Transmission Repair

I typed my above post in WordPad and copied and pasted it to the forum. After Alex's response, I went back and looked to see what he wrote and I noticed the entire opening paragraph was not included. 😞 Sorry for my mistake. I noticed I can't go back an edit it like I did before, either. I'm guessing there's some sort of timer mechanism in play. Here's the preface to above mentioned post: ============================================== Great topic for us baby boomers. I've already exited but I thought I would share what I learned from the process. I'm not purporting to follow my experience, but do take away whatever lessons that may apply to your unique situation. I need to preface this by saying I sold our transmission repair specialty shop. We did only clutches, transmissions (auto & stick), differentials, transfer cases, and drivelines. 85% of our work was automatic transmissions.

Great topic for us baby boomers. I've already exited but I thought I would share what I learned from the process. I'm not purporting to follow my experience, but do take away whatever lessons that may apply to your unique situation. I need to preface this by saying I sold our transmission repair specialty shop. We did only clutches, transmissions (auto & stick), differentials, transfer cases, and drivelines. 85% of our work was automatic transmissions. Our building looks much bigger than it really is. It has a very small shop space of only 3K sq. ft. w/ 4 lifts sitting on a fully paved .9 acre lot with an abundance of parking. However, very few people believe the traffic count numbers let alone the sales numbers. I consider our situation an anomaly and not the transmission industry average. The traffic count was 203K/day (see picture) and we had a consistent $1.2M/yr. for the last 3 years of operation. No wonder the buyer send a CPA in, to audit our books, bank records, state & federal tax returns both corporate & personal, all for the last 3 years. First and foremost, the last 3 years of record-keeping will make or break your retirement. You must show a positive cash flow and avoid hiding personal expenses in the shop expenses. The same holds true for unreported income (skimming cash). Don't do it. Report everything legit and pay all necessary taxes as proof of sales of EVERYTHING. Did I say everything enough? For most automotive businesses, the customer list has a high value also. For a transmission-only specialty shop like ours, it had little value. What transmission shop owner wants a list of people who recently had their transmission rebuilt when that's all you do? Our transmission shop's location had built up a reputation as "that transmission shop on the freeway" and to a much lesser degree, the name of our business, "Certified Transmissions". The few times we received checks for payment, it wasn't out-of-the-ordinary for people to ask "Who do I make the check out to?" or "What's the name of this place?" Anybody could hang any name on the building like, "So-N-So Transmissions" and it would be no different. I can't count the number of times I've told people the name of our shop and it doesn't ring a bell. When I tell them we're down the street from "The Jet On A Pole" (see picture) they ALWAYS go, "Oh yeah, that transmission shop on the freeway." Everybody knows what we do at our location, but few know our name. In most (if not all) instances, it benefits the seller to carry the note in two ways. First, you can ask for more when you're carrying the note. Second, it reduces taxes so you don't have to show a big chunk of income all in one tax year. We are still carrying the $303K note which will end in May 2020. We didn't sell anything but the assets. No customer goodwill, no customer list, no name, no nothing, just assets. We were only able to get 3X the new replacement value of the assets because we carried the note. If you own the building, that's a separate matter. IMO, monthly rent should be at least 1% of the current value of the building. We started charging $11K/mo. but by the time the lease is up in 5 more years, it will be $13K/mo. NNN in real estate talk which means "triple net" or that the tenant pays for the building's insurance, property tax, and maintenance. Our building is our retirement, not the sale of the business. It will be paid off in 4 more years. ( whew! [̲̅$̲̅(̲̅ ͡° ͜ʖ ͡°̲̅)̲̅$̲̅] ) For those of you who didn't plan your retirement like my wife and I, let me explain. My wife and I married 13 years ago and at which time, neither one of us had much in retirement to bring into the marriage. We started the business in Oct. 2008 and when the 5-year lease came up for renewal in 2013, we bought the building through a mortgage company, though it was an owner financed mortgage. I, being 58 at the time decided to do an accelerated mortgage which meant a 10-year mortgage = $High Payment$. We are currently not making a dime on the rent, but are driving down the principal. Between now and Nov. 2023 we are still working (more on that later) and plan to fully retire at that date. So, my advice is to beg, borrow, or steal to buy your building because that's the only real retirement (except in rare cases) you'll have with a single-location shop. If you have any questions or need further clarification either respond to this post or my contact info is below: J. Larry Bloodworth, CMAT 12529 Minuteman Dr. Draper, Utah 84020-9541 [email protected] (214) 347-7788 [O] (214) 473-5563 [C]

I'm sorry I'm late coming to the party. Some people will withhold information and that speaks volumes about the sad state of our industry. I don't rely opinions; you know what they say about those. My recommendation is to call Kristin Carney at Cubit Planning in Austin, TX. She has an El Cheapo radius report for only $49 bucks that will give you all the demographics in a 1-mile, 3-mile, & 5-mile radius of the shop address you give her. If you're not happy with it, she offers a money-back guarantee. I'm an expert at picking shop locations. I can do it for you or if you want to DIY, I'll tell you how. I come from the school that helping people is the best way to get business. Here's a link to a radius report I gave a client with whom I'm helping select a great location.-->https://drive.google.com/file/d/12Dqqq1V6G9Fb_RHoBNzXARwFErQxKNDD/view?usp=sharing Here's the add-on services that you can get in addition to the radius report: 1. Traffic counts & map. - $50 2. Competitor list & map. - $199 3. Three drive times instead of radius distances. - $50 4. City population projections. - $25 5. Custom area instead of radiuses - $50 6. More than 3 radius distances. - $50 7. Custom calculations. - $100 For less than $600 bucks, you can find out everything anybody would want to know about FACTS, no opinions. There's more sources than just Kristen. Her order form is at the bottom of this page.-->https://www.cubitplanning.com/data/radius-report and her phone number is 800-939-2130 and tell her Larry Bloodworth sent you. If you have more questions, I'm at [email protected] or (214) 347-7788 [office] (214) 473-5563 [text]

What are you REALLY buying? Are you buying a business, or are you buying a job? For many shops, if they had to hire someone to perform the owner's job functions, one would discover that the business isn't profitable. Another test is to see if the owner claims the accounting isn't REALLY what he makes, as in under-reporting income or burying personal expenses into the shop. Businesses needs to make a profit over and beyond what the owner is paid for his job function(s) and businesses shouldn't have to under-report income to allegedly do it. The target percentage of profit is debatable, but all agree it should be something. Have you been able to look at the P&Ls for the last 3 years? If so, what's the bottom line profit, as a percentage of sales? When you answer, I'll continue.

Off and on from 1999 to 2011, our shop had a booth at various technical colleges’ career fairs. We hired several students to train as R&R techs with the hopes of moving them up to rebuilding. We didn’t have a very good experience with ITT Technical College in SLC nor WyoTech College in Laramie, Wyoming. The best employee we ever hired out of a technical college came from Salt Lake Community College. Both ITT and WyoTech are for-profit colleges. WyoTech is part of the Corinthian College system. Around 2014 or so, both ITT and WyoTech filed for bankruptcy and eventually went out of business, but I didn’t really understand why until now. The story of why these colleges failed is the subject of a half-hour documentary on PBS’s Frontline. Before you decide to get involved with a for-profit college, I would like to suggest to watch the short documentary, A Subprime Education, online at https://www.pbs.org/wgbh/frontline/film/a-subprime-education/ It will also make sense why our federal government has also instituted a “student loan forgiveness” program to help students who can’t find a job in the field they were allegedly educated in. Sad, sad, sad.

There is a little-known free service that companies charge for. Some reputation management companies are built entirely around this service. The service is that they let you know, via E-mail, if your shop gets a review, or any time your shop’s name is mentioned online. Google offers this service for free and it’s called Alerts. Google Alerts allows you to enter any name, website, company, or whatever you want to stay on top of. For example, I listed my name, my shop’s name, my shop’s website, and my main suppliers into Google Alerts. Google Alerts watches the entire internet including social media. If you do a YouTube search for Google Alerts, there’s a lot of videos showing how you can may $100/day or more with Google Alerts. I can go on about it, but it’s easier to simply go to https://www.google.com/alerts Now you know!