Mind Wrench Podcast
Welcome to The Mind-Wrench Podcast, your go-to resource for personal and professional development in the automotive repair industry. Discover effective strategies to elevate your life to the next level, applicable not just for auto professionals, but for anyone seeking personal growth. Join our knowledgeable host, industry veteran Rick Selover, as he imparts practical insights on mindset, self-improvement, and leadership, enabling you to run a thriving shop and lead a more fulfilling life. Tune in every Monday to expand your horizons. For additional information, connect with Rick on Instagram @rick_selover, become part of the vibrant CollisionMasterMind Facebook Group, or visit rickselover.com for additional information and resources.
Mind Wrench Podcast
Episode #194- Setting your shops GPS for a smooth transition - w/Matt DiFrancesco -HighLift Financial
Show Notes:
Is your collision shop financially prepared for the future?
Feeling lost in the complexities of shop ownership?
In this week's MindWrench Podcast we uncover essential financial strategies for collision shop owners as we tackle the intricacies of business transitions. In this episode, the industry’s only Certified Exit Planner, financial expert Matt DiFrancesco, sheds light on how to secure your shop's future while creating generational wealth. We explore “business musts” such as setting our GPS & establishing a clear vision for your business, the importance of business continuity plans, and innovative stay bonus programs to retain valuable employees.
With insights geared for the collision industry, Matt explains how to avoid common pitfalls that many shop owners face and offers actionable steps to promote healthier financial decisions.
This engaging conversation not only informs but also inspires shop owners to make proactive decisions regarding their financial health and legacy. Don't miss out on the valuable insights shared in this episode – tune in, learn, and take the first steps toward ensuring a successful future for your business!
Guest Info: Matt DiFrancesco – Founder -High Lift Financial/ Host- Your Business, Your Life Podcast
Email: Matt@highliftfin.com Website: https://highliftfinancial.com/
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This week I'm super stoked. I get to spend some time with a good friend of mine one of my co-hosts Inclusion Cocktail Hour, matt DeFrancesco. He is the owner and financial technician at High Lift Financial. Today we're going to catch up on a lot of great financial tips, suggestions and ways you can help yourself if you're a shop owner, either looking to hand down your business to your family or exit, or make some financial improvements. That makes your business more worthwhile. So make sure you stay tuned. It's going to be a great episode.
Speaker 2:Welcome to the MindWrench Podcast with your host, rick Sellover, where minor adjustments produce major improvements in mindset, personal growth and success. This is the place to be every Monday, where we make small improvements and take positive actions in our business and personal lives that will make a major impact in our success, next-level growth and quality of life make a major impact in our success, next-level growth and quality of life.
Speaker 1:Hey, what's up everybody? Welcome to the MindWrench Podcast. I'm your host, rick Silover. Thanks so much for stopping in. If you're a returning listener and haven't done so already, please take a minute and click the follow or subscribe button and then rate and review the show. When you rate and review the show, the algorithms for Apple, spotify, google Podcasts, iheartradio, amazon Music and review the show. When you rate and review the show, the algorithms for Apple, spotify, google Podcasts, iheartradio, amazon Music and all the other platforms will see that it's valuable and show it to more people that have never seen it before and hopefully it can help them too. I would really, really really appreciate your help sharing this word with your friends and family as well, and if you're a brand new listener, welcome. I hope you find something of value here that helps you in your personal or professional life as well. Please make sure to click the subscribe or follow button so you never miss another episode.
Speaker 1:Today I'm super stoked. I got one of my buddies on, a very good friend of mine, a fellow podcaster like myself, and he's one of my co-hosts on the Collision Cocktail Hour, matt DeFrancesco. He is the owner and financial technician of High Lift Financial. He's also the founder and host of the your Business, your Life podcast. We got lots to talk about today. Like I said, I'm super happy that he's on with me today. And, matt, welcome to the show.
Speaker 3:Hey, thanks, rick. I'm glad to be on here, so I'm looking forward to our conversation.
Speaker 1:Absolutely, absolutely. So just a quick review. So Matt and I, we first met in 2021. I recently started a podcast. His was fairly new as well, and he reached out to me because he was interested at that time in getting more into the collision side of business and my name popped up a couple times for him.
Speaker 3:Yeah, it was basically. I mean, I was dealing with just family businesses in general, all kinds of different family businesses. I always kind of I'll give you the high level. The high level story it's when I, when I first got into financial services, I didn't have access to any money. I didn't have any any. You know, rich family, rich friends, anything like that. So I basically had to kind of grind it and I I knew two things I knew municipal bonds and I learned 401ks. So that's what I spent my time doing. I spent all day calling family businesses Do you have a retirement plan? Do you know the tax benefits of it? Or you do have one? What's the last time you had it reviewed? And I was selling these plans. So what happened was I got a collision shop owner who referred me to another one and I really just started doing a deeper dive into the industry and I really liked the demographic, I liked the people in it and I just decided to go all hog into just the collision industry. So that's basically how I got involved in it.
Speaker 1:Okay, great. Yeah, it's a unique industry, but there's so many good people and there's so many people that need help on the financial side. So it's a unique industry, but there's so many good people and there's so many people that need help on the financial side, so it's a great fit for you. I know, since we first started talking, that your business has grown through the collision industry and now you're at the point where you're doing speaking events, which is fantastic. So you're getting in front of more larger groups of collision shop owners and I'm telling you folks, matt has made a great impact on my life and I know he's making an impact on those other lives out there, because there's some of this stuff that you know.
Speaker 1:I spent my whole life in collision shops and most of these shop owners had no idea, on the financial end of the business, really what to do. Or you know best moves, best tax advantages, you know how to get in and out of buying a shop or selling a shop, you know passing it down to their kids or grandkids or whatever. So there's a lot of financial information there. That's just that block was missing and Matt has been doing a great job providing that to the shop owners, wouldn't you say, matt?
Speaker 3:Yes, I think the biggest thing and this is I mean it's, it's interesting, I mean it's, it's typical of collision shops, but I think it's. It happens in every business. You know you invest so much time and money in your business and then all of a sudden it's, it's. You get to a point where it's like, okay, I start looking at the next chapter and nobody knows where to go and there's so much misinformation that's out there that they really just don't get the guidance. And it's actually interesting because I just submitted an article for Body Shop Business about why DIY exit plans don't work. And I see this a lot of times where shop owners looking at transitioning the business to kids or to a key employee or they're like I don't have anybody, I'm going to sell it to a third party, and all of a sudden they just get stuck All right, and either they never get out of that, that revolving five-year exit window, or they do something rash and then end up regretting it 12, 24 months down the road.
Speaker 3:So really, what my goal is with clients, and especially with collision shop owners, is, first off, to help them identify what they want that next chapter of their life to look like.
Speaker 3:Okay, and I really equate it to a GPS. So if you're going to go on a trip, rick, first thing you're going to put in is where you want to go, right, absolutely Okay. So we figure out where we want to go, so we develop that vision. But then the second thing that the GPS is going to ask you is where are you starting from? Right? So then we've got to figure out where they're starting from, and typically what happens is we're going to find that there's a gap in there. So now it's about okay, how do we address the gap to get you to that end point? And so now we can create a roadmap out of it. And that's really what I do with these collision shop owners is really help them to identify where they want to go, figure out where are you now? Are they going to match up, and if not, then what do we need to do to get to that end point?
Speaker 1:Okay, that makes sense. So I see I was looking on your website recently and it says you're the only certified exit planner in this industry currently. Is that still true?
Speaker 3:Yes, there's only about 130, maybe 140 of us in the world certified exit planners. Okay, that's awesome. I'm the only one that focuses specifically in the collision industry.
Speaker 1:Yes, Okay, I think that's a good fact for people to know. So Matt not only knows his stuff, he knows it to the level of you know. He's actually been certified to help shops exit their business, so in many different forms. So I'm also going to refer to him as the GPS of the exit plan, so because everybody's going to need it.
Speaker 3:So that's right, that's exactly right.
Speaker 1:Yeah. So let me ask you. So we're talking about generational wealth and exiting and things like that. So what exactly is generational wealth, and why does it seem to be not on anybody's radar within the shop? If you're looking for a competitive edge for your business or a more effective jumpstart to your personal development in 2024, I'll make your first step super simple.
Speaker 1:It is a fact that an incredible number of the most successful business owners, nearly half of the Fortune 500 companies, top-earning professional athletes, entertainers and industry leaders like Microsoft's Bill Gates, former President Bill Clinton, oprah Winfrey, richard Branson, amazon's Jeff Bezos and Salesforce's Mark Benioff all have one thing in common they all have at least one coach and some have several that they work with on a consistent basis, someone that helps guide, mentor and support them, challenge them, help them set and achieve goals that move them forward and then hold them accountable to follow through driving personal and professional growth. Working with a coach has many substantial benefits. Just for an example, 80% of coaching clients report improved self-esteem or self-confidence thanks to coaching. 99% of individuals and companies that hire a coach report being very satisfied and 96% would do it again If, deep down, you know it's time to make those improvements in your business, your personal life, that you've kicked down the road year after year.
Speaker 1:If you're tired of knowing there's a better version of you waiting to shine, but unsure of how to bring that version to light, if you're tired of wanting to enjoy a more successful business but not sure how to start, and if you don't want to go another 12 months without better results but you don't want to go it alone, then take the first step. It's super simple. Sometimes talking to the right person can make all the difference. Go to wwwrixelovercom contact and I'll set you up with a free consultation. Call with me to see if one-on-one coaching is right for you.
Speaker 3:Well, I think, first off, what? What does generational wealth mean? Generational wealth is being able to take what you've built and create an ongoing legacy, not just for your generation, but for the next generation and all the generations after. Um, it's really, it's really the model of you. Look like the rockefellers, the vanderbilts. You know a lot of the old time, the carnegies, the old time uh, industrial wealth. What they were able to do was create, basically, just a vehicle that is carried on through multiple generations, not only to benefit their families, but to benefit societies itself. Well, that could be done on a very on a smaller scale too, and I think nobody realizes. They think that you've got to have multi, multi, multi, millions and billions to be able to do something like this. So it's really about creating an awareness about what's, what are the possibilities that are out there.
Speaker 3:Okay, the second thing is that I just don't think it's ever been approached. I don't think people have been educated on what they can really do with their lives. You know, most of the time most of us go through life, you know we just kind of hunker down, we grind, we do our thing and then then what? We don't know because nobody's ever really educated us on what we need to do. That's what I really feel my role is. Why do I do speaking engagements? I do it to try to educate people, say these are the possibilities for your life, okay. Why do I write articles for in the industry publications? Because I want to educate people. This is what's possible and when? So all of a sudden, people start to see the possibilities, now their world opens up, they can make something that's much bigger than themselves. It's not just a collision shop. It can become a legacy.
Speaker 1:Right, it becomes a mindset. Mindset shift at that point too. Right? Because I think I've heard you say before this is one of your taglines is we seem to spend as a shop owner. We'll spend a large portion of our life underneath, with the hood up right. We'll come out from underneath the hood and go God, I'm in my 60s, what the hell am I supposed to do now? Right?
Speaker 3:How do I get?
Speaker 1:out of this, what's my next step?
Speaker 3:Yeah, exactly, and it's because they just don't know. And so that's what my role is is really to help them to define that. Just to use another analogy, I always say you know to. To execute these things is actually it's like putting a puzzle together, right, and you just take the pieces and put them, and I know how to put the pieces together, but I can't help you to put the pieces on until we create the picture on the box, because you ever try to put a puzzle together without seeing what it's what the end product's supposed to look like. No, you can't, you can't, right. So that's that's what my role is is to help to create that picture, help you, the shop owner, to develop that picture. Then we can start putting the pieces of the puzzle together. Right, but I think it takes it. It does take.
Speaker 3:A certain quality among shop owners is the first thing is you've got to be coachable. You've got to be willing to say all right, you know what. I'm going to trust that this guy's going to lead me in the right direction and you're going to follow the steps that I tell you to do. I've had too many times where clients have said, oh, you keep talking about these stay, know, you keep talking about these stay bonuses or you keep talking about business continuity. All I need is a consultant to come in and fix everything. Well, you know what building value in your business is more than just getting your operations right. I had a lot of really good operators that are still a mess and they don't have the valuation that they need because they haven't put any other non-financial aspects and the financial aspects into place. So that's really. My role was really more as a coach through all of this helping you, leading you through the process, executing what I can from my skillset and then bringing in the outside professionals that can help you to accomplish your goals. So this becomes a team effort. It really needs to be that. And you know goals. So this becomes a team effort. It really needs to be that. And you know all of you guys on our Collision Cocktail Hour group are part of that team and I've got many, many others that can help us to execute. Give you a great example, rick.
Speaker 3:I just did an intro call on Tuesday with a dad that owns the business. Sons are in it, he wants to transition it and we're talking about certain things and he was talking about yeah, well, I'm just going to hold the note and I'm like, oh, is that your plan? And he said, well, that's the only plan. I thought and I'm like, well, there's other ways to skin the cat. I mean, we could restructure as a C-corp. Now you're doing stock purchases instead of asset purchases, but now you're paying capital gains instead of ordinary income. Oh, and you know what? Guess what? Because they're your kids, you can utilize gift strategies. You can almost eliminate any tax liability that could occur because of using gift and estates and estate planning and trust. And he said to me he goes, goes. Why isn't anybody told me this? And I said because they don't know because he hadn't talked to you yet.
Speaker 1:That's why that's right.
Speaker 3:So that's really what it comes down to. I think you got it. You know they got to be educated, but then the second thing is are you willing to listen to what I teach you and follow the steps right?
Speaker 1:that's probably I. It seems like that would be the biggest or most difficult part of the job, for what you do is, number one, casting the vision to where someone actually could see it and go. Yes, I get that. Okay, how do I start to go in that direction? Right, cause I think a lot of times I've talked with thousands of of collision shop owners and technicians and managers and stuff, and and you know, they can be pretty hardheaded, sometimes they can be very egotistical, right, you know, this is my baby. I built this thing from the ground up and you know I know what's best for my company. And sometimes, getting past that, right it. Listen, I'm not challenging you, I'm not telling you you're not smart. I'm just saying you haven't looked at it through this set of lenses yet, you know, and if you get somebody to look through it through that set of lenses in a non-threatening way, then they go oh, I really never thought of it that way, right?
Speaker 3:Yeah, that's no, that's exactly right. And I think you know, somebody asked, somebody was asking me about why you know why collision shop owners, and I talked a little bit about the demographic. But I think one of the biggest things is and I told a little bit of my story, but you know, I've had to grind to build my business. All right, all right and so, and I find most collision shop owners that's what they are they're. They're they're guys who love cars, started working in the industry, worked themselves up, either started a shop or or bought a shop that they worked for or, you know, took over dad's shop, but they kind of grinded it out and I can relate to that.
Speaker 3:I also can relate to, you know, thinking that I was. You know it's, it's up to me that you, I don't need anybody's help, and I've come over the years to realize that I have shortcomings. I was talking to a woman I'm doing some work with and she's really good at developing SOPs and I'm like that's where I suck, that's where I suck. All right, so I'm getting, I'm hiring people now to help me develop standard operating procedures so that now workflows can work much, much more fluidly. That's where it takes some humility to do that, and I guess you know what I tell shop owners is that look?
Speaker 1:would you rather be right or rich? Exactly.
Speaker 3:It's similar, mike.
Speaker 1:Anderson. Mike Anderson's got a tagline very similar to this is you know, do you want to be happy or do you want to be right? Cause there's a difference, right.
Speaker 3:There is a difference, there's a big difference.
Speaker 1:Yeah, yeah, and he's referring to talking with insurance companies and things like that. So you can argue all you want to you know it.
Speaker 3:That's exactly right. That's the bottom line.
Speaker 1:Well, I'm glad there's someone like you out there right now doing the things that you're doing. I've seen a lot of adoption, I'd say, in our collision industry of people wanting to get more educated, wanting to learn these things that maybe we didn't learn for 30 years. But we see the world around us changing. We see the collision world around us changing massively right. See the collision world around us changing massively right. You've got some heavy-duty, top-notch groups out there. You know buying up shops that have everything figured out. They know their financials, they know their operations, they have SOPs already built. So I think there's a nice higher level that you know your average mom-and-pop shop can get to if they really want to. But they have to enlist the right people right. They have to reach out to the right type of coaches, the right type of resources. Like you or Laura Gay with you know the way she works with people on selling their or buying their shops. Yeah, it's, it's a shift.
Speaker 1:I feel we're like in the midst of right now man, and, like I said, I feel fortunate. I know enough people in this business now they're that know how to help others get there. Um, because, just from my background, you know dealing with the smallest to the biggest of shops. For a lot of years I always felt for the smaller business guy. Right, I always felt for the you know the guys that's struggling. He's got one of his kids working for him. He's got one other guy. He's constantly battling with the kids, it's like. But you know they want to get to that next level but they just don't know how and I hate to see them all sell out and just get out of the business because they've given up on the battle. But I think you know, with the money I see being made in collision centers these days, you know the prices on labor keeps going up. The items that we were missing for decades that we're now charging for drives the revenue up and it's becoming a better business. It really is.
Speaker 3:I completely agree yeah.
Speaker 1:Yeah, great, yeah, yeah, I I like to see where people like you, people like me, people like mickey and the other people on our team can get involved and help these shops. You know, you're not, you don't have to do this alone, and that's I think that's the message I I like to try to get out there. You don't have to do all these things alone. It's, it's not like it was a couple decades ago and every man for himself. Now it's there's, there's a little bit more community, I think, in this industry than there's ever been.
Speaker 3:Right, and you know what? It's interesting Again, being in financial services, I use this analogy a lot because people ask me, like what's a great stock to buy, or what's a great investment, and you know, there's lots of real estate's good.
Speaker 3:You know there's stocks you can buy Nvidia, and, and you know there's lots of real estate's good. You know there's stocks you can buy in NVIDIA and you know a lot of people made a killing on that. But the best investment you can make in is in yourself, and I find that the shop owners that are investing in themselves that they're, you know, they're being part of, you know, Mike Anderson's 20 groups, or they're investing with Mickey Woods in marketing, or, you know, investing with you and working in mindset those types of things, or investing in me to help them, to put the financial pieces of the puzzle together to get them the end result that they want. You know those are the ones that always progress, and that's what I think I really like about our collision cocktail hour is we've got shop owners on there that want to learn and yeah, there's probably what I would say about a quarter of them. They participate in the conversation, but probably two thirds of them sit there and just listen, but you know that you're taking something out of it because they're there month after month after month. Oh, yeah, that's. I think that's a great testament to the people in this business, to a certain percentage of them.
Speaker 3:Yeah, and it's interesting because I had a guy that came to me one time and he sat in on one of the collision cocktail hours and afterwards I was talking with him and he said you know, I was on your collision cocktail but I had to bug out of there because you know, all those people have time to work on their business and I don't have that. And I said that's your problem, You're not making it your time. You know we have to, and my coach teaches us all the time and I teach this to my clients that there's three types of time we need to, that we need to invest in. We've got a tactical time. Tactical is when we're working in the business. That's when we're doing our thing, All right. But then we've got to invest time in strategic, which is working on the business, and we have to literally dedicate time, pull to put that into our calendar and say, look, I need to do this. And if you're, if you're in a position where you can't do that, then that's really your first step is that we need to find the people, by your time back, that can allow us to take more strategic time, All right.
Speaker 3:And then third one is renewal time, and renewal time is really that's time. We need to just get away from the business, Because I find when I get away from the business that's when my greatest breakthroughs come in, because I'm not working in the day to day, yeah Right. And when you're at the beach or you're, you know, on a hunting trip out in the Rockies or you're riding motorcycles on the Hatfield-McCoy Trail, that's when you have your breakthroughs. And so you've got to work yourself into that position. And if you're not in that position, then that tells us. Here's what our first steps are.
Speaker 1:Absolutely, boy. I'm 100% on that. I find my best thinking time is when I'm not, you know, in the whirlwind of work, and all the things that I do is when I'm out on a walk or I'm sitting on a beach, and you know God, I always like to. I have my phone with me no matter where I go, obviously like every other person in the world, but I usually take notes, so I'll have things come to me. Oh, I should. You know, maybe it's a podcast episode I want to do, maybe it's a thought for work, or maybe it's just something I need for my own self. Oh, you know, if I started doing this, I think that would be a good idea for me. I'll keep those notes because that's the only time you have clarity. And you know what, if you reprioritize some things, you can make time for working on the business instead of it. Right, because everybody has to you.
Speaker 1:Look at every top performer that goes to. You know a mike anderson. You know his spartan 300 group, right? This isn't a promo for the his Spartan 300 group, right? This isn't a promo for the Spartan 300 group. But I'm saying these are all guys that are serious and gals that are serious about their business. They dedicate the time to go out of town, spend a couple days with a bunch of other business shop owners going over things that are important, but they make that time and it makes them more successful, right yeah. And they also invest in the time you said to just tune it down a little bit, get the hell out of the shop for a little bit, get away from everything for a little bit and have that me time to rejuvenate and let your body heal up a little bit from the scars of working every day. It's absolutely needed. It really is absolutely needed. I found that in my own life when I started doing those things like wow, life gets better, better when you do that.
Speaker 3:It really does exactly there's. Yeah, there's no doubt, and it's, you know, it's interesting. It's interesting as you're talking about that funny story. I had a client that came to me one time and says, you know, hey, matt, I look I've got no kids. I don't have, you know, so I've got no succession plan there. None of my key employees are interested. I want to sell the third party. So I said all right. So we started going through the process and I actually introduced him to Laura and so she did an evaluation and we kind of looked at everything. We were matching up the numbers and he was actually part of Mike Anderson's Spartan group, so it was really good.
Speaker 3:But anyway, as we were going through the process and I started going through, okay, let's evaluate what's more important to you, a third-party sale, or internal or external? And he started to realize that if he didn't have to, if he didn't have to be there 60 hours a week, 60 hours a week, he could live. If I could be more of an absentee owner, why would not? I having the name on my shop is important to me because I couldn't drive by it and see. You know one of the consolidators names on there, right, okay, yeah, I'd like to provide more for my key employees and maybe start, maybe give them a little bit of an equity share in in, in in the shop.
Speaker 3:And so all of a sudden his thinking shifted because he started to realize what was really important to him. And I think that's, that's a danger, and I and and Laura and I, that's why we I think we work well together, because she a lot of times we'll bring me on the front end to help them to define this vision. Then, if they, if a third party sale is it, she goes and negotiates that and then I come in on the back end to structure those assets, to help them uh, create that, uh, multi-generational legacy right. So on the third party end, but you know, also on the internal end, we you know the uh, the uh internal sale, whether it's a child, children or key employees. That can be another very fulfilling thing. There are some owners that say you know what I do love the business, I just don't want to be grinding it here.
Speaker 1:40, 50, 60 hours a week, Right, yeah, there's really plenty of options to go at that point. There really is. It's only the ones that are truly I've had it, I've done. I can't take one more minute of this. I just want to go fish the rest of my life.
Speaker 3:Do you really want? I mean, I think about that in my life, like, do I really want to get to the point where I'm just so freaking burned out that I just got to give up what I do? Yeah, I mean, I'd like to have options before that.
Speaker 1:Yeah. Well, if you make yeah, you make the changes earlier, you get the help earlier, you get more people involved in your business that are an asset, right, then, yeah, you can get there. You can.
Speaker 3:Yeah, I mean one of my, one of my very first collision client. He's still a client here. This is what 10, 11 years later and we were initially working on an internal transfer with his two sons the one son didn't work out. The other son left for a little bit, came back, just went through a lot of these ups and downs, but now what he's realized is that he's about 62 now and he realizes, you know what. I don't want to completely exit, but I like building my culture legs, but I just I like building my culture. So I want to kind of be the 50,000 foot guy and his, his younger son and his key employee where he's developing them to do more of the operations so he can go now, live the lifestyle that he wants. But he doesn't have to be detached from the business. Things can evolve that way too and he, you can have the best of both worlds, but you've got to be willing to plan to do it and then be able to be coached, implement the things that you need to do to get there.
Speaker 1:Yeah, my message is always you know nothing's off tape. You have the opportunity to really direct your life in any direction you want. It's just are you willing to do that? Are you willing to make changes or involve the people? And I, you know, I like to tell people I don't care where you are if you're not stuck there. You're only stuck there if you let yourself be stuck there and you convince yourself oh, I can't do anything but what I'm doing right now. So we all have. We all have the options to prove and maneuver and grow and all those other things.
Speaker 3:So well, and I think that's, I think that's a lot of the benefits that you provide these shop owners.
Speaker 1:Again, so much of it's up, here it is everything's up if you don't, if you don't get the six inches right between your ears, you're not gonna go anywhere yeah, it doesn't matter how hard you work or how hard you grind, or how many employees you have, or how many cars you buy or how many houses you have. If you don't fix that in between years, you won't really enjoy any of it. You won't get the fruits of those labors. Right, yeah, exactly, yeah, I want to switch gears a little bit. So obviously I've got a great financial wizard, I believe, on the horn here today. So, matt, could you give us so for any shop owner, small or large, that probably hasn't gone through any of these things or hasn't enlisted a really good strategist in their business? What are, like I say, the top three financial flubs, if you want to call it, or financial misnomers that we can talk about? That would help somebody. If at least they understood these three things. It would get them thinking in the right direction of hey, what else can I do?
Speaker 3:Right, right. So definitely the first one, and it's so funny because it just works out this way. But the first step every shop owner needs to take is putting together what I call business continuity plan. So basically, the business continuity plan is a plan that says, okay, if I die, if I become disabled, if I you know if there's a divorce or you know if I've got a partner irreconcilable differences how do we ensure that the business functions, either until a successor can take over or until it can be put into a position for third-party sales? We want to look at protecting not only the business but also the owner's family. So that really entails a couple different things, two aspects that are probably vital to it and it's so funny because I've had guys that say you keep talking about these things, why do you keep harping on it? I say because they're that important. One is what's called business continuity instructions. It's basically a booklet that we help our clients put together that has all the instructions who needs to be contacted, who are the key advisors that need to be contacted, top vendors, who is going to take over certain roles, where are the passwords, who has access to the bank accounts, where's the combination to the safe, all these different instructions all in one spot. So then something happens. A spouse or key employee can go there and have all the instructions written out for them.
Speaker 3:The second one is what's called stay bonus programs. And stay bonus programs and stay bonus programs are basically the programs that we develop that for key employees that have vesting schedules on them. So they kind of work like a golden handcuffs type of uh type of program where if they leave they're going to leave money on the table. So you want to develop these stay bonus programs so it makes that key employee stickier. Because, first off, you want to develop these stay bonus programs so it makes that key employee stickier. Because, first off, you want to make sure that they leave. What happens a lot of times is if something happens to the owner, key employees panic and they leave. Now all of a sudden the business is screwed. But the second thing with the stay bonus program is they now have got finance. They feel like they're bought into ownership on the business because you typically want to tie these stay bonus programs into increases in net profit.
Speaker 1:Partial ownership right Right.
Speaker 3:So it's not really partial ownership, but the way they qualify for the businesses is on increases in net profit. So you kind of get two things there. So I think that's probably the biggest thing that I, that just about everybody, every shop owner, misses. Every shop that I've talked to gives their employees bonuses, and you can't do away with the cash bonus that you give them because a lot of them rely on that. But now you want to implement this stay bonus program that basically, will you know, reward them for increases. So think of it kind of like a profit sharing plan, but it's under our vesting schedule so that you know if they leave within that year they don't get any of that money. Okay, and then little bits of it are vested over each year over time.
Speaker 1:Okay, I don't think many shops I know of will do something like that. You're right, they all do bonuses. Well, most of them will do bonuses, but yeah, I'm sure there's a way to figure out. Okay, we'll have a little bit less cash but we'll have more of this, this vested bonus, stay, stay bonus program.
Speaker 3:But actually no, because you're building on increases in gross profit.
Speaker 1:Okay, it's based on gross profit, net profit.
Speaker 3:So think about it this way. So let's say you're I'll use nice round numbers let's say your net operating profit after tax is $500,000. So what we do is we set that at a baseline. Okay, let's say then that you grow to $600,000. So you have a hundred thousand dollar growth. All right, out of that hundred thousand dollar growth we we have the owner retained 60% of that because he still, you know, needs to invest in the business. Then 40% is taken as part of the um the state program.
Speaker 3:So let's say, you have four employees, that four key employees, that would give each of them $10,000.
Speaker 1:Okay, gotcha.
Speaker 3:Okay, and then you could structure it any way you want. Some of them might do 5,000 as a cash bonus. 5,000 that goes into the stay bonus program. That's under a vesting schedule Okay.
Speaker 1:I like that. That's a really interesting concept and it sounds like it'd be fairly painless for a shop owner to really set things up that way it's all based on growth yeah it's all based on growth if you're hustling and you're contributing, yeah, everybody wins, house wins, and you guys win.
Speaker 3:You're winning as a shop owner, because you're still growing and you're still retaining 60 of those earnings right yeah, that's the first one, that that's probably the biggest.
Speaker 3:That's typically the first step I do with shop owners. The second one is putting together some type of adequate retirement plan. Too many shops I see have simple IRAs. Simple IRAs are good, they're inexpensive, but they don't give you a lot of flexibility as far as how much can be deferred into a plan and there's great tax benefits to it. Most shop owners want to. You know, nobody wants to pay more than they have to correct.
Speaker 1:Yeah.
Speaker 3:So a good, solidly designed retirement plan is the best starting point for any type of tax deferral, and I just see that the shop owners missed that opportunity over and over again.
Speaker 1:Okay, well, that's good, that's you know. I wanted a couple of good takeaways for those that listen and those are great takeaways because those in a lot of the shops I've dealt with over the past 35 years anyways, I never heard any of those three things mentioned and I've had really good intimate conversations with shop owners I've known for 20 years or 25 years years and and I don't think those you know, maybe today it's different with all the advances we've had in the last five years with you know, you know the collision shops and what they've really focused on and stuff, and I'm sure some of these larger groups in the smaller msos are. They probably have things like this set up, but the average collision shop owner probably doesn't. So those are three great uh takeaways that uh, someone can start thinking about right now. Reach out to you and go hey, matt, can I get a little bit more information? That's right.
Speaker 3:Yep, oh yeah, no doubt that's what we're here for. And again, it's really about education. Most people don't know these things. Why? Because they've never been exposed to it.
Speaker 1:Right Now somebody can reach out, schedule just a consultation, free consultation call with you, right.
Speaker 3:Yep, yep, so you can go to my website. It's highliftfinancialcom, okay, and up at the there's a up on the top right there's a let's chat button that you can get right on my calendar. I give everybody 30 minutes of my time no charge, and here's the one thing I promise everybody is, even if I can't help you, I will get you pointed in the right direction.
Speaker 1:That's excellent, that you can't ask for more than that, man. That's. That's more than fair right.
Speaker 3:It's all about providing value.
Speaker 1:Yeah, no, that's great. Well, I'll make sure I put a link for that in the show notes. Okay, when I when I post this. Just a couple more questions. And this has been great financial information, and I know it's tough for you because you're going through dealing with the flu, but I appreciate the hustle and the can-do attitude here. No problem, man, I've noticed that you've been getting a lot more speaking gigs. Yes, so I've seen you a couple places and I know you've got several lined up this year. So if the folks are hitting any of the trade shows, is there a couple that you could share that you know you'll be at for sure if they want to try to catch you there and maybe listen to some more on what you've been talking about.
Speaker 3:Yeah, so Northeast is probably the one that's coming up. Well, that's in March, actually, the AASP Illinois show I'm going to be at that's February 22nd. I'm going to be actually talking about building value in your shop to exit, on your terms, because it's always about preparing ahead of time. Yes, and that's in Naperville. Then in March I'll be at the Northeast show. I'm actually going to be doing a um, a co-presentation. Laura gay and I are doing it together, kind of walking them through the steps that we talked about, from, you know, identifying, you know, your personal vision, your gap, then going through a sale process and then how the back end works. Um, uh, it's southeast. That is um, southeast that's in may.
Speaker 1:I think late april or may. Yeah, yeah, that's may?
Speaker 3:I'm going to be talking about becoming an incidental owner oh, okay, one that is not where the business is not dependent on them anymore and how to become that okay. And then we're looking at abat abat, that's in september, possibly shop expo, which is in june. And um actually just got an email from josh kent about the tennessee show, so he just asked me he had a speaking request there. So excellent.
Speaker 1:Yeah, that's right. And how do you like doing that? Because you didn't do that before. This is relatively new than the past year and a half, right? So how?
Speaker 3:do you like? That I love it. I love it, I love being in front of people. I love uh, I just like people and I like interacting with them and I like educating them. I think that's probably the biggest thing. I just find it as a good vehicle to be able to help them to get to where they want to go and make them aware that there are possibilities that are out there.
Speaker 1:That's awesome and that's probably one of the things we share a passion about is just helping educate people, giving back, you know, taking some of the things we've learned and share those that don't know it yet. So that's awesome. I will see you out at AASP in Illinois, so I am planning on heading out there next month and, of course, I'll see you on every. So. The collision talk I'll already mentioned it a couple of times, so that's something that there's four of us now that co-host Is it four or five, five, five, yeah, yeah, so there's five of us. Now Clay had dropped off.
Speaker 1:So every third Wednesday of the month, 8 pm Eastern time, we have an hour-long Zoom call and we'll get anywhere from 30 to 70 shops. Get on there. It's just a free exchange of you know. We'll share a topic for the night and then usually it'll evolve into something else, or it may just go the whole hour, sometimes it goes an hour and a half, but the cool thing is is it's absolutely free, there's no charge, there's no nothing, it's just a get together for the industry. There's no nothing, it's just a get together for the industry.
Speaker 1:And we have a lot of really loyal returning shop owners, very manager, even a technician, a supplier, as long as you don't work for an insurance company, you're more than welcome to join us. We'd like to keep a nice I guess, safe environment to talk about the things that are on shop owners' minds. So I invite anybody to go to collisioncocktailhourcom. There's a website for it and we have a Facebook group for it. If you guys are interested, stop in and check it out. It's a lot of fun. Me and Matt will be on there almost every month, but anyways, I just wanted to bring that up while we talked about it earlier.
Speaker 3:No, I think it's important. It's a really great forum and I think it's interesting because I know there's times when we've even said, oh, maybe with a holiday, or we'll do this, we're not going to meet. Everybody gets upset.
Speaker 1:Yeah, I know it's still my favorite night of the month. I enjoy doing that. It's always a good time, lots of good conversation. So, matt, I know we've stressed your voice. As far as we're going to stress it today, I want to give you a break and get you out of here.
Speaker 1:I really appreciate everything you shared today Great tips, great advice, great input from you, as usual. And, like I said to the folks out there, all BS aside, matt has made a positive impact on my life. He's a great human, he's got a lot of great things to share and I'm sure if you give him an opportunity, he'll probably make a difference for you as well. So I will leave all of his contact information in the show notes and with that, matt. Any final words before we go.
Speaker 3:You know, and I thank you for the kind words, I do appreciate it and I think that's one of the things that appeals to me about this industry People like you, people like Laura, all the different shop owners that are part of our Collision Cocktail Hour there's so many good people out there that really just not only want to benefit the industry but benefit each other, and I think that's what appeals to me about this industry. I mean, go to a Collision Industry Conference, go to any of these shows. It's amazing how people are willing to share and help each other. It's just an industry full of quality human beings. So I appreciate the kind words. I feel the same for you.
Speaker 1:And let's just keep rocking it and make this industry as great as it can be. Well, I hope you enjoyed that financial wisdom Matt shared with us this week and maybe picked up on a few helpful tips on how you can start preparing your business for a successful transition, or maybe just making your shop a more financially stable business. That'll pay you great dividends down the road. If you want more information on the subject, be sure to connect with Matt at High Lift Financial and definitely check out Matt's podcast, your Business, your Life. I'll leave all the links in the show notes. Check out Matt's podcast your Business, your Life. I'll leave all the links in the show notes. Thanks again for tuning in. I really appreciate your support and I hope you have a great week. I can always be reached at wwwrickselovercom where you can find all my social media links podcast episodes, blog posts and much more Outro.
Speaker 3:Music.
