Changing The Industry Podcast

David Roman [00:00:02]:
You recording?

Lucas Underwood [00:00:03]:
Yeah, I'm recording.

David Roman [00:00:07]:
There you go.

Lucas Underwood [00:00:08]:
The man who needs no introduction. Introduce yourself.

Frank Scandura [00:00:11]:
Oh, my. Frank Scandura, owner of Frank's European Service right here in Las Vegas. And I hope you guys got at least five minutes to stop by.

Lucas Underwood [00:00:20]:
Yeah, we'll definitely try and make that work. Surely we can make that work.

Frank Scandura [00:00:23]:
Yeah. I'm also coach for transformers institute.

David Roman [00:00:26]:
45 minutes. Just like leave the parking lot. This is 45 minutes.

Lucas Underwood [00:00:31]:
Has this. Okay, so I love the Apex show.

Frank Scandura [00:00:34]:
Yes.

Lucas Underwood [00:00:34]:
It is like one of my all time favorite shows. I love what the Auto Care association is doing for our industry. I don't know that I love Vegas the week before the F1 race.

Frank Scandura [00:00:44]:
I don't either.

Lucas Underwood [00:00:46]:
It's a. It's a mess.

Frank Scandura [00:00:47]:
It's a mess. Last year was worse because the race was closer to the show. And it's bad because I don't live that far from here. It was a 45 minute ride for me to get into here. And it's ridiculous.

David Roman [00:00:56]:
It should have been the F1 race a disaster then. Weren't they complaining, like the roads weren't right.

Lucas Underwood [00:01:01]:
The hotels were mad because. Weren't they like billing them? Weren't they like billing the hotels?

Frank Scandura [00:01:06]:
You had visibility of the race. You got billed and they put. Yeah, so like we have these pedestrian bridges over the strip and they put blockades up so you couldn't see the race walking around. It was. It was pretty much us. Not you. It's us four. No more kind of group.

Frank Scandura [00:01:22]:
And they really alienated a bunch of local people.

Lucas Underwood [00:01:25]:
Yeah, it was. It was a mess. And you know, I have spent the last five years getting used to this town and learning how to navigate this town. And I was good at getting around.

Frank Scandura [00:01:36]:
This town right up until the barriers went off. It's a nightmare. It really is. You know what's really sad is we've got a beautiful racetrack here.

Lucas Underwood [00:01:43]:
Yeah.

Frank Scandura [00:01:43]:
And it's like they don't want to use it.

Lucas Underwood [00:01:46]:
Right, Right.

Frank Scandura [00:01:46]:
So they. They could have used it. They could have put a road course section in it. May even have one. They pissed me off a long time ago. I don't go anymore locally, so. So it's really sad that we don't use the resources. We have Raider Stadium being built right off the Strip now.

Frank Scandura [00:02:00]:
We're building a ballpark right off the Strip. So it's all about revenue for the hotels. Because what happens is the people who come to F1 or the ball games stay at the hotel, spend stupid money. So it's not about the fans in My opinion.

Lucas Underwood [00:02:13]:
Yeah.

Frank Scandura [00:02:14]:
I don't get to be a fan.

Lucas Underwood [00:02:15]:
Exactly.

Lucas Underwood [00:02:16]:
Yeah.

Lucas Underwood [00:02:16]:
And a lot of the locals that I've talked to are extraordinarily frustrating.

Frank Scandura [00:02:21]:
A lot of businesses have gotten blocked out, so a lot of bad stuff happened.

Lucas Underwood [00:02:25]:
Yeah, for sure.

Frank Scandura [00:02:25]:
And I think we only have eight more years of this.

Lucas Underwood [00:02:27]:
Yeah, eight more years.

Frank Scandura [00:02:29]:
I heard it was a ten year deal, so I don't know if it'll go through for 10.

Lucas Underwood [00:02:32]:
I mean, I don't know, dude.

Frank Scandura [00:02:33]:
Very disruptive.

Lucas Underwood [00:02:34]:
Yeah. The, the locals around here, the Uber drivers and everybody else, I mean, everybody you talk to says, I hate this. Yeah, this sucks.

Frank Scandura [00:02:42]:
Because if you think about Uber's like, you know, turning cars.

Lucas Underwood [00:02:46]:
Yeah.

Frank Scandura [00:02:46]:
Get them and get them out. Get them and get them out. And if I'm stuck in traffic for 30 minutes.

Lucas Underwood [00:02:50]:
Yeah.

Frank Scandura [00:02:50]:
I don't get to charge more.

Lucas Underwood [00:02:51]:
Yeah, for sure. And like. So we're in the wind this year. Love it. Right? Favorite hotel on the strip. Usually you can walk out the side door of the Wind. You can walk right across the street to here and walk right in here.

Frank Scandura [00:03:06]:
Not anymore.

Lucas Underwood [00:03:06]:
No. It's like a 40 walk to get over here. But now the show itself, bar none, the coolest.

Frank Scandura [00:03:14]:
Apex is the best. And if.

Lucas Underwood [00:03:16]:
Yeah.

Frank Scandura [00:03:17]:
You've never been, you have to go. Yeah, I think I've been going almost every year since, I don't know, early 90s, okay. Late 2000s, whenever they started. So I've been coming for a long time.

Lucas Underwood [00:03:27]:
How much has it grown since then?

Frank Scandura [00:03:30]:
Last couple years has shrunk down a little bit. Covet took a. Took a hit.

Lucas Underwood [00:03:34]:
Yeah.

Frank Scandura [00:03:35]:
But it's always been the place to go to learn what's new for your industry and how you can improve your business, whether it's technology or training or products or whatever the case may be.

Lucas Underwood [00:03:46]:
Yeah.

Lucas Underwood [00:03:47]:
You're a guy who's really connected to our industry. If you were going to give a state of the industry. Right. Because that's one of the things. I've been to a couple training classes lately and really appreciated some of the perspectives that I've heard from educators and folks who are really involved, kind of giving their synopsis of where our industry's at. What are we looking at? What's Frank's state of the industry?

Frank Scandura [00:04:10]:
So we'll start with the average car today is 13 years old.

Lucas Underwood [00:04:13]:
Okay.

Frank Scandura [00:04:13]:
I'm old enough to remember when cars didn't last 13 years, let's be honest. So that, to me is really amazing. So when I was younger, first starting out in his industry, a car was pretty well worn out at 100,000 miles.

Lucas Underwood [00:04:30]:
Yeah.

Frank Scandura [00:04:30]:
3, 4, 500,000. It's not uncommon.

Lucas Underwood [00:04:33]:
Yeah.

David Roman [00:04:34]:
So are we going back though, to that? No, because I think, well, there, there was, you know, there's several years, mid 2000, early 2000s, mid 2000, even less than late 90s. The 200,000 miles, 300,000, very common. But you're going to tell me like, I don't know, 2014, Buick Enclave in completely clapped out at 100,000.

Frank Scandura [00:04:59]:
We're in that transition for some of those cars because don't forget, we are the guinea pigs for new technology.

Lucas Underwood [00:05:04]:
Yeah.

Frank Scandura [00:05:05]:
They'll run things through simulators and they'll do some testing and, you know, build these prototypes. But the end user, the consumer truly is the person testing it. So buick enclave with 90,000 miles, that needs 3, 4, 5,000 dollars worth of timing chains. Come on. There's no reason for that, right?

David Roman [00:05:21]:
Six or seven.

Frank Scandura [00:05:22]:
Yeah. Well, so, right. The point injectors and the average driver gets that bill and they. Yeah, it got electrocuted.

Lucas Underwood [00:05:32]:
Yeah.

David Roman [00:05:32]:
So you can't tell me they're not kind of designing a little bit into the car going. We want it to be super clean because the EPS is on, EPA is on our ass. We wanted to get ridiculous gas mileage or at least be able to advertise. It could not be accurate. Right.

Frank Scandura [00:05:49]:
Your results.

David Roman [00:05:52]:
So we want to be able to say it gets 25 in the city and that's it. We don't care. And we'll give you a 60,000 mile powertrain warranty. And it just needs to make it to that 60 and then past that, it blows up. We have a new one for you.

Frank Scandura [00:06:07]:
However, when a customer comes to you and says, I'm looking for another car, is that car going to be on the list of recommendations?

Lucas Underwood [00:06:15]:
No.

Frank Scandura [00:06:16]:
And don't think the manufacturers don't know that.

Lucas Underwood [00:06:19]:
Yeah, they do.

Frank Scandura [00:06:20]:
People ask me all the time, what should I buy for a reliable car. And I'll tell them, Toyota first, on to second, Nissan never.

Lucas Underwood [00:06:25]:
Yeah, right.

Frank Scandura [00:06:26]:
And how many of us have put a transmission in a Nissan just to have it shoved down our throat?

Lucas Underwood [00:06:30]:
Yeah.

Frank Scandura [00:06:31]:
And that to me is just enough to say, don't even go near those cars. Right. And the European cars are not highly reliable.

Lucas Underwood [00:06:38]:
No, absolutely.

Frank Scandura [00:06:39]:
I just happen to be a Euro guy. I just happen to work on Euros. We're expanding now into Lexus, we're expanding into Lincoln. We're doing some more of the more luxury cars to, you know, has that.

Lucas Underwood [00:06:50]:
Shifted in the Euros over the last couple years? We work On a lot of Audis and Volkswagens. And I feel like I have seen a shift. It seems like we're seeing less reliability. I don't want to say they've ever been terribly reliable.

Frank Scandura [00:07:03]:
Yeah.

David Roman [00:07:03]:
Tell me when they were reliable.

Lucas Underwood [00:07:05]:
But I feel like there's some things that we're seeing right now that make me say that's kind of odd.

Frank Scandura [00:07:10]:
Kind of odd. And shame on you.

Lucas Underwood [00:07:12]:
Yeah.

Frank Scandura [00:07:13]:
How many? 2.0 Audi and Volkswagen motors as we seen, drop for no good reason.

Lucas Underwood [00:07:19]:
Yeah.

Frank Scandura [00:07:19]:
Again, we are the testing bed for that, which is kind of sad.

Lucas Underwood [00:07:23]:
Yeah.

Frank Scandura [00:07:24]:
How many cars have these extended warranties now, these extended campaigns where it's like we're not going to recall it, but just we'll go ahead and take care of it for you.

Lucas Underwood [00:07:33]:
Right. To try and sweep it under the rug.

Frank Scandura [00:07:35]:
Sweep it under the rug, yeah.

Lucas Underwood [00:07:36]:
Yeah. For sure.

Frank Scandura [00:07:37]:
So anyway, the state of the industry is good.

Lucas Underwood [00:07:40]:
Okay.

Frank Scandura [00:07:40]:
It really is. It's still a good business to be in.

Lucas Underwood [00:07:44]:
Okay.

Frank Scandura [00:07:45]:
It's not as easy it used to be. It's hard.

Lucas Underwood [00:07:48]:
Yeah.

Frank Scandura [00:07:49]:
The technology and keeping up with it and. And I really do believe that we have to really find our niche. Where do. How are we going to specialize? What's our niche going to be? I don't think we can be all makes, all models, all customers. Yeah.

Lucas Underwood [00:08:02]:
It's getting very hard.

Frank Scandura [00:08:04]:
It's really, really hard to keep up with technology. Scanners, special tools, timing tools. I mean, that's a small fortune. And a couple years later that engines out of production.

Lucas Underwood [00:08:13]:
Yeah.

Frank Scandura [00:08:14]:
So it's. But overall, I think the industry is very good. I think the manufacturers want to build cars that people continue to come back and buy. Brand loyalty is not what it was 30 or 40 years ago when I was a young pup like you guys. You know, the Chevy, Ford guys were die hard.

Lucas Underwood [00:08:33]:
Yeah.

Lucas Underwood [00:08:33]:
They would not even consider.

Frank Scandura [00:08:35]:
Wouldn't even consider it.

Lucas Underwood [00:08:36]:
Yeah.

Frank Scandura [00:08:36]:
And today it's not that way. It's like people have had problems with their vehicles.

Lucas Underwood [00:08:41]:
Like they're out.

Frank Scandura [00:08:41]:
I'm out. Gonna get something I can count on.

Lucas Underwood [00:08:44]:
What do you think the. You know. So for instance, in Vegas, right. We see especially locals. Many of the locals that I talk to around here, unless you're an Uber driver, you don't have a car. Right. You Uber everywhere you go. You don't.

Lucas Underwood [00:08:57]:
You.

Lucas Underwood [00:08:57]:
Right. Next generation doesn't even seem to be interested in buying a car.

David Roman [00:09:01]:
Hold on. Is that true?

Frank Scandura [00:09:02]:
No. I don't see it though. I. There's a. I think there's a smaller segment. Right. There's an Age group.

Lucas Underwood [00:09:08]:
Yeah.

Frank Scandura [00:09:08]:
That's kind of like anti. Whatever my parents did.

Lucas Underwood [00:09:12]:
Right. That's a good point.

Frank Scandura [00:09:13]:
Okay. Whether it's having a steady job.

Lucas Underwood [00:09:16]:
Yeah.

Frank Scandura [00:09:16]:
Having my own place, paying my own bills, having my own car.

Lucas Underwood [00:09:20]:
Frank's not a boomer. It's okay, y'all.

Frank Scandura [00:09:21]:
I'm a boomer. I'm right on the Edge. 1962. Right. So yeah, so there's that. But that's changing. The generation behind him is like, hey, I need to stand on my own two feet. I need to do things for myself.

Lucas Underwood [00:09:33]:
Yeah, I've seen that. I've definitely seen that. Do you think that that's going to change? Because there are a lot of folks, especially in, in the bigger cities who say, I'm not going to buy a car. Not interested in buying a car. Just city wise. Or is that.

Frank Scandura [00:09:49]:
No, it's city. It's a city. Okay. So I technically live in the city of Las Vegas, but where my home is is a rural preservation part of town.

Lucas Underwood [00:09:57]:
Yeah.

Frank Scandura [00:09:58]:
Half acre minimum lots, no street lights, no sidewalks, no gutters, there's no buses, there's no transportation out by me.

Lucas Underwood [00:10:04]:
Yeah.

Frank Scandura [00:10:04]:
So it's still a little bit rural. Some of my neighbors have horses, some of them have chickens. And you know, you can hear the, you know, chickens in the morning and stuff. And so we're not going to be without a vehicle. There's no way.

Lucas Underwood [00:10:16]:
Right.

Frank Scandura [00:10:17]:
The grocery store is five miles away.

Lucas Underwood [00:10:19]:
Yeah.

Frank Scandura [00:10:19]:
You know, I can't walk to the corner store.

Lucas Underwood [00:10:21]:
Right.

Frank Scandura [00:10:22]:
So. But inner city, I was thinking about it. One of our favorite shows is Blue Bloods and we're binge watching season eight now. And one of my favorite parts of the show is the overhead of the skyline of different parts of the city.

Lucas Underwood [00:10:34]:
Yeah.

Frank Scandura [00:10:35]:
And that's the very first thing. Right. Eight million people, nine million people, you can't have a car. There's no place to put them.

Lucas Underwood [00:10:42]:
Right.

Frank Scandura [00:10:42]:
So that's why there's so many taxis and so much public transportation. The subways, the buses, the taxis. Because they're fulfilling a need. Right. Free market. Find a need, fill it.

Lucas Underwood [00:10:52]:
Yeah.

Frank Scandura [00:10:53]:
So it's. So I think in the city. Yeah, absolutely. People are not going to have a car. Even at high rise buildings that are getting built here, you get like one parking space, you need another one. It's stupid rent.

Lucas Underwood [00:11:04]:
Right.

Frank Scandura [00:11:05]:
Just to get a spot to put a car garage. So it does depend on where you're living and how you want to live. So I could see it happening both ways.

Lucas Underwood [00:11:13]:
Let me ask you this. You've been a Coach, for a long time, you work with a lot of shop owners. What challenges or what struggles do you see the majority of shops fighting with right now?

Frank Scandura [00:11:22]:
Other than getting them to listen to me?

Lucas Underwood [00:11:24]:
Yeah, right, Absolutely.

Frank Scandura [00:11:26]:
It's nothing's new under the sun.

Lucas Underwood [00:11:32]:
Yeah.

Frank Scandura [00:11:33]:
So we still have the same struggles we've always had. It's just when you're smaller and starting out, your help problems are at level one. When you're getting bigger, your health problems become level five. So your financial problems and things like that. I think the biggest struggle is trusting your coach to price yourself accordingly. Right. Don't feel bad to price yourself to be fair. And that means you're not overcharging the customer, but you're not undercharging yourself.

Frank Scandura [00:12:05]:
So that, that's a challenge. A lot of companies, you know, are hitting the market trying to help you find help. A lot of headhunting companies, which we didn't have a few years ago. Right. So different things are going on to help us cope with it. What I think their biggest challenge is going to be for shop owners moving forward is getting out of their own way.

Lucas Underwood [00:12:27]:
Okay.

Frank Scandura [00:12:29]:
I started as a technician. I wrote the car, I ordered the parts, I wrote the ticket, I fixed the car, I did the bills. Right. I did it all.

Lucas Underwood [00:12:39]:
Yeah.

Frank Scandura [00:12:39]:
And those days are gone. Right. You have to surround yourself with good people and you have to start giving a level of service that people want.

Lucas Underwood [00:12:47]:
Right.

Frank Scandura [00:12:48]:
And it's not enough to fix a car.

Lucas Underwood [00:12:50]:
Yeah.

Frank Scandura [00:12:51]:
And.

Lucas Underwood [00:12:51]:
And you've got to be. You've got to charge enough that you can afford all those, to offer those amenities and. And what goes with that?

David Roman [00:12:59]:
Is there a market for not doing any of that and saying, screw all that noise, I'm going to fix the car the way I'm going to do it. I'm going to offer you what I'm going to offer you.

Lucas Underwood [00:13:09]:
I've thought about that a lot.

Frank Scandura [00:13:10]:
Right.

Lucas Underwood [00:13:10]:
Because there seems to be a subsection in my market who. All they want is they want the one problem fixed and they don't want to be told about anything else.

Frank Scandura [00:13:19]:
No. No. They don't care if they die in a fire request. But that's the result, though.

David Roman [00:13:22]:
But I don't know that that's. I don't. I don't know that it has to be like that. I'm talking about, like, hey, I'm not open on Saturdays. I'm not. I'm not going to be open on Saturdays. I don't care.

Frank Scandura [00:13:33]:
And there's a lot of chatter about 7 day weeks now and all this stuff.

David Roman [00:13:37]:
And that's my point. There's no end to that. There's no end to that.

Frank Scandura [00:13:41]:
So in that respect, I'm not gonna open on Saturday either.

David Roman [00:13:44]:
Yeah.

Frank Scandura [00:13:45]:
Nor will I ever open on Sunday. I believe everybody needs a day.

David Roman [00:13:48]:
But you know, they. One of those, one of those aquarium, aquarium in the front shops opens up across the street from you. You have a gorgeous building. You got a, you know, but they, they almost, they're 90% of the way there. But seven to seven, seven days a week. And all of a sudden your customers, you see streaming a wallet open on Saturdays. For me, I can come in at.

Frank Scandura [00:14:10]:
From time to time. And I think if we are focused on the areas we need to focus on and stay focused there, we can continue to give a level of service that will give us the level of customer we desire.

Lucas Underwood [00:14:27]:
Yeah.

Frank Scandura [00:14:28]:
The customer that's running around to the last minute to get everything done and just drives the car until it breaks needs that shop open on Saturday and Sunday.

Lucas Underwood [00:14:38]:
Yeah.

Lucas Underwood [00:14:38]:
And they, those, those customers are high demand. They don't always have a lot of money. They're hard to deal with. And so it stresses your advisor, it stresses your staff, it puts additional load that you shouldn't have to have.

David Roman [00:14:51]:
They have money. What I found with some of these people is that they don't stretch their thinking a little bit. It's like they need the car. So they want to wait in the lobby while I diagnose a bad wheel bearing. Possible bad wheel bearing. And they want to wait in the lobby while I fix the car. It's like, okay, but can you just drop it off and then go to work? Well, how am I supposed to get to work?

Frank Scandura [00:15:15]:
Because they're not capable of solving problems. Thinking ahead. Right. So. And it's like they have money, but do they? Because everything is drama. Everything is an emergency. Everything is. Oh my gosh.

Frank Scandura [00:15:30]:
Yeah, I can't deal with this right now.

David Roman [00:15:32]:
Yeah.

Frank Scandura [00:15:33]:
Because there's no calm in their lives. Right. So there's a lot to be said for that. You know, most people spend way more than they earn.

Lucas Underwood [00:15:45]:
Yeah.

Frank Scandura [00:15:45]:
78% of people live paycheck to paycheck.

David Roman [00:15:48]:
Yeah.

Frank Scandura [00:15:49]:
78. That's alarming.

Lucas Underwood [00:15:50]:
Yeah.

Frank Scandura [00:15:51]:
I'd say go to church and look at 10 people. Two of them are okay, the other eight are in trouble. That's alarming.

Lucas Underwood [00:15:57]:
And think about overall health, long term. Of a whole society that lives like that. Right. Like the, the stress that it puts on them. Chronic disease. Right. It has long term, long lasting effects. There's There's a shift in our markets.

Lucas Underwood [00:16:15]:
I probably shouldn't call it a shift, but there's. I guess the best way to explain it is I'm seeing a lot of people who I thought had my similar vision or values associated with auto repair and. And that we were going in this direction, not necessarily as a. As a group of people, but that we were all kind of progressing in the industry in a certain direction. Right. And then I see. And I'm not going to blame any one coaching company. There's lots of coaching companies out there.

Lucas Underwood [00:16:44]:
But then I see there's more of this push to seven days a week and more of this push to raise the prices. But be ruthless and still employees, whatever you have to do to get the employee, like, you got to be ruthless. And I've always held back from that ruthlessness. I'm just not good at it. Right. In fact, I hired a manager who's a little more ruthless. Not like cutthroat ruthless, but I hired a manager who's a little more ruthless and willing to say, hey, man, we're here to make money, and I'm over here giving the farm away. What do you think contributes to this shift? And do you see a line that shop owners, at some point in their career, they cross it and they say, the money's more important.

Frank Scandura [00:17:24]:
To me, when you put money ahead of people, you fail.

Lucas Underwood [00:17:27]:
Yeah.

Lucas Underwood [00:17:27]:
I agree.

Frank Scandura [00:17:28]:
And if you put people ahead of money, the money will come.

Lucas Underwood [00:17:30]:
Yeah.

Frank Scandura [00:17:31]:
And you can never go wrong by doing the right thing.

Lucas Underwood [00:17:34]:
Yeah.

Frank Scandura [00:17:35]:
And that's part of our value system, is, you know, when we've made a mistake, take immediate steps to make it right.

Lucas Underwood [00:17:42]:
Yeah.

Frank Scandura [00:17:43]:
And you and I, we're all in the industry, we could make mistakes that nobody ever knows we made.

Lucas Underwood [00:17:47]:
Yeah.

Frank Scandura [00:17:48]:
But that's not high integrity.

David Roman [00:17:50]:
Right.

Frank Scandura [00:17:51]:
And high integrity gets recognized, but you don't know it.

Lucas Underwood [00:17:54]:
Yeah.

Frank Scandura [00:17:55]:
And it gets recognized in your general reputation. Right. So we spend very little on advertising. Like, 1% of our total marketing budget is new customers. And, you know, people ask me all the time, how can you get so many new customers? Is it because if you come to town and you talk about European car repair and where to go, our name always comes up first.

Lucas Underwood [00:18:15]:
Yeah.

Frank Scandura [00:18:16]:
And people say things like, hey, they're expensive, but they're good. They take a long time, but they're good. So those are things that you can't buy. And when you're ruthless, you may think you're doing okay initially?

Lucas Underwood [00:18:28]:
Yeah.

Frank Scandura [00:18:28]:
People get tired of it after a while.

Lucas Underwood [00:18:30]:
Well, that was one of the Things that come up for me is, is there's a lot of people talking about massive numbers. Right. And they're talking about these huge numbers these shops are putting out. And all I can think to myself is, if you're. If you're working that much, turning that many hours and you're driving your team that hard and you're driving your advisors.

Frank Scandura [00:18:48]:
That hard, it's just a matter of time.

Lucas Underwood [00:18:50]:
Yeah.

Frank Scandura [00:18:51]:
You break good exact people, and then you start going through good people, then you don't have a reputation as the place to work. And then you end up with more ruthless people doing more ruthless things because you're putting money ahead of people. It just. It's not a good plan.

Lucas Underwood [00:19:05]:
I think what drives me nuts about it, one of the things that I catch often is that these people don't tell the whole story when they're talking about this.

Frank Scandura [00:19:16]:
Yeah. Like the stress and the drinking all day and all night because you got to deal with the stress of everything. All the emotional problems that you have and all the physical problems that you.

Lucas Underwood [00:19:23]:
Have, they're only painting the picture of what's good. And so they. They talk these owners into it.

Frank Scandura [00:19:28]:
Unlike Facebook, isn't it?

Lucas Underwood [00:19:29]:
I know, right. Well, they talk these owners into it and then they start making decisions. I've talked to quite a few owners who have made decisions based on recommendations of some of these companies, who later came back and said, hey, man, I was told by a coach to say yes to everybody, to everything, all the time, no matter what. Get them in the door. Don't care how you do it. Just get them in the door. Don't care if you can't meet their expectations. Get them in the door.

Lucas Underwood [00:19:54]:
And now all my staff quit along.

Frank Scandura [00:19:57]:
With two advisors because you brutalize them by flooding them with people who are just abusive, verbally abusive, financially. I don't want to pay full price. And what you mean. And it only took them 20 minutes. And it's just. It's. There's so much to be said for a calm work environment where people can just enjoy their job.

Lucas Underwood [00:20:17]:
Yeah.

Frank Scandura [00:20:18]:
Right. Frank's is a calm work environment when a customer starts getting abusive. Unless we've blatantly screwed up, I'm very sorry. This is not the right shop for you.

Lucas Underwood [00:20:28]:
Yeah.

Frank Scandura [00:20:28]:
Because we all have those customers who make demands on us. And you're going to do this and you're going to do that. You're going to. Well, no. Let me tell you what I can do for you. Let me tell you how I can help you.

Lucas Underwood [00:20:39]:
Right.

Frank Scandura [00:20:40]:
And just you know, what do you.

Lucas Underwood [00:20:43]:
Say to a shop owner who is being pushed by a coaching company? They join a coaching company. To me, it comes back to the frog in the pot of water syndrome. Right. They get in there and they say, oh, just make this little change. And then they start making more money and they like the money. And so now just make this other little change. And they never realize that they're shifting their values, their morals. What do you say to somebody who joins a coaching company and that coaching company is sharing things that may be outside of your moral or ethical values? What do you say in that case?

Frank Scandura [00:21:14]:
Well, you should never be in a relationship that challenges your value system of any kind. And so I'll give you an example. I hired a service advisors with me, I don't know, a couple of months, and I get a fax from a bank wanting to verify his employment and income.

Lucas Underwood [00:21:31]:
Okay.

Frank Scandura [00:21:32]:
His employment was. He lied about how long he'd been there and he lied about how much he was making.

Lucas Underwood [00:21:36]:
Yeah.

Frank Scandura [00:21:37]:
So I fired him right there on the spot. He goes, I don't understand why you're firing me. I said, if you lie to the bank for financial gain, you'll lie to my customers for financial gain. And that's. That is outside of our value system.

Lucas Underwood [00:21:48]:
Yeah.

Frank Scandura [00:21:49]:
And so what I did was I set an example for the entire team.

Lucas Underwood [00:21:53]:
I'm not.

Frank Scandura [00:21:54]:
We don't lie.

Lucas Underwood [00:21:55]:
Yeah.

Frank Scandura [00:21:56]:
We don't do things to enrich ourselves financially at someone else's expense. And we set a standard. So we have a very high level of expectation for ethics. We do a lot of ethics training. John Maxwell's got a book, Ethics 101. Everybody's great, reads it in our, in our company. So why doesn't that apply to all of your relationships?

Lucas Underwood [00:22:19]:
Yeah.

Frank Scandura [00:22:19]:
When your kids lie to you whoop them, don't you?

Lucas Underwood [00:22:21]:
Yeah.

Frank Scandura [00:22:23]:
So I wouldn't. So it's, it's not lying, but it's just, it doesn't align with my values. I can't allow you in. You know, I don't, I don't think.

David Roman [00:22:32]:
Most people are grounded like that though.

Frank Scandura [00:22:34]:
But you know what you need to be, you need to look. So it's a. All right, so then they don't have personal accountability if they're not, you know, if they're a little wishy washy and they kind of go, well, you know, I don't want to say anything and I don't want, you know, I know my advisor's stealing, but I don't, you know, I don't want to Ruffle anybody's feathers.

David Roman [00:22:49]:
You may not. They may not tolerate the stealing, but they will tolerate them. Taking advantage of a customer chop wins. They know that what the advisor did was a little sketchy and they'll go, eh.

Frank Scandura [00:23:04]:
But then there's no end in sight on how bad that'll get.

Lucas Underwood [00:23:06]:
Yeah.

David Roman [00:23:07]:
Oh, sure, sure.

Lucas Underwood [00:23:07]:
And so that. That kind of comes back to the. The thought I was having and what started this, this conversation on this subject is that coach comes to you and says, hey, but I'm the professional. I've made millions of dollars. I'm showing you how to do this. And I just think that your values are a little off here. Maybe we should adjust this. Maybe we should rethink this.

Lucas Underwood [00:23:32]:
Right. Because we talk about coaches not listening or people not listening to their coaches. And then on the flip side, you have some coaches and I'm not talking about you, and I think everybody knows that, but we have some coaches who push and say, nah, nah, man, it'll be okay. Just do this one little thing. Just do this one little thing. So how do we find that balance? Because if we're not willing to let the coach push us outside of our comfort zone because. Right. Growth doesn't happen in the comfort zone.

Lucas Underwood [00:23:59]:
How do we find that balance of that?

Frank Scandura [00:24:01]:
So I try to get my clients so far out of their comfort zone, they can't find. Mind it again.

Lucas Underwood [00:24:05]:
Yeah.

Frank Scandura [00:24:06]:
Ethically.

Lucas Underwood [00:24:07]:
Right?

Frank Scandura [00:24:08]:
Ethically, right. And if somebody's asking you to do something, so just imagine a little angel and a little devil on your shoulders.

Lucas Underwood [00:24:15]:
Yeah.

Frank Scandura [00:24:16]:
And the devil's always going to say, well, nobody's going to know. It's going to be okay. Well, somebody's going to know and it's not going to be okay. And you just going to get to a certain point where you're not going to be able to turn back. Your reputation will be ruined, your business may be ruined. You're never going to get good people. You know, there's a chain of stores here in town that got sued constantly because they would charge people for repairs they didn't perform. That was their business model.

Frank Scandura [00:24:38]:
They trained their staff to charge people for repairs because the numbers is all that mattered. And they wanted 85% GP. And you can't do that by buying parts and put them on cars. And so they eventually changed their name because the reputation caught up with them. So it's, you know, there's. You can't win in this game of life by compromising your ethics. If you don't know where your ethics are, man, you Figure it out.

David Roman [00:25:03]:
The difficulty, though, is you'll talk to somebody and you'll say, hey, that job, like, we're talking about the timing chains, it's a $7,000 job. You're doing them for $3,500. That's not market value for that job. You're undervaluing the work that you're doing. Assuming that you're doing everything correctly, are you using correct materials, using quality parts? Are you short or shortcutting the repair process? You're not. Okay, then that's a $7,000 repair. That's not $3,500. And the response is, I just don't feel right charging that much.

David Roman [00:25:38]:
I don't think it's worth $7,000.

Lucas Underwood [00:25:40]:
That's.

David Roman [00:25:40]:
I just don't feel like being coached.

Frank Scandura [00:25:43]:
Helps you come over that barrier. Because when I feel bad that the job costs $7,000, I've let my feelings cloud my better judgment.

Lucas Underwood [00:25:53]:
Right?

Frank Scandura [00:25:53]:
Yeah. And I don't know about you guys, but I'm old enough to have had my feelings get me in trouble more than once.

David Roman [00:25:59]:
But they'll turn that into an ethical conundrum. They'll say, this is an ethical question for me. I don't want to violate my ethics. And you're like, that's not an ethical question. This is subjective. This isn't right or wrong. You think it's wrong, it's not wrong. I don't know how you navigate that and try and go, hey, we're not going to violate your ethics.

David Roman [00:26:22]:
We're not going to do anything wrong. But at the same time, things that you think are wrong or not, if.

Frank Scandura [00:26:27]:
The job cost the customer $7,000, that's what it costs the customer. If the job should cost 3,500 and you're charging 7,000, that's an ethical boundary that you've crossed. We need to talk about that.

David Roman [00:26:42]:
Yeah.

Frank Scandura [00:26:42]:
And most of the shops I talk to, it's the opposite problem. Yeah.

David Roman [00:26:46]:
Oh, for sure, sure.

Frank Scandura [00:26:47]:
It's like, oh, my gosh, I don't think he can afford that. Let me see what I can do.

David Roman [00:26:52]:
Yeah.

Lucas Underwood [00:26:53]:
I'm going to lower the part quality and figure out later why they're coming back screaming, upset.

Frank Scandura [00:26:57]:
But I did you solid, man. I took care of you. Yeah, well, I didn't ask you to take care of me. I asked you to fix my car so I could put my wife and kids in it so I wouldn't have to worry about them. And here we are, three months later. That Chinese timing chain you put in there. Nothing against trainees broke. Right.

Frank Scandura [00:27:12]:
So here we go again. And you only have a 30 day warranty. What do you mean?

Lucas Underwood [00:27:16]:
Yeah, yeah.

Lucas Underwood [00:27:17]:
Well, you know, and I squarely kicked the hornet's nest the other day.

Lucas Underwood [00:27:22]:
And.

Lucas Underwood [00:27:22]:
And I keep doing this because people seem to think that when I say that technician owned businesses struggle more than business owner owned businesses, it's not me saying that technicians shouldn't own businesses. It's me saying that you have a disadvantage because you have this curse of knowledge about what it takes to fix the car. And when we're good at something, we tend to undervalue that something. Right. Because it seems easy to us.

Frank Scandura [00:27:49]:
How many of us as technicians fix somebody's car for a six pack of beer?

Lucas Underwood [00:27:53]:
Yeah.

Frank Scandura [00:27:53]:
Want to talk about undervaluing yourself?

Lucas Underwood [00:27:55]:
For sure.

Frank Scandura [00:27:56]:
Okay.

Lucas Underwood [00:27:56]:
For sure.

Frank Scandura [00:27:57]:
So my challenge is, I was a technician that went into business. They struggle. Yeah. Long hours, low profits, turnover. Just what am I doing? I just. Maybe I should just set the building on fire.

Lucas Underwood [00:28:11]:
Yeah.

Frank Scandura [00:28:11]:
I'll wait. They'll just rebuild it. Then I got to do it all over again. And it's so I had to learn how to be a business owner.

Lucas Underwood [00:28:21]:
Yeah.

Frank Scandura [00:28:22]:
And that's where the coaching really makes a difference. Right. I still have a coach. Greg Bunch is still my coach. I had a coach many, many years ago that, you know, one of the exercises we did was he goes, you know, go through your repairs and price out all your parts. And so we see what your GP was. Because that was before hitting three buttons and getting it up.

Lucas Underwood [00:28:38]:
Yeah.

Frank Scandura [00:28:39]:
Because most of those repair orders were handwritten back then.

Lucas Underwood [00:28:41]:
Right.

Frank Scandura [00:28:42]:
That's how old I am. And then seeing 12 and 14% GP on a job and then understanding that gross profit dollars pays bills.

Lucas Underwood [00:28:57]:
Yeah.

Frank Scandura [00:28:58]:
Gross profit dollars buys your home. Gross profit dollars puts food on your table.

Lucas Underwood [00:29:04]:
Yeah.

Frank Scandura [00:29:05]:
And learning how it's okay to charge what it costs to get a car.

Lucas Underwood [00:29:10]:
Yeah.

Lucas Underwood [00:29:10]:
And it is, it's that I see these technicians and it seems to be a trend. Right. And I'm not saying that the business owners or the business man that comes in and buys a shop or starts a shop is smarter. Don't misunderstand. That's not my point at all. That's what the listeners. I think they keep taking what I'm saying and turning it into that it's not the case. But my point is that they come in with the mindset of, I need this to be profitable.

Frank Scandura [00:29:42]:
It's a business.

Lucas Underwood [00:29:44]:
One of the most powerful statements I've ever heard was a video of Warren Buffett. And it was, it was in the 70s or 80s, right. And Warren Buffett's talking to a group of, of college students and it's like the commencement speech. And he said, let me tell you something, if you can go to China and you can borrow money for, for 3, 4, 5%, and I can take that money and I can start a business that makes 10%, guess what? I made? 5% made, 10% made, whatever it is.

Frank Scandura [00:30:11]:
And he said, so the mindset.

Lucas Underwood [00:30:13]:
Exactly. The reality is I need a business that needs to make this many percent on the bottom line. And I think that the disadvantage technicians have is we come into this and we say our mindset is we want to fix the cars properly. We want the cars to be right, we want the clients to be happy. It's a different mindset. And they still have to learn to look at that bottom line and say, I need this percentage of profit that you can't do. You can't do away with that.

Frank Scandura [00:30:37]:
But that's the right mindset as you transition to a profitable business owner. I want to fix the cars. Right. I want my customers to be happy.

Lucas Underwood [00:30:44]:
Absolutely.

Frank Scandura [00:30:44]:
I remember interviewing a technician, you know, I've always one of the questions during the interview process, where do you want to be in five years? And his answer was, I want to own my own shop so I could work on the cars so the customers see how much I care. I was like, oh, so I don't care because I don't physically walk around cars. I challenged him a little bit and he goes, well, no, right. As a tech who wants to own your business, if you don't want to treat it like a business, get a job. Don't put up with the stress, don't put up with the burden. Don't put up with the taxing authority going, oh, by the way, it wasn't 12,000 Euro, it means 24,000. And then you go freak out, tell your wife, you know, I don't know what we're going to do because we didn't plan properly for this. We don't have the money.

Frank Scandura [00:31:27]:
Right?

Lucas Underwood [00:31:27]:
Yeah.

Frank Scandura [00:31:28]:
So there's a lot to be said for that. Don't go into business because you have tools and you know how to fix cars. Go into business with a mindset. 1, 3, 5, 10 years, what is this going to look like? I didn't do that when I first opened up.

Lucas Underwood [00:31:45]:
I didn't either.

Frank Scandura [00:31:46]:
I opened Frank's European Service because it pissed me off to work for somebody else.

Lucas Underwood [00:31:51]:
Yeah.

Frank Scandura [00:31:51]:
I had a shop that I did very well in and, you know, change of events in my life and spending more time with my kids and walking away from that and saying, okay, I'm gonna go back to the dealership. Oh my gosh, what a mistake that was. And went to work for an independent shop here in town and did nothing but argue with the guy.

Lucas Underwood [00:32:06]:
Yeah, right.

Frank Scandura [00:32:06]:
I had a successful business. He asked me to come run his shop. And, you know, I'd come in and say, hey, let's, you know, do this. Let's try this. Oh, that'll never work. Oh, you can't do that. Oh, that'll never work. Kind of does.

Lucas Underwood [00:32:18]:
Yeah.

Frank Scandura [00:32:19]:
I've proven it. Right. So.

Lucas Underwood [00:32:20]:
Yeah.

Frank Scandura [00:32:21]:
And, and it's, it's just, you know, I remember telling my wife, I said, look, unless you're going to get a second job at keeping a lifestyle I'm.

Lucas Underwood [00:32:28]:
Accustomed to too, how'd that go over?

Frank Scandura [00:32:30]:
It did. She goes, that's not going to happen. I said, I'm. I'm going to go open a repair shop. Right. And she went, oh, dirty. Oh, why would you do that?

Lucas Underwood [00:32:38]:
Yeah.

Frank Scandura [00:32:39]:
And I'm like, cuz we just got married, we've only known each other a couple years. And I'm like, ah, okay. She doesn't know the automotive Frank. She knows the guy who showed up to church without a job to start a dating, you know, his hot mom. Right. And you know, taking out the dinner and stuff. So I had to show her I operate at a level that most people don't understand. I operate with a mindset focused on a customer.

Frank Scandura [00:33:04]:
So I was able to, you know.

Lucas Underwood [00:33:06]:
Convince her that this will, this was the right decision.

Frank Scandura [00:33:09]:
And actually what I did was I told her, I promise you will never have to hide from a customer.

Lucas Underwood [00:33:15]:
Yeah.

Frank Scandura [00:33:15]:
And that's important. Right. So when you, when you talk about David doing things that are. Oh, I know, it's a little shady. Oh, I know. Maybe he shouldn't have done that. At some point something's going to happen and somebody's going to find out.

David Roman [00:33:27]:
Yeah.

Frank Scandura [00:33:27]:
The truth always comes to the surface.

Lucas Underwood [00:33:30]:
You can't avoid that.

Frank Scandura [00:33:31]:
Right.

Lucas Underwood [00:33:31]:
That always happens.

Frank Scandura [00:33:32]:
Guy goes in and jumps in a car, goes across, you know, two state lines and something happens. It gets his car looked at over there and all of a sudden they're going to tell them everything that you didn't tell them. They're going to say, hey, man. Yeah, you know, if you would have had your car check before you went on the trip, you wouldn't have had that fan belt break.

Lucas Underwood [00:33:46]:
Well, Frank checked my car.

Frank Scandura [00:33:47]:
All right. Who's that man? Is like, hey, why didn't you check it? Oh, hey, man, I didn't want you to get mad at me if I told you a whole bunch of stuff wrong or, you know.

David Roman [00:33:57]:
Yeah.

Frank Scandura [00:33:57]:
Something really super shady goes on. It's just not right.

Lucas Underwood [00:34:02]:
The mindset that I see so many technicians go into this with is that if I can fix the car properly and I'm very, very good at fixing the car, everything else will be okay. I don't have to worry about the business side of things because I'll be profitable because I can fix the car. If I just fix the car, everything else comes together. And I think there is some truth to that.

Frank Scandura [00:34:23]:
Right.

Lucas Underwood [00:34:23]:
Like if you do a good job fixing cars, you're going to have clients, you're going to have things together. You can't. In the same respect, you can't be profitable by accident. Right. I have tried. It doesn't work.

Frank Scandura [00:34:35]:
No.

Lucas Underwood [00:34:35]:
Like, you have to plan to be.

David Roman [00:34:36]:
Profitable if they keep their overhead ridiculously.

Lucas Underwood [00:34:39]:
Low, they offer no amenities.

Frank Scandura [00:34:42]:
No. There's no office. There's, you know.

David Roman [00:34:44]:
Yeah.

Frank Scandura [00:34:44]:
You texting me? I don't even have a phone. Maybe not licensed, maybe not properly insured. So I got almost no skin in the game. Maybe. But it's not really a business. That's a job.

Lucas Underwood [00:34:57]:
Yeah.

Lucas Underwood [00:34:57]:
You just bought a dangerous job.

Frank Scandura [00:34:59]:
Yeah, dangerous, right. Working alone, especially. You got to. What these one man shows, man, really make me nervous.

Lucas Underwood [00:35:06]:
Yeah, right.

Frank Scandura [00:35:07]:
Something happens, just.

Lucas Underwood [00:35:08]:
Dude, I'm telling you, you've got a huge problem.

Frank Scandura [00:35:12]:
And so if you're a technician and you want to go in business, have the intention to make it a business.

Lucas Underwood [00:35:21]:
Yeah.

Frank Scandura [00:35:22]:
Your family deserves for you to have a profitable business that doesn't depend on you working day and night. I got to go in late, sweetheart. I got to go in on Saturday. I got to get this car finished on Sunday. The guy's putting a lot of pressure on me because that's what happens in those scenarios.

Lucas Underwood [00:35:38]:
You know, There was a gentleman I talked to, I think it was Nathan Bryant a while back, and one of the things that he said was, is he said, I recognize that if something happens to me, this business is no more. He said, now I have a tech, but I don't want to grow beyond where I'm at right now. I'm really comfortable where I'm at. We're profitable right now. I like where I'm at. And he said, so then on the flip side of this, I go out and I get short term and long term disability and I get life insurance. I create a plan for shutting the business down if something happens to me and I create this black book that I can give her that says take step one, step two, step three, and give her the tools that in the event that I pass away or I'm incapacitated, I can't work. Here's how this works now.

Lucas Underwood [00:36:21]:
Right. Here's what you do now. I thought that was a really interesting concept.

Frank Scandura [00:36:26]:
I'm going to take succession planning.

Lucas Underwood [00:36:27]:
Yeah, for sure.

Frank Scandura [00:36:29]:
On a scale of it's me and one guy. Here's the plan. If something happens.

Lucas Underwood [00:36:32]:
Yeah.

Lucas Underwood [00:36:33]:
The one thing I will say about that is that you have to be very cautious and you have to be profitable. So, you know, because short term, long term disability and life insurance are not exactly cheap propositions. Right. Like, so we have to make sure the business is profitable enough to pay for that. For these guys that are one man bands. Now, I'm going to tell you when, when this flood hit western North Carolina, I mean, to say epic proportions is an understatement. I was driving back, I went and got an MRI for my back the other day. And as I'm driving back, I was telling David, there's this swath on the side of i40 that there used to be two metal buildings and two shops rented.

Lucas Underwood [00:37:10]:
Each of the two metal buildings, it was split and they kind of did this thing. Those shops are like, it's a 400 foot wide path of rock and just debris, rocks bigger than my car washed out into the middle of this. And it's just this empty open space now. They weren't in the flood zone. Right. So guess what? They didn't have flood insurance and now everything is gone. And they were saying to themselves, one day I'll someday I'll be profitable.

Frank Scandura [00:37:42]:
I love that. And Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, Sunday, there's no one day, there's no someday.

Lucas Underwood [00:37:47]:
Right.

Frank Scandura [00:37:48]:
Get it done today.

Lucas Underwood [00:37:49]:
Right. And so they weren't profitable. That was their retirement strategy. I put everything I have into this. Now it's gone.

Frank Scandura [00:37:58]:
So it's heartbreaking. Yeah. Which is no different than that. Technician with a couple of people employed two or three employees. Technician mindset as a business 20, 25 years later decides to put it up for sale. And it turns around and he's got a 250 or $300,000 value on his business and he needs a million dollars to get out.

Lucas Underwood [00:38:22]:
Now what?

Frank Scandura [00:38:22]:
Now what?

Lucas Underwood [00:38:24]:
You know, you went into this as a parts man and you had this like grand idea. People always pick on you because you're always like, how much you hate auto repair and how much you hate owning a shop and, like, you just hate everything about it. What. What's your take on all this? Because you didn't come into it as a technician. I came into it as a technician. What's your take now?

David Roman [00:38:46]:
I still hate it. It was a bad, bad move on my part, but my mistake. Now I'm too deep in it. I'm stuck.

Lucas Underwood [00:38:56]:
I mean, what did you. What did you envision was going to happen?

David Roman [00:38:58]:
Same thing. Same thing as him. Just, I couldn't work with somebody else. It's the same thing, the same story. That's why when somebody argues with you, like, you, like, dude, like, we haven't been through this.

Frank Scandura [00:39:09]:
Right.

David Roman [00:39:10]:
You really gonna argue with me? You're gonna tell me you're unique? Your situation's that unique. It's completely different from everybody else's.

Lucas Underwood [00:39:16]:
Yeah.

David Roman [00:39:16]:
Get out of here.

Lucas Underwood [00:39:17]:
No, I mean, and that's just. It is that it's the same pattern over and over again, over and over again.

David Roman [00:39:22]:
Yeah. And I don't know where they get this idea. They think that they're. It's like, no, I got it figured out. I'm gonna be the one guy. Okay.

Frank Scandura [00:39:30]:
That's it.

Lucas Underwood [00:39:30]:
Right.

Frank Scandura [00:39:30]:
They're the one guy. So I had a few years ago, one of my techs, the operating system we had, when they were looking on the screen, I could see parts cost.

Lucas Underwood [00:39:39]:
Yeah.

Frank Scandura [00:39:40]:
And he challenged me and says, what makes you think you're allowed to make that much money on parts? Like, oh, time for a shop meeting.

Lucas Underwood [00:39:48]:
Right.

Frank Scandura [00:39:49]:
So I got $101 bills. I said, here's 10. That's rent. 10%. Here's 20 for parts expense. Here's 25 for labor expense. And I went right down the line for everything we paid and had four bucks left over in the end.

Lucas Underwood [00:40:02]:
That's a wake up call, isn't it?

Frank Scandura [00:40:04]:
Yeah. I said, do you mind if I at least keep four bucks for myself? Oh, wow. I didn't realize. Well, you don't realize, and that's the problem. And, you know, they think us as shop owners are like Scrooge McDuck going home and swimming in our bed full of money.

Lucas Underwood [00:40:22]:
Yeah.

Frank Scandura [00:40:22]:
And it's not the case. The man, the stress that we're under, the liability and the risk that we take.

Lucas Underwood [00:40:30]:
Yeah.

Frank Scandura [00:40:30]:
We could lose it all. They're gonna go get a job.

Lucas Underwood [00:40:33]:
Yeah.

Frank Scandura [00:40:33]:
You know what I'm saying? So it. There's a lot on the line for us. I think we have to be special. Kind of crazy to do it.

Lucas Underwood [00:40:42]:
Yeah.

Frank Scandura [00:40:43]:
But if you do it right, you do it with a plan and you do it with a purpose. Purpose, it can be very rewarding.

Lucas Underwood [00:40:50]:
How many shops do you work with that are maybe it's starting out that are fighting to survive, are fighting to pay the bills.

Frank Scandura [00:41:01]:
I'll tell you what, this quarter has been more than the last few years and shops that I know I was telling you earlier, you know, car count for us dropped a little bit.

Lucas Underwood [00:41:14]:
Yeah.

Frank Scandura [00:41:15]:
And, but we're very busy shops so you know, 10% drop in car counts, not devastating.

Lucas Underwood [00:41:20]:
We can, we can survive. Yeah, yeah.

Frank Scandura [00:41:22]:
And some of these shops where they've got two technicians and a service advisor, 20% drop in car count. They're screwed. Yeah, they're screwed. And unfortunately not enough people have cash reserves.

Lucas Underwood [00:41:35]:
Yeah.

Frank Scandura [00:41:36]:
They carry a lot of debt. They keep credit card debt at high. And when you need money the most, when you're not financially responsible is when it's the hardest to get.

Lucas Underwood [00:41:47]:
Yeah.

Frank Scandura [00:41:48]:
So then they do these predatory loans with the credit card companies and take money out of your account as soon as it hits. The money you need to survive now goes to a debt. So. But, but I'm seeing it more now with smaller operators. That's very alarming.

Lucas Underwood [00:42:04]:
Yeah, yeah.

Lucas Underwood [00:42:05]:
Well, I mean they don't have as much capacity for revenue generation.

Frank Scandura [00:42:08]:
Correct.

Lucas Underwood [00:42:09]:
Right. And so a big shop has a lot of bills but you have more opportunity to create profit and a higher amount of profit that can help pay that. And you know, my strategy has been the past couple of years when we moved into the new shop is we have, we're very seasonal and so like I need to stack cash in the busy season.

Frank Scandura [00:42:28]:
Right. For when it's up.

Lucas Underwood [00:42:29]:
And, and so I've not done a good job of that the past couple years because you know, we're moving into the new shop and things went wrong. Things happen. But, but I'm with you. These small shops, these one man bands, gosh, it is nerve wracking to think these guys are going out and starting their shops and putting themselves in this situation without being prepared, without understanding. And they say, well, I don't have money for sms, I don't have money for a coach, I don't have money for a bookkeeper. I just need to make as much money as I can. Well, if you're not managing that, it's.

Frank Scandura [00:43:00]:
Never going to be enough.

Lucas Underwood [00:43:01]:
No.

Frank Scandura [00:43:01]:
If you don't, if you don't know what you need in revenue to be profitable, which means paying your bills and having leftover, then you'll never know how much you need. You're always just going to be spinning your tires.

Lucas Underwood [00:43:14]:
Yeah, right.

Frank Scandura [00:43:15]:
And you're going to think, if I come in Saturday to get that car done, I'll be okay. And you're not because it's, you're just.

Lucas Underwood [00:43:22]:
You'Re just taking the can down the road.

Frank Scandura [00:43:24]:
Yeah, yeah.

Lucas Underwood [00:43:25]:
Do you think when, when we look at some of these mobile guys and mobile guys have less overhead, but you look at these single man bands and you say, all right, if I'm going to do this the right way, I'm going to have the insurance I'm supposed to have. I'm going to have the amenities that my clients would expect to the quality of product that I want to offer. I'm going to use the part quality that I think I should use. I'm going to put all the pieces of this puzzle together. Is it possible for a one man band to earn enough revenue to be able to. To do what he's supposed to do? Because I'm thinking about like my insurance, right. And I'm thinking, well, that's 3,000amonth, right.

David Roman [00:44:00]:
I'm thinking insurance is not $3,000 a month. What are you talking about? All of it. 3,000.

Lucas Underwood [00:44:07]:
Yeah, but I've got. That's the loaner cars. But I'm just saying like. And obviously I'm a bigger shop and I've got more stuff.

David Roman [00:44:13]:
I'm insured even with the loaner cars. I mean, maybe if you add my workman's comp, I'm still near 3,000. You're nuts.

Lucas Underwood [00:44:19]:
Yeah.

Frank Scandura [00:44:20]:
You know what though? It's. I remember the very, very first meeting I went to. It was I management success at the time. You know how they get you there for the weekend.

Lucas Underwood [00:44:27]:
Yeah.

Frank Scandura [00:44:28]:
Rah rah. Get you all excited, sign you up.

David Roman [00:44:30]:
Yeah.

Frank Scandura [00:44:30]:
And they went around the room asking everybody what their expenses were. I was hearing 30,000, 40,000. Ours is like super cheap. Our rent was 1800 bucks a month at the time. And I'm like, I would never have a shop that had $45,000 in expenses. Those guys are crazy.

Lucas Underwood [00:44:46]:
Yeah.

Frank Scandura [00:44:47]:
My expenses right now are around. I have to do $171,000 a month in gross profit dollar to be profitable.

Lucas Underwood [00:44:54]:
Holy. Makes me cringe. That's probably why I don't have any money.

Frank Scandura [00:45:00]:
That's probably how much I should have. But. But knowing that.

Lucas Underwood [00:45:05]:
Yeah.

Lucas Underwood [00:45:06]:
Is what is the tool that allows you to.

Frank Scandura [00:45:08]:
And my team knows that if we don't hit $171,000 in gross profit dollars, no bonus. Sorry.

Lucas Underwood [00:45:15]:
Yeah.

Frank Scandura [00:45:16]:
Because I can't afford to bonus you if there's no money. Let's think about this, right?

Lucas Underwood [00:45:20]:
Yeah.

Frank Scandura [00:45:21]:
And all these things I had to learn the hard way on the way up. And these are the things you need to know. You need to know what it costs, you know? I just found a new gal that cut my hair. And it's her and another gal, their partner. She opened up their little tiny studio. It's about the size of this little cubicle here. And I knew the answer. I said, so, you're open a year.

Frank Scandura [00:45:39]:
Did you hit all your goals? She laughed. Because we just. I'd hoped it'd be okay. I said, I knew that was a test.

Lucas Underwood [00:45:45]:
Yeah.

Frank Scandura [00:45:46]:
Said now, my dad was a barber. I know. It's like a technician, man. The bones give out after a while. You can't work forever. What's your plan?

Lucas Underwood [00:45:57]:
Yeah.

Frank Scandura [00:45:58]:
And no different for any tech out there. You can't work forever. A rare breed is that guy who's 60, 62, 63 years old, still wrenching, and his body hasn't given out.

Lucas Underwood [00:46:08]:
Yeah.

Frank Scandura [00:46:09]:
That is not the norm.

Lucas Underwood [00:46:10]:
Right. And there becomes a time in your life as a technician that it's not an option anymore. This stuff going on with my back. I feel myself getting weaker. I can't do the things that I used to be able to do. Right. Like, it. It's not that.

Lucas Underwood [00:46:26]:
Oh, I hurt. So I have to take some pain medicine so I can do it. No, it's. I can't.

Frank Scandura [00:46:31]:
You can't?

Lucas Underwood [00:46:31]:
I can't do it.

Frank Scandura [00:46:32]:
Yeah. I heard MRIs last night. Both shoulders. Yeah, that's it.

Lucas Underwood [00:46:36]:
Yeah.

Frank Scandura [00:46:37]:
Don't go up any more than that. It's. You know, it's like I do things around the house. My wife always says, will it be hard? And I used to say, nah, babe, I got this.

Lucas Underwood [00:46:48]:
Right.

Frank Scandura [00:46:49]:
Everything's hard, sweetheart. Right.

Lucas Underwood [00:46:51]:
Getting out of bed's heart, she goes.

Frank Scandura [00:46:52]:
How long do you think it'll take? I said, whatever number I give you, multiply it by five.

Lucas Underwood [00:46:56]:
Right.

Frank Scandura [00:46:57]:
Right. Why do you have to go to Home Depot so many times? Because I don't have 7,000 fittings on hand, and I thought that was the one I needed.

Lucas Underwood [00:47:05]:
Yeah.

Frank Scandura [00:47:06]:
So it's. It's.

Lucas Underwood [00:47:07]:
I mean, that is shop ownership in a lot of ways, that is shop ownership.

Frank Scandura [00:47:12]:
Abusive to our bodies. For everybody in the industry, you're not going to be able to do it, provided you don't get hurt. We're not talking about an injury.

Lucas Underwood [00:47:20]:
Yeah.

Frank Scandura [00:47:21]:
Just the wear and tear in our bodies. You're just not going to be able to. Got to have a plan.

Lucas Underwood [00:47:25]:
I remember when I, my very first coach, Rick White came to me and said, like, hey, what's your destination? Where are you going? Like, what are you trying to accomplish? Hell if I know. Right. Like, I hired you, you're my coach. That's what I'm trying to figure out. Why are you asking me?

Frank Scandura [00:47:41]:
Right.

Lucas Underwood [00:47:42]:
I don't know. I don't even know what's possible. I don't know where I can go. I don't know what I can do.

Frank Scandura [00:47:46]:
Don't know what you can or can't do unless you have somebody help you get there. What does that look like?

Lucas Underwood [00:47:53]:
Well, and I mean, so you take a one man band. I don't need a coach to tell me what to do. I don't need somebody to guide me and coach me. And I don't. I just need to fix the cars.

Frank Scandura [00:48:02]:
Well, maybe.

Lucas Underwood [00:48:05]:
I don't know, man.

Frank Scandura [00:48:06]:
Listen, but let's really touch on. There are some mobile guys that are unemployable and they're shysters.

Lucas Underwood [00:48:14]:
Yeah.

Frank Scandura [00:48:14]:
And that's not everybody.

Lucas Underwood [00:48:16]:
Right?

Frank Scandura [00:48:16]:
Right. There's some guys that are super legit, super professional. They're clean, they do a good job.

Lucas Underwood [00:48:21]:
Yeah.

Frank Scandura [00:48:25]:
They're going to argue with you. Well, I don't have brick and mortar expenses. You've got a van expense or truck or whatever it is and it's susceptible to break down and wear and tear. Right. You've got to be insured. You have to stand behind a product. You've got to put up with. You know, I thought I had room to work on this car here.

Frank Scandura [00:48:44]:
Or can you imagine getting called out to an apartment complex and you start working on somebody's car in an apartment complex and next thing you know you got the cops there because you're not.

Lucas Underwood [00:48:53]:
Supposed to be doing that.

Frank Scandura [00:48:53]:
You can't do that. Right.

Lucas Underwood [00:48:55]:
Yeah.

Frank Scandura [00:48:56]:
So I think the challenges are more detrimental.

Lucas Underwood [00:49:01]:
Right. Higher liabilities. Right. More things associated with it. And I. Look, I don't have a problem at all with tax going and starting a business, but I would venture to say that more businesses that are ran by techs fail as a result of poor management or not knowing. Right.

Frank Scandura [00:49:19]:
You could apply that to business in general.

Lucas Underwood [00:49:21]:
Yeah.

Frank Scandura [00:49:21]:
Three years. Most businesses fail in the first three years.

Lucas Underwood [00:49:25]:
Yeah.

Frank Scandura [00:49:25]:
And that's usually how much operating capital they borrow.

Lucas Underwood [00:49:29]:
Right.

Frank Scandura [00:49:30]:
All right. You ever walk into a new franchise, you know, whether it's ice cream or something. We had one that, you know, yogurt place that was right down the street in the House, it was really nice. You go there, you fill your cup as much as you want. Year later, listen, a year later, place is gone.

Lucas Underwood [00:49:43]:
Right.

Frank Scandura [00:49:43]:
What happened? Well, I don't know. Marketing something. But what I've noticed is they forget about the customer. And I don't think you can just fix the car because most technicians need to be kept away from the humans.

Lucas Underwood [00:49:59]:
Yeah.

Frank Scandura [00:50:00]:
They just don't have the personality. And I don't mean to say this bad about techs. I was that guy for the longest time. You know, when I first started, it was in a gas station. Back when you used to take your car to the gas station to get it fixed, you didn't just get your milk and your Twinkies. There's.

Lucas Underwood [00:50:17]:
Yeah.

Frank Scandura [00:50:19]:
Where back then the business model was. You talk to the mechanic, he go to the parts, he fixed the car, he did everything, did all the paper, took all the money. That's just the way you did it. And that's not, in my opinion, a successful model anymore.

Lucas Underwood [00:50:34]:
No.

Frank Scandura [00:50:34]:
Because when somebody would say, well, how come the brakes were so expensive? What would the mechanic do? They'd fly off the handle and go, whoa. You saying I ripped you off?

Lucas Underwood [00:50:43]:
Yeah.

Frank Scandura [00:50:44]:
Where a trained service professional can say, well, you know, Mr. Jones, we use a premium product here and I know it seems expensive, but it really is going to cost you a lot less in our long run. And don't forget, we have the 3 year, 36,000 mile nationwide warranty for peace of mind and blah, blah, blah. Right. Where that technician doesn't generally have that training or that aptitude.

Lucas Underwood [00:51:03]:
Yeah, I'm with you 100%. I think it's something that we learn over time and we grow into that. The, the learning curve to accomplish that is sometimes very painful.

Frank Scandura [00:51:14]:
Oh, right. Yes, it is. And we'll get tuned up by a couple of ruthless customers along the way.

Lucas Underwood [00:51:19]:
Has cost of doing business in this industry increased since you've been in it?

Frank Scandura [00:51:24]:
Yes.

Lucas Underwood [00:51:24]:
How much? Rough guess.

Frank Scandura [00:51:26]:
You know, I don't know if I can quantify it, but my first shop was, or when I first opened Frank's, I think it was about 3500 square feet. It was paying 1500amonth rent. Right, Right. So insurance was used to get. Seemed a lot easier. My rent right now is $22,000.

Lucas Underwood [00:51:48]:
Holy cow.

Frank Scandura [00:51:49]:
Okay, is that, is that a number that makes you want to throw up in your mouth a little bit?

Lucas Underwood [00:51:51]:
Yeah.

Frank Scandura [00:51:52]:
Right. My insurance is roughly.

David Roman [00:51:55]:
Yeah, it's worth 22,000.

Lucas Underwood [00:51:57]:
So it is a really nice shot.

Frank Scandura [00:51:59]:
But you have no idea how hard, hard it is to keep the place busy, to cover all those expenses. I pay more for electricity now than I used to pay for rent. Yeah, right. And you know, you have to be really careful on how you operate because if you have a lot of workers, comps, claims, your rates go up.

Lucas Underwood [00:52:17]:
Yeah, right.

Frank Scandura [00:52:18]:
Because I don't know about your state, but in Nevada, it's a percentage of payroll caps out at like 36 or 39,000. So once I hit that much for an employee's pay, I don't have to pay anymore. So my rate's less than 4% right now. But if you got claims and you have problems and you have issues at 7, 8, 9, 10%.

Lucas Underwood [00:52:35]:
Yeah.

Frank Scandura [00:52:37]:
Insurance. You know, our liability insurance is a percentage of gross sales. Well, that's nice. So the better I do, the more I gotta pay. And it's, it's really, really difficult. It's very difficult to stay ahead of it. Benefits. I have to have insurance to have good people.

Frank Scandura [00:52:55]:
401k. Right. 20 years ago.

Lucas Underwood [00:52:58]:
Yeah.

Frank Scandura [00:52:58]:
You're lucky you had a job. Get your butt back to work. Right. So you have to do things different. Hey, my dog's got an ingrown toenail. I need to take him to the vet tomorrow. Okay?

Lucas Underwood [00:53:09]:
Right.

Frank Scandura [00:53:09]:
Flexibility. Right. Didn't have to do that 20 years ago. It's like, hey, that's not my problem. If you're going to go take your dog to the vet, take your toolbox with you. You can't do that.

Lucas Underwood [00:53:18]:
Right.

Frank Scandura [00:53:18]:
You'll be without and then word will get out that you're hard ass and you don't care about my dog.

Lucas Underwood [00:53:24]:
Right.

Frank Scandura [00:53:24]:
And I do care about your dog now. I didn't then, but I do now because I've changed too.

David Roman [00:53:29]:
Yeah, definitely.

Frank Scandura [00:53:31]:
Right?

Lucas Underwood [00:53:32]:
Yeah.

Lucas Underwood [00:53:32]:
And, and look, I, I'm completely guilty. I even have my text telling me from time to time. And, and you know, I hired this new manager and he's come to me and he said, Lucas, like, you're given a little too much here.

Frank Scandura [00:53:44]:
I've been told that for years, Years. But I've never done without my giving more.

Lucas Underwood [00:53:51]:
Yeah.

Frank Scandura [00:53:51]:
There's a principle to giving, right? And it's, it's, you know, you reap what you sow.

Lucas Underwood [00:53:57]:
Yeah.

Frank Scandura [00:53:57]:
If you sow generosity, you reap generosity. So I've never, I'm still waiting to reap.

Lucas Underwood [00:54:04]:
I, I, here's my problem is you can create, you can accidentally create these constructs in your business. What I did was, is like I paid my guys for everything. Right. And so you get a 40 hour, a week paycheck, and then you're bonused on things. And so they were still getting hours for, like, all the warranty work, even if it was their fault. Right. And so, like, they got paid to do it, but then it went towards their bonus if it was their fault on warranty. And so the new manager says, like, hey, I have a wee bit of a concern with that because I am really concerned.

Lucas Underwood [00:54:37]:
I've got a technician who is intentionally.

Frank Scandura [00:54:41]:
Well, there's no consequence.

Lucas Underwood [00:54:42]:
Right, Exactly. No skin in the game.

Frank Scandura [00:54:44]:
Yeah, yeah.

Lucas Underwood [00:54:45]:
And. And like, I've created pay plans where I paid them. Like, they would come to me and they'd say, I can't survive like this. I need more money. So I'd give them more money, and then they'd come back again and I'd give them more money. And all I, I, I, I've watched it happen. I built this construct where the more money I gave them, the more they spent and the more money I had to give them so, so they could survive. And I created this nasty circle of, whatever you want to call it.

Lucas Underwood [00:55:11]:
Vicious cycle. I guess so. I mean, you got to be careful, though.

Frank Scandura [00:55:15]:
You do. And I've got enough white hair on my chin to have learned when a technician says, I'm not making enough money, I say, okay, why don't you bring three months of bank statements, you and your wife come to dinner with my wife and I, and we'll see what your monthly budget looks like.

David Roman [00:55:33]:
Oh, I make that suggestion, people lose their minds. Frank's over here. Like, been doing this for 30 years. This is the way we operate. Everybody's just cool with it.

Frank Scandura [00:55:43]:
Well, guess how many guys take me up on it?

David Roman [00:55:45]:
Nobody.

Frank Scandura [00:55:46]:
Nobody? Yeah, because then they know. They know I have a spending problem, not an income problem.

Lucas Underwood [00:55:50]:
Yeah.

Frank Scandura [00:55:50]:
And that's good enough for me because now I've brought. I don't have to say, well, you've got a spending problem. No, let's look, because you're making pretty good money. And I see your car. You're not making payments. Your debt paid off the house. I gotta know. You don't have a house payment, so there's really no reason for you to be broke.

Frank Scandura [00:56:08]:
So let's talk about it. And I've put people through the Dave Ramsey class that I teach, Dave Ramsey's Financial Peace University. And I've told my team, anybody who takes the class, if you don't feel like it was worth 129 bucks, you paid for it, I will personally give you the money back out of my pocket. Pocket. Right. Nobody's ever asked for it back and it's been a life changer. So that is the answer to I'm not making enough money.

Lucas Underwood [00:56:33]:
Yeah.

Frank Scandura [00:56:33]:
Right. So. And when you really think about it, is there enough? That's true. Right? Very true.

David Roman [00:56:44]:
Parkinson's law.

Lucas Underwood [00:56:45]:
Yeah.

David Roman [00:56:47]:
I'm just starting to think that in those, like, good months, I just need to take all that extra cash that I normally spend on frivolities and just hold on to it.

Frank Scandura [00:56:58]:
That is correct.

Lucas Underwood [00:56:59]:
Yeah. I should probably do that too.

Frank Scandura [00:57:00]:
Listen, as guys, that's hard. I've got about a year's worth of income in our emergency account for my.

Lucas Underwood [00:57:08]:
Wife and I. Holy crap.

Frank Scandura [00:57:12]:
And I'm looking at that going, I could buy a couple cars. I could buy, I could do, I could get. But that's my safety net. Right.

Lucas Underwood [00:57:24]:
That. That comes with a maturity though, right? There's some maturity that you say I'm not mature.

Lucas Underwood [00:57:30]:
Yes.

David Roman [00:57:30]:
Because I'm just telling you I'm looking at it going, you know what it is, is you always assume I'll still keep doing this next month.

Lucas Underwood [00:57:38]:
Yeah.

David Roman [00:57:39]:
And then next month, like, I've turned the corner.

Frank Scandura [00:57:41]:
Wish I had the money.

David Roman [00:57:42]:
Yeah. Every single time. No, it's every single time you, like I've turned the corner.

Lucas Underwood [00:57:46]:
You can burn yourself so many times before because like, that was my thing is the one thing I'd never wanted to happen. Right. Was that if something happened to me or something happened to the shop, I never wanted it to impact the family property. Right. So I've got an account that has six months of payments in it no matter what. So then like insurance or disability or whatever it would be would kick in after that. Right.

Frank Scandura [00:58:13]:
Because my waiting period.

Lucas Underwood [00:58:15]:
Exactly. I've got a short term and a long term. But it's kind of like the way it's set up. But you know that. That I would not impact them. We would have a time to. To sort out the mess and solve some problems and deal with whatever had to be dealt with.

Frank Scandura [00:58:28]:
And.

Lucas Underwood [00:58:29]:
And so now I'm starting to see it's easier to do that. My problem is credit cards because we come to Vegas. I don't know if you know this. Vegas is expensive. I mean, like, just to go, like you can go to in n out and spend 80 bucks for four people like nobody's business.

Frank Scandura [00:58:46]:
Crazy. Yeah, it is, it's. And you touched on something a lot of people don't realize. You have got to have a rock solid block wall between your personal finances and your business finances.

Lucas Underwood [00:59:00]:
Yeah.

Frank Scandura [00:59:00]:
And I've seen a lot of people fail in business when things are tight and they don't have the money for the rent, they take it from the home money.

Lucas Underwood [00:59:06]:
Yeah.

Frank Scandura [00:59:06]:
And take it out of the home savings and they take it out of the 401k and it keeps sucking this.

Lucas Underwood [00:59:11]:
Or they don't pay themselves at all.

Frank Scandura [00:59:12]:
And. Right. So they're not paying themselves and they're taking money from places it should come and getting home equity loans and all this other stuff and then everything.

Lucas Underwood [00:59:20]:
We think we're successful by doing that. Right. We, We. That comes back to someday I'll right. It comes back to, oh, if I just keep doing this and I fix enough cars. You can't fix enough cars to be profitable.

Frank Scandura [00:59:32]:
You can't fix enough cars to fix stupid.

Lucas Underwood [00:59:34]:
Exactly. Exactly. If you're not profitable, you're not going to be profitable fixing more cars.

Frank Scandura [00:59:40]:
And that's one thing my wife and I have always done. And I've told her that we won't intermingle personal and business. I'll never take money from the house to pay a business expense. I never will do that. It's dangerous. Don't do it. The business, if it's in financial trouble, it has to suffer its consequences. Fix the problem there.

Lucas Underwood [01:00:01]:
Yeah.

Frank Scandura [01:00:01]:
Right. And when we go shopping, I don't put everything on a business credit card and say, roll of toilet paper for Frank. A roll of toilet paper for the company. A toothbrush for Frank. Oops. The company doesn't need that. I'll just keep it. It's crystal clear.

Frank Scandura [01:00:14]:
You can edit and, you know, audit all my stuff. There's no blurring of the lines. And that's really important.

Lucas Underwood [01:00:22]:
Yeah.

Frank Scandura [01:00:22]:
Right. Because once the lines get blurred, then you can't find it anymore. Then it's hard to get out under it.

Lucas Underwood [01:00:27]:
I agree. I agree.

Frank Scandura [01:00:29]:
The trick to the savings is maybe a good start and you got 10 or 20 or 30 grand. You had a really good month to start. But little bites.

Lucas Underwood [01:00:40]:
Yeah.

Frank Scandura [01:00:41]:
Okay. And when we were first in business and struggling like everybody else that thought they knew it all and. And you know, I was trying to encourage my wife to save money. She's doing the bookstore. She goes, we can't afford important. I said, challenge me on this. Put $200 a week in the savings account.

Lucas Underwood [01:00:58]:
Yeah.

Frank Scandura [01:00:59]:
And what I learned from that was most business owners look at the checkbook balance and decide who gets paid.

Lucas Underwood [01:01:04]:
Yeah.

Frank Scandura [01:01:05]:
And never pay themselves first. So that 200 eventually went up higher and higher and higher. We put $8,000 a week in savings.

Lucas Underwood [01:01:13]:
Yeah.

Frank Scandura [01:01:14]:
Now there's weeks that we dip into that because a grand is a lot of money to put into savings every single week.

Lucas Underwood [01:01:19]:
Right.

Frank Scandura [01:01:19]:
And then my wife goes, I had to transfer out of savings.

Lucas Underwood [01:01:23]:
And.

Frank Scandura [01:01:25]:
Right. Isn't that what it's there for? Isn't that the reason to have that money to transfer out? Yeah, so it's.

Lucas Underwood [01:01:31]:
Yeah. And so that's what I do is I've got it set up to where it's automated.

Frank Scandura [01:01:34]:
Right.

Lucas Underwood [01:01:34]:
And I move it into various accounts based on what I'm trying to offer first kind of concept, very similar to that concept. So that's what I've been doing and I've found that's the only way I do it.

Frank Scandura [01:01:44]:
Now.

Lucas Underwood [01:01:44]:
Occasionally something happens. We have a slow week, a slow month.

Frank Scandura [01:01:47]:
Right.

Lucas Underwood [01:01:47]:
Like I got a new advisor and he ran into some troubles with, with the front counter, stuff like that. Really great guy. I'm not saying anything bad about him, but he ran into some trouble. So a shop that normally does 50,000 plus a week was doing 20,000 a week. Yeah, exactly. And so that meant like all the savings depleted quick, like real. And so. But if I had not had that and I, you know, as bad as this sounds, had I paid all the bills I was supposed to pay, we would have had a bad ride.

Lucas Underwood [01:02:16]:
Now I paid all the bills now.

Frank Scandura [01:02:17]:
But.

Lucas Underwood [01:02:17]:
But the point was, is had I had I not planned ahead and had some cushion, things would have got really uncomfortable really quick.

Frank Scandura [01:02:25]:
And using credit as your cushion, that's.

Lucas Underwood [01:02:29]:
Dangerous business because you'll back yourself into a corner, you don't have the cash flow to survive.

Frank Scandura [01:02:32]:
Exactly. Right. And then you start making real dumb decisions because the pressure is so enormous.

Lucas Underwood [01:02:37]:
Yeah.

Lucas Underwood [01:02:37]:
And then it's an emotional decision, not a fact based decision.

Frank Scandura [01:02:40]:
It's not a fact based, calm decision.

Lucas Underwood [01:02:41]:
Yeah.

Lucas Underwood [01:02:42]:
Right.

Frank Scandura [01:02:42]:
Somebody who's got six months worth of expenses saved up and in a business it could be hard. Right. 171 grand.

Lucas Underwood [01:02:48]:
Yeah.

Frank Scandura [01:02:48]:
It's a lot of money to have saved up for six months. But I got two to three months cash saved up. It takes the pressure off.

Lucas Underwood [01:02:56]:
Yeah.

Frank Scandura [01:02:56]:
If next week no cars came in.

Lucas Underwood [01:02:59]:
Yeah.

Frank Scandura [01:03:00]:
I'm not going to panic. I will a little bit, but it's not going to be an emergency.

Lucas Underwood [01:03:06]:
I can't survive.

Frank Scandura [01:03:07]:
It'll be okay. Let's figure out what changed. What are we doing? What happened? Did my website crash? What's going on? Yeah, you know, let's figure this out. Because like you said, you know when you go from 50 to 30 and you've got no reserves.

Lucas Underwood [01:03:18]:
Yeah.

Frank Scandura [01:03:19]:
You're like, you're ready to eat the dog and kick the kids, and that's bad news.

Lucas Underwood [01:03:24]:
I was talking to somebody from the Department of Commerce because of all the flooding that happened the other day and just happened in passing. And I said, you know, I know that there's a lot of businesses that are suffering. And he said, you know, it's really interesting you say that because we got statistics back from the Department of Insurance, and what they came back to us with was that less than 2% of the businesses that got wiped out had income replacement.

Frank Scandura [01:03:48]:
And he said less than 2%.

Lucas Underwood [01:03:50]:
Less than 2%. And so all of these are small businesses. They're owned by these people. And how many of them probably didn't have enough reserves to survive that? To put it in perspective, Asheville, North Carolina, is saying it'll be four, four months before they get city water back to everybody that had city water before. There are spots in North Carolina that will not have power for a year and a half to two years before they restore power to certain areas.

David Roman [01:04:14]:
I don't believe you. I saw the interview with that mayor and she looked entirely competent.

Lucas Underwood [01:04:21]:
Which mayor? I didn't see it.

David Roman [01:04:22]:
The mayor of Asheville.

Lucas Underwood [01:04:23]:
Oh, that's a shoe, buddy.

David Roman [01:04:28]:
She looked competent. I trusted her. She knew what she was doing. She was not at all in overhead.

Lucas Underwood [01:04:38]:
I could only imagine being in their shoes. But, I mean, you think about that and you think about the consequence that has on somebody. And, you know, you talk about separating yourself from the business, buddy, when you find out you're gonna be shut down for six to eight months with no income, man alive. Like that is next level sketch most. I mean, I think you're just done. You roll over.

Frank Scandura [01:05:01]:
Not they won't. There's no survival. Yeah, yeah, they're done. They're just done. If they were fortunate enough to own the property, they may have. If they owned a free and clear. An opportunity to sell property. But it can imagine a mortgage, no flood insurance, no reserves, no lost income insurance.

Lucas Underwood [01:05:17]:
That's bankruptcy.

Frank Scandura [01:05:19]:
It is guaranteed. Guarantee. Yeah.

Lucas Underwood [01:05:21]:
Frank, thank you for being here.

Frank Scandura [01:05:22]:
My pleasure. It's always great to talk to you guys.

Lucas Underwood [01:05:25]:
Yes, sir.