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My name is Jeff, and I'd like to welcome you on a journey of reflection and insight into the tolls and triumphs of a career in automotive repair.
After more than 20 years of skinned knuckles and tool debt, I want to share my perspective and hear other people's thoughts about our industry.
So pour yourself a strong coffee or grab a cold Canadian beer and get ready for some great conversation.
00:00 So welcome back everybody with me tonight. A really good friend of mine, Mike Allen is here. Mike is a whiskey connoisseur and a shop owner and has some very interesting perspectives and stories. And I'm very honored to have him on this podcast with me tonight. And we're going to get to know Mike, I hope. So Mike, how was your Thursday?
00:35 SPEAKER_00 It was good, man. And thank you for having me.
00:38 SPEAKER_02 And I hesitate to start off with a correction, but you said I'm a whiskey connoisseur. I'm more of a whiskey consumer. But I drink all the whiskeys, not just the snooty whiskeys. I don't partake in too much of the snooty stuff either. The high end bourbon is for a different class of people than where I put myself. I just try to hang out with Lucas a lot and then he buys it. Right. It's so, I mean, Brian Pollock made the joke that like, you know, you probably saw it, Lucas had a very expensive bottle of it and Brian's like, oh, I would definitely mix that with Dr. Pepper and drink it over ice. And Lucas like came unglued, right, because it's probably, you know, a wrap. You haven't lived until you've had Dr. Pepper and Peppy Van Winkle. I mean, it's yeah. Snooty whiskey. I mean, we're up here in Canada. We're known for our whiskey. We have some pretty good stuff, but I've never I don't buy the high dollar high barrel stuff. I tend to stick to Crown Royal, which is our one of our great Canadian
01:47 SPEAKER_00 gifts to everybody else. It's a, you know, you get it. It gets the job done, man. It achieves the desire.
01:53 SPEAKER_02 It's delicious. So so starting out, what's tell us a little bit about yourself, where you're located. Are you a multi shop owner now, Mike?
02:01 SPEAKER_00 You're up to three. Is that right? Yeah, that's correct. So maybe my business is Carfix, three locations in and around Raleigh, North Carolina. You know, I have aspirations to continue to grow, but it's the industry is all I've ever known. I grew up in my dad's shop. My dad grew up in his dad's shop. So since 1937, that's kind of been what what my family has done. Interestingly, my grandfather's shop was it was like the community center. It was the gathering spot for single men because when he he built the shop when he before he got married, it was the feed lot for all the local farmers. It was the grocery store and it was the auto repair facility. And when he started out, it was cars, farm equipment and buggy. So we've got a picture of him with Model T on a drive on left and a buggy next to it. He was working on both. So very cool. That was neat. My dad literally grew up in that shop because they lived. There was a there was a bedroom, a living room and a kitchen built onto the back of the two bays and the grocery store. So that's where that's where he grew up. He said, I never want to be in the auto business and I'm going to go away to college. He went to college and college was not for him and he dropped out and he started a family. He tried to do other businesses. He had to suck back in. He ended up opening his own shop. And that's where I grew up. And I grew up, you know, busting tires and changing oil and sleeping and taking out the trash. And I hated it. And I'm not going to be in this industry. And I went away to college and college wasn't for me. And I dropped out and I tried to do other things and I got sucked back in. So Carfix was born in 2004 with the help of my father. And in total transparency, my father was the seed money for that. And it was before I was truly, frankly, before I was mature enough to have a business of my own. I went there as an employee and finally decided to start growing up a little bit and ended up buying the business for my father. In 2019, I opened store number two. In 2021, I opened store number three.
04:22 SPEAKER_02 And with any luck, number four won't be far behind. So you're definitely like when people say it gets in your blood, right? Like motor oil and grease is in it. It's in your it's literally probably close to being in the DNA, right? When you think about like it's one thing to go to the shop every day, but grandpa lived on the back end of the shop. And then you guys grew up in there. That's that's that's some strong lineage, man. That's that's pretty cool. I admire the heck of that. You think it's just like when when you say your dad went to school for something else and it wasn't for him. And you went tried to go down a different way. And it was is it just because like, is it a personality thing that just makes you think that or is it like, I mean, obviously, there's love for the industry. There's no question about that. But do you think there's something in your personality that just like it feels the most comfortable this and this is like, you know, do you feel like this is like I say all the time? I feel like I was put here to do this. You know what I mean? Yeah. Yeah. So I said for dad, you know, he is one of the smartest guys I've ever met. Right. He has a very low tolerance for or is this a rated podcast? You can be as organic, transparent and as and as natural. We don't I'm not worried about this. The the the few words that come out.
05:48 SPEAKER_00 It's for adults. All right. Dad's got a very low tolerance for bullshit. Right. And that's how he was raised. Our whole family is that way. And he grew up in a very direct, very straightforward. You say what you mean, there's no window dressing kind of world. And he went away to university from a very rural, very blue collar setting. And he was trying to go to engineering school. And the academic, the mental capacity was there. But he just couldn't put up with the reality that is university life. Right. Add to that, he got married and was starting a family. He decided just to go start making a living. And I can't fault him there. My educational experience was way different. You know, I was very fortunate by the time I came along, dad had already started getting some coaching in his business. Right. And so I got to witness that transition from like 120 cars a day at 80 dollars a repair order. It was just a madhouse. You know, we would unload an 18 wheeler of tires every week into the warehouse in the back. And it was just we're a high volume tire store. And you pull pull a set of wires out of the trash and plug one on that made connection and send them to the dealership when it was misfired. That type of deal. Right. And that transition from that to an actual repair and maintenance facility with higher skill level technicians and taking things seriously and training and raising labor rates to be able to give benefits and that kind of thing. That happened while I was watching as a teenager. Right. Good stuff. And dad made a conscious effort to teach me about running a business rather than to have me learning about, you know, auto repair and maintenance. So, you know, I had a an understanding of theory of operation and systems and that kind of thing. But really, you know, this, you know, the school, quote unquote, that I went to with dad was how to read a financial statement and what you should do for marketing and how to handle customers and how to deal with upset employees and things of that nature. And that I owe everything to that because that set me up for success when I finally started.
08:06 SPEAKER_02 So was he a how big an operation are we talking about, Mike?
08:10 SPEAKER_00 Because when you talk about like a tractor trailer load for the tires once a week and 120 car count day, like we talking a pretty above average for the time and area. Yeah, at the time, I think we I think we were the biggest independent shop in the state. I think we were 18 days. And this was late 80s. So there may have been some bigger, like pure tire stores, but we had six quick load bays, no pits. But we had six bays that were full of GS guys just busting tires and changing oil and alignment left. And then the rest was, you know, technicians at the time. We probably just had to see text, you know, you know, to use that term, which is probably distasteful now. But we didn't have any real high school. We didn't have any real high skilled guys at that time.
09:01 SPEAKER_02 Yeah, yeah. Yeah. I understand that. So that's bigger than a lot of even the dealerships would have been back in the day for sure. Right. Like you're talking 18 basis. I haven't worked in a facility that big yet. We are the biggest dealer I worked in Ottawa. We were one to we were about 14 days in a big shop, which now is not that big from a dealers. Yeah. Well, I mean, dealerships are throwing up 45 Bay service departments these days. But I mean, for me back in 2004, when I first walked in, I was like, holy jumping. This is, you know, this isn't like the little former converted gas station, you know, four days that I'd worked in. It was it was a big deal. That's pretty powerful stuff that your dad way back then was already making sure that you understood that. Right. And I because, you know, we see it all the time, right. How second generation shop owners, right. Their father was a fantastic mechanic and they become a fantastic mechanic. But sometimes they don't learn the I don't want to say the right stuff, but they don't learn necessarily the business side of it to really become exceptional, not just average. But, you know, you kind of you you didn't have I don't want to say you didn't have the obstacles, but maybe you're a little bit more prepared for some of those obstacles, whereas some of the other shop owners that dad was a great mechanic, I became a great mechanic. He taught me how to set up this and the car, but not the whole thing. You your dad was focused on by the sounds of it, making sure that you knew how to do this and make money at it.
10:37 SPEAKER_00 And that's yeah, he made all he made all those mistakes. And then he was intentional and teaching me the lessons that he learned from those mistakes so that I get to make new, different, exciting mistakes. But they're on a different level, right. So that's wow. We should all aspire to do that for our kids is to set them up for a success greater than the ones that you've already built yourself.
10:58 SPEAKER_02 And I think that's so key. I mean, I hope that I can I mean, I'm just a small portion of this industry for sure. And I, you know, I don't have my fingers to the ground of everything that's going on. But if I can see that trend change, right, when I see second generation and third generation shop owners, if I can see that trend kind of come out to where it's they're finally starting to do coaching and they're finally starting to say, hey, this is what, you know, a proper way to set up your shop is. This is how you properly charge. This is your margins.
11:30 SPEAKER_00 If we can get that, we can turn the sucker around in a very short period of time, I feel, you know. Well, and we need to. And one of the things that you said a minute ago kind of rang true is that you have so many second generation guys that grew up learning how to be a very high skilled technician. And I mean, so many shop owners, right? No matter how they got there, they are high skilled technicians who are low skilled business owners, for lack of a better term. Why is this industry the way that is? Why can't we have nice things? Why is it so broken? Right. It's because of let's be honest, it's shitty owners. Like everything can be tracked back to poor management, poor ownership. And so many of our crappy owners are world class technicians that get tired of working for crappy owners and want to go open their own shop, but they never learned how to be a good owner. And they fall into the same traps that the place they were working at fell into. But it takes five years for them to go from world class technician to crappy owner. It's a slow, perilous, slippery slope down that to where they're ground down to an oven. They start making crappy decisions and treating people poorly. They don't realize that they've become the thing that they hated and they ran away from.
12:52 SPEAKER_02 They bought themselves a job, right? For all intents and purposes, like you just you jumped out of one frying pan into another frying pan because and you know, and I don't mean to say that with any kind of disrespect, because I think for some people at the end of the day, if they didn't make five more cents or say at the end of the year, they didn't make five grand more than they made the year before, but they were in charge, it was theirs, then I can understand that seeing to be still worth doing, right? Because it's mine. I didn't make any extra money, but it's mine. I got to call the shots and I took all the responsibility and the, you know, the whole thing. I understand that I can the pride thing. You can't pay your bills of pride, but some people just sustain, you know, sustain themselves on pride. I can't I'm not going to fall people for it. But, you know, I it's just like you said, I see it's a cycle and it's and I don't even I used to get really mad at people, shop owners, when I saw the cycle happening all the time, me sitting on the outside before I started to network with so many people like yourself and Lucas and David. And as I've networked with them, I realize it's not a malice thing that the cycle keeps going on. It's just lack of oversight, lack of training, lack of introspection. Like it's, you know, they don't know what they don't know, as Lucas says.
14:08 SPEAKER_00 So, I mean, it's just like anybody starting out in a new career. Right. You go from your career as a technician, you get ground down, you decide that your career is going to be a shop owner. Similar, but there's a different mentality. Right. And they're starry eyed. Everything's going to be great. I'm not going to do any of the things that happened. And they get ground down to a nub. And then, you know, there's a value. Let's say, you know, technician Johnny's making $85,000 a year. He's fed up with the system. And he goes and he makes $85,000 a year, but he did it his way. And he was his own boss and he wasn't answering to anybody but himself. There's a value to that for a year or two or three. But if he's still making what he could make in a shop, he's got all the risk. He's got all the exhaustion, the sleepless nights. You know, he's busting his ass 60 hours, 70 hours, 80 hours a week. And then he's going to go home and he's going to do the books. Or his wife is doing the books or whatever else it might be. There's got to be an evolution towards being a business owner and away from being just that rock star genius technician. You know, if that's what you are and you don't want to evolve away from that, then I say, you know, just find a shop that you're happy with that treats you as valuable as you are and stay there.
15:28 SPEAKER_02 Because it's not the best thing for the industry, right, Mike? If everybody like the scenario that I just laid out where everybody, OK, so you go and you make the same money, but it's yours. It's your business. You assume all the rest. That's really not what the industry needs, is it? Is more people doing that? I mean, I think that's fair to say. And, you know, maybe it's not the most popular opinion, but I've heard others voice it. That the industry doesn't need more of these lone wolf kind of, you know, I'm going to do it my way and, you know, to heck with everybody else's thoughts. I think the industry needs to if we're going to fight the battles that are going to be ahead of us. And I don't want to say, oh, it's going to be the always versus us. But I mean, it probably will be something similar to that. Then we need to be much more unified and everybody going out and saying, I'm just going to try and, you know, get myself treated better because I'm going to call the shots is not going to leave us much to have to work with when that battle arrives.
16:24 SPEAKER_00 And I know this is starting to sound like a whole. I mean, there will always be a segment of our industry that is that lone wolf guy. And, you know, that's OK. There's a segment of the consuming marketplace that wants that that individual. So that's fine. But to what you said, yeah, there's a portion of our industry that needs to go out of business that need to pack it up and go back to work for somebody else or go to a different trade. And when we're dealing with the quote unquote technician shortage that we've got, you know, it seems counterintuitive to say that people need to leave the trade.
17:02 SPEAKER_02 But some of the people that are creating the reputation that our trade has need to. Yeah. What do you think is going to be like we've heard Lucas talk about barrier of entry and stuff like that. But what do you think is going to really start to push that to where we see? Like, is it just you think it's going to be an age out thing or not keeping up with the tech or just what? Not you need to have three shops in order to kind of have the I don't want to say buying power, because that's like alluding to maybe, you know, more of how dealer groups operate.
17:37 SPEAKER_00 No, I mean, so you don't you don't have to be a multi store operator or some giant operation. And I don't think that technology or access to information is going to run the little guy out of business anytime soon. Eventually, yeah. But I mean, the average car in my market is got one hundred and three thousand miles. And so I know that that's going to be a lower number and a lower age. The further north you get just because of rust issues. But, you know, there's still three percent of vehicles or EV or whatever of new vehicle purchases in my market or EV. It's going to be a long time before the technology is so advanced that a one man show can't get things done. And as long as we don't really screw it up and lose the right to repair fight in government, which I don't believe that we will, I think we'll I think we'll stay ahead of that because I think ultimately politicians realize that the right to choose repair is popular with the voters. Yes. So I think we'll win that eventually. But I don't think access to information or the evolution of technology is going to run the little guy out of business for another 20 years or more. Will it be harder to be a single location operator and to be the little guy moving forward? It will steadily get more difficult. Yeah. But not in our career. And that's a problem for my kids if they if they want to take the business over, frankly, it doesn't mean I don't care about it. It doesn't mean I'm not thinking about it. I am. Because it is from a selfish perspective, I need to position my business to be ready for any evolution that's on the horizon to set it up for success for my children or for whomever buys it from me if my kids don't want anything to do with it. Can I make the assumption that that's kind of a goal of yours is to see it go stay in the family? Only if they're interested, you know, and my oldest turns 13 in two weeks. So I got time, you know, but in 10 years, if any of them are interested, I'll expect them to voice that interest and get started in the business. You know, all through all through growing up in school, I was busting tires and changing oil. But when it became obvious that I was going to get involved in it, I didn't come back and I was manager Mike. It was actually he threw me in the in the way back the far back bay and I was doing spray and bed liners, which is miserable work. Oh, my God. But, you know, they're going to need to work their way up through the company. They need to understand what the folks in each position of the business, what their life is like before they can leave.
20:21 SPEAKER_02 Yeah, I believe that it's like that old analogy they say where it's like you should treat the janitor with the same respect that you would treat the, you know, vice president or CEO, because, I mean, everybody is an essential part of that machine, you know. And I like that says a lot about your father's character to not just hand it to you on the silver platter, right, and make you really work for it. Because I think then again, this doesn't is not me picking on a lot of owners that I have worked for. But I have seen it where, you know, the the prodigal son just kind of, you know, is always around, but doesn't really know what the tech does or doesn't really know. And, you know, then they take it over and you see that ship sink. Right. And it's whether you can say, OK, well, maybe people don't respect that person, maybe it's jealousy, whatever it is, it's still sunk, you know.
21:14 SPEAKER_00 Yeah. And don't get me wrong, I am not a technician, but I understand that that's a blind spot in my experience and in my perspective. I was a service advisor. You know, I think I was a pretty good one for a long time. So that's one of the reasons it's important to me that my right hand man in my company, the general manager over all my stores started off 10, 11 years ago now with the company as a technician. And then he was a shop foreman and then he was a store manager and then he was a manager over all the stores. And he still goes to technical training along with management training.
21:52 SPEAKER_02 So realizing that's a blind spot, I need to have somebody who can tell me, no, Mike, that's a mistake or you're being a dumbass or whatever it is from a technical perspective. I understand where you're coming from.
22:04 SPEAKER_00 Because, I mean, and that's but even not necessarily to be a tech, the fact that it wasn't just like you drew a salary and got to hang around, you know, and sit in the office and talk on the phone or something like that. No, no, I had to earn it all. I mean, that didn't, you know, there was a there was a period of time when I came back to the business after I tried to do other stuff. And I say tried because really what I was doing was I was really good at whatever I wanted to do, but I only did enough to be able to keep the party going, you know, to keep the bar tabs paid and everything else. I was, you know, I was not making good choices at that stage of my life. So it was good that I came back. But I thought that, you know, I was just going to hang around until dad decided he was done and then he was going to give everything to me. And I think he was perceptive enough to realize that in my immaturity, that's what I thought. And there was a very distinct period of about three weeks where he had me read a few books and he had me have some long conversations and meet with, you know, his core group of advisors. And it was like this business exists to take care of our customers and take care of our team and to take care of this family. And this business is always for sale. If somebody comes in with a briefcase full of cash and there's enough in there, it's going to be sold tomorrow. And so when I am no longer part of this business, it's going to be because someone purchased it. That can be you or it can be someone else. And it's like, oh shit, well, I got to pay attention and I'm going to have to buy this read. And it was a process over several years. I would buy shares a little piece at a time as I could. So, you know, it was kind of a bubble burst for me. It was that, oh, wait, I'm going to have to be a grown ass man and do this.
23:43 SPEAKER_02 So sometimes, though, the roads that we take like that, right. It's it's you. You don't see the value in the lesson at the time. Right. But I think it we are we are who we are because of what we go through.
23:56 SPEAKER_00 I believe that. And, you know, it was about the time that I was getting married and I was I was getting out of my wild child phase and I was not resentful of it at all. It made by the time he shared it with me, it made sense. But if it had been, you know, if it had been when I was 19 years old, I probably would have been butthurt about it. But, you know, it's so maturity.
24:18 SPEAKER_02 When you touched on the on the technician shortage and you kind of gave some air quotes, let me hear your thoughts on like, is it in your mind? Can we say that is definitely a real thing? But is it over exaggerated?
24:32 SPEAKER_00 Maybe a little bit. And I got a lot of thoughts on that. I think that's why I asked. There's a there's a technician shortage for people that don't pay well, for people that are abusive, for people that don't treat others with respect, the people that don't charge enough to be able to do all those things. One of the things that Lucas will speak to commonly is you've got to be profitable enough to take care of things when it goes off the rails. Because if you don't have enough money to take care of things when they go off the rails, that creates an incentive to do things that are sketchy. Right. Yeah, we made an honest mistake and we blew that lady's motor up and she doesn't need to pay for a motor. We need to eat it. Well, if you're profitable, you've got the money in the bank to eat it and it's not the end of the world. If you're struggling to make payroll and you need to eat an $8,000 motor, that's a bigger problem. Well, maybe you're saying, well, Mr. Jones, we had no way to know this happened and you're going to need to, you know, I feel really bad this happened. You know, we'll help you out and we'll give you, you know, employee discount on that or whatever.
25:42 SPEAKER_02 It's either cost or something, but we're not responsible. So it's just unfortunate luck. But here's one at cost and let's pump our labor rate down. And yeah, or, you know, and when you say sketchy stuff, it's like when they say, okay, Mr. Mr. Tech or Mrs. Tech, that's a crappy mistake. That's a terrible thing that happened. You put the thermostat in upside down or whatever, right?
26:08 SPEAKER_00 You overheated the engine, killed it, blah, blah, blah. You're going to donate that labor to change that out. And, you know, so that I'll never be on board with that ever. 100%. So I had, I had an epiphany at the ETI conference in Albuquerque with Brian Mott. Um, and. Okay. Tangent. The first time I ever saw your name was, uh, a conversation with Lucas Underwood. And, uh, I think it was two years ago. We did a Facebook live, uh, to announce registration for AST. And, uh, it was like an hour long and it was Lucas and David and I, and one or two other people, and we were just kind of just blabbering, talking mess. And I went on a rant about how flat rate is not evil and was not the cause of all the problems in the world. And you had sent him a message that said, I don't know who this Mike Allen guy is, but I want to punch him in his face.
27:14 SPEAKER_02 Yeah. Yeah. I remember.
27:17 SPEAKER_00 And, uh, and I was like, I don't know who this Jeff Compton guy is, but I don't want to have a drink with him. And yeah, here we are. But yeah. And here we are. But yeah, you know, the, oh my gosh, I went off on the tangent and I lost my
27:34 SPEAKER_02 point and what was the question? Flat rate thing and why I was so vocally against it. And you.
27:42 SPEAKER_00 Yep. And, and my epiphany with Brian and Albuquerque. So I was raised in my dad's shop and, um, I've only ever worked for my dad or for myself, and I've never worked in another shop. I've never worked in a dealership. And so the entirety of my perspective was in that world. And so I've been like, you know, flat rate is not the problem. The problem is crappy owners. The problem is people who don't charge enough to be able to pay enough or people who don't market well enough or don't employ advisors that are talented enough to keep the bays full so that the technicians have more cars than they could ever possibly work on because flat rate works great. If you have more cars than you can ever possibly work on and service advisors who can sell everything, right? You don't, you don't need to be unethical. You don't need to make shit up. You just, just feed the machine and you just have a building full of animals. And I always wondered why that was so hard to understand. Yes. And when flat rate derails, in my mind, it was because there's not enough cars, because the owner's not doing their job of marketing or the advisors aren't doing their job of converting phone calls or selling the things that are found or that technicians aren't doing good checklist and finding the things that are needed or their, you know, poor quality work, you know, whatever. And I was, you know, sitting, having a conversation with Brian and some other folks and he was, you know, he, his whole company and he has three stores also. He's a, he's a technician. Uh, they're all salary. There's no incentive based pay in his company. And he's so strongly opinioned about, you know, how terrible flat rate is. He was telling me about all the times he got screwed as a flat rate technician in his career at independence and at dealerships. And the examples were all people coming in the back and saying, uh, or, or not even saying anything to him, just taking time away, just changing the time. And I was gobsmacked. Like, what do you mean they're changing that? Yeah. You're kidding me. Right. How would, why don't you just pack your shit up and move out? Right. And it's like, because everybody does it. It never even occurred to me that that was a thing. If I'm cutting the price, you know, because I screwed up as a service advisor or as a manager, I'm giving a concession to the customer and we're taking dollars away. That those dollars come from the owner. They don't come from the technician. The time stays the same. The dollars change. Yeah. I had no appreciation that it was a thing that if the business owner decides to cut profit, that they're then going to take money away from the person who did the work. That's bonkers to me.
30:17 SPEAKER_02 Yeah, it is. And when you say it out loud, it's still amazing that so many do it. And I want to apologize because, you know, I feel like our mutual friend, Lucas, like he, he, he puts you out there a lot of times as this, you know, massive proponent for flat rate. And I don't think that's quite the case, but it was a situation of I'm a very Brian and I are our Brian and I talk every day a lot. And and, you know, we have hours of conversations recorded, you know, through our rants about, you know, this is, you know, flat rate did this to the industry and flat rate did this to that job and all that kind of stuff. And flat rate did this to me. And this is why I feel this way. All are very valid points. So I was coming when that did not happen, I was coming from a place where it's like I wasn't getting the whole perspective, right. It was kind of like you were. And and I was like, oh, Lucas, who is this? Mike, his head so far up his butt, I don't know how he can see to get home. And I want to apologize because, like I have said before, the flat rate can certainly work. And I would be a hypocrite if I said that it doesn't work because I made a lot of money. I did it for a lot of years. But it is something that, unfortunately, and I'll say it again in this industry, there are too many people that use it as a bandaid instead of using it as the good tool that it can be. It is the same thing. It is a bandaid to cover up for incompetent, inept poor management is what it is.
31:50 SPEAKER_00 You know, 100 percent. So, yeah, and I believe that every. Style of compensation has underlying limitations and problems that can be addressed with management, with ownership, owning the situation, and they're just challenging and difficult in different ways. You know, I have evolved my opinion to the place that if there's a technician that I believe has gotten the skill set that we need and the the aptitude and the attitude. Yeah. Right. That we want him or her to be a part of our company. I'm going to pay them how they want to be paid. They want flat rate. Great. Because that's my preference. It still is. My preference is flat rate. If they want salary. OK, if they want a base plus a bonus, that's fine, too. I'm not going to lose somebody because they want salary. I'm not going to lose somebody because they want flat rate. I'm going to pay them how they want to be paid. Now, there's going to be varying levels of accountability. You know, if they're true flat rate with no minimum guarantee and I've got a ton of days and I'm not dying for space and they're performing 30 hours in a 45 hour week. Well, if I'm not squeezed for base base, OK, they're OK with that. I'm OK with that. Whatever, because it doesn't cost me anything more. Now, if they want one hundred and twenty thousand dollar salary. And they're turning 30 hours in a 45 hour week, unless all they are doing is high level diagnostics and electrical problem solving and wiring. Then I got a problem and they got a problem.
33:24 SPEAKER_02 That's fair. That is fair.
33:27 SPEAKER_00 I mean, so, you know, the level of it, there's an inversely proportional level of accountability with guaranteed income versus variable income. You know, additionally, I don't know. I very much get soapboxy on this kind of stuff. It it all comes down to shitty owners. The good owners can make any pay plan work if you have enough good people, if you're in a very rural market and there just aren't enough good humans. That's a problem. I'm fortunate that I live in a medium sized metro area and there's enough good technicians out there that I can find them.
34:02 SPEAKER_02 Yeah. I you know, because we've heard the the you know, the proponents and people say, well, there isn't a shortage of technicians. There's a shortage of competent qualified technicians. And I have always retorted responded back to that with, well, qualified is depending on what you need them to do. Right. If you hire a, you know, a C-Tech and if I screw this up, I apologize, because it's up in Canada. We don't tend to use ABC too much. As technicians, I mean, we speak the same alphabet, but I mean, we don't tend to use that classification. So if you hire a C-Tech and then you're trying to give him more drivability or her than they have ever seen with no training and no tooling, you cannot really call them incompetent. It's like trying to take a fish and say, I'm going to take that fish and I'm going to throw it off my back deck and I want to see how far that fish flies. Right. It's not going to go well. So and conversely, if you take a guy that is very strong on, I, you know, drivability, electrical programming and stuff like that, and you give him an engine job that has to come in and out in a rusty old car and, you know, the flat rate book time, no adjustment for whatever. And he doesn't knock that out of the park or she does not that at the park. Again, you know, people fit in certain roles. And if we can identify as an owner or a shop manager, whatever you want to call it, if we can identify where people fit in the role that they're best suited for, are you really the best manager or owner for your role? Probably not. Right. That's that's that's a bold statement to make. But I think that's the case, I think, in order to be successful as a manager, especially you have to be able to recognize skill sets and you have to be able to put those people and some people are just not. We've heard Lucas talk about, you know, not every shop needs a top tier diagnostic and drivability tech. And that is true. And a lot of techs don't like to hear that because right now the popular thing is to to push yourself to be really good at drivability, electrical and really good at die egg. And that's where the future is. And that's where the money is. And none of that is necessarily false. But you have to walk that line, because if you get too much like that, you can really pigeon your hole yourself into you may have to move away from the area that you're in to get the money that you think you're worth. You know, if there is a huge demand for it outside of a dealership network or somebody that, you know, you're in a tough spot, you really are.
36:32 SPEAKER_00 So I think, you know, what you and I probably define as a true top tier technician who is able to address almost anything that you throw at them. Only five percent, maybe less of technicians need to be that. Right. And most I would say most shops don't need that individual if their area has a mobile diagnostician. Right. Who has that? Because most shops can't afford that person. Right. So, I mean, you know, it's the people who listen to this podcast, the technicians that listen to this podcast are probably already trending towards that top five percent, maybe the top one percent. Right.
37:18 SPEAKER_02 Yeah, that makes me that makes me feel good. If you think that that's my clientele or my my listening listener base. Yeah. Yeah. We would all take that as a compliment for sure.
37:29 SPEAKER_00 Well, they they choose to spend their free time learning about their field and their trade, not just the technical aspects of learning, but also what's happening in their trade. And that is not typical. Right. So, you know, there's a higher percentage of the people that are going to hear this that match that five percent descriptor. Right. That need to be at the best shops. You know, that's one of the things that I consider as we're growing our company. I've got three very different locations. I've got 13 bays, seven bays and four bays. I've got a rural, rural ish, you know, commuter community. I've got downtown metro and then I've got a university on just off campus. Right. So very different customers, very different, you know, demographics. They've got more or less money. Right. But I don't need a you or Brian in every shop. Yeah. Yeah. I probably need one in the company. But what I've got is, you know, there are tools now available for communication. I can't imagine that there's not some cadre of world class technicians that you guys have that you communicate every day in a group about problem solving. And, hey, this is what I've got. You know, I've seen some of the Facebook groups and they're trash, you know, but private communication. So we've got slack in our company and there's a general chat with everyone in the company. And then there's a technical chat with all the technicians. And then there's a shop foreman chat with just the shop foreman. And then there's just just the service advisors. Right. So, you know, find those peers that you identify with, that you feel like you can, you know, iron sharp and iron, you know, and trade information with each other and communicate daily. Every day. I've got a group of three other shop owners in other parts of the country. And we talk every single day. I was texting with them right before we logged on.
39:34 SPEAKER_02 What a fantastic tool that is for you and your company to have actually set that up in terms of, you know, because for all intents and purposes, the tech at another location gets to know who is for all intents and purposes, who is partners are that aren't even necessarily the same building as him. Right. And you can spitball problem vehicles across that all day. Long like this is that's exactly what a lot of my DM chat is all day long. Right. Is either sharing memes and jokes and and, you know, funny stuff, or it's discussing this industry and it's discussing problem vehicles. And I got to thank you for putting me in the classification of Brian as terms of like, you know, top tier talent, because I follow that guy around. And just like I am not at his level, not even close. I can ask Brian any question and he has the answer for it. And if I had like I could ask Brian about a hundred problem cars and he would be able to have the answer. He never really needs to contact me about a problem car. He is on a next level for me. I would I was talking with a young apprentice that just started with me today. And this is me kind of just bragging about Brian a bit. And then we said, I said to him, I said, I talked with some pretty smart guys, you know, quite often in this industry, I said, and I would put them probably in the top 20 percent of, you know, skills. And when I said that guy, Brian, if we had a skills competition with some of the top techs in the country and say you gave them a network problem, an ecotech timing job, a transmission pole and a set of ball joints, all four would probably get through all the jobs. But I bet you at the end of it, Brian finishes all four of those vastly different jobs faster than anyone else. And that's what he is truly. And he hates, you know, he's very downplays his abilities and he's very modest and he all shucks. And, you know, the guy is incredible.
41:30 SPEAKER_00 What a smart guy. What he you can just tell when you're sitting and talking to him, that dude's got something going on up there more than most of us.
41:36 SPEAKER_02 And it's not just the the technical ability to be able to troubleshoot this. He has had so many different engines apart, transmissions apart, differentials that he doesn't even talk about. You know what I mean? And he just does. It's not like he gets through it. He like he kills it. Like, I mean, he does phenomenal on the time and the quality and the way it's done. He's just he's next level. And that's and it's hopefully fine. And I'm not trying to make him blush and all that kind of stuff.
42:04 SPEAKER_00 But yeah, if but he is. I need to ask Brian a question because I know that he'll listen to this eventually. I don't know how long it might be two or three weeks before this is released. I mean, you know, but Brian, if you listen to this, you got three shops now, brother. I mean, is it time for you to not be not be that guy anymore? Do you need to bring that guy into the company so that you can focus on the other things? I think you really enjoy being that guy.
42:30 SPEAKER_02 Yeah, him and I talk about that all the time. And he has he definitely gets emotionally invested into what all three of the locations are doing right and how they're doing and everything else. And he takes it as as a very serious responsibility that he wants to see, you know, he wants to be the waves that raise all ships. Right. He wants to be that. And that's I love that about him. I mean, I there is another person. Well, there's people I know that are just as passionate and crazy about this industry and want to see it. Well, I surround myself with them. I intentionally do that. It is only because of them that I'm still in this. That is only because of them that I'm sitting here talking to you. Right. It is only because of those people that I have met through these. You know, you mentioned the shitty Facebook groups. I hung out in those for entirely too long, and I still do. You know, and it was never a situation of trying to, you know, belittle anybody or anything. It's just trying to. I wanted to make it something that I think at the end of it all. It'll never get to. And it's like I wanted it to be I.A.T.N. but on Facebook, and it will never get to be I.A.T.N. on Facebook. And that's OK.
43:36 SPEAKER_00 But I think the dudes that made I.A.T.N. so amazing when it was at its prime are all retired. And I think the I think this generation just communicates differently. And I think that, you know, each medium has its has its time. And I think it's harder to get to, you know, like my memory of I.A.T.N. at its peak was some of dad's text using it. Right. Right. And it was. There's no bullshit. Just the facts. You better have done your due diligence before you go asking, or you're going to get just destroyed. No stupid questions. And and I feel like modern social media groups, there's so much bullshit that you can't get that very like dense, you know, calorie rich food, you know, it's just very dense, high quality content with not a lot of fluff.
44:40 SPEAKER_02 Like I don't think that's I saw somebody post a question about a brake pedal problem and they called it a grand caravan. They didn't state what year. And I'm shaking my head ready to pull my throw my phone out the window because I'm like, OK, so I've seen Grand Caravans way back in 1998 and I've seen them in 2022. Like, what are we talking about here? What system do you have? And then it's just like me from three years ago would have been just absolutely sideways and would have probably berated that poster. And and and instead I was I still made a response, but it wasn't nearly that caustic because there's just no point. There's just no point. You know, it's not that that person is I look at it this way. It's not that that person is dumb, but it really shows when that person works at a dealership and they're reaching out on a Facebook group that's not even brand specific. And that's the ability that the questions they post. And so I was talked with, go back and ask your shop foreman to help you and let us know what it is that you're actually working on. Three years ago, I would have said my like I would have just lost my mind. So growth. But I mean, it's a situation of I just think that that is the new generation now that is coming into this industry. That is just how they communicate. That is just how they talk. That is how they give us problems. And it's like here it all is. Tell me what to do next. And whereas if you'd have been on IA 10 and you'd have posted that, you'd have been like your butt would have been on fire. You'd have been lit up so bad. So all I tried to do was to try to make it more like IA 10. And I finally have accepted and realized that it never will be. And that's OK. I just, you know, it's I shift my direction to something else. It's not about necessarily solving. And it never was. It never was about in a Facebook group for me, about trying to give somebody the answer to fix the car. It was to try and teach people how to better fix cars, how to better diagnose cars. I realize now that those people, when they're on Facebook, they are merely looking for the fix for the car.
46:49 SPEAKER_00 Looking for somebody to do it for them. They're not trying to learn.
46:52 SPEAKER_02 They're trying to get an answer. And I so coming back around a flat rate, Mike, that was one of my things that I always had as a as a as a negative for it is because I saw too many really good, talented techs that lost some of that passion of like trying to diagnose it and take the challenges on because it's just like, listen, I just want to get this bugger fixed and out of my bay to get the next one.
47:15 SPEAKER_00 You know, so a couple of couple of thoughts come to mind. One, I want to talk about Paul's post about charging for learning. I think that was a great conversation that came from that post. And to flat rate, preventing skilled guys from becoming more skilled because they got to beat the clock. Yet again, is a symptom of an owner who hasn't taught his service advisors to sell diagnostic time, initial diagnostic, secondary diagnostic, tertiary diagnostic need to be willing to pick up the phone and call again. And you can't call again unless you've laid the foundation that, hey, yeah, we see this kind of we see, you know, check engine lights on these vehicles all the time. We get permission to start off at one hundred and seventy five dollars. That's going to cover our initial testing, inspections and evaluations. We're going to have one of two conversations when I call you in a couple of hours. It's going to be, hey, Miss Jones, here's what we found. Here's the test that we've done. Here's what we believe needs to be done. We know that this is bad and we've got to replace that. We'll complete the testing procedure after we replace what we know is bad. And if there's anything else that you should be aware of, we'll let you know. That's one of the conversations that we might have. The other conversation is, well, here's what we found out so far. We've done X, Y and Z and here are the results. And we still don't have a definitive answer. We still need to do A, B and C. Now, the next step on that is I should have an answer for you, you know, by tomorrow afternoon. And it's going to require an additional investment. Do I have the permission to get started? Yeah, and you can call that however you want to. But if we've prepared the client that you're going to have one of those two conversations and you're going to start off at, you know, whatever the initial cost is, and you're either going to get an estimate for a repair that might not be the end of the road because there might be more after that repair, or you're going to get a request for authorization on more testing. Well, then, you know, it's OK. You know, you don't have to feel pressured to cut the corners to learn what you're doing. You can do that because you have faith in your team up front to sell the time. Is everybody in my company doing that effectively? No. OK. But I would say that 75 percent of my advisors are. So, you know, it's a constant struggle. You know, that's one of the that's one of the things that is difficult going from one location where you're on site every day and you're involved every day to go into multiple locations where you have to have you have to place your trust in others to carry the torch for you. Yeah. Right. And you have to understand that they're not going to care as much as you. Yes. And they're not going to put in the same level of effort that you will. And you've got to come to terms with, well, if this, you know, and if this is just an audio recording, let's say that I'm holding my hand around my chin. If this is what the average in the market is and this is what I am with one location because I'm there every day and I'm talking to every single customer and my hands way up in the air. And when I go multi-location and I have to have other people who are doing it and I can't have my hand on every car, maybe that comes down an inch or two. But it's still way above what the general industry is. You got to be OK with that. Yeah. And if that's not OK, if you can't come to terms with that, then you need to just have one awesome kickass location is the best in town. And that's OK. You can do that, too. So, I don't know. It's. Yeah. I don't even know where we started with that.
50:32 SPEAKER_02 Oh, I'm sorry. I just I was just going to say, because, you know, when you mentioned how they'll never be as invested as you will. Right. That that I think it's the fact that when I hear people lament about that and they're just like, I can't understand why, you know, to you, it doesn't seem so simple or why, you know, why you're not giving, you know, this. Well, you're not giving 100 percent. Your 100 percent when it's yours will be different than my 100 percent that I give you when you're 100 percent when you lose your house, if things go tits up. Yeah. Right. And that's, you know, it's it sounds like a very jaded attitude to take from it. But it's it's just reality. You know what I mean? Like, yes, you have a lot on the line. You have a lot of risk. Right. It's yours. Just like you said, you know, if you have three stores and people come in
51:20 SPEAKER_00 and don't perform well and you lose a store, that's a huge loss. Right. That person that works. OK, I got a I got a 10 year lease. If I have to close that store, the rent still is due for the next however many years. I got to deal with that problem. And that I'm committed to that.
51:38 SPEAKER_02 You know, those people may lose a job, but they find another job. Right. You.
51:46 SPEAKER_00 Everybody in our industry can find another job tomorrow.
51:48 SPEAKER_02 So going back to the flat rate thing, not that I want to pound that into the ground, but it's an interesting it's an interesting perspective to have you here and to be able to discuss it. So how do you think when a shop because here's always been my gripe and Brian's gripe as well. And a lot of people's gripe when you look at a traditional flat rate system and you say, OK, you're going to go in there and you're going to do flat rate, you're all necessarily paid the same amount per hour. Then it just becomes about how many hours you're selling. Right. And if you're heavy, die egg, heavy programming, heavy wire repair, whatever it is, the nightmare cars, the problem child, it's really hard to produce the hours. Right. You heard my original podcast years ago where I was like, don't even mention the word production to me. Talk to me about proficiency. Show me what you can fix. I'm not impressed by your hours. And that is still on my core. But I mean, I now if somebody says, well, what kind of money do you make in this industry? OK, how do you pay that person that's going to get those nightmare cars? What's the you know?
52:53 SPEAKER_00 Well, so the first yeah, the first issue is that you operate on the assumption that everybody makes the same amount per hour in a flat rate system. And that's that's not OK. You know, the the 22 year old kid who, you know, went to tech school and he got out of NASCAR Tech or Wiotech or whatever it is. And when he was, you know, 20 years old, he doesn't make the same as you. Right. Because he doesn't have the same experience. He doesn't have the same efficiency. He hasn't built half of his own tools, you know, the way that you may have. So the answer to that question is I mean, there are many answers to it. Right. But if you're saying from a purely flat rate place, let's say that I only played paid flat rate. That was the only thing that I did. Well, the dude who gets all the problem cars and the hard issues and just the testing, maybe he only does diagnostics and then we pass off what he finds in the next guy. Well, if he's on flat rate, he's going to make fifty five, sixty, sixty five dollars an hour. Yeah. Right. And that kid that we just described is probably twenty five dollars an hour because we're comfortable with him doing brakes or suspension and chassis work. But, you know, we're not going to give him any drivability or noise diagnostics or anything of that nature. So and there's a spectrum from that bottom end all the way to the high end. Right. And my company, most of the really high guys have a guarantee because I know that they're going to get the problem cars or they're going to get the comebacks or they're going to help unscrew the things that the young guy screwed up. Right. And so they're not going to be able to have the same level of efficiency. So they have to have some kind of guarantee. But I still want them to have a portion of their income that is performance based because when they kick ass and take names, they need to get rewarded for that. Right. Because maybe, God willing, there's a couple of weeks where we don't have a bunch of problem cars and all we're doing is just, you know, just killing it. And they need to be killing it on a higher level than the young guy. I was listening to one of your episodes. I think it just released. It was the episode with Brandon Dills. Just dropped on Tuesday. Yeah. Yep. And, you know, Brandon's a good dude. And you're talking about how low skill guys make more than high skill guys because high skill guys get the hard stuff and low skill guys only get the gravy. And when they screw it up, screw up goes to the high skill guy. Because now we
55:18 SPEAKER_02 really need it fixed. Yes. Yeah. Yeah. And like, in my mind, I was like, holy shit. Yeah. If that was the reality in my business, I would also hate flat rate. There's so much that gets lost on us when they, oh, you know, you guys are just, you're so anti flat rate. And I don't understand why. I keep reminding people that we're talking, when we're talking in ASOG, you're talking to change in the industry and you're talking to people that are pro flat rate. You're talking to 2% within the industry that actually implement it properly. And it works for them. The rest of us, most of our experiences in flat rate has been from a dealership standpoint, where it's like, you walk in the door. And if you have, you know, an ASC or whatever certified, say you got a Ford master training, blah, blah, blah, you top out at this, the guy down the bay from you could have the same certs and not be able to fix a sandwich. And he's going to make the most, he's going to make the same hourly wage as you. And you know what? Because he's not fed the problem child, he's going to take a better paycheck home most weeks out of the year than you will, because they just can't dispatch him that kind of work. But we need him to get the breaks done. We need him to get the appointments in and out the door. And we've got to- So you're rewarding incompetence. Very much so. Yes. You know, and that's, and so the anti hate there or the hate of flat rate for me comes from that. Because I was, I was above average in ability in terms of problem solving. And I watched the guy that, and he wasn't dumb, but man, he played like he was dumb. You know what I mean? Like he just pretended like he couldn't solve the problem. And so it didn't
57:05 SPEAKER_00 feed him that kind of work. And he just- So today I was home with the kids because it's summer, kids are out of school and our childcare situation dictated that I had to work from home. One of the things that happened today was I was asked since I was home to take my boys, I've got a soon to be 13 year old and a 10 year old and my eight year old daughter, take them and get their hair cut. And so I got, I got, I got no interest in that, right? My kids got no interest in the haircuts. It's, it's always a big thing. And so I take them and my middle child wants to get a Mohawk. And so I said, great, get a Mohawk buddy. It's going to be awesome. Straight like the whole deal. I'm never going to be asked to go take the kids to haircuts again. So, you know, mission failed successfully, right? So my son is thrilled. My wife is not. I never get tasked with that again. So that guy was failing the mission successfully so that he can make more
58:03 SPEAKER_01 money being lower skilled. Right. Every time, Mike, I have a conversation about flat rate and that scenario unfolding, I'm going to think about your son's Mohawk.
58:15 SPEAKER_02 Cause I was going to ask, well, what does Mrs. Allen think? And you obviously, I don't even have
58:20 SPEAKER_00 to ask. I can just picture she's, when you say she's not thrilled. I know. I knew what she would think before it happened. He said, dad, can I get a Mohawk? And I said, absolutely.
58:34 SPEAKER_02 So that's where it comes from for me is the distaste for it, right? It's because it was used against me for too long to keep everybody equal. Right. Well, why are you complaining about you still made 45 and big deal. He made 55 or big deal. He made 50 because I was never going to be number one ever. There was just, the system's not set up where if I had to do, you know, 12 really complicated dykes that week and he had to do none, he's just going to get more breaks and flushes than me. And if we're all the same, if it pays out at 24 an hour and he sold 55 and I sold 42, that's a big whack of change difference for me. That was like, you know, getting the, the problem ones done because like Brennan and I talked about, if you don't get the problem cars solved, you can't sell them the flush next time that they come in. You can't do it. So to me,
59:30 SPEAKER_00 I- Well, and that was the, that was the epiphany with Brian was now, now I kind of understand it because it never even occurred to me that that would happen. Right. Because, you know, we compensate, it's a meritocracy. If you prove yourself to be valuable, you earn more money. If you prove yourself to be a dumb ass, you probably don't stay with the company. Right. But in understanding more where Brian and you and other guys who just hate flat rate or come from, I get it. You know, it makes more sense to me now, but I hope that I can also help you guys and others understand that flat rate is not the problem. It's shitty management or poor owners or lazy owners that are the problem. And any pay plan will be bad if you've got a terrible owner, if you've got a terrible manager and any, not any, but almost any pay plan can be a home run
01:00:33 SPEAKER_02 if you're an awesome organization. Yeah. So what, how do you set it up? Maybe I don't want to ask like to divulge some secrets, but I mean, the conversation kind of came up at some point about, you know, how do you set up the, how do you put them on the scale balance as to who's more, who do you compensate better financially? Do you compensate your really high performing tech or do you compensate higher your high
01:01:03 SPEAKER_00 performing advisor? I mean, it's two different things as apples and oranges, right? My highest performing techs make more than my highest performing service advisors, but not by a lot. My highest, I mean, you know, a high performing tech without technicians, nothing happens. Right. Without service advisors, the technicians will still sell some stuff. You know, something will happen, right? It might not be on the same level. That being said, a really high skill advisor is really high value because he's going to feed three or four tech, three or four high level technicians. He or she, I mean, I've got, it's not an equal split, but I'm working towards that. So, you know, everybody's on a performance based plan of one form or another with a couple of exceptions. I have a couple of dudes that are just hourly, you know, very low level entry level guys who are learning or, you know, retirees who work part time, that kind of stuff. And all of those performance based plans are tied to the same key metrics. So everybody wins together or everybody loses together. And I want all of them to win because the more they win, the more I win. Right. And so, you know, is, you know, I look at it like, you know, my job as the owner is to bring the right people in the business. It's to provide the right equipment so that they can get the job done and make sure that the facility is up and running and to make the phone ring. If I put the right people in place, I provide them with the right equipment and the right training and I make the phone ring constantly. Everything else should run, right? Because the advisors are going to convert the inbound phone calls to customers and convert the DVI's to sales. The technicians are going to diagnose things and do a quality DVI and do the work in an efficient manner, you know, without a lot of comebacks and that kind of thing. And it all just kind of, it runs like a sewing machine. It's amazing to watch in action when things are going right. But if any one of those pieces of the machine screws up, it's a trimwreck. So there's a lot of pressure on me that I have to have good people in every position in the business or it negatively impacts everybody's income. So it works really well
01:03:12 SPEAKER_02 or it works really poorly. There's no in-between. Yeah. It doesn't seem to be right. Like I see either really, really well performing shops or I see train wrecks, you know? Well, not train wrecks, but you know, shops that have a lot of improvement to make them,
01:03:30 SPEAKER_00 maybe is a better way to say it. I mean, I think Lucas and David have been talking a lot lately on their podcast about there was some shop owner they spoke with that was doing like one and a half million dollars in revenue and had no money. He couldn't pay the bills. Um, that, I think that is way, way more common than people have any idea of, uh, you know, I think Lucas touts the statistic that I think came from, I don't remember where it came from, but it's that the average automotive repair shop is netting 5%. And it's appalling to him and to me and to the people that listen to the podcast and people in the groups, because the people that listen to the podcast and people in the groups are already on the front end of that bell curve. But the large majority have never even heard of ASOG or of changing the industry or of jaded mechanic or of vision or ASTD. They live in a bubble and they live on an island and they're
01:04:25 SPEAKER_02 by themselves and they're just languishing in their ignorance. It's the same on the tech side, because it's like, I still see countless young people and I see countless established technicians that if I say Paul Danner, they have no idea who I'm talking about. And I mean, Paul laughs because it seems like he gets mentioned in every, in every episode, but it's just, I, you know, it, it is what it is, Paul, because I can't, I'm honestly, I'm dumbfounded now that when young people like up here, for instance, right, when we do our apprenticeship training, when they go into the, these classrooms and they, and they go into what we call these blocks of, you know, for all intents and purposes, like a college course, you know, three months at a time for four years, that the instructors haven't already been sharing his material that you can look for free and see it to share who Paul is. It just absolutely blows my mind. And then, you know, the more I think of it, I was like, well, no, because those instructors maybe at that age are not on YouTube as much as I am and was never came across that maybe they go home at night and they don't look at auto repair on YouTube and nerd out to it. Right. So maybe they don't, but it's just, it boggles my mind how the shop owners, especially that when we think, you know, they're only netting 5% that they aren't made, do they not Mike, do they not see that as they're struggling and then they don't reach out? Is it a pride thing or is it just, they're not in their mind,
01:05:58 SPEAKER_00 they're not struggling. It's just always the way it's been. Yeah. They're netting 5%, but you know, they're making 85 to a hundred thousand dollars a year and they're their own boss and they got a bass boat and they got a cool F 250 and maybe they got a drag car that takes up one of the bays that should be turning revenue and employing a technician. You know, they're okay with the life that they got and you know, maybe the life is better than their life ever was before and maybe it's better than their parents life was and it's a step up for them and I can't fault them for being comfortable in that. Right. But yeah, so what you were talking about with, with the instructors at the school, not, you know, at least exposing their students to something like Paul or some of the other guys that are out there with channels, I'm concerned about the quality of the skill set and the knowledge of the instructors in our technical schools because the technical schools can't afford to pay well enough to get really high skill guys because really high skill guys have a very valuable skill and they're going to be out there earning and they're going to be out there earning. Right. So you're going to make 120, $130,000 a year with your skill fixing cars. That car came in and it's broke and that family stressed out. At the end of the day, it left out of here and it was running great and I, and I saved the day and I made a ton of money doing it. That's pretty cool. Or I'm going to go to tech school and make $65,000 a year. I don't know how much tech schools pay. I know it's not a ton. And I'm going to deal with 15% of my students are passionate and love it and care about it. And 60% are mediocre. They may wash out, they may not. And then the other ones are staring at their phone the whole time
01:07:54 SPEAKER_02 and don't care. Just had to sign up for something. Mom and dad said you're going to college or whatever. So what's more fulfilling? Yeah. So how are you going to get, how are you going to get good teachers? I think the teachers, they do it for that 15%. Honestly, they're not doing it for the money. And I think they're doing it for that 15%. And I think they're doing it of that 15% to see one become the next Brendan Steckler or Keith Perkins or Brian Pollock or, you know, Brendan Dills. Any one of these names we can, you know, there's a myriad of it. It's… If any of you guys want to move to North Carolina, it's a great place to live. Here's what I got to say. For me being up in this cold great white North, what is it with North Carolina? And it seems to be like so many people that are the top tier shops and talent seem to be all within that state. What is it? Is it just because of like, you guys all kind of got organized early and started to make yourselves or what is that? What is it about that state? Because Brian and I, Pollock and I talk
01:08:59 SPEAKER_00 about it and it is like the epicenter of aftermarket repair that has its shit together. And why is that? I don't know. I mean, it's… There definitely seems to be a high density of like smart individuals. And Dutch is there. Lucas is there. You know, like you're there. Yeah. I mean, Brandon's down here. You know, Jim Caconis is right here and Isaac Rodel is right here. And I mean, I don't… I mean, there's a lot of smart individuals. And I think our trade association has helped to bring training to North Carolina at a high level. And if you're exposed to training early on, you tend to accelerate your growth faster. So you get to a higher level, right? So, I mean, everybody's heard Lucas tell his origin story a half dozen times, right? That he was a one-man operation. He was ready to fold up shop and go back to the dealership to work. And he came to AST and the director of our association at that time pulled him out of a technical class and shoved him into a management class. And it changed his life. Right. And so, and you see how he's had this like, you know, stratospheric rise over the last, you know, five, six years. And there's… So there's the availability of training and then there's this organized group of passionate shop owners and technicians that are trying to draw trainers in. And it's also the home of Advanced Auto Parts and Carcass Technical Institute and World Pack Technical Institute is all centered here in Raleigh. So we've got those trainers that go all over the country. They live here, right? So that helps. So it's just, there's a lot of factors that came together to do that. And I probably shouldn't be doing this on recordings because I'm going to be taken over as the president of the ASTA after the show this year, after ASTE. The vice president now, and I guess I have to become a little bit more well-polished. I got to go to the Lucas Underwood school. I had to say a lot without saying anything. Lucas, that was for you, buddy. But, you know, there's… We've got 650 members. We've got 650 people who are willing to invest annually in bettering themselves and their business
01:11:22 SPEAKER_02 and the industry and there's value to that. Because I mean, like I cry out all the time, if we could just get something the size of ASTE or something the size of Vision to come to Canada, I think we could really make some change happen up here. And this is not, that's not me crapping on my country and saying, oh, we're so far behind you guys. That's not the case at all. That's not what I'm trying to say. It's just that it seems really lonely sometimes up here when I'm constantly talking to people in North Carolina that are like really sharp and really have their stuff together.
01:11:56 SPEAKER_00 It's… I bet you could get something like that in Toronto or something. That's a big enough metro area that you'd be able to pull something together. Toronto's two hours away. You need
01:12:05 SPEAKER_02 10 or 15 really strong personalities to start something like that. And I would dare to say that if I stepped too far away from maybe the industry group, changing industry, the ASOG group and started to actually go outside of those groups and start to talk about, have you ever heard of ASOG up here in Canada? They'd go, what? You know what I mean? Like it's, I want to say it's that bleak and maybe I'm wrong. Cause, but if we were to do a poll in changing industry and ASOG of how many are actually in the Canadian contingent, I dare to say it wouldn't even be 20%. So when we talk about that's a whole country that only 20% is getting represented in one Facebook group. And then we see how many more training opportunities and whatnot are available. And I'm not saying it's a wasteland where there's no training, but I mean, there's nothing like,
01:12:54 SPEAKER_00 you know, nothing. Well, there are some Canadian based management trainers. You know, the dude who changed my dad's life and therefore my family's life generationally, right? That was Canadian. Uh, Greenwood? No. I don't know if he even coaches anymore. He might be retired. Kelly Bennett. Okay. I remember his name. Yeah. I think he was in a car accident or something. And I don't know if he's still coaching, but like my family is in a better place generationally because of the lessons that he taught my dad, but he had to come down to North Carolina and do it. And my trade association is what drug him down here. Right. So I think you need to get group regionally. There need to be groups of like-minded industry personnel and doesn't have to be just shop owners, right? Because, you know, we'll have a thousand people at AST this year, maybe more. Uh, and half of them will not be shop owners. They'll be technicians seeking betterment of their skillset, right. Or service advisors learning how to, you know, deal with angry customers or break bad news or whatever it might be. Right. So find a group of like-minded individuals in our trade that are desirous of improvement. And then just, you know, meet after work one day a month, talk about life, talk about shared experiences and develop an understanding that there's more cars out there than I can work on or than you can work on or than he can work on. And we're not competition with each other. Yes. Frankly, frankly, our competition in my mind, our competition is the manufacturer, is the dealership. And so once you can get a community of people together who understand that it's okay to share with each other because we're not, we're not cutting each other's throat, then you can start to gain traction and gain momentum towards something.
01:14:45 SPEAKER_02 And as I can, I can say this as a former dealer tech, I never understood why more in the after market didn't get banded together. Cause I mean, really we're already so like the dealer plays dirty. You know what I mean? Like they, they know every dirty trick and they, and they use it, whether it's locked out information or, you know, locked out tooling or whatever like that, that's just, that's on the OE side. When you go to the dealer level, it's next level slime in terms of how they will do it to keep Mrs. Smith at the dealer and not in, you know, it's fear based selling. So when I see the, the independent shops that are always worried about well, the guy across the street from me, if I go to $100 an hour door rate, he like, I'm gonna, he's still at 90 and he, I'm going to lose all my customers to him. Like if you just walked over there and shook each other's hands and said, we're both going to be a hundred and you know, like, or we're both going to be 120. And then let's try and get all the customers we can out of the dealer and into our two shops. And then you combine that by, you know, all I know a shop and I know a shop and you get everybody thinking on the same wavelength. You really.
01:15:51 SPEAKER_00 So I gotta say this. You can't go over and say, we'll both be a hundred or 120 because that's price fixing and there are antitrust laws in the United States and we'll go to federal prison for that. But what you can say is your price has nothing to do with my price. I got a text message today from a service advisor who works 10 miles from me. He used to work for me for a long time and we're still friends. And he said, Hey, we had a computer glitch and we lost all of our BG fluid service pricing. What are you charging for BG services? And I said, you know, frankly, I don't know anymore because I haven't been on the price setting stage for a while. I said, you can text and my GM who he knows, so you can text him and he'll tell you, but don't forget what I charge has got nothing to do with what you charge. What you charge is your expenses and your desired profit. And you know that because I've taught you that. So set your price and run with it, dude, because they're not going to leave you and come to me because your transmission service is $9 more than mine. Right. Right. Good point. So when you mentioned BassBolt from a shop owner's perspective, is one boat enough? Well, I don't know if you know, I did a Zoom, just a casual conversation Zoom the other day in the group and the password to log into the Zoom was two boats. Yeah. Now,
01:17:20 SPEAKER_02 so all kidding aside, no, I mean, I think we all have our expensive hobbies and our poor choices financially, right? The BassBolt is now. Mine was having three kids, but. The BassBolt is now your poor choice to spend money on, I can tell you right now. I don't have them, but it is the end goal. It is the end goal. But I mean, so and that's sometimes I think really hard is the, and I was guilty of that sometimes is that the employee looks at what the employer has. You know, you talk about the race car, right? And that always triggered me because I've seen so many shops and they had a race car and it just sat in the bay, you know, and nothing happened in that bay other than maybe fixing the car to go blow it up next weekend, right? And there was so many shop hours allotted to this, you know, race car. And I'd shake my head at that and be like, at the end of the year, how much does that really cost? Right? And then we would say, okay, it's not a race car, but then say Mrs. Shop Owner shows up on Friday and gets her car detailed and that's, you know, that ties up a bay and all this kind of stuff. And I used to sit there and go, like, they're just rolling in money and they're just flaunting it. As I've got to meet more owners and talk with more owners, I realized that most are not doing that. You know what I mean? There are some still some bad apples that tend to, and I don't think they necessarily intentionally flaunt it, but you know what I mean, right? It's like, it's like, have you seen that meme where it's like, well, that's a really nice car boss. And he's like, yep. And if you work really hard this year, next year, I can buy another one. You know, that used to resonate so strongly with what I thought was everything that was wrong with this industry. And I realized that I should be more complimentary of when I see an owner that can actually have that because there's so many right now that don't, you know what I mean? They're barely getting…
01:19:19 SPEAKER_00 Well, it's okay if they have that as long as they didn't do it by shitting on their team. The first new vehicle I ever purchased for myself was last year. I got a 2022 Silverado Trail Boss. I needed a pickup truck for the company. I went and bought it. And that's the first time I've ever done that. Before that, my 4Runner had 340,000 miles on it. And it's still running. It's a great 4Runner, but those things are worth their weight in gold anyway. But for whatever reason, and I don't know what the history of this is, the industry says that if you're running a really good shop, you should have 20% net profit. So if your shop's doing a million dollars, you should make 200,000. That's really rare. It happens in our circles because of the people that we run with. We're trying to surround ourselves with high operators. I made a choice years ago. I place a very high value on having time with my family and time to do the things I want to do. Like take my kid and get him a mohawk. I didn't have to be at the shop. So I'm okay with significantly less profit than that 20% target because I pay a lot of people really well and I give them good benefits so that they will love their job and want to do well and want the company to do well. 5% is not sustainable. Do I have a bunch of ass boats? No, that's not my thing. I got a bunch of guns because that is my thing. I like that. America. Yeah. So if you're in business for yourself, it is to take care of your people, to take care of your customers, take care of your family and to better your position in life and profits.
01:21:16 SPEAKER_02 It's been an eye-opening thing to me as I've met more people and I see that they're, I don't want to say struggling, but they're building towards that. I'm much better now at not judging when I see somebody that has something that I don't, immediately jumping to that negative headspace that, oh, I had to go without so that they got that. And that's not really what it's all about. And it's comparing apples to oranges again. It's irrelevant.
01:21:47 SPEAKER_00 Perception matters. I have a friend who has a shop and he sold it now. He's retired. He had a shop in Chicagoland and he bought whatever the big Mercedes SUV is. And he had it for three months and going to the shop was, Hey boss, must be nice. And it was from, that was from the team and from the customers, it was, gosh, I guess I am paying too much if you're driving that. Right. And he went and traded it in and he got a Yukon Denali and all of that stopped. It was not a significant price difference between the two, but it was the perception.
01:22:23 SPEAKER_02 Mike Yeah. So in closing, Mike, what do you, I mean, you've given us all a lot of pearls, but where, you know, give us, no, it's for sure. For sure. You snicker at that, but I mean, it's true. Where do you see, like, if you're going to give one piece of advice to owners and one piece of advice to techs, let's do it. Let's close it out with that.
01:22:47 SPEAKER_00 One piece of advice to owners is, I am living proof of the benefit of learning from the mistakes of others so that you don't have to make those mistakes yourself. And so seek out training. That being said, not all trainers are the same. Not all trainers will teach you the way that you want to do business, understand how you want to do business and seek out a trainer that aligns with your values. Don't wait until you can afford it. Do it now. Sell the bass boat if you have to. Sell the, well, one, sell the race car. Don't have any projects in a bay. You know, anyway, that's the tangent. A piece of advice for a technician, technician who wants to be a career technician. I think you need to invest heavily in yourself and in training, not in tools and tool storage, but in training because your body will fail and you need to be able to make your money with your brain. So seek knowledge and skill around emerging technology and using your brain rather than your back. If you're a technician that wants to own your own business one day, a lot of the same things that I'm talking about, but also you need to learn about the basics of business operation and human communication. So Dale Carnegie wrote a book called How to Win Friends and Influence People and Mike, I don't remember, McCallewitz or something like that, Profit First. So master how to win friends and influence people and understand
01:24:26 SPEAKER_02 profit first and the E-Myth and you can open your own business. That's awesome Mike. That is fantastic. That's exactly, we had that conversation just yesterday with another podcast, it'll be dropped. And I said that very same thing about how the end goal always for me was to try and see more of us develop our brain as techs so that as the body slowed and weakened and got ailments, you could stay at least close to that pay level by being able to get the jobs that other people couldn't get or couldn't do or didn't want to do. Or be a shop foreman or be a teacher or whatever it might be, but you need to have the skills. It was to develop that brain so as the body slows down and you can't hustle physically, you can hustle mentally. But man, I just want to say thank you. This was been, I think this was like if you did, well, like we started off with this. If you'd have told me two years ago when you were talking flat rate is the greatest thing in the world and I was half drunk saying to Lucas, I'm going to punch that guy right in the mouth. I never thought that we'd be sitting here having this conversation and you and I are a lot more alike than we're different. And it's not just because of the career that we chose, but it just is the way it is. And I want to thank you honestly for being here. I say this in a lot of the podcasts, you all are coming back for second and third episodes. It's going to be a revolving door because I mean, the end goal to this is to get people familiar with the top 10%. To where they're familiar with, they know their stories and they know where their core values are and what they think because I want to shine the light on the people that are the 10%. And I want the people that are seeing them to see that it's possible that you can get there. And then if we do that, I think then it's not 10% anymore. It's 20%. You know what I mean? Huge difference, big number. And if we can get that, then we get this industry changed. And I think that that's all that this is about. And I appreciate every guest that comes on here and spends this little bit of such, time is so valuable because this is the only way we get this change is we have
01:26:43 SPEAKER_00 these conversations and I want people to know. Well, I'm excited to have been here and I appreciate you having me on and I can't wait to be back on. I want you to get Dutch and Brian and the two of us and can you get Paul on here? I'd love to hear him talk about issues rather than just repairs. He's agreed to be a guest as well. There's like 30 people that are knocking on the door to be on here. So I mean, I'm recording. Hey man, believe it. The fact that you've got a list of who's who that want to be on with you speaks to the voice that you're developing
01:27:27 SPEAKER_02 in this field. And that's a good thing. It's only good things come from that. And that's exactly it. And I have Lucas to thank for that. I really do. I have Lucas and David to thank for that because they gave me the platform to not just be some grouchy, you know, and they didn't have to push me. They just kind of had to show me a different perspective. And then it was like, okay, now I know what I need to do. I'm not going to be a Paul Downer in terms of teaching people how to fix cars, you know, in the high end diagnostics. But I have for some strange reason, people seem to gravitate to want to hear what I have to say about a certain topic. And you know, it resonates with people and I don't know why that is Lucas has it too. And you know what, if everybody wants to come on here and hear me rant and we'll discuss a topic, please get a hold of me. Let me know. Anybody is welcome. I will discuss anything with anyone. And I think that that's- You're correct to thank David. Stop inflating Lucas's ego. It's already bad enough to control. Listen, when his looks leave him, he's going to be screwed. That's all I've got to say. He's a pretty, pretty man. He is. Well, Mike, I will thank you very much. And we'll have you on again for sure. Thank you. We'll talk to you. Take care.