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This book should go to every new owner after their first year in business, Imo
This book at the first link below, should go to every new shop owner, after their first year in business, Imo (to help them remember what they forgot, and/or learn what they don’t know). The cash flow management system outlined at the second link, will be a little more effort
As we look to transition our business to the next generation, I have been assembling resources that I believe might be helpful in ensuring the new owners success. Occasionally one of these resources jumps towards the top of the stack as it applies to core foundational reminders.
The short book at this link is one of those. It is more of a targeted short story written in large font on a small page format, and an evening read. . The author is a young CPA from a firm that specializes in automotive repair shops. They claim 450 auto repair clients, and they do have some impressive stores listed as clients. I like this young man. I have reviewed a few of his podcasts and webinars and he speaks/articulates well. Many of us can find some value here, if we chose.
https://paarmelis.com/your-perfect-shop-book-download/
Now the harder part:
The link below is to a webinar I came across that was put out by this young CPA, interviewing an industry coach on a cash flow system that I had not previously heard of nor ever given much consideration. As the concept took hold, I immediately thought “simple brilliance”.
I have now done what I do, which is to dig into the digital footprint of this “Profit First” concept and underlying for-profit industry. It is essentially the commercial version of the “consumer side industry” built around the teachings of Dave Ramsey.
None the less, even after many hours of scrutinizing the core foundation of this concept, where you segregate your deposits into the buckets you want them to live in, “as they enter your bank account”, I would still call “simple brilliance”.
Typically, as most stores transition to the next generation of ownership, there can be a substantial change in the reserve cash a business has to operate on. This is one of the places this concept would make a real difference. The other is situations where a business has been in place for many years, but mostly have underperformed from a profit/cash perspective.
For those that are not aware, overall we have a profit problem in this industry. Not everywhere, not with everyone, but I would suggest it is more common than not.
The webinar is based on a cash flow process that has been lacking in my business for my entire career. It’s an hour long and they really don’t give you a good picture of it until you are almost an hour in. It is based on this concept:
Sales minus expenses equals profit- WRONG
Sales minus profits equals expenses- CORRECT
I actually burst out laughing when this slide came up. It seems so simple and made sense to me immediately(because I had watched the webinar up to that point)
My goal is to make my successor better at running a service facility then I am, and more successful then I am.
I have spoken to two of my banks and have appointments with both to discuss further. I meet with Chris Cotton (the coach in the webinar) and we may use him for implementation. He no longer participates in the “for-profit based” company that Profit First is built around, but like me, he believes in the underlying core concept.
https://paarmelis.com/webinar-the-profit-first-method-for-automotive-shops/
Early warning. NO ONE likes the part about the bank accounts, but i would contend that it is indeed our bank account balances, we pay the most attention to.
If anyone has implemented a cash flow management process of any kind, in their automotive service business, it would be great to hear about it. I have quick books, put the profit first approach seems more my style(force feeding required).
I have no connection to either of the organizations or the individuals motioned, but I am highly appreciative of good content and simple brilliance
Randy Lucyk
Midas Kalkaska
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