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Anyone here a millionaire?


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Anyone here a millionaire? I'm  not talking about assets, I mean $1 million in the bank.

This industry is good to make a living but not to get rich. Wondering if you guys think the same or I'm wrong and people are making a killing.

My goal is to become a mlillionaire in 5 years but I don't think it'll happen through my automotive business

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I would think if you are hitting the proper margins (while paying yourself an appropriate salary), doing enough in sales, and not living an extraordinary life style, becoming a millionaire (in the bank) is not impossible.

Based on what I've seen you post, I would bet that you are pouring a lot of your money back into your business to grow. That's fine, but it will certainly hinder how soon you can have that much money saved up.

A saying comes to mind “If you will live like no one else, later you can live like no one else.” - Dave Ramsey. He is talking about watching your personal expenses and habits right now and saving, so later on in life you will have enough saved up to live life comfortably.

If you can forgo the 5 year deadline, compounding interest will definitely get you there. Plenty of good books out there that touch on this topic (again, Dave Ramsey does a great job at explaining it).

If you're not hitting the proper margins and sales goals in your auto repair shop, I would think it would be a bad idea to go getting into other business types. Personally, from what I've read, I'd say having 3 months of operating expenses saved up would be the best starting place, then look at investing in the market. I'm nowhere close to what you would call a financial advisor, but I have read a few books on the topic.

To answer your question though, I'm not a millionaire. And I don't think it happens overnight for most people either. I think it's probably a slow, methodical, well thought out plan that you have to continue working at. 

Edit* Thought I would add this one thing. When you have a goal you want to achieve, I've found it's easy to work backwards. IE, Your goal is 1 million dollars saved up in 5 years. That means you will need to be accruing $200,000 each year.  Or, $16,667 a month. With that, you can figure out ,based on your margins, how much you need to do in sales to be saving that much a month. You can also calculate daily sales requirements, how many techs you're going to need to do those sales, etc, etc. 

Edited by mmotley
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In the grand scheme of things a million dollars is relatively easy to obtain. Anyone who is trying to attain wealth is not going to leave cash sitting for long. They will be investing that money to allow it to work for them in various forms of investing. Networth is a better measurement of wealth vs cash sitting in the bank. 

Shop owners can probably become millionaires in 5 years without having multi locations. If you have a shop grossing 2 mil at even a 10% net you will be a millionaire in 5 years. 

Edited by mspecperformance
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7 minutes ago, xrac said:

If you own the property in a valuable retail area like we do it is easier. 

And that is the single key in becoming wealthy in this line of business, control the property, set an objective net return; find a hungry, reliable candidate with integrity that want to own his own business, train him and help him achieve his dream, and there you have another egg for your retirement nest.

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11 minutes ago, xrac said:

If you own the property in a valuable retail area like we do it is easier. 

Correct. If you are measuring your networth which includes equity in real estate then absolutely. IMO if you are a smart business person you will make profits in your auto business and funnel them into other investments which can include other businesses, more locations, real estate, market investments, life insurance, etc. 

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the millionaire next door is a good read. The guys you see in new sports cars with rolexes usually are credit rich but are probably worth very little. I know guys with multi million dollar dealerships who put water in the ketchup bottle to get the last bit out. 

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This is interesting stuff. I'm new to this group (pretty excited to have found it). I've owned an auto repair shop for almost 6 years. I have 5 bays. This past year we grossed approx 500k, however barely made a profit this year when all said and done. Kind of frustrating because were ALWAYS busy and working our butts off. I am considering expanding to get a few more bays. However, there is also another great location (Building) for sale near me. I have thought about adding another location, then wonder if I've lost my mind!!!. I'm pretty young, so I don't mind upping the ante so to speak, if it would be a good long term move. Any advise would be greatly appreciated.

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55 minutes ago, alfredauto said:

the millionaire next door is a good read. The guys you see in new sports cars with rolexes usually are credit rich but are probably worth very little. I know guys with multi million dollar dealerships who put water in the ketchup bottle to get the last bit out. 

Yes! THis is so true! I read that Sam Walton drove a old pick up truck at the time of being name the richest man in the US

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7 minutes ago, autorepairuniversity said:

This is interesting stuff. I'm new to this group (pretty exited to have found it). Ive owned an auto repair shop for almost 6 years. I have 5 bays. This past year we grossed approx 500k, however barely made a profit this year when all said and done. Kind of frustrating because were ALWAYS buisy and working our butts off. I am considering expanding to get a few more bays. However, there is also another great location (Building) for sale near me. I have thought about adding another location, then wonder if ive lost my mind!!!. Im pretty young, so I don't mind upping the ante so to speak, if it would be a good long term move. Any advise would be greatly appreciated.

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Hey! Welcome to the forums. I am pretty new myself but I have grown considerably since joining and getting help from these seasoned professionals.

I just opened my second location and I thought I was nuts as well- been in business for 2 years. In the works of opening a third, suppose to hear back from the landlord tomorrow. Risky but you only live once. Hope all works out! I'd say go for it

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11 hours ago, autorepairuniversity said:

 because were ALWAYS busy and working our butts off. I am considering expanding to get a few more bays.
Sent from my SM-G930P using Tapatalk
 

Just like in fixing a car you need to analyze the numbers to understand the underlying cause of this. The old AAA business model of if your not making money you need to work harder is not the answer. Adding bays is not an automatic fix....

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19 hours ago, autorepairuniversity said:

This is interesting stuff. I'm new to this group (pretty excited to have found it). I've owned an auto repair shop for almost 6 years. I have 5 bays. This past year we grossed approx 500k, however barely made a profit this year when all said and done. Kind of frustrating because were ALWAYS busy and working our butts off. I am considering expanding to get a few more bays. However, there is also another great location (Building) for sale near me. I have thought about adding another location, then wonder if I've lost my mind!!!. I'm pretty young, so I don't mind upping the ante so to speak, if it would be a good long term move. Any advise would be greatly appreciated.

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Get some training that covers both the sales side and the expense side. Maximize sales, minimize expenses. I belong to a 20 group and it's been great. I would caution you about expanding until you've figured out how to be profitable in your current situation. There's no reason to go from being a very busy but unprofitable 5 bay shop to being a very busy but unprofitable 10 bay shop, or worse, 2 unprofitable shops.

Funny story about being unprofitable. For many years I was running by the skin of my teeth. My general manager went to training a little more than a week ago on how to read your financials in an automotive business. The trainer included some samples of P&L and balance sheets in the training materials. He recognized the balance sheet as one of mine from back in 2013. The trainer told the class that the shop in the example was probably not losing money, but was dangerously close to getting into trouble due to lack of cash. He was right of course. Since then I've gone from barely scraping by month to month to having 250K in my checking account and 100K in an investment account, all due to knowing what benchmarks I need to hit not only on the income side, but on the expense side.

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39 minutes ago, AndersonAuto said:

Get some training that covers both the sales side and the expense side. Maximize sales, minimize expenses. I belong to a 20 group and it's been great. I would caution you about expanding until you've figured out how to be profitable in your current situation. There's no reason to go from being a very busy but unprofitable 5 bay shop to being a very busy but unprofitable 10 bay shop, or worse, 2 unprofitable shops.

Funny story about being unprofitable. For many years I was running by the skin of my teeth. My general manager went to training a little more than a week ago on how to read your financials in an automotive business. The trainer included some samples of P&L and balance sheets in the training materials. He recognized the balance sheet as one of mine from back in 2013. The trainer told the class that the shop in the example was probably not losing money, but was dangerously close to getting into trouble due to lack of cash. He was right of course. Since then I've gone from barely scraping by month to month to having 250K in my checking account and 100K in an investment account, all due to knowing what benchmarks I need to hit not only on the income side, but on the expense side.

Best advice I've seen and I completely agree.

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Great advice, its so nice to be able to talk to other shop owners, other than your neighbors (which are competion). Where I struggle, is that I know I could find more ways to charge more per job. But in the end it either feels like im charging a fair rate, or im charging too much. Example, if I charge $200 for a brake job, I feel like its a fair price. Say I were to mark up parts more and add more shop supplies, now Im charging $250 for the same job. I feel like that would be considered too high for my particular city / area. I can't think of any practical ways too save much more $. Any more advice. Again thank you!

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7 minutes ago, autorepairuniversity said:

Great advice, its so nice to be able to talk to other shop owners, other than your neighbors (which are competion). Where I struggle, is that I know I could find more ways to charge more per job. But in the end it either feels like im charging a fair rate, or im charging too much. Example, if I charge $200 for a brake job, I feel like its a fair price. Say I were to mark up parts more and add more shop supplies, now Im charging $250 for the same job. I feel like that would be considered too high for my particular city / area. I can't think of any practical ways too save much more $. Any more advice. Again thank you!

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The cure to your problem is to visit other shops and size up their operations. I have found some really crappy shops in the dumps that were charging premium prices, it was there that one of their customers told me that "it is expensive being poor". Found that yes, indeed, the poor pay much higher prices.

Edited by HarrytheCarGeek
a word, spelling fat thumbs
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14 hours ago, autorepairuniversity said:

Great advice, its so nice to be able to talk to other shop owners, other than your neighbors (which are competion). Where I struggle, is that I know I could find more ways to charge more per job. But in the end it either feels like im charging a fair rate, or im charging too much. Example, if I charge $200 for a brake job, I feel like its a fair price. Say I were to mark up parts more and add more shop supplies, now Im charging $250 for the same job. I feel like that would be considered too high for my particular city / area. I can't think of any practical ways too save much more $. Any more advice. Again thank you!

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Problem no. 1 is that you're managing off your feelings.

What's your gross profit on parts? GP on labor? What's your break even? What's your car count? You're inspecting every car aren't you? How many jobs are your techs finding per RO? What's your average HPRO? What's your rent factor?

What's the benchmark you should be aiming for on all of these numbers and many more?

If you're managing by your feelings, what happens when you have 2 shops? Or 3? How do you manage those shops if you're not going to be present in each shop every day? I could go on and on, but the point is that if you don't have a good handle on your numbers it will be very difficult to be a profitable shop.

I looked at your demographics, and your customers are not wealthy, but that doesn't do very much to change the cost of auto repair. It is what it is. If you're feeling uncomfortable about what you're charging, run the numbers and find out what you should be charging. The numbers don't have feelings.
 

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I totally agree. Its easy to get caught up in the day to day hustle and not look at the big picture. Sounds like I should spend some time examining the numbers, and possibly raise my prices a bit... I honestly feel like I have more work than I can handle most of the time. Thanks for the advice. I'll put some time / effort into this. Also probably have some more questions along the way. Thanks guys!

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  • Have you checked out Joe's Latest Blog?

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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