May 8, 2025 • 48 mins
Ever feel like you're sprinting on a hamster wheel in your business—working harder but not moving forward? You're likely caught in the production trap that prevents true business growth.
The Lewis Brothers tackle a critical turning point every entrepreneur faces: the shift from production to operations. Drawing from their 79-year family business journey, they reveal how being caught in day-to-day tasks creates a ceiling for your success and quality of life. The solution? You must "fire your old self" to reach new levels.
This isn't about abandoning what made you successful—it's about creating capacity for strategic growth. The brothers share their framework for this transition: starting with proper organizational structure (maintaining a 4-8 person ratio per manager), developing detailed standard operating procedures, and planning days around high-leverage activities rather than reactive tasks.
What makes this episode particularly valuable is the practical advice on navigating the awkward middle ground where many leaders get stuck. You've hired people to scale, but find yourself constantly jumping in with "here's how I did it." The Lewis Brothers offer tactical approaches to break this pattern without losing quality or control.
The conversation extends beyond theory into financial management, revealing how they view KPIs not merely as daily targets but as reflections of operational effectiveness. They even share a real-life example of managing a $1.7 million cash flow challenge after a record sales weekend.
Ready to transform your business from a job that consumes you into a system that multiplies your impact? This episode provides the roadmap. Follow along, implement these operational strategies, and watch your business—and life—transform.
Feel the dynamic energy of the Lewis Brothers as they deliver real stories and lessons that keep local businesses on their toes, and share how experiences in the community inspire them to keep on driving.
Check out all our great episodes at CrossroadConversationsPodcast.com!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I grabbed a piece from this book over here and
then I grabbed a piece from Alex.
Neither one of those wereautomotive, but it was business.
It was systems, yes, and whenyou start looking at it from a
production to the operationalside, that must be the lens that
you go through and that meansyou're going to have to give up.
But I'm just going to come backto this again because, taylor,
(00:20):
I know there's people listening.
That's hard to do.
Hey, everyone, welcome toCrossroad Conversations with the
Lewis Brothers, where we aim toshare real stories about
running a successful familybusiness, working through
adversity and pouring back intothe community that keeps our
door open.
We're your hosts, matt Shelbyand Taylor, and we bring you
(00:41):
relevant local business adviceand automotive insights that are
sure to change the way you lookat running a business and maybe
even throw in a plug for you todo business with us.
Welcome to CrossroadConversations with the Lewis
Brothers.
Hey, we're back this week andwe got an exciting subject to
talk about, taylor, I'm excitedabout this one really because as
(01:01):
we've evolved and grown as abusiness, we've really lived in
this subject.
And the subject is beyond thesale mastering the operational
side of your business.
Yes, it's really big.
That sounds easy, but when youstart pulling the layers back
and I can't wait to dive intosome of the details of what
(01:22):
we've personally gone throughabout starting to work on the
operational side and how do youhave the right pieces in place
that allow your business toscale with reducing the amount
of times you pull your hair out?
That's what I'm going to say.
You know what I mean.
Or trying to find a betterbalance of work-life balance
while growing your business atthe same time.
(01:44):
Much easier said than done.
We'll dive into that here in asecond.
But why don't you recap lastweek, hey?
Speaker 2 (01:49):
recap last week we exchanged Shelby out, brought
Mac back in, we shot him off.
So we're back in the middle ofit here.
But recapping last week, hiringversus talent or hiring versus
culture, we really deep doveinto that and you've got to find
that happy medium because ifyou go too far one side or the
other, it's going to disruptyour whole path of what you're
(02:10):
on.
So dive back into the previousepisode.
That was 33.
Hey, always check us out thereon lewissuperstorecom for all
the new, freshest deals,specials, everything online that
we have to offer.
And what did we drive today?
What did we drive today?
What did we drive today?
Well, we actually walked overto our podcast room but new
(02:30):
vehicle that just came out andit's been a long time since
we've had.
But I got on the showroom floorover ford a king ranch f-150.
I've talked about the superduty, I've talked about the
expedition, but the f-150 isreally the og that it kind of
was all in there and it's theultimate experience.
I always talk about these, butthe interior sun, oh it's so
(02:52):
nice.
Speaker 1 (02:52):
so I, uh, I'd have to check the facts, but I'm pretty
sure the king ranch in thef-150 maybe came out in like oh
two, oh three.
I can remember, you know, Igraduated high school in 2000.
So I can remember, just shortlyafter that, going to college
and seeing the King Ranch comingand it was like man, hey, dad,
can I drive one of those?
(03:13):
And he was like no, no way.
And I'm like at least I'm goingto go sit in it.
So I'd sit on the lot and, likeyou know, it would have that
saddle-like leather and when youopen the doors it just smelled
different.
Speaker 2 (03:30):
It's just something that feels like a higher level.
When you get into a king ranchf-150 oh it does.
I was pulling it in theshowroom the other day and put
level kit and tires on it so itlooks good, but just the stigma
around it, everything.
The finishing awesome truck.
You got to come check it out onthe showroom you bet you do.
Speaker 1 (03:45):
Okay, let's dive right in.
Today I talked to you about hey, today we're going to get in
the weeds, and there's probablysome listeners out there that
are in this situation.
There might be some that are init and don't even realize it,
or others that realize it, butthey're like I understand, I'm
stuck, I don't know how to getout of this.
I don't know how to take thenext step, and I'm here to tell
(04:06):
you.
We've been there and inmultiple areas.
We're still there.
My biggest piece of advice,before I get into the details,
is make sure you're listening topeople whether it's a podcast
like this or're reading a bookor you're investing in a seminar
to people that are where youwant to go.
(04:28):
No matter where you're at inlife or in business, you've got
to make sure that where you'regathering information from and
the people you're surroundingyourself are not where you
currently are, but where youwant to go.
And I found myself lookingoutside the automotive business,
and I think that's a tip beforewe get even farther into this.
Is business, is business.
(04:50):
And, taylor, one of the thingswe found is you know, forever we
had studied automotive and westarted finding ourselves
looking in the restaurantindustry, looking in the
hospitality industry, you know,looking in, we were in the
construction industry too.
But looking at all thesedifferent industries and there's
more crossovers than you thinkthere is, and the amount of
(05:11):
businesses that I talked to andbusiness owners that are like,
yeah, but mine's different, andthis and that, if you'll get out
of the forest and really peelit back, it's processes and
people and what systems have youput in place?
So when we started looking atthat, going hey, how do we scale
our business?
What different systems do weput in place, we had to look to
mentors outside, many of themnot in the automotive industry,
(05:35):
to figure out what do we put inplace?
How can we learn from them tobe able to scale up?
Now, many of you, especially ifyou've started a business or
you've worked in the sameindustry, you get caught in this
area and I'm going to walk youthrough.
No different than we haveourself, whether it's in sales
in our business or if it was asa technician or changing oil or
a parts counter person, is, youget in the middle of a
(05:56):
production role.
So let's take sales, forexample, in sales of selling the
car, being there, prospectingyourself, working on your own
customer database, reallyworking on you in your
production, because that's whatyou're wearing control of, and a
lot of startups are that waytoo.
You're the one knocking on thedoors, making the calls, doing
(06:17):
the estimates, checking the work, so on and so forth, and your
business explodes because youhave passion, because you're
part of it and you're part ofthe production.
But then, as it goes on and youget past your bandwidth or your
capacity, you start to hiresomebody.
Speaker 2 (06:34):
Yeah, you've got to bring some people on because
you're hitting.
You're hitting the rev limiterand you realize one of two
things.
The biggest thing is one Ican't scale past where I'm
currently at if I don't get anyhelp.
And two, it's the quality oflife, because a lot of people
start to get into there of like,I can do this, I can be in the
middle of it, but I can't scale,and then it doesn't allow me to
(06:55):
be able to decompress and stepback every now and then.
So then you bring someone on,you start bringing any people on
to help you in different areas.
Then kind of what happenswhenever you move on from there
is you have to start more into aquality control aspect than
necessarily of you knocking onthe door every single day.
(07:17):
You bet.
Speaker 1 (07:18):
And one of the things and I'm guilty here, so I'm not
sitting here talking like that.
I've got it all put together.
I'm just going to tell youwhere I failed and where I've
learned from, and anytime I havea setback or I'm not going to
call it a failure but maybe itdidn't go exactly how I wanted I
always look towards, no matterwhat the industry.
Let me find somebody else thathad success out there and let me
learn from them.
You know, we're smart enough toknow that we don't have any
(07:39):
doctorate degrees, but enough toknow that we don't have any
doctorate degrees, but we'resmart enough to know, hey, we
can go learn from those peoplethat have the doctorate degrees
or their masters or their MBAs,or that it may be just been down
the path that we're going andwe could learn from them.
So one of the things thathappens is you get to a point
where you start hiring people onto help increase your sales,
(08:00):
increase your production,whatever it may be, and when you
do that, you find yourself inthis middle ground of like I
know I hired on three people ortwo people to help multiply the
output of our business, but butyou're still like your foot's
(08:21):
still in it, Like you findyourself still stepping in and
going, no, here's how you do it,no, here's how I did it.
And you're like, are they doingthe production or am I doing
the production?
And many of us get there.
We're in the middle of tryingto do the splits, which we can't
do All right, and it builds upfrustration and a couple of
things happen Burnout onyourself, higher employee
turnover because you're just notempowering them and letting
them go.
(08:42):
And I know you've experiencedthat too, where you've been
caught in the middle of it andyou keep injecting yourself in
to make it work.
Right, but you know you need toempower the others.
It's really tricky.
Speaker 2 (08:55):
Very tricky of going into that.
I ran across this the othernight, one of the processes that
we had set in as far as salesand growing and realizing and
laughing of you know, our goingthrough the process of the sale,
but laughing about why has thisgotten so difficult?
It's not necessarily that it'sgotten difficult.
(09:16):
Our business has evolvedbecause it's grown so much.
It's grown so much in the lastyear and no different than the
principles, practices,everything we've done that has
got us here.
We have to remember that'sdeep-rooted and that keeps our
culture.
But it's okay to adapt andchange that because without
(09:37):
doing that, you're not going tonecessarily be able to scale.
And so I sat back and it's like,oh, me, and you're right, and a
couple of other managerslooking at me.
I said, tay, that's just partof growth, that's part of growth
going.
And I said I understand, youknow about my fight, what it is.
And they said, no, I know yourculture and you and your
brother's culture.
That's what you want to keepand you want to grow and
(09:57):
everything else.
I said, but you've got to lookat this other so, having having
people around you that feelcomfortable enough to be able to
coach and push you, that's soimportant it really is.
Speaker 1 (10:13):
And I mean I can't tell you how long I fought it
and I still fight it, you know,because it's because you have
passion and it's because you'vehad success in doing the
production and that got you towhere you currently are.
So if you're in a managementrole, if you're in a supervisor
role, if you're in a supervisorrole and you're not in a large
company, that can teach you howto keep making those micro steps
and empowering others andyou're probably listening to
(10:34):
this because you're part of asmall business is how do you
take that next step?
And I'd find myself and it'dfinally get to about a breaking
point.
You know where nobody elsereally saw, but behind the
scenes it's like you're justsitting there at your desk at
the end of the day or on yourdrive home going.
Why can't I figure this out?
Why am I absolutely just toast?
(10:57):
I like what I do.
My employees are fantastic.
You know we got great culture,but holy moly, and I get the
ramp up period, like let me justtell you this Like even with
our business we've been inbusiness for 79 years when we
moved and we started scalingagain.
I don't know about you, but tome it almost felt like we were
starting a new business.
(11:18):
It was, I mean it just we'renot done there yet, and I can
remember that.
And then about 90 days passedand I was like I didn't really
expect this and I was like, okay, let's peel back the layers.
What needs to be fixed here?
How do we need to empowerothers?
And just as soon as I thought Ihad empowered people, there was
(11:38):
a whole new level and we're onour journey there.
I'm not telling you right nowwe've even figured it all out,
but we're on our journey there.
I'm not telling you right nowwe've even figured it all out,
but we're on our journey to beable to get that.
I got to talk about a turningpoint where this finally hit
home with me, because I'm a andso are you.
It's just kind of how we weregrowing up, is we just?
I mean, we work and we workhard, and when we hit an
(12:01):
obstacle, we just work harder.
We just put the time in and wejust like put the load on me, I
can carry it, I carry it.
It's like, hang on, there's gotto be a smarter, smarter way.
So I'm reading a book, and thiswas a couple of years ago when I
read this.
It's called the motive and inthe book the motive they talk a
whole lot about.
They compare a couple ofdifferent CEOs of large
companies and the two peoplethat were going down the same
(12:23):
track and you know, both of themhad this outside mentor and
leadership coach and they starttalking about what you're doing
to be able to scale.
And one of the things thatstuck with me there real simple
thing was you have to fire yourold self to be able to get to
the new levels.
And I rewound that part acouple of times because I'm
(12:45):
listening to it.
You know whether I was runningor driving in the car and I was
like, huh, I got to fire my oldself to be able to get to where
I want to go.
And that was it was kind ofcontroversial for me because I
was like if I fire the personthat got me to the success level
, that got my employees to thelevel of success where they are
(13:05):
now, are you sure that's reallyright?
But what they really meant andas I read more into the book and
I listened and I dissected thatis you have to create the
capacity and the time to be ableto work on your new role and
your new systems, and the onlyway you can do that is about
removing stuff from the past.
(13:26):
You can't empower others ifyou're still trying to step into
the middle of helping them todo their job.
But, man, is that easier saidthan done?
Speaker 2 (13:35):
Very very difficult Now you've probably went through
it before myself or Shelby oflearning and going through that
process, but you hit the nail onthe head Whenever you feel like
your wheels are spinning.
A lot of times at the end ofthe day you can go back and look
and say, well, okay, let mebreak down what I've went
through throughout the day, andevery day that you are
(13:56):
absolutely spun out, it's a daywe probably went and looked over
things that we shouldn't havelooked over.
Yeah, now, don't hear me wrongthere.
You need to go back and alwaysquality check every aspect, but
on a day-to-day basis.
It should not be of your dailyroutine that you're going in and
(14:17):
still doing things from yourold self from years ago, you bet
, because that is not enablingyou to be able to expand to a
new self.
Speaker 1 (14:25):
And I'll tell you this if you don't tell your time
and your schedule what to do,it'll tell you what to do.
And here's what I mean by that.
It doesn't matter if we work 9,10, 12, 14, 16 hours in a day.
There's enough stuff coming atus.
It'll fill the whole day.
So it's never an issue of, well, I have enough to do.
(14:46):
Today, it's more of prioritizingas a leader and, you know, on
the business side of operations,of prioritizing, where I can
get the biggest X factor andthat has just been ringing in my
mind, and it's this filter thatI mentally go through is if I
take this meeting or if I putthis small group activity
(15:08):
together, what kind of X factorcould it equal, you know, versus
me just working on somethingindependently?
And if you go back a coupleepisodes, you'll listen to where
we talked a whole lot about andI started talking about
rescheduling my day, and Ilearned this from Alex Hormozy.
He said you know, he doesn'tschedule anything in the first
half of the day that doesn'thave to do with his business and
(15:31):
his leaders and his managers.
He said you know, I'm notmeeting with outside vendors,
I'm not meeting with anybody onthe outside.
That's not helping me.
X factor the inside.
Now do you need to meet with us?
Sure, we got plenty of reps weneed to meet with, but those are
scheduled for the afternoon.
And why are they the afternoonversus the morning?
The morning is when yourbrain's the freshest, you have
(15:52):
the most energy, you can use themost attention to detail that's
needed, and why would you spendthat on outside sources?
I think that's so important.
So I'm telling you about like Igrabbed a piece from this book
over here and then I grabbed apiece from Alex.
Neither one of those wereautomotive, but it was business.
It was systems, yes, and whenyou start looking at it from a
(16:15):
production to the operationalside, that must be the lens that
you go through, and that meansyou're going to have to give up.
But I'm just going to come backto this again because, taylor,
I know there's people listening.
That's hard to do, that's sohard to do.
Speaker 2 (16:30):
There's a really good point.
You just went over that.
I want you to go back and saywhat did you say about your day?
Prioritize your day, or what?
Speaker 1 (16:38):
You need to prioritize your day or the time,
the activities in there.
It will prioritize your day.
Speaker 2 (16:45):
Okay.
So I love that.
We were in a meeting yesterdayand this is where you hear
little bits and pieces.
We were in a meeting yesterday.
Matt was running the managermeeting and then I ran the sales
meeting afterwards and so wewere going through everything
and in a lot of meetings, ifyou're ever listening to this
and you're running a meeting,you have people that are really
engaged.
You have people look likethey're still asleep.
(17:08):
You couldn't throw a pot ofcoffee on them and get them
excited.
But I went back into that.
We were halfway through themeeting.
I said you know what, guys?
I said let's prioritize our day.
And I said how do we prioritizeit and how do we remember
things?
They're like oh, write it down,it's a great, everybody write
it down.
So half of them did.
I went back and I was oh, writeit down.
I said great, everybody, writeit down.
So half of them did.
I went back and I was like no,write it down.
I'm coming around, you're goingto tell me how we're going to
get to this step and we're goingto get to your next goal.
(17:30):
So we wrote it down.
Fast forward to in theafternoon.
I actually hear a guy thatnever follows through with the
process because he wrote it down.
He's coming back around to themanager to check on it.
I'm like boom, that hit home.
That made sense.
That's why you do that.
So that's so important of whatMatt said Prioritize your day,
(17:51):
and it doesn't matter if it's ina spreadsheet, on a big chief
tablet, like you're doing.
Whatever works for you is goingto help you drive the day.
Speaker 1 (18:00):
That's such a great point.
I hope the leaders out therehear this.
And we learned this early on inour career.
And then you know we share allthis information to just help
each other grow as brothers.
But you know you do less withmore impact.
So on that meeting like that youwere going over yesterday.
It's not.
Hey, can I cover 10 differentsubjects?
It's no.
(18:20):
Can I cover a maximum of three?
And while I'm reading theaudience or my employees, if
they're not engaged and they'renot writing down, I'm stopping,
I'm going back over.
Write it down.
I'm coming to inspect it, likeyou just talked about.
Okay, so then you'll get themultiplication factor later.
Yes, and had so many people Ilistened to, especially early on
(18:42):
in their career, and they juststand up and they talk and they
go over so many subjects andthey think they killed it and
they got no role playing andthey didn't pause and they got
no cadence.
Now they were fired up andeverybody comes out of the
meeting going man, they werejacked up.
It's going to be a good day,but they can't remember what
they talked about because theywent over too much.
And just, I'm just telling youyou may be uber successful out
(19:04):
there.
But I'm telling you there'sanother level.
There's always another level,but you can't ever see it If you
don't step back.
Look at the operational side ofit.
Look at your systems in placeand it's okay to evolve.
Yes, it's okay to removesomething in your business
that's keeping you from whereyou need to get to.
(19:24):
I love being able to use it asan example with our employees
and our customers when we talkto people about how we've grown
and what's our next step.
As I said, we were a wildlysuccessful company.
We really are Family-ownedcompany.
Four generations, 79 yearswildly successful generations 79
(19:45):
years, wildly successful andthat success got us to where we
are now.
It enabled us to build a26-acre campus with 150,000
square feet, you know, but?
But those systems not all ofthem, but a lot of them were not
built to scale on where we'regoing.
(20:07):
So again, that's at theoperational side.
We could have just put our headdown and just continued to
grind it out from what we hadalways done, but we said no, we
got new layers, we need newpeople, we need new processes
and we've got to look at thisfrom an operational standpoint.
You know and I think I'll goover one other piece here we're
(20:28):
in the retail business, so likeit's, it's so much less
structured than if you were onan assembly line.
Yes, you know, and you do A andyou do B because you've got so
many variables coming in.
But our managers, we talk aboutthis at the start of every
single day.
You've got to treat it a littlebit like an assembly line to
(20:49):
make sure you go around and allyour machines are turned on.
You don't have any breakers,that you've got what we call
tripped.
You've got to go flip thebreaker and that means are you
coaching, are you leading yourstaff to make sure they're doing
the daily activities again inthe morning so we get the
multiplication factor all daylong.
You can only do that if youevolve as a leader to the
(21:13):
operational side, you know, tothe operational side, so that
doesn't rain.
I know we got more to dive intothere, but we got to get to our
automotive fun fact of the week,this day in this month in
history in the automotivedealership business, what
critical financial metric isoften used to assess the
efficiency of turning vehicleinventory into sales revenue and
(21:37):
is a key indicator on how wella dealership manages its
inventory?
Is it A gross profit, Is it Bnet profit margin, Is it C
inventory turnover rate, or isit D customer satisfaction index
?
Speaker 2 (21:53):
That's pretty good.
I think the majority of thelisteners that are not in this
are probably going to gostraight to.
I'm going to give you one thatit's not and we'll narrow it
down for you, but gross profitmargin.
Speaker 1 (22:05):
I think they'd go straight there.
Straight to that.
They'd go straight to that.
We'll come back to the answer.
Of course, we've talked aboutthe answer on a whole episode,
which is exciting, but we'llcome back to that one that's a
good one.
Speaker 2 (22:18):
So laying straight into the next part of it, laying
the operational foundationsystems and processes for
scalability, so really big dealthere.
We've kind of already talkedabout rolling into that, but
about so stepping.
We've talked about um,realizing that, understanding
that, but then stepping back andsaying, hey, these are the
(22:41):
systems I'm going to be able toput in to be able to move to the
next level and um so what we'reafter really at the core and
and I know I got to relate otherindustries because we've got a
lot of industries listening outthere.
Speaker 1 (22:53):
Plus, I've personally learned from a whole lot of
industries um, I've beenstudying the restaurant and the
hospitality, got a lot ofindustries listening out there,
plus, I've personally learnedfrom a whole lot of industries.
I've been studying therestaurant and the hospitality
industries a lot lately and oneof the things they talk about
some of the most successfulrestaurants or hotels out there
is how do we duplicate that wowexperience?
(23:13):
And if we start thinking aboutthat customer that we personally
walked through a sale or workedthrough service and they had
just an amazing experience inthe back of your mind, you're
like, if I could get thatduplicated, wasn't hard, you
know we didn't give the houseaway to do it, you know.
But how can I take thatexperience that I did or my top
person did and duplicate thatthroughout the entire dealership
(23:34):
?
And the way to do that is youstart looking at your systems
and you start looking at yourprocesses.
One of the things we've done,our foot's really been on the
gas.
If you look at last year, itwas kind of two halves is, the
first half was moving, gettingeverything finished up, because
when we moved, construction wasstill finishing up.
And then the second half reallyafter the third quarter going
(23:56):
into the fourth quarter was okay, we're here, you know what,
what new meetings, what newprocesses, and when we started
off with you know a better orgchart.
I mean, I'll just be reallyhonest with you.
You know we had all thisinformation in our head but it
wasn't on paper.
Like, what is the org chart?
How would I move up?
Who reports to who?
What's our ratio of manager toemployees?
(24:18):
And we started right there.
Yeah, you know, we studied themilitary a whole lot there and
if you look at the military andtheir rankings, you look at the
maximum amount of people thatsomebody can manage, you know,
or to be able to lead, and it'sin between four and eight people
.
We had some areas that had atwo to one ratio and then we had
some areas that were 16 or 17to one.
(24:39):
So we first had to start rightthere and go.
Can we free up the capacity ofa leader to actually do what
we're talking about?
Because it's one thing aboutdoing what we're talking about,
but it's two to have thecapacity and you talked about it
with time.
If you got a 10 to 1 ratio andyou're still plugged in on doing
what you did five years ago toget to here, you can't ever work
(25:02):
on that new stuff, correct?
Speaker 2 (25:04):
Yeah, that's really big, because once you start you
don't realize that while you'rein it You're just it's a worker
mentality or anything else.
I'm going to work harder andI'm going to do it.
It's a worker mentality oranything else.
I'm gonna work harder, I'mgonna do it.
You're stuck in the mudspinning your wheels and you're
going nowhere, exhaustingyourself, all because you need
to make that little adjustmentto be able to help that system
(25:27):
grow, help that system be welldefined in the areas that it
needs to be.
You bet um, very important tobe able to do that, you know,
and that helps you step backwhenever you do delegate that to
a new person to be able to helpyou grow there.
It helps you identify otherareas.
So, whether it be in our retailside of it, of customer service
, of inventory management, ofworkflow communication, all of
(25:49):
that you know.
Speaker 1 (25:50):
So you know that was kind of step one.
There's like get your org chartright, you know, and when I
first met, I started at thegeneral manager level wise, and
then I went to gsm and and youknow, then we went to service
and parts and I had them allwrite it out.
I didn't do it for them, okay,I had them all write it out and
they brought it to me and it wasa mess.
At first it wasn't perfect,nobody's was, and then we
started moving stuff around.
Then I started teaching aboutthe ratio, because I first
(26:12):
wanted to see where they were.
Then they modified, theybrought it back.
So that was step one gettingthat org chart and getting the
ratio right.
Step two was SOPs, so standardoperating.
You know processes andprocedures and what we would do
in every and we're not done withall this.
I don't think we have all thisput together.
We're right in the middle of.
So it's a great subject to talkabout is we would talk about
(26:34):
each of the areas when westarted with our central office
and we said, okay, accounts,payable accounts, receivable
deal clerks, title clerks whohave payroll, whoever it may be,
write down, take screenshots,write out.
You know your process and theprocedure for ap, for ar, you
know for payroll, and we havedigital copies.
(26:56):
And then we got the old schoolthree ring binders too and it's
got the process so we could filla spot, whether it's a new
employee or we become layeredbetter.
So if somebody goes on vacation, we can still do accounts
receivable, still do accountspayable, and these were multiple
sheets.
Now how do you get started there?
You sit down with youremployees and you have them
(27:16):
write down what they think theirjob description is.
A couple of things are going tohappen here.
One, it's going to start theprocess on how to put together
the actually operating procedurefor that position.
Number two, it's going to helpidentify what they think their
job is versus what you hiredthem to do.
So you start there and then youstart listening out.
(27:37):
This goes back and forth, backand forth, and what you're
developing there is an actualprocess so you can train
somebody else, cross train so itcan layer, or two, to make sure
, when somebody new gets hired,that you're training them on the
correct process.
Because that's the other thingwe've seen is is maybe we hired
somebody and we know that we gotit all right for what they want
(27:59):
them to do, but then you hireda sales manager that then hired
a sales person.
They're now training them.
And what if they interpreted ormissed a couple of the steps
and then another one down theroad?
Then they're training onsomething totally different that
you and I didn't even talkabout.
Speaker 2 (28:15):
Yeah, they shot way off to the left over here and
you thought we were goingstraight down the road,
completely off to the left.
So that was so big to be ableto do, because if you're not
putting the next person to stepin the right capacity role and
you're not helping them, guidingthem to be able to do it, it
just completely throws them off.
(28:36):
The other part of loving whatputting all this um, the whole
structure in of all the jobtitles and everything else, not
only does it give structure towhat I'm supposed to be doing.
You know what we found a lot ofthis is from us being in the
spots we're in but of someonesay, that was, of whatever level
(29:02):
they are at, that a completelydifferent department.
They're coming and reportingand asking a manager in the
sales department, maybe someonethat is, uh, the shop cleaner
that takes care of anythingthey're coming all the way over.
Or even a lot porter that istaking care of the whole lot.
They're coming and reporting.
Myself I know of being in a GSMspot at Ford when I need to be
(29:24):
managing my other managers.
They were coming over to me nodifferent than when I would go
over to the CDJR side.
So putting the workflow chartin there is not to say, now,
don't take this to me, of sayingyou can't ever come talk to me
because I am not that type ofmanager, nor will I ever be of
in the operational side of it.
(29:45):
But that's taking time awayfrom you.
It's robbing time andefficiency of you being able to
work.
If that's not set with yourproper systems, procedures and
processes, they're coming to robin time from you.
Whenever I'm not trying to bemean and a lot of people say,
hey, don't be a dick about it asfar as coming to it or anything
(30:06):
else, you're not being aboutthat.
It's about the process,procedures and putting it in
place.
Speaker 1 (30:12):
That's such a good point, but it's a slippery slope
.
So let me give you a coupletips on what Taylor just went
over is you have to make sure,especially when your office is
like, if you ever come into oursales manager office, all the
managers are there.
Salesperson walks in, or acustomer walks in, they're going
to go straight to Taylorbecause they're like well, he's
the highest position there, hecan make the deals happen.
(30:32):
And so here's a a couple tipsfor you if you're out.
There is number one firstlisten to what they say.
Okay, so you at least know whatit's about before you chop
somebody's legs off.
Okay.
And if it's, for example, ifit's to work a deal, then I
pause at that at that moment andI bring them over to the sales
manager and I tell that salesmanager hey, can you help bob,
(30:55):
work this deal?
I'm right in the middle ofdoing some marketing to be able
to generate some more leads forus.
Do you have the capacity to dothat right now?
So first I got to make surethat it's not a question that
only I could handle, okay, andthat only takes 30 seconds to
run through that filter.
And then I take them over and Iintroduce them there and I show
that manager that I have faithin them and I'm empowering them,
(31:15):
and then that salesperson seesthat I have faith and I entrust
them as well.
So that happens in every singledepartment.
You just got to know that.
And if you don't address that,and I'm telling you, it's going
to happen repetitively at first,but then it starts to die down.
It never goes completely away,never goes completely away.
And if you find that happeningmore and more and more and
(31:36):
you've got other managers orsupervisors or team leads
sitting there that could handlewhat they keep asking you about,
you need to remove yourself foran hour or two to another
office I don't care if it's thejanitor's closet so you can
focus.
And here's why Because whatyou're working on affects your
entire team.
You know, and if you nailyourself down to just one person
(32:00):
, there's 8, 10, 12, maybe 25,maybe 30 people that are waiting
for you to accomplish thatother task.
That's the lens you've got tolook through when you're in a
manager role.
That's so important, so easilymissed.
It really is.
Speaker 2 (32:15):
Hey, diving into our fun fact automotive quiz of the
week.
You know we had talked aboutthis, of going through there,
but what's the criticalfinancial metric that's often
used to assess efficiency of aturn?
During talking about revenue,key indicator, everything of a
dealership, I told you it wasn'tgross profit.
(32:35):
You thought it may have beenthat.
It's not net profit either.
It's not net profit.
Two options there.
It's inventory turn rate.
We talked about how quickly canyou turn inventory, and this is
not just an automotive, it's inany retail aspect.
How quickly can you turn theproduct that you are selling,
you are offering to the public?
How quickly can you turn it?
(32:55):
Because the longer it sits onyour shelf, the more it costs
you.
The quicker you can turn yourinventory, the better it is for
you as a business.
Speaker 1 (33:03):
And you know you could wind me up and I could
just go on about that, but whatI'm going to say is go listen to
that episode on inventory turn.
If you don't understandinventory turn and you don't
understand cash flow, you don'tunderstand business.
I'm not trying to be ugly, I'mjust saying you need to stop
what you're doing right now andlearn about inventory turn and
learn about cash flow.
(33:24):
That's a good one.
That's a good one.
We appreciate our productionteam putting that question in
place.
That was a good one, for sure.
And next up, decoding thefinancial dashboard,
understanding the numbers thatdrive success.
Okay, I'm going to lead intothis one and then I'm going to
tell you how it's evolved.
Okay, because we have KPIs,which are key performance
(33:44):
indicators.
Every industry has them.
You may call them other things,but you know the universal term
is KPIs.
You know, in our business it'shey, how many cars did you sell?
How many service repair ordersdid you write?
How many parts tickets did youdo?
And forever, okay, forever.
That's what we looked at everysingle day.
Hey, how many did you sell?
(34:04):
How many were new?
How many were used?
How many service tickets didyou write up?
How many more oil changesyesterday, how many front
counter, how many back countertickets and like that's what we
looked at.
And that's what we looked atand we understand our numbers
and we could recite the numbers.
You know we go over it daily.
Daily we have quick managermeetings with everybody in there
at 15 minutes, going over thoseKPIs, you know.
And then we even go deeper ofhow many phone calls did you
(34:27):
make?
You know how many appointmentsdid you set.
You know what were your averagesales, what was your average
dollars per RO, what's yourgross percentage, so on and so
forth.
We can go over all these KPIs.
But as we evolved and this isperfect for this podcast as we
evolved into the operationalside, this shift, you reflect on
(34:48):
KPIs.
It's kind of like thescoreboard at a game.
If we're in the middle of agame, you look up at the
scoreboard every once in a whileto see either how many timeouts
you have left, how many secondsare left on the clock, what is
the score, but then you don'tstare at the scoreboard the
entire game.
You go back to putting yourgame plan in place.
So as we've evolved to moreoperational, it's like okay,
(35:09):
those are the numbers thatreflect how well we've been
operating our business.
We need to spend more timefine-tuning the operational side
and our output of the KPIs willbe greater.
Oh yeah.
Speaker 2 (35:23):
No, that really changed the whole look of it
because it's not looking at this, going over your monotonous
task of these three and thesefour different indicators are
what's going to tell me.
It's like staring at thisscreen telling you what's going
on out in the out, in the whole,uh, business world of it,
whether being your accountingofficer out in the retail sales
(35:45):
of it, knowing those differentmetrics, helps you be able to
instantly look at a sheet andsay, oh, I need to go check in
there, I need to look in service, I need to look in parts.
This is where it's reallyneeded.
My attention's needed in thereright now, of being able to grab
that quickly where, if you'rejust looking at that and saying
hey, they had many sold here,how many sold new used parts
(36:07):
service, you can't really seewhat side of it is If it's
getting the inventory, if it'sselling the inventory, if it's
the amount of people we have inthat are salespeople and so on.
Speaker 1 (36:23):
That's right.
That's right.
But now I'll dive more into thefinancial side, because I know
that's what I said the subjectwas going to be.
But I'm going to help adviseyou as we talk about financial.
I love crunching numbers,really to be able to find trends
, really to try to findopportunities.
And I can tell you, earlier inmy career I would start making
spreadsheets.
My desk could be covered indifferent financial statements
because I was looking for atrend.
I was looking for, hey, whatdid we do there?
(36:44):
What changed?
What was our expense look like?
What was our employee count?
What are our inventories?
And I'd look up and I mean, I'mjust I'm gonna admit this to
you I've spent days sitting atmy desk crunching numbers till
my eyes are crossed, glued,excited from what I found.
And then I'll look up two orthree days later and I'm like I
(37:07):
found that information, it wasgood data.
But what I do with it?
What I'd do with it?
Yes, nothing, I did nothingwith it.
I was proud that I gathered itall.
I was proud.
But sometimes you exhaustyourself with all the numbers to
the point of your normal task,get backed up and then you don't
(37:28):
even get to do anything withthe numbers Now how we've
evolved.
There is I now have some peopleI can lean on to that can
gather that information for me.
So then my brain is clear andI've got that energy back that
then I can take the ball fromthere to put a game plan in
(37:50):
place to actually use it to helpmove the business.
To put a game plan in place toactually use it to help move the
business.
So that's just a personal storyof mine of where I used to do
all that and I could getsomebody now to duplicate it.
But that's hard to let go of.
Speaker 2 (38:01):
Very hard to let go because you're letting someone
else be able to help you with atask, but then growing, going
back up to one of our previoussection of you, growing into the
next level of expanding, firingyour old self, realizing that,
hey, I've got to change if I'mgoing to be able to move,
because one of the things that'sallowed you to be able to do is
(38:22):
get that information and I'veseen a whole lot of that come
out in manager meetings that itis, hey, this is a quick scope
of what we did, and then it'sallowing them to be able to dive
in, which then helps themmanage their team better, more
effectively, in a day by daybasis.
Speaker 1 (38:38):
That's right and I think that's a goal of ours.
We've tried to evolve in themanager meetings is providing
that information.
Go ahead and dissecting andhelp them identify trends, but
then say I don't need you to digany farther into this, you just
take it and move the needle andmove the needle.
And I think when you talkedabout you know evolving as a
leader, I just love this quoteby Craig Groeschel.
(38:59):
He talks about everybody winswhen the leader gets better.
So you're constantly trying toget better because the rest of
your team, it doesn't justaffect you, it affects everybody
that you influence in yourbusiness.
So back on the financials yougot to understand the financials
and they've got to be a part ofyour business, you know.
So the same thing, whether it'sprofit and loss or balance
(39:20):
sheet, whatever it may be youknow one of the things we really
look at are our heat sheets and, like our business is a cash
eating monster.
I mean a cash eating monster,and there's fruit from that.
But if not handled correctly,it'll bury your business.
And I can remember and you'llprobably remember the text a
couple weeks ago, that we werecoming out of one of our last
(39:42):
weekends of the month and it wasa Monday morning and I can tell
you there wasn't much money inour account because we had had a
massive weekend, a massiveweekend, and that was coming.
Yes, we had sold 70-somethingcars Nope, Okay, over the
weekend 70-something cars, Notto mention all the repair orders
, but there wasn't a ton ofmoney in our operating account
(40:04):
from cash.
We had to bridge this gap untilall the contracts actually got
cashed.
And that morning our CFO cameto me and she said great job on
the big weekend, but we need togo over this.
We need to write a check for$1.7 million this morning to pay
off all the vehicles that weretraded in.
That we told the customers we'dpay off.
(40:24):
And currently, right now,there's not that amount in our
account.
And I said yeah, but what aboutall those contracts?
She goes yeah, it's coming,it's coming.
So you got to know, as abusiness owner, I didn't freak
out.
Luckily, I'd been through thesesimulations before.
What I started doing was goingokay, I understand my financials
, I understand where the moneycan come from, but I must take
(40:45):
action.
So I communicated with you andShelby.
I'm like, hey, go get withfinance.
We got to get these contractscashed.
Here's how much we got comingout of our account because we're
going to pay off the customer'strade.
So you must understand thefinancials to keep the cash
moving, the inventory turningand the business to work.
Speaker 2 (41:03):
Yes, it's so important.
If you don't know all yourvitals, you can't.
No different than Matt lookingback into sports.
He saw the play coming.
You have to call the audiblebecause you got to do it quick.
If not, it just is like a traincoming down the tracks and she
comes off the tracks andeverything behind it is just a
train wreck.
So make the adjustment there.
(41:26):
Be able to call, do that, haveyour key, uh, key people you get
a hold of to be able to pullthat lever.
Hey, do this, do that.
And it was a smooth transitionand it keeps running like a
finely tuned machine.
Speaker 1 (41:38):
It does.
It wasn't an alarm we pulledoff.
It's like, hey, here's what weknow.
Keep this in the back of yourmind.
Go get them.
My CFO and our controller.
I said, okay, get up to date.
Heat sheets for service, forparts, for finance, for rebates,
anybody that owes us money, ouraccounts.
You know our accountsreceivable, but the girls in the
office aren't calling any ofthose accounts.
And we figured it out and yourock on.
(42:00):
It's just a part of business.
You don't freak out about it.
You step up to the line, youstep up to the plate.
Another point there infinancial is you could get to a
point to where you you need helpand you know you need expert
advice where you might not knowand it's.
Do you seek that advice or doyou just keep acting like you
(42:24):
know what you're talking aboutbecause you're embarrassed to
admit that you don't know?
Speaker 2 (42:29):
Well, you know, one side was like no, I've got to
figure this out, I've got tofigure this out.
But luckily, you know, we sidewas like no, I got to figure
this out, I got to figure thisout.
But luckily, you know, we'reblessed not only as brothers,
but then we have dad and unclethat are on board as well.
So, as a quick, if you had togo back and say, hey, what would
you do here, really quick, tobe able to sound against?
And you have those key peoplethat are your outside influence,
(42:52):
you can do that really quicklywith.
Speaker 1 (42:54):
I will tell you this, though, just to look behind
into our family okay is, if Idon't ask my dad or my uncle,
they're not going to tell me no,no, they're going to make me
ask, oh yeah, and like.
So.
I've learned that, which hasbeen good.
It's been good.
I know that we also were a partof a different, what they call
(43:14):
20 groups in the automotiveindustry, so we have other
people that we can look to foradvice there.
But I'll tell you, even withinour departments, one of the
success stories that we've hadthis past year what we call
these micro meetings.
And these micro meetings aredepartment based between our
entire automotive group, wherewe get all the parts managers or
all the service managers allthe parts managers or all the
service managers or all thefinance managers or all the
(43:37):
sales managers in a meeting, ourCFOs in there, our office
controllers in there, and wetalk about different things.
That has brought up we havemultiple different managers that
after one of those meetings hasgone and sat down not
necessarily with me or you, butgone and sat down or not our CFO
, but our controller and said,hey, will you please explain
this part?
(43:57):
Where are these numbers comefrom?
Because they knew they neededto move them, but they needed to
better understand what goes inand out of that account.
And then how can I affect that?
Yes, so the betterunderstanding you must
understand your financials ifyou want to be able to move the
mark and not just keep lobbingstuff in there and hope there's
something in the bank accountand there's not.
(44:21):
You know, that's a big one forsure.
Well, this one's been aninteresting for sure.
So I think we need to go tohelp the listeners here.
So think about this is I wantto talk about takeaways before
we go into frequently askedquestions.
So takeaways today, and I'llask you here in just a minute,
and then I'll jump in after that, on really making the
(44:45):
adjustment and masteringoperational side of your
business versus what you haddone in the past.
Speaker 2 (44:48):
My biggest takeaway that I love that you went over
is knowing that you need to,knowing that you need to grow,
and so you are.
You're enabling others aroundyou, and how you do that of
being able to do is exactly howMatt had talked about.
That I spoke about in the salesmeeting of it doesn't matter
(45:10):
what level you get into, whatyour role goes into.
You've got to plan out your dayor it will play in you and
you'll go in the complete wrongdirection.
So, knowing of dedicating thoseother tasks to different
managers, different departmentheads, putting that in there so
you can grow, but knowing that Istill have to plan my day out,
(45:31):
Because if not, even though I'mtrying to delegate and do these
other things, I still love beinga part of the sales and the
daily activity and I'll sitthere and grind that all day
long.
But if I don't plan that out, Ilose that efficiency of a day.
Speaker 1 (45:45):
I think that's a great point and I think if you
plan your day correctly, you cando both.
If you plan your day correctly,you can do both.
Oh yeah, if you plan your daycorrectly, you can do your
operational task.
In the morning, you can getthat stuff done, and then the
afternoon that frees that upwhere you're in the middle you
can go appraise a trade, you cansay hi to customers, you could
do a one-on-one coaching sessionwith somebody, as long as you
(46:07):
plan that correctly.
Hey, I got three for you herein these order that we've been
going through and hopefullyit'll help you as well.
Number one start with your orgchart.
Within your org chart, try tomake sure your manager to
employee ratio is correct.
We find four to eight people,depending upon what the
department is.
Number two standard operatingprocedure with each area.
So you've got that written downin digital and a physical copy
(46:30):
to make sure that your newemployees are getting trained
how you would want them to dothat position.
And then, number three theplanning of not only your day
but, if you're over, managers.
You know managers bring back tome, hey, give me your day and
your weekly schedule.
What does that structure looklike when are you prioritizing
time with your team?
And you've got to plan that outjust like you, or it'll.
(46:51):
It'll play in you, you know forsure, and you can do both.
But you must prioritize whereyou get the most fruit, and that
means pruning stuff you did inthe past.
You got to cut it off.
If you want new growth, thatmeans firing the old you and
hiring the new you to get you toa new level.
So this has been a been areally good one.
This has been a good one forsure.
(47:11):
So any frequently askedquestions you've been hit with
this past week Hi, you know itis.
Speaker 2 (47:19):
We just finished up the ultimate challenge and we're
getting into it and this isprobably the most fun.
The most fun, we as threebrothers get to go and we have
these big prize auctions we dofor our employees, but right now
they're asking about how you'refiguring out or how how many
tvs or how you're doing that orthis.
So it's been so much fun ofexplaining to them what's really
(47:41):
going to happen and so loving.
I love that aspect of it, ofthat your employee cares enough
that what you're doing andreally that they're involved in
the whole aspect of it.
Yeah, that's gonna be, that'sgonna be a whole lot and really
that they're involved in thewhole aspect of it.
Speaker 1 (47:54):
Yeah, that's going to be a whole lot of fun and we
love celebrating in the culturewith our employees.
Hey, thanks for tuning intothis week.
This has been a great episodeon mastering the operational
side of your business, as always.
Hey, if you would go ahead andreview these podcasts, it helps
us out and it means a lot to us.
Leave something in the commentif you want us to cover.
We want to cover the subjectsthat you guys are struggling
(48:15):
with or that you need some helpwith out there in the business
world.
Find us on any of your podcastareas.
Make sure to like, share,comment.
You guys have a great day.
Hey, thanks for joining ustoday and we hope you enjoyed
this episode.
Make sure to give it a like,share it with your friends and
family.
Visit our website and send ussome questions.
We want to know what you'd liketo hear, who you'd like to hear
from and what you want to see,or maybe even some questions for
(48:38):
us to answer about either theautomotive industry or just
business in general.
I grabbed a piece from this book over here and
then I grabbed a piece from Alex.
Neither one of those wereautomotive, but it was business.
It was systems, yes, and whenyou start looking at it from a
production to the operationalside, that must be the lens that
you go through and that meansyou're going to have to give up.
But I'm just going to come backto this again because, taylor,
(00:20):
I know there's people listening.
That's hard to do.
Hey, everyone, welcome toCrossroad Conversations with the
Lewis Brothers, where we aim toshare real stories about
running a successful familybusiness, working through
adversity and pouring back intothe community that keeps our
door open.
We're your hosts, matt Shelbyand Taylor, and we bring you
(00:41):
relevant local business adviceand automotive insights that are
sure to change the way you lookat running a business and maybe
even throw in a plug for you todo business with us.
Welcome to CrossroadConversations with the Lewis
Brothers.
Hey, we're back this week andwe got an exciting subject to
talk about, taylor, I'm excitedabout this one really because as
(01:01):
we've evolved and grown as abusiness, we've really lived in
this subject.
And the subject is beyond thesale mastering the operational
side of your business.
Yes, it's really big.
That sounds easy, but when youstart pulling the layers back
and I can't wait to dive intosome of the details of what
(01:22):
we've personally gone throughabout starting to work on the
operational side and how do youhave the right pieces in place
that allow your business toscale with reducing the amount
of times you pull your hair out?
That's what I'm going to say.
You know what I mean.
Or trying to find a betterbalance of work-life balance
while growing your business atthe same time.
(01:44):
Much easier said than done.
We'll dive into that here in asecond.
But why don't you recap lastweek, hey?
Speaker 2 (01:49):
recap last week we exchanged Shelby out, brought
Mac back in, we shot him off.
So we're back in the middle ofit here.
But recapping last week, hiringversus talent or hiring versus
culture, we really deep doveinto that and you've got to find
that happy medium because ifyou go too far one side or the
other, it's going to disruptyour whole path of what you're
(02:10):
on.
So dive back into the previousepisode.
That was 33.
Hey, always check us out thereon lewissuperstorecom for all
the new, freshest deals,specials, everything online that
we have to offer.
And what did we drive today?
What did we drive today?
What did we drive today?
Well, we actually walked overto our podcast room but new
(02:30):
vehicle that just came out andit's been a long time since
we've had.
But I got on the showroom floorover ford a king ranch f-150.
I've talked about the superduty, I've talked about the
expedition, but the f-150 isreally the og that it kind of
was all in there and it's theultimate experience.
I always talk about these, butthe interior sun, oh it's so
(02:52):
nice.
Speaker 1 (02:52):
so I, uh, I'd have to check the facts, but I'm pretty
sure the king ranch in thef-150 maybe came out in like oh
two, oh three.
I can remember, you know, Igraduated high school in 2000.
So I can remember, just shortlyafter that, going to college
and seeing the King Ranch comingand it was like man, hey, dad,
can I drive one of those?
(03:13):
And he was like no, no way.
And I'm like at least I'm goingto go sit in it.
So I'd sit on the lot and, likeyou know, it would have that
saddle-like leather and when youopen the doors it just smelled
different.
Speaker 2 (03:30):
It's just something that feels like a higher level.
When you get into a king ranchf-150 oh it does.
I was pulling it in theshowroom the other day and put
level kit and tires on it so itlooks good, but just the stigma
around it, everything.
The finishing awesome truck.
You got to come check it out onthe showroom you bet you do.
Speaker 1 (03:45):
Okay, let's dive right in.
Today I talked to you about hey, today we're going to get in
the weeds, and there's probablysome listeners out there that
are in this situation.
There might be some that are init and don't even realize it,
or others that realize it, butthey're like I understand, I'm
stuck, I don't know how to getout of this.
I don't know how to take thenext step, and I'm here to tell
(04:06):
you.
We've been there and inmultiple areas.
We're still there.
My biggest piece of advice,before I get into the details,
is make sure you're listening topeople whether it's a podcast
like this or're reading a bookor you're investing in a seminar
to people that are where youwant to go.
(04:28):
No matter where you're at inlife or in business, you've got
to make sure that where you'regathering information from and
the people you're surroundingyourself are not where you
currently are, but where youwant to go.
And I found myself lookingoutside the automotive business,
and I think that's a tip beforewe get even farther into this.
Is business, is business.
(04:50):
And, taylor, one of the thingswe found is you know, forever we
had studied automotive and westarted finding ourselves
looking in the restaurantindustry, looking in the
hospitality industry, you know,looking in, we were in the
construction industry too.
But looking at all thesedifferent industries and there's
more crossovers than you thinkthere is, and the amount of
(05:11):
businesses that I talked to andbusiness owners that are like,
yeah, but mine's different, andthis and that, if you'll get out
of the forest and really peelit back, it's processes and
people and what systems have youput in place?
So when we started looking atthat, going hey, how do we scale
our business?
What different systems do weput in place, we had to look to
mentors outside, many of themnot in the automotive industry,
(05:35):
to figure out what do we put inplace?
How can we learn from them tobe able to scale up?
Now, many of you, especially ifyou've started a business or
you've worked in the sameindustry, you get caught in this
area and I'm going to walk youthrough.
No different than we haveourself, whether it's in sales
in our business or if it was asa technician or changing oil or
a parts counter person, is, youget in the middle of a
(05:56):
production role.
So let's take sales, forexample, in sales of selling the
car, being there, prospectingyourself, working on your own
customer database, reallyworking on you in your
production, because that's whatyou're wearing control of, and a
lot of startups are that waytoo.
You're the one knocking on thedoors, making the calls, doing
(06:17):
the estimates, checking the work, so on and so forth, and your
business explodes because youhave passion, because you're
part of it and you're part ofthe production.
But then, as it goes on and youget past your bandwidth or your
capacity, you start to hiresomebody.
Speaker 2 (06:34):
Yeah, you've got to bring some people on because
you're hitting.
You're hitting the rev limiterand you realize one of two
things.
The biggest thing is one Ican't scale past where I'm
currently at if I don't get anyhelp.
And two, it's the quality oflife, because a lot of people
start to get into there of like,I can do this, I can be in the
middle of it, but I can't scale,and then it doesn't allow me to
(06:55):
be able to decompress and stepback every now and then.
So then you bring someone on,you start bringing any people on
to help you in different areas.
Then kind of what happenswhenever you move on from there
is you have to start more into aquality control aspect than
necessarily of you knocking onthe door every single day.
(07:17):
You bet.
Speaker 1 (07:18):
And one of the things and I'm guilty here, so I'm not
sitting here talking like that.
I've got it all put together.
I'm just going to tell youwhere I failed and where I've
learned from, and anytime I havea setback or I'm not going to
call it a failure but maybe itdidn't go exactly how I wanted I
always look towards, no matterwhat the industry.
Let me find somebody else thathad success out there and let me
learn from them.
You know, we're smart enough toknow that we don't have any
(07:39):
doctorate degrees, but enough toknow that we don't have any
doctorate degrees, but we'resmart enough to know, hey, we
can go learn from those peoplethat have the doctorate degrees
or their masters or their MBAs,or that it may be just been down
the path that we're going andwe could learn from them.
So one of the things thathappens is you get to a point
where you start hiring people onto help increase your sales,
(08:00):
increase your production,whatever it may be, and when you
do that, you find yourself inthis middle ground of like I
know I hired on three people ortwo people to help multiply the
output of our business, but butyou're still like your foot's
(08:21):
still in it, Like you findyourself still stepping in and
going, no, here's how you do it,no, here's how I did it.
And you're like, are they doingthe production or am I doing
the production?
And many of us get there.
We're in the middle of tryingto do the splits, which we can't
do All right, and it builds upfrustration and a couple of
things happen Burnout onyourself, higher employee
turnover because you're just notempowering them and letting
them go.
(08:42):
And I know you've experiencedthat too, where you've been
caught in the middle of it andyou keep injecting yourself in
to make it work.
Right, but you know you need toempower the others.
It's really tricky.
Speaker 2 (08:55):
Very tricky of going into that.
I ran across this the othernight, one of the processes that
we had set in as far as salesand growing and realizing and
laughing of you know, our goingthrough the process of the sale,
but laughing about why has thisgotten so difficult?
It's not necessarily that it'sgotten difficult.
(09:16):
Our business has evolvedbecause it's grown so much.
It's grown so much in the lastyear and no different than the
principles, practices,everything we've done that has
got us here.
We have to remember that'sdeep-rooted and that keeps our
culture.
But it's okay to adapt andchange that because without
(09:37):
doing that, you're not going tonecessarily be able to scale.
And so I sat back and it's like,oh, me, and you're right, and a
couple of other managerslooking at me.
I said, tay, that's just partof growth, that's part of growth
going.
And I said I understand, youknow about my fight, what it is.
And they said, no, I know yourculture and you and your
brother's culture.
That's what you want to keepand you want to grow and
(09:57):
everything else.
I said, but you've got to lookat this other so, having having
people around you that feelcomfortable enough to be able to
coach and push you, that's soimportant it really is.
Speaker 1 (10:13):
And I mean I can't tell you how long I fought it
and I still fight it, you know,because it's because you have
passion and it's because you'vehad success in doing the
production and that got you towhere you currently are.
So if you're in a managementrole, if you're in a supervisor
role, if you're in a supervisorrole and you're not in a large
company, that can teach you howto keep making those micro steps
and empowering others andyou're probably listening to
(10:34):
this because you're part of asmall business is how do you
take that next step?
And I'd find myself and it'dfinally get to about a breaking
point.
You know where nobody elsereally saw, but behind the
scenes it's like you're justsitting there at your desk at
the end of the day or on yourdrive home going.
Why can't I figure this out?
Why am I absolutely just toast?
(10:57):
I like what I do.
My employees are fantastic.
You know we got great culture,but holy moly, and I get the
ramp up period, like let me justtell you this Like even with
our business we've been inbusiness for 79 years when we
moved and we started scalingagain.
I don't know about you, but tome it almost felt like we were
starting a new business.
(11:18):
It was, I mean it just we'renot done there yet, and I can
remember that.
And then about 90 days passedand I was like I didn't really
expect this and I was like, okay, let's peel back the layers.
What needs to be fixed here?
How do we need to empowerothers?
And just as soon as I thought Ihad empowered people, there was
(11:38):
a whole new level and we're onour journey there.
I'm not telling you right nowwe've even figured it all out,
but we're on our journey there.
I'm not telling you right nowwe've even figured it all out,
but we're on our journey to beable to get that.
I got to talk about a turningpoint where this finally hit
home with me, because I'm a andso are you.
It's just kind of how we weregrowing up, is we just?
I mean, we work and we workhard, and when we hit an
(12:01):
obstacle, we just work harder.
We just put the time in and wejust like put the load on me, I
can carry it, I carry it.
It's like, hang on, there's gotto be a smarter, smarter way.
So I'm reading a book, and thiswas a couple of years ago when I
read this.
It's called the motive and inthe book the motive they talk a
whole lot about.
They compare a couple ofdifferent CEOs of large
companies and the two peoplethat were going down the same
(12:23):
track and you know, both of themhad this outside mentor and
leadership coach and they starttalking about what you're doing
to be able to scale.
And one of the things thatstuck with me there real simple
thing was you have to fire yourold self to be able to get to
the new levels.
And I rewound that part acouple of times because I'm
(12:45):
listening to it.
You know whether I was runningor driving in the car and I was
like, huh, I got to fire my oldself to be able to get to where
I want to go.
And that was it was kind ofcontroversial for me because I
was like if I fire the personthat got me to the success level
, that got my employees to thelevel of success where they are
(13:05):
now, are you sure that's reallyright?
But what they really meant andas I read more into the book and
I listened and I dissected thatis you have to create the
capacity and the time to be ableto work on your new role and
your new systems, and the onlyway you can do that is about
removing stuff from the past.
(13:26):
You can't empower others ifyou're still trying to step into
the middle of helping them todo their job.
But, man, is that easier saidthan done?
Speaker 2 (13:35):
Very very difficult Now you've probably went through
it before myself or Shelby oflearning and going through that
process, but you hit the nail onthe head Whenever you feel like
your wheels are spinning.
A lot of times at the end ofthe day you can go back and look
and say, well, okay, let mebreak down what I've went
through throughout the day, andevery day that you are
(13:56):
absolutely spun out, it's a daywe probably went and looked over
things that we shouldn't havelooked over.
Yeah, now, don't hear me wrongthere.
You need to go back and alwaysquality check every aspect, but
on a day-to-day basis.
It should not be of your dailyroutine that you're going in and
(14:17):
still doing things from yourold self from years ago, you bet
, because that is not enablingyou to be able to expand to a
new self.
Speaker 1 (14:25):
And I'll tell you this if you don't tell your time
and your schedule what to do,it'll tell you what to do.
And here's what I mean by that.
It doesn't matter if we work 9,10, 12, 14, 16 hours in a day.
There's enough stuff coming atus.
It'll fill the whole day.
So it's never an issue of, well, I have enough to do.
(14:46):
Today, it's more of prioritizingas a leader and, you know, on
the business side of operations,of prioritizing, where I can
get the biggest X factor andthat has just been ringing in my
mind, and it's this filter thatI mentally go through is if I
take this meeting or if I putthis small group activity
(15:08):
together, what kind of X factorcould it equal, you know, versus
me just working on somethingindependently?
And if you go back a coupleepisodes, you'll listen to where
we talked a whole lot about andI started talking about
rescheduling my day, and Ilearned this from Alex Hormozy.
He said you know, he doesn'tschedule anything in the first
half of the day that doesn'thave to do with his business and
(15:31):
his leaders and his managers.
He said you know, I'm notmeeting with outside vendors,
I'm not meeting with anybody onthe outside.
That's not helping me.
X factor the inside.
Now do you need to meet with us?
Sure, we got plenty of reps weneed to meet with, but those are
scheduled for the afternoon.
And why are they the afternoonversus the morning?
The morning is when yourbrain's the freshest, you have
(15:52):
the most energy, you can use themost attention to detail that's
needed, and why would you spendthat on outside sources?
I think that's so important.
So I'm telling you about like Igrabbed a piece from this book
over here and then I grabbed apiece from Alex.
Neither one of those wereautomotive, but it was business.
It was systems, yes, and whenyou start looking at it from a
(16:15):
production to the operationalside, that must be the lens that
you go through, and that meansyou're going to have to give up.
But I'm just going to come backto this again because, taylor,
I know there's people listening.
That's hard to do, that's sohard to do.
Speaker 2 (16:30):
There's a really good point.
You just went over that.
I want you to go back and saywhat did you say about your day?
Prioritize your day, or what?
Speaker 1 (16:38):
You need to prioritize your day or the time,
the activities in there.
It will prioritize your day.
Speaker 2 (16:45):
Okay.
So I love that.
We were in a meeting yesterdayand this is where you hear
little bits and pieces.
We were in a meeting yesterday.
Matt was running the managermeeting and then I ran the sales
meeting afterwards and so wewere going through everything
and in a lot of meetings, ifyou're ever listening to this
and you're running a meeting,you have people that are really
engaged.
You have people look likethey're still asleep.
(17:08):
You couldn't throw a pot ofcoffee on them and get them
excited.
But I went back into that.
We were halfway through themeeting.
I said you know what, guys?
I said let's prioritize our day.
And I said how do we prioritizeit and how do we remember
things?
They're like oh, write it down,it's a great, everybody write
it down.
So half of them did.
I went back and I was oh, writeit down.
I said great, everybody, writeit down.
So half of them did.
I went back and I was like no,write it down.
I'm coming around, you're goingto tell me how we're going to
get to this step and we're goingto get to your next goal.
(17:30):
So we wrote it down.
Fast forward to in theafternoon.
I actually hear a guy thatnever follows through with the
process because he wrote it down.
He's coming back around to themanager to check on it.
I'm like boom, that hit home.
That made sense.
That's why you do that.
So that's so important of whatMatt said Prioritize your day,
(17:51):
and it doesn't matter if it's ina spreadsheet, on a big chief
tablet, like you're doing.
Whatever works for you is goingto help you drive the day.
Speaker 1 (18:00):
That's such a great point.
I hope the leaders out therehear this.
And we learned this early on inour career.
And then you know we share allthis information to just help
each other grow as brothers.
But you know you do less withmore impact.
So on that meeting like that youwere going over yesterday.
It's not.
Hey, can I cover 10 differentsubjects?
It's no.
(18:20):
Can I cover a maximum of three?
And while I'm reading theaudience or my employees, if
they're not engaged and they'renot writing down, I'm stopping,
I'm going back over.
Write it down.
I'm coming to inspect it, likeyou just talked about.
Okay, so then you'll get themultiplication factor later.
Yes, and had so many people Ilistened to, especially early on
(18:42):
in their career, and they juststand up and they talk and they
go over so many subjects andthey think they killed it and
they got no role playing andthey didn't pause and they got
no cadence.
Now they were fired up andeverybody comes out of the
meeting going man, they werejacked up.
It's going to be a good day,but they can't remember what
they talked about because theywent over too much.
And just, I'm just telling youyou may be uber successful out
(19:04):
there.
But I'm telling you there'sanother level.
There's always another level,but you can't ever see it If you
don't step back.
Look at the operational side ofit.
Look at your systems in placeand it's okay to evolve.
Yes, it's okay to removesomething in your business
that's keeping you from whereyou need to get to.
(19:24):
I love being able to use it asan example with our employees
and our customers when we talkto people about how we've grown
and what's our next step.
As I said, we were a wildlysuccessful company.
We really are Family-ownedcompany.
Four generations, 79 yearswildly successful generations 79
(19:45):
years, wildly successful andthat success got us to where we
are now.
It enabled us to build a26-acre campus with 150,000
square feet, you know, but?
But those systems not all ofthem, but a lot of them were not
built to scale on where we'regoing.
(20:07):
So again, that's at theoperational side.
We could have just put our headdown and just continued to
grind it out from what we hadalways done, but we said no, we
got new layers, we need newpeople, we need new processes
and we've got to look at thisfrom an operational standpoint.
You know and I think I'll goover one other piece here we're
(20:28):
in the retail business, so likeit's, it's so much less
structured than if you were onan assembly line.
Yes, you know, and you do A andyou do B because you've got so
many variables coming in.
But our managers, we talk aboutthis at the start of every
single day.
You've got to treat it a littlebit like an assembly line to
(20:49):
make sure you go around and allyour machines are turned on.
You don't have any breakers,that you've got what we call
tripped.
You've got to go flip thebreaker and that means are you
coaching, are you leading yourstaff to make sure they're doing
the daily activities again inthe morning so we get the
multiplication factor all daylong.
You can only do that if youevolve as a leader to the
(21:13):
operational side, you know, tothe operational side, so that
doesn't rain.
I know we got more to dive intothere, but we got to get to our
automotive fun fact of the week,this day in this month in
history in the automotivedealership business, what
critical financial metric isoften used to assess the
efficiency of turning vehicleinventory into sales revenue and
(21:37):
is a key indicator on how wella dealership manages its
inventory?
Is it A gross profit, Is it Bnet profit margin, Is it C
inventory turnover rate, or isit D customer satisfaction index
?
Speaker 2 (21:53):
That's pretty good.
I think the majority of thelisteners that are not in this
are probably going to gostraight to.
I'm going to give you one thatit's not and we'll narrow it
down for you, but gross profitmargin.
Speaker 1 (22:05):
I think they'd go straight there.
Straight to that.
They'd go straight to that.
We'll come back to the answer.
Of course, we've talked aboutthe answer on a whole episode,
which is exciting, but we'llcome back to that one that's a
good one.
Speaker 2 (22:18):
So laying straight into the next part of it, laying
the operational foundationsystems and processes for
scalability, so really big dealthere.
We've kind of already talkedabout rolling into that, but
about so stepping.
We've talked about um,realizing that, understanding
that, but then stepping back andsaying, hey, these are the
(22:41):
systems I'm going to be able toput in to be able to move to the
next level and um so what we'reafter really at the core and
and I know I got to relate otherindustries because we've got a
lot of industries listening outthere.
Speaker 1 (22:53):
Plus, I've personally learned from a whole lot of
industries um, I've beenstudying the restaurant and the
hospitality, got a lot ofindustries listening out there,
plus, I've personally learnedfrom a whole lot of industries.
I've been studying therestaurant and the hospitality
industries a lot lately and oneof the things they talk about
some of the most successfulrestaurants or hotels out there
is how do we duplicate that wowexperience?
(23:13):
And if we start thinking aboutthat customer that we personally
walked through a sale or workedthrough service and they had
just an amazing experience inthe back of your mind, you're
like, if I could get thatduplicated, wasn't hard, you
know we didn't give the houseaway to do it, you know.
But how can I take thatexperience that I did or my top
person did and duplicate thatthroughout the entire dealership
(23:34):
?
And the way to do that is youstart looking at your systems
and you start looking at yourprocesses.
One of the things we've done,our foot's really been on the
gas.
If you look at last year, itwas kind of two halves is, the
first half was moving, gettingeverything finished up, because
when we moved, construction wasstill finishing up.
And then the second half reallyafter the third quarter going
(23:56):
into the fourth quarter was okay, we're here, you know what,
what new meetings, what newprocesses, and when we started
off with you know a better orgchart.
I mean, I'll just be reallyhonest with you.
You know we had all thisinformation in our head but it
wasn't on paper.
Like, what is the org chart?
How would I move up?
Who reports to who?
What's our ratio of manager toemployees?
(24:18):
And we started right there.
Yeah, you know, we studied themilitary a whole lot there and
if you look at the military andtheir rankings, you look at the
maximum amount of people thatsomebody can manage, you know,
or to be able to lead, and it'sin between four and eight people
.
We had some areas that had atwo to one ratio and then we had
some areas that were 16 or 17to one.
(24:39):
So we first had to start rightthere and go.
Can we free up the capacity ofa leader to actually do what
we're talking about?
Because it's one thing aboutdoing what we're talking about,
but it's two to have thecapacity and you talked about it
with time.
If you got a 10 to 1 ratio andyou're still plugged in on doing
what you did five years ago toget to here, you can't ever work
(25:02):
on that new stuff, correct?
Speaker 2 (25:04):
Yeah, that's really big, because once you start you
don't realize that while you'rein it You're just it's a worker
mentality or anything else.
I'm going to work harder andI'm going to do it.
It's a worker mentality oranything else.
I'm gonna work harder, I'mgonna do it.
You're stuck in the mudspinning your wheels and you're
going nowhere, exhaustingyourself, all because you need
to make that little adjustmentto be able to help that system
(25:27):
grow, help that system be welldefined in the areas that it
needs to be.
You bet um, very important tobe able to do that, you know,
and that helps you step backwhenever you do delegate that to
a new person to be able to helpyou grow there.
It helps you identify otherareas.
So, whether it be in our retailside of it, of customer service
, of inventory management, ofworkflow communication, all of
(25:49):
that you know.
Speaker 1 (25:50):
So you know that was kind of step one.
There's like get your org chartright, you know, and when I
first met, I started at thegeneral manager level wise, and
then I went to gsm and and youknow, then we went to service
and parts and I had them allwrite it out.
I didn't do it for them, okay,I had them all write it out and
they brought it to me and it wasa mess.
At first it wasn't perfect,nobody's was, and then we
started moving stuff around.
Then I started teaching aboutthe ratio, because I first
(26:12):
wanted to see where they were.
Then they modified, theybrought it back.
So that was step one gettingthat org chart and getting the
ratio right.
Step two was SOPs, so standardoperating.
You know processes andprocedures and what we would do
in every and we're not done withall this.
I don't think we have all thisput together.
We're right in the middle of.
So it's a great subject to talkabout is we would talk about
(26:34):
each of the areas when westarted with our central office
and we said, okay, accounts,payable accounts, receivable
deal clerks, title clerks whohave payroll, whoever it may be,
write down, take screenshots,write out.
You know your process and theprocedure for ap, for ar, you
know for payroll, and we havedigital copies.
(26:56):
And then we got the old schoolthree ring binders too and it's
got the process so we could filla spot, whether it's a new
employee or we become layeredbetter.
So if somebody goes on vacation, we can still do accounts
receivable, still do accountspayable, and these were multiple
sheets.
Now how do you get started there?
You sit down with youremployees and you have them
(27:16):
write down what they think theirjob description is.
A couple of things are going tohappen here.
One, it's going to start theprocess on how to put together
the actually operating procedurefor that position.
Number two, it's going to helpidentify what they think their
job is versus what you hiredthem to do.
So you start there and then youstart listening out.
(27:37):
This goes back and forth, backand forth, and what you're
developing there is an actualprocess so you can train
somebody else, cross train so itcan layer, or two, to make sure
, when somebody new gets hired,that you're training them on the
correct process.
Because that's the other thingwe've seen is is maybe we hired
somebody and we know that we gotit all right for what they want
(27:59):
them to do, but then you hireda sales manager that then hired
a sales person.
They're now training them.
And what if they interpreted ormissed a couple of the steps
and then another one down theroad?
Then they're training onsomething totally different that
you and I didn't even talkabout.
Speaker 2 (28:15):
Yeah, they shot way off to the left over here and
you thought we were goingstraight down the road,
completely off to the left.
So that was so big to be ableto do, because if you're not
putting the next person to stepin the right capacity role and
you're not helping them, guidingthem to be able to do it, it
just completely throws them off.
(28:36):
The other part of loving whatputting all this um, the whole
structure in of all the jobtitles and everything else, not
only does it give structure towhat I'm supposed to be doing.
You know what we found a lot ofthis is from us being in the
spots we're in but of someonesay, that was, of whatever level
(29:02):
they are at, that a completelydifferent department.
They're coming and reportingand asking a manager in the
sales department, maybe someonethat is, uh, the shop cleaner
that takes care of anythingthey're coming all the way over.
Or even a lot porter that istaking care of the whole lot.
They're coming and reporting.
Myself I know of being in a GSMspot at Ford when I need to be
(29:24):
managing my other managers.
They were coming over to me nodifferent than when I would go
over to the CDJR side.
So putting the workflow chartin there is not to say, now,
don't take this to me, of sayingyou can't ever come talk to me
because I am not that type ofmanager, nor will I ever be of
in the operational side of it.
(29:45):
But that's taking time awayfrom you.
It's robbing time andefficiency of you being able to
work.
If that's not set with yourproper systems, procedures and
processes, they're coming to robin time from you.
Whenever I'm not trying to bemean and a lot of people say,
hey, don't be a dick about it asfar as coming to it or anything
(30:06):
else, you're not being aboutthat.
It's about the process,procedures and putting it in
place.
Speaker 1 (30:12):
That's such a good point, but it's a slippery slope
.
So let me give you a coupletips on what Taylor just went
over is you have to make sure,especially when your office is
like, if you ever come into oursales manager office, all the
managers are there.
Salesperson walks in, or acustomer walks in, they're going
to go straight to Taylorbecause they're like well, he's
the highest position there, hecan make the deals happen.
(30:32):
And so here's a a couple tipsfor you if you're out.
There is number one firstlisten to what they say.
Okay, so you at least know whatit's about before you chop
somebody's legs off.
Okay.
And if it's, for example, ifit's to work a deal, then I
pause at that at that moment andI bring them over to the sales
manager and I tell that salesmanager hey, can you help bob,
(30:55):
work this deal?
I'm right in the middle ofdoing some marketing to be able
to generate some more leads forus.
Do you have the capacity to dothat right now?
So first I got to make surethat it's not a question that
only I could handle, okay, andthat only takes 30 seconds to
run through that filter.
And then I take them over and Iintroduce them there and I show
that manager that I have faithin them and I'm empowering them,
(31:15):
and then that salesperson seesthat I have faith and I entrust
them as well.
So that happens in every singledepartment.
You just got to know that.
And if you don't address that,and I'm telling you, it's going
to happen repetitively at first,but then it starts to die down.
It never goes completely away,never goes completely away.
And if you find that happeningmore and more and more and
(31:36):
you've got other managers orsupervisors or team leads
sitting there that could handlewhat they keep asking you about,
you need to remove yourself foran hour or two to another
office I don't care if it's thejanitor's closet so you can
focus.
And here's why Because whatyou're working on affects your
entire team.
You know, and if you nailyourself down to just one person
(32:00):
, there's 8, 10, 12, maybe 25,maybe 30 people that are waiting
for you to accomplish thatother task.
That's the lens you've got tolook through when you're in a
manager role.
That's so important, so easilymissed.
It really is.
Speaker 2 (32:15):
Hey, diving into our fun fact automotive quiz of the
week.
You know we had talked aboutthis, of going through there,
but what's the criticalfinancial metric that's often
used to assess efficiency of aturn?
During talking about revenue,key indicator, everything of a
dealership, I told you it wasn'tgross profit.
(32:35):
You thought it may have beenthat.
It's not net profit either.
It's not net profit.
Two options there.
It's inventory turn rate.
We talked about how quickly canyou turn inventory, and this is
not just an automotive, it's inany retail aspect.
How quickly can you turn theproduct that you are selling,
you are offering to the public?
How quickly can you turn it?
(32:55):
Because the longer it sits onyour shelf, the more it costs
you.
The quicker you can turn yourinventory, the better it is for
you as a business.
Speaker 1 (33:03):
And you know you could wind me up and I could
just go on about that, but whatI'm going to say is go listen to
that episode on inventory turn.
If you don't understandinventory turn and you don't
understand cash flow, you don'tunderstand business.
I'm not trying to be ugly, I'mjust saying you need to stop
what you're doing right now andlearn about inventory turn and
learn about cash flow.
(33:24):
That's a good one.
That's a good one.
We appreciate our productionteam putting that question in
place.
That was a good one, for sure.
And next up, decoding thefinancial dashboard,
understanding the numbers thatdrive success.
Okay, I'm going to lead intothis one and then I'm going to
tell you how it's evolved.
Okay, because we have KPIs,which are key performance
(33:44):
indicators.
Every industry has them.
You may call them other things,but you know the universal term
is KPIs.
You know, in our business it'shey, how many cars did you sell?
How many service repair ordersdid you write?
How many parts tickets did youdo?
And forever, okay, forever.
That's what we looked at everysingle day.
Hey, how many did you sell?
(34:04):
How many were new?
How many were used?
How many service tickets didyou write up?
How many more oil changesyesterday, how many front
counter, how many back countertickets and like that's what we
looked at.
And that's what we looked atand we understand our numbers
and we could recite the numbers.
You know we go over it daily.
Daily we have quick managermeetings with everybody in there
at 15 minutes, going over thoseKPIs, you know.
And then we even go deeper ofhow many phone calls did you
(34:27):
make?
You know how many appointmentsdid you set.
You know what were your averagesales, what was your average
dollars per RO, what's yourgross percentage, so on and so
forth.
We can go over all these KPIs.
But as we evolved and this isperfect for this podcast as we
evolved into the operationalside, this shift, you reflect on
(34:48):
KPIs.
It's kind of like thescoreboard at a game.
If we're in the middle of agame, you look up at the
scoreboard every once in a whileto see either how many timeouts
you have left, how many secondsare left on the clock, what is
the score, but then you don'tstare at the scoreboard the
entire game.
You go back to putting yourgame plan in place.
So as we've evolved to moreoperational, it's like okay,
(35:09):
those are the numbers thatreflect how well we've been
operating our business.
We need to spend more timefine-tuning the operational side
and our output of the KPIs willbe greater.
Oh yeah.
Speaker 2 (35:23):
No, that really changed the whole look of it
because it's not looking at this, going over your monotonous
task of these three and thesefour different indicators are
what's going to tell me.
It's like staring at thisscreen telling you what's going
on out in the out, in the whole,uh, business world of it,
whether being your accountingofficer out in the retail sales
(35:45):
of it, knowing those differentmetrics, helps you be able to
instantly look at a sheet andsay, oh, I need to go check in
there, I need to look in service, I need to look in parts.
This is where it's reallyneeded.
My attention's needed in thereright now, of being able to grab
that quickly where, if you'rejust looking at that and saying
hey, they had many sold here,how many sold new used parts
(36:07):
service, you can't really seewhat side of it is If it's
getting the inventory, if it'sselling the inventory, if it's
the amount of people we have inthat are salespeople and so on.
Speaker 1 (36:23):
That's right.
That's right.
But now I'll dive more into thefinancial side, because I know
that's what I said the subjectwas going to be.
But I'm going to help adviseyou as we talk about financial.
I love crunching numbers,really to be able to find trends
, really to try to findopportunities.
And I can tell you, earlier inmy career I would start making
spreadsheets.
My desk could be covered indifferent financial statements
because I was looking for atrend.
I was looking for, hey, whatdid we do there?
(36:44):
What changed?
What was our expense look like?
What was our employee count?
What are our inventories?
And I'd look up and I mean, I'mjust I'm gonna admit this to
you I've spent days sitting atmy desk crunching numbers till
my eyes are crossed, glued,excited from what I found.
And then I'll look up two orthree days later and I'm like I
(37:07):
found that information, it wasgood data.
But what I do with it?
What I'd do with it?
Yes, nothing, I did nothingwith it.
I was proud that I gathered itall.
I was proud.
But sometimes you exhaustyourself with all the numbers to
the point of your normal task,get backed up and then you don't
(37:28):
even get to do anything withthe numbers Now how we've
evolved.
There is I now have some peopleI can lean on to that can
gather that information for me.
So then my brain is clear andI've got that energy back that
then I can take the ball fromthere to put a game plan in
(37:50):
place to actually use it to helpmove the business.
To put a game plan in place toactually use it to help move the
business.
So that's just a personal storyof mine of where I used to do
all that and I could getsomebody now to duplicate it.
But that's hard to let go of.
Speaker 2 (38:01):
Very hard to let go because you're letting someone
else be able to help you with atask, but then growing, going
back up to one of our previoussection of you, growing into the
next level of expanding, firingyour old self, realizing that,
hey, I've got to change if I'mgoing to be able to move,
because one of the things that'sallowed you to be able to do is
(38:22):
get that information and I'veseen a whole lot of that come
out in manager meetings that itis, hey, this is a quick scope
of what we did, and then it'sallowing them to be able to dive
in, which then helps themmanage their team better, more
effectively, in a day by daybasis.
Speaker 1 (38:38):
That's right and I think that's a goal of ours.
We've tried to evolve in themanager meetings is providing
that information.
Go ahead and dissecting andhelp them identify trends, but
then say I don't need you to digany farther into this, you just
take it and move the needle andmove the needle.
And I think when you talkedabout you know evolving as a
leader, I just love this quoteby Craig Groeschel.
(38:59):
He talks about everybody winswhen the leader gets better.
So you're constantly trying toget better because the rest of
your team, it doesn't justaffect you, it affects everybody
that you influence in yourbusiness.
So back on the financials yougot to understand the financials
and they've got to be a part ofyour business, you know.
So the same thing, whether it'sprofit and loss or balance
(39:20):
sheet, whatever it may be youknow one of the things we really
look at are our heat sheets and, like our business is a cash
eating monster.
I mean a cash eating monster,and there's fruit from that.
But if not handled correctly,it'll bury your business.
And I can remember and you'llprobably remember the text a
couple weeks ago, that we werecoming out of one of our last
(39:42):
weekends of the month and it wasa Monday morning and I can tell
you there wasn't much money inour account because we had had a
massive weekend, a massiveweekend, and that was coming.
Yes, we had sold 70-somethingcars Nope, Okay, over the
weekend 70-something cars, Notto mention all the repair orders
, but there wasn't a ton ofmoney in our operating account
(40:04):
from cash.
We had to bridge this gap untilall the contracts actually got
cashed.
And that morning our CFO cameto me and she said great job on
the big weekend, but we need togo over this.
We need to write a check for$1.7 million this morning to pay
off all the vehicles that weretraded in.
That we told the customers we'dpay off.
(40:24):
And currently, right now,there's not that amount in our
account.
And I said yeah, but what aboutall those contracts?
She goes yeah, it's coming,it's coming.
So you got to know, as abusiness owner, I didn't freak
out.
Luckily, I'd been through thesesimulations before.
What I started doing was goingokay, I understand my financials
, I understand where the moneycan come from, but I must take
(40:45):
action.
So I communicated with you andShelby.
I'm like, hey, go get withfinance.
We got to get these contractscashed.
Here's how much we got comingout of our account because we're
going to pay off the customer'strade.
So you must understand thefinancials to keep the cash
moving, the inventory turningand the business to work.
Speaker 2 (41:03):
Yes, it's so important.
If you don't know all yourvitals, you can't.
No different than Matt lookingback into sports.
He saw the play coming.
You have to call the audiblebecause you got to do it quick.
If not, it just is like a traincoming down the tracks and she
comes off the tracks andeverything behind it is just a
train wreck.
So make the adjustment there.
(41:26):
Be able to call, do that, haveyour key, uh, key people you get
a hold of to be able to pullthat lever.
Hey, do this, do that.
And it was a smooth transitionand it keeps running like a
finely tuned machine.
Speaker 1 (41:38):
It does.
It wasn't an alarm we pulledoff.
It's like, hey, here's what weknow.
Keep this in the back of yourmind.
Go get them.
My CFO and our controller.
I said, okay, get up to date.
Heat sheets for service, forparts, for finance, for rebates,
anybody that owes us money, ouraccounts.
You know our accountsreceivable, but the girls in the
office aren't calling any ofthose accounts.
And we figured it out and yourock on.
(42:00):
It's just a part of business.
You don't freak out about it.
You step up to the line, youstep up to the plate.
Another point there infinancial is you could get to a
point to where you you need helpand you know you need expert
advice where you might not knowand it's.
Do you seek that advice or doyou just keep acting like you
(42:24):
know what you're talking aboutbecause you're embarrassed to
admit that you don't know?
Speaker 2 (42:29):
Well, you know, one side was like no, I've got to
figure this out, I've got tofigure this out.
But luckily, you know, we sidewas like no, I got to figure
this out, I got to figure thisout.
But luckily, you know, we'reblessed not only as brothers,
but then we have dad and unclethat are on board as well.
So, as a quick, if you had togo back and say, hey, what would
you do here, really quick, tobe able to sound against?
And you have those key peoplethat are your outside influence,
(42:52):
you can do that really quicklywith.
Speaker 1 (42:54):
I will tell you this, though, just to look behind
into our family okay is, if Idon't ask my dad or my uncle,
they're not going to tell me no,no, they're going to make me
ask, oh yeah, and like.
So.
I've learned that, which hasbeen good.
It's been good.
I know that we also were a partof a different, what they call
(43:14):
20 groups in the automotiveindustry, so we have other
people that we can look to foradvice there.
But I'll tell you, even withinour departments, one of the
success stories that we've hadthis past year what we call
these micro meetings.
And these micro meetings aredepartment based between our
entire automotive group, wherewe get all the parts managers or
all the service managers allthe parts managers or all the
service managers or all thefinance managers or all the
(43:37):
sales managers in a meeting, ourCFOs in there, our office
controllers in there, and wetalk about different things.
That has brought up we havemultiple different managers that
after one of those meetings hasgone and sat down not
necessarily with me or you, butgone and sat down or not our CFO
, but our controller and said,hey, will you please explain
this part?
(43:57):
Where are these numbers comefrom?
Because they knew they neededto move them, but they needed to
better understand what goes inand out of that account.
And then how can I affect that?
Yes, so the betterunderstanding you must
understand your financials ifyou want to be able to move the
mark and not just keep lobbingstuff in there and hope there's
something in the bank accountand there's not.
(44:21):
You know, that's a big one forsure.
Well, this one's been aninteresting for sure.
So I think we need to go tohelp the listeners here.
So think about this is I wantto talk about takeaways before
we go into frequently askedquestions.
So takeaways today, and I'llask you here in just a minute,
and then I'll jump in after that, on really making the
(44:45):
adjustment and masteringoperational side of your
business versus what you haddone in the past.
Speaker 2 (44:48):
My biggest takeaway that I love that you went over
is knowing that you need to,knowing that you need to grow,
and so you are.
You're enabling others aroundyou, and how you do that of
being able to do is exactly howMatt had talked about.
That I spoke about in the salesmeeting of it doesn't matter
(45:10):
what level you get into, whatyour role goes into.
You've got to plan out your dayor it will play in you and
you'll go in the complete wrongdirection.
So, knowing of dedicating thoseother tasks to different
managers, different departmentheads, putting that in there so
you can grow, but knowing that Istill have to plan my day out,
(45:31):
Because if not, even though I'mtrying to delegate and do these
other things, I still love beinga part of the sales and the
daily activity and I'll sitthere and grind that all day
long.
But if I don't plan that out, Ilose that efficiency of a day.
Speaker 1 (45:45):
I think that's a great point and I think if you
plan your day correctly, you cando both.
If you plan your day correctly,you can do both.
Oh yeah, if you plan your daycorrectly, you can do your
operational task.
In the morning, you can getthat stuff done, and then the
afternoon that frees that upwhere you're in the middle you
can go appraise a trade, you cansay hi to customers, you could
do a one-on-one coaching sessionwith somebody, as long as you
(46:07):
plan that correctly.
Hey, I got three for you herein these order that we've been
going through and hopefullyit'll help you as well.
Number one start with your orgchart.
Within your org chart, try tomake sure your manager to
employee ratio is correct.
We find four to eight people,depending upon what the
department is.
Number two standard operatingprocedure with each area.
So you've got that written downin digital and a physical copy
(46:30):
to make sure that your newemployees are getting trained
how you would want them to dothat position.
And then, number three theplanning of not only your day
but, if you're over, managers.
You know managers bring back tome, hey, give me your day and
your weekly schedule.
What does that structure looklike when are you prioritizing
time with your team?
And you've got to plan that outjust like you, or it'll.
(46:51):
It'll play in you, you know forsure, and you can do both.
But you must prioritize whereyou get the most fruit, and that
means pruning stuff you did inthe past.
You got to cut it off.
If you want new growth, thatmeans firing the old you and
hiring the new you to get you toa new level.
So this has been a been areally good one.
This has been a good one forsure.
(47:11):
So any frequently askedquestions you've been hit with
this past week Hi, you know itis.
Speaker 2 (47:19):
We just finished up the ultimate challenge and we're
getting into it and this isprobably the most fun.
The most fun, we as threebrothers get to go and we have
these big prize auctions we dofor our employees, but right now
they're asking about how you'refiguring out or how how many
tvs or how you're doing that orthis.
So it's been so much fun ofexplaining to them what's really
(47:41):
going to happen and so loving.
I love that aspect of it, ofthat your employee cares enough
that what you're doing andreally that they're involved in
the whole aspect of it.
Yeah, that's gonna be, that'sgonna be a whole lot and really
that they're involved in thewhole aspect of it.
Speaker 1 (47:54):
Yeah, that's going to be a whole lot of fun and we
love celebrating in the culturewith our employees.
Hey, thanks for tuning intothis week.
This has been a great episodeon mastering the operational
side of your business, as always.
Hey, if you would go ahead andreview these podcasts, it helps
us out and it means a lot to us.
Leave something in the commentif you want us to cover.
We want to cover the subjectsthat you guys are struggling
(48:15):
with or that you need some helpwith out there in the business
world.
Find us on any of your podcastareas.
Make sure to like, share,comment.
You guys have a great day.
Hey, thanks for joining ustoday and we hope you enjoyed
this episode.
Make sure to give it a like,share it with your friends and
family.
Visit our website and send ussome questions.
We want to know what you'd liketo hear, who you'd like to hear
from and what you want to see,or maybe even some questions for
(48:38):
us to answer about either theautomotive industry or just
business in general.
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