Gearbox Podcast

Jimmy Purdy [00:00:00]:
Welcome to the Gearbox Podcast, where we dive deep into the dynamic world of automotive repair and ownership. I'm your host, Jimmy Purdy, an experienced technician turned shop owner with a passion for sharing insights, stories, and conversations with industry leaders. This is the Gearbox Podcast. Do you like. Do you like to be in the limelight? Do you like the attention?

Mike Allen [00:00:37]:
Yeah, I'm an attention whore. Totally. Yeah.

Jimmy Purdy [00:00:40]:
Well, is that, like, a North Carolina thing? You guys are, like, sarcastic, but, like, not.

Mike Allen [00:00:44]:
Not all attention. It's just I need the praise of other people. Just constantly tell me how great I am and I'll be. Don't criticize me, though. I can't take it.

Jimmy Purdy [00:00:54]:
The sarcasm is not coming through right now. I just can't tell. Right. I'm so confused. I think that speaks to all of us though, right?

Mike Allen [00:01:03]:
Yeah, it's true.

Jimmy Purdy [00:01:04]:
The egotistical thing.

Mike Allen [00:01:06]:
We all have egos.

Jimmy Purdy [00:01:07]:
Well, Mike Allen, I appreciate you coming in. Sorry I was a little late. I know you're a busy guy.

Mike Allen [00:01:12]:
You know, I got out of the ASP meeting and just been kind of chilling around, walking around, getting my steps in. You know, you don't want to fall below a hundred thousand steps a day in this crazy city when you're here.

Jimmy Purdy [00:01:25]:
So I gotta ask you, you were like, well accomplished. Multi shop. I mean, you're just killing it. What is. What is your draw from come for coming to Apex still after all these years of years of your success?

Mike Allen [00:01:41]:
First I will.

Jimmy Purdy [00:01:42]:
Was that enough affirmation for you?

Mike Allen [00:01:43]:
Yeah.

Jimmy Purdy [00:01:43]:
Yeah. I'll keep it. I'll keep it coming. It'll be. It'd be flowing. Tell me.

Mike Allen [00:01:46]:
Tell me more about me. So I would say that I don't know that I need to come every year, but probably every other year because there's enough emerging technology and. And from my perspective, it's not tooling, Right. Because I was never a technician. So I bring one of my guys, I'm like, hey, just tell me what we need and I'll go get it. Right? Because I don't know what we need. Okay. But for, you know, marketing, CRM software, service providers, coaches, that kind of stuff, I mean, they're all here, so get them all in one place, it's a little easier than trying to track them down.

Mike Allen [00:02:24]:
And I think we all have Zoom fatigue, right? So I'm so fed up with Zoom meetings and, you know, vendor meetings over Microsoft Teams or Google Meet or. Yeah. So you get to share a beer and. And have a real conversation and build some rapport.

Jimmy Purdy [00:02:40]:
Yeah. See the latest and greatest you know, so your, your background wasn't technical. Right. So you'd never. You weren't really technician that jumped into it. So I kind of want to go back in the time machine a little bit, and a story I've never heard is where you came from.

Mike Allen [00:02:56]:
Okay. So my grandfather opened his business in 1937, and it was a general store and the feedlot and the repair shop and the social hub for his little rural community. It was like potbelly stove and the grocery store around it and all the old men sharing fishing stories and that kind of stuff. And that's what my dad grew up in. And he hated it and he wanted to get out, and he went away to college, and he didn't finish college because he had a kid and needed to go support the child. Right. And got married. So he went back into the automotive industry because it's all he knew at that point.

Mike Allen [00:03:37]:
And he ended up becoming manager for a chain in our area. And then the owner of that chain started selling off the stores, and dad bought one of his stores. So then I grew up in my dad's store, you know, busting tires, changing oil, sweeping up, that kind of stuff.

Jimmy Purdy [00:03:55]:
So you were a technician?

Mike Allen [00:03:56]:
No, mechanic. I was a looby at best. So. And this is before DVI. This is before we didn't do checklists, much less DVI had handy repair orders. We're doing like 100 cars a day. So it wasn't like you're shaking down cars and finding what it needs. You're just order takers.

Mike Allen [00:04:13]:
So drain and fill, drain and fill, drain and fill all day. So not a technician. But I hated it. I went away to college. I did not finish college, but not because I did something like get married and start a family is because I was way too busy having a really good time. Mom and dad stopped paying for college after a year, and I worked multiple jobs just to keep the party going for three and a half more years. So after almost five years of college, I was a junior and I figured that that's not. It wasn't fun as fun anymore because all my friends graduated and went and got real jobs and I was just a creepy old guy at the college parties.

Jimmy Purdy [00:04:55]:
No one wanted to party with you anymore.

Mike Allen [00:04:56]:
I know. So. But eventually I came back to dad's shop after a couple years, and very quickly I was on the front counter as a service advisor. And I'm pretty good at that, or I was at the time. And so I. I did well in that role. Dad eventually purchased a second location. I Went into that store, I started running that store, and I eventually bought my dad out of that second location.

Mike Allen [00:05:28]:
He didn't own the real estate at the first one, so there was a finite timeline. So that one just ended up going away. And so I eventually bought my dad out of the first store. And then in 19, I opened store number two. And 22, I have a number three. And I figured out that I'm no longer as much of a masochist as I used to be. So I have stopped growing for now, and I'm just kind of chilling.

Jimmy Purdy [00:05:51]:
So you're out of the growth phase and you want to get back to the comfort phase, maybe.

Mike Allen [00:05:56]:
My wife definitely wants that.

Jimmy Purdy [00:05:57]:
So I don't think there's anything wrong with that. I mean, it's nice to be comfortable a little bit. They say it's dangerous. Right. Like, as you do all this coaching and all the things, like, being comfortable is the. Is the enemy. Right. And it's like, well, I think you got to grow and then you got to like, be like, grow into your comfort.

Jimmy Purdy [00:06:12]:
Right. Like, the whole point of growing is so that you can be comfortable. Right. Isn't that like the idea?

Mike Allen [00:06:16]:
Well, there are varying levels, like, how much is enough. Right. And that's a different definition for each person. You know, some of our friends in this industry have small single location operations. They're very successful. They do. And they have everything they want. And so they look at me and say, why in the hell would I want to open another shop or multiple more shops and just magnify my level of headaches? Right?

Jimmy Purdy [00:06:45]:
Yeah.

Mike Allen [00:06:46]:
I think I've kind of found a little bit of a sweet spot for me where I am for now. But then there I have other friends who, you know, 10, 12, 15, 20 stores and, you know, they've got a whole different set of goals and, you know, the sweet spot for them. And what they're, what they're targeting is in a different stratosphere from what I'm targeting. Right. And that's okay too. It's just different ways of going about it.

Jimmy Purdy [00:07:10]:
Yeah.

Mike Allen [00:07:11]:
I'll ask you a question. And one of my good friends is Dutch Silverstein. And.

Jimmy Purdy [00:07:18]:
Yeah, the old guy.

Mike Allen [00:07:19]:
Yeah, the old grumpy old bastard. I think that's what he's gonna name his new little shop. Right. The grumpy old bastard Shop. He says that everything is all of the growth and the new big time shops are being driven by greed, and it's just greed. So at what point does your level of revenue and income transition from being A successful business owner to being a greedy business owner.

Jimmy Purdy [00:07:46]:
Doesn't it happens kind of slowly though? Like, I feel like if you're in this, in this industry because you're greedy, you don't last very long.

Mike Allen [00:07:54]:
I feel like if you're greedy, you're an industry.

Jimmy Purdy [00:07:57]:
Exactly. Right.

Mike Allen [00:07:58]:
Yeah.

Jimmy Purdy [00:07:59]:
But you're an anomaly for one, if you do make it. But I just, I just seem like everyone that comes in that wants to just make a ton of money, they end up getting one blasted all over social media and then, and then whatever that means. But for two, they end up and crumbling because they're not making the money they thought they were going to be making. So they, they quit on their own or it's just very obvious that like all you're trying to do is make a bunch of money off people and you're calling out shit that doesn't need to be fixed. And I don't know, natural selection takes, takes its course.

Mike Allen [00:08:28]:
Is it possible to be money motivated and give really good levels of service and be ethical?

Jimmy Purdy [00:08:34]:
Why not?

Mike Allen [00:08:35]:
That's my opinion.

Jimmy Purdy [00:08:36]:
Yeah. I mean, I don't think, I think if you can back up your price with an awesome service, then that's what you're doing. Right.

Mike Allen [00:08:43]:
I think sometimes we fall into the trap of thinking that the automotive industry as a whole is the world in which we operate. But you know, our little online community and the forums that we're active in and the people that come to these shows, obviously this one's huge, but represent a very small fraction of our industry and it's the most forward thinking portion of our industry in a lot of ways.

Jimmy Purdy [00:09:10]:
That's a great point.

Mike Allen [00:09:11]:
And the majority out there are totally unplugged from anything like this. And the conversations that happen in those Facebook groups and forums and on these podcasts, they have no concept of that. Right. And that's okay. Just they don't know what they don't know. They've not been exposed to it before. But you know, these talking heads and the really outspoken folks in the industry, me being one of them to a degree, have a very narrow scope of experience and I sometimes get blinders on and think about, of course it's got to be done this way. That's the only thing that makes sense.

Mike Allen [00:09:50]:
But what makes sense for me, it's not necessarily what makes sense for everybody else. I'm sorry, I'm going off on a tangent here.

Jimmy Purdy [00:09:57]:
No, no, no, it makes total sense. Yeah. So no, and, and I, I mean, that's the direction I wanted to go. Because it, it pulls the next point of like your reality is not my reality. Right. Like I, I'd like to get to the point where I had two or three locations. I don't have that as like my overarching goal. Like if that doesn't happen for me, I'm gonna, like, I did this all for nothing.

Jimmy Purdy [00:10:20]:
I just want to experience it. Like I want to do that, to experience that.

Mike Allen [00:10:23]:
You just come run my stuff for a couple months, go to the beach.

Jimmy Purdy [00:10:30]:
So it is as bad as everybody says.

Mike Allen [00:10:32]:
Right.

Jimmy Purdy [00:10:33]:
But that's my point. Like I don't know like what your level of suck is. Right? Like, is it really that bad? And I mean, and I can always go back. Like I don't need to have it forever and I can, but it's just one of those things. And I feel like for the growth, that's what you grow to. Like if you want to have, be in the growth phase, like that's the natural course. Right? And you can be like Dutch and have one spot and go fishing at, you know, 3:00 in the afternoon and, and be happy. Right.

Jimmy Purdy [00:10:56]:
Then you got the argument. Well, you're not serving your community if you're going to shut down at 3:00. Right. You need to be open 24 hours a day.

Mike Allen [00:11:02]:
Yeah. 24, 7.

Jimmy Purdy [00:11:03]:
Yeah. 2:00am Oil change.

Mike Allen [00:11:04]:
If somebody needs a nine dollar oil change at 2:00 in the morning, by God, you're not servicing, you're not serving your community unless you're there to do it for them.

Jimmy Purdy [00:11:11]:
See, and that's great for the, for the, for the. I, I don't know. That's not great for anyone.

Mike Allen [00:11:17]:
It's great for the crackhead who gets an oil changes today.

Jimmy Purdy [00:11:19]:
That's right, that's right, that's right. But, but that puts that negative connotation towards the technicians, right? So it's like, well, I'm just not a commodity. You can't just have me working at 2 in the morning doing oil changes for 9 bucks. Right? That's what we hear. That's the pushback that comes back from that. And so there's that fine line. Like obviously that's an extreme. It's obvious no one's going to be doing that.

Jimmy Purdy [00:11:37]:
I don't think so. I mean, if you do it, good for you. Bless your soul.

Mike Allen [00:11:40]:
There's a Honda dealership in my market that is open seven days a week and they're open till midnight. So they run multiple shifts. If that's, I mean, their technicians are miserable.

Jimmy Purdy [00:11:52]:
Right, right. But they can go somewhere else.

Mike Allen [00:11:54]:
Yeah.

Jimmy Purdy [00:11:54]:
And like I said, natural selections should pull itself away from that. Right. So you would think if something was bad that way, if you think you had someone coming in that just was in this just to make money, you think the natural selection of the course would take its course and they would. They would be put out of business. But they're not. And they make it. Look at McDonald's, right? Who thought McDonald's have you 15 bucks?

Mike Allen [00:12:12]:
Like, McDonald's knows who they are. They know who their target client is. They don't have any illusions that they're Ruth Stress, you know, and they don't want to be. So I wish that as an industry, we knew ourselves as well as McDonald's knows themselves.

Jimmy Purdy [00:12:29]:
That's very true. I mean, that's. That's what. Maybe that's what the key is. Do you have the key? Do you know? The secret is, give me 20 bucks.

Mike Allen [00:12:37]:
I'll tell you.

Jimmy Purdy [00:12:40]:
After the recording. I want everybody.

Mike Allen [00:12:42]:
Yeah, yeah.

Jimmy Purdy [00:12:43]:
No, but you bring up interesting points, too. As we. As we communicate, you know, online, and it's that transition as you make, as you start growing, and things have to change to make sense. And one of those things is like doing discount services. One of the big ones that you. You get a lot of slack on is your free diet. Right. And I feel like the more you think about it, the more we're already doing that.

Jimmy Purdy [00:13:04]:
We're just not promoting it.

Mike Allen [00:13:05]:
Well, there are plenty of guys out there that are charging for one hour of diag and spending five hours doing the diag.

Jimmy Purdy [00:13:11]:
Exactly.

Mike Allen [00:13:12]:
And so at least what I'm doing is trend. Dutch will jump my. If I say transparent, but is very honest about what it is. You're getting one hour of my time. This is my marketing expense. You know, I'm gonna win you over and show you how awesome we are in this hour and give you free information. And if you take that free information and go away, then. Okay.

Mike Allen [00:13:37]:
Just like I sent a postcard and they didn't come back in to redeem that coupon. It's okay. You know, and when I talk about it, I always kind of throw the conversational grenade into the room. Free diag. And then watch everybody lose their mind.

Jimmy Purdy [00:13:50]:
Of course. Yeah.

Mike Allen [00:13:52]:
That I don't explain myself. And they don't ask for explanation. They assign intent.

Jimmy Purdy [00:13:57]:
Yep.

Mike Allen [00:13:58]:
So you must be screwing your text. You're not paying your tax. Or you. You.

Jimmy Purdy [00:14:03]:
You must be misleading your clients.

Mike Allen [00:14:05]:
Yeah, yeah, yeah. You're cheapening the industry or, you know, all that other kind of BS that I get. I'm here to tell you we're in a free market economy. And as long as we are in a free market economy, then it's competitive marketplace.

Jimmy Purdy [00:14:18]:
Yeah. And on that, one thing I wanted to ask you about that is how. Because it's a recent innovation that you had, right?

Mike Allen [00:14:25]:
Yeah. It started January 1st.

Jimmy Purdy [00:14:27]:
How is the feedback from your staff, from your technicians on that?

Mike Allen [00:14:32]:
It doesn't affect them at all. They still get paid. It hasn't changed how they're compensated for diag at all. So, I mean, December 31st of 23 was $196 for us to begin the inspection process. And then we're going to call you back and let you know what we found or let you know if we need more testing and inspections and what the additional investment would be. And now they still get paid an hour and they come back with an estimate or the additional testing that they need. If they need the vehicle needs more than one hour, then I'm going to call the client and I'm going to sell additional testing. The client's getting one hour for free, and that's on me.

Mike Allen [00:15:09]:
It doesn't affect the technician at all because they're still getting paid.

Jimmy Purdy [00:15:12]:
So, and then the most important question, what does that look like on the bottom line? So, because I know we talked and you said you took, you took all your hours and you did the math and you're like, you know what, I can do this, this would make sense. Has it panned out that way?

Mike Allen [00:15:26]:
It has. So in 23, I did just over $200,000 in diagnostic labor. And that store that I did the math from did like 12,500 hours over the course of the year. And it came out to something like 16 and change when I divided them into each other. And So I just added 17 to my labor rate and stopped charging for diag. And the effective labor rate, I think it went down by like 75 cents or something.

Jimmy Purdy [00:15:55]:
So that would make sense though.

Mike Allen [00:15:58]:
But I'll tell you what, it's done though. Car count is up, average repair order is up. But I, I plugged in a bunch of new systems and new concept. So I can't say that it's all because of free diag. But what I can say is Ms. Jones has just moved to the neighborhood. She doesn't know anybody. She doesn't have a shop that she trusts.

Mike Allen [00:16:19]:
The dealership is not convenient, and she calls five shops saying, my check engine light has come on and it's flashing and my car is running Weird. And I'm scared. Right. Well, the first shop doesn't answer the phone. She leaves a voicemail. The second shop, Bob shop, hold police puts her on hold for three minutes. Right. Third shop, maybe they're trying and they answer the phone.

Mike Allen [00:16:41]:
They're nice, they're polite, they're informative. You know me, a year ago. Absolutely, Ms. Jones, I can help you with that. What I'd like you to do is set up an appointment to drop it off with us. I'll give you one of our free loaner vehicles. We're going to start the inspection process, determine what we believe is going on. I'm going to get back to you within a day with a full written report of what we found.

Mike Allen [00:17:03]:
What we're recommending, it's either going to be a recommended service item to address your issue or it's going to be recommended. Further testing. We do get permission to start off at 196 to do that. I'm never going to spend a penny of your money without your permission. And it won't be a penny over 196 unless we talk first. Can I go ahead and get you in today or you want to drop it off tomorrow? Right. So that was the conversation.

Jimmy Purdy [00:17:23]:
Nice pitch.

Mike Allen [00:17:23]:
Yeah. And so you can win over Most of those Ms. Joneses with that and then you'll get the ones like you're going to charge me $200 to do what AutoZone will do for free. They don't know. So then you need to educate and inform and overcome. You can overcome some of those. And some of them are going to say, 1 $200, get bent. Click.

Mike Allen [00:17:41]:
Right. And so you lose a portion of those customers. And I can hear your listeners saying, well, I don't want that customer. Okay, maybe you don't, but now it is. Absolutely, Ms. Jones, we can help you with that. Anytime you're experiencing a check engine flashing like that and the car is not running right, it's important that we have one of our ASE certified master techs inspect that problem for you. I'll get you a complete written estimate for whatever we see.

Mike Allen [00:18:06]:
Is now a good time to bring it in. So we were polite, we offered a solution. We didn't put up a barrier of cost and we didn't put up a barrier of time. And so marketing spend is down, car count is up. And I think it's because of that conversation. The difference between those two conversations, they're both good customer service conversations. One is just a different marketing methodology.

Jimmy Purdy [00:18:31]:
Now, what about, what about the conversation about at the end of it, when you told me you were going to tell me what's wrong with it. Right. You said that there was your. And now you're asking for money to figure it out.

Mike Allen [00:18:42]:
So what I just role played with you was the phone conversation. And at write up, you know, when we're doing our information gathering and our discovery conversation and we're documenting what's going on with the vehicle, we're going to have the second part of that conversation from the first role play. And it's okay, here's what we're going to do. Ms. Jones, you know, technician Jimmy is going to, he's one of our ASE certified master technicians. He's the right guy to be looking at your vehicle. He's been doing this for 20 years. He's going to be inspecting your vehicle and testing to see what's going on.

Mike Allen [00:19:10]:
We're going to have one of two conversations. It's either going to be, here's what we found, here's what we know we need to do next and here's the cost, or it's going to be, we've eliminated A, B and C. There's additional possibilities. It could be X, Y or Z. In order to determine that, we do need to get an investment beyond that. And if you're not comfortable with that, that's fine. I'm going to give you all the documentation for everything that we've done to this point and you can take that to whomever you want to go to for the next steps. And I mean I would tell you that, you know, doing roughly 100 cars a week, I don't know that we've had one in 10 months that has gotten mad and said, you told me it would be free because they're getting a significant amount of stuff or the.

Jimmy Purdy [00:19:56]:
One or the ones that decide to pick it up because they're not paying anymore. Yeah, I feel like you get more conversion that way because once the car's.

Mike Allen [00:20:01]:
There, it's like, well, yeah, the car's in the bay. You've already put them in a liner car, you give them a ride home. They've come in, they've seen that your facility is clean and that your people are nice and they've got a shop tour. They know that you've got a five year warranty.

Jimmy Purdy [00:20:12]:
And there I think is the key.

Mike Allen [00:20:15]:
You're buying an opportunity to wow them with your service and your facility.

Jimmy Purdy [00:20:20]:
As long as you can wow them right.

Mike Allen [00:20:22]:
Well, and you don't have to have a Rockstar facility. You can wow Them with your service and the fact that you care about them.

Jimmy Purdy [00:20:27]:
If you have that.

Mike Allen [00:20:28]:
Yeah. Wow.

Jimmy Purdy [00:20:29]:
Do you think, do you think if.

Mike Allen [00:20:30]:
You have a shitty facility and shitty service, maybe it's not the right business for you?

Jimmy Purdy [00:20:34]:
Well, do you think that a lot of the opposition might come from that? It might be coming from like the owner operators that don't need any more cars for one and they just don't feel like they have the confidence to show off what they have and be proud of it. I talk to a lot of guys and that's what the going trend I get a lot is. Right. Like it's just not where they want it to be yet. They have a vision for what they want their shop to be and it's just, it's never going to be there for one. I don't think we ever have the shop that we really want, truly want. And so it's really hard to market yourself that way. And I, I struggle with that because I'll have five technicians on staff now.

Jimmy Purdy [00:21:06]:
I'm down to two. But constantly, just constantly. And that's my own problems. Yeah. You know, that's my own internal problems that I need to deal with. But it's really hard because I'm like, go for it with marketing. Right. Like let's, let's do it.

Jimmy Purdy [00:21:16]:
Right. I got five technicians, let's feed them and then I got two. I'm like, great, now I'm back on the floor helping these guys with diags pull back the marketing. Right. And I just don't have the same confidence selling those jobs. Right.

Mike Allen [00:21:26]:
You just need to understand that your marketing has a 90 day lag.

Jimmy Purdy [00:21:29]:
Yeah.

Mike Allen [00:21:30]:
So if you had five and you're marketing full on and you're down to two and you're like, oh my God, you know, pull the brakes. The brakes are going to have a 90 day lag before they slow down.

Jimmy Purdy [00:21:41]:
Yeah.

Mike Allen [00:21:41]:
And in 90 days you're going to be back up to four and you're going to need more cars. So just keep marketing.

Jimmy Purdy [00:21:45]:
Right, Right. And I've noticed that. But it's like that internal thought, right. And it's the internal trying to show someone a tour of your facility when you're, there's, oh man, that trash can still not clean yet. Because I haven't had a chance to tell something like stupid things like that that are going on in your head. And it's like really difficult to see that nuance of like giving away something and not having that immediate roi. Like no, every dollar needs to be documented. And I Think a lot of that maybe goes.

Jimmy Purdy [00:22:12]:
And talking about coaching seems to be the trend. That's a lot of what we're taught. Right. Like when you first get a coaching, it's like everything needs to be have a return. Like every single thing you do to have return. And if you went to a coach, say, hey, I think about doing this, they would just laugh at you. No, you're not going to do that. You're just going to raise your rate.

Jimmy Purdy [00:22:29]:
Just keep raising your rate and make sure every dollar is documented for. And it's really difficult like to.

Mike Allen [00:22:34]:
To show me on the doll where the coach touched you.

Jimmy Purdy [00:22:40]:
You see right here. That's not a good play. So is that normal or exactly what they did?

Mike Allen [00:22:46]:
I can tell that you can't show me any inside of the doll. Is that what you're saying?

Jimmy Purdy [00:22:54]:
Yeah. Too much, huh?

Mike Allen [00:22:55]:
Sorry.

Jimmy Purdy [00:22:56]:
I'll put the doll away for now. Okay, sorry. It makes me feel good when it's sitting on my lap or I'm sitting on its lap or whatever. This is going off topic a little bit, huh?

Mike Allen [00:23:05]:
I don't mind going off the rails, man. You've been on some of my Friday night calls. You know what it's like.

Jimmy Purdy [00:23:10]:
That's true. Yeah. So I mean that's the crowd too that like so you, you missed the last one because you, because I don't know, you had to go to bed or whatever. But one of the things was like what's the purpose of coaching? Right. And Dan, Dan's and he wants to like do his own non profit coaching or whatever he wants to do. And there's so much free information out now. Whether you listen to this podcast or another one or whatever, there's a lot of information, a lot of valuable people that come on this show and a lot of other shows and a lot of training that you can go to and you can go on these Facebook groups. And a lot of it's fluff, but there is some good information in there and it makes it difficult to say, well, what's the value behind spending money to have someone coach you when you can get all this information for free?

Mike Allen [00:23:53]:
I think so. I've never had a one on one coach. I've been in 20 groups. Are you familiar with the 20 group concept?

Jimmy Purdy [00:24:01]:
Okay, so I just recently got out of one. Yeah.

Mike Allen [00:24:04]:
Okay. And so that's what I've always been in. So I've enjoyed that because I have a group of peers, like talking to them this morning. Like there's three other shop owners, there's one in Texas, one in Indianapolis and one in Hartford, Connecticut. And we talk every day. We know each other's businesses intimately. We know our numbers, we know our employee issues, we know our vendor issues that we're having. Everything that type of intimate knowledge is really useful to have other successful shop owners to bounce ideas off of and concepts off of.

Mike Allen [00:24:35]:
Just like a lot of technicians have group chats with technicians that they have established relationships with around the country where they're talking about tools or talking about diag conundrums or whatever it might be. So I enjoy the sounding board of a 20 group. But with a coach, the difference between a coaching relationship and all the free information on ASOG or CTI or, you know, the, the podcast, everything else, there's accountability and you need another human being to call you out on your bullshit when you're making excuses. And you also, when you get all that free stuff, it's in the pile with all the BS also.

Jimmy Purdy [00:25:20]:
Yeah.

Mike Allen [00:25:21]:
And not everybody can tell what's BS and what's good information. And what's good information for Euro specialty is shop In Seattle with a 350 labor rate is not the same thing as what's good for a general repair domestic guy in Nebraska. Right.

Jimmy Purdy [00:25:38]:
Y.

Mike Allen [00:25:39]:
So coaching is you got to have the right coach for your style of business and they've got to understand how your business works and they've got to hold you accountable. And so I think that's the value in paying somebody to hold your feet to the fire.

Jimmy Purdy [00:25:53]:
Yeah, that makes sense. And also your level of expertise and being in a. In a group like that, that's. That's where you need to be. Right. It's not where everybody needs to be.

Mike Allen [00:26:05]:
Yeah.

Jimmy Purdy [00:26:06]:
You know, and it's. And it's really tough to find. What is it that I need to know? I don't know. Who knows that? I don't know what. I don't know.

Mike Allen [00:26:13]:
So that's one of the reasons, I think that shopfix came out of nowhere and became the dominant coaching organization in the industry. And six years ago nobody really had heard of them. Right. And now they are the big dog. For better, for worse. Whether or not you like them or hate them.

Jimmy Purdy [00:26:29]:
I'm.

Mike Allen [00:26:29]:
I'm kind of agnostic. They built a system that answered those questions and gave an easy to follow set of directions for a new shop owner. Who doesn't know. Maybe. I mean, and most new shop owners are just really good techs. Right. Or at least above average techs who get tired of working for the man and they wanted to do their own thing. They don't know squat about how to build an estimate, price matrixes, how to set your labor rate.

Mike Allen [00:26:57]:
They don't know anything about how to manage the business. They don't know about marketing. They don't know how to choose a pos. They don't know. They don't know what they don't know. And so it just. Shop Fix gave them the manual on how to operate that business model. Very easy to understand and implement methodologies and I mean, they hit a home run.

Jimmy Purdy [00:27:21]:
Yeah. It works for most.

Mike Allen [00:27:22]:
Yeah.

Jimmy Purdy [00:27:23]:
So and talking about your journey and we kind of just cut to. You just all of a sudden owned three shops. So you were like in college partying, and then you own three shops. So that was a. I guess it's just.

Mike Allen [00:27:37]:
And then I was a service advisor and then I was a store manager, and then I had one, and then I had two. And then real quick, let me back up real quick. I am not a Shop Fix guy. I just, I think that the way that they kind of went supernova on the market is an interesting case study. I'm a client of Elite Pro Service. So if you hit me up if you want to go to Elite.

Jimmy Purdy [00:27:56]:
So you do a little bit.

Mike Allen [00:27:58]:
No, no, I'm not a coach, I'm a client, so.

Jimmy Purdy [00:28:01]:
Right. But yeah. So you're involved in a coaching process.

Mike Allen [00:28:05]:
Yeah. Copy.

Jimmy Purdy [00:28:05]:
And you're part of the. The twenties group in. In Elite.

Mike Allen [00:28:08]:
That's right. Exactly.

Jimmy Purdy [00:28:09]:
And that's kind of. You guys just hold each other accountable and make sure you do your own thing. Right.

Mike Allen [00:28:13]:
Absolutely.

Jimmy Purdy [00:28:13]:
But your process is going from owning one shop to three. What are some of the things that you can remember as far as making that jump? And a lot of things I've heard about is that one to two is the hardest thing you've ever done, but the third one is much easier. I don't know.

Mike Allen [00:28:29]:
So for me, you need to understand that you're going to look at 10 shops before you find one that you might be able to buy or it might be the right deal for you. I did it on a shoestring budget and I had at the time a business partner, minority business partner. And so when I bought the second shop and went and got it up and running, he was back running the first shop. Right. And so it wasn't really that hard because there was somebody that had skin in the game at both shops. Every day we opened the third shop and we had to switch to zone defense. Right. Is when it got really hard.

Mike Allen [00:29:06]:
So because I had a partner, it was third. That was the hard for us. And then I bought him out. And this is just me with the three. And then it was really running around my hair on fire. It highlighted how I needed to build out some systems and processes.

Jimmy Purdy [00:29:21]:
So you built them out after. After the fact instead of. Yeah, instead of the way we've all, you know, been taught or told. Like, you got to make sure your systems and processes are perfect and you go the next. And you go on to the next.

Mike Allen [00:29:34]:
Yeah, I did not do that at all. I just was like.

Jimmy Purdy [00:29:37]:
So, so how was, how was that sleeping at night?

Mike Allen [00:29:40]:
You're so tired that you can't help but sleep.

Jimmy Purdy [00:29:41]:
Okay, so you can still sleep at night. That's all it really matters.

Mike Allen [00:29:47]:
When you're looking for another shop. Here's the. The funny thing that I learned is I can't afford big super successful shops. So I look for distressed shops and I want to go in and plug my systems in what few systems I have and try to flip it and make it a good shop. Right. And so that's what I've done. And so you're every.

Jimmy Purdy [00:30:06]:
You're a fixer?

Mike Allen [00:30:07]:
Yeah, I guess something like that. I look for, I look, I look for broken people and I want to bring them into the fold.

Jimmy Purdy [00:30:15]:
I was wondering why you decided to sign up for this podcast today.

Mike Allen [00:30:19]:
You know, masochist. But every small struggling shop owner that hasn't made a profit in five years on the books, maybe they're taking it out, out of the back door in their pocket and cash that they're smuggling out of the business or whatever, but they have no profit to show for it. They all still believe that their business is worth a million dollars and that's what they need because they think they need a million dollars to sell their shop. You know, the shop is worth nothing but assets and equipment. Right. So you got to break a lot of hearts and tell them that they're crazy. And you know, usually you become the bad guy when you do that, but then they end up selling for a reasonable number to someone else down the road. After two or three people tell them that in then they realize, oh wait, my business is actually worth a hundred thousand dollars and not a million dollars.

Mike Allen [00:31:05]:
Right?

Jimmy Purdy [00:31:05]:
Yeah. They're not going to believe you.

Mike Allen [00:31:06]:
Yeah. My second shop was, they were in trouble with the tax man and like it was padlock was about to go on the door and their landlord actually called me because I, I toured the facility and looked at the books and said, I'm sorry. Thanks for letting me come and visit. But the business doesn't have any value because of all these problems that you've got. And I don't want to, I don't want to offend you by giving you a number that's not realistic. And so I left.

Jimmy Purdy [00:31:37]:
I didn't take you as a, as a, someone that would not want to.

Mike Allen [00:31:41]:
Offend someone, as a non offensive person, but their landlord called me a week later and was like, hey, they're falling for bankruptcy. They're closing up tomorrow afternoon and they have three years left on their lease. Would you. I told them I'd let them out of your lease, out of the lease if you would come in and move in on Monday. And so I was like. He said, you need to make a decision in 24 hours. And so I called them and I said, hey, what are you doing with all your stuff? They said, well, we got trailers backed up to the bays right now. We're packing.

Mike Allen [00:32:15]:
I said, stop packing. I came down there and I said, what are you going to do with it all? So we're just going to sell it on like marketplace or something. It was 2019, so I don't know that marketplace was huge at the time, but. And I said, why don't you just let me buy? I said, well, anything that we sell above board, the tax man's just going to take it all. I was like, it's your responsibility to report your taxable income and pay your back taxes. Doesn't affect me at all. It's like, how about I just give you an envelope with $20,000 cash and you just leave all your equipment? And I said, but you got to report that to the tax man. And you're like, sure thing.

Mike Allen [00:32:53]:
And so that's how I got my second shop was I. I took over an existing lease and an envelope of $20,000 and I got a six page shop.

Jimmy Purdy [00:33:00]:
Wow.

Mike Allen [00:33:00]:
So, I mean, it was a hole, man. It was a train wreck. But you know, I did a million and a half the first year, so. Take that.

Jimmy Purdy [00:33:07]:
That's pretty awesome. Yeah, can't complain with that. So you use all your old equipment and obviously the client base eventually. How do you staff something like that so quick?

Mike Allen [00:33:18]:
I was the entire front office and front counter and everything for the first several months. I kept one of their technicians. I brought a GS in from my big store and then I hired one. So we started off with two text and GS and myself.

Jimmy Purdy [00:33:32]:
So the idea is you got to keep light.

Mike Allen [00:33:35]:
Yeah, yeah. I mean, shoestring budget, right?

Jimmy Purdy [00:33:36]:
Yeah. So Well, I think that's missed for a lot. They want to buy the big shiny stuff. And I mean, how many guys have you talked to that like they open a shop and they go put themselves hundred thousand dollars in debt the first year because they want a brand new tire machine, brand new alignment machine, branded, this thing, brand new, that brand new toolbox.

Mike Allen [00:33:54]:
I love used equipment.

Jimmy Purdy [00:33:56]:
Yeah.

Mike Allen [00:33:56]:
Love it. I mean, pull up my Facebook marketplace right now. It's going to show you any, you know, used Hunter equipment within a 20 mile radius. Because it knows that's what I click on. Right? But I mean, if you like, listen to Lucas and David, they're going to tell you that you shouldn't open a shop until you've got all the equipment and the building and $150,000.

Jimmy Purdy [00:34:18]:
I was gonna just go right into that. Yeah.

Mike Allen [00:34:20]:
And I disagree. And start with floor jacks and a set of hand tools if you have to.

Jimmy Purdy [00:34:25]:
I mean, that's the idea, right? Like just fix the damn car and bring in cash flow. And it's funny because one, one of the topics they bring up too is like, you just need cars, right? David says that a lot. Like you just need cash flow and you need cars. So then why do you need a hundred thousand dollars in an asset, like, why do you need liquid asset of that, that capital when all you need to do is just have a set of hand tools? It's not much more complicated than that, is it?

Mike Allen [00:34:51]:
I mean, yes, cars are more complicated than that now, but you can, like, you can do brakes and tires and basic service and maintenance with not a lot of high end equipment.

Jimmy Purdy [00:35:03]:
Yeah.

Mike Allen [00:35:03]:
Yes, there are vehicles out there where you need more advanced equipment to do brakes. Yes. There are vehicles out there where you need more advanced equipment to reset maintenance miners.

Jimmy Purdy [00:35:12]:
That rolls into like the third or fourth or fifth year that you're talking about, right? Like day one, year one. What's your goal here? Right? You're working by yourself. You're trying to just get a customer stream. Like you can change oil with just, you know, a couple tools.

Mike Allen [00:35:27]:
I mean, a lot of the dudes who are starting out new, right, they've got, you know, the cliche is they've got one left in the barn out back. Right. Well, great. That means you have almost no overhead. Your overhead's what, a couple thousand dollars a month? Great, that's perfect. Because it's easy to, to break even and start putting some money to the bottom line there. And you just grow it incrementally, man. You know, incremental improvement.

Mike Allen [00:35:52]:
Iterative improvement. You don't have to go be, you know, like, Lucas's big Garage Mahal and Blowing Rock next week. Let that take a decade. That's okay.

Jimmy Purdy [00:36:04]:
Yeah. Or if that's even what you want. Right. Like, I mean, how many times have you had the thought of maybe you should just go build something in your back? And, I mean, for me, it's like, maybe I'll just put a garage out back and. And just do one or two cars a week, you know, I'll probably make the same amount of money, you know?

Mike Allen [00:36:21]:
Then I would say you need to go back to the coaching, but you.

Jimmy Purdy [00:36:25]:
Know what I mean? Like, sometimes that thought comes across, and you have those months, you're like, why am I doing this? Right? And then the next month is like, blows it out of the water. Okay, I get it now. There's something going on here that's bigger than I am, which is cool.

Mike Allen [00:36:36]:
But in the emotional roller coaster of being a shop owner, just exhausting. You win so big, and it's so frustrating when you lose. Oh, my God. The highs and lows, dude.

Jimmy Purdy [00:36:49]:
You know, I was just talking about. And this is probably something you can't relate to, but as a technician, that emotional roller coaster that you have when your head's down every day and you're just trying to just fix as many cars as you can, you're not talking to nobody. The days just start rolling by, and you're just ecstatic when you fix the car. Then when that car does not get fixed by what you thought was broken, how much that just. Just pulls you down, and it's just a stupid car. Like, you know, and you're just, like, so. Just devastated that you were wrong over a piece of machinery. And you're like, why is.

Jimmy Purdy [00:37:26]:
And you're like, I'm gonna forget about it. And you go work on something else, and 10 minutes later, you're back over there messing with it again. Or you're at home and you're on. On the Internet, and you're, like, researching the different things, and you're talking to, you know, sending a message to Brian, right? Like, what's going on? Right? Like, all these things, and it's like, over this stupid car, man. And then the next day, you fix it, and you're like, I can't wait to do the next one. I think that's kind of relatable to owning a shop.

Mike Allen [00:37:48]:
I've got. Exactly. Right now I've got a version of that going on for. For me. Because, you know, as an owner, I don't think from a tax perspective like a lot of owners do because they were techs. I think from an advisor's perspective, because that's what I was. I will spend so much time drilling a certain methodology or a certain word track or a certain script or whatever you want to call it. And then today, actively at one of my shops in North Carolina, I have a friend who has another shop an hour away who's mystery shopping me.

Mike Allen [00:38:23]:
Called in, brought it in for a service. He wanted to see what our sales process was like and how welcoming we were. And did we really say bring it in right now and all those types of things that need to be our touch points. And so he's like, live streaming me updates about how the process is going while I'm out here in. In Vegas at this meeting. And I'm like, it just makes me want to throw up because he. He texted me the first time, say, hey, they're almost done with my car. I'm waiting for him to take me in the back and show me what they see.

Mike Allen [00:38:52]:
And I looked at the time, said, wait a minute, it's 12:30. In North Carolina, they don't work on cars from 12 to 1, which means he's been there since 11, which means he's been there for 90 minutes, and they're just now pulling him in the back. It has already gone off the rails. This whole big system that I'm so proud of that I've drilled so hard on the one time I got a buddy coming into Mystery Shop us, it's just a train wreck. Right? So I don't know if I consider.

Jimmy Purdy [00:39:16]:
That a train wreck, but I get your. I get your mindset, right. And talk about, Talk about the growth phase and like, taking that step back and looking about where you came from and to where you are. And like, man, if I get someone in and out of my shop and answers in 90 minutes, I'm ecstatic. Right? Like, yeah, yeah, that's just where I'm at. Right.

Mike Allen [00:39:33]:
Well, last year it would have been, drop it off and I'll talk. I'll call you tomorrow. Right.

Jimmy Purdy [00:39:36]:
So.

Mike Allen [00:39:37]:
But we've tried to evolve, you know, how we got a market on that prospect, so.

Jimmy Purdy [00:39:41]:
Yeah, that makes sense. But you don't know what you don't know. You know, you can have all the systems and processes in the world, but doesn't mean everybody follows them. Yeah, you know, we've. I think we've talked about that multiple times during this event of how to get the buy in from. From the team how do we get everybody to do what they need to do and then how do we take that system and buy the second shop and then buy the third shop without it all just like falling apart?

Mike Allen [00:40:03]:
Well, and also when there's one location and you're there, you know every customer and you kind of know every car and you know the, you know the workload and the level of quality of service is so high, when you go to two, it will drop because you can't know everyone and you can't be involved in every interaction. And when you go to three, it drops a little bit if you don't have your system in place. So you got to get your systems in place as we were talking about that I didn't do so that the level of service and quality stays consistently high enough to justify, you know, how you're coming to market. So I like to sit. We don't have cameras here, but if you imagine that the industry as a whole, on a scale of 1 to 10, we're really bad at what we do, especially service. As an industry, we're terrible at service. So let's say that the average is like four, right. And when you've got one really fine tuned high level single location shop and you are the best shop in town, you're 10, right? You're 10.

Mike Allen [00:41:08]:
You're the gold standard in your market and you go to two or three or four and it's a much larger market and you can only get to one or two stores a day because of geography or whatever else it might be, it's going to drop down from 10 to nine or eight, hopefully not seven. Right. You're still way better than four. You're still giving better service and better quality and better warranty, but you're not giving what it was. So if you're going to grow, you've got to become comfortable with your customers getting something less than what they got when it was just, you know, I.

Jimmy Purdy [00:41:42]:
Think you brought that up before and that was a huge thing to think about, right? As you think that you can run two or three shops as good as one. That's all we, we think we can all do that, right? Like if you really nail one, the next one or like moving on to the second or third way before your first one's even at it.

Mike Allen [00:41:58]:
Yeah, yeah, yeah. Well, I mean, and it's, it's possible, but it's really hard to find people to put on your team that care as much as you do and you find people that care. Right. But still just a job Right. They don't wake up at night in a cold sweat thinking about the shop.

Jimmy Purdy [00:42:21]:
I think they might, I mean that's. Yeah, I think it's a people thing.

Mike Allen [00:42:25]:
Like I've got a few that are that way.

Jimmy Purdy [00:42:27]:
Yeah.

Mike Allen [00:42:27]:
But out of 35, I've got some that wake up thinking about cars. Right. And diagnostic conundrums and, and or thinking about tools. But I've got a. Ones that are just passionate about giving world class service and just taking care of people and being the best to like at my level. Right. They're just like what do you do, what do you do for fun when you're not at the shop? I think about the shop, I talk to other people about their shop.

Jimmy Purdy [00:42:54]:
That's fun for me.

Mike Allen [00:42:55]:
Yeah.

Jimmy Purdy [00:42:55]:
I don't know what the hell else I would do anyway. Yeah, I mean that's the main thing. Do you find yourself as, as you needed to increase your market share and it's kind of like a wrap up question here, needing to lower. I don't want to say lower, but I'm gonna say lower. Lower your quality of service to increase the car count. Instead of focusing on quality so much, you got to get more quantity.

Mike Allen [00:43:19]:
So how does that work? I think where the loss is like so our warranty is still five years, 50,000 miles nationwide. Right. So you've got to use decent parts to be able to put a warranty on like that or you should use good parts. And we still have a very high standard for technicians in the company. Where it goes from 10 down to 8 is not in your systems and your offering and your value adds. You've still got free loaner cars and all that kind of stuff. But where it goes from 10 to 8 is the personal relationship with the customers. So many customers have my cell phone number for so many years and they came in and they only wanted to talk to Mike and that's okay because I had built a relationship.

Mike Allen [00:44:01]:
If I'm going to run a business at a higher level, at a larger volume at multiple locations, I can no longer spend eight hours a day talking to customers. And so I've got to wean them off of that and let them talk to new people and new faces. Means the trust isn't there. And they don't. They come in and they want to talk to you rather than just toss the keys and say call me if it's over five grand. Hahaha. Right.

Jimmy Purdy [00:44:22]:
Yeah.

Mike Allen [00:44:22]:
But they mean it and that doesn't happen anymore. Now it's. They still say yes, but we need to Call and go through the whole process, and that's okay. It's just not the same level of relationship that they have with me.

Jimmy Purdy [00:44:34]:
Do you think it would have been easier to start that years and years and years ago for me? I never gave anybody my cell phone number. I. From day one, I wanted to make sure everyone went through the process. I wanted to make sure everyone talked to who I had hired at the front. I wanted to make sure my name wasn't on the business. I wanted to make, like, from. That was my vision, and no one really taught me that, Told me that. I just.

Jimmy Purdy [00:44:53]:
I knew. I just wanted to make sure I was separated from the sales process.

Mike Allen [00:44:58]:
I think a lot of us make the mistake of making it too personal and giving people your cell phone number or answering customers on the weekends or whatever else might be. And it's hard to un. It's hard to put that genie back in the bottle Right. Once it's out. But you can. It just takes time. So now I go to the shop, and maybe they're super busy, and I just hop into the van and give somebody a ride home because somebody's running for parts or whatever, and they asked me how long I've worked there. Right.

Mike Allen [00:45:27]:
It's, like, perfect. Oh, I've been here for a while, you know.

Jimmy Purdy [00:45:31]:
Oh, I'm new here.

Mike Allen [00:45:32]:
Yeah. They don't have a clue who I am, and that's okay. They've been a customer for a while, and Customer. And they like us, and.

Jimmy Purdy [00:45:39]:
And you've built something that you can be proud of. That's awesome, man.

Mike Allen [00:45:43]:
Thanks for having me.

Jimmy Purdy [00:45:44]:
Yeah. You ready for Vegas tonight?

Mike Allen [00:45:48]:
What are we going to do?

Jimmy Purdy [00:45:49]:
I don't know.

Mike Allen [00:45:49]:
Make some poor choices.

Jimmy Purdy [00:45:50]:
You said something about something fun.

Mike Allen [00:45:54]:
I believe that shenanigans can be accomplished in this town.

Jimmy Purdy [00:45:58]:
Yeah.

Mike Allen [00:45:58]:
So.

Jimmy Purdy [00:45:59]:
All right.

Mike Allen [00:46:00]:
I think we've got some. We've got some parties we've got to go to. I think the last one's over at midnight, so we can actually start.

Jimmy Purdy [00:46:10]:
Get a good early start then. Yeah, Fantastic.

Mike Allen [00:46:13]:
All right. Thanks, man.

Jimmy Purdy [00:46:14]:
Thanks, Mike.

Mike Allen [00:46:15]:
See you.