Transmission Repair

We had a simple policy for our transmission shop. We would offer to take in anything; for a price. The more we didn't want to work on something, the higher the price. I wouldn't say an emphatic "No" on anything. We once had a highly modified Dodge Ram 3500 diesel come into our shop. The guy was on his 4th transmission and we would be #5. He had a chip that could be modified from the driver's seat on the fly. It's was lifted with big tires and an exhaust system bigger than the sewer pipe to my house. Injectors, manifold, etc. and it was a "rolling coal" example. High liability, so I told him I would have to Remove, Disassemble, and Inspect the damage to give an accurate price. He kept pressing me for a "guesstimate". I finally said, no less than $9K, depending on what we found. He said, "OK, go for it." After the job, we never saw the truck again. Lucky us, huh? Later I discovered I should have charged him for installation:... ATS Uninstalled Transmission Prices

Remember the "Buggy Whip Story"? Well, that's the trap a lot of fatalistic-thinking people think about conventional ICE vehicles. I'm in total agreement with what Joe said. I couldn't have said it better. Our industry WILL ADAPT to the changing technologies. That's what we've always done, right? And oh, by the way, the buggy whip business is alive and well. They just adapted. https://www.buggywhip.com/

I wouldn't even consider an EV unless we also installed a 220V charger in my garage at the same time. Charging away from home doesn't fit my lifestyle either. While I like EVs, we chose to buy a 2021 Toyota RAV4 Hybrid in January of last year. It gives the best of both worlds. 38 mpg freeway, 50 mpg in town. Locally, it runs mostly on electric power, however on the freeway, it's mostly gas powered. Can you believe we only have 4,500 miles on it after 15 months?!?!? That's only 300 mi./mo. I guess that makes me a Certified Homebody. 🙂

I knew nothing about commercial real estate. I had never leased or sold any before 2015 when I leased our shop. When it came time to sell in 2020, I didn’t have a clue. I was forced to sell when the buyer of my business and leaseholder skipped out on a 10-year lease after only 5 years during the summer of 2020. Unfortunately, he stripped the building and took all the shop equipment with him. The only way we found out was after-the-fact when we drove by and there was no sign on the building. By the time we entered the building, he had been gone more than a month. Instead of dealing with all the hassle of leasing, we decided to sell the real estate, It was on the tax rolls for a valuation of ~$1M but I felt it was worth much, much more. But what did I have to sell? A pretty much empty building sitting on 0.92 acres of land? What the hell do I do? I didn’t even know how much to list it for, let alone how to list it without a commissioned real estate firm getting involved. We had a high-visible freeway location. There’s only ONE north-south interstate in Utah and it’s I-15; and we were right on it. I started researching for comparable real estate that was listed in the past 5 years to see what it went for. NADA! There was nothing to be found. Long story made short, I settled on a $3.2M asking price. Ballsy, huh? But how do I get the word out? Then I discovered LoopNet.com. It’s the biggest internet search engine for commercial property for sale or lease. I listed there for about $125 and it generated a ton of calls from people interested in the building seeking a tour of the building. The building was in shambles. At the same time of the listing, I had a huge 8’X30′ banner made and put on the building. I purposely list a Dallas phone number that would forward to my cell phone. (see picture below) I also found out that LoopNet.com also places my ad with several other online search engines sort of like Indeed.com does for employment which generated even more calls. Of all things old-fashioned, a plumber drove by, saw the sign, and called me for a tour. It was a couple in their mid-30s with a fleet of 40 plumbing trucks. They wanted the place to not only work on their own vehicles, but they needed PLENTY of parking. (Which we had) The sign had only been up for a week and I was surprised. A few days after the first tour, he called for a second tour. It was the tour where he gave me an offer of $2.2M. I was desperate to sell so I negotiated a $2.3M sale price. It was 3X what paid for the building just 7 years prior and over twice its appraised value. I had hit a home run. Lucky me. So, my advice is to follow just what I did in this story. The sale could have gone either way; LoopNet or a sign. I designed the sign myself in Adobe Illustrator anId found a sign guy to make, install, and remove the sign. (Image below) I had a lot of pictures of both before and after the shop was stripped; mostly after, that I listed online along with a video of back when we were in the building. Here’s a link to the pictures:… Certified Transmissions Draper, Utah I’ve posted this a couple of times before, but here it is again. The video of the exterior of the building. Notice it has a double fence on the property. https://youtu.be/V89FJzM7KCg 1:07 Lastly, follow the 10 Rules For Selling Your Shop which I posted a few days ago. May you have the same success that I did!

Advertise it nationally as well as locally with LoopNet.com It's the largest online searching for commercial property to buy, sell, or lease. It's the Google of commercial real estate.

Just to follow up for those wishing/thinking/planning/ or actually retiring. Here's the final update to our retirement situation. We paid all of the income tax owed. The CPA said my wife was off by $1K in tax liability. For those who may not know, my wife is an accountant with 2 degrees; one in accounting and one in economics. She went back over the CPA's return and found his error in the $1K and let the CPA know about it. We gave the return back to the CPA. He admitted his error, apologized, and signed the edited copy. Imagine that. Pay a CPA to know we were all legit and it turns out my wife was right after all. (See photo) We paid the $400K income tax yesterday and paid off the house today. Sadly, some expenses never go totally away. While we don't have CC payments because we now use only debit cards, we still have to pay for utilities, insurance, taxes, gas, and food. My accountant wife has calculated after everything is considered, we will still be able to put $2K/month into savings while still living in the lifestyle we've grown accustom. Hallelujah! However, with all this damned inflation, that could change dramatically in a heartbeat. 😞 If you remember one of my previous post, we didn't retire on the sale of our business in 2015. Where we made our retirement was selling the shop and the .9 acres it sits on. Joe M. is correct about not expecting to retire on the proceeds from the sale of your business. It's simply not enough if you live well past your retirement.

The price of most parts, new or used, are affected by the liability factor(s). Just sayin'...

You're right about transmission swapping. Just in the last decade, about 2 dozen new transmission type have been introduced. For the 2 or 3 decades before that, transmissions would have no more the 4 speeds and transmissions stayed largely the same. It's gone up from 4-speeds to 10-speeds and everything in between, not to mention the infamous CVTs. Because of all the changes, there is much more liability in transmissions than ever before. Even with the car manufactures, there's more liability and costs. Ford and GM have collaborated on both a FWD 6-speed as well as a RWD/4X4 8-speed, not to mention a 10-speed as well. If you buy a new Ford or GM truck, the chances of them having the same transmission is more than good. Mopar, now Stellantis, simply said "fuck it" and is buying ZF 8-speeds instead of designing and building their own. If you think finding automotive technicians is hard, you ought to try finding a competent transmission rebuilder. There's not enough new young rebuilders to replace all the older builders that are getting out of the profession or retiring. Many transmission "rebuilders" nowadays are merely disassembly/assembly people. They can't diagnose. For comedy, I read technical transmission websites and Facebook Groups. They are chocked full of "rebuilt" transmissions that either fail or don't work right from the get-go. If a new job comes in or perhaps one of theirs isn't working correctly, the only thing they know how to do is pull the transmission out and see if anything visual is awry. When shops buy a reman for a late model vehicle, often the only choice is the dealer. It's not uncommon for transmission problems to NOT be the transmission itself. There was one clown working at a shop with a new job that the transmission was stuck in failsafe. Naturally they pulled it out and rebuilt it but couldn't find anything really wrong with it other than wear and tear. Upon installation, the transmission was doing the same thing. The way I discovered this story was on a transmission website, TRNW.com. Get this subject line of the post of this story: THE $4,000 DOLLAR FUSE. A blown fuse to the transmission was causing the failsafe or "limp in" mode. Crap like that happens every day and it sickens me. On top of that, since I retired in 2015, trouble finding transmission techs has gotten worse along with parts shortages, chip shortages, and supply chain issues. I read everyday how shops have a bunch of cars sitting on the lifts because they can't find parts. I feel very lucky. My 40-year career was in the "Golden Age" of transmissions. Nobody could pay me enough to put up with all the shit transmission shops have to deal with today. I only observe it from afar, thank goodness. I am SO GLAD to be retired and not in the daily grind. J. Larry Bloodworth, still a CMAT, 801-885-2227 [email protected]

Well said, Jim. Those who have read of Eddie Lampert and his shenanigans know how Fast Eddie used Sears and Kmart only to enrich himself, nobody else. Many DIY'ers have readily available cheap scanners and often are buying the first error code with a part name on it. Do you realize how many unneeded oxygen sensors they sell? Every year they sell hundreds of thousands of unneeded sensors, solenoids, and etc. only because "the scanner said so". The DIY'er isn't dead, but a proper diagnostic routine is. I was in the transmission repair industry all my life with a 40-year career. A lot changed not only in transmissions, but like you indicated, the whole damn car changed. More and more computers, chips, and and multiple CAN networks. They last longer with less maintenance. When I started, vehicles were expected to last only 100K miles. It was a regular occurrence at our shop to be doing a transmission on a vehicle with less that 50K miles on it. Good God, vehicles back then only had 5-digit odometers. Now they have 6-digit odometers and a 300K mile life expectancy. Just look at the EVs. Those are million-mile vehicles with little maintenance and connected to the internet of over-the-air (OTA) updates and reprogramming. They can even buy extra features and options with OTA communication after they already made the original purchase. But it's often been said that any type of new technology takes 30 years to be widely adopted, I think EVs are just starting on that path. ICE powered vehicles will only diminish over time, but I doubt if they will ever completely go away. Additionally there's a lot of shops that can't diagnose; they only do parts swaps. This created a whole new industry with mobile programming and diagnostics. While most of what you say is true, I think there will always be DIY'ers, tinkerers, and hot rodders to be served by the auto parts market. Snake oil-type additives, stop leaks, and fix-alls will always be popular. Equally true, the wannabe DIY'ers, tinkerers, and hot rodders are slowly going away for just the reasons you mention. I no longer own a shop or rent the building. I now take my truck into a shop instead of working on it myself because I'm retired with few tools. Shifting gears, speaking of retirement... I retired 7 years ago at the age of 60 and I feel very blessed and lucky. I personally know of two local (SLC, Utah) transmission shop owners who are in their 80s who can't afford to retire. They are both active in their business and work way over 40 hours a week. Now THAT is really very, very sad. Like many, I spend more time on my PC now that I'm retired. I often read of various business and technical problems on the automotive and transmission forums of the problems they are experiencing. I retired before our industry became plagued with parts problems, supply chain issues, and chip shortages. I only read about those problems, I've never experienced them myself and I often wonder how many are being pushed into early retirement because of all those types of problems. While I live the same lifestyle to which I have grown accustom to over the years, I now don't have any monthly notes like I used to. We have a 2021 RAV4 Hybrid which my wife picked out and really loves. The owner's manual is 768 pages and the infotainment and navigation manual is 242 pages. Combined, that's over 1K pages. Now THAT'S some serious technology training. There's so many buttons, switches, knobs and software options we feel more like we're flying the space shuttle than driving a Toyota. We have no car notes, mortgage payments, or monthly CC bills and that has only happened since we retired. Taxes, insurance, and utilities are the only recurring bills except the ever-growing inflationary weekly food bill. Who would have ever thought bacon would hit over $8 bucks? And that's not even for a pound. They are only 12 ounces nowadays. While we won't have as much due to inflation, we have enough to withstand it. It's hard to talk about inflation without going off the rails into politics, so I won't. Finally, a technical tip if you're still reading my epistle... I have a hard time reading the small font size in this forum. If you hit CTRL and +, whatever you're reading will grow in size. You can hit CTRL and + as many times as you need to get the size you feel comfy with. Just sayin'... J. Larry Bloodworth, 801-885-2227 [email protected]

Call tracking is a marketing measurement and management tool. In unto itself, it does no marketing of its own. When I discovered call tracking, it opened up a whole new world to me. I was able to see what marketing and advertising worked and more importantly, what didn’t. By far, Google’s AdWords PPC worked the best for us. We’re a transmission repair shop, I don’t know how it would work for a G/R shop. The reason I say that is way back before the internet I learned a terrific advertising trick. I would get an unlisted number from the phone company. I would buy a full-page Yellow Page ad using the unlisted number. Because it was full-page, the ad always appeared in the frontmost location under the “Transmission” section. I had a separate telephone on my desk for the unlisted YP number. When that phone rang, I instantly knew the source of the call. If by chance, the ad didn’t work, I could cancel the phone number and not be responsible for the large YP ad bill. I told another G/R shop owner who was a good friend about my strategy and he tried it. It was a dismal failure. The YP ad was costing him more than the business it created. On his best month, he only broke even. After only 5 months, he canceled the phone number. So, the bottom line is that I don’t know if Google’s AdWords PPC will work for G/R as it works for transmission repair. However, I do know call tracking will work for any business that gets its new sales leads over the phone. I tracked it for a few years and it proved to me that my Google AdWords PPC worked for our shop. Before Google PPC advertising, our shop sales plateaued at about $700K/yr. After we started Google PPC advertising, our sales instantly increased by $500K to about $1.2M/yr. Admittedly, we were paying about $50K/yr. to Google, but it was worth it to us. Call tracking proved beyond a shadow of a doubt that for every $1 we paid Google, we received $10 in new business. Overall, we were giving Google 10% of the amount in the new business we created. In fact, we would get so busy and far behind, I would actually turn off or ‘pause’ the Adwords campaign to give us time to catch up. Once we started seeing daylight, I would turn it back on. In closing, I have a link below to a 3-year analysis of our Google PPC program as measured through our call tracking campaign. Below is a link to 1 day of call tracking data and you can see the information you get via call tracking. Certified Transmissions Pay-Per-Click Analysis Call Tracking 2012-03-26-2012-03-26 https://www.convirza.com/solutions/by-industry/automotive/ J. Larry Bloodworth 801-885-2227 [email protected]

These are the rules I followed to successfully sell our shop.   TEN COMMANDMENTS FOR SELLING YOUR TRANSMISSION REPAIR SHOP 1. Value Your Shop Appropriately (and in this Business, Value is Based on Cash Flow) You must be realistic about valuing your shop. Sources state that 70% of all businesses for sale never sell, which is probably due to the business being priced too high or having a bad financing structure. You should be familiar with the prices of other shops that may be for sale in your area and be in a position to assess the cash flow and other financial points regarding your shop that are favorable when compared to these other shops. To be able to assess this, before your business goes on the market for sale, you should have certain financial records ready. You should have your last 2 years of business federal tax returns, profit & loss statements and bank statements, and from these records have calculated an accurate annual net income/cash flow figure. REMEMBER: HIGH CASH FLOW IS WHAT SELLS CENTERS AND ALLOWS BANKS TO MAKE BUSINESS LOANS! Serious buyers will immediately ask for this information so it benefits you to advertise it. 95% of the time, Buyers will want to see your tax returns right at the outset to check that you have been accurate in your statements and to assure that they can get a bank loan, if one is needed. Nothing will kill a deal quicker than a potential buyer feeling uncomfortable about the accuracy of the information he is being given and a seller not being able to prove it from his financial records. BOTTOM LINE: If you cannot provide substantial proof of your advertised cash flow, do not expect to sell your center. On the other hand, if you can provide such information but not from your financial records, be prepared to help your Buyer with financing. 2. Write a Comprehensive One Page Fact Sheet About Your Shop Buyers will need to know many details about the business being sold and you do not want to risk leaving out pertinent data they will need to know. So rather than having to re-state this information each time you talk face-to-face with a potential buyer, make up a one-page summary of the key financial statistics about your business (number of employees, average weekly/monthly sales, net income/cash flow, lease terms, list of equipment etc.) and also include some history of the business and your ownership and management, important attributes of the area or particular location where you do business, what you would recommend to a new buyer to increase business once he takes over, the reason for selling and any training that will be available after the sale, etc. 3. Get Maximum Advertising Exposure to Generate Lots of Potential Buyers To sell your business, you need lots of potential buyers (ones that are financially qualified) to see that your shop is for sale. Buyers looking for the right opportunity may be willing to relocate and can come from all over the United States or Canada so you need wide-reaching advertising exposure. You must advertise adequately on the internet to get the word out to the right buyers and you will need to know what to tell them about your shop to generate maximum interest. While it only takes one buyer to buy the business, it is always best to generate maximum leads to assure success in selling your business. 4. Get Non-Disclosure/Confidentiality Agreements (NDA) Signed Have all potential buyers sign and date a confidentiality agreement before you give out any information. This is very important to protect your ongoing business during the sale process. Make sure that potential buyers understand how important confidentiality is, not just to you but also to them in the event they buy your business, and that they must sign it before you can have any dealings with them. 5. Get the Negotiations Going and then Keep Them Moving Make sure that when you get an interested buyer, you stay in touch and, especially when you are negotiating the terms of the sale, that you keep moving forward. No situation, whether it be a point of negotiation or providing information needed for various decisions that must be made along the way (such as with a lender or financial advisor) should be left sitting. Anytime this happens, it could kill your deal. 6. Get a Purchase Agreement Signed and Deposits Placed Immediately Getting a purchase agreement signed and moving ahead under its terms to reach closing on the transfer of the business is critical. Your goal at this point is to sign off on any contingencies as quickly as possible. To be sure everything goes smoothly, have your accountant ready to address the allocation of the purchase price under the purchase agreement. Waiting until later may delay your deal and, again, Delay Kills Deals! 7. Set a Clear Limit on the Time for Due Diligence by the Buyer Due diligence by the buyer should last no longer than two weeks. If you have followed the steps given here, you will have your information organized and ready and this is all the time a buyer should need to investigate your business. You do not want to be waiting for a deal to become final, only to discover that the buyer you thought you had has decided not to move ahead and your other potential buyers have moved on to other interests. The purchase agreement should specify a defined time period for the due diligence, and all parties need to keep to the schedule. Remember, Delay Kills Deals! 8. Get Your Money in Hand Before You Stop Observing This Sale Process Until the title to your business transfers and you are paid the purchase price from the escrow, the business is not sold. Many deals fall out of escrow for a large variety of reasons. Continue to keep in touch with any other leads/potential buyers you may have and keep collecting contact information for any new leads. Be sure that you have a successful deal before you let up on any of your efforts to sell your shop. 9. Keep a 100% Positive Attitude Throughout the Process A 100% positive attitude leads to positive interest from buyers, which then leads to positive results, i.e. the sale of your shop! Your positive attitude will make prospective buyers want to deal with you and make all your dealings go more smoothly - key ingredients in making any sale. 10. Hire An Experienced Consultant Who Knows the Industry to Help Bring About a Sale You need a result-oriented industry consultant who can respond to the types of questions that a prospective buyer might ask about owning a transmisison repair center and help that buyer to better understand the opportunity involved in owning your business. Keep in mind that most general business brokers are just that -- they take all types of listings from anyone that comes to them and do not concern themselves with knowing about the specific business being sold. They would be just as happy leading a potential buyer to purchase a donut shop that they have listed rather than selling the merits of owning a transmission repair shop. At a minimum, you should be looking to hire someone who has had experience in selling auto repair businesses and who can persuade you that they can "walk the walk and talk the talk" of why your business is a great opportunity.

Once we hit 1.2M/yr. in annual sales, I didn't have much to worry about. We were at our production limit without putting on a second shift. Just the thought of that kept me up more at night than anything. We were at capacity and were hitting $1.2M year after year WITHOUT setting a goal. I just simply had it in my head to do more and more and more with no real number in mind. But when we hit our production maximum, wanting more was a moot point. We were a transmission repair only shop, no G/R. I learned from a good friend who worked for Aamco corporate for 33 years that we were #5 in the nation for gross revenue. I couldn't believe it. We were #1 in our state. Until he told me all this, I just sort of took it for granted. I didn't really lose sleep during those years because everything was so automatic. Most job were repetitive. Most jobs were "canned job" and all we had to do on each job was to edit the parts list as needed. We sold by YouTube. I would shoot a short 3-minute video after the transmission was disassembled and either Email or text the link to the customer. Once viewed, I would send the final estimate which was always spot-on. In the seven short years we were at that location, our YouTube channel had grown to over 2,200 videos. It was the assumptive sale. Half the customers would either Email or text me back asking when their car was going to be done and the other half would call. Remember these are big tickets. Half of all customers would give me their CC info over the phone before we even started the repairs. That was from being in an affluent area with a freeway location with a traffic count of 250K vehicles per day. Lucky us. To see our "Show-N-Tell" customer videos, check out https://youtube.com/user/LarryBloodworth Now that I'm retired, nothing keeps me up at night. 🙂

Thanks, Brian. You appear to be a great marketer. I love your location. Is the car wash I see next door on Google maps part of your operation? If so, I commend you. Keep up the great work. I was born & raised in Houston but at the age of 33 in 1988, I moved to Utah and have been here ever since. I love it! Low moisture, no roaches, mosquitoes, hurricanes, tornadoes, or other natural disasters. J. Larry Bloodworth, CMAT and RETIRED! Draper, (SLC), Utah 84020 [email protected]

As most of us already know, Aamco went into General Repair. But did you know that was back in 2006? I have a 2017 franchisee brochure from an Aamco insider who is a good friend. His wife was the general council (attorney) for Aamco although they are now both retired. Here's he brochure. Aamco Franchise Information Pay particular attention to page 3 where they say transmissions are only 34% of their business and G/R is 66%. Wow! That's incredible.

Yeah, it's a really old ad I ran across years ago and saved it. For whatever reason, Carl Icahn thought he could build an automotive empire. Like you said about Sears being out of touch, I think the same thing is happening among Icahn Automotive subordinates who make the management decisions. Look at it; none of them have any automotive experience. They are all a bunch of retail customers trying to run what their idea of what an automotive business should be. Fairy Tales. One thing for sure, all of his automotive investments are heading south.

Here's an ad out of the old Sears catalog. This was waaay before baby seats and seat belts. https://drive.google.com/file/d/1nO9OhyHJVT4hC1LVWx-uN-fLtWhTH-e_/view?usp=sharing

Yes they were. The last Sears location in Utah was at their downtown SLC location and it became a Sears parts depot for Sears and Craftsman. It soon closed after the one I had applied at closes. Reminds me of Carl Icahn's automotive holdings. He bought Aamco, Cottman, Precision Tune, Pep Boys, Auto Plus, Just Brakes, and CAP (Consumer Auto Parts). I've worked for the first 3 in the past and wasn't impressed. Aamco used to have 900 locations. Now they're down to 400. A very good friend of mine worked for Aamco as their operation manager. His wife was their general council (lawyer). I was talking to him yesterday and he said all but 2 people in corporate are working from home and it looks like a ghost town at the corporate office. Many of Carl Icahn's automotive holdings have gone down in value since he purchased them. Like you said about Sears, I think he's (they) are out of touch as well. See https://www.icahnautomotive.com/leadership.html

I sold my business in 2015 and leased the real estate to the buyer for $11K/mo. on a 10-year lease and I paid property taxes. I guess you could call it "Double Net". I was 60 years old at the time. Like Joe M. said, it's not enough to retire on because I was still in 7 years deep on a 10-year owner financed purchase. Long story made short, the business dropped 2/3rds and the buyer skipped out after 5 years. We were able to get an $85K judgement against him but we can't collect it. Where we made our retirement was selling the real estate for $2.3M in 2020 to a plumbing company with a fleet of 40 trucks. We carried the paper on it for $9,600 on a 30 year note. 5 months later the plumber sells his business and the buyer paid the whole mortgage off. We didn't have a prepayment penalty clause in the contract. Silly me. $400K in state and federal income tax instead of paying just a little bit each year. Be very careful when you sell.

Today was one of the most painful days of my life. We picked up our taxes from our CPA. My wife is an accountant and already calculated our taxes but decided to let the CPA do it to make sure. She was only $1K off. We sold our shop real estate last year and today was the day we paid the piper. Nearly $400K in federal and state income tax. OUCH! Damn it!. It was a once-in-a-lifetime event and the IRS is now recommending we pay $83K in quarterly estimated tax. No way, Ray. What pisses me off is the way it all came down. We sold the real estate and owner-financed the mortgage ourselves for $9,600/mo. for 30 years. 5 months after we closed the deal, the buyer sells his plumbing business. ( https://mybuddytheplumber.com/ ) He has a fleet of 40 trucks. The buyer IMMEDIATELY pays off the $2.3M mortgage so we got a huge tax bill all in one year. The mistake I made was NOT including an early payoff penalty clause. Let this be a lesson to all.

After selling my shop, I needed something to keep me busy. In 2016 I applied to be an Auto Center Manager. The qualification tests were grueling. Spreadsheets, employee scheduling, merchandising, P&L analysis, and on and on. I spent a full day online going through the wringer. In a couple of weeks, they called me in for an interview. During that call, I was informed my starting salary would be $41,600/yr. Do what? Practically be in business for myself for $600/wk. take home pay? Ridiculous. I never went in for the interview. The following year, that particular Sears location in Salt Lake City closed down. Oh, well!