So I started putting some stuff together to get the shop going. I had a lot of equipment already because I was doing some side work at the house and the age old thing that we're doing. So in July of Nine, I jumped ship, put my two weeks in and opened my doors and pretty much was sitting at a desk wondering what the heck I had just done because I quit a job that I was at for quite some time. Making good money. Well, was making good money until the market fell apart. And I did the traditional things that owners or text turned owners typically do. So I go in there and all I'm thinking is, man, if I can just turn out some work, get some customers in here, we're making money. I didn't know anything about KPIs, I didn't know anything about process, I didn't know anything about shop manuals. And SOPs and I did that for three years in a 1200 square foot building that I found, and I met Laurel E in 2011. I was engaged prior to that, and I actually caught I am not a.
Lauralee Schmidt [00:07:08]:
Home wrecker, by the way.
Erich Schmidt [00:07:10]:
I did not bring no, there was some time between. There's some time between them.
Lucas Underwood [00:07:18]:
Sure, we'll let him finish his story.
Erich Schmidt [00:07:21]:
No, there's definitely some time between, but we understand.
Lucas Underwood [00:07:26]:
Listen, we know that you all are.
Erich Schmidt [00:07:28]:
Probably in the same building, and we.
Lucas Underwood [00:07:29]:
Also know she's got a reputation for abusing people if you're in trouble.
Erich Schmidt [00:07:36]:
Okay, I got the door barricaded, it's blocked up over here, so we're good. And I got a window out to the shop so I can flag a tech down to get some help. Okay, we're good.
David Roman [00:07:48]:
We'll make sure.
Erich Schmidt [00:07:49]:
But yeah, so there was some time between, but I was engaged and I had learned some things about a relationship that everybody dreads in a relationship, and we decided to talk that out and work through it. And a couple of weeks later, I started going through bank accounts, and I was pretty busy, and I'm like, man, I really should be growing this bank account more than I'm seeing it. And my suspicion led me to start digging, and I found that she was actually moving money out of our accounts, and I was unaware of it. And that was pretty much the end of all. You know, I left and sent her packing and ran my shop for a while by myself, met Laura Lee. I moved down to Cincinnati from where I was living up north, and that's kind of where I met Laura Lee at. We were both living in the city at that point in time. Laura Lee was relatively freshly back from New York. She'd spent about ten years of her life there in her career in cosmetics and makeup, and she got on board with me. Jeez after Emma was born, when we.
Lauralee Schmidt [00:09:07]:
Found out we were pregnant, 2016 is.
Erich Schmidt [00:09:11]:
When I yeah, so she decided to leave her career, 16 in 16 after Emma was born. Well, right before she was born, she made the decision, hey, I think I want to stay home. And we're like, well, okay, we'll have to figure it out, which we tend to all do. So we figured it out financially and made it work. About that time, my dad was actually helping with books and reconciling parts and so forth. Very basic stuff. Still was not very privy to operating a business at this time. We had moved into a larger building as well, so we went from about 1200 square foot to about 5000, 204,800 somewhere around there. And my dad comes from the banking industry, so of course I felt very good with running financials with him. Now, my dad is a very old school guy, so he's very conservative. And we know in business, if you're conservative, you're probably not moving forward. There's an element of risk taking with that. And he wasn't trying to hear none of that risk taking. So Laurel Lee started coming in the shop and helping a little bit. And then one day he just looked at me and said, hey, in January I'm done, I'm at fully retire. And I said, oh, well, that wasn't very much time, a couple of months. So I went home, told Oralie, and she grabbed the rings and dad trained her on what his processes were so she could pick that up. And then we quickly learned that there were some holes in our processes. We grew stagnant, about a half million dollars. I tried a lot of different things to come out of that stagnant situation. We weren't doing bad, but we were stagnant. And I actually reached out to the editor at the time of Ratchet and Wrench and he guided me towards Elite Worldwide and we took a coach, Mike Cost, fantastic person, excellent to work with. The knowledge base, extremely big. He was an absentee owner, multiple shops. So we learned everything about KPIs processes, so forth with them. They helped us develop all of that. And that's when things started growing pretty quickly. Things started moving pretty good. And then in 17 we moved to our facility that we're in right now, which is 12,000 square foot in one building, about 3800 square foot in our satellite building. And we are on par to try to purchase this property at this point. And I would say within a couple of years we'll probably purchase this. So that's kind of where we're at.
Lucas Underwood [00:12:04]:
So a couple months back, and I don't mean to get you in trouble with Laura Lee over here, but a.
Erich Schmidt [00:12:11]:
Couple months, I ain't worried about her.
Lucas Underwood [00:12:13]:
You reached out and we had a pretty emotional conversation, pretty tough conversation.
Cecil Bullard [00:12:19]:
It was.
Lucas Underwood [00:12:21]:
Tell me what was going through your head, because we've been friends for a while now and I could feel the sheer panic. Like I could literally feel you in a panic of I don't know what to do here. Tell me how you were feeling.
Erich Schmidt [00:12:36]:
Yeah, we had a really good staff at our other building. I quickly learned a business that we're never going to retain staff forever. You know, that's always a misnomer to new business owners. I believe, especially in shops, is that we get this great team and we're just going to keep them forever. I personally did not have enough hindsight to say, hey, these people may leave. And of course we're developing a business which has its pain points as well. So we moved over to the new building with that and brought those guys over and then we had a big shift in employees. And with those pain points we have employees that don't want to buy in on the process or our Ideologies or any of those things. So that's tough to swallow too, and frustrating to try to get somebody to buy in. And some people aren't ever going to buy in to your process. They're not your people. They're not the same thinkers as you. So we had decent amount of turnover, especially when we got into the big building. We're in the big building. We got big overhead. We got a push, and we maybe have pushed in the wrong direction or pushed the wrong way on people. I'm a guy that will take fault when things go wrong in a shop. I'm 100% responsible for the things that go wrong in our shop. There's nobody else but me to blame. So we had big turnover, which discouraged me, and I started to get pretty burned out when we opened the shop. We were short staffed. We have a large facility, and I essentially work myself to death. And when I get stressed out, I want to work more. And so it was kind of a parabolic thing that just kept sucking me in further and further to the point where I got into burnout, to the point where I struggled with some pretty heavy mental issues. And then all of these items started coming to a head with our service riders and car count, and we would come up with processes and say, hey, these are things. And they would just blatantly say, well, I'm not doing that. I don't believe that this and that. So it just wasn't really going the way that we wanted to push people. And our car count declined and continued to decline drastically. And at this point now, I've been hit in the head so many times with so many different things from so many different avenues that I just kind of gave up. I really didn't want the shop anymore. We both seriously talked about auctioning the shop off, not even selling. We did eventually have a shop company reach out to us that was acquiring shops. They're specifically right now acquiring shops in the Midwest. I had great conversation with a man I know how to evaluate a business. I knew we were outland, which was pretty much exactly where he landed with his evaluation, and I wasn't happy with that number. Too much work, too much time spent, too many sleepless nights, too much stress. I feel like I should be compensated more for it, as we all do in business. So my thought was, we need to pump up our cash flow. Cash flow. I need to pump up the cash flow and get that going so we can value the business better. And at this point, I still wanted to let go of the business, but pumping up cash flow from a near dead business is extremely difficult.
Lucas Underwood [00:16:41]:
And I remember that conversation because it was emotional for me. Right. Because I remember being there. I remember being in that spot, and then I realized how much you had on your shoulders, financially speaking. Right.
Erich Schmidt [00:16:57]:
Yeah.
Lucas Underwood [00:16:59]:
My heart poured out in that. I don't know if you know this or not, but dude, that was heavy for me, because I realized just how big of a situation it was. Do you feel comfortable sharing where you were right then? I mean, you were pretty close to the brink of a couple of different scenarios, right?
Erich Schmidt [00:17:17]:
We were, yeah. I obviously struggled with the notion of actually keeping the business. I did get to a point where I didn't care what happened to the business anymore. I didn't care if it just fell apart and people came after us. I mean, the biggest saving grace for us is we don't have huge amounts of debt compared to most businesses, especially for the size of our company.
Lucas Underwood [00:17:42]:
Right.
Erich Schmidt [00:17:43]:
But mentally, it took me down a very dark path. I contemplated some things that I would rather not talk about, of course, but basically my brain was in survival mode of, how do I get out of this situation? How do I remove this stress?
Lauralee Schmidt [00:18:06]:
Yeah, we went from running, like, a 2020 $5,000 week, and I think the week that it broke for us, the week that we said, everybody's gone, like, we're gutting it tomorrow when we go in, we closed with $4,000.01 week, $4,325. And I saw that closing number, and Eric came home, and I said, monday, everybody's gone. Monday. That was the only way I was staying on board. I was already looking for jobs and interviewing other places. I was done. I was done. I was out. I think I even prior to the ASOG board and told you guys, I don't think I deserve a spot on the board. I can't lead. I'm a bad leader.
Erich Schmidt [00:18:49]:
Well, prior to that situation, I had reached out to you, Lucas, because I knew that you had recently went through letting go of an advisor. It's a big deal. I have four years with this man. I liked him. I still don't feel any sort of way about it. At the end of the day, it's business.
Lauralee Schmidt [00:19:15]:
We just didn't want to believe what was happening.
Erich Schmidt [00:19:17]:
We didn't want to believe it. And it was and it was an ignorant, thought process from my end of things for the simple fact that it was a belief thing. I can't believe this is happening. We had such a good thing going. We were doing over $25,000 a week. We would hover in the high twenty s to low 30s, mid 30s pretty consistently. And so, of course, I start digging through financials. I start digging through processes. I start pulling tickets and inspections and auditing all this stuff, and I start just finding unbelievable amounts of holes. No documentation of anything, handfuls of cars going through where they got absolutely no process. And then I go out and I talk to technician, and they're like, well, they told me not to do a process. Well, why? You know, you need to do a process every single time we do these cars. And no one cared. No one cared, no matter how many times I said something. So I started digging I found a lot of discrepancies, and then once I found those, I was kind of like, well, how do I prove to myself that I need to do what I think I need to do? And that's when I reached out to you. And to write a million a year in sales is extremely difficult. I can't do it. I go out of my mind in, like, four weeks. I'm not a great service advisor, as most prior technicians aren't. I'm good with people. I can diffuse situations extremely well. I can talk to people well. I just don't like the sales part of it. I don't like telling people that, hey, you need $5,200 worth of work on this poor car. And they're like, I'm not that guy. Once we started doing that and I saw this evidence of just the sheer lack of care documentation, care processes, following anything, any sort of thing, I actually started calling out, calling some of my good clients out of the blue. Some good clients that I have interpersonal relationships with that I hadn't seen for some time. And I just asked them. I was like, man, I know this is a weird phone call. I said, I'm trying to figure out some things in my business here. We got some things going on. Tell me a little bit about our service advisor, and tell me a little bit about your experience in the process of the intake and the receiving of your vehicle. And a lot of people gave me good things to set. I heard good things, and not all of it was bad. And I know that our advisor had very good rapport with people. I mean, we had a situation where somebody tried to bash us on a local community forum. They were completely out of line and incorrect in the situation. And the community actually stepped up and praised our service advisor. So I know he's doing a great job of rapport. Something happened, though, at one point in time, he wasn't yeah, something happened. I don't know what it is. It's not my place to ask. I can tell you that. It was enough to be concerned for him. Depression, maybe feeling hold on, time out.
David Roman [00:22:52]:
Time out, time out. So you're finding these holes, and you go to the service advisor and say, hey, this car that just got checked out didn't have a DVI on it, 300% rule wasn't followed.
Lucas Underwood [00:23:07]:
What's going on?
David Roman [00:23:08]:
And his answer was, oh, well, there's.
Erich Schmidt [00:23:12]:
A different excuse for every single thing. So many yeah, how much time you got for excuses? But that was my fault. As an owner is accepting that instead of putting my foot down and saying, this is our process. This is the reason we follow this process, and this is why this process is important for our business, and because we don't want to do a disservice to our clients.
Lauralee Schmidt [00:23:35]:
We gave a long lead way, and a very tiny rope is what we should have gave him, but we gave him a long actually, we hung ourself with that rope.
Lucas Underwood [00:23:46]:
By the time we got to the end of that rope, I mean, Laura Lee, you were upset. I don't think I've ever seen you.
David Roman [00:23:52]:
That anybody would be upset.
Erich Schmidt [00:23:54]:
Well, she had already checked out. Yeah, she had already checked out. I was the only one that was still grinding myself to pieces on it. She was trying to help, but she was also checked. Now, coupled with this situation, we had made some bad choices in hiring. We had an excellent technician that got chased off, went to a competitor up the road. I lost him. In this couple of weeks time, I had two technicians that might have had 10% efficiency. I mean, it was insane. And this happened because I allowed it to happen, because they didn't care anymore. So coupled with technicians that didn't want to move work and wanted to sit in a bathroom all day or sit in a chair, do something stupid, and then the lack of care up front, I want to put on the record, though, that I don't think the lack of care was intentional. Like I said, I feel like there was something else going on, because it's not his statute of personality.
Lauralee Schmidt [00:25:00]:
Three years of good and then this twist, and then a very strong seven months of bad.
Erich Schmidt [00:25:09]:
Yeah. And it could have we kept thinking.
Lauralee Schmidt [00:25:11]:
Could have been turn around. And I think that's why we hung out so long, is we kept thinking, oh, this is going to turn around. This will turn around.
Erich Schmidt [00:25:18]:
But this is when I called you and I asked for your opinion on it. Should I let this guy go?
David Roman [00:25:25]:
Sales go. Were they still maintaining sales?
Lauralee Schmidt [00:25:30]:
No, they were kind of going like this. Okay.
Erich Schmidt [00:25:37]:
It would put her along and then.
David Roman [00:25:38]:
Get these a bad week, and then.
Erich Schmidt [00:25:40]:
They would get these random fire offs where you got a little bit of hope back.
Lauralee Schmidt [00:25:44]:
And so we were like, oh, it's ramping back up. We really saw that around, like, August of 2022. And I started this is what made me actually pay attention. We have a shop owner, David Philhabber. He came through, and he was going to some conference in Nashville or something. He called and said, hey, I'd like to come up through your shop and have an oil change done.
Cecil Bullard [00:26:05]:
Why?
Lauralee Schmidt [00:26:05]:
I didn't really tell my service advisor that I was having a shop owner come. I just had him come, and I said, I want to know what your idea of our shop is after you leave. The notes he gave me were like I was standing there with my mouth open, like, none of this is what you should have experienced. And he looked at me, he goes, I expected way more out of you.
David Roman [00:26:24]:
What did he say? Hold on. I want to hear the notes. What's? The notes.
Lauralee Schmidt [00:26:28]:
Just like, that my service advisor had no trust in our team. He did not think that the technicians were skilled enough to be in the facility. No inspection that let me know right then that that was part of our reason for tech turnover, is because there was not a supportive service team giving them any love. He was told to not inspect his car. He ran it through the oil change and gave it back to him all disheveled like. I guess it wasn't even really put back together the correct way. He got no notes, none of what we set in place for the experience to be like. So I started sending in secret shoppers people that had never been to our shop before. I was just giving work away. Hey, come, I'm going to give you a tire rotation. Just go to my shop and tell me what you think. And I had a form that they had to fill out, and I consistently saw in every form there was no customer service. There was no process, none of it. I had a man that wanted to spend money here with us, and he wouldn't call him back to book the job.
David Roman [00:27:33]:
I'm trying to understand here. I am so non confrontational. I don't want to have to talk to anybody about anything, and I don't want to approach anybody and ask them why they didn't do their job. I hate that. It gives me anxiety. I want to avoid it like the plague. And so I am very easy to just dismiss. But if I got to the point where I had to send in a secret shopper, I'm done. I'm firing everybody, and we're burning the place down because no, I don't understand.
Erich Schmidt [00:28:14]:
We're right there.
David Roman [00:28:16]:
The guy hands you like that's non confrontational. Well, no, hold on. The guy gives you no DVI on this ticket. One time I go to him and I go, hey, why is there no DVI on this ticket? Well, you see, what happened was excuse, excuse, excuse. Okay. But we have to do this every single time. You understand that, right? And he's like, we put this in place, you and I. Okay, the next one, I'm losing my mind. Well, I'm not firing I hate firing people, but I'm going to lose my mind. Like, I will lose my ever flipping mind.
Erich Schmidt [00:28:57]:
I mean, I'm kind of numb to the firing thing at this point. I mean, it's just well, listen.
David Roman [00:29:07]:
Too easy to fire that person. I want an answer. I need to understand, you guys, because I need to understand. This doesn't make sense.
Erich Schmidt [00:29:17]:
Well, at the end of the day, man, I mean, it's like we were.
Lauralee Schmidt [00:29:21]:
Then going to have to be the people that did everything, and we were not trying to be the people that did everything.
Lucas Underwood [00:29:27]:
Y'all just resonated with David. I can't resonate with that.
Erich Schmidt [00:29:30]:
Fine.
Lucas Underwood [00:29:30]:
Get out of the way. Just do it.
Erich Schmidt [00:29:32]:
The whole situation here was tolerance of something that should have been intolerable. I tolerated low production from my staff in the back for far too long. This is all 100% my fault, the whole situation, but I tolerated the lack of care and ability up front. I tolerated way too much.
David Roman [00:29:55]:
Bull crap. You're falling on the sword, and I appreciate that, but those are facts. I'm interested in the mindset. So he tells you an excuse. I'm just curious.
Erich Schmidt [00:30:11]:
Well, at that point, I was done. What's the dialogue look like? Yeah, at that point, I was done, man.
Lauralee Schmidt [00:30:17]:
I just didn't care because I was harping on these technicians are not efficient and productive. They're not in line with what we need to have in line. Now, looking back, it was all probably due to service. But my service person was the most loyal person in the building. He never called off in four years. The man didn't come to work like he came to work like he was not sick. He was the most loyal. He had deeper relationships. He was bringing in fleet work. There were so many things that we were loving about it that we were overwilling to look some of the things that were going on, and then the things were getting cringier and cringier, and I think I was looking in the wrong place for the blame. So when I'm trying to be like, this technician's not working now, there were many that were not working. At the end of the day, that meant Eric was going to have to go back to Wrench. If we get rid of service, that means Eric's going to have the right service, because I can't do either of those jobs. And we were just trying to keep it off of his back because he was already mentally declining with the things that were going on. And I was like, there's no way this man can take anything else. So part of it was to protect us. At the end of the day, it didn't protect us, it didn't protect our staff, and it came to an ugly head. And here we are.
Lucas Underwood [00:31:34]:
That speaks to and here's the thing is, one of the things that Eric and I talked about that night was it kind of came down to that. And there were multiple times that I found myself in that situation. And there were a lot of times in life that, as opposed to confronting the situation, I tried to avoid confronting the situation. And all that did was make the confrontation that much worse when I finally did have to deal with it.
David Roman [00:31:56]:
I've seen you almost get into fistfights with people on your camera.
Lucas Underwood [00:32:00]:
Not since I started the shop. That's been years and years and years and years.
Erich Schmidt [00:32:04]:
He's a different man now. I video a different man.
Lucas Underwood [00:32:09]:
All right, let's move this to Cecil now, because Cecil, I'm not going to lie, you hear a story like that, and my first thought is, I don't. Know if a business like that can be saved, right? Because that's a mess, man. And the fact that the owner has partially given up.
Lauralee Schmidt [00:32:29]:
And we had no.
Lucas Underwood [00:32:30]:
Money, we do now.
Erich Schmidt [00:32:32]:
No money. Financial gone.
Lucas Underwood [00:32:34]:
No part of the staff is pretty much gone at this point. I mean, they might be in the building, but they're gone $50,000 a month in overhead.
Cecil Bullard [00:32:44]:
The way I look at it is I've got a shop. I'm in a city. There are clients. I've got all the equipment. Of course it can be saved. All right. What had happened was what happened was they wanted to be absentee owners, but they didn't set it up for them to be absentee owners. Meaning there are certain things that you need to pay attention to, whether you're an absentee owner or not or someone else needs to pay attention to in your business. And what are the inspections? One of the first things we often do when we walk into a business that is not doing well is we do a work order, quality control. I look at the work order. How old are the cars? What are we finding? What are we selling? Before we blame the techs, we often interview techs and service team and try to figure out, is there any trust here? Are there trust issues, et cetera. If you had backed that up, and maybe two years prior when you were paying attention, you were looking at your opportunity and you watched your opportunity fall, then you could say to yourself, oh, I better go look at work orders. Why is there not enough opportunity here? So car comes in. It's got 100,000 miles on it. It's a Chrysler. What do I expect? Well, I expect it to have $3,000 worth of crap needs to be done. That's what I expect. And instead what I see is an inspection sheet that's either not filled out or it's all green pencil. To me, that's like, red flag. All of a sudden, the check engine lights on, right? Check engine lights on. Is there really a problem here? Well, the machine is still running, right? And it's still running. Okay, but that flag right there should have told me you've got an issue, right? We're not inspecting cars. Well, why aren't we inspecting cars? No management. Nobody's making it happen. Right? So you look at this and you say, okay, wow. Here's a shop that, I don't know, a year ago, was doing 25,000 a week, approximately, and now it's doing four. Well, of course the owners are in a panic. How do we fix that? So the first conversation, I think, was, well, we need more car count. We need more car count. Wait a minute. Are we doing inspections?
Erich Schmidt [00:35:20]:
There you go.
Cecil Bullard [00:35:21]:
Am I there?
David Roman [00:35:22]:
Yeah, you're there.
Cecil Bullard [00:35:24]:
I'm sorry. I'm a little bit of trouble probably in my Internet. Are we doing inspections? I don't want to just add car count. I want to make sure that we're doing inspections properly, and I want to make sure that everything is working the way that it's supposed to. Am I still here?
David Roman [00:35:49]:
Yeah.
Cecil Bullard [00:35:51]:
And you can hear me? Well, all right. But you have to stand back from your business. You have to look at that 30,000 foot view. And I think the second thing first, you talk to the owners, and you try to figure out what's going on. Are they really completely checked out? Can we get them back invested in their company? And then the next thing was, send me some phone calls. I want to hear what's going on. And I think when they sent me phone calls that I could listen to, it actually, for them was like, a huge wake up call. I remember it was a Friday. I sat down to listen to the phone calls, and I'm talking to him on Saturday, going, you got to fire this guy. He's got to go Monday morning, first thing. You cannot have this guy in front of anybody.
Lucas Underwood [00:36:41]:
What was it in the phone calls? Cecil, what did you hear that made you say.
Cecil Bullard [00:36:48]:
Heard? I've listened to tens of thousands of service advisor phone calls. The first phone call I got was actually someone from an association looking for Laura Lee because she was going to.
Lauralee Schmidt [00:36:58]:
Speak oh, my God, I forgot about that.
Cecil Bullard [00:37:00]:
Yeah. And the service advisor, the guy that was there, was like, well, she's never around here anymore. And you're like, okay. And the woman was like, well, hey, I'm from this association. I understand if this is what do you call it? The gatekeeper. Right? Hey, well, we don't just push through calls through to her all the time, but that isn't what it was. He was like, oh, no, she's been pushed out of the business. That was the exact word to use.
Lucas Underwood [00:37:30]:
Holy cow.
Cecil Bullard [00:37:31]:
Serious? Oh, my God, we got a problem. And then you her name's on the building.
Erich Schmidt [00:37:37]:
How damaging is that in a professional career? How damaging is that?
Lauralee Schmidt [00:37:42]:
We were supposed to speak on a panel, like, three weeks later, and she thought I was gone.
Cecil Bullard [00:37:46]:
Yeah, she thought you were. I don't know, maybe you passed away or something. The way it was being talked about, it wasn't even that. It was like, Well, I got rid of her because she was terrible. Even the way he spoke, his attitude, everything was like, this is an inconvenience. I don't want to talk to this person. And he was not helpful. And that was the gist of every phone call I listened to. This is a person who somewhere along the way got ruined for whatever reason. Maybe once he took over kind of managing and they decided to be st owners, the pressure got to him, and he didn't talk to him, and he didn't but he felt like, I deserve better than this, or whatever, and it just went downhill from them.
Lucas Underwood [00:38:33]:
Cecil, let me ask you this because I have been in that state of panic before, and sometimes getting through to somebody that's in that state of panic is not as simple as saying, oh, don't worry, this can be fixed. It's not that big of a deal. Let's just do this right? I have a feeling that Eric wasn't as easy to get through to as simply calling and saying, do this. Tell me.
Cecil Bullard [00:38:58]:
I don't think either we got we got three month window here. We need to get this fixed. Are you guys willing to do what it takes? Sometimes there's a hard conversation as a coach that you have to have. I don't think that most business owners, especially techs that became shop owners, I think they're just like, oh, I'll just go to work for somebody. I don't think they realize what they're really saying. I'm going to give up this dream that I've had that I've worked for for ten years, because somebody else is literally ruining it for me. Rather than go fire that person, grab the bull by the horns, get the processes back in place, make sure we're checking out cars. I think when we recognize this, probably two or three weeks in, and it was like, okay, holy smokes, I know exactly what the problem is. Okay, now we know what the problem is. What's the solution? And so we got to terminate this guy, I think I said, do you know anybody that can answer the phone with a smile? Like, hey, thank you for calling. We're glad to have you? Anybody that you could hire just to even answer the phone and book an appointment. And they were like, yeah, we got this gal that we know really well. We could get her in, you know? Dang it. I think Eric went to work on Monday. I'm pretty sure he wasn't happy to go to work and terminate somebody, but he terminated the, you know, at the end of the week. We had a great week.
Erich Schmidt [00:40:23]:
I had just terminated my entire shop as well, including my lead technician that left. So by guy I had a new hire in the back. He had been there for two weeks. 27, younger guy, not totally green, but green enough. And I remember I had let go of the other guys the prior week, and then that's when Cecil and I had had the conversation on Friday. He basically said, well, I think you've got your answer. You know what you need to do. And I said, yeah. And that's when it came, and I said, we got to let it go. So it's not funny, but it is. So we let him go, and he took it with a bit of grace. I will say that he wanted to know why, but it's not something that I was willing to talk about. I just said it was performance and financial, and that was it. And he went on about his way, so I went out back, and of course, that was a million pounds let off my shoulders as well, as we all know when that happens. And I went out back, and my one last remaining technician that had been with me for only two weeks, he's like, Where is everybody? And I said, well, man, everybody. I let him go, and he goes, you what? And his eyes were so big, and I said, hey, man, why don't you come on in my office here? And so I had really thought he was being like, he probably did. I said, hey, man, let's go talk about it real quick. And he obliged and came along. And so he sat down and I said, Listen, man, here's where we're at. I said, You've been here for two weeks. You've seen the nonsense going on with the lazy technicians and the things that weren't happening, the low production we had billed the week prior $4,325, I think it was, for the entire week, where we were normally billing 25 plus. And I sat them down. I said, man, here's the deal. I said, we're going to start over. I said, I've let go of everybody. You're the only man standing. Me. And you are going to learn to estimate. We're going to learn to use this tech metric real well. And that's what I did. I taught him to estimate. I went out in the shop. We had hired Savannah a couple of weeks prior, and her start date was that week. Yeah, she started the day that that had happened, so that couldn't have worked out any better. So Laura Lee came and belonged, helped her, trained her. So her and Laura Lee worked the front counter. We went in the back. I bumped out work, he bumped out work. And then what we were both doing is actually estimating in the shop where we normally estimate in the office with the service advisor. And so we were doing the estimates, and then what we were doing is utilizing techmetrics text and SMS and email to send the estimates. And then what we would do is about ten minutes after we sent that, 15 minutes later, I would run up front and I say, hey, Orally, just call these people, check on them, see if they have any questions, anything like that. On this estimate, surprisingly, it worked quite well. The closing ratio was pretty good.
Lauralee Schmidt [00:43:43]:
I thought that would work.
Erich Schmidt [00:43:45]:
Yeah, man, it worked real well, actually, as David already knows. So that week we turned, will you do 21,000 and some change that week with just instant turnaround one and a half?
Cecil Bullard [00:44:01]:
Right.
Erich Schmidt [00:44:05]:
Had six people in the building prior to that.
Lucas Underwood [00:44:08]:
So, Eric, when you realized that's what was going to happen, did your chest get tight when you walked into work that morning? Right? Yeah, and I know what it feels like. Like, oh, man, I'm taking back over the advisor position. I'm taking back over a tech position. That's heavy.
Erich Schmidt [00:44:24]:
It is. I was definitely worried about it, but I also have this odd ability to step up when I'm under tremendous stress as well. There becomes a point that I'm like, yeah, I mean, maybe. So I kind of came in, took it in head on. I pretty much rehearsed what I was going to say in my head the night before. All night. I didn't get a lick of sleep that night. Both of us up all night, tossing and turning. I got up super duper early, man. I think I come into the shop at, like, 530 or something and was in my office and he walked in, put his lunch in, and I said, hey, man, you got a minute to talk? He's like, yeah. So he sat down and he sat down with his notepad like he was going to take and we were going to hammer that day out. Right. And I just said, Man, I've had to make a really difficult decision over the weekend, and I've thought a lot about it, and I said, at this point, I think we need to go our separate ways. And once that came out, you mentally internalize that and you kind of release it in a form of words. But at the same time, this is a higher level position. It pays well. Typically, your service advisors are pretty intelligent dudes, so you have to be very careful about how you go about that because you can open yourself up for lawsuits and many other things, for sure. So I was very short and just said it was a performance and financial based decision. He knew we were struggling financially, and really, at the end of the day, I couldn't have paid him after this week. So it was something that was going to happen regardless.
Lucas Underwood [00:46:21]:
Regardless or another.
Lauralee Schmidt [00:46:22]:
Yeah, but he never came to the table to be like, let's try to figure this out as a team financially. Let's try to figure out how we can make this better. It just was like just continually like, okay, well, that's cool. So if we don't make I don't know where he thought the money was supposed to come from long term, they never do.
Erich Schmidt [00:46:41]:
It's funny because we were thin air.
David Roman [00:46:45]:
Like, how do you think we make money here? Doesn't go we don't get paid.
Cecil Bullard [00:46:49]:
It's the tree in the backyard.
Erich Schmidt [00:46:51]:
Yeah, right.
Cecil Bullard [00:46:52]:
Go grab it off of it's all out.
Erich Schmidt [00:46:54]:
So here's the crazy thing. So we were actually, over the last couple of years, had been molding him because my ultimate goal is to buy a couple more shops. I would like three or four more.
David Roman [00:47:06]:
What is wrong with you?
Erich Schmidt [00:47:09]:
I'm still trying to figure this out. David. Yeah, I can't get the same rush I can't get the same rush I had in the military, so we got to do it this way. But yeah. So we had been kind of training him and trying to position him in a situation to where we could develop him as a general manager. He had the longest time with us at that point in time. He was very trustworthy to us, so we started developing him. That one of those processes is we teach them how to look at balance sheets and PNLs. Now, of course, we leave out the last page or two of the PNL. So a couple of weeks prior to this situation happening, we were having a lot of meetings about how we could get this business pumped back up. And he sat down. I specifically remember a day he sat down in the office, and I'm just in here with my head banging off the computer, just trying to figure out what's going on. And he's like, hey, man, I got a question for you. And I was like, sure. And so he sits down on my couch in here. I just can't understand where all the money went. And I said, well, what do you mean? He goes, Well, I don't know where the money went. He's like, how in the world did all that money disappear? At this point, I'm pretty confused by the conversation. I have no idea where we're going with this. And I said, this business is very expensive to run. I was like, we got 50K in overhead, or almost 50K in overhead a month. And I was like, what kind of money are you talking here? And he's like, whoa. It was like $670,000 or something. And I was like, what are you talking about? And he said, well, that's what you guys are making. And he's like, I saw it right on a PNL. And I said, I don't think you were looking at that PNL, right? And he's like, oh, yeah, I saw it in the number.
Lucas Underwood [00:49:19]:
He was seeing the profit line at the top, not the bottom.
Cecil Bullard [00:49:22]:
Here's a big mistake that we make. We feel like, I don't want to show him the net profit, so I don't talk about it.
Lauralee Schmidt [00:49:27]:
Well, he saw that.
Erich Schmidt [00:49:30]:
Oh, yeah, eventually.
Cecil Bullard [00:49:32]:
But there was a cartoon online the other day. There's this whole thing with techs that think all owners are bad Sobs that are just stealing everything. I saw that. And so there's a cartoon with this pipeline, and there's a starving little tech down there with a drip coming out of the pipeline, and he's getting this little drip. And at the end, there's this huge thing coming out, and there's this big fat owner out there just slurping up all this gravy coming out of this pipeline. And I'm thinking there needs to be a new cartoon because where's the other drips? Where's the rent and utilities and the.
Erich Schmidt [00:50:09]:
Insurance.
Cecil Bullard [00:50:12]:
And the benefit packages and the accountants and all of this other stuff? If we don't explain it to them, they think you charged $130 an hour. You paid me 30. You kept 90 or you kept 100, and you're ripping me off, and they don't get it. They don't understand that the owner, in many cases, at the end of the day, is making less than they are, especially if you're not running your business.
Lauralee Schmidt [00:50:39]:
Correctly, which we definitely were making less.
Cecil Bullard [00:50:44]:
Yeah, but here's the sad thing about this. It didn't have to happen, right?
Erich Schmidt [00:50:48]:
Okay.
Cecil Bullard [00:50:49]:
Like Eric said, it's my fault. It's poor management. I know the KPIs I need to look at. Okay? So 300% rule. Do 100% of the cars get inspected? Well, no, they don't. They never do. Not in any shop. If the car was here last week and it comes back for something, we probably don't inspect it. But somebody needs to be looking and saying, are 97% of the cars being inspected? And if they aren't, then there has to be consequence. There has to be something that gets done. It makes me nuts, because I'm that guy. In some ways, Dave and I have a lot in common. So I'm like, Son of a bitch.
Erich Schmidt [00:51:29]:
They'Re not doing it.
Cecil Bullard [00:51:30]:
What the the the fact is this. When employees realize that there's only one way to do the job, that there's only one way to do the job, they will do the job. That way, if you allow them to do the job a different way and to make whatever excuses there are, they will make the excuses. And I don't think they intentionally go, let's see if I can tank this business. There was no point that their guy said, I'm going to intentionally tank this business. No point.
Erich Schmidt [00:51:59]:
Okay?
Cecil Bullard [00:52:00]:
But there was a point where he thought, they're making 675,000, and they're telling me there's no money, and I'm upset because I should get paid more and I should do this. And all of a sudden, his attitude shifted, right? And what I needed to do was catch that before it happened. When the vehicles weren't being inspected. The first time, I needed to notice, and I needed to say something. And the second time, I needed to say something much louder, and by the third time, I needed to lose my crap, right? I mean, I needed to lose it and say, if you work here, this is how you do it. If not, I'm happy to let you go for no performance. And by the way, if you have your employee handbook written out where there are performance criteria in there, that is insubordinate for no performance, you can terminate without any kind of consequence, okay? And I don't care what state you're in now, in some states, you'll probably end up paying unemployment because like it or not, they don't care what the reason is, right? But you can terminate for lack of performance doing any. It's called gross insubordination. When your manager, your owner, says, this is what I need you to do, and it's not illegal or immoral, right? Then you have to do it. And if you don't, that's called gross insubordination. And if we had paid attention earlier, right? If we had caught this two years ago when it started going downhill and said, okay, I got to get back in. I got to get interested. I got to pay attention. And I was looking at my KPIs. I was looking at the inspections. I was looking at what the opportunity was, what the sell rate was, et cetera. And I was watching that come down. That's when the hair on the back of my neck starts standing up, and I'm like, oh, my gosh. I got to get in there and pay attention, because if not, somewhere down the road, I'm out of business, and.
Erich Schmidt [00:53:58]:
I want that to happen well, and that's why I say it was 100% on me. We had SOPs we had employee handbooks. We have all of these processes in place. We train for multiple weeks with this stuff, typically, and at the end of the day, I tolerated, instead of terminated, I tolerated low performing technicians for way too long, which put us in a financial situation. And then we turn around and have a situation up front where we're not selling. And it's kind of the perfect storm of how fast you want to lose your money. Now. I did that. PNL. Situation really ground on me hard, because I went home, and I'm telling worldly about it, and then I wake up the next day, and I'm going, this dude's in a straight, laid down thinking we're making close to $700,000 a year, right? And I think most people probably would. And at that point, I went in, I pulled the p LS. And I said, let's have a conversation. And I actually showed him the rest of the p l. And I educated him further on the end of that p l. And he looked right up at me, and he stood up, and he said, you're freaking crazy. He's like, there's no freaking way I'd do that for that kind of pay. And that's when he, I think, realized that we take on a whole bunch of BS. For very little money. There's not one CEO in the country that runs a major corporation that would deal with the crap we deal with for that kind of pay. This would never happen.
Cecil Bullard [00:55:30]:
But by cleaning up the business and running it right and holding people accountable, you could make 400,000.
Erich Schmidt [00:55:40]:
Absolutely.
Cecil Bullard [00:55:43]:
You go from a business losing whatever it was, losing 20,000 a month to a business that could make 40,000 a month just by making sure that the things happen the way they're supposed to.
Erich Schmidt [00:55:55]:
Happen, just in the changes. We're showing 10,000 more than we normally run in the last few weeks. We're in the 30s now. There's a couple of weeks we've hit some 40s. So we're getting some traction back, reeling some people back in. Another big issue was client retention. We didn't take the client retention situation seriously, which ultimately creates the demise as well.
Lauralee Schmidt [00:56:31]:
Games after this to get it back.
Erich Schmidt [00:56:35]:
There was a lot of worry afterwards. Of course, we got the unemployment thing pretty quick. Ohio is one of those states that you're getting unemployment if you get let go, period. It doesn't matter what it is. We had a guy that was addicted to drugs in our old building. We found out, let him go. He pulled unemployment. We appealed it four or five times. They took it anyways. Ohio is kind of wild about it, but at the end of the day, I mean, that's what we pay into it for. So it is what it is, and I'm not going to harp on something like that.
David Roman [00:57:09]:
There's no sense triple your percentage, because that's what they did to me.
Erich Schmidt [00:57:13]:
We take an awful lot of classes. We take an awful lot of employee classes.
Cecil Bullard [00:57:18]:
Hey, David, when that happens, you know what you do, David? You raise your labor rate, buddy. Sorry, you got to pass those costs on.
Lucas Underwood [00:57:29]:
So let's talk about where we are compared to where we were. Cecil, you're the numbers man. Tell us.
Cecil Bullard [00:57:37]:
I don't want to tell you how much money they made last month, because they might be mad at me for telling you that very large amount. When your business is running well, when you are paying attention and you're looking at the KPIs and you understand what they're telling you and you're able to manage that, well, we went, okay, we have this problem. We have to solve it this way. We have this problem. We don't know how to solve this one. Like, what about the customer retention? What about all the people he's chased away? What do we do? So we said, let's do these five things. Let's call people. Let's send out a message. Let's say, hey, there's been a change here, et cetera. Let's do this PR campaign to get these people back to us. And so you put solutions in places where you can you put solutions in places even sometimes where you don't know what the real solution is. You're like, okay, I'm going to try this, and if this doesn't work, then I'm going to try something else. And then I'm going to try something else. And you keep making adjustments with your business, and I don't think you have to be there all the time. I have a lot of clients we work with who aren't. They spend a couple of days in their business a week, and they do fantastically. But you have to be on the ball. I don't think you can be an absentee owner either, where you're not there. I think you have to pay attention to certain things. And whoever you're going to have in that position, you have to have the finger on the pulse all the time of that person, because that's the person that's now kind of controlling your fate. So you got to be watching the numbers with them. You got to be talking about management. And I think you got to develop a relationship with that person that's a real good give and take with that guy that's going to be your second or that gal that's going to be your second in command, because they have to come to you when they're worried about something or hey, I don't know how to get these texts to do these inspections. Okay, great. Here's how we do. I mean, their numbers are great right now. I still think we have improvements and certainly if they want to run multiple businesses, there's more we need to do to get set up for that. I know Laura Lee's. Like, no way. How am I going to do you know, again, you can have one business and say, great, I make a decent living, I get a great paycheck. I always say if I have a million dollar business, I'm probably taking 100 grand as a paycheck for running it and then I expect 200,000 as a net profit. That's a $300,000 company. And if you're happy with that, that's great. If you're not, either build that one, go to 2 million or whatever the facility can do, understand what that looks like and how you're going to get there. And then if that isn't it, then go to the second one or the third one, but don't be broke. Like I can't make any money in one, so now I'm going to have three. Right. Just drives me nuts. You're making 4%, 5% out of one shop where you should be making 20 net, and now you're going to buy a second shop to make another 4%.
Lucas Underwood [01:00:55]:
I really upset a shop owner one time. I said, they came in and they were really upset and we were talking about their scenario and they said, well, we're getting ready to expand into 15 Bays. And I said, if you can't make three Bays work, you damn sure can't make 15 work. Right. The problems are going to magnify. Cecil, I'm curious, how does it feel to take a business? And I know it was their hard work that did it and their ownership.
Cecil Bullard [01:01:24]:
I didn't do any of the work.
Lauralee Schmidt [01:01:27]:
Oh, my God, you did so much of the mental rebuilding of that's what I do.
Lucas Underwood [01:01:34]:
How does it feel to take a business that's at the brink of disaster, at the brink of bankruptcy and bring it back? How does that feel?
Cecil Bullard [01:01:42]:
I can tell you. It's kind of funny because I look at the, oh, my God, we're ready to quit. We're at the brink of disaster and I'm thinking, oh, it's not that bad. I'm like, oh, it's really not that bad. Do we have customers? What was the worst was he terminated his best technician the week before I got involved.
Erich Schmidt [01:02:02]:
He left. I didn't terminate him.
Cecil Bullard [01:02:04]:
Well, and we had to rebuild. Right. That's the hardest part. So Lucas, I don't do this for the money. I mean, I think some people, because. I'm the guy that goes, raise your labor aid and all that. Oh, Cecil's just money driven. And of course, I'm teaching sales, and part of sales is it's about money, right? And running a business properly is about money. I mean, it's about do I have enough money to feel safe for the business, to be safe, to pay my employees correctly, whatever that number is? David that I can take care of my people and they can take care of their families. Do I have that? That's what that's about. I don't do this for that. I mean, don't get me wrong. I drive a nice truck. I wear nice clothes. I'm going to go on vacation right after this podcast. I'm going out to California to see my know, all of that is good. The reason I do this is because when that turnaround happens, I live for the that is the highest high that you can get, period, is when you help somebody go from, I don't know what to do to, wow, oh, my gosh, the world opens up in front of me. I have all this opportunity, or, oh, my God, I think I'm going to close this thing. And they were so down. I got to tell you, my first meeting, Eric was like, I didn't even know if I could get him off the floor. He wasn't even on the floor. He was, like, 20ft in a pit.
David Roman [01:03:23]:
Right?
Lucas Underwood [01:03:24]:
And I remember that. That's what I'm saying. During our telephone call, I could feel the emotion.
Cecil Bullard [01:03:32]:
How distraught he was. And I'm looking at it and I'm going, I know there's a problem here. I was thinking about this podcast before I came on, and what I want you to understand, every business owner, if your business is going backwards, slowing down, if you're not making money, it's almost never about what you're charging. It's almost always about the service that the customer gets and whoever's giving them that service. And in this case, our main person didn't have any faith in our staff, and we didn't catch it, we didn't fix it, et cetera, which led to further that person getting down, and we didn't fix that, which led to us getting down, and then no money in the bank, which is like, end of the world. And like I said, I was like, oh, this isn't that bad. We can fix this. And funny thing, three months in, we fixed it in three months.
Lucas Underwood [01:04:29]:
We're making in a big way, not.
Cecil Bullard [01:04:33]:
Just like a little fixed it.
Lucas Underwood [01:04:34]:
Right? Laura Lee, you want to talk about how fixed fixed is?
Lauralee Schmidt [01:04:40]:
Well, my kid's still in private school. Thought she was going to not even be in school, period, because I couldn't afford to put gas in my car. When I tell you that we were.
Erich Schmidt [01:04:53]:
Broke with $600 in the bank account yeah.
Lauralee Schmidt [01:04:59]:
I haven't been that broke since high school. It was crazy. I was going to my parents, my parents were literally thinking I was about to have a nervous breakdown. I was, like, shaking, physically shaking all the time. It was not good. I could no longer think or form sentences. Eric was a mess and we thought we were selling our house. We had our cars up for sale. We had motorcycles up for sale. I was selling purses and bags and shoes, you name it. We were trying to fire sell it.
Erich Schmidt [01:05:32]:
Retirement money we shoved into the business. Personal money.
Lauralee Schmidt [01:05:36]:
I took money from my parents. I went and asked them, I was like, can you float us a month? My father happily did that for us because he believed in us. And he knew. He said, you just have changes you have to make and you have to get rid of some of your management. He saw it. He saw it, my mom saw it. And we chose to not I think we saw it. We chose to not make a move because we're stupid.
Erich Schmidt [01:06:01]:
No, I avoided it because of the stress. That's why we just avoided it.
Lauralee Schmidt [01:06:06]:
Yeah, maybe that's maybe we're just avoiding.
Erich Schmidt [01:06:08]:
I don't know.
Lauralee Schmidt [01:06:09]:
And now, literally, like you said on day one, day 1, May 15, I'll never forget this day. It was pivotal. By the end of that, we did.
Erich Schmidt [01:06:17]:
Like five grand that day.
Lauralee Schmidt [01:06:19]:
Like that day, I called a fleet company and they were like, we were wondering why you haven't been collecting payment. Nobody was even calling to get money.
Erich Schmidt [01:06:28]:
The amount of parts sitting in the back, I mean, I think we returned close to $10,000 worth of parts that were just stashed in the back that.
Lauralee Schmidt [01:06:37]:
Was sitting on our credit card, just hanging out.
Erich Schmidt [01:06:41]:
Found a ton of things hidden.
Lauralee Schmidt [01:06:42]:
Have that credit card paid off so we were able to use our travel points. Thank you, David, for that tip a couple of years ago to get the ASTE all paid for because I was cursing you when that credit card was all the way jacked up because nobody was returning parts. I was like, David, that was my we were literally talking to the school about, we need to pull our daughter out for next year. We're not going to be able to have her here and we aren't having any of those conversations anymore. We've actually been able to invest. We've bought a new scantal for the shop, which we thought we were never going to buy equipment ever again. We've physically brought in talent from other states that have been extraordinary and they've been team players with our vision from day one. And that is so pivotal.
Erich Schmidt [01:07:41]:
Our culture change was unbelievable.
Lauralee Schmidt [01:07:44]:
And when you have those people, it makes all of the difference in the freedom of the finances and it's just opened up and we're back to where we were. I'm able to take my whole team to ASTE. It's paid for. We don't have to worry about it. Are we going to have money to be able to eat on. I think we'll be straight. I did give up the financial side of it. The lady who did our bookkeeping came to me and said, I don't think that you belong here in finance. And I was super insulted and like, what are you talking about? I got us through COVID I am the one. And I was not the one. I am not the one. Finance is not I'm an artist. And so she was like, you need to go create content and do PR control, because that's what you do and get into the public. And she took over finance and she keeps up with me every week. She's got money stashed away. I don't even know where it came from. That woman's got it stashed in piles. And we really aren't worried about our bills. We have a good two months of savings already added up. We have very lofty goals with what that should look like. And it really is in part because she saw something and believed in us. She wanted to stay on board. When she saw the ship was failing, she asked to stay on board. She asked to do it for free. She said, Take my pay and take it away. I will stay here with you. I believe in this job.
Erich Schmidt [01:09:07]:
I want to talk on that a little bit. The culture that we had prior to this, we've always prided our shop in culture. We've always prided ourselves with customer service. Of course, when this stuff fell apart, we hired the wrong people, which took a toll. So you hire a lazy technician and you've got a lead guy over here cranking. They're not going to like that at all. So we made some bad choices in hiring, which kind of ruined our culture. Whatever happened with up front and the attitudes with that changed the culture. And then, of course, I got down on myself, which changed the culture. As the leader, you are the developer of the culture. And when we got our staff changed over, the people that we have here are awesome. They all contribute in meetings, they speak up when things happen. They get together and figure things out together. If they're having an issue with something. The amount of help that's offered between technicians in the shop is second to none.
Lauralee Schmidt [01:10:28]:
And not just process.
Erich Schmidt [01:10:29]:
Yes. And it helps with our mental capacity as well. You look at this and you're going, awesome. And now I'm coming into work happy and I'm looking forward to working with these guys. Yeah, absolutely, man.
Lauralee Schmidt [01:10:45]:
Oh, my God.
Lucas Underwood [01:10:48]:
It has the same effect on them, right? And we don't think about that. If we're burnout, if we're beaten down, then they're probably feeling the same way, because we are. Where the energy in the shop is.
Erich Schmidt [01:11:01]:
Derived from toxicity and mental well being is a cancer in the shop. And if it's not, well, it spreads faster than you could ever imagine see it coming. You don't. And you can literally take an entire shop out in a week with bad culture. It's incredible how quickly it moves through the shop.
Lauralee Schmidt [01:11:27]:
But you can build it back just as you can.
Lucas Underwood [01:11:31]:
So you guys had wanted to be out of the shop. How does it feel to be back in the shop? I see you're both in the shop.
Lauralee Schmidt [01:11:37]:
I'm only here because podcast lucas, don't you?
Erich Schmidt [01:11:41]:
No, she's not. She came into work today, although the summer she does stay away from the shop a lot because we have our little one. However, she still writes content and we do all our own content marketing and branding in house. We have some companies that move it around for us and do certain things. But all of the branding that you see from us, all the artwork, everything is developed by her. So that's something she can do remotely. I come in every day. I manage. I've been floating in the shop as kind of a shop manager. Unfortunately, I'm a central hub right now because we straight have all new people. So I'm training, managing, and central hubbing, an entire staff all at one time every day. But these people are receptive. They're communicative. So it sounds like it's more than it really is. Because these people work with you, because they do what they're supposed to do and because if they don't understand something, they have questions about it and they ask and we just hash it right there. But that plays a big part in it.
Lauralee Schmidt [01:12:47]:
I think. Prior to letting everyone go and starting over, eric specifically on Sundays, like at 02:00, he would start having existential dread, like chest headaches. I could see him shut down like around 02:00. It was crazy. And I was just pissed all the time. I was just pissed off.
Erich Schmidt [01:13:16]:
And she's such a peach to begin with because my natural anything to not, she's a peach, man. So when she gets mad, it's really scary.
Lauralee Schmidt [01:13:26]:
I just knew it was going to be more crap, right? Like I'm going to put a process forward. Nobody's going to do it. I done wasted my whole time building this and nobody's going to support it. So what's the point? That's literally where I was and Eric was just getting sick, like physically affecting him. And now Sunday comes. We're hanging out. I don't hear nothing of that. Like, I got a headache, my chest hurts. He's eating like a normal human. He's sleeping kind of.
Lucas Underwood [01:13:52]:
It's better that's shop owner sleep.
Erich Schmidt [01:13:55]:
She said. Kind of sleeping.
David Roman [01:13:56]:
Kind of.
Lucas Underwood [01:13:57]:
That's just shop owner sleep. Okay, that 03:00 a.m. Am I going to be able to pay that?
Erich Schmidt [01:14:02]:
Did I write that?
David Roman [01:14:06]:
You got to put the earbuds in and run that ASMR. And you wake up and you're like, no, I'm going to play something sleepy and put me right back to sleep.
Erich Schmidt [01:14:18]:
I do want to say something about this whole situation. Though, that I definitely want to get it out before this is all over is in, you know, whirly had reached out internally into the moderators forum asking what to do, which she never asked me. I never knew she did that, but just putting it out on the table, man. I'm more humbled than words can bring because of the people, the key people that stepped up for us and helped us. There were a handful of key people, including Cecil, that helped us free of charge until we could get ourselves back.
Lucas Underwood [01:15:06]:
That's amazing.
Erich Schmidt [01:15:07]:
I don't know why they did it. They told me why they did it, and that's because they see something in our shop in specifics of we are very adamant about trying to change the industry, as well as a lot of the people in ASOG and changing the industry. And before I knew any of you guys years ago or any of this stuff, I literally left the dealership in Nine to change the industry because I was so tired of it. I was so tired of the toxicity in the shop. And I'm not going to sit here and say if somebody that knows me hears this. I was toxic when I was younger, for sure. I look back and I go, oh, my God. How did anybody ever work with not knowledge, with age? I guess we mature in age and know that we're doing things we shouldn't be doing. But the amount of people, including you, Lucas, that took my phone call, and it was unbelievable how people poured out their care and saw something that I basically said, well, we're just a jacked up shop that doesn't even need to be in business anymore. I mean, we're just doing the wrong things. We're doing wrong by people. And the reality was we were just in a really bad spot because I didn't want to fully manage my shop. And I thought that we had things rolling and I backed off at the wrong time, and these people stepped up and helped us. And we definitely would not be standing here talking or in business if it wasn't for those people.
Lucas Underwood [01:16:47]:
Well, can't be scared to ask for help. Part of the family.
Cecil Bullard [01:16:51]:
Yeah.
Lucas Underwood [01:16:52]:
It's embarrassing.
Lauralee Schmidt [01:16:54]:
It is. It was so embarrassing. I was mortified to reach out. I can't tell you how many times I wrote that text and deleted the text and wrote the text and deleted it before I press send. It was the most humbling moment to be like, I need help, for sure.
Lucas Underwood [01:17:10]:
Laura Lee I promised you I'd give you an opportunity to say what you really thought, like, unabridged, however you want to say it. What would you say to that service advisor if you had his attention? What would your message to him be?
Erich Schmidt [01:17:32]:
MMM, that's a hard question.
Lauralee Schmidt [01:17:37]:
Oh, man.
Erich Schmidt [01:17:39]:
Personally, I'd like to know the why.
Lauralee Schmidt [01:17:42]:
Personally, I'd like to know the why of what did occur. Can you just break it down to me, like what honestly did occur. And I hope that if he goes to another shop or whatever, that he learns to follow policy. I will not allow the next group of service advisors or technicians to break outside of our policies. I just won't. And people might think I'm really bitchy for being in policy line, but I know what stepping outside of it does. There's a reason corporate America thrives a lot of times and it's because everybody's in policy.
Erich Schmidt [01:18:25]:
You know, it was amazing, the set forth.
Lauralee Schmidt [01:18:28]:
You gotta hold to it. If it's what your shop needs, it's what your shop needs. It doesn't have to be some black and white non movable ever policy, but God, if you're supposed to put the vin in, put the vin in.
Erich Schmidt [01:18:41]:
There's a lot of people that haven't learned that you or we had made a post about policy on a couple of different forums, including changing the industry and ASOG. And the responses that I saw from a lot of the shop owners was incredible to it. Just the only thing that I can envision in the back of my head is a three ring circus going on in their shop because they think that Laurel E is a poor business owner manager or I'm a poor business manager or owner because we are such stringent people to the policy and we stick to the policy. And if you don't like the policy, you can kick rocks down the road. And it protects the employee, it protects the business, it makes things run smoothly, everything man. So these people that are naysaying her saying she's the problem with the industry or she's the problem with the technician issues and all of these things is madness to me. And it goes to show that we still have a lot of work to do. And it goes to show how many shop owners, even the shop owners that are involved in our conversations on ASOG and so forth. And I don't post a lot there, I just watch. But they just don't know. And they really need to take it seriously. Because if you do get in this situation, I can tell you right now that the shop that came back of ours is one in a million situation. I don't think that anybody, very many people would have come back from this.
Lauralee Schmidt [01:20:19]:
You can't be scared though, either. And I do think when you talk about staying inside of policy and procedure, I'm standing by that. There's a lot of fear. People are scared like, I will lose my team. Let me tell you, it's better to have nobody on your team than a bunch of people who are going to take you down.
Erich Schmidt [01:20:36]:
Right?
Lucas Underwood [01:20:36]:
Yeah.
Erich Schmidt [01:20:36]:
But that's the risk you take in business.
Lauralee Schmidt [01:20:38]:
Stand in this empty shop with my one technician and my one new girl and make a flourishing week than to spend one more moment entrapped with five people who are doing nothing. You cannot be afraid to hold to your guns. You just can't. There's a reason.
Erich Schmidt [01:20:56]:
But the risk factor, I think, is and that kind of goes back to my dad is an older, conservative banker is that he didn't want to take unnecessary risk. He straight looked at my wife after he found out what we were going to set aside for marketing when she first took over. And he looked right at me and Lauren said, you're going to go out of business. And I was just like, what do you say?
Lauralee Schmidt [01:21:21]:
Every dollar that we put towards marketing was $1 we took out of our daughter's mouth. I was terrified. I was like, oh, maybe he's right.
Erich Schmidt [01:21:34]:
Yeah. But the fact of the matter is, when you wake up in the morning, you take a risk. When you get in your car, you take a risk. When you walk down the steps, you take a risk. So how is this any different other than it can affect you financially, which anybody could come back from?
Cecil Bullard [01:21:51]:
Employees want stability, and stability is, this is how I want you to act. And if you act this way and you do these things, then this is success. You don't want to have an employee who wonders if they were successful. And if you don't have policy, procedure, they don't know what to do, so they do what they think, well, I don't need to inspect that car. Well, the customer doesn't look like he has any money. I won't inspect that car. Whatever. Employees it's funny because probably 30 or 40% of the business we work with are on the verge of bankruptcy when they get to us, and we successfully walk them through and make them successful. So we don't make them. We help them. Okay? And again, we influence. We help. We help you understand things. We help you see things. We pick you off the ground, we keep you moving forward, et cetera. You do the work. No good coach or consultant can come do the work for you. But if you have policies and procedures and you have a successful business, financially successful, you have happier employees, better paid employees, better attitudes, everything. Every business that we work with that makes it through our programs, those guys, their employees are paid more, they have better culture, et cetera. And you can't have employees that don't know what to do because they leave at the end of the day, and they don't know if they were successful. So they come back with the questions in their mind, and they're not as secure. And an insecure employee, you're going to lose at some point, they had to get rid of employees either because they didn't have any money or because they didn't feel that they were doing the job right or other things. They had to end up getting rid of them. What if they had managed them properly in the beginning? They may still have all those employees. You can have employees for 20 years in this business. You just have to help them understand what doing job right is and then charge for it and be successful.
Lucas Underwood [01:24:01]:
100%. Guys, thank you for being here.
Erich Schmidt [01:24:05]:
Thanks for having me.
Cecil Bullard [01:24:06]:
Thank you greatly. Appreciate it.
Lauralee Schmidt [01:24:09]:
Thank you.